Glamping Hub

I've recently started on a new project called Glamping Hub with a few other MBA's and we're building a hub where people can find glampsites around the world.

What is glamping, you ask? Good question. Glamorous + Camping = Glamping. Basically it's 5 star accommodation in the beautiful outdoors.

Check out the site and drop me a note with suggestions.

Also, follow us on facebook and on twitter @glampinghub!

Thanks for all of your support!!!

Pontiac Dies

Last week, we all had to say goodbye to Pontiac. The General Motors brand had been suffering for the past few years with sluggish sales and little innovation for new design. The fact that GM had filed for bankruptcy hasn't helped either.

The NYT said, "For most of the 1960s, Pontiac ranked third in sales behind Chevy and Ford — a position now held by Toyota. But in the decades since, Pontiac’s edge and high-powered image wore off. Repeated efforts in the 1990s and 2000s to revive the brand failed. Drivers too young to remember the GTO came to associate Pontiac with models like the DustBuster-shaped Trans Sport minivan or the Aztek, a bloated-looking crossover widely regarded as one of the ugliest vehicles of all time. By early 2009, Pontiac had fallen to 12th place in the United States market, and its top-selling model was the G6, a sedan commonly found on car-rental lots."

Despite the success of the GTO in the muscle car era, Pontiac has struggled to maintain the edge and the high-powered image. It's interesting to look at a brand like this whose products were focused on image. It makes me wonder how long companies like Apple will be able to maintain success.

USF Microfinance Club Investment Potluck

The USF Microfinance Club is throwing a potluck during dead hour (from 5:30-6:30 pm) of November 10th. We have been making a lot of progress, and we are hoping you will bring a dish to celebrate with us!

We will be unveiling our new investment strategy and fund management tools, and we are also hoping everyone can bring a dish to celebrate.

Please let me know if you're interested in helping out at the event, and we are looking forward to seeing you!

Twitter Predicting the Stock Market

Last week there was a report that came out from Indiana University (see here), where researchers had come up with a method for predicting changes in the Dow Jones through an analysis of Twitter updates. The researchers analyzed 9.7 million tweets from March to December 2008 with the use of two mood-recording algorithms, the Google-Profile of Mood States (GPOMS) and OpinionFinder.

What they found was that there were strong correlations between the moods and the movement in the market. Supposedly, there was a correlation between the "calmness" index (one of the six moods that was measured in GPOMS) and this could be used to predict whether the Dow Jones went up or down between 2-6 days later.

"We find an accuracy of 87.6% in predicting the daily up and down changes in the closing values of the DJIA and a reduction of the Mean Average Percentage Error by more than 6%. "

Incredible? I think so too. Articles that I've read said that they need to do more research on this; however, the impact of social media is undeniable.

Biometrics in the Tanning Salon?

The days of passwords, ID cards, and keys are becoming numbered because of the growth of biometrics. Biometrics authentication, as a definition, is used to define all methods for uniquely recognizing humans based upon one or more basic physical or behavioral traits. Last year I did some research on the growing number of business that are relying on biometrics measures rather than traditional forms.

The information that is collected from biometrics can be composed through facial recognition, fingerprint analysis, iris scans, and voice recognition. These methods are chosen because each humans face, voice, iris, fingerprint, and DNA is obviously distinctive. While doing this research, the only example that I had seen in real life was the IRIS scan that they had in major airports, specifically Heathrow.

What's interesting is that I went to the tanning salon this week, which I do about once every 5 years, and they had a biometric system in place. They took a fingerprint scan, which held all of your account, credit card, and purchase details. So, every time I walk into the salon, I place my finger on the pad, and the details about which bed I was in, how long I was there and who I am, all pop up on one screen. What is most bizarre to me is that the second place that I've seen this behind major international airports is the tanning salon.

This new age of biometric technology indicates that access to private files, bank accounts, medical records, security codes, and secure areas will no longer be protected by passwords, keys, and ID cards, instead fingerprints, iris, or any other method of biometrics will be used for identification. Some aspects of this makes me a bit nervous, especially in terms of privacy, but at the same time, it is also quite fascinating technology. I'm looking forward to seeing how quickly this type of technology is adopted.

Kraft's New Mac & Cheese

I saw this commercial the other day on tv, and thought it was a brilliant ad. Not only is this a creative way to introduce a new Kraft product, but it's also a clever way of reminding consumers that they have two target audiences: kids, and adults.

The ad does a good job in pointing out the exact concerns that were probably raised when first looking to launch this product, including: packaging, target audience, methods of being cooked, etc. The girl is darling in letting "Kraft Corporation" know that she's onto them, and that she won't be left behind as a loyal customersimultaneously reminding mom's why kids love the regular mac & cheese with the mention of Cheezosaurus Rex. Good work Kraft - you've got a great ad to launch your new baked mac & cheese.

The Groupon Phenomenon

Early last year I was interviewing with a company that did research on people who played games that were connected to Facebook. Many of these games required users to take quizzes which questioned their demographics (sex, age, location, etc.) From this information, the marketing research company would then sell this information to a company that works with local companies in respective cities to give deals to people in the area. Thus, the coupon, or the 'Groupon Phenomenon', has been re-born and re-defined in the social media world - spurring impulse purchases.

How many times have you purchased deals on yoga classes? or restaurants? or skydiving lessons? Every morning my inbox is crammed with new sites that are offering deals in my area. Some of the common ones are Groupon, Living Social, Homerun, and now Yelp is starting to offer deals also. Because these deals are only offered for one day, there's a sense of psychological urgency to 'get the deal before it's gone', albeit they are good deals. The fact that many consumers are price-conscious due to the economy is an additional benefit to these daily deal sites.

