A Norwegian company's challenge to the car market

I read an article about release of a new-type electric car. Think Global, the Norwegian company, released a realistic electric cars. Actually, there were many prototypes of electric cars in US market. For example, GM introduced several models of cars and already invested about 4 million dollars to the development of the company's battery research and development operations. But their electric cars were just innovative products. Actually, the cars failed to attract customers except innovators. But Think's car is different. It's more fuel-efficient and cheap that normal cars. Think has been selling gas-free, Lilliputian city cars in Europe and will start peddling them to fuel-crunched Americans in 2009. The company's newly formed North American division has high hopes for Think's existing models—and even higher ones for the upcoming Th!nk Ox, a concept unveiled at the Geneva International Motor Show earlier this year.

Electric car is one of the alternatives that will replace gasoline and gas cars. Think's Ox is a preview of Think's next-generation production vehicle, due out in 2011. They planned to introduce more innovative and efficient cars. The Ox can travel between 125 and 155 miles before needing a recharge, and zips from zero to 60 miles per hour in about 8.5 seconds. Its lithium-ion batteries can be charged to 80% capacity in less than an hour, and slender solar panels integrated into the roof power the onboard electronics. It's a surprising performance! Even today, they can make independent electric car market through their products. They said that they will price the cars about $25,000.

Also, Think developed some very distinguished designs. Think's senior vice-president for design, Katinka von der Lippe, says the Ox is a "real car, a big step away from the cuteness of [other] electric vehicles." All that distinguishes the Ox from name-brand, fuel-sipping compact cars, in fact, is its silent hum and zero emissions. They considered their products as gasoline cars. That means they want to increase the efficiency of their cars to the level of gasoline cars. The Ox also embodies the characteristic simplicity of Scandinavian design, featuring uncomplicated lines and clean, uncluttered surfaces. A band of unpainted metal stretches from the front of the vehicle to its rear, revealing the Ox's interior architecture, an aluminum frame. An unassuming grille is tucked between sophisticated sloping headlamps.

The company's business model is very innovative and is similar to that of Dell's, which fueled its rise by ruthlessly optimizing its manufacturing and supply chain. Think's ultralean manufacturing system lets it build production facilities for about $10 million, compared with the billions invested in new plants by old-line manufacturers. That means more factories closer to customers, further cutting costs. I think it will very effective to penetrate niche markets. Maybe someday, the Norwegian company can be a number one producer of entire car industry.

Author: Matt Vella

Title: The Electric Car Lives

Date: June 16, 2008, 12:32PM EST

Page: 1

reference: http://www.businessweek.com/innovate/content/jun2008/id20080616_955452.htm?chan=innovation_innovation+%2B+design_top+stories

entry # 15 20700067

The government's policy to lower mobile phone bills for the poor

Recently, a news article conveyed the fact that the government has announced its policy, that it would expand cuts in wireless service charges for low-income earners as part of efforts to alleviate the burden of rising inflation. It sounds reasonable. However, there are many things that should be considered before the government actually put this into effect.

As the government is thinking of enhancing the nation’s power and well-being, it is undeniable that low-income earners must have some advantage that can help them elevate their positions. After all, a country cannot keep its power if there is a huge gap between the rich and the not-rich. The middle-level people must exist to make it possible for the country to keep growing and developing, and perhaps not to fall down. However, the problem is, how would the government afford the cost in helping the poor?

The way how the government will afford the cost is quite a sensitive issue. The article says that the nation’s three mobile carriers will take the whole financial burden for the new program, which is expected to cost 300 billion won each year. This does not seem to be so good. If the government forces the mobile carrying companies to an extent, making them take the financial burden for lowering mobile phone bills for the poor, the companies will try to get the money back by increasing mobile service fees to not-low-income earners. This will make the middle-level earners suffer. In addition, there can be some confusion in deciding who gets advantage and not, who gets categorized as low-income users and not-low-income users. This will bring arguments.

