US Debt Ceiling

So this is a post which has little to do with technology or with business in general. It will mainly be an economics based piece looking at the US deficit.

The US government is in debt, and it’s not the small debt most consumers call credit card debt. This is equivalent to a normal persons mortgage on a £3 million mansion with an extra £60 thousand in personal loans ( it could be more than this but this is exaggerated). The US government, both congress and president Obama have been struggling with this issue since before Obama started his second term in office. Democrats want to keep certain programmes which have been seen as progressive in the sense that healthcare should be provided to those who can’t afford it. While Republicans are trying to push for lower taxes on the richest of the rich who already control a lot of the economy and get away with it.

The Obama healthcare or Obamacare as it’s dubbed by media is the first thing Republicans want to remove as it is a policy focused on low income families or those who are struggling and are on welfare. It’s quite shocking that in the UK, the National Health Service is provided to all for basic and complicated healthcare issues and that accommodates a country of below 70 million. It makes it much harder to have across the board healthcare in the USA as they have to focus on over 350 million residents. It will be much more costly if everything was provided in the USA.

The Democratic Party has had problems when it comes to their policy implementations. Obama being president has some powers but has to pass the major laws and policies through Congress, which is led by Republications. This causes a major power struggle for the President who wants to implement policies but is blocked. The best policy changes Obama has done in this presidency is the repeal of the Defence of Marriage Act and how same sex couples are allowed to marry in the state of California but that is more state law rather than Federal law.

What does this have to do with the debt limit? Well everything that Obama does or doesn’t do can effect the way in which he pushes for cost cutting measures come October 15th. The USA will be bankrupt as of 1st October as they have to make payments of $60 billion with only $30 billion in the kitty. The increase in the limit of the US debt is just a bandage on a gushing wound. With debt of over $13 trillion, the structural deficit will be focal point for budget cuts. The larger sum has been accumulated by all previous presidents and should not be Obama’s problem to completely irradiate. If Obama is able to push for higher taxes on the rich and super rich, he would be able to create larger revenues for the fiscal year, but he would need to compromise on something.

One solution to this is pay off debt with more debt. The US Treasury could issue super long term bonds with low interest rates in order to pay it’s current debt. This will be a short term fix, but it will allow the future presidents to worry about the debt issued today, so Obama wouldn’t have to think too much in that respect. The fact that the US government has made drastic cuts already to the budget especially for military personnel could just mean that the US Congress will not reach a decision this time either. One thing I personally feel the government could do it cut agricultural subsidies. It baffles me to think that governments subsidise agriculture when the products cultivated are then just stored in the millions. The US has got millions of tonnes of corn not being used because it is highly subsidised but then is re-engineered to become high fructose corn syrup causing cheap sugar to enter the US consumer market.

Nike SWOT Analysis

This is a post based on the sports apparel company Nike and will look at the business model focusing around the SWOT analysis.

Strengths

Nike has a strong global brand which everyone will know by its logo. The logo itself needs to be presented without the name and everyone will know what it is, that is how powerful the brand is. Some companies require their names to be present but in this case that is not true. This is garnered a long term customer loyalty base where the products are synonymous with high quality clothing and fitness trainers. The power of the brand is also evident in the fact that Nike has well known athletes and other celebrities which will put further backing to the brand if it is deemed to be “cool” to wear. Athletes like LeBron James, Roger Federer and others such as Andrew Luck where each of these people represent a different sport from basketball to tennis to American football respectively. They promote the company by wearing Nike branded clothes from head to toe to more recently wrist in the form of the Nike FuelBand.

Nike FuelBand

The company is a clothing brand and there is little to innovate in. However, Nike has managed to find ways to innovate their products and to provide a range for various different price points to cater for different demographics. This shows that the company is versatile in its product offering, whilst also remaining relevant as the industry leader. The new Flyknit running shoes, the FuelBand wristband and the Dri-Fit clothing technology are all innovative and are applicable to different products. The Flyknit trainers are very unique where they allow the runner to have a bare foot feel experience, while the FuelBand moves into the new market of wearable technology with a focus on keeping active. The FuelBand allows the user to connect it to their smartphones and to compete against their friends to give a competitive side to always moving and being active.