In terms of customer retention, I'm not sure how well it works. Speaking from personal experience, I have only ever redeemed one of my purchases. But, what an interesting way to look at product marketing and consumer behavior.

Google Enters the Offshore Wind Power Business

Google announced that it would begin investing in offshore wind power, called the Atlantic Wind Connection - a move that displays a deviation from their primary search engine business. Although Google did not disclose how much the project would cost, The New York Times reported an agreement which projected $5 billion.

Google will be joining forces with two companies, Good Energies and Marubeni Corporation, to help finance the project, which is aiming to lay down 350 miles of underwater cables (from Virginia to New Jersey) to transport the energy created from wind farms to cities in the US. It is projected to provide power to 1.9 millions homes. The main company leading the venture is Trans-Elect. Supposedly, Google will be investing in 37.5% equity for the initial development of this Atlantic Wind Connection.

This, however, is not the only move that Google has made in other businesses. Also last week, Google announced that it was testing cars that drove themselves. It's interesting to see Google's vested interest in green technology. I suppose part of it is good PR - being socially responsible is never a bad thing, especially in today's economy. My other feeling is that Google has an extraordinary amount of data centers, and this could ensure that there would always be a power supply to any data centers. Moreover, if you look at where Google is physically located around the world, they have situated themselves near large bodies of water. While these might not be obvious to the average Joe, it makes me think that Google is truly a forward-thinking company that realizes that there will be problems with water scarcity, sources of energy, and other resources.

Food Insecurity in Developing Nations

One of the projects I worked on this semester has been focusing on a global trend. Our group chose to focus on food insecurity in developing nations. To shed light on the current situation, it is necessary to look at contributing factors. First off, food prices are estimated to have risen by 80 percent over the past three years. For example, some staple crops such as rice have tripled in price in just the last 2 years. Food production costs have also increased, which has been affected by the volatile price of oil. Because of this, an estimated 75-100 million additional people have been pushed into poverty and food insecurity as a direct result of the crisis. Ironically, agriculture is the largest source of employment in developing nations.

Additionally, agriculture receives only 4 percent of U.S. foreign assistance, while most developing countries are also only allocating 4 percent of their budgets to the agriculture sector. Increased food prices with little aid ultimately results in the threat that those who need food most will not have it. The health implications on these societies are larger than simply missing a meal - it implies long term health problems which will cut many lives short.

The company that we decided to focus on was ACDI/VOCA. ACDI/VOCA uses value chains, specifically value chain analysis, to understand private sector development in emerging economy settings to jumpstart economic growth and poverty reduction. ACDI/VOCA's value chain approach is unique in that it uses a participatory, stakeholder-driven approach to exploit opportunities for investment and growth in industries with high levels of micro and small enterprise (MSE) involvement.

Today the organization is known for its value chain approaches to enterprise development, self-sustaining financial services development, farmer organization, self-help community development and projects that work to stabilize fragile economies. This will inevitably include poking into their other programs such as agribusiness and financial services, but our focus will remain on the overarching trend of food security and food scarcity.

You can find more information on our site.

Gap's Brand Snafu

If it wasn't a double dip in the economy, I knew that there had to be some sort of catastrophe for 2010. Although they kept us waiting until October for this crisis, Gap has brilliantly decided to unveil their new slick logo and ditch their iconic one. Not to my surprise there has been huge outrage regarding the change in the online community.

Gap responded quickly to the outrage with the following response:

Since we rolled out an updated version of our logo last week on our website, we’ve seen an outpouring of comments from customers and the online community in support of the iconic blue box logo.

Last week, we moved to address the feedback and began exploring how we could tap into all of the passion. Ultimately, we’ve learned just how much energy there is around our brand. All roads were leading us back to the blue box, so we’ve made the decision not to use the new logo on gap.com any further.

It's interesting, but not surprising, to see the vast amount of brand loyalty behind Gap. Hansen, the CEO, was trying to symbolically show that they company was looking to move forward and have a more contemporary feel, but one can only remember the Coca-Cola and Tropicana re-brand disasters. The benefit of this exercise, however, is that it reaffirms the passion and value behind the old logo, without ever having to change anything about their actual products. Plus, the fact that they have listened to their customers and gained free publicity shouldn't hurt either.

Thank goodness you reverted to your old logo, Gap. We thought we had lost you for a minute as one of our true American brands, and America really can't afford any more loses in 2010.

The World is Flat

Here is a fascinating discussion from Thomas Freidman who wrote "The World is Flat".

Facebook Privacy Concerns

Facebook's privacy policy continually changes - so much so that it's rare that I can actually keep up what they are selling to advertisers about me and what they aren't. Nevertheless, Facebook still continues to receive heat for their privacy policy, especially after supposed important information had been leaked. And, to be fair, it is a bit disconcerting that even if you disable your profile, all of your information stays in their system. Trust me. Try it just for kicks.

I read an article in the New York Times this week about a group of students from NYU who have created diaspora, a privacy aware social networking platform. While in theory this sounds nice, I'm not sure how they'll make any money off it. Currently, the way that the majority of major social networking sites monetize is through CPC or CPM ads.

Anyway, I'm looking forward to learning more about it, and seeing what they come up with. Let's hope it's something new and disruptive in the social media world. Evolving business models are so interesting!

Marketing Vs. Finance: The Battle

For a long time marketing and market research people have tried to evaluate the true meaning of “brand equity”. Conversely, those of us in finance have been asking our most important question “what is it worth?” Ads build brand value and within this paper we hope to shed some light on how companies build up their brand value and then go forth to put a number on that worth.

