Between the open of October 30th and close on October 31st on Nasdaq, Facebook’s shares dropped 3%. The decline in adolescent interest on this popular social networking site has resulted in Facebook hoping to gain more members through Snapchat. The Wall Street Journal reported on November 14, 2013 that Facebook offered to buy Snapchat for an absurd amount: $3 Billion. And Snapchat rejected.

According to Om Malik, Google offered Snapchat $4 Billion the next day which CEO of Snapchat, Evan Spiegal, rejected once again. With approximately 26 million users and a vast amount of members flocking from Facebook to Snapchat, it is no wonder why Spiegal declined the offer. Also, Snapcat was established with virtually no assets, but made its way to one of the top apps that big companies are vying for.

So did Evan Spiegal make the right decision? Only time will tell.

Bercovici, Jeff. “Facebook Tried To Buy Snapchat for $3B In Cash. Here’s Why.” Forbes. Web 11 November 2013.

http://www.forbes.com/sites/jeffbercovici/2013/11/13/facebook-wouldve-bought-snapchat-for-3-billion-in-cash-heres-why/

Wismer, David. “Snapchat: How To Make $4 Billion- Or Was It $4 Billion- Disappear. (And Other Quotes of The Week).” Forbes. Web 17 November 2013.

http://www.forbes.com/sites/davidwismer/2013/11/17/snapchat-how-to-make-3-billion-or-was-it-4-billion-disappear-and-other-quotes-of-the-week/

Poverty in America has been a struggle for a long time, exacerbated after the Great Depression with 15% of Americans living below the poverty line of $11,945. The Atlantic’s Matt Bruenig and Elizabeth Stoker brought up an idea to solve this problem in their article, “How to Cut The Poverty Rate In Half (It’s Easy)”. The solution? Give every American $3000.

Hypothetically, if the Government gives every American citizen a cheque for three grand, it could cut poverty in half; however, this project would also cost around $907 billion or 5.6% of the nation’s GDP. This sum is almost equivalent to the government’s current expenditures of $750 billion on low income families and by implementing this idea, the government can also eliminate other costly social welfare programs. This sounds like a simple and potentially successful solution to a very complex problem, but there must be reasons for why it’s highly unlikely to pass congress.

I believe, along with Danny Vinik from Business Insider, that this could decrease the incentive to work for many low income bracket Americans, especially if the money given is wasted. If those in poverty receive the money and decide to rely on the Government instead of work, it could worsen the economy.

Switzerland will be holding a referendum to give each adult $2800; if this vote is successful, Switzerland will be the first country in the world to give its citizens a basic income. Whether it will be applied to the US is still questionable down the road.

Works Cited:

Bruenig, Matt et al. “How to Cut The Poverty Rate In Half (It’s Easy)”. The Atlantic. Web 29 October 2013.

Vinik, Danny. “Everyone’s Talking About This Simple Solution To Ending Poverty By Just Giving People Free Money”. Business Insider. Web 12 November 2013.

In response to Zilue (Sunny) Zheng’s post, “A New Way To Create Healthy Fast Food”, I believe that Fast Food Companies’ doubt in branding their food as healthy, legitimate. Although these companies are being pressured to make their food healthier, the delicious, cheap and simple meals; although it is a healthier alternative, it is removing a major point of parity. This could greatly reduce the amount of customers as healthy food is often associated with a bland taste, according to Zilue Zheng’s blog post.

Also, I believe that making fast food slightly healthier will not attract more customers that value living or eating healthy; health-conscious customers would most likely eat elsewhere rather than a fast-food restaurant with the reputation of producing low quality food trying to promote “low sodium”. In conclusion, I strongly believe that if companies like McDonald’s or A&W try to change their menus or food ingredients to appeal to healthier customers, their sales and profits will eventually decrease.

