Bill McBride referenced a part of Professor Hamilton’s lecture at Econbrowser: Lower gasoline prices. Gasoline prices are always a hot topic in daily life. Slight fluctuations may lead to a huge influence in the society. The price for gasoline in States hit a lowest point in three years.

Professor explained why the changes in production of crude oil would not bring real changes to the gasoline market price. The increase in production will never cover the increase of emerging consumption. This is why the gasoline price does not change with the price of crude oil. Based on this theory, I think this also can explain why there is a huge gap between gasoline prices in Canada and States. Even though Seattle and Vancouver are only about 200 km away, the difference in gasoline prices in two cities is likely to be 50 cents per litre.

It is reasonable to conclude that the decreased production rate for sure will rise the gasoline price, but the increase in production rate will not necessarily lower the gasoline price. The reason is that demand in different area variates depending on time.

Source: http://www.calculatedriskblog.com/2013/11/sunday-night-futures.html

I clearly remember how big influence Target had brought to people when it announced that it would expand into the Canadian market. Shortly, many big retail stores like Zellers were replaced by Target. Initially, customers were excited about the entrance of the new American retail store. However, when people found out that Target’s price in Canada is different from its price in America, their passions went out.

I totally agree with what Junwei says “Target fails to compete against its rivals in Canada in price”. Cheaper price is Target’s point of differentiation in States. However, since it cannot maintain its low price in Canada, Target loses its competitive advantage making it the same as other retail stores in Canada.

What Junwei mentions in the blog that Walmart creates difficulties for Target to get supplies is also a reasonable cause. Both Walmart and Target are American retail stores. Walmart has expanded into the Canadian market much earlier than Target does. Walmart has a solid customer base and stable supply chains. Thus, the barriers created by Walmart for new entrants are really high.

Target’s future is worrying, if it cannot establish a stable supply chain and attract more customers soon.

Source: https://blogs.ubc.ca/junweisu/2013/11/17/target-misses-its-target/

Continue reading →

Zappos offers candidates out of the town a tour before the interview. How candidates treat shuttle drivers directly results in whether the candidates will be employed.

“It doesn’t matter how will the day of interviews went, if out shuttle diver wasn’t treated well then we won’t hire that person,” says CEO Tony Hsieh.

Providing a tour for candidates out of town reflects Zappos’ caring attitude towards it employees. It gives candidates a more comfortable environment to prepare for the interview and allow them to concentrate. We also have discussed many similar things Zappos does to create a better working environment for its employees in the lecture. I believe that even though these acts may bring Zappos extra costs in the short run, they will promote employees’ passions towards work, loyalty to the company, and its benefits will be revealed in the long term.

In my opinion, this tour also can be considered as part of Zappos’ interview. Getting feedback from drivers’ tells Zappos values not only its employees’ ability but also their personalities.

Amazon Zappo’s Merger

News originated from The Wall Street Journal: Story of the Week | Zappos’ Tony Hsieh

http://projects.wsj.com/soty/week/21/story-of-the-week–zappos-tony-hsieh

After operating for eight years, Twitter finally went to public in Nov. 7th, 2013. Twitter’s Initial Public Opening went successful in the New York Stock Exchange. On the first day, Twitter had a 73% bump. This certainly was a good startup for Twitter, compared to the huge fall in the Facebook’s stock price after its IPO.

The reasons that I think Twitter’s IPO went well are that people have an expectation of its future and Twitter’s good preparation. Though Facebook’s stock was not going well right after IPO, its price has reminded ascending afterwards. Another technology company, Google’s stock price also keeps increasing. Therefore, people expect Twitter to do well in the future. Besides, Twitter had prepared for its IPO for almost two years. It gained experience from Facebook’s unsuccessful IPO. Facebook’s IPO had created a crisis in the NASDAQ Stock Market. Therefore, this time Twitter chose to hold its IPO in the New York Stock Exchange which is more prepared to tolerate the huge pressure that might have on the first day of going public.

It is good that the IPO of Twitter was fairly successful. However, Twitter’s future still makes some people concerned. It is not making a profit even till now. The intense competition in internet technology market may lead Twitter to aging process if Twitter cannot figure out a way to generate more revenue.

Mike Cassese/Reuters

In the newest monthly report, the Canadian Estate Association pointed out that the average selling price of a house in Canada has increased 8.5 percent compared to last year. Vancouver is one of cities in Canada that its price has rised most rapidly.

One reason I think that house price keeps growing is the continuous increase population in Vancouver. More and more immigrants continue moving to Vancouver so that the demand of houses keep rising. Also, city of Vancouver is closer to Asia than cities in Eastern Canada. Vancouver is also famous for its landscape, immigrant culture and modern life. Considering above reasons, new immigrants are more willing to live in Vancouver. Therefore, with limited supply of housing and unlimited demands, the house price in Vancouver reminds high and keeps going up. I believe the incredibly high house prices are already foaming. Any economic changes may lead to a crash in the Vancouver house market.

