Many developed nations have a Baby Boomer generation, a particularly large age group ranging from late 40s to early 50s.  While the bump in population is fine now, the problem lies in what happens after the Boomers retire.  With less people in the age bracket below the Boomers, the dependency ratio of countries like Canada will jump.

However, aging populations are even more damaging to countries like China, who, despite their tremendous economic growth, is still technically developing and relatively poor.
A recent blog on the National Public Radio, highlights a similar, albeit mirrored, situation. China’s infamous One-Child Policy, doesn’t lead to a large group of elderly Boomers, but rather a small group of young adults to care for them.

However, as a poorer nation, China does not have the safety net that most developed nations are able to provide their elderly with.  In an attempt to quell the looming problem, China has relaxed the One-Child Policy.

The situation in China shows how government intervention disrupts the natural equilibrium of populations and the market.

Image from : http://www.statcan.gc.ca/edu/power-pouvoir/ch1/examples-exemples/5214854-eng.htm

Everything has a trade-off.

It’s an unavoidable truth.

So while reading Megan Barnabe’s blog post on the positive effects of motivation, I couldn’t help but wonder how smaller, start-up companies would be able to afford keeping their employees happy.  Not that employees for new companies are treated badly, just that there’s an obvious price tag to the flexible hours and team bonding that motivate workers so well.  It’s all well and fine when big companies like Google and Walmart hold motivational seminars, but smaller companies would be hard pressed to find the extra room in their income statements for little more than a motivational pep talk.

That’s why it’s so much more impressive when companies like Zappos are able to not only build a fun-loving company culture but keep their heads afloat while they do it.

There isn’t much debate against the positive effects of a happy worker, but there shouldn’t be much surprise when most of the corporate world chooses to stick to the old, 8-hour day grindstone.  Sometimes, the benefit just doesn’t exceed costs.

What do you do when you’re 23 years old and have a $3bn company on your hands?

According to Snapchat co-founder and chief executive, Even Spiegel, you wait for it to be worth even more.

Recently, Snapchat rejected a $3bn buyout offer from Facebook (the most expensive acquisition Facebook would have ever made), on the grounds that other investors were valuing the company at an even higher $4bn.  Snapchat’s high valuation makes sense when you think about similar companies like Twitter and Pinterest.  These companies have only been growing in the past few quarters, most especially Twitter, whose IPO soared to $23bn.

Interesting how something that is decidedly a vitamin manages to overtake and decline an offer from Facebook, a company that has risen to pain-killer status in our society.

“We are not in the coffee business serving people, we are in the people business serving coffee.” – The Starbucks mission statement

It’s no secret that some people can’t function before their morning dose of caffeinated pep, and you’d have to have been living under a very large rock to not recognize the green and white lady that’s got everyone from teenagers to CEOs wrapped around her two tails.

Starbucks has become a veritable addiction, and boy have they capitalized on it.  From mugs to specially distilled agave nectar to the actual coffee, Starbucks has got it all.

But what’s different between the Starbucks of today and that of, say thirty years ago?

Two words; social responsibility.

That’s right, the guilt-indignation-action craze that is the green revolution has touched most every corporation, and Starbucks is no exception.  Take a stroll through their official site, and you see an entire section devoted to environmental action plans and ethically sourced coffee beans.  Like many corporations, Starbucks understands what’s important, namely, what their customers see as important.

There’s no real way to know if Starbucks is doing this out of the goodness of their caffeinated hearts or just as a PR stunt, but in the end, does it really matter?

Developing nations are still getting more sustainable treatment, disposable cups are still slowly being phased out, and the greater good is still achieved.  What’s important here is the precedent Starbucks has set for every other coffee house that wants to compete.

After all, if the big, greedy, corporation cares about the environment, so should everyone else, right?

The aforementioned pages:

 http://www.starbucks.ca/responsibility/environment

http://www.starbucks.ca/responsibility/sourcing

“We save people money so they can live better.”

Watch a few minutes of TV and you’re sure to come across a Wal-mart ad.  Whether it’s about their annual roll-backs or just their every-day low prices, these ads have managed to worm their way into TV, newspapers, and all sorts of different media.  (Quite effectively considering I could remember their taglines without having ever actually physically being in a store before…)

Wal-Mart regularly ranks as the top corporation in America, and among the top of the world.  Coupled with their wide-spread, middle-income target market, Wal-mart should by all rights be up with the best.  However, it wasn’t their ubiquitous ads or far-reaching span that netted them the top spot.  It was their revolutionary inventory system.

The Management Information System (MIS) they have set up allows Wal-Mart to collect information, such as product type and seasonal changes in sales.  This lets people in their back office do more efficient analysis of their inventory and project future sales more accurately.

Implementing these decisions allow Wal-Mart to cut costs and increase profits, all while giving us that low, low, price we all love.

http://www.bloomberg.com/news/2013-09-25/wal-mart-cutting-orders-as-unsold-merchandise-piles-up.html

https://www.youtube.com/watch?v=qJwrlF8AzmA

Today in class, we were treated to a unique experience: the chance to listen to a first hand account of how a radically different and innovative enterprise develops from inception to actualization.

Wade Larson is the COO of UrtheCast, a company that will soon provide live-streamed video feed of the earth from the International Space Station (ISS).