The government’s thought and consideration to help the low-income level heighten their economical level and overcome the sufferings from the inflation that is taking place in the nation is quite impressive. However, there muse be lots of efforts to figure out pros and cons and which way is the best way to perform the plan as effective as it can be. Otherwise, it will bring huge side effects. In fact, the constant government seems to having trouble in performing their policies generally, and they seem to have confusions in determining whether or not their plan is good. The most reasonable way is to listen to what the citizens in this nation is requesting and what they really want. It is strongly recommended that the government goes back to the basics.



Reference : http://news.naver.com/main/read.nhn?mode=LS2D&mid=sec&sid1=108&sid2=208&oid=044&aid=0000074521


20700273 Entry 15

War against China's Blogs

          Since the Internet allowed so many emerging new businesses to enter the market with a unique business model, one company in China is now successfully carrying out its value to its clients. Daqi.com is a Beijing-based firm which looks for the comments or posts from more than 500,000 online forums that might affect crucially to certain business or firm and try to reslove the problem that those consumers have before anything gets worse.

          Since Daqi.com is the first to provide such service, they charge firms from $500 to $25,000 a month to seek out for those influential comments on the web so they could effectively manage the brand image. The CEO of the firm states that even a single negative comment can end up influencing the entire industry.

          When Daqi.com finds out those kind of postings or comments, they first figure out whether it is influential or might flare up. And then they determine who are behind of the criticism and what they are trying to get from it. When the information is collected, they also concider how fast the complaint is spreading on the web.

          Many other similar businesses are jumping into this market; they often hire college students to write positive comments or create false comments on the competitor's products or service, which can be concidered as unethical. One the other hand, people who are hired for such job gets average of 1.5 cents per post.

          I think when companies use this kind of method to create a keen relationship with its customers can significantly increase the loyalty towards the company, and therefore, acquire greater market share. However, the problem that I'm worrying about is the ethical issue that it would face in many cases if it is used for a wrong prupose. Sadly, China is often concidered as one of the most unethical countries in the world for providing poor quality of good and services, and for having many pirates on the web. I hope firms like Daqi.com would become a leading company in China to change this kind of perception and help the right Internet business models to be settled in the market.

Reference;
Roberts, Dexter. "Inside the War Against China's Blogs" BusinessWeek. June 12, 2008.
http://www.businessweek.com/magazine/content/08_25/b4089060218067.htm?chan=technology_technology+index+page_top+stories

20601008 - 14th Entry

GM's Struggle to change its sturucture

I read an article about GM(General Motors)'s struggle to change the production structure. GM is a American company that provides converts or trucks. But now they try to focus on the small car market. GM's CEO announced that there will be plans to introduce a new line of compacts for North America, while also boosting passenger car production and closing four truck plants. Also he said GM will build the Chevrolet Volt electric car in 2010. It's because of the recent losses in the truck market. GM lost $3.25 billion in the first quarter of 2008, including special charges. Accordingly, management now suggests that they should downsize the production of trucks and more focus on the small fashionable cars.
Also, as the gas price goes up, there will be low consumption in the big cars like trucks. Accordingly, GM plans to introduce a new compact car that will be better equipped than today's compacts, with more amenities and also a 9-mpg boost over today's 27-mpg Chevrolet Cobalt. An all-new version of GM's Korean-made Chevy Aveo subcompact is coming. Also, they will close four truck plants. They said that "If the market is going away, there's no sense making the vehicles". In other words, it time to change.
Also, they plan to diversify their production to outside of the US. As the production costs go up and they felt needs to reduce costs by employing cheap labors. It seems so past, but to GM it's a recent innovation. Actually, they were proud of their location is mostly on US. But for survival, they have to break their rule. Also, now Americans don't prefer cars like trucks or converts. Many of customers recognize Japanese and Korean brands as the better small cars, that GM can offer competitive models. Accordingly, if GM will develop nice-looking small car, there will be harsh competitions betweem GM and asian companies. If GM cannot catch the market, they will someday bankrupt and find other businesses.
I think the case is well adapt to korean companies. Actually, past decades, Korean companies used low cost car strategies. But now customers want to find cars that have good design and also cheap price. Accordingly, korean company like Hyundai now try to develop very-low price car that has new age design. But I think there must be some high-quality cars in production mix of Hyundai. Because if they cannot produce these cars, their brand will be like a cheap image. Actually, Toyota, Japan's worldclass car company, used strategies like Hyundai do. But they realized the necessities of high-price, but high-quality car. And they developed the LEXUS. Now nobody thinks their image is cheap. I think it's a good model to Hyundai. Also, other korean companies should learn the lesson.