What is Brand Equity?
Brand Equity is quite simply the value of the brand in the marketplace. It is a term most of us are very familiar with and have seen throughout finance and advertising, but as a business concept most of us have a very broad understanding of it. In essence, a high equity brand has high value in the marketplace. Usually, this would mean that your brand is easily recognizable when encountered in advertising. It can also mean that your brand is the one that is most easily recalled, “What brand of laptop would I buy if I was looking to spend $1500?” Brand equity could mean that individuals would be willing to pay a premium price for your products. It also means that when someone refers a product to you it will be that well-known brand. All of these positive responses to the brand: readily recognizable, brand that is recalled quickly and easily, one that individuals are willing to pay a premium price to acquire, and a brand that is recommended to others. These are the main characteristics of a high equity brand.

It is also important to note that when your brand is well known, it has high brand awareness. It is easily recognizable and easily recalled when faced with that brand-related need. On the other hand, brand image is what is known about the brand. It is the information and association consumers have about your brand stored in their memory. Ultimately, it is both Brand Image and Brand Awareness that lead to your Brand Equity.


Brands on the balance sheet
Accounting for intangible assets became an issue in the late 1908s during a series of brand acquisitions, which resulted in large amounts of goodwill that accounting standards didn’t know how to justify on the balance sheet. Essentially companies were faced with questioning the social value of brands. Goodwill is defined as reflecting the value of intangible assets such as a strong brand name, good customer relations, good employee relations and any patents or proprietary technology.

In order to find an approach to value intangible assets, two evaluation models have been developed: research-based brand equity evaluations, and financially driven approaches.

Research-based approaches
Research-based methods use consumer research to measure the relative performance of the brand. However, this method does not use any financial data to determine the relative value. Instead they assess consumer attitudes to decide the economic performance of said brand. Aspects such as market share and relative price are sometimes included also.

Financial-based approaches
There are several different types of financial-based approaches: cost-based approaches, comparables, premium price, and economic use. However, the only method that is commonly used is the economic use approach, which was developed in 1988. It is commonly used and has been used in more than 3,500 valuations of brands across the world.

This approach is based on several fundamental financial principles:
•Customer Demand: Brands generate customer demand, which eventually turns into revenue through the purchasing of products. Because brands are the source of customer loyalty, this ensures the repurchase of products.
•Future Expected Earnings: From a financial perspective, they will look at the net present value of the future expected earnings. Once the earnings are recognized, then they are discounted to the net present value with a discount rate.

Case Study: Coca-Cola Company & Google
Today some brands have demonstrated an amazing ability to last. The third most popular brand, as show in Fig. 2, is Coca-Cola. The brand has a special intangible that in many businesses is the most important asset. Coca-Cola is more than 124 years old and a majority of the world’s most valuable brands have been around for 60 years. Compare with this fact with an estimated average life span for corporations to be 25 years and we can see that there is something special about the brand name Coca-Cola.

Several studies have been done to estimate the contribution that brands make to shareholder value. A study that was done by Interbrand in association with JP Morgan concluded that on average brands account for more than one-third of shareholder value. The study reveals to us that brands create significant value either as a consumer, corporate brand, or a combination of both.

Currently, Coca-Cola spends more money on sport sponsorships around the world than any other company in the world, in excess of $1 billion per year. Their commitment to marketing their brand in the sporting sector reinforces their overall brand equity. Coca-Cola also distributes around 300 brands of drinks around the world including Fresca, Diet Coke, PowerAde, and Surge. Because Coke is so entrenched in the public consciousness, it would be hard to imagine a world where they have anything less than the second place in the market share battle.

Google has topped the list of most powerful brands. In 2008, Google’s estimate value was at $86 billion. Millward Brown’s annual BrandZ Top 100 Most Powerful Brands conducts a survey each year that determines the most significant brands through examining the portion of intangible earnings that can be attributed to the company’s most loyal customers. They take into account the market valuation, risk profile and potential for growth. In 2008, Google reached the number one position in the Millward Brown study for the second year in a row with a 30% year-on-year increase in value.

So what makes Google such a valuable brand? From a consumer’s point of view, the brand provides a few key elements: simplicity, ease of use, innovation, personalization, coherency between all Google products, and user focused. The combination of these factors lead users to want to go back to Google. However, the ultimate goal of customer loyalty and brand building is to get consumers to come back to try other Google products. Once a consumer has returned to Google for other products or services, the consumer has built confidence in the product, thereby establishing brand loyalty.


Additionally, it’s interesting to look at how companies have treated marketing and branding during the current economic downturn. Joanna Seddon, Chief Executive Officer of Millward Brown Optimor said that “A new trend has emerged in the wake of the recession as more companies realized the importance of maintaining and even increasing budgets to support brand loyalty and engagement.” Despite the poor economy over the past few years, the strong brands have established and re-established themselves as strong brands through increased marketing budgets and using innovation to maintain the same brand equity through the economic downturn.

If both Google and Coca-Cola Company maintain the same customer focused approach, Puzzle Group is confident that their brand equity will remain strong. Their current consumer confidence and brand value have landed them high spots, and their customers are excited to see what’s next.

Monetizing Foursquare

Apparently these Foursquare promotions are taking off more quickly than I thought. I checked in at my home and there is a Crunch Fitness just down the street. Not only are they promoting a free 7 day pass for potential new members, but they are also promoting a free water bottle to the Mayor. Interesting stuff. Good work Foursquare!

Not the Perfect 'Pepsi', But the Perfect 'Pepsi's'

Spaghetti sauce has probably never been more interesting than this video! Here's an interesting and funny discussion about the food industry.

Recently in my Marketing Research class and Global Product Development course, we've been discussing addressing market needs, and changing products to fill those needs. Here, Malcolm Gladwell talks about how Howard Moskowitz, and his research in Pepsi, Campbell's soup, spaghetti sauce, and pickles. He delves into why the food and beverage industry have been looking at consumers wrong for years.

