In this age of web-based technological innovations, increasingly complex methods of production and styles of organization, it may seem difficult to distinguish specific examples of entrepreneurship. Nonetheless, entrepreneurs have been introducing various methods since the times of Adam Smith, from the mechanization of the Industrial Revolution to our Information Revolution today.  Car manufacturing can be considered the atypical form of heavy industry; structured, efficient, and constantly improving. Yet all this began with Henry Ford and his Ford Motor Company. True to Schumpeter’s definition of entrepreneurship, Ford introduced the moving assembly line into his factories, creating an enormous increase in production. Aimed towards the often ignored market of common farmers and workers, he reaped in massive profits as his sales increased exponentially year through year. Despite its ultimate success, this entire enterprise was not without risk, as Ford himself had to convince investors to fund his initial operations.

Picture: http://autodesign-blog.com/tag/model-t/

              Since we discussed earlier in September, Netflix’s decision to separate the DVD business and raise prices has gone drastically wrong, resulting in massive losses in stock. Mark Gongloff’s blog discusses the worsening situation over the past few days, the company’s dwindling future. Following its drastic drop of 15% and loss of 810,000 subscriptions on Monday, the situation has continued to deteriorate, resulting in a 37% from yesterday’s closing; $118.84 to a mere $75 per share. Goldman Sachs has decided to downgrade Netflix from a buy rating to neutral due to its recent troubles; both future success and profitability seem to be in doubt. The business had failed to recognize that with such a competitive emerging market, its services were price elastic.

              While this may not seem to affect the assets or increase liabilities of the company, at least not in the accounting sense, these setbacks represent a severe drop in shareholder’s equity. As stocks measure the worth of the company, the investors have suffered heavy financial losses. Since the accounting equation has shareholders equity equaling assets and liabilities, this represents a corresponding reduction in the available assets for recovery.

 http://blogs.wsj.com/marketbeat/2011/10/25/netflixs-nuclear-winter-analysts-react/?mod=google_news_blog

http://blogs.forrester.com/nigel_fenwick/11-09-19-netflix_can_a_company_really_be_this_inept_and_succeed

               Of the rapidly developing economies that make up the BRIC, Brazil has often been overlooked by its more glamorous rivals; great powers such as the Russian Federation, China and India. However, through the consistent efforts of its celebrated past president, Luiz Inacio Lula da Silva, the nation has been left with a confident, growing middle class, prepared to drive the nation into modernity. While economic grow in the West has clearly stalled in the wake of the recent recession, Brazil has surpassed rivals Russia and India in GDP (nominal), challenging traditional European powers Britain and France for national wealth.

                Just last year, Brazil demonstrated a phenomenal growth rate of 7.5%, higher than any other country save China and India, and a record high in 25 years. Despite the economic turmoil from the European debt crisis, economists still predict a roughly 3.5% growth rate this year. Although the country still struggles the lack of export compared with consumption spending, high inflation and poor infrastructure, it has established itself as a major economy. With the capital and consumer spending, it seems that for the first time in decades, the Brazilian future looks bright.

http://www.reuters.com/article/2011/03/03/us-brazil-economy-idUSTRE7222QZ20110303

http://news.xinhuanet.com/english2010/business/2011-03/04/c_13760668.htm

http://www.bloomberg.com/news/2011-09-14/brazil-july-gdp-grew-at-fastest-in-six-months-as-rousseff-eyes-4-growth.html

http://www.nytimes.com/2011/10/09/world/americas/dilma-rousseff-and-brazil-face-stiff-economic-test.html

                We’ve discussed Indian products in class before, particularly the Tata Motors Nano car designed for the burgeoning local middle class and soon to be showcased in Canada. Recently, yet another Indian company has unveiled its own cheap product for the masses, the Aakash, “sky” in Hindi computer, priced as a measly $45. This has come after a string of previous ideas, including $15 water purifiers and affordable heart surgery, designed to bring the comforts of modern life to a relatively impoverished population. Despite doubts about the quality of these products, these innovations posses the common aspect of being highly affordable, and focused on a particularly large, needy market.

