Response to Zhaopeng’s blog: Is ranking system effective? or is it a failure?

Without competition, an individual will not have the incentive to invent or improve base of his original creation. Microsoft has removed the employee ranking due to the unwillingness of teamwork among workers. While the ranking system can indicate the best of the best within the company, it also become a system of failure. To create something extraordinary, one must collaborate with others, and each member will specialize their speciality in order to maximize the efficiency. Once the ranking system steps into the game, collaboration alters into competition, where everyone treats each other as enemy. Well, isn’t that obvious? Sometimes the CEO needs to take a risk evaluation before continuing with their plans.

This reminds me of myself working in Roots. There is no commission at all, but the manager still keep track of our selling record. This doesn’t make any sense to me in the beginning. After looking at different perspective, one reason is that Roots is attempted to maximize each worker’s capacity by illustrating their retail record, which motivates them to sell more. Meanwhile, this system will lead to excessive advertising, and annoys the customers. In a large cooperation, it is recommended not to established a ranking system.

To read his blog:

https://blogs.ubc.ca/zhaopeng/2013/11/14/microsoft-removes-employee-ranking-system/

To a hardcore video gamer, a trade off between a $5 worth of old game to $60 worth of new game is a dream. As I mention in my previous blogs, Play Station is releasing the new game console. In order to prevent decline in the market demand, the company comes up with a sneaky method to keep customer’s loyalty. Trade old games for new games. According to the PS4 description, the old games for PS3 cannot be used in PS4 and vice versa; as a result, a trap has set to blind consumers and lead them to trade their old PS3 games for the new PS4 games. Consumers feel that there is more opportunity cost for not trading the games, eventually they step into the trap, and they have to purchase the new game console in order to satisfy their gaming desire. Thank god I took econ and not step into this malicious trap.

To read his full blog:

https://blogs.ubc.ca/lucienlu/2013/11/13/best-buy-future-shop-video-game-trade-in/

In response to external blog.

An idea can be brilliant or worse, but whether this idea can turn out to be successful in the market, it is about the packaging and advertisement. Consumers’ first impression on the product is crucial, and it helps consumers to determine whether they want to purchase the item or not. Frankly describe by a guest blogger, in order to increase the consumerism rates in the market, the product must grab consumers’ eyes, not literally of course. As a result, packaging gives a brand positioning in the market and potentially enhance its market value. Why does a same piece of T-shirt cost more than another? Brand name and style. An appealing design can attract multiple customers even the brand name is not well-known, reflecting to what the market so-called, the psychological game. While many consumers only shop for specific brand, the brand new design from a new brand can leads to a trend that influence the popular brand. An example will be Chrome-Heart, a new clothing brand that has recently been published. The price was around $80-$100 few years ago, and now, more than $120 just for a piece of T-shirt. Style and packaging determines the market power in clothing industry.

To read his full blog:

http://sme-blog.com/guest-blog/the-essential-importance-of-packaging-when-developing-your-product

Speaking of entrepreneurship, who could ever thought of turning the movie, Toy Story, into real life? A innovative team call established a new fluffy toy, Ubooly, that is talkative and interactive with kids. This toy allows parents to inspect the actions of their kids remotely, and convenient for parents during work. This innovative idea enhance the lifestyle for both parents and kids as parents do not need to pay for babysitter when they can take care of their kids in distance. For the kids, they can have fun while being safe. Ubooly operates with IPad and IPhone, and with some simple clicks on the phone, parents can access with IPad that stores in Ubooly. Who could ever thought toys can be “alive”. The company has generate more than $2.5 million revenue within years, and it is specifically from idea as simple as this. This is what made a entrepreneur successful: building something that the society is missing.

Want to know more? Click here: http://www.theglobeandmail.com/technology/gadgets-and-gear/gadgets/sony-playstation-4-review-dawn-of-the-new-console-generation/article15393427/

It’s amazing to see the evolution of video games; from simple colour graphic in Artic Game Console, to fascinating 3D characters in PS4. Play station is intriguing its consumer with every gaming console it introduces. Its value proposition is to deliver a futuristic experience to consumers by projecting 3D objects in the screen. Consumers will likely to interact with objects in the screen by controller or body movement. PS4 attach the concept of motion sensor from Wii and extend the value by connecting the connection between console and controller, which is convenient for consumers as they do not require to purchase and adjust the camera. PS4 also collaborates with Netflix, Crackle, Crunchy Roll, and NHL game center to extend its customer segment. Certainly Play Station is targeting a broad customer base instead of teenagers, and it is guarantee gaming will not be as fun if consumer can share the experience in social media. The features provided by PS4 allow them to generate more than 1 million pre order around the world. Play Station has established a new high selling point compare than other video games company.