Gladwell says that Moskowitz contributed the following three things to the food industry:

1. The food industry never asked consumers what they wanted, and consumers don't actually know what they want. No one was servicing the needs of the 30% of Americans who crave chunky spaghetti sauce in the late 1970's. Since then, the business has changed into a multimillion dollar industry.
2. Horizontal segmentation: there are different types of products that suits different types of consumers. It's not that one type of mustard/ spaghetti/ Pepsi is better than another, but rather, consumers just have different preferences.
3. The platonic dish: Chefs were looking for cooking universals, but today there is an understanding of variability. Understanding these differences can be key to a company's success. Not everyone prefers plain spaghetti sauce, just like not everyone prefers just one type of pickle.

"To a worm in horseradish, the world is horseradish."

Integrating brands with social media

I haven't had a chance yet to discuss Foursquare (which I'm slightly obsessed with). But, recently I've been noticing a growing trend of companies that are integrating themselves with the location-based service. Two companies that come immediately to mind are Bravo and Starbucks.

First of all, I want to talk a little bit about location-based social media. Loopt was kind of the navigator with the location-based mobile application, but has since fallen off the chart - despite the fact that they've tried to revamp their application with trending places. Foursquare came along and provided some of the features that consumers really wanted. Foursquare rewards users with badges, once they go to certain locations, or check in at certain times. Also, they offered incentives such as becoming the mayor of certain locations, which ultimately fosters competition between friends, or people who "check in" to the same locations as you. It becomes a simple game for users, and some of the big corporate dogs have noticed.... so let's talk about them for a minute.

Bravo
Bravo TV has started their own Foursquare profile, which anyone can become friends with. Once you're friends with Bravo, if you check into venues that they recommend, you will receive their badges. Great marketing gig, Bravo! Because of this, Bravo offers tips at each of these locations, and in return, Bravo can also see the tips and comments that their users give. It's an interesting way for the TV network to interact and communicate with their consumers. Plus, it offers Foursquare the chance to engage with a more mainstream audience - seemingly a truly symbiotic relationship.


Starbucks
Similar to Bravo, Starbucks has also struck up a deal with Foursquare. Like Bravo, Starbucks can offer incentives to their consumers, dependent upon how many times they check into Starbucks locations. Not only does Starbucks want to foster the competition for mayorships over their coffee shops, but they also are offering Starbucks Barista badges and other special prizes. A Starbucks spokesperson said “Starbucks recently announced a relationship with Foursquare, which enables us to engage with our customers in unique ways by breaking down barriers of digital and physical worlds. Foursquare is another way for Starbucks to take the pulse of the experience in physical stores in real time and hear feedback from our customers.”


So is this all just a bunch of social media hype, or are these companies jumping on an opportunity that could really be cutting edge? Essentially what these marketing mavericks have done is taken their customer relationship and rewards program to the next level - the mobile level. Because users can leave tips, comments, or suggestions about these venues, Starbucks and Bravo are able to gain a deeper insight of their consumers, right at the touch of a button. Moreover, they have found a way to market deals and specials (pictured above). Simply brilliant!


Wait, did you just catch what I said? TV corporations, food and beverage megastars, and others are building partnerships to integrate city tips into the gamers' experience of a location-based mobile service. Plus, there's been a report that Facebook should be launching location-based features this month. Good idea Facebook. I think these Foursquare partnerships are fantastic, and I can't wait to see what Foursquare does next.

Apple Isn't Laughing

I can completely understand why Apple isn't laughing at Ellen DeGeneres' latest iPhone ad, but I thought I'd post it because it's funny.

In terms of the actual product, Ellen brings to light some fair user issues with the touch screen. But, if you're an Apple user, then getting used to the touch screen is a quick process.

I do think it's funny, however, that Apple seems to poke fun of PC's in all of their commercials, but when the tables are turned, they throw a hissy fit. Ultimately it was a comment on the product, not the company, or Jobs specifically.

At any rate, Apple has got the best products, and everyone wants them. Chill out a little bit Apple. You're making billions and one comedian isn't going to ruin your cash flow!

Microfinance Club Casino Night

We finally hosted our Microfinance Club Casino Night this past Friday! It was our club launch and first fundraiser. Overall, we had a good turnout, and the event was a lot of fun! The guys really got into the poker game, so I think our Microfinance Club team was very pleased with the event.

However, I have to say that I'm pretty disappointed with the Graduate Business Association. Two of the members, the VP of MBA Clubs and the VP of Academics, showed up to the event and refused to come in. I thought it was tacky to not support our fundraiser, especially since they were part of the GBA. Plus it's not like it was a $50 donation.... it was $10.

At any rate, I am excited about our upcoming events, and look forward to raising enough money to start investing in microfinance entities! We only raised a couple hundred dollars from our first event, but we will have more events soon! Stay posted.

Trend Blend

I found Trend Blend last year. It looks at trends in business, society, government, technology, science and environment. The graph shows the opportunities and risks related to each. Below are the issues related to 2009.



Check out the website to see the 2010 map.

Is social media a fad?

This is an adaptation of the Did you know 3.0 conference in Rome last year.

Some interesting figures.



I'm not sure how many of these numbers are accurate.... but regardless, it's worth thinking about the impact social media has on business today.

Net natives, or "net" so much?

In today's post I'm going to take a quick look at our digitally savvy generation, examine how we use social networks, and explore a few of the common misconceptions about Generation Y. Upon starting the MBA program back in September, the curriculum was launched with a Communication Management course. Part of the class was focused on resume building, and managing your personal "brand" online (ie. facebook, linkedin, twitter, etc). The professor asked the class who used facebook, and nearly everyone raised their hand. He then asked about linkedin, slightly less raised their hand; and then about blogging, and even less students raised their hand. Finally, he inquired about twitter, and I was the only one to raise my hand. It was shocking to me not only because of all the hype twitter has received over the past year and a half, but also because being in an MBA course, I assumed that every student was as "plugged in" as I was.

