Month: September 2017

Toys “R” Gone?

Image

Do you remember those times where we would spend weeks begging our parents to take us to the toy store, only to have our minds blown away by the sheer abundance of things to buy? Despite us first-year Sauder students being as young as 17 years old, this whole phase of our childhood could be on the brink of extinction. Technology has come a long way since we were born. We talk about VCR and DVD’s nowadays as modern day adults talked about gadgets from 40 years prior. The world is evolving at an accelerated rate that continues to increase every year and this past week on September 19th, another major milestone in our childhood saw the beginning of the end. Toys “R” Us Canada has filed for bankruptcy .

Source: International Business Times

Toys “R” Us has blessed children of the world since 1957 with Christmas, Birthday, and many other special-occasion gifts. Despite the overwhelming success Toys “R” Us has had across Canada and the United States, the decline in its profit has been fairly rapid, but why? The answer lies in the advancement in technology in our modern-day lives. Amazon has been link as the main culprit as families across the globecan now order virtually every item imaginable off the Internet, eliminating the need for in-store purchases.

 

This isn’t just Toy “R” Us having to deal with losses as a result of Amazon; many other retail stores have been declining as the world goes digital. Many of us will remember the fall of Blockbuster, the popular DVD store that inevitably lost too much profit from its online competitors. This past June, Sears Canada also filed for CCAA protection once again due to the rise in online shopping.

 

Dave Brandon, the chief executive of Toys “R” Us said that the filing for bankruptcy marked “the dawn of a new era” (McKenna, 2017). Whatever Dave meant specifically by that statement, the fact we know is that this truly is a new era for retail stores. One of the biggest issues these stores face is not the fact they are losing profits, but the fact they are doing so while the economy is strong. “GDP is growing in both Canada and the U.S. So are jobs, wages, and retail sales” (McKenna, 2017). With losses faced in this environment, a recession could easily spell game over for many more of these companies.

The main problem, which ultimately led to their demise, was their accumulated $5 Billion in debt. With liabilities this high, Toys R Us had to pay $400 million of interest expense per year, something they simply could not keep up with in our ever-changing society. Only time will tell which companies are next.

Source: Business Insider

 

Word Count: 449

Business Ethics

Standard

We live in a world where most people view money/success and making the world a better place as two completely separate ideas. As business students, we all hopefully recognize that this is simply not true; however, there are instances that seem to perpetrate this stereotype. An example of this is Mylan Pharmaceuticals which sells Epi Pens across the United States. One would think that such a necessary commodity would be free of charge and covered by a nation-wide healthcare plan; however, the United States lacks a strong coverage system as compared to Canada. The article I delved into was written by the CBC and can be found here. To sum it up, Mylan Pharmaceuticals has quadrupled the price of Epi Pens in the past 8 years, bringing the price to $600 USD for a pack of two. This type of price is absurd as anyone with severe allergies can literally die without one. By raising the price of Epi Pens, the economic divide currently seen in the United States may become a manner of life and death.

Source: Business Insider

 

This way of making a profit for a business is extremely unethical and harmful to people who need the medication. If media outlets spread this information around (which already has been happening, in this article), they could potentially make a dent in the company’s credibility and further decrease their profits. The increase in pricing of this item for the sake of profit coupled with public awareness would become a lose-lose situation. This could have all been avoided with Mylan utilizing good business ethics. Here in Canada, a company called Pfizer Canada has a licence through Mylan. A spokesperson for the company has stated that “the price has not changed and there are no plans to do so.”

 

As a more personal example of the importance of business ethics, we have to look no further than our own school. Every faculty seems to have stereotypes about Sauder students and many appear to believe that we’re only in this program to make the most money possible. During Imagine Day, the Dean of Sauder, Robert Helsley showed us examples of businesses that have gone on to make the world a better place, all of which were founded by Sauder students. All those people he mentioned are not only successful financially, but their incredible business ethics have contributed vastly to our society in an extremely positive way. After all, as we learned in the second class of Comm101, teamwork is more important in the long-run than the success of an individual.

Source: UBC Sauder School of Business

Word Count: 425