Click here to read full article: http://www.theglobeandmail.com/technology/gadgets-and-gear/gadgets/sony-playstation-4-review-dawn-of-the-new-console-generation/article15393427/?page=3

Does Twitter really worth less than Facebook? According to its IPO status, twitter is generating more than 30 billion per year, which is equivalent to $129 per users, while Facebook is only paying $97 per user. Some say Twitter does not have potential to enhance its future profit, however, its spectacular strategy has proven them wrong. Even though Facebook’s price per share has lower to its original IPO price, it does not indicate Twitter is better.  Facebook is not a vitamin pill that users take once a while, but a pain killer; it is inevitable for users not to use Facebook in modern society. In the long run perspective, Facebook’s lumbering IPO can serve its company better. Instead of giving attractive pricing like Twitter release, Facebook stands in an unique perspective by lower its price per share to $18 from $38. Twitter only sold small portion of company to investors whereas Facebook sold around 421 million shares at price $38. The total revenue is 10 times more than Twitter. Facebook creates the illusion to blind investors to believe its failure, but generate billions of dollars at the mean time.

Read full article: http://www.theglobeandmail.com/globe-investor/investment-ideas/strategy-lab/growth-investing/dont-sleep-on-facebooks-growth-potential/article15379777/

The shutdown of U.S government has traumatized the entire stock market around the world. Without the capability to default the debt, U.S government is attempting to do a test vote on setting a debt ceiling in order to prevent excessive borrowing for U.S. If the government had announced the default, then there would  be a significant decline in economy and increase in interest rate on the next loan. Majority of the investors cease to invest as they are fear the money will not be invested into charity box instead of profit box. Many industry fear the damage to economy from this shutdown will worse than 2008 recession, which increase the unemployment rate and bankruptcy. Some banks, such as Banca Monte dei Paschi di Siena Sp, plans to deduct 3600 jobs in order to receive 4.1 billion euro assistance from the European Union. Japanese currency, yen, has greatly influenced by the shutdown. This caused their value to fluctuate negatively 96.57 per dollar, and the exchange rate is nine months low. The chain reaction that caused by U.S. has become a devastation.

For more information, click here

The consumption of chocolate has increase tremendously in the world, and the demand of chocolate has entirely driven by Asian’s chocolate desire. The excessive demand has increased the price abundantly, and it has given coco industry in West Africa and Indonesia a guidance to gate of wealth. The increase of “21 percent of coco production in Standard & Poor’s GSCI Spot Index” has enlightened a new profitable path in food industry. One of the reason of this tremendous fluctuation is the concern of the health problem. Chocolate renders the blood pressure in human, and improve skin quality. The concern of obesity in US has driven the competition of chocolate out of the zone.  The demand of chocolate in Asia has improved the supplier surplus since the marginal utility of chocolate will not be extinguished. The preference of consumer will remain consistent in the future, and it will be difficult for small chocolate company to enter in this industry. Indonesia, “the third largest grower, will become the net buyer”, and its supplier power allows them to determine the price and maximize the profit.

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Toyota’s target population is towards the car lovers, and the younger generation do not seem to have slight interest in car. Akio Toyoda, the president of Toyota, is confused that value of the car in teenager’s eyes has worth less than the past. The incentive of purchasing a car has driven by their financial situation, which is the largest barrier in their age. The competitors of Toyota is not other car industry, but cell phone company. Even though the price of car worth more than phones, in teenagers’ perspective, the value of phone is greater than car because phone is considered relatively practical while car is not a necessity. Another problems is the design. The plain and moderate design has no longer intrigue the expectation from the teenagers. In this circumstance, buyer’s power has enforced Toyota to change its design in order to satisfy young generation’s self-esteem.  The introduction of FRS, the new sport car for Toyota, is not enough to reach most of young generation’s standard since there are no more varieties for them to choose. The experience of driving car has devalued; will Toyota able to resurrect its sale in the market?

For more information, click here

Recently, Malcolm Moore has reported a great business ethic controversy in Beijing, China through The Telegraph. It is apparent that China has become a quintessential financial developing country. Along with the population, many business from several countries have initiated their expansion to China. However, the problem has occurred in a pharmaceutical company,GlaxoSmithKilin. GSK in china “is facing a potential £2 billion fine” as the embezzlement from the executives are not reported. During the investigation, the head of GSK has proposed to withdraw all of its business from China. However, due to the large amount of investment, the withdrawal will cause more than 8000 civilian to lose their jobs, and cease the operation from multiple hospital facilities. The amount of investment has exceeded “£320m in Shanghai research and development base and six manufacturing facilities.” However, majority of the investment have not spent in the facilities, but kept in Chinese executives’ pocket. The corruption does not only influence the company itself but the health of chinese civilians.
According to an executive from GSK: since the investment do not entirely funded to the research, the company will begin to :test on human subjects based on data that was false, and got rid of everyone connected to what happened.” GSK in China has become a slaughter house. In order to maintain their reputation and the continual embezzlement, they will eliminate the threat to its company. Business ethic within GSK in China has completely extinguished. The humanity has conceal from the desire of money. The incentive between GSK in English and GSK in China is not on the same line; If GSK continue to feed the greed from executive, the research will become normative rather than positive.
Click here to discover the unethical business in China. (The Telegraph)