I am going to make the argument that despite the fact I'm surrounded by an intelligent group of young individuals who were raised simultaneously with the advent of the computer and internet, there is only truly a small percent of this circle that actually understand and are interested in digital technology. Because we have grown up on the internet, it's assumed that the computer has transformed our approach to work, politics, and education. Now I'm not saying that I am the most computer savvy person - to be honest, writing code and understanding the back end of my computer really doesn't interest me. What does interest me, however, is this whole revolution of social networks, and how those networks are changing the way we communicate and do business. What about the fact that Iran election protests ran rampant across twitter and remained a trending topic for weeks? Or how Dell had increased their profit by $3m last year from twitter deals? Or, what about Zappo's, or Ford, or Starbucks, or Virgin? All of these companies are following suit to engage in conversations with their customers. Is all of this not a social media revolution?


Marketing is no longer sending out the single message that you want the consumer to receive, but rather it's shifted to an open innovation paradigm. Instead of the company deriving products and services, third parties and customers are now making recommendations to companies about what they want -- and companies are listening. As these social networks continue to grow, the level of your engagement is key. Yes, this does pose questions about transparency, but the model has changed and being transparent is part of the evolution. The benefits include thought leadership, market presence, CRM, brand building, and becoming a source of authority.

So, you just need to sign up for twitter and facebook, right? Wrong! Setting up twitter and facebook accounts for your business is yesterday's news. Many companies who were early adopters of these mediums paved the way for social media strategies, by taking chances, making mistakes, and also making landmarks in establishing customer relationships. While there's still a lot of debate about the 'right way' of marketing your brand across these mediums, there's no disagreement that companies have to be involved in the conversation. What it ultimately boils down to is pushing beyond typical boundaries and having a genuine interest in customer engagement. Companies need to engage in order to establish an online presences and to have a 'voice'. Consumers care about what brands they buy, and what they're brands have to say.

Not engaged yet? Jump on it, because you're customers are waiting to talk.

Mobiles to Fight Poverty

In another incredible video on TED, Iqbal Quadir discusses his bottom-up business model that empowers communities. Small loans and technologies can spur the GNP of emerging nations.

Check out the video below.

Microfinance Club Launch!

After months of planning and work, the Microfinance Club at USF is finally getting launched! Tom, Neha, Jacob, Wilhelmina, David and I have come together to start this group for USF MBA's. Here's a little bit more about us:

Vision and Mission
The USF Microfinance Club (MFC) is a student association at the University of San Francisco dedicated to promoting prosperity in the developing world. The founding board of what would become the Microfinance Club decided to pursue an ambitious project in the field of microfinance.

The endeavor began as a curricular service project in an MBA leadership class. By raising and strategically donating funds through a portfolio of microfinance institutions (MFIs), the MFC makes otherwise elusive capital (microloans) available for creating and maintaining businesses that provide essential goods and services in low-income communities in developing nations. While the principal of each loan is ultimately repaid into the Microfinance Fund, the MFC uses part of the repaid principal to help support the MFIs. As a result, the Fund must be continually replenished by support from the local community.

The MFC not only raises capital – it raises awareness. Just as our activities empower entrepreneurs on the ground in our target communities, they simultaneously empower the MBA students charged with using their business and leadership skills to cultivate and manage the Fund for future generations. In addition to fundraising and fund-management activities, the MFC helps to educate young leaders about the growing field of microfinance and how it can be used to change lives and communities for the better. Our members help us to research and evaluate MFIs, write blogs and articles, and reach out to the community for support.

Our vision for a world where credit is available to anyone who needs it embodies USF’s Core Values of “social responsibility in fulfilling the University’s mission to create, communicate and apply knowledge to a world shared by all people and held in trust for future generations.”

Future events
Tuesday, April 20th - Kiva speaker at USF @5:15pm Malloy Hall LL4
Friday, April 30th - First Annual Microfinance Club Casino Night, 330 Main Street, 6pm-10pm

Donations
Contact me if you're interested in donating to our group. We are looking to raise funds to start investing in a portfolio of microfinance entities this year.

We appreciate all of the support from USF and from fellow students! Come support us at our group launch party on the 30th!!

Facebook's developer platform

Back in 2006, Facebook launched their developer platform, and with the app craze, it looks like Facebook continues to rev up their business with the platform/ application business model. The F8 Conference is on Wednesday, and will be a networking conference for developers and entrepreneurs in the bay area.

A few things they will focus on:
- Growth: how Facebook grew to 400 million users in less than 2 years
- Moving quickly: the techniques for maximizing the performance of Facebook applications and websites
- Industry news and trends: developers discuss the future of mobile, and challenges of cross-platform development
- Social games: the gaming world and the future of Facebook games


But the main question I have been exploring is how Facebook markets applications and retain usership?

1. Facebook has developed three ways of marketing their applications. The first is through joining the app and then sending an invitation to friends. Although Facebook has limited this to 10 people (it used to be 100), it is still an effective marketing tool that spreads an app's success virally.
2. The second is through the mini-feed or news feed. As users play the game and reach higher levels, their success is posted on this feed - a great way to remind people of successful applications.
3. The third way is through the badges on a person's profile. Upon seeing this badge on a friend's profile, you can click the application and add it to your profile too. Even with these tools, many applications do not get substantial visibility.

Facebook’s application development platform is one way to promote the long-term success of good applications.

The iPad Launch

Two weeks ago, the iPad became available for the many anxious Apple fanatics. However, the iPad has some features that are not perfect, such as not supporting Flash, no USB port, and not supporting video chat. Other manufacturers, such as HP and Dell are about to launch their own table and slate PCs, and the market for tablet PCs, e-readers and netbooks will soon be crowded. Various functionality, features and price points will be factors that determine consumer behavior in the market place for these variety of products. Some manufacturers may engage in price wars and thus margins will suffer.