Recently, Joye Kwon wrote a blog on Mercedes-Benz’s new CLA Sedan. This car will cost just from $31,000 which is targeted towards the middle-class populace to increase sales. According to Joye, this is an insufficient marketing strategy because Mercedes-Benz “is a brand of exclusivity” and this new release will only “diminish the company’s luxury image”. However, I believe that although Joye made a reasonable point, the CLA Sedan is potentially a good strategic move for the future of Mercedes-Benz. The lower cost will broaden the brand’s target audience, resulting in an increase in price and profit. The main issue brought up of the diminishing luxury image which is a point of difference for Mercedes Benz, can be counteracted. The company can still maintain its high-end reputation without having to be completely exclusive; they already released smart cars, Smart For Two, costing around $25,000 and the brand is still associated with class. They can sell a variety of cars, including the expensive AMG models and the more affordable CLA Sedan, to a wider range of customers. Also, Mercedes-Benz can still soldify their reputation among the car-buying populace by maintaining their quality and design (valued points of differences by customers) in the new cars. For example, car company Toyota, has a luxury car devision called Lexus for a specific range of customers. I believe that Mercedes-Benz can follow suit without damaging their reputation and that the CLA Sedan will benefit the company in both sales and reputation among middle-class buyers. 

Recent articles published called “Ask The Headhunter” by Nick Corcodilos (PBS) and “Has LinkedIn Crossed an Ethical Line” by Nancy Collamer (Forbes) has commented on the ethics of LinkedIn. The main issue that both articles point out is the fact that LinkedIn has transitioned from a free service to one that’s charging an optional fee ranging from $20 to $50 per month for job seekers that want a “featured applicant” posting , despite actual employee qualifications.

This option leads to skewed information for employers who are looking for potential employees that suit their company, not just a LinkedIn member who paid to get priority.

According to the SWOT, this could both be a strength and weakness to LinkedIn; although it is increasing the company’s revenue (strength), LinkedIn is also faced with ethical problems and a less reliable reputation (weakness). However, there aren’t many solutions to this issue as well. As a job board, the company has to charge its members some sort of fee in order to profit and keep the website running, unless it was to have more advertisements or receive donations (opportunity).

Citation:

Collamer, Nancy. Has LinkedIn Crossed An Ethical Line? Forbes. Web 3 September 2013

http://www.forbes.com/sites/nextavenue/2013/09/03/has-linkedin-crossed-an-ethical-line/

Corcodilos, Nick. Ask The Headhunter: Is LinkedIn Cheating Employees and Job Seekers Alike? PBS Web 13 August 2013.

Twitter has filed for it’s IPO and despite the fact that its document lacks information on its main source of revenue, advertisements, many predict that it will still do better than Facebook’s IPO last year with a multi-billion dollar valuation. According to one news article, the author believes that it could be a competitive advantage to not include information on its advertisements; however, it is still crucial for investors to know, even if twitter is growing in terms of members.

The prediction that Twitter will do better than Facebook comes from the fact that Twitter went public sooner than Facebook, preventing hype and an inflation in the valuation. Also, the underwriter for the Twitter IPO, unlike that of Facebook, is Goldman Sachs, not Morgan Stanley (which has led many failed tech companies).

Taking in these points, I believe that Twitter will do better than Facebook for its IPO if its revenue from advertisements is growing and there isn’t a pre-hype that causes a fiasco when stock prices drop.

Citation:

Vardi, Nathan. Why Twitter’s IPO Won’t Be Like Facebook’s IPO. Forbes. Web, 13 September 2013.

http://www.forbes.com/sites/nathanvardi/2013/09/13/why-twitters-ipo-wont-be-like-facebooks-ipo/

Berman, Dennis K. The Big Hole in Twitter’s IPO Filing. The Wall Street Journal. Web, 10 October, 2013.

http://online.wsj.com/news/articles/SB10001424052702304500404579126950604701622

As the world’s second largest economy, China’s crude oil imports rose to 25.61 million metric tons, surpassing those of U.S., according to the General Administration of Customs. However, communist leaders believe that it is a weakness to be relying heavily on Saudi Arabia and Iran for imports for political reasons. There are also environmental ramification with the result of increase in oil imports for cars, factories, etc; cities are with pollution and smog.

Oil imports into China have risen “as a result of expansion in the economy and its growing demand for resources,” customs spokesman Zheng Yuesheng said at a briefing in Beijing today.

China is also the top world’s top buyer of commodities like copper, iron ore, soybeans and  coal. As a result of economic growth, auto-ownership has increased (Sales of vehicles rose 11%), thus leading to a high demand of oil imports.

