US lawmakers threaten to block Dubai ports deal

Dubai ports deal has caused such a controversy in the past few months. Protesters to the deal whether the U.S. senate or the majority of the U.S. public which are affected by the media “propaganda” of Arabs, stipulated the U.S. government to stop what they’d call “ this non-sense” of selling their ports to foreigners. This opposition challenges the White House’s view that the deal, which would give the Dubai-owned company the right to operate five main ports in the U.S., has been appropriately investigated and does not threat U.S. national security.

Despite the multi-million or even billions of dollars and hard work the Dubai owned company pulled in effort to continue its well premeditated investment strategy to build a diverse portfolio of direct investments across various industries around the world. The threats that have been conveyed by the senate’s lawmakers to stop the deal are a reminder of the swift devastation that David Baron’s non-market environment issues can bring to a company. David Baron defines the non-market environment arrangement as those which include social, political, and legal understandings that are often excluded from a pure market environment. In my analysis of this article I will emphasize on Baron’s four I’s of the non-market environment.

The key issue at hand is whether the opposition of the deal is of a national security concern or purely politics. The senate majority leader Bill says: “when it comes to security, you can't be too careful” while the U.S. Treasury officials insist that national security measures have been taken into consideration and the opposition is based on politics.

Parties that have interest in the issue include: The Government of U.A.E. and Dubai since the company is owned by the U.A.E. government, the Washington lawmakers, the Congress, the Whitehouse, the Organization for International Investment, the U.S. Treasury and may include the employees of the company.

Baron categorizes Institutions to be either legislative, regulatory, international, or non-governmental. The institutions at play here are: Various U.S. legislative entities whether it’s the Congress, White House, or even the U.S. senate. The U.A.E. government representatives of the Dubai company, the media and the public attitude.

The Information transferred between the media to the public is of great importance. In fact, the media formulates the public’s opinion based on the quality of information they transfer. Unfortunately, the quality or accuracy of the information conveyed by the media is not questioned by the public and taken for granted taking into consideration that the media is a profit-making entity.

This ongoing controversy points out several important questions that yet need to be answered but the most important by far is why can’t the United States government operate it’s own ports?

Apple's "screen cam"

I would like to analyze the strategic implications of Apple Computers patenting a new technology that allows monitors to record video of their viewers at the same time as displaying visual output. This article refers to this patent. Using Barney’s VRIO framework to analyze how this patent affects Apple Computer’s strategic position, we can observe the following:

Valuable: It is not immediately obvious to me how this technology might be beneficial to an end user. One question that comes to my mind is what additional benefit does this technology bring over simply embedding a camera at the top of the monitor, a feature that Apple has implemented in its iMac and MacBook Pro products. Giving Apple the benefit of the doubt, let us assume that it has a well thought out target market for this feature. That would make this technology valuable as an enabler of business opportunity.

Rare: This resource is definitely rare as Apple hold a patent preventing other companies from using such a technology.

Imitability: In Barney’s terms, something cannot be imitated if it comes at a significant cost disadvantage to the company. Since the patent extends to Apple the right to legally pursue any company that violates its intellectual property, companies are unlikely to engage in using this technology without permission for fear of significant amounts of money that could be paid out in damages.

Organization: Apple has a reputation for being a creative company and I would imagine that such an organization would have the required procedures and practices in place to support the proper use of this technology as a strategic resource.

It seems that Apple could be on the path for a sustained competitive advantage, but this depends on two unclear factors: whether the end user will find the technology beneficial and desirable, and whether the company has the necessary organizational skills to capitalize on this resource.

Another strategic issue that emerges from this patent is the potentially damaging non-market environment issue that could arise from concerns about privacy invasion from using such a technology that could lead to a large spread of cameras that could be used to invade people’s privacy while using computers.

High hopes for Dubai skyscraper

Samsung, the South Korean mega corporation has won the contract to build the world’s tallest tower in Dubai. The ‘Burj Dubai’ is publicized to be 800 meters high, with 160 floors and should be completed by November 2008. I believe that Dubai is trying to differentiate itself from its competition by marketing itself as a world leader in various aspects to be the number one city with respect to attractions and tourism. This attempts to stand out across the VRIO framework for analysis of the strength/weakness of a resource or process as a source of competitive advantage.

I believe that having the tallest tower in the world built in Dubai will give the city a potential sustainable competitive advantage. Applying Jay Barney’s VRIO framework gives us a better understanding of the issue at hand:

Value: obtaining such a building adds to the growing image of Dubai as "The place to be" and proliferates potential tourism to the city which results in it being considered as a valuable resource.

Rareness: I would consider the Burj Dubai to be very rare since it is going to be undisputedly the tallest tower in the world given the fact that the current tallest tower is only 500+ meters in height.

Imitability: The beefy multi-billion dollar tag price on the Burj‘s construction is an indication of how difficult it would be for other competing cities (such as Australia’s Gold Coast) since it puts them at a cost disadvantage which leads to a low imitability.

Organization: It seems that Dubai has the organizational skills required to coordinate and commission the construction of the world’s tallest tower.

