U.S: dont buy our ports..buy our defense plants!!

http://seattletimes.nwsource.com/html/nationworld/2002960238_dubai29.html

Following the controversial Dubai Ports deal that ended up failing because of security fears in the U.S, a Dubai based company got the green light to purchase plants for a major supplier of parts for military vehicles.

Issue: Dubai International Capital, which is owned by the Dubai Government, is going to purchase Doncasters Group, who owns nine plants in the U.S, for $1.2 billion. These plants which make precision components and assemblies for such companies as Boeing, Pratt & Whitney and General Electric, are the sole source of turbine blades for U.S. tanks and aircraft. So because of the chaos and concern that the prior deal caused for the U.S government, this deal is going through a lengthier and more cautious investigation before being 100% agreed. And if for some reason this deals also collapses, then the relationship between the two countries would be at risk which eventually lead to a lot of lost business between the two nations.

Interest: the main interested parties in this case would be from organized interest in the form of the U.S government and Dubai government. Dubai International Capitol is also has interest because it’s their deal and should anything disrupt the deal, their strategic plans would be damaged.

Institutions: the investigation has been ordered by the Bush Administration and is carried out by the Committee on Foreign Investment in the United States (CFIUS) which falls under the regulatory agencies. There is also a nongovernmental institution in this case and it’s in the form of public sentiment. The American people were opposed to the idea of Arab-owned ports in the U.S, and they have to be informed on the current deal. Otherwise, they might oppose this deal too and protest to the government which could lead to another “no deal”.

Mobile phones replace wallets..whats next!!

http://seattlepi.nwsource.com/business/1700AP_Malaysia_Visa_Nokia.html

Visa has created a new credit card payment method called the Visa Wave card. This card acts just like a credit card but instead of swiping it through a reader; you just have to wave the card in front of the reader to make the payment. This is similar to the “touch and go” cards used in the transport systems. This method was introduced by Visa last year and there are now around 4 million customers using this card, most of them in the United States. Malaysia, one of the latest countries to introduce this system is currently the testing ground for an improved type of payment method based on the Visa Wave system. Visa has teamed up with Nokia Corp. to release the first mobile payment system in the world. It uses the same technology but uses a mobile phone to wave on the reader instead of a card. This new system is still in the testing phase but odds look good for it to succeed. I will attempt to conduct a Barney based analysis of this joint project between Visa International and Nokia Corp.

Value?
This system could provide value to both companies because new technologies that make everyday activities easier and more convenient are welcomed and sought after in today’s tech era. The main advantage, other than speeding up the credit card payment process, is that this technology will always be with the consumer because it is embedded in the mobile phone which became need rather than a want in the last decade.

Rareness?
The only similar type of technology available to consumers is the Visa Wave card. This eliminates current competition because Visa is a partner in this new experiment. The article doesn’t mention any other company offering any similar products. So this technology can be deemed rare, or even unavailable, in the market.

Imitability?
This technology might be the product of two of the biggest companies in their fields but this doesn’t mean that others can’t imitate or create a similar service. Also the article doesn’t mention anything about this technology being patented, which makes it more likely to be imitated. But to do so, a competing firm must posses the financial and technical resources because it is a costly project. In my opinion, I expect a similar collaboration between companies like Master Card and Ericsson to come up with a direct duplicate or even a substitute to this service; mainly because they have the adequate resources to do so.

Organization?
Both companies, in my opinion, are exploiting their full potential to be put themselves in a competitive advantage. Nokia is producing special phones for this service and Visa are making special technologies to make this service as secure as possible.

I conclude that this new technology is valuable, rare, costly to imitate, and fully exploited by both companies. This would create a sustained competitive advantage and big economical profits for both companies.

Wal-Mart vs Unions...again

http://www.mercurynews.com/mld/mercurynews/news/local/states/california/northern_california/14434028.htm

I previously posted a blog entry about the everlasting love-hate relationship between the labor unions groups in the US and Wal-Mart stores, the nation’s largest employer. Well, I recently found another article reporting that those union groups are stepping up their actions against Wal-Mart. This provides a great example of Baron’s non-market environment issues which I will be discussing below:

Issue: unions have finally decided to take action against Wal-Mart by planning a rally in 35 cities from New York to Los Angeles to protest what they called inadequate health care coverage and low pay by the superstore giants. Wal-Mart called the rallies a political stunt and denied these claims by replying that they have helped the labor force and their customers during the last year.

Interests: there is more than one type of interest in this case. There is organized interest in the form of Wal-Mart, the target of these rallies, and the Change to Win labor federation and other unions who are demanding better working conditions for their employees. They are the people responsible for these protests. There is also some type of unorganized interest in this issue in the form the Wal-Mart employees who are the center point of this whole case.

Institutions: there is only nongovernmental institution involved in this case. That is the public sentiment. If hundreds or thousands of people protest against one of the biggest organizations in the US because they don’t provide proper health care for their employees or whatever, then the public won’t be happy. This could affect Wal-Mart’s business because most their customers receive middle to low income and of the same level of the Wal-Mart employees. So Wal-Mart is upsetting their employees and customers as well.