CBC News: Average house price in Canada rises 8% to $391,820

http://www.cbc.ca/news/business/average-house-price-in-canada-rises-8-to-391-820-1.2427778

Tina talked about that Apple chooses to manufacture overseas in her blog. This phenomenon is now a common strategy for many firms. I agree with what she said that Apple did that because it is cheaper and easier to find workforce.

In addition to cost minimization, I believe firms also take the advantages and disadvantages of overseas manufacturing into consideration. The biggest advantage is that it has lower labour cost. However, a disadvantage is oversea manufacture takes longer processing time. Comparing Apple and Samsung, Apple spends more time on shipping. Yet, Samsung has a direct selling model since its factory is close to its company. Samsung will be able to make any adjustments on production instantaneously and more accurately control it inventory. For example, Apple was running out of gold Iphone 5s for about two months. We can imagine how much Apple has lost for being short in inventory. If Apple is not manufacturing overseas, the company hopefully can change the amount of different colors of Iphone 5s produced. From a society angle, firms choosing to manufacture in other countries negatively affects its local country’s employment rate.

Source: https://blogs.ubc.ca/tinazhang/2013/09/18/why-does-apple-choose-to-manufacture-its-products-in-asia/

Blackberry’s new smartphone will start selling this month in Canada. After the failure of its last smartphone and tabulate, Blackberry now introduces Z30 which has a touch-screen model.

Blackberry missed the perfect time to enter into the new field of touching screen. Blackberry was once believed in that the full keyboard that they designed would be the best and irreplaceable by other product. Seeing the trend of touching screen, Blackberry starts to introduce this feature to its products. However, it first concentrates more on tabulates instead of phones. Lacking of uniquenesses and points of differentiation, Blackberry did not do well.

Besides the physical improvements of the new smartphone, Blackberry also announces that they will change the method of selling. They decide to abandon their partner, Rogers, who had been helping them since the beginning of their business. The new phone will be carried by different Canadian carrier, and be sold in retailer stores.

As an audience, I am curious to see whether the new smartphone will save Blackberry or it will tear it down as a final result.

http://www.cbc.ca/news/business/blackberry-s-new-z30-device-won-t-be-carried-by-rogers-1.1894629

For most people, they would draw an equal sign between Bill Gates and Microsoft. Even though, Mr. Gates is the chairman of Microsoft, and holds the largest stock and is one of four members of the committee which decides who the next Chief is going to be, apparently, Mr. Gates was not the chief of Microsoft after the year of 2008 when he left his day-to-day responsibilities. Under great pressure coming from powerful competitors, like Apple, Microsoft is facing the situation that they are losing the dominance and monopoly in the field of personal computer softwares, and company interests have been stumbling for the past few years. Recently, its chief executive announced that he would resign in the next year. This action again brings influence to Microsoft and its employees.

Various predictions are made by the public. Some people think Gates is coming back to his day-to-day position again. Some people speculate that Mr. Mulally of Ford might be the one who takes the seat. Many Microsoft current and former employees expect to have someone who is sophisticated in technology to be the next chief.

Anyways, with the increasing number of substitutes, Microsoft is running towards a crossroad. Who the next chief is going to be may directly affect the future direction of Microsoft.

http://www.nytimes.com/2013/10/08/technology/gatess-future-fuels-speculation-as-microsoft-seeks-new-chief.html?ref=business&_r=1&  

(The New York Times, Gates’s Future Fuels Speculation as Microsoft Seeks New Chief)

The partial shutdown of U.S. government started on Oct.1 st, has brought impacts to its nation and even the entire world. The dispute between Republicans (anti-Obamacare) and Decorates (pro-Obamacare) directly led the delay of budget bills. Even though the social security department is still functioning appropriately, the shutdown of the government still results in closures of national parks, stagnation of government-related work and the furlough of over 800,00 federal workers.

The closure of national parks impacted the American tourism hugely. The Chinese national long week-off happens at the same time while the U.S. government is shutdown. Since it is one of the longest national vacation in China, every scenic spot expects to get profit from it. Closures of national parks force visitors to go to somewhere else. A Chinese visitor, Miss He says: “The trip to U.S. makes me cry!” on Weixing (Chinese Twitter) when she was in Washington, D.C during the government shutdown.

The shutdown of U.S. government may affect the global economy. Ted Wieseman in Morgan Stanley expressed in The Wall Street Journal that it won’t be a big deal to the market either in the short term or in the long term. The Assets Management, Trevor Greetham, said on The Wall Street Journal, the shutdown is beneficial to the stock market.

http://www.cbc.ca/news/world/u-s-government-shutdown-what-s-next-1.1875050(Reference of CBC News, U.S. government shutdown: What’s next?)

http://news.163.com/13/1003/16/9A9AVIN60001121M.html (163News on the impacts of U.S. government shutdown on China)

http://baike.baidu.com/link?url=cwKidUZo8mb_p3Q4Z9WIax4fZ5tGGHTRHLdgYSlUA-RS0c_4Gfh9EafSFzOlWUZBeX_yrbXt9F0yBhp7mo2vBK#refIndex_19_5567902 (Chinese Wikipedia about the government shutdown)