As the class progressed, Mr. Larson outlined the difficulties he encountered with UrtheCast, namely, how exactly he got investors or partners to buy into the idea of something so fantastical and frankly gimmicky.

We were told of how he struck a barter deal with Russia’s cosmonauts, exchanging their equipment for a ride to the ISS.  (Interesting to see bartering still taking effect.  A relatively quantitative way to think of opportunity cost, albeit on a grand scale.)

After spending last night (and this morning) on the second individual assignment, it was refreshing to see some of the tools we’ve learned in class actually used in a real case.  Porter’s generic strategies are now even clearer in my mind after listening to Mr. Larson apply it to his space age company.

Approaching the UrtheCast model from a marketing perspective shows a wealth of advertising potential.  How easy it is now though, to be awed by a company like this, when just last year’s class was skeptical of its success.

UrtheCast is a wonderful example of what humans can achieve and how big the returns are after such a monumental risk.

http://www.urthecast.com/about

Many large companies managed to dodge the sizable amount they pay in corporate income tax through a loop hole called outsourcing.

By declaring their profits in countries like Bermuda, where corporate income tax simply doesn’t exist, Google UK has cut down on its overall taxation.

This calls to question the current laws regarding the taxation of multinational corporations.  Currently, the corporation must abide by the laws of the particular country it is stationed in.  The parliamentary Public Accounts Committee (PAC) has called attention to Google’s truancy in tax payments and has called on the government to change multinational corporations’ tax laws.

But what problems would arise from a multinational law?  The reason the status quo is where it is now is due to a lack of a competent organization that would police such a law.  The closest the world has now to a global police is the International Court of Justice and the International Criminal Court, places that should be reserved for grievous faults against humanity, not such petty things as tax evasion.

http://www.bnn.ca/News/2013/9/30/Google-pays-55M-tax-in-Britain-on-2012-sales-of-55B.aspx

The past year has been a less than fortunate one for many of the major car companies around the world.  Due to safety problems, many of the more popular models of these companies, such as the Toyota Sienna minivans, are being recalled to their designated companies.

While this is not the first time a recall has happened, in fact, Toyota had another such recall earlier this month, it has not happened so simultaneously between the main car manufacturer brands.

The question then arises, what does this do to the market?

And even more pressingly for the manufacturing companies, what does this mean to their operations.

With recalls come replacements, where Toyota and its competitors will have to gift brand new versions of the faulty models to avoid any suits in regard to safety being filed against them.

In a still recovering economy, it begs the question of whether or not consumers are still willing to buy new cars when safety can apparently be so easily compromised.

http://www.bnn.ca/News/2013/9/30/BMW-Hyundai-and-Kia-recall-over-180000-cars-in-China.aspx

http://www.webpronews.com/toyota-recalls-vehicles-for-8th-time-this-year-2013-09

RIM reports a loss of nearly a billion dollars for its second quarter.  Due to this not quite so unexpected blow, the company is expected to lay off 4,500 workers, a number that makes up 40% of its current staff.

The company’s lack of success is mostly credited to the disappointing sales of its newest contribution to the smartphone market, the BlackBerry Z10.  The phone came into the market a few weeks after its Apple and Samsung competitors, which put it at a significant disadvantage after so many patrons pledged their loyalties to the rival brands.

This is far from the first time RIM has been late to the party.  When the iPad ushered in the tablet craze, RIM’s playbook came several months later and had to compete with Samsung’s Galaxy tab as well.

This begs the question, what exactly does the Blackberry bring to the table?  What exactly sets it apart from iPhones and Samsung tablet-phones?  Without the advantage of business oriented BBM, is there anything left for the BlackBerry to offer its clientele?

http://www.cbc.ca/news/does-blackberry-have-a-future-1.1862945

Normally, prices in a free market are largely controlled by consumers.  Prices will rise only as high as a consumer is willing to pay, and supply is dictated by consumer demand.  However, this happy equilibrium is set askew during times of natural disaster.  In the midst of hurricanes and floods, the demand for necessities such as bottled water, canned goods, and batteries sky rockets.

As it is in most companies’ best interests to generate as much revenue as they can, is it proper for establishments to raise the price of such necessities to capitalize on undeniable need?

Price gouging is the act of raising market price when no other retailer is available.  From an ethics stand point, it is a low blow.  With the stress of being displaced from their homes, losing a sizable amount of their possessions, and possibly dealing with illnesses, the last thing natural disaster victims need is an extra figure to weigh on their bank accounts.

But moral compass aside, there is an economic downside to the unethical price hikes.

As Freeman explains in this week’s video on his Stakeholder Theory, a company in decline is one that disappoints its community.  And what better way to disappoint your community than to charge them a few extra dollars for their pain?

While the windfall temporarily pads their pockets, companies that practice price gouging will suffer in the long term, losing loyalty and consumers in the decline Freeman so vividly outlined.

http://www.cbc.ca/news/canada/calgary/story/2013/06/22/calgary-price-gouging-floods.html  (Calgary Floods)

http://finance.yahoo.com/blogs/daily-ticker/price-gouging-hurts-consumers-amid-hurricane-frenzy-183842221.html

http://business.time.com/2012/11/02/post-sandy-price-gouging-economically-sound-ethically-dubious/ (Hurricane Sandy)