Below I have assumed I am the Product Manager (PM) of the iPad, and am called to Apple’s boardroom to explain your decision about the iPad features & functionality, cost & price, accessories and its evolution.

The release of the iPad this weekend has a lot of hype. Not only are we thrilled about our product, but we are confident that this ground breaking product will create a new market of tablet PC’s/ e-readers. Below we have outlined the features, pricing, and future evolution of the product.

In today’s computing market there appear to be three new types of products that are similar, yet slightly different. These are: the simple e-reader (such as the Kindle), the tablet PC, and netbooks. Consumers overwhelmingly want smaller, more portable computers. After Amazon launched the Kindle in 2008, many companies have eagerly jumped into this e-reader market with different types of products in 2009. With e-reader functions becoming more diverse, computing in the future will no longer be solely used for reading, which has become apparent with the emergence of tablet PC’s and netbooks. This analysis will examine the iPad against the current products in the market, and will look at future developments in order to hols the market share.

In terms of market evolution, the iPad Product Development Team believes that it will take 2 full years before the iPad has moved from the Innovators and Early Adopters to becoming adopted by the Early Majority. This is displayed in the graph below. Early Adopters will have purchased the product upon the release. These Innovators and Early Adopters are Apple fanatics already. They most likely have several Apple products, and believe that we will pave the way in the e-reader market. However, the team knows that most Early Majority adopters will wait until the second version of the iPad is released in 2011. Because there are several disadvantages to the product (which will be outlined below), the iPad Product Development Team will look to improve these aspects with the release of version 2 of the iPad. However, despite any “disadvantages” that might be seen initially, we believe the product is truly ground breaking and will pave the way for e-readers and tablet PC’s.

Features

The primary benefit that we see with the iPad is the fact that it's a product between the monumental iPhone and hugely successful MacBook line. The iPad Team thinks that the product will take over the netbook and tablet PC market, thus changing the entire personal computer market as we know it today. Below we have outlined some of the main features that will attract consumers to our product.

Physical Features

• 9.7-inch LED backlit IPS display – true and deep colors
• fantastic battery life: almost 11 hours
• 16GB, 32GB, or 64GB
• a volume rocker
• screen position lock (which forces the device to remain in landscape or portrait mode)
• a power / sleep button and headphone jack on either side of its top edge
• Apple's famous 30-pin dock connector alongside a single thin speaker on the bottom of the unit
• photo application - fast scrolling, high resolution
• renders webpages quickly
• the hugely successful app platform

One of the disadvantages that the iPad has received already has been in terms of handling a flat slab. Consumers seem to be concerned about typing on a flat surface and the fact that the iPad is heavier than the iPhone. Either consumers will find themselves typing on a flat surface, typing with one hand and holding the device with the other, or typing with two hands using the dock. Early reports have revealed that typing on a flat surface is actually nice. The way our team has designed the product is that the virtual keypad is actually quite big. Although there will be a learning curve in using this product, iPhone users will be adept, and the others will either learn to either type on a flat surface or using the dock. Although typing with one hand will be difficult for some users, we believe the other two options are sufficient for using the product.

However, the touch screen features that consumers love are still included in the product. We have mirrored some of the functions from the iPhone such as the tap and hold function (although we have improved it). Additionally, the iPad has the ability to do split screen, contextual menus and menu bars, and the hover over feature for popup windows. These touch features will be highly appealing to iPad users.

Price

In terms of competitors, we are competing against three other types of products, as mentioned previously. The graph below analyzes the pricing point of the iPad to its competitors.

Product	Price
iPad	$499
HP Slate	$540*
Kindle	$259**
Dell Mini	$299
Aluratek e-reader	$179

* The HP Slate has not yet been released, but early estimate prices say that it will be around the $540 range.

**Kindle recently slashed this price when the XD was released, and upon the release of other tablets like the iPad and expected HP Slate. Clearly the Kindle knew that the only way to stay competitive was to drop prices.

Although we are in the higher end of the price range, Apple must remember that we have produced a sleek, well-designed product that we believe will be the best on the market. In terms of pricing, we believe this is ideal since it is not the highest priced product, but it is near the top end. Apple users know that we produce premium products, and when looking at the list of above products, the iPad stands out because of all of the functions (games, iCal, email, videos, photos, etc). The iPad’s functionality will blow the e-readers functionality out of the water, yet it will simultaneously be different than other netbooks.

Additionally, the strategy of paid content must be included. Apple’s App Store will be a major component in bringing in revenue for the product. Because the company has partnered with many providers, the Apple strategy going forward will be similar to the iPhone. Currently, the average prices of applications are $3.13; however, many applications come for free.

Product placement

As mentioned above the iPad Team believes that we are reaching a market segment that hasn’t been reached yet. The graph below looks at the price and quality of products.

*The quality of the products go from high to low. We believe we have the highest quality product in a price range that isn’t met. Most e-reader products are in the $150 to $260 price range, while netbooks are in the $300 range, and new tablet PC’s will be in the $500+ range.

Despite the few "disadvantages" pointed out by Early Adopters, the iPad's attractive design, multi-touch capability, and application platform will offset the initial omission of Adobe Flash, according to preliminary forecasts from iSuppli Corp. Based on current forecasts, the iPad is expected to sell 7.1 million units in 2010, 14.4 million in 2011, and nearly triple to 20.1 million sales in 2012. These promising statistics have reaffirmed our decision regarding price point.

