After reading a post by a fellow student, I found it interesting how ZARA can still be successful while maintaining the traditional Vertical Integration system.

The Dell example we discussed in class seemed to imply that virtual integration is the way to go in modern business; however, firms like Zara and Ikea prove that, with the right strategy, it is possible to survive and thrive with a vertically integrated system.

Why does vertical integration work well with firms like Zara, but not with firms like Dell? First, I thought it is due to the differences in the products they manufacture. According to this article, Zara has retained vertical integration because of the “fickleness” of fashion trends.

Computers are about research, development, who has the thinner chips and faster processors at the end of the day. Outer aesthetics and software aside, all firms are aiming for the exact same goal.

On the other hand, fashion is about high-quality, unique products that cannot be copied by other competitors. In this sense, it would be worthwhile to keep seamstresses and designers in your company as loyal employees, rather than outsource their work to temporary partners that might emulate their styles in the future.

This is why Zara is constantly sending its designers across the globe to attend fashion conventions and catwalks; it wants to stay one step ahead of its competitors in the fashion market. With the information designers bring back and its company-owned factories, Zara can quickly design, manufacture, and market a new line of products in merely 3 weeks. This is something that other virtually integrated clothing brands (like GAP, H&M) cannot do.

This article is the first that I’ve read about the recent Volkswagen “clean diesel scandal”.

I’ve always thought diesel could be a way for people to drive in a more environmentally conscious fashion as the world waits for green technology to improve. For almost a decade, Volkswagen’s “clean diesel vehicles” championed that idea. Or, at least, it tricked the public into thinking that it did.

Clearly, deceiving the masses, breaking the law, and selfishly polluting the environment for profits is unethical. They have not released any other reason why they have fitted their vehicles with “defeat devices” besides wanting to get past emission tests.

However, I think business ethics isn’t the only issue revealed by this scandal. The US emissions testing system only tests vehicles in laboratory environments, doing artificial and predictable movements (read more about it here). Not only does this mean that test results can possibly be inaccurate, but also that the test can easily be gamed. The VW scandal is not just an issue about business ethics; it also reveals how governments may not be doing enough to keep businesses in line.

Meanwhile, as the fines and recall fees rack up for VW, it’s up to consumers and shareholders to reprimand them for their unethical practices by not buying their products.

In a nutshell, this article explains how Toronto is trying to become a city that evolves with changing times and technologies by allowing Uber to prosper with traditional taxi services.

I agree with the article’s perspective that the future of transportation lies in Uber, and not taxis. Cities should, like Toronto, aim to adapt their laws to accommodate for the drawbacks in ride-sharing services, while still giving them room to prosper and contribute to the economy.

The Toronto government’s stance boils down to this; Despite the fact that Uber’s existence lethally threaten the taxi industry, Uber should be allowed because people love it for its low price and high efficiency over traditional cabs. From a utilitarian perspective, it’s a good move.

Still, the livelihoods of thousands of taxi drivers will be compromised. Although Toronto’s aim is to “balance fair regulation for taxi industries while safely introducing… Uber to the market”, this is easier said than done. There will inevitably be a painful adjusting period where cab drivers are losing jobs.

The article states that banning Uber is like “trying to stop people from using smartphones or ATMs.” When the world transitioned from bank tellers to ATMs, there was also a painful period where tellers lost jobs. But the ATM transition had, in the long term, advanced the banking industry by making deposits and withdrawals more convenient. Uber is much like that.

For new ideas to live, old ideas must die.