Citation:

n.p. Bloomberg News. China’s Crude Oil Imports Increase to Record as Economy Expands. Web 12 October 2013. 

http://www.businessweek.com/news/2013-10-12/china-s-crude-oil-imports-increase-to-record-as-economy-expands

Tan, Florence. Aizhu, Chen. Update 1- China to ramp up overseas M&A as it overtakes U.S. as top crude importer. Web 11 October 2013.

http://in.reuters.com/article/2013/10/11/china-oil-idINL4N0I12UZ20131011

McDonald, Joe. China passes U.S. as world’s biggest oil importer. Web 10 October 2013.

http://www.huffingtonpost.com/2013/10/10/china-passes-us-oil-imports_n_4076857.html

According to research firm, Gartner, PC shipments has fallen 6 shipments in a row, down 8.6% September one year ago. Mikako Kitagawa, principle analyst in Gartner, believes that this could be due to the growing popularity and affordability of tablets.

“A greater availability of inexpensive Android tablets attracted first-time consumers in emerging markets, and as supplementary devices in mature markets.”

Although PC’s PoD includes its affordability and compatibility, like the statement made by Kitagawa, tablets also provide these characteristics as well as the fact that they’re even more convenient than PC’s. When faced with the decision between tablets and PC’s, by comparing the advantages each device provides, consumers will be more attracted by the tablets, hence causing the decline of PC’s.

I also believe that the growing competition in the technology industry is also causing the decline of demand for PC’s. Products like the MacBook Air, Macbook Pro, iMac, iPad from Apple are also drawing the attention of consumers away from PC’s. Though expensive, Apple PoD (quality, branding, unique software, user-friendly) are in sharp contrast to PC’s, leading to consumers trading in their PC’s for Apple products.

Citation:

n.p. Global PC Shipments Drop to a Five-Year Low. BBC News. Web 9 October 2013

http://www.bbc.co.uk/news/business-24470639

When Apple’s new iPhones, iPhone 5c and iPhone5s, became on sale for customers on September 20th, they became 2 of the top 3 smartphones for four different carriers (AT&T, Verizon, Sprint and T-Mobile). However, despite the 9 million shipments being made, there were still doubts on the success of sales of these iPhones due to the large price cuts made by both Best Buy ($50 discount) and WalMart ($45 discount).

Although the price cuts are associated with the need to get rid of inventory for the lack of sales, there could also be a positive explanation for large discounts. It could be that they’re  trading “some of their profit margins in exchange for a higher share of sales for a hot new product.” (All Things D’s Ina Fred).

The discount could be an incentive for customers to buy more of the products and sign up for the phone plans, becoming a regular customer.

Citation:

Sparks, Daniel. “Apple’s iPhone 5c sales may be faring well after all”. 8 October, 2013. http://www.fool.com/investing/general/2013/10/08/apples-iphone-5c-sales-may-be-faring-well-after-al.aspx

Cenovus Energy, a Canadian oil company, has recently announced that military veterans will have priority in the hiring of new employees. Through the government veterans’ transition plan, this program at Cenovus will provide opportunities to many of those who served the country and is now adjusting to civilian life. Toronto’s Hospital for Sick Children also joined the program.

Not only is this a selfless act for the company, the availability of prospective jobs will probably lower unemployment rate for the veterans transitioning from military life. By doing so, Cenovus has shown good business ethics by wanting to assist former military persons which gives the company a good reputation. However, it is not known whether or not this also applies to injured veterans. There has been increasing support for this new program while Cenovus is the first to take initiative.

The company will also be able to utilize the leadership, discipline and communication skills instilled in those formerly trained by the military.

Senior vice-president, Jacqui McGillivray, said, “We’ve been actively working with the Canadian military on opportunities to hire because the quality of individuals from the Canadian Armed Forces is exceptional”.

This is an ethical decision made by the company that will benefit both itself and the society.

Citation:

Bill Graveland, The Canadian Press. “Cenovus Energy to give military veterans priority when hiring” (Wednesday, Sep. 11 2013). http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/cenovus-energy-to-give-military-veterans-priority-when-hiring/article14260694/