Evolution

Being the iPad Team, it is of course expected that we will launch new and better versions. Improvements in the second generation will include:

• 4G network: data/ network capability improvements from the current 3G
  
• OLED screen: Organic Light Emitting Diode screen which will provide truer color, and more dynamic ranges of contrast.
• USB 3.0 port: It will be much faster than the current USB 2.0
  
• better battery life: Although the battery life is already impressive, we will look to continually improve it.
  
• faster processor: As with each Apple product, we will continue to improve the speed and efficiency of the processor.
  
• thinner and lighter: Similar to the MacBook Air coming out, we will also aim to make the iPad lighter.
  
• camera's: Cameras will enable video chat function, and other fun photo features that users are looking forward to.
  

The final reason why we are sure of the product's success is due to the fact that the iPad Team is focused on launching a product that is the best, and not necessarily the first to market. We believe we've developed a truly revolutionary product, and we anxiously await the future!

The Clean Energy Race

The clean energy movement has been gaining speed and a lot of attention in the global arena. As hybrid cars, green buildings and other clean technologies continue to emerge, countries are outbidding each other in the investment in clean energy technology, which will threaten the balance of energy security and power among key regions around the world. The primary question will be: How will the energy map being redrawn, and what are the key implications? By evaluating the access to renewable resources and re-assessing established alliances, the race for clean energy will continue to drive competition. Bremner and Keat state that “the world’s energy supply increasingly comes from parts of the world that are politically unstable. The world’s growth is increasingly driven by emerging markets” (Bremner & Keat, 2009). The race for energy is exactly this, and this paper hopes to examine some of the intricacies, and political and economic risks.

The investment race

Taking a glance back in history, energy transitions take time. It took approximately 100 years for coal to go from being 10% of the world’s energy source to 60% currently. After that it took 60 years after the introduction of oil as fuel to provide 50% of the world’s energy (Hodum, 2010). Green technology or renewable energy is no different than coal or oil, and although the adoption of new technology has been slow, there is a large appetite for innovation, and research and development.

In terms of top investors, the biggest have been China, the United States, South Korea, and the European Union, although Europe severely lags compared to the Asian nations. Over the last five years, total global annual investment in clean energy has grown from $36 billion to $145 billion, with total transactions amounting to over $200 billion in 2009 (Swezey & Norris, 2009). Capital investment is going primarily to energy efficiency, mass transit, and renewable energy deployment. The Breakthrough Blog claims that China, Japan and South Korean “governments will invest $519 billion in clean technology between 2009 and 2013, compared to $172 billion by the U.S. government. Climate and energy legislation, which passed the House in June, would contribute $28.7 billion of the $172 billion five year total. China alone will spend $440 billion to $660 billion over the next ten years on clean tech.” (Breakthrough, 2009) See Graph 1 in the Appendix for a depiction of foreign and US investment in clean technology.

What does this investment in the public sector mean for the US? It means that the US must take swift actions in order to remain competitive. In 2009, the US House of Representatives passed a new clean energy policy known as the American Clean Energy and Security Act. While this looked like a good attempt for the US to stay viable, many Americans thought that it was too radical. However, when looking at this policy on the international scale, the policy did not include enough proactive policy, and the funding for research and development, commercialization and production of clean technology was rather low, when compared to Chinese investment. The issue is that if this investment gap continues to exist, the US will continue to become tremendously reliant upon importing these technologies.

Key players and real examples

The United States and China rank first and second in deploying clean energy and creating a policy environment for growth and investment. Let’s look at the G2. The bilateral relationship with the US and China is an example, where clean energy has been elevated to a priority issue between both governments. The G2 is steadily beginning to address trade pressures related to clean energy deployment.

Looking at wind energy for example, there is a rare earth element called neodymium that is required for the magnets in the wind turbine. The world’s largest earth deposits are currently located in China, and China recently made it public that they intended to strengthen control over these elements. Additionally, the report Rising Tigers Sleeping Giant states that, “the United States relies on foreign-owned companies to manufacture the majority of its wind turbines, produces less than 10 percent of the world’s solar cells, and is losing ground on hybrid and electric vehicle technology and manufacturing” (Rob Atkinson, 2009). This statistic is scary when considering that most Americans assume that they lead the way in green technology.

Moreover, when looking at hybrid vehicles, the rare earth element known as lanthanum is a primary component that is part of the nickel-metal hydrate battery in Toyota’s Prius. While the Prius also requires neodymium, the increasing dependence upon these rare earth elements has prompted companies like Toyota to search for other alternatives outside of China (Hsu, 2010). In addition, the Chinese company, BYD, introduced the world’s first plug-in hybrid car at the end of 2008, which was at least one full year ahead of the competition in Japan and the US. The bottom line is that the US is becoming heavily dependent upon importing these materials in order to stay in the race, and doesn’t even lead the race for new technologies.

It’s not just investment

Not only is investment an integral part of this race, but economic policy is also key. China has paid attention to this. In 2001, it cut value-added taxes in half on wind power production, and between October 2007 and June 2008, the government provided $205 million in financial subsidies to companies in wind power. It is important to note that the US suffers in this area also. Because the US does not have economic policies that incentivize companies to pursue and to compete with Chinese companies, there is little private investment.

An authoritarian globalizer or a resource nationalist?

Bremner and Keat refer to China as an authoritarian globalizer. They state that while China has accepted the necessity of foreign presence in their financial system and market, an authoritarian globalize state has small elites that hold a monopoly on political power. Because foreign exposure places pressure on this type of government, there is a constant balance between foreign influence and the elites in politics.

However, due to the nature of China’s investment in renewable energy, I would make the argument that they could also be seen as a resource nationalist. Bremner and Keat describe these nations as leveraging their “energy wealth to consolidate power at home and to flex their muscles abroad… [They] have changed the rules for foreign investment in what they consider to be ‘strategic sectors’ of their economies – especially natural resources” (Bremner & Keat, 2009). China seems to exude many of these qualities especially when considering the fact that they hold many of the resources necessary for renewable energy, both investment and resources.

