The success of Bitcoin has certainly been a disruptive innovation in field of finance; however, many investors who were initially hesitant has begun investing in this unique digital currency. Bitcoin is a digital currency that can be earned by solving complex mathematical problems using computers, with its main feature being that the currency is decentralized, meaning that the production and transfer of Bitcoins are not controlled by any government. Additionally, unlike the Canadian currency which can be printed by the government, there is a finite amount of Bitcoins that can be discovered.

Retrieved from: http://business.financialpost.com/investing/how-hedge-funds-are-driving-the-bitcoin-rally

Raszl’s blog provides a concise overview of Bitcoin’s benefits and risks. Advantages of Bitcoins he noted included the absence of transaction fees and low potential inflation due the limited and finite number of Bitcoins. As both a pro and a con, the Bitcoin provides high anonymity, as trader’s identities are anonymous and transactions are difficult to track. Although this secures private transactions, it also provides a new mean for illegal activities. While providing many thoughtful points, some of Raszl’s suggestions could be expanded upon. He suggested that being easy to carry is an advantage of Bitcoin. However, debit cards and various digital banking systems are also easily carried. By introducing a point difference of Bitcoin, its anonymity and decentralized nature, Raszl could further his point by suggesting that Bitcoin is not only a currency that can be carried easily but also one that provides anonymity, in contrast to digital banking systems which require verified identities and are monitored.

Despite the chief executive of JPMorgan Chase, Jamie Dimon, calling Bitcoin a fraud, many large institutional investors, mainly composed of hedge funds are beginning to capitalize on cryptal currencies. This influx of large investors will bring even more volatility, as each hedge funds will control a large proportion of the market and the exiting of a few large investors could cause significant price drops and a lack in confidence in cryptal currencies from individual investors.

Ultimately, although Bitcoin is seeing greater recognition in the financial world, it is still a high-risk investment. The lack of government control and the heavy influence hedge funds hold over the currency allows for significant volatility. Additionally, unlike regular currencies which is monitored by fiscal policies and back by authorities, Bitcoin illustrates questionable long-term growth as it’s not protected by any government and is largely based on a consensus of its value. Moreover, as previously mentioned, the anonymity of Bit coin is promoting black market interactions, which will likely eventually lead governments to intervene. Therefore, while not an ideal long-term investment, in the short-run Bitcoin has illustrated exceptional growth and riding with hedge funds on the current spikes may yield handsome profits.

Bitcoin to USD exchange rate chart. Retrieved, 8 Nov. 2017, from: http://markets.businessinsider.com/currencies/btc-usd

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While celebrating its 20^th anniversary, Canadian burger chain Triple O’s announced its plans of further expansion in Asia, including the opening of 4 additional outlets in Hong Kong. Since its arrival in Hong Kong 2004, Triple O’s has already opened 6 shops and these shops demonstrated notable growth and revenue. Triple O’s franchisee Cynthia Suen initial decision of expanding into Hong Kong was prompted by the large numbers of Hong Kong residents that traveled to, or stayed in Vancouver since the 1980s. The high revenue reports from Hong Kong outlets has proven Suen’s decision to be profitable. In fact, Triple O’s president Warren Erhart stated that “Asia has some of our top locations. Our restaurants in Pacific Place and Shatin do more sales on a per-unit basis than any of our stores in British Columbia”.

Retrieved from: https://www.miss604.com/2012/12/triple-os-giant-burger-giveaway.html

However, an increasing number of burger chains with a value proposition similar to that of Triple O’s – an emphasis on ‘quality burgers’, are beginning to expand into Asia, increasing the competition Triple O’s will face. Shake Shack has announced its plans to open its first Hong Kong outlet in 2018 and complete a total of 14 outlets by 2027. Although Triple O’s have the advantage of high brand recognition in Hong Kong, the entry of companies like Shake Shack will bring threats to Triple O’s by providing more substitutes.

Retrieved from: http://blog.bpir.com/latest-news/collaborate-to-grow-the-pie/

Foreign markets in many cases are similar to a big pie, and with more players the difficulty of securing a large piece will become increasing difficult. Preksha Singhvee’s blog on international business provides insight into this issue by suggesting how additional market research may be required to understand the new set of consumers with somewhat different values and experiences. Additionally, Singhvee’s blog noted that international expansion often involved the redesigning of good or services, which aimed to target this new consumer segment with different culture and taste preferences. This strategy is used by many burger chains including Shake Shack, who plans to increase the variety of chicken products offered in their Hong Kong outlets. In contrast, Triple O’s did not, and does not plan to adjust its menu or flavours to fit the preferences of the Hong Kong market. Although Triple O’s has seen significant success in its Hong Kong outlets, with increasing competition, it may need to reconsider its points of different to stand out from the variety of burger chains.

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Less than a week ago, the 2017 Nobel prize in economics was awarded to Richard Thaler for his contributions to the field of behaviour economics, more specifically for the development of the ‘nudge’ theory. The field of behaviour economics focuses on the prime assumption of traditional economics – that humans always make rational decisions and proposes the contradictory, that people make irrational decisions all the time. Thaler’s nudge theory suggested the idea that small incentives, such as tweaking the working of tax demands can influence people’s response. Applications of the theory can be seen in how by changing the wording of tax reminder letters could lead to increases in HMRC takings in Britain. Notably, Thaler previously commented on how Brexit illustrates how British voters went for an economically irrational choice due to incentives from elites and the mainstream media.

