Month: November 2011

I recently came across a very interesting post by fellow Sauder blogger Kashmir on the mystery of increasing tuition fees. As poor stduents who can barely scrape enough together to make ends meet, undergraduates definitely do not like to see continuous increases in tuition on a yearly basis. However, this is precisely what is happening all over the nation. As Kash mentioned in her post, average undergrad tuition fees increased from $4, 942 to $5, 138 in 2011. Commerce students face the biggest increases, even here at UBC.

What explains this general upward trend in tuition fees is the ever-increasing demand for higher education. Faced with high demand from both domestic and international students, universities have the ability to admit and reject according to their own standards. This increased selectivity can be seen in the higher admission averages each year. However, such a trend also provides universities with massive supplier power.  After all, alternatives to a university education seem less and less favourable in the consumer (student’s) eyes.

Kash mentioned a very interesting idea on universities offering a “differentiated product”, thus providing them with more supplier power. I believe this definitely has to do with the ability of some prestigious universities to conveniently “bump up” their tuition, because they are able to offer unique eductional methods and good learning fascilities that students will not be able to obtain elsewhere. Moreover, parents and students are also significantly affected by each university’s “brand image”. The university of Toronto, for example, is able to charge significantly higher tuition than its counterparts in the Maritimes provinces because of its reputation as “Canada’s best university.”

Education, unfornately, is an inelastic good. With rising trend in demand, bargaining power of educational institutions will continue to go up. Students as individual consumers have little they can say about the increase in prices, unless they opt to drop out altogether and face lower wages. The only way to solve this problem is to set a cap on how much universities can charge students for an undergraduate degree, thus resulting in more students with the ability to live economically sufficient lives.

Photo credit: http://www.theglobalcity.org/wp3/?page_id=288

Credit:
https://blogs.ubc.ca/kashkaur99/2011/10/14/the-mystery-of-increasing-tuition-fees-is-it-supplier-power/#comment-7  (Kashmir’s post)
http://www.statcan.gc.ca/daily-quotidien/100916/dq100916a-eng.htm (Statistics Canada’s information about recent tuition fees)

On the topic of successful entrepreneurship, much can be said of Facebook, Windows, and Apple. However, there is a start-up company just as innovative and refreshing as its technology-dominant counterparts: Northland Power Inc. Founded in 1987 by James Temerty, the company redefined a brand new venture within the Cnadian market: that of independently producing electrical power.

During the 1980s, few were thinking far ahead enough about environmental sustainability and conservative innovation. However, Tmerty was ahead of the game when he began his successful venture. Temerty began by using recycled wood residue from nearby sawmills as fuel for production. He at first only produced from a 10-megawatt power plant in northern Ontario. Today, the company has grown into a large electricity provider for communities in Ontario, Quebec, and Saskaetchwan. By using environmentally-friendly green biomass-fuelled power (as opposed to fossil fuels), the plant produces more than 815 megawatts of electricity for power consumers. Temerty says that he plans to expand into other parts of Canada as well as the United States in the near future.

Northland Power Inc. is a successful entrepreneuring venture not only because it was able to become profitable, but also because it exemplified a level of forward thinking and innovation that was ahead of its time. It is due to this fact that the company was able to obtain a leadership position in the clean-electricity industry in Canada, and capitilize on a simple, sustainalbe idea.

Picture source: http://intuitech.biz/?p=1434
Source: http://www.ey.com/CA/en/About-us/Entrepreneur-Of-The-Year/Awards-and-events/2010-winner-profile—Temerty

When many people think of successful social entrepreneurship ventures, catering is rarely the first thing that comes to mind. Catering is a difficult business, and since 2008’s financial crisis, it has also become a shrinking business.

It is surprising, therefore, that many of Canada’s charity social services agencies run successful catering services. Vancouver’s own Potluck Cafe and Catering is one such example. This not-for-profit organization is projecting a $1-million sales in catering in 2011.

One of the main aims of catering not-for-profit organizations is the reincorporation of people back into society through training. In Potluck’s case, 30-40% of staff are trainees who suffer from mental issues, housing insecurity, and addiction recovery. However, this aim also acts as an anchor that weighs down the business’s competitive edge, as it brings an image of lack of professionalism and premium quality to its services.

“We can’t mess around–we’re trying to make money back for our community. It’s not a charitable thing.” Said The Stop’s executive director Nick Saul to Globe and Mail. This sums up the basic sentiment of the organizers of chartible catering. Programs within the organization are run by professionals within their field, all seeking to earn as much money as possible for the organization.

What essentially makes The Stop successful is its ability to offer its customers a unique point of difference while still offering top-notch quality services. The catering program, run by top-shelf chef Chris Brown, first started gaining momentum when Brown decided to cook fundraising dinners to support the program. Corporate donors and potential customers were satisfied with the services but also were keen on exemplifying corporate social responsibility. Many organizations that have hired The Stop also signed on as donars.  While essentially paying for the same services, organizations can now enjoy the positive image of supporting local charities and giving back to communities.

I agree with The Stop’s executive director in that a successful social entrepreneurship is not simply a “charitble thing” with good intentions to do well for the community. Rather, it needs the the successful infrastructure, innovation, and marketing in order to thrive in a competitive market, just like any other entrepreneuring endeavour.

Photo Credit: http://www.yummylocal.com/news/the-stop-community-is-growing/
Credit: The Globe and Mail; Charity, one canape at a time (Chris Nuttal-Smith); Wednesday, November 16, 2011

Recent actions by influential mining companies show that investing towards environment protection can be economically sustainable and profitable.

Within the mining industry, energy consumption takes up almost 25% of production costs. Companies such as Barrick Gold Crop. and Rio Tinto PLC are investing significant amounts of money in building reneweble energy infrastructures. Barrick Gold Corp, for example, has recently initiated its $70 million wind farm project in Chile. The company’s vice president exemplifies the sentiment that this is one of many renewable energy projects that will be taken on in the future. Other mining companies are following suit.  Their collective actions show that renewable energy is more economically sustainable in the long term than traditional forms of energy.

These companies are taking the initiative to make long-term investments beneficial to the environment, even ahead of government policies, which have yet to find ways to regulate the industry through carbon taxes and credits. I think that the “green revolution” that many industries will go through in the future will come only partly from government pressures. More importantly, it will come from pressures within the market for innovation and retaining a competitive advantage. For example, in Diavik Diamond Mines Inc.’s case, investment in a $30 million wind farm is projected to save about $5 million each year in diesel costs. No matter if the decisions are driven purely by economics or not, this turn towards sustainability is reassuring.

Photo credit: http://www.outback-australia-travel-secrets.com/finding-jobs-in-the-mining-industry.html
Credit: The Globe and Mail, Miners turn to renewable energy to cut costs (Brenda Bouw), Wednesday November 16, 2011