Archive by Author | samanthachin1

Barnes & Noble’s Nook Tablet to Offer Google Apps, Gmail

With the Barnes & Noble’s Nook Tablet already competing with Amazon’s Kindle Fire as reading tablets, the Nook is becoming more competitive as they just added Google’s Android app store and services such as Gmail and Google Maps. This addition comes after there were disappointing holiday sales of the Nook devices whose revenue fell twenty-six percent as reported in the month of February. A negative aspect to this addition of Android apps is that now Nook device owners would also be able to buy and read Kindle titles, and digital books from Google Play. This could perhaps lead to an increase in sales of the Kindle titles being sold, which would lead to profit for Amazon. Google in return, is benefitting from both of these companies that use its services and are expanding on mobile devices. Although Barnes & Noble is declining to state the amount of revenue that would be shared with Google, instead it can be assumed that they will be receiving a similar or higher amount compared to how much Amazon shares as well.

This change in the Nook Tablet beginning to offer Google apps, is the beginning of a change in an increase in profits for Google. Whether or not Nook will see an increase in profits is debatable because they are can access Kindle Fire. The economy is overall moving towards a more efficient and easier access, which can allow future innovators and those wanting to seek profit from companies, that own tablet products can start up their own ideas. The trend for Barnes & Noble, with a decrease in their sales shows how companies overall try to earn high profits.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324582004578459231323427780.html?mod=WSJ_business_whatsNews

 

Retailers Wage War Against Long Lines

New technology involving infrared vision to detect body heat above the entrances and cash registers are being used in the supermarket giant, Kroger Co., and has shown a decrease to the customers average wait time to twenty-six seconds. Before these cameras were installed it took an average of four minutes. Retail strategist, Kurt Kendall claimed that since the checkout is the last experience in the store, it is important that they do not have a bad experience or it will affect their overall profits and customers that wouldn’t return. Other stores such as McDonalds and Wal-Mart are also seeking to improve their customer service through the use of technology, where McDonalds plans on using a new ordering system that will pay closer attention to hospitality, and Wal-Mart that is planning to us a “Scan & Go” system. Technology is constantly changing the way customers are shopping in their supermarkets, retail stores, or fast food chains because they are using their mobile devices to make their lives simpler.

This new change in technology allows companies to better their overall profits, as the line wait will decline making more purchases over time.  Not only does the new technology provide efficiency, but it also allows to track and collect data about what items that customers are buying and what times that the lines fill up fast. Overall this provides better business for the American companies that consumers return to after receiving good customer service.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887323798104578453293807869744.html?mod=WSJ_business_LeadStoryRotator

Would-Be Buyers of Organix Naturally Hesitant on Name

Many private-equity firms are second-guessing their decisions when deciding whether or not they should risk investing money behind a product called Organix, by the company, Vogue International. The hair-care products are being criticized for not being what its name may assume to be which is organic. The products fail to meet California’s standards where in order to market products that are considered to be organic must contain 70% organic ingredients by weight that excludes water and salt. The company can resolve this issue if the products are renamed to OGX with formerly Organix written in the back. Goldman Sachs currently advises the company and has been reaching out to private-equity firms to invest, but many withdrew because of the controversy over the branding issues. Goldman Sachs originally priced one billion dollars on Vogue but after corporates placed their bids, many were targeting the price range of $700 million to $800 million due to the branding concerns.  The founder of the company claims that he might have to sell to a bidder that is not the highest because he prefers to participate with an enterprise that wont have payments tied to the company meeting future performance targets.

As I have learned from this article, branding a product can lead a company to face many legal issues, and plays a huge role in determining profits as well. Although the distribution of the Organix shampoos have increased the sales of chains such as Wal-Mart, Walgreens, and CVS Caremark increase, for other products, it can decrease the amount of profits the company takes in. In this case, many corporate bidders are failing to make offers due to the brand name that is misleading and has attracted litigation. Many corporate bidders do not want to invest in products that have “baggage.”