Retrieved from: https://voiceofpeopletoday.com/richard-thaler-wins-2017-nobel-economics-prize/

As a blend of economics and psychology, behaviour economics provides insights that could be applied to marketing strategies. Loss aversion is the mentality where consumers are more willing to avoid loss than pursue gains. Gift with purchase is a strategy that utilizes loss aversion, as consumers will be more willing to avoid the loss of a free gift than to gain the savings brought by discounts. While insights gained from behaviour economics doesn’t necessarily help a brand build its value proposition or reputation, it can help some brands win the active consideration stage of the consumer decision journey. Ultimately, by utilizing the insights from behaviour economics, the effectiveness of marketing strategies could be augmented.

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As one of the leading figures of the toys industry since the late 20^th century, the news of Toys ‘R’ Us filing bankruptcy to both the U.S. and Canadian government came as a surprise to many individuals. However, unlike Future Shop’s abrupt closure 2 years ago, Toys ‘R’ Us has announced that the vast majority of their stores will continue to function normally and that this filing is a proactive step to restructure its $5 Billion debt, generating more financial flexibility for investments and to ensure its inventory for the holiday season. Considering from a financial accountant’s perspective, the massive long-term debt on the balance sheet not only may repel potential investors but also bring a notable interest that may limit the company’s cash flow. However, with the newly obtained 200 million USD term loan and 300-million USD revolving credit facility provided by a group of investors led by JPMorgan Chase Bank, Toys ‘R’ Us Canada seems to be in an unfavourable, but maneuverable position. Analysts such as Seung Hwan Lee, a professor from Ryerson University has suggested that Toys ‘R’ Us’ old fashioned way of sales, or the ‘channels’ building block of the canvas model‘, is the main factor of the company’s decline. With the development of online sales, Amazon has taken an increasing significant role in the toys market, providing lower prices and more convenience in both browsing and receiving toys. On the other hand, retail stores such as Walmart has also brought a threat to Toys ‘R’ Us with their lower prices and convenience as parents can grocery shop while their child shop for toys. As suggested, Toys ‘R’ Us may need to improve its ways of communication, distribution, and sales. A possible model Toys ‘R’ Us may wish to consider is creating more interactive shops that provides toys and play areas to increase customer satisfaction and create an advantage over online shopping where one cannot physically experience the toys. Interestingly, despite criticize from analysts Toys ‘R’ Us’ Canadian subsidiary said in court documents that it is “performing well financially, with net earnings doubling and sales revenues increasing at a compounded annual rate of 5 per cent over the last three years”. Personally, I found that Toy ‘R’ Us did a fine job with keeping up with the increase in the demand of digital goods, as their shops provided various video games and game console for test play. Nonetheless, to recover its dominance in the toy industry it will need to use its new loans effectively to restructure its channels of communication, distribution, and sales.

Retrieved from https://www.todaysparent.com/wp-content/uploads/2017/09/toys-r-us-declares-bankruptcy-when-should-i-use-my-gift-cards-1280×960-1024×576-1505911862.jpg

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With the release of the Apple keynote and the announcement of new iPhones today, professor Jonathan Sterne’s article “Your new iPhone will soon be trash, and that’s the point” provide profound insights to Apple’s business models. In the article, Sterne suggests that Apple updates the iPhone line with a fresh look annually to make its customer think that their older iPhones are out of date. The elimination of headphones jacks on the iPhone 7 and Apple no longer supporting older models are both examples of Apple luring its consumers to purchase their new products. Anecdotally, I found that older models of the iPhone runs smoothly on an older iOS, but lags significantly on a newer iOS. This design perhaps aims to take advantage of the more power new chips while promoting the users of old iPhones to buy newer models. Notably, the article claims that Apple stated that “their ideal lifespan for an iPhone is about three years”, and has gone as far as stating that “The company that designed your new gadget already imagines it as future trash.” Considering that the price of the new iPhone X ranges from $1,319 to $1,529 CAD, this marketing strategy that aims reduces the lifespan of these expensive gadgets raises an issue of business ethics. In fact, this business strategy contradicts Edward Freeman’s stakeholder theory, which suggests that managers should aim to benefit all stakeholders, rather than maximize shareholder wealth. Noting Freeman’s comment on how all stakeholders should have a common interest in order to make “capitalism tick”, and I perceive this marketing strategy of Apple as a portion of the stakeholders trying to lure the customers into sharing a common interest. While this strategy does not break the law or cause fraud, it is targeted towards benefiting the company and its shareholders at the cost of its customers. In this sense, the company’s managers has failed to achieve their social responsibility, especially noting that the production and disposal of iPhones are both economically and environmentally costly. Ultimately, while from a financial perspective this strategy may be beneficial, the ethical concerns of unnoticeably influencing consumer decisions is fairly significant.

Retrieved from: https://www.apple.com/es/support/products/iphone.html

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