Stephen Ilagan's Blog

Target’s $1.8 billion purchase of most Zellers leases is old news, and many my fellow Comm101 bloggers (Akaash Bali and Karen Lee to name a few) have discussed the possibilities of what Target will bring to Canadian retail when the takeover happens, many people have forgotten what Zellers plans to do in the wake of a major liquidation.

In Tuesday’s Globe and Mail, an article titled “Zellers’ Last Christmas” outlined Zellers’ creative strategy for this holiday season. With the unique situation of having time before relinquishing their stores (Target’s takeover won’t be complete until March 2013), Zellers has the opportunity to plan out a strategy to maximize profits. Consequentially, with Zellers no longer focusing on gaining market share by trumping discount leaders (they’ll be gone soon, so whats the point?) they have started to stock inventory with higher margin items such as clothing and jewelry. Traditionally, Zellers had focused on advertising cheap, low margin goods (such as paper towels) during the holiday season. Now, Zellers is going digital in an attempt to maximize profits by advertising through Facebook, and letting consumers vote on weekly sales.

Its quite ingenious, really. Zeller’s unique situation makes it an ideal case study for  changing strategies and tactics in response to the business environment. As CEO Mark Foote says, “it’s a weird time”. Weird, but interesting. It is definitely worth following how Zellers handles the next year.

Here’s an article that all of us in Comm 101 should take a look at: The Top Eight Rules of Networking, by Kelly Eggers, a regular blogger in FINS finance. True, most of this is common sense, and a select few of us are well-practiced at applying these basic rules in real life, but it does point out a few intricacies such as the differences of how to look at a person during a professional or social conversation.

Interestingly enough, the article also pointed out that business cards are beginning to trump random resume passing. Coincidentally, it seems like I’ve had to hand out more and more resumes whenever I want a job just to get an interview. It seems like you have to know someone in the company for there to be even a remote chance at landing that job. For all those wanting holiday or summer jobs, take note. This is trend that is affecting us now and will affect us in the future: job hiring (and business in general, for that matter) is becoming more and more personal. The sparkly resume simply doesn’t cut it anymore. But hey, I guess that’s why we are all in Sauder, right?

For all you sport-nut Sauderites, here is a recommendation for a sports show that puts a business twist on topics. Tom Mayenknecht hosts a show on the TEAM 1040 (better known for rants and in the words of David Pratt, “yahoo callers”) every Saturday from 9am to 12 noon called “the Sport Market“. Mayenknecht is a 30-year veteran in sport marketing and brand management and his insights often reveal things that are overlooked for most spectators of sports.

Think of Mayenknecht’s show as BusinessWeek meets ESPN Radio. Concepts that we have been learning in class – from brand positioning to supply chain operations to the effect of technology – are applied in a sports context. The application of those concepts to a real-world entity makes classes exponentially more valuable. The fun part is, of course, it involves sports, which, for a sports fan, should be a real treat, as all the perks of your regular sports radio shows – athlete guests and caller opinion – still exist.

Take last week’s show, for instance. Mayenknecht was talking about this year’s small media market World Series and the implications on TV Revenue and Baseball’s dependence on the Series reaching seven games (which it did).

If you have nothing else to do on a lazy Saturday morning on campus, tune in to AM 1040, even if its just for a few minutes, for some entertainment and learning.

Few men have been as influential in shaping the way the world operates as Steve Jobs. Many credit Jobs with single-handedly lifting Apple one of the world’s most valuable and successful companies. With his passing, Apple now looks to Tim Cook to lead the way into the post – Jobs era.

This brings to question one thing: How much impact can individuals have on a business? Undoubtedly, there have been prime examples of individuals shaping not only their business, but the world around them. The Gates’, Fords, Edisons, and so on. Traditionally, as we are taught here in Sauder, running a business is as much a team effort than anything else. Would these men be in the same place without their “teams”? Or were they so driven that they influenced the people around them and pushed themselves to success? It’s a question that deserves some recognition, especially considering that many of us Sauderites are leaders in our ways.

Interestingly enough, I am currently reading Driven, written by Dragon’s Den host Robert Herjavec, a person who carved out individual success in his own right. He emphasizes the power of determination and “being driven”, and ultimately loving what you do in business and life. Funnily enough, these same points are emphasized in Steve Job’s 2005 Stanford Commencement Address.

Sorry, Mr. Hubbert, the "pimple" doesn't exist

Reynolds, Neil. “A Peak Oil Technocrat Ignored the Power of Technology.” The Globe and Mail 5 Oct 2011: B2. Print.