Microsoft may aim for Yahoo! Acquisition

Microsoft aims to increase the number of people using its online search engine in order to attract more advertisers to adCenter in an ongoing rivalry against Google on the dominance of the online search market. The article reveals Microsoft’s intention about acquiring a major portion of Yahoo to keep up with industry leader Google.

Applying Barney’s VRIO framework to the article, the resource or capability in question is whether acquiring a portion of Yahoo affects the overall competitive state of the company.

Acquiring or even teaming up with Yahoo is clearly valuable to Microsoft. Google and Yahoo are known to be the industry leaders in online search engines. On May 4th, CNN news announced that Microsoft’s current MSN search engines share fell (In the U.S.) from 14% to 11% , while Google and Yahoo each gained, rising to 49 percent and 22 percent of the search market.

The question of rareness and imitability are closely related in this case. Barney defines rareness as an element of competitive advantage in terms of access of that resource by the competition and in this case, the acquisition of the Yahoo by Microsoft is indeed rare specially since Yahoo and Google are the top leaders in the market followed directly by Microsoft’s own MSN search engine. The limited rivalry of the online search engines to these three entities which divides the most of the market share between them makes it impossible to imitate by Google.

The question of organization is very hard to spot in such short article indeed, but analyzing the overall performance of the company in various segments of the software market we can assume that it has favorable organization practices.

http://money.cnn.com/2006/05/03/technology/microsoft_yahoo/index.htm

Microsoft’s message to RIM

Research In Motion, the producer of the popular Blackberry devices and the market leaders in mobile e-mail services are being challenged by Microsoft’s announcements of four upcoming devices to be shipped with its new "push" e-mail function built in.
Applying Barney’s VRIO framework on RIM to analyze the strengths and weaknesses of RIM based on it’s resources and capabilities, we have to first answer the question of value. Was their push email services valuable and is it still so? To my understanding of the question of value, I would argue that is was indeed and still is. They were the market leaders as the article indicates which proves that they saw an opportunity and took full advantage of it. Analysts told the Journal that while they expect Microsoft to rapidly gain market share in the mobile e-mail sector, they don't necessarily expect it to catch up with RIM's Blackberry offerings anytime soon. This expected inability comes despite the fact that Microsoft is penetrating the market by offering lower costs, and in addition to major wireless service providers launching Microsoft’s new push e-mail service (including Vodafone Group, Bell South, and AT&T). I believe that this proves that RIM’s Blackberry does in fact give the company a competitive advantage in the market.
The second issue we have to address is whether RIM’s Blackberry push e-mail service is rare or not? It is obvious that it was rare and gave them ultimate advantage over any other software producer until Microsoft’s announcement of it’s new services.
The third question which is the most important to address is the question of Imitability. The article clearly indicates that Microsoft Corp. was not able to cheaply and easily offer the push e-mail service which gives the push e-mail service in Research In Motion’s Blackberry a competitive advantage regarding the cost disadvantage Microsoft faces.
The article shows that the level of competitive advantage that a company enjoys is not a constant factor and that it may increase or decrease over time. Whereas RIM once enjoyed considerable competitive advantage in the mobile email sector, that strength has been lessened by large companies like Microsoft wanting to enter the market and control a greater segment of it.


http://money.cnn.com/2006/02/13/technology/microsoft_blackberry/?cnn=yes\b

Danish Boycott

Danish Boycott!! The Effect of Consumer POWER..

On September 30th, Jyllands-Posten, Denmark’s largest daily newspaper published cartoons depicting Prophet Mohammed (Peace be upon him), and were reprinted once again by Norway’s Magazinet magazine on Jan. 10th, 2006. As a consequence, Muslims all around the world started a boycott of Danish products. Mohammed Gashgari, retail sector manager at Savola Group, which owns the Panda supermarket chain said: “We have pulled all Danish products from the shelves of our Panda supermarkets and hypermarkets as of Thursday and left the shelves empty for the people to notice. We have stopped promoting Danish products since early last week. This is a very important issue for us out of principle. This will continue until a just and satisfying official response from Denmark,”

Danish Manufactures have been dealt great losses as a result of this boycott. This raises an interesting question that stems from this unique, albeit very awkward position for Danish companies: should management of Danish producers be blamed for poor performance? Should the Denmark government take the blame for lower performance of Danish companies? Is it management’s fault that a Danish Newspaper published these cartoons? There are many questions that arise, but none seem to have clear answers.
Prior to the incident, Danish Products such as Lurpak and others, were very popular in the Middle East. The fact that consumers could easily switch to other products points out the effect of Porter’s Five Forces that these Danish companies face. The available substitutes in the market with comparable prices eases the boycott. We can also apply consumer power, although the supermarkets will lose a portion of their revenue gained from selling Danish products, they faced considerable pressure from their regular customers which forced them to boycott the products as shown in the article where the manager of one supermarket in Jeddah revealed that one of his customers brought back a purchase asking for a refund.

The ongoing repercussions of publishing the blasphemous caricatures of the prophet Mohammed (may peace be upon him) give us an idea of how devastating the power of consumers can be within Porter’s model of industry dynamics.

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