Monthly Archives: October 2014

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Dell announced to bow out of stock market in 29th Oct. 2013 with $24.4 billion buyout. After one year, without spending on shares,Dell’s cash flow increased from 30 to 50 hundred million dollar expected in January . 2015,which enables to reduce liability from 180 to 150 hundred million. This allows Dell’s market value increases which shows the success of this decision .

I agree with this act due to following analysis of Dell’s circumstances. Initially,Dell wants to take a qualitative change including service type.which was not supported by shareholders. The Macro economics in America allows little profit for PC industry, this increases rivalry and threat of substitutes. Unlike Apply also selling phones, Dell has weakness that the key activity is solely producing PC .In addition, the rapid growth of T from PEST and threat from tablets rivals causes the sales of Dell declines in past 3 years. This situation put the change into high importance-emergency level which forces Dell to bow out of stock market. However, in the initial phrases it continues cost leadership strategy but” gross profit decreases by 72%”.In my opinion, This is still accessible as Microsoft offered 20 hundred million dollar loan with 11% investment turnover rate. This inspires me to think that since PC is a industry faced with high macro technology advance, the PC companies should use its diverse strength to meet the opportunity of cooperating with other firms ,which they can identify customers’ need clearly and enhance CSV by building supportive industry clusters with shared communication about technology. “If a company has software, for example, but doesn’t understand how to get it to market, or how to market it to a niche of potential customers, we’ll hook them up with someone who can help them do it” said by Mr. Mullen . The success of Dell’s start-up program with Fouders club50 also verify my idea.

reference:
http://boss.blogs.nytimes.com/2014/07/03/dell-expands-a-program-for-tech-start-ups/?_r=0

Alibaba enducted IPO in 19th December in America, and its stock value is about 34 billion dollar.This demonstrates the huge success for Alibaba and for the E-commerce industry as well. The invent of E-commerce is the excellent use of disruptive innovation. It applies the high technology of internet and allows people to shop online which can be regarded as customers’ pain reliever, as it brings numerous convenience to customers.
The emerge of E-commerce is main drive force for Alibaba to stand out in market by the cost leadership strategy. The retailers on Alibaba can sell at low price due to the availability of its low cost and following three mesures.The first is It directly sells products online and reduce retailers’ fixed cost about using a non-virtual stores. The second is Alibaba doesn’t have any inventory.Based on the inventory turnover ratio(=costs of goods sold/inventory),the higher the results,the faster cash flow can be turned over .Without inventory, producers can be more flexible to give expense in the purchasing and selling(operating) activity,which decrease the risk of shutting down.Since inventory is current asset ,Alibaba also allows retailers to reduce liquidity ratio(CA/CL) to ensure high ability of paying off debt.Lastly , alibaba ’s delivery channel is through mailing which is cheaper than traditional company’s delivery department. By using E-commerce, alibaba can also have opportunity about cooperating with online banking like Paypal and other companies through the wide-spread internet.E-commerce have high potential to achieve largest profitability in nowadays business.

reference :http://www.chinadaily.com.cn/china/2014-03/16/content_17350114.htmhttp://www.chinadaily.com.cn/bizchina/tech/2014-02/12/content_17278121.htm

In siyu’s blog, she states that introducing 5c isn ’t a good choice for Apple as there are many competitors aimed at middle-income group . I disagree with that .Apple product uses the focus strategy(differentiation) to sell its uniqueness to royalty customers. After launching 5c ,it applies differentiation strategy and expands its customer segment to include middle-range customers. There are people who are unwilling to switch from 5s to 5c,but low-income customers who can’t afford 5s are willing to pay for 5c no matter the uniqueness of 5c is less attractive .They are still attracted by 5c’s brand and superior quality compared with other competitiors, which boosts total sales.

Meanwhile, the cost leadership strategy is also incurred by introducing 5c to the broader market segment . Low-income group are attracted by the price advantage and tend to buy more due to Apple’ PoD , which adds Apple’s force to compete in rivalry. Despite that, Apple owns customers’ loyalty due to previous value proposition. Loyal customers segment demonstrate a part of buyer power of Apple, and it also adds strength by competing with other rivals who only offer the similar price.
https://www.google.ca/search?q=5c+5s+%E5%8C%BA%E5%88%AB&espv=2&biw=1366&bih=621&source=lnms&tbm=isch&sa=X&ei=GHViVLvPO8W7ogSb24KoBw&ved=0CAYQ_AUoAQ

http://www.vancouversun.com/news/metro/Unilateral+park+declared+Tsilhqot+includes+Prosperity+mine/10192766/story.html

First nation people announced that they fold New Prosperity Mine into tribal park areas, which states that they are against the Mining industry in order to protect natural habitats.

Based on PEST analysis, the S-social and cultural factor in Macro environment influences New Prosperity mine’ development. Specifically, first nation people regard tribal park as a land of their “cultural, heritage and ecological values”. They have ownership of the land and responsibility to maintain their heritage-tribal park. The concept of values decides the survival of $1.1 billion gold-copper project of New Prosperity. New Prosperity’s key activities have to be stopped due to social effect. The revenue stream shrinks .Key resource including land resources and human resource reduces as first nation people are unwilling to offer them natural resource and native employees.

First nation people’s value about tribal park’s environment and heritage imposes a threat to New Prosperity. In SWOT, New Prosperity’ weakness- factory site decides that the validity of first nation ‘s threat.First nation enforces the supplier power and disability of barrier to enter to mining industry, which restricts company and disables the opportunity from abundant key resource.

word cited from http://www.vancouversun.com/news/metro/Unilateral+park+declared+Tsilhqot+includes+Prosperity+mine/10192766/story.html?__federated=1#ixzz3ITFjrOS0