Weaknesses

Due to the strong brand, the company can be seen as exploitative and greedy. The company can stick their logo on a plain white t-shirt and sell it for over triple the manufacturing cost, not to mention the fact that the company has had problems in the past with its manufacturing processes. The high mark up on the basic products allows the company to generate large levels of profits which can be a seen as unethical, but they do operate as a for profit company. The supply chain is the most important aspect of Nike’s business model, as they need to ensure that they have a solid supply chain from sourcing raw materials to manufacturing and to delivery logistics. Each of these areas creates a cost for the company, much like any other, and they could try to squeeze their factory workers with lower wages and/or bad working conditions.

Workers rights violated?

The profit margin of the company is impacted by other factors which aren’t the supply chain. The other main restrain on the margin is the retailer cuts where the retailer will push for a lower wholesale price in order to keep lower prices for their customers. The only way Nike can bypass this is by having their own physical stores, however this would result in an increase in fixed overheads such as wages, rent and utilities which can make it counterproductive. The only way in which this would work is if the store is locating in a central location with a high number of footfall, the best example for the UK is London Oxford Circus, which gets domestic and international tourists entering the branch.

Opportunities

Technology is moving very quickly, and the industry is coming up with new different form factors of usable technology. Mobile phones became smartphones, CDs became MP3 players and VHS became Blu-Ray discs. Nike has dabbed it’s hand in technology when it created Nike+ with a collaboration with Apple where is was sold as a smartphone feature to track running distances and calories burned. Nike had then moved onto making its own wearable fitness technology with a fitness watch, the FuelBand and with a game with the Kinect camera for Xbox 360. Nike could look at investing into more of these types of wearable technology so that they technology is already placed in smartphones. This would be an excellent way to create licensing revenue as well as having a wider reach of consumers.

There are various different types of shoes that Nike offer and the products are seemed to be blurring into other product ranges. Within the Nike Free range, there is Freerun 3.0, Freerun 5.0, Freerun+ 2ID, FlyKnit, FlyKnit Lunar1 +ID and it can be confusing when picking a running shoe. There are only slight differences in the product but the differences can be hard to understand when there is no expanded explanation. The only way in which a consumer can understand these differences is to spend time reading each one and comparing it, or physically going to a Nike store and getting a sales person to assist, and there is no guarantee that the sales person knows everything. Nike could try and streamline the naming of some of their products within certain ranges. This will allow the company to maximise the customers understanding of the products on offer and the features they represent.

nike

Threats

For large multinational corporations, the profit generated from different countries is a great way to continue operating when the domestic market is reaching saturation. The main risk with this is currency fluctuations and how a massive change in the foreign and domestic currency will make any profits overseas can turn it into a loss. Companies have had to create finance divisions specifically to manage their currency risk, most likely using a combination of forward contracts, futures contracts and call/put options. The recent decline in the Indian Rupee shows how the company can benefit from drops in foreign currencies where the goods that Nike will ship to other countries will be even cheaper. The main problem with any currencies changing would be domestic currency for Nike which will be the US Dollar. The US Federal Reserve choosing to continue its asset purchase scheme has allowed the US Dollar to strengthen stock markets to be more risk taking and choose the US market to invest in and the Federal Reserve seems to be continuing asset purchases for the foreseeable future.

All that money

The recent collapse of a Bangladesh clothing manufacturing factory caused major publicity problems for fashion retailers. The collapse brought to light the bad working conditions and the major problem of cutting corners in countries where building legislations are sometimes ignored, especially in the case of the Bangladeshi factory. Nike has had problems with their factories which they have actively and vocally created internal codes of conduct to address concerns of the public. When it comes to the problems of the collapse, the developed world would find it ways to boycott a company is there are seen to be unethical. Nike could find difficulties domestically if they encounter problems with sales if they have any problems with their factories.

Next generation of pioneers

Next Generation of Pioneers

There is a slight passion in everyone to be sustainable. In most instances, we try to be sustainable with our money and how we budget for the future. It’s quite nerve-racking to think that when we do this, we think about the short-term, which can even be as long as a couple of decades, for example getting a mortgage for a house. Others have a different magnitude of passion. Some individuals in the world try to push themselves in respect to sustainability and can even become pioneers in thinking differently. They would try to think outside of the box and try to make their ideas flourish by telling others either by protests or by presentations.

Here is an example of a young man thinking like a pioneer. He has used his personal passion of diving to come up with an ingenious idea to remedy the problems he encountered during his diving sessions. And he is only 19 years old and this is his presentation.