                According to Porter’s generic strategies, these products all demonstrate the emphasis on Cost leadership, utilizing its government support to reduce prices and painstakingly developing a viable product. As stated the article, the purpose was the start a price war, a challenge for others to produce superior products, while keeping costs and technology in mind. With the mass of poverty stricken schoolchildren, young businessmen, farmers and government as potential consumers, the broad market provides wonderful opportunities, both for business and the improvement of the community.

http://www.thestar.com/news/article/1065032

http://newstonight.net/content/india-unveils-35-tablet-computer-aakash

               Over the past decade, the Canadian dollar has been consistently rising against the United States dollar, particularly following economic or political crises. Many of you have certainly visited the states, and have witnessed first hand the vastly cheaper fuel, food and household products that are available there. This has contributed to the massive differential in prices across the borders, which finance minister Flaherty has been investigating recently.  

                However, the past few weeks have reversed much of this ongoing trend, due to the European troubles. Since investors are hesitant about the fragile state of the European economy due to the Greek debt crisis, the USD is viewed as a safe haven from the financial turmoil which threatens to envelop the world in another recession. This has driven down the Canadian dollar in relative value, reversing the trend and making our products more attractive. Despite these advantages, the volatility of the Canadian dollar make it difficult to accommodate, compared to steady changes. Combined with the state of the sluggish economy, the increase in Time Value of money is minimal, making our investments a choice between sluggish growth and unpredictability.

http://www.canadianbusiness.com/article/49211–canadian-dollar-lower-well-off-early-lows-as-commodity-prices-strengthen
http://www.montrealgazette.com/life/Flaherty+wants+probe+into+irritating+Canada+price+gaps/5365716/story.html
http://www.theglobeandmail.com/report-on-business/economy/currencies/swinging-loonie-keeping-exporters-off-balance/article2190993/

                Arab Spring. This term has been used by political commentators worldwide to describe the turmoil that has engulfed the Middle East for much of the past year. The term ‘Spring’, as far as I can recall, as first used in the 1848 European ‘Spring of Nations’, a struggle for liberalism and national determination.

                 It was also an abject failure.

                For economists, perhaps a better example would be to consider the 1989 fall of Communism, where freedom from state planning led to vibrant market economies emerging in Eastern Europe. With the rise of democracy in the Middle East, some argue that Arab countries are in an ideal situation to replicate these successes.

                However, local economies in the region are technically capitalist, albeit dominated by government interference, monopolies and corruption. Unlike the relatively smooth political transition within the former Communist bloc, the Arab Spring has brought about mass civil unrest, protests and civil war. With these countries already intertwined with the global economy, the International Business Report indicates that fully a quarter of North American businesses are negatively impacted, and almost a tenth of global companies are hesitant due to the incessant turmoil.

               To compound to their troubles, the urge of economic reform along with political freedom seems wholly absent. Without a clear economic aim, no potential economic integration, and powerful entrenched interests, the task for reformers seems highly daunting.  

http://www.economist.com/node/18867047

http://www.gti.org/IBR2011/Arab-Spring.asp

 http://www.cics.northwestern.edu/groups/mena/newdirections.html

http://www.upi.com/Top_News/World-News/2011/07/01/UN-official-lauds-Arab-Spring/UPI-96851309517686/

                Predominantly among Chinese immigrants, it is well known that mainland authorities have initiated a massive censorship project unofficially known as the Great Firewall of China, designed to combat “subversive” ideas as well as information deemed inappropriate or harmful. While we often witness multinational companies exploiting the situations in less developed societies, such as child labour in South-East Asia, the row between internet giant Google and China remains a rare bright incident of business ethics.

               This issue began in January of 2010, following an alleged cyber attack originating from China targeted Chinese human rights activists via Gmail. Thereafter, Google decided to withdraw its services from the Chinese mainland, taking an open stance against the government in insisting on open information access. Despite the fact that this move cost the company dearly against its primarily local rival, Baidu, it has decided to stand by its commitment in the Global Network Initiative agreement against the potential gain within the enormous Chinese market. Through this unexpected stand against government interference in person freedoms, Google has once again given strength to its unofficial motto; “don’t be evil.”

               Although the search engine has withdrawn from the mainland to servers inHong Kong’s looser legal framework, it retains business, mobile and export based services which target the growing internet community inChina.

Articles used:

http://www.bbc.co.uk/news/business-13740893

http://news.bbc.co.uk/2/hi/8455712.stm

http://www.guardian.co.uk/technology/2010/mar/22/google-china-shut-down-censorships

http://mashable.com/2010/01/12/google-dont-be-evil/

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