However, it is also important to remember that the relationship between the US and China is very important. The Yuan is pegged to the dollar, and China is reliant upon the US for exports. Although it’s suspected that the Yuan is undervalued, China does not want the value to go up, because then the value of the exports would go down. Similarly, throughout the Great Recession, China has not wanted the US economy to hurt, because if the US economy hurts, then so do Chinese exports.

Implications

What do the above mentioned changes mean? They both reflect the accelerating shift of global power from America to Asia, which some claim to have been caused by poor US economic policy. While it may be possible for some US companies to benefit from joint ventures abroad (jobs, innovation, tax benefits, etc.), it is apparent that Asian nations are the clear winners, specifically China. The Rising Tiger Sleeping Giant report claims “If the United States hopes to compete for new clean energy industries it must close the widening gap between government investments in the United States and Asia’s clean tech tigers and provide more robust support for U.S. clean tech research and innovation, manufacturing, and domestic market demand” (Rob Atkinson, 2009).

As a result, one primary concern in the transition to clean energy is that the United States is only developing a new dependence on China. While the goal has been to move away from the dependence of Middle Eastern oil, some of the new technologies are dependent upon China, and as previously discussed, it is clear that China’s investment in renewable technology poses an enormous threat to the US.

Although the US clearly faces some new challenges, there are also opportunities. It is evident that the US is losing the clean technology race. If the US does not want to become dependent upon imports, they must implement new policies that encourage domestic investment and an appetite for innovation, research and development, and producing clean technologies on American soil. The US has always succeeded in innovation, especially when looking at Silicon Valley and the culture of start-ups and venture capitalists. Although China is dependent upon the US for exporting goods, the US and Chinese governments need to support policies that fosters collaboration, instead of protectionist competition. Managing these relationships and policies will ensure that the US remains competitive in the race for renewable energy.

A Pegged Currency

I know this isn't marketing focused, but in my Financial Case Analysis class we are examining the benefits and disadvantages of the Yuan being pegged to the dollar. Below are some thoughts and analysis on the current situation, and how China is benefiting.

The current Chinese policy of pegging the Yuan currency to the US Dollar at artificially low rates is beneficial to the Chinese economy as a whole. Lower exchange rates with trade partners lower the demand for imported goods as they become more expensive to Chinese consumers. In addition this makes Chinese exports cheaper than they would be if the Yuan was traded freely without government manipulation of their currency. This benefits Chinese industry at the expense of Chinese consumers in the short run, but long term growth of domestic industry is seen as having many benefits to Chinese society.

By distorting their currency China has become the world’s supplier of cheap unskilled labor and a place that investors can get value for their investments. American companies cannot compete with a Chinese company who has equal capitalization, technology advancement, and human capital of labor due to the current conditions. However, China is currently undercapitalized as a county. They lack the incorporation of technology into their production methods and they lack human capital in many types of industries. To remedy this issue, China has created the opportunity for foreign investors to look towards China as a great investment. Also, investing outside of China is more expensive for domestic investors, thus forcing China to infuse industries with capital to incorporate more technology. To marginalize the effect a lack of initial human capital would have on enterprise, China can compete with overall lower wages offered in labor. Training costs may exceed their foreign competitors, but training costs can be marginalized with low turn-over within a company and can only occur once per employee while a lower wage is always going to benefit the company in terms of lowering costs.

While a simplistic economic model, a Production Possibilities Curve graph can easily depict the reason China has adopted this currency policy to address the issues described above. To infuse capital into their economy they have decided to make it more enticing for investors to invest in China. This is why outsourcing to China at the expense of our other trade partners has occurred over the past two decades. In order to speed up this process of increasing the capacity of production within China, a devalued currency would help foster domestic industries that in the long run will be able to compete against foreign companies which are currently more productive and profitable due to proper capitalization and human capital.

If China were to change their policy and let the Yuan float against other currencies in a free market it is likely that the Yuan would appreciate in relation to these foreign currencies. This can have societal effects that could lead to a dangerous internal political climate. It would be expected that as the Yuan increased in value exports would be reduced. This reduction in exports from an export based economy like China would render it with high unemployment as their labor intensive export based businesses like the garment industry would be rendered uncompetitive against foreign competitors.

While China’s currency policy has hurt American companies attempting to compete directly with artificially cheap Chinese exports it has benefited the American consumer and all companies that do not directly compete with Chinese exports. Every time an American buys a Chinese good that is cheaper than alternatives due to currency “manipulation” it increases the buying power of that American consumer. This increased purchasing power allows American consumers the chance to purchase other goods and services they normally would not have been able to afford. A perfect American company that is an example of this would be Walmart. Walmart has benefited greatly by being a large buyer of Chinese exports and providing American consumers the opportunity to purchase these goods at lower prices than domestic providers can produce them at.

Although one could make the argument that with greater purchasing power we are hurting in terms of reducing the ability to export goods. The question then becomes: Is the benefit greater than the cost? In this case the answer is an emphatic yes. Most of our economy is not subject to Chinese competition. China does not sell us a house in Orange County, a meal in New York or health care in Chicago. On top of that we do not purchase any of their cars or airplanes. Therefore, only a small segment (i.e. clothing and furniture) is harmed, but at the same time this segment becomes more efficient as a result. China has given itself a competitive advantage and competition is good for capitalism.

Being able to purchase Chinese and other foreign products at the lowest possible price makes American companies more competitive. It allows them to sell more products and hire more American workers. Therefore, as some of us would like to render the devaluation of the Yuan as “manipulation” of Chinese currency, we have made the argument that it actually saves and create jobs here in the United States.