YiRun (Ryan) LI Blog: THINK-ing GREEN-back

Think Different

Apple Inc., 1997, after three years of record low stock prices and financial losses, on the merge of bankruptcy and inefficiency, Steve Jobs was invited, after being fired years ago, to be CEO again. At this point Apple and Jobs started its entrepreneurial venture. The company, led by Jobs, exhibits many common characteristics, based on Joseph Schumpeter’s definition, of entrepreneurship. Apple was able to introduce new revolutionary products that changed the way how people phone, listen to music, and compute on a mobile and personal level. The IPhone was so much smarter than other smart phones of the time (ex. IPhone’s music and internet browsing functions). IPads and IPhones opened vast new markets for tablet and mobile computing along with a new market of device cover-skin production (ex. Companies are dedicated in making covers and skins for apple products). Apple reformed with the slogan Think Different, partly to challenge Big-Blue’s ThinkPad. Apple aimed to be different and to pioneer in new products and technologies. It put on large amounts of risks in doing so but was able to generate a huge amount of growth and wealth with its new products in a relatively short time frame.

Image 1: Canada shows net loss in tech transfer payments in 2009

After reading: Barrie McKenna, “Canadians are an inventive
lot, but seem to have trouble making it pay”, Globe and Mail, October, 3, 2011, News.

Registered patents can be a very rewarding thing. Patents, in accounting, are even considered a company asset. Usually leading companies can hold the patents they have in a specific field and make money selling or leasing them, or as a way to keep the, from Porter five forces, barrier of entry high. But it has not been the case for Canadians. Canadians are great inventors and has created many technology break through registering many patents in key technological fields, yet there is a net in tech [patents] transfer in 2009 (Image 1). Basically Canadians are not making money with patents that are important to pioneering developments such as canola oil. This show just by having the know-how is not enough. One must not only have the assets [patents] but also need good strategies and tactics in order to put the assets into good use and turn it into money.

-After reading: Barrie McKenna, “Ottawa urged to build bridges
with china”, Globe and Mail, October,
19, 2011, Report on Business.

Canadian business leaders are urging Ottawa to diversify the Canadian economy and build more bridges with the Asian market for two reasons. One, diversifying lowers risk. Canadian companies rely a lot upon exports to the United States, if something bad happens in the states Canada will be effect dramatically and quickly due to the Canadian economy’s non-diversified reliance on US. Plus the USA economy is already not doing very well, Ben Bernanke’s QEs has showed little boost in US economy. Two, Asian markets are growing very fast. Not only will Canada decrease its risk but also may gain more profit by building more ties with the emerging Chinese market, for example. At this current time when the US economy is not very prominent, and some Asian markets really rising fast it seems right, it not already too late, to build more ties with Asia. Not only will Canada diversify its economy, lowering its risks, but also see more opportunities to gain more developments and profits.

Olympus Corp. president Shuichi Takayama at a news conference in Tokyo on Nov. 8, 2011.

Financial accounting produces series of detailed financial and economic information of a company. Reports created by financial accounting are used by investors to judge the profitability of a company and thus effect a company’s financing abilities, such as stock price and loans. Or they can be used by managers for strategic decision makings purposes. Olympus Corporation, an optics company of Japan, tried, for decades, to use accounting loop holes and creating special accounts to hide its losses that would otherwise be reflected on financial statements, which would have affected the company’s stock prices and financing powers. Olympus Corp. admitted in early November 2011 that it has been using methods to cover up its investment losses, meaning to keep them off their balance sheets so investors cannot see. This has caused Olympus’s share price to fall and other legal issues. Companies has to be more transparent in their actions for “sunlight is said to be the best of disinfectants; electric light the most efficient policeman” (Brandeis 1933, 62). The public (sunlight) and the media (electric light) and the best watch dogs to ensure companies do not walk away with financial schemes.

DEC's Minicomputer

Digital Equipment Corporation was an American computer
company holding lots of early computing patents during the 1950s to 1990s. DEC  was leader in embedded systems and business minicomputers, dedicated big machines that control processes. DEC grow rapidly as there were few competitors during its years, but later on as personal multitasking computers emerged with  IBM, Apple, and Microsoft, DEC failed to identify itself in that market and lead to its doors closing. DEC entered the personal computers industry, repositioning itself from business minicomputer to pc, making three big mistakes thus become defunct. DEC tried to be too different, ignored frames of references, and was, simply, too late. DEC focused on points of differentiation too much when knowing difference is not enough to compete; it rejected to use IBM standards and thus had low compatibility. DEC’s systems were very powerful indeed, but failed to acknowledge on reference brand such as IBM’s systems which was not be as powerful but was way easier to use and more compatible. Lastly DEC was simply too late, with Big Blue (IBM) already setting up the market trend DEC had little place to innovate but to follow. Failed positioning lead to DEC’s grave consequences.

http://mises.org/daily/5618

http://mises.org/daily/5618

AT&T Inc. American owned multi-national, mobile, and fixed telephone communication company in United States tried to buy off T-Mobile’s, a German based mobile service provider, US branch. AT&T’s attempt to buy the US branch of T-Mobile was stopped by the US Government in late August 2011. Although US have a free market economy but the government still reserves the right to intervene and block merges if necessary. The US government argued that the merger will clear out a very big competitive force for AT&T in USA, because T-Mobile is a big low-priced mobile service provider and competitor of AT&T, representing the anti-trust law. Without T-Mobile’s competition AT&T, lacking competitors, will have more freedom to raise prices and have less incentives to keep low competitive prices. Linking to the vodka problem studied in class, the government is trying to interfere with the free-market to insure its freeness, competition, and order yet too much federal interventions of a free-market would create unfairness and disrupted natural patterns. It is better for the market itself to maintain itself and sort its problems; after all free-market’s invisible hand is deemed the most efficient.

The News Corporation is a conglomerate media company that owns many popular shows, channels, and newspapers in the world. Founded by Rupert Murdoch, and led by Murdoch, News Corp. has become a multinational media mogul.

Recently, in July 2011, the News Corp has been exposed to phone-hacking scandals, and other unethical behaviors regarding on its ways of seeking for news and information.

It turned out the newspaper, News of the World (owned by News Corp), had used phone hacking techniques to achieve firsthand information about important people and events. Cases of long term illegal hacking of the royals, PM, and families of kidnaping victims’ telephone lines. There have also been reported cases of police bribery by News Corp to achieve first hand terrorist attack information.

The main ethical issue is that Murdoch tried to achieve his goals without considering social responsibilities of his corporation, government laws, and failed to respect people’s rights as in illegally listening to private phone conversations. Although Murdoch did become the media mogul but in the end he’s News of the World had to close down, other
buy off deals had to be terminated and faced court charges.