Monthly Archives: October 2014

Electric cars or Gasoline cars?

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With the advanced technology, Tesla informs people that having a fully-electric sports car is no longer a dream. They differ their product from Nissan’s as they provide comfortable, high-performance and comfortable experience with their model S. However, people argue if Tesla a disruptive innovation, or not. Would it affect the sales of gasoline cars?

Michael Kanellos compare these two types of cars in a lot of aspects. First, we could look at the fuel price. Providing for an electric car requires a lower cost than a gasoline car. Although some people would say that in some countries (i.e., Germany and Australia) the electricity price is high, the fuel price is still way higher than the electricity. Second one would be the fuel efficiency. Electric car has a dominant lead in this area. Lastly, we could look at the range. No doubt, gasoline car wins in this game.

Although the above evidences are just part of the analysis, we can see that electric car has a competitive advantage in this competition. But, is Tesla a disruptive innovation? I would say no. Although it dominates in the competition to gasoline cars, it is still a new concept to people. Furthermore, the magnates in the automobile industry are still gasoline cars. They can offer a variety of vehicles whereas Tesla can only provide their only model–model S.

Air Canada’s New Move

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CBCNEWS has reported that Air Canada decides to add $25 checked bag fee for passengers who fly within Canada, also those flying to and from the U.S., Caribbean and Mexico. The fee only applies to passengers who chose the lowest-fee ticket option. This change wouldn’t affect anyone who holds an Air Canada membership, military personnel or anyone booking with Air Canada Vacations. When Air Canada’s CFO was asked why they made such decision, he explained, “It’s what the market is bearing at this point in time.”

If looking at this move in the view of an accountant, this decision could benefit Air Canada. I think there might be an increase in the company’s revenue. But, considering “it’s what the market is” Air Canada might not find an increase in their profit. On the other hand, if looking at this action in the perspective of a marketing person, there would be an adverse effect on Air Canada. Recently, an American airline called Southwest Airline is trying to enter the Canadian Market. They are offering cheap price and high-quality service, which is attractive to people. As the service both companies provide is at the pretty much same level, people would choose Southwest Airline over Air Canada, because of the price difference. In my opinion, Air Canada’s decision of adding checked bag fee would put the airline in a disadvantageous position. Since there’s another better offer waiting for them at Southwest Airline, Air Canada might face a decrease in their demand.

First nation partner issues

have been a major external factor impacting Canadian organizations’ business model. The federal government has been in charged of aboriginal affairs since Canada was founded 1867. Canada has published couple acts to take control of most aspects of aboriginal life. For example, as it was mentioned in a CBC report that Canada published Indian Act in 1876. As an outcome, the Indians express an ambivalent emotion the Indian Act; “They denounce its paternalism, but are at the same time reluctant to give up its protections.”

As Prime Minister Stephen Harper made a formal apology in 2008 to Canada’s Aboriginal Peoples on the behave of Canada’s policies. The politicians’ attitude towards the first nations has changed. The changes that they have made have an impact on Canadian organizations’ business model. For example, on September 14th of 2014, B.C. Premier urges cooperation, and she hopes that there would be less litigation in the future.

The suggestion of having interaction between the natives and the “Canadians” would affect the business environment, customer demographics, cultural limitations, and the lifestyle attitude. Indeed, the first nations have relatively different taste towards goods and culture. I think these organizations should plan some strategies to fit the new market. In my opinion, they may need to adjust their products or services to meet the new needs of the market; study the characteristics of the new market, and adapt themselves. The change of the business environment and new demands could be an excellent opportunity for the organizations to expand or improve themselves.

Umbrella Revolution

“Umbrella Revolution” has been the hottest topic for all sorts of magazines and newspaper. The protest started in the late September. It started because the Chinese government said that they are going to approve the candidate who can run for the upcoming election in 2017. People started protesting, and as time passes along, the protesting transferred into some sort of revolution. This revolution is all about if Hong Kong could stay as “Hong Kong”, or it’s just going to become like other provinces in China mainland.

Hong Kong has always been referred to a financially successful city. It has developed its own legal system and economic system, when it was under the lead of the British. When it was given back to China, it kept its own systems. As it was mentioned in Vivian Lam‘s blog, the revolution may damage Hong Kong’s current reputation in the financial world. Certainly, The Umbrella Revolution is going to have a huge economic impact on China, because the investors would consider of the higher risk of putting money into Hong Kong’s market

However, we could look at this revolution from a different perspective. As the revolution slows down China’s economic growth, US’s economic growth is accelerating. The difference between two is a “positive net global impact”. That means it is a good thing for global economic growth.