He has found a way to remove plastic from the oceans in a unique way which most people could not imagine, as well as making it profitable. There would be a few businesses who will invest in this man, but most likely for the wrong reasons. He could be employed by an oil company who would use his invention to capture spilt oil which can occur at any time or in any area of the world. He could also be employed by government, who are likely to use his idea for the right uses.

The Problem

There is a major problem when it comes to sustainability. It’s each to their own. There is never or rarely collective thinking to reduce the impact of humans on this planet. The fact that people all over the world are using different types of plastic on a daily basis but are not thinking what happens once its left the big bin outside their homes.This plastic has most likely have been dumped into rivers, lakes and into oceans and it is mostly to have been done on purpose. And yet this young man has found a solution to this problem, even though it shouldn’t be his problem to solve.

Businesses blame lack of governmental influence when it comes to these sensitive topics. Business would say government because businesses too need to be sustainable, they need to sustain their profits to appease investors. Governments on the other hand cannot afford to keep their environmental policies and investments intact for long periods of time, and this is because of politics. Political parties change on average every 4 years, and you can’t make change in that time. Hell, it’s even hard to change things during 8 years in office. When a new party comes into power, the first thing to change is environmental policies.

Tony Abbott winning the general election for Australia in late 2013 shows this will be the case. The previous government had introduced a controversial carbon tax on emissions which is likely to be scrapped by this new government. The only way in which policies would be kept indefinitely in law is with a communist based government. China has had subsidies for solar panel production and has caused controversy with Western manufacturers as they are finding it harder to sell their less efficient solar panels. The Obama administration has pushed to disallow new power plants using coal, which has angered the coal industry as expected, but has not had a strong push on an alternative toward producing new energy sources. The best example for renewable energy is California which is just a state pushing for policies on solar panel installations.

What next?

It is very hard to deny the fact that the planet is undergoing problems due to the massive amount of pollution which is being put into both the air and the oceans. A strong legal position should be presented by various governments, particularly the G20 nations, in order to place a strong emphasis on sustainability. Corporations should lend a helping hand also by improving their own environmental procedures with a top down culture with continuous monitoring to ensure effectiveness. This recommendation is based on the fact that is can cost lots of money to get started, however the current cost is much less when compared to potential future costs which could be infinite as the damage can be irreversible.

iPhone 5C and iPhone 5S

iPhone 5C and iPhone 5S Announcements

The new iteration iPhone has been announced by Apple on the 10th of September, where the company introduced 2 different iPhone models. There was a strong negative impact on the company’s stock price where the price dropped by 5% the day after the announcement. The primary reason this could be because analysts and consumers were hoping for a much lower price point for the lower end phone, iPhone 5C.

iPhone 5C

This iPhone has a plastic backing with the same internal technologies as the iPhone 5 so there is not much of a difference in technical power. The phone comes in 5 different colours and with the new operating system for all iPhones, iOS7. The iPhone 5C is due to be released on the 20th of September 2013 which is a lag of 10 days between the announcement and sale dates. Apple has also created new colour cases which are made solely for this phone and have chosen the base colours amongst others to provide contrast such as black and white. There is a slight improvement to the camera with the same features as the iPhone 5S, but some features have been revoked which would be to give consumers more reason to buy the premium handset.

Although this phone is seen to be a nice addition to the roster of phones available via Apple, various market analysts felt that the price point needs to be much lower to ensure that the company can benefit from selling these devices in the market, particularly the developing market. Apple has had a hard time trying to expand into developing markets such as China and India where smartphones are usually not subsidised by the carrier with a long term contract. These 2 markets consists of over 2 billion people which Apple could have gained some market share in if it had priced the lower end phone at a much lower price. Apple’s competitors such as Samsung and Nokia are using their low price, decent technology handsets in these markets and gaining a large market share which Apple could never attain if the prices remain so high. Even in developed markets, the iPhone 5C is still priced high for a phone which has last year’s technology inside it.

iPhone 5S

This version of the handset has much more exciting technology inside it. The handset costs slightly more when bought out of contract or pay as you go, but that could be because of inflation. The iPhone 5S has 2 main features which makes it completely different from the previous iPhones, firstly the Touch ID home button and the 64-bit architecture for its A7 processor.

The Touch ID allows the owner to use their fingerprint to unlock their phones without having to type in their passcodes. A potential indication has been hinted that the user can authorise payments for music and movies with their fingerprints and would eventually be open to third party applications. There is little worry for identity theft as the company has put the fingerprint data onto the A7 chip which is only accessible to the handset only and can’t be copied out of the chip. Although this was pushed as a key security feature, there could be a way for hackers to find a way to get this information.