“Hubbert’s Peak is still not in sight”. Marion King Hubbert’s prediction that the world oil production would begin to decline after the 1970s has been squashed, according to U.S. Energy historian Daniel Yergin. All that fear about oil running out and OPEC crippling the American economy? Pure fantasy. The power of technology has allowed the Western Hemisphere “to move back into self-sufficiency” (Reynolds). Oil drilling has become more efficient with the technology to tap into shale oil reserves. In fact, countries like Venezuela and Argentina have untapped reserves the size of Saudi Arabia’s. America’s dependence on foreign oil in going down.

Hubbert, who was a Technocrat, failed to see a major component built in to the global market economy. If demand exists for a good – we will find a way to get that. Technology now lets us achieve that. In today’s world, technology has become a driving force behind every industry, even in conservative markets like oil drilling and mining. As Reynolds concludes in his article, drill, baby, drill.

The catastrophe that is unfolding in the Euro Zone is one for the history books. Europe’s future, both politically and financially, has literally been hanging in the balance in the past few weeks. Here is my two cents on what is happening on the EU and what could possibly be done to save Europe:

The way I see it, the structure of the EU is the major problem. This “crisis” has shown just how slowly a united front of democratic nations moves into action. Here in Canada, we always complain about the government being slow to react to public demands. Compound that with 27 governments and you have a recipe for disaster. True, when at it’s peak, the EU has the capability to compete economically with global powerhouses like China and the US. However, at its worst, unnecessary expenditure falls heavy on countries like Germany, one of the few economically “stable” countries.

At his point, the only solution I see is letting the ECB take control and pull Greece out of debt. The EU cannot risk a Greek default, since that would result in an incomprehensible amount of investor confidence lost in the EU. Then, begin slowly contracting the EU to avoid such disaster in the future.

While reading Thursday’s issue of the Globe and Mail, one of the articles that caught my eye was the investigation by the antitrust subcommittee of the American Senate into Google possibly “abusing its dominant position to stifle rivals”. In fact, Google Chairman Eric Schmidt was busy this past week testifiying to a group of US Senators, who are claiming that Google rigs its search results to have it’s products appear before competitors.

Now, my instant reaction to the article was that the Senate was wasting its time. Logically, if I were Google, of course I would list my own products and services (such as Google Shop) first on my search list. The reasoning is that I invented the search engine, after all. I am merely trying to maximize my profit by getting one step ahead of my competitors who didn’t invent search engines. Boo-hoo for them, welcome to capitalism.

The more I thought about it, however, the more I realized just exactly why the Senate is going through all this trouble. Google was recently involved in two substantial transactions – the purchase of Motorola and Zagat. Ever since their inception, Google has been steadily acquiring technology and internet based companies (they own YouTube, as well). What I find alarming is that given their dominance over any other search engine, Google can control what the average consumer sees on the internet. Now, coupled with the fact that Google is further expanding into other sectors (Flight and Food Reviews, to name a few), this is quite a scary thought. To the average person, an internet search is merely that – a simple search for information. Now, imagine how many internet searches on Google are run everyday. To Google, each search is becoming an opportunity for profit, not only from advertising (which was their original plan), but now from a wealth of services that the company is quickly acquiring. If you were to think of the internet as a city, you could say that Google is re-directing all roads to their companies alone. Now, that is some pretty powerful stuff. In a sense, they are becoming the Wal-Mart of internet businesses. Like Wal-Mart suffocating small businesses every time it builds one of its esteemed “supercenters”, Google is doing the same to internet businesses every time it enters a new market by purchasing another company.

Video: Google’s Schmidt denies cooking results to favour own products (via the Globe and Mail website)

Perhaps one of the biggest news stories to hit the headlines this past year has been the News Corp. phone hacking scandal. If you dont already know about the metaphorical earthquake that has seemingly struck Rupert Murdoch’s empire, a quick guide can be found here.

As I alluded to in my previous (and much more informal) post, the fallout of the scandal has been humongous. The ethics involved in the case are quite obvious, as breaking the law to get the edge on competition is undoubtedly the most extreme form of unethical behaviour. With News Corp being second only to the BBC as a multinational media corporate giant, the question to ask is how much more did News Corp get away with? Considering the fact that they own some of the world’s biggest newspapers (including News of the World, the tabloid which the scandal is focused on and at the time happened to be the number newspaper in Britain), the incentive undeniably exists to get every edge over competitors, especially in the fast paced world of news.

Did other cases of questionable ethics help News Corp become one of the most powerful companies in the world? And if they did, how does one punish News Corp? Despite the fact that CEO James Murdoch may very well lose his job, News Corp will continue to be a gigantic force in the media world. They are just that big. Its like stabbing an elephant with a toothpick. News Corp the company will continue to thrive. How can that be fair to smaller companies? Or dare I ask, is that just the brutal nature of business in the “real world”?

Link to News Corp’s website: http://www.newscorp.com/

I recommend you check out the press releases.