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887323798104578455134230275820.html

China Manufacturers Survive by Moving to Asian Neighbors

The Chinese apparel company, Lever Style Inc. has declined by its workers and payroll, as they have chosen to move their production for a Japanese retail chain, Uniqlo to Vietnam. The company is also planning to shift to India as it will test to see whether or not the production will be as successful.  A former investment banker who took over his family business claims that operating in Southern China is just leading to break even as many other companies are shifting their manufacturing to other countries. The costs in China have rising wages and a labor shortage, which a move would allow to keep consumer prices in check. In order to maintain the manufacturing companies in China, it would have to expand its service sector and create a higher-skilled manufacturing job as well as embrace research and high-technology, similar to other countries as South Korea and Japan.

Overall I believe that the company is making the right decision by deciding to relocate their manufacturers and in order to actually earn profit. This affects the economy overall because companies such as Nordstrom and Uniqlo would have to pay different prices compared to how much they would have to pay for their factories in China. Therefore, these companies might actually see profit because their costs would not be going towards the wages, but rather they would see an increase earnings.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887323798104578453073103566416.html?mod=WSJ_business_LeadStoryRotator

Food Magazines Feast on New Ads

In the first quarter, many popular food magazines have noticed a large increase in their ad pages, since food magazines are broadening their traditional focus. Magazines such as Bon Appetit, Food Network, and Eating Well have broken away from the traditional recipe magazines where they now include popular destination restaurants, celebrity chefs, and travel.  This new change in expanding the topics within food magazines has been successful as there was an increase in the total paid circulation for most of the major food magazines even though there was a marginal drop for the overall industry. Before Food Network Magazine was launched, many of the spending on magazines had dropped around 21% whereas now it is revitalized and more people are interested in the food magazine genre.  Now that this change occurred, more non-food advertisers around the world are reaching out and are able to make titles less vulnerable to swings in a certain industry.

I believe that due to this change in the culture of food magazines, and how they present food as a lifestyle benefits many advertisers. This can bring more profits to agencies because now that there is a broader audience who read the food magazines, they will be able to reach out to a larger audience as well. There can also be a downside to this growth in food magazines because their rivals of other genres are struggling to capture the attention of other audiences and agencies.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887323798104578452943642168814.html?mod=WSJ_business_whatsNews

Chinese Industrial Profit Growth Slows

The overall increase in the profits of just 5.3% in March from the previous decline of 17.2% in the first two months of the year for the earnings growth in China, shows how the second-largest economy could slow down even further. Although there is an overall decline in China, some businesses continue to advance, while overcapacity, reduced government spending, and a difficult environment to operate their businesses in hurt others. Sports retailers show a decline with their massive growth in inventory as their earnings fell 20% from a year earlier. Auto sales have also declined due to a maturing market that is showing a weak recovery. The real-estate sector, instead, is the biggest contributor to the domestic demand, which might bring a decline to the overall economy of China when the government crackdown on bubbly housing prices could possibly slow the development.

The industrial profit can increase as China’s leaders want household consumption to play a larger role in reshaping the economy to encourage growth, but there has been an unpredictable market. I believe that as China’s markets shows a decline in overall growth; it can also affect the growth here in the United States. If companies are doing poorly overseas in China, such as YUM Brands, which is the owner of the KFC restaurant chain, it can affect the overall company and their sales. With a decline in profits for these companies, it may force them to bring changes to how they operate elsewhere and in the United States as well. It is important that the leaders in China, as well as businesses, figure out a way to resolve this issue and increase their growth in industrial profits.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324482504578450792466803324.html?mod=WSJ_business_whatsNews

Scalpers Beware: New Laws Redefine What Is a Ticket

With many companies choosing to become paperless, concert promoters in the California state have chosen to preserve paperless tickets, which would be redeemed at the venue by the purchaser. Online sellers of tickets such as StubHub, eBay and Ticketmaster are seen as having an issue with these paperless tickets because they are also promoting paperless tickets. The change in direction towards paperless tickets is due to the reason of an increase in scalping, which has become more sophisticated. One reason why the price for the average North American ticket prices have increased over the past ten years is to make up for the difference of concert promoters who earn profit through the secondary market. New York is currently the only state that restricts paper ticketing and almost in New Jersey, where a ban has been proposed.