The other main area of change is the 64-bit architecture of the CPU in the phone which is said to be the first in the world for a smartphone. This A7 chip will allow applications to run at a faster rate than the 32-bit processors which can be a reason for consumers to buy new the handset if they want the faster phones all the time. The other aspect which shows that Apple is thinking forward is that they can port this A7 chip to its tablets which in turn would run better programs and have better computing power for running graphic intensive applications such as games. Another forward thing Apple can push for is reducing its independence on Intel processors which could be more expensive when compared to UK processor company ARM Holdings in respect to its laptops and other Mac products. This would be an excellent opportunity for Apple to acquire ARM Holdings fully since they do have a lot of money on their balance sheet, as well as restricting the competition from having the intellectual properties of their processor manufacturing methods.

Which to buy?

The purchase decision will differ depending on the person’s perceived value of the new phones. The features of the new phones can be apparent to those who have not made an iPhone purchase before and are getting tired of their own smartphone. However, existing users may see this as pointless such as me. I can’t justify tying myself to a new 24 month contract to get a phone with a fingerprint scanner and a slightly better camera. I have a compact camera (Sony NEX F3D) for taking pictures and I hardly ever take pictures on my current iPhone 4S, only for those “on the whim” moments. Most of the features which are being promoted on the new phones will be available to me for free, via iOS7. The operating system update alone will keep me satisfied for another 2 years since I tend to buy the “S” versions of the phones as Apple would have kinked out any problems in the normal “numbered” phone.

PlayStation Vita

PS Vita Price drop then new console announced

The PS Vita was given a price cut from this year’s GamesCom which was in the middle of August. The reduction in price has been in effect for months in Japan where the console has had a strong reception. The console has needed an official price drop in the Western markets, but retailers had cut the price and took a hit to their margins in order to shift units of the handheld console. GAME in the UK is charging less for the 3G version which is supposed to cost more than the Wi-Fi only version which shows that the console needs to shift more units, especially in the UK. It is quite surprising that Sony decided to announce a new version of the console on the 9th of September, less than a month after changing the prices worldwide.

The Vita 2013 edition will have a lower quality screen of an LCD screen compared to the first Vita having an OLED screen which has high quality images. The 2013 edition of the Vita will come in various different colours and have internal memory which is great for having content saved to the console such as indie games, which tend to have smaller file sizes. The console will have a slightly lower price than what is being charged in Japan at the moment of ¥20,000, where the redesign will cost ¥19,000.

Vita 2013

The upcoming content for the console will be very important in the life long survivability of the Vita. Sony has allowed indie developers to create games for both the Vita and the PS4 which makes it easier to sell if there is cross-play functionality. The new concept of cross-play for PS4 games on the Vita console with complete control is a great way to push units. Sony can create a bundle of both PS4 and Vita to push the cross-play gameplay which will in turn push hardware and software sales. This will have a positive effect on the overall company’s sales and profit margin.

PS Vita TV

Sony also announced the TV version of the Vita, which allows the gamer to play Vita games on their TV with a PS3 controller. The ability to play these games would allow gamers to experience the games in a different way, but could lead to problems when the game is expanded onto a bigger screen. The games could look outdated and pixelated if they are not scaled properly to a high definition resolution. There will also be a problem with whether or not the touch interface in Vita games will be removed, or coded to work with DualShock 3 controllers. The only way this would work is with the PS4 controller which does have a touch pad on the front but the new mini “console” announced to only use the PS3 controllers.

The TV Vita has a low price point which will come bundled with a controller with no games. Both of these Vita’s will only be available in Japan from October for the new Vita and November for the Vita TV. It is still unknown as to whether or not the console will make the journey to other PAL regions and North America.

Vita TV

Final Fantasy XIV, a Realm Reborn on a Bunch of Wonky Servers

Agree with the server problems, but its a good thing for me since I need to focus on other things.

Tech

Final Fantasy XIV may be cursed. You know this if you’ve tried to play recently and met the business end of a 1017 error (indicating a full server). It hasn’t been a good week for Square Enix’s second-shot MMO. Heck, it’s been a pretty miserable three years. I keep expecting my copy of the PlayStation 3 version to turn up a black spot.