Information: the unions have provided information about Wal-Mart’s health care insurance which failed to cover 57%, which add up to 775,000 employees, of its workforce. The unions also cited an internal Wal-Mart memo, which became public last fall, that said 46 percent of the children of Wal-Mart workers were uninsured or on public health care. Wal-Mart replied that they created 225,000 U.S. jobs last year and also says it saves its customers, including working families, about $2,300 a year.

Harley-Davidson roars into China

http://news.bbc.co.uk/2/hi/business/4842736.stm

This article talks about Harley Davidson’s entrance to Chinese market. Harley Davidson is a well know motorbike manufacturer all around the world. They managed to create a loyal fan base of customers who all share the unique lifestyle that comes with owning one of their bikes. As they entering this market for the first time, which they describe as population with a restricted but expandable disposable income, they did not want to take all the risk by themselves. That is why they teamed up with a local motorbike dealer, Beijing Feng Hou Lun. According to Hamel’s framework, Harley Davidson is expanding and enhancing their value network. They decided to form a coalition with Beijing Feng Hou Lun and open a store, in April of 2006, which will be run by the latter. The dealership is to sell several models of Harley-Davidson bikes, parts, accessories and collectible goods. The reason Harley Davidson chose to form a coalition with a local dealer is to reduce the risk involved in entering a new market. They could also benefit from Beijing Feng Hou Lun’s expertise and market knowledge as well as human and physical resources which could save Harley a great amount of money and effort. This deal is also beneficial to the Chinese dealer as well because coalitions usually benefit all parties involved. Beijing Feng Hou Lun can use the brand name and popularity of the Harley Davidson bikes for economical profits as they will be the sole dealer for the brand. This partnership could also be seen as a strategy used by Harley Davidson to expand their company boundaries by intermediating between their strategic resources and their value network.

I personally think that there is a demand, whether small or big, for the Harley Davidson brand in most countries. And seeing that the cost of this project is relatively low, the chances of success in my opinion are high.

Selfishness Has Its Value to the Economy

This article discusses the love/hate relationship between one of the United State’s biggest communities and Wal-Mart. It describes how New York, a state filled with anti-corporate organizations and individuals, is one of the toughest markets for Wal-Mart. Everybody knows that Wal-Mart has enjoyed a huge success and currently is positioned as the top retailer in the United States with around 3,800 stores across the nation and the lowest prices to go around. Despite all that, they are facing a lot of legal and public issues in the state of New York and particularly New York City. People in New York feel that Wal-Mart employees are underpaid and that their supply and management practices are unfair. That is probably one of the main reasons why Wal-Mart has yet to open a store in New York City. Still most of the New Yorkers, including those who are opposed to Wal-Mart’s practices, can’t help but shop there, in the stores located outside New York City. If we take a look at Wal-Mart’s organization then it would be obvious why they are everyone’s number one choice to shop. Wal-Mart resources and capabilities are considered valuable because of their huge and very flexible distribution practices and centers. Their resources and capabilities are also considered rare because they allow them to offer the biggest variety of goods and services with the cheapest prices. They also possess resources and capabilities that are hard to imitate because it would be very costly to duplicate or even try to substitute their huge and very efficient supply chain. Finally, this is what leads them to huge profits and enjoy a sustainable competitive advantage in the industry. In conclusion, the low prices and huge varieties are enough to make customers ignore all other issues about the company while spending their hard-earned cash there. That’s why around 138 million customers visit Wal-Mart stores worldwide every week. I personally think it is just a matter of time before they break in New York City.

The Real Cost of Google's Sellout to China

This article talks about Google's two sides when it comes to the theory of censorship. Google may seem that they are all for the freedom of speech when they rejected to help the US government in censoring and reducing the amount of child porn on the internet because they felt they should protect their users' privacy. On the other hand, they seem like a purely profit-driven company when they decided to cooperate with the Chinese government in filtering the search content of its engine to meet their high level of censorship. Google has recently been able to establish itself as on of the most powerful technology companies out there along with the infamous Microsoft. And according to Porter’s paper, they posses an advantage in terms of bargaining power of suppliers in the IT industry. Some of the main factors that helped them reach these heights are their huge number of customers, which in term of numbers are the highest in the industry when looking at their search engine counters. I think the reason behind their refusal to work with the US government regarding the censorship issue is that they want to assure their customers of their total privacy and that no one, not even the US government, can view their details. This was an excellent move considering that other companies like MSN, Yahoo, and AOL have complied with the government. As for their Chinese agreement, Google acted against their “Freedom of Information Act” to tap in the 2^nd largest internet market in the world, and soon to be the 1^st, and cooperate with the Chinese government to filter out the unwanted websites and information that might stand against what the Communist China is trying to implement in their country. This move could reap huge financial rewards for Google. In the end, Google may be losing their ethical integrity they held for so long. But in return they are profiting from the financial and economical advantages of their moves which may lead them to greater bargaining power in the IT world.

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