I believe that the benefit of paperless tickets ensures that some tickets stay at face value rather than being bided online at a secondary market is what is most beneficial for many concertgoers who should not pay an extra amount from scalpers.  The only downside is that only 0.1% of the tickets sold today are paperless which proves that if this method of using paperless tickets is chosen, it may lead to a decrease in profits because people would rather purchase them traditionally, but end up spending more in the secondary market.
Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887323551004578441132136821420.html

Shopping Tax Free on the Web Nears End

Last Thursday, the Senate passed a 63-to-30 procedural vote to pass the Marketplace Fairness Act, which is a bill ending tax-free shipping online. The final Senate vote is scheduled for May 6. With the growth of online retailers who are beginning to expand their operations nationwide, they have been benefitting from not having to charge shoppers a sales tax. This bill would replace a Supreme Court decision that was made in 1992 where it held that states could not force a retailer to collect sales tax unless they had a physical property such as a store or warehouse. The Chief Executive of eBay, John Donahoe believes that it would damage smaller retailers because it would be treating them the same way as it treats larger merchants. Amazon gave their employees color-coded U.S. maps so that it would show present red states that symbolized it would trigger sales-tax collection if travelled that far. Amazon thought of a technique to go around this by building distribution centers close to urban centers for delaying the start of sales-tax collection.

I believe that the Chief Executive of eBay made a strong point about the new bill that could possibly affect smaller businesses. Since eBay and possibly other online Web Stores collect commission fees from sellers, having a sales tax to online retailers could take away these small retailers. Overall this new sales tax on online orders can affect the amount of consumer spending through online stores, as well as have a decline in the small businesses or individuals who choose to have their business through online rather than storefronts.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324743704578445220306876996.html?mod=WSJ_business_whatsNews

UPS Posts Higher Profit

After a strong post holiday shopping spree by many of the U.S. consumers online, it has led to an increase in the first quarter profit of the United Parcel Service Inc. (UPS) by 6.9%. The Chief Financial Officer, Kurt Kuehn predicts that the U.S. economy will be stable so that their forecast for 2% in growth has not changed. Other countries in Europe and Asia have profits that are opposite of those in the United States where many of their sales have been slowed down. These transport companies play a significant role in our economy because they transport everything that is bought and sold from business to business or business to consumer relations. Also, on Thursday, UPS also stated that it would buy Hungary based pharmaceutical logistics company, Cemelog Zrt to strengthen its health-care business in Europe.

With higher profits in transportation companies, I believe that it can tell a lot about how consumers are spending in the economy, and what is being shipped across the nation. Companies such as UPS play a vital role in determining and being able to present how the flow of goods is being exchanged.  If profits are down for the transportation companies, it can present a decline in the overall economy of business and consumer spending.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324474004578444511846351012.html?mod=WSJ_business_whatsNews

Coke Refreshes Aging Board

Coca-Cola has a very powerful and influential company board over the past decade and a half, as they are able to replace chief executives and influence company strategies successfully. Their board has also been among the oldest as over half of the seventeen elected in 2012 were at least seventy years old. There is going to be drastic changes for the future as two of the oldest directors, the former president and the chairman of investment firm Allen & C o., and James Williams, the former chairman of SunTrust Banks Inc., are retiring. Not only are the oldest of the board stepping down, but the other Coke directors also plan to do so by the year 2015. The new and younger board members plan on directing their money towards smaller but faster drink categories, as well as more acquisitions.

I believe that this will have an effect to all Coca-Cola consumers because now that there will be a new “refreshing” board, they might not know the company and what Coca-Cola represents and is. Although this may be a negative, there are also positives to this change in board as Coke wants to redirect their targets to a larger market of young people, in which younger directors would be needed for. A change in the age of the directors can bring new reinvented ideas as well as keep up with the changing times. The company has also not advertised as much in social media, which hopes to change with the new, younger board of directors.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887323551004578441192135940694.html?mod=WSJ_business_LeftSecondHighlights

Tobacco Industry’s Challenge to Law Requiring Graphic Labels Is Rejected

A 2009 federal law requires that there are graphic warning labels on cigarettes and an expanded marketing restriction on tobacco products was challenged by the tobacco-industry, but rejected on Monday. This federal law was challenged because it was argued that it violated the constitutional free-speech rights of the tobacco companies such as R.J. Reynolds Tobacco Co. and Lorillard Tobacco Co. The law specifically claims that half of the space on the front and back of the cigarette packages has to account for the graphic health warnings, as well as their marketing practices such as cigarette-brand sponsorships of sporting or cultural events are also banned.  Although many producers argue about the FDA rule, consumer groups actually support the actions of the Supreme Court because it keeps the federal tobacco law in place.