Though being full up is kind of a good problem to have, unlike the far more serious issues the game had back in September 2010. Then, it was in such bad shape Square Enix had to ask for a mulligan, haul its beleaguered pseudo-medieval realm of Eorzea back to the forge, shutter the servers last November, and promise to essentially rebuild the thing from the ground up.

Which is where we find ourselves today, a little over a week into delivery of said promise, still sporting roman numeral XIV, but…

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Microsoft Xbox One vs. Sony Playstation 4

The date for the next generation of video gaming has been set, 22nd November 2013. The last company to announce the release date which is for the Microsoft Xbox One while Sony’s Playstation 4 is set to release on the 15th November in the USA and on the 29th November in the EU. The Nintendo Wii U began the 8th generation of home console video gaming when it released in November 2012, one full year before the other 2 main competitors but has had lack lustre sales over the one year head start.

Microsoft has aimed its release date to be worldwide but has undercut Sony by one week in the market it has struggled in the most, the EU. Microsoft is making sure that the EU is a focus point in aggressive marketing by bundling day one consoles via FIFA14 which is the equivalent to NFL in the USA. The only problem the company will have is that the console is £429 in the UK compared to the £349 for the PS4, which makes the console even harder to sell. Both companies would try to use their existing infrastructure with their online platforms in order to transfer current generation gamers into the next generation.

Microsoft has secured exclusive games and content for their next generation console such as Titalfall and content with the Call of Duty Ghosts which is most likely to be timed exclusive. Gaming analysts and websites such as IGN like the originality of Titalfall with good use of the next generation’s technical power. The game allows user to be a soldier who can run up walls with futuristic weapons but also let the player use mechanical robots, known as a “Titan”, to move around to fight against enemy ‘mech’ soldiers. The game is based on a futuristic concept much like the Halo series and Gears of War series, which are both exclusive to Microsoft.

Microsoft have had a lot of backlash from gamers since they announced the Xbox One console towards the end of May 2013. At the beginning, Microsoft had opted for a digital strategy to disallow gamers to share physical copies of games, and had strict digital rights management as well as an always online connection being required with the Kinect camera needing to be always connected. Since then the company has heard the feedback from the gamer community, which has mainly been against these policies and now each one of these features has been removed or adapted significantly so that it matches more closely to current generation requirements. Some analysts feel that Microsoft are are listening to the consumer which is the best possible outcome for the success of the console, whilst some analysts think that the damage has been done.

Memes on Xbox One policy changes

The PS4 on the other hand has seen to be resonating with gamers, with their pro indie stance on game development and gamer friendly policies. Sony had chosen to unveil their console in 2 different stages: the first announcement which acknowledged the console’s existence and revealed the controller with the second announcement being the E3 expo 2013 where the console was revealed with a myriad of games, both first party and indie games.

The E3 presentation revealed the price of the console for three main markets, much like Microsoft’s presentation, as well as the design of the PS4. The exclusive games which were announced were Driveclub which allows players to join clans of drivers so compete in different racing challenges, as well as Infamous: Second Son which allows the player to use powers in a post appocalyptic Seattle. There were various other indie games shown which was a nice welcome for the hardcore gaming audience as well as games from Square Enix which has been fairly quiet when it came to game development.

Sony was said to have won E3 2013 and that was mainly due to it’s straight forward approach to answering the gamers’ concerns with new policies. Gamers wanted to know whether or not Sony will follow Microsoft’s now revoked console features such as the always online where Sony took a direct attack on it’s competitor by stating their policies in a clear confident manner. They even released a cheeky video to reflect the policy. In the most recent gaming conference in Germany, GamesCom, Sony revealed that they had received over 1m in pre-orders for the PS4, while Microsoft have yet to reveal any pre-order numbers.

At this point in time, there is no way to tell who will end up “winning” the 8th generation of home console gaming. Microsoft is taking a “all in one media system” approach, while Sony has chosen to focus on the core gamer. As for Nintendo, they are trying to imitate their success from the Nintendo Wii by targeting casual gaming for all members of the family. The product life cycle for newer generations of home console gaming is over 8 years, where in the past consoles where revamped over a shorter time period. This is mainly due to the fact that technology was moving much faster back then, whereas now there are only advances in CPU/GPU power with little advances in overall technology. This generation could last until early 2020s, and the content of the software will only get better in quality over time as developers get used to the consoles architecture, which is very similar to PC development.