I believe that this ruling should be kept in place about the graphic danger warnings on the cartridges, will allow people to be more cautious and think twice before they purchase a pack of cigarettes. This new ruling will definitely decrease the sales of cigarettes because their marketing strategy will face a loss when they are not allowed to post sponsorships at events. This new federal law can change the way consumers spend on tobacco, as well as the amount of people who smoke.
Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887323735604578438594078101904.html

Hasbro’s Loss Widens on Restructuring Charges

Although the toy making company, Hasbro Inc. has improved its revenue for three of the four product categories, its first quarter losses have increased.  Hasbro Inc. relies on brand innovation for its growth in revenue for its Games, Preschool, and Girls categories. The largest category of the company, boy’s products have dropped by 20%, which can account for such a loss in the first quarter. A factor that causes the decrease in sales for boys’ products that include Transformers and G.I. Joe toys is due to popularity of mobile-device play.  For the first quarter, they have already reported a loss of $6.67 million, or five cents a share, which is an increase of three million since last year where they reported $2.58 million.

I believe that this overall affects the market in which children’s toys will be affected with losses and a decrease in the sales of their toy products. Technology has a large impact not only on companies in which adults are targeted, but now there is an increasing trend in the usage of mobile devices for children. Young children nowadays are spending more time on their parent’s tablets or phones rather than playing with traditional toys. The rival toy maker Mattel Inc., unlike Hasbro has seen higher profits with an increase demand in certain toy brands such as American Girl and Monster High dolls. This proves that toy companies will have to ensure that their company will target their audience in order for their company to survive in the market.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324874204578438381315004190.html?mod=WSJ_business_whatsNews

Koch Industries Eyes Tribune Papers

Billionaire brothers, Charles and David Koch of he diversified industrial conglomerate, Koch Industries are interested in buying Tribune Co.’s newspapers, which include the Los Angeles Times and the Chicago Tribune. Koch Industries currently owns a wide variety of industrial businesses that include energy to paper milling, but they have not owned a business linked to the media industry. Tribune under bankruptcy protection at the end of last year has hired Evercore Partners and JP Morgan to explore the sale of its newspapers, which will present financial information in the upcoming month. Both sides have not discussed about a deal or bid, but Koch Industries is hoping to explore the Tribune as an opportunity that will be profitable. Other famous investors as well as other entertainment industry high ranks, such as News Corp, owner of The Wall Street Journal and television stations in Los Angeles,  are also interested in the Los Angeles Times.

The bidding of a significant newspaper company, the Tribune Co., affects us because it can potentially affect what readers in Los Angeles and Chicago will read. The information about events that occur around the world are portrayed to us depending on what the media chooses to include in their publications. Since Koch Industries has had little exposure within the media business, both companies may not benefit from this deal whatsoever.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324874204578436943221475074.html

Part-Time Work Becomes Full-Time Wait for Better Job

Although our economy has generated thirty straight months of job growth, many of these jobs just consist of part time jobs rather than those who are mostly looking for a full time position. About fourteen percent accounts for the involuntary part timers and people who want to work but have stopped looking, because they are accepting part-time pay because they have no other choice. The only markets that are particularly hiring are low-wage service jobs that include retail, home health care, and food preparation, which can explain why household incomes have fell in the latest report. Since the recession, three percent of workers have increased to working fewer than thirty-five hours, from about sixteen percent to nineteen percent.  Many employers are competing with one another to receive more hours, but managers cannot afford to be paying everyone the hours that they actually want.

This overall trend of an increasing number of part-time employees rather than full-time can have negative effects on our economy. Due to a lower income, this may force decrease the overall consumer spending. With a lower spending, companies will not make as much sales that could also potentially lead to a decrease in hiring a certain number of workers.

Written by : Samantha Chin

Source: The New York Times

http://www.nytimes.com/2013/04/20/business/part-time-work-becomes-full-time-wait-for-better-job.html?pagewanted=2&_r=0&ref=economy