Author: David Welch
Title: GM: Small Is the New Big
Date: June 3, 2008, 12:27PM EST
Page: 1

reference: http://www.businessweek.com/lifestyle/content/jun2008/bw2008063_595262.htm
entry # 14 20700067

United, US Airways to charge $15 for 1st checked bag

The United Airlines and the US Airways announced their new fees recently. Most carriers in the U.S already have instituted $25 charge for checking a second bag. Southwest Airlines will be the only U.S carrier that permits two checked bags for free. According to Tom Parsons, an air travel expert expects more service fees to come. Because of the extra charges for seat reservations, he expects the legacy carriers to follow the lead of discount carrier spirit Airlines. Currently, the prices are $5 for middle seats, $10 for window and aisle seats and $15 for exit-row seats. Other airlines also have started to charge money for window or aisle seats.

United Airline said the baggage fee will goes into place with customers who buy tickets beginning Friday for domestic flights. This will not apply to customers flying in first or business class. Also for those who have premier status with United or Star Alliance. It also increased their fee to check three or more bags in the Chicago-based carrier. The overweight bags or items that require special handling costs $125 from $100, and $250 from $200.

The United’s chief operating officer said, “With record-breaking fuel prices, we must pursue new revenue opportunities while continuing to offer competitive fares by tailoring our products and services around what our customers value most and are willing to pay for.” United expects $275 million of the potential revenue from baggage handling service fees a year. US Airways already planned to takes fees at the beginning of July 9th.

The US Airways Chairman mentioned that they must write a new playbook for running a profitable airline in this new and challenging environment. Also, the Steady rise of fuel surcharges continued with United, Continental Airlines, Delta Air lines, US Airways and Northwest Airlines. They all matched the cost which was increased $20. It was because of the fuel surcharges that were initiated by American on most of its domestic routes. Now, United Airlines are at their lowest level in the company’s three years out of bankruptcy.

I think while other companies raise their costs it would be a competitive advantage for companies that do not charge the same amount of fees. The situation might be difficult to lower the cost, however, increasing the market share through lowering price strategy would greatly benefit their profit.

http://www.newsweek.com/id/141246/page/3

20620042 – entry # 14

South Korea will need 730,000 more homes after unification

A recent news article has announced that South Korea will need 730,000 more homes after unification. This announcement was based on a discussion which was held at a forum on the future of the country’s housing that was hosted by the Korea Housing Association in May 2007. Most experts in this field has agreed to the fact that a large number of North Koreans are likely to move to the South in search of better economic and social opportunities after unification. This is something that we South Koreans should not neglect to focus on and prepare in advance. Not only about the house problem, but also there are lots of significant economic aspects that should be considered before and after the unification. So it is recommended that we study about the economic influence that unification will bring, and prepare for it.

Millions of people do think that unification in Korean peninsula is something that must be done. However, most of them don’t actually think about what it’s going to be after unification, and what we should do to actually bring the unification. It might be because both Koreans have lived so many years separately, and people actually don’t want any significant changes. However, whether or not we are prepared for it, the unification will come someday, and we’ll have to live after unification also. That is why we should prepare for it in advance.

Unification in Korean peninsula will absolutely bring a huge crisis to Korea’s economy. As we all know, South Korea’s economy scale and quality is definitely better than North Korea’s. The gap is so huge that it is even useless to compare. So whenever the unification takes place, the subject will be South Korea, leading the unification. And the form of unification will be South Korea absorbing and supporting North Korea. This is the problem. The gap between two countries is so huge that it will definitely bring severe crisis to South Korea’s economy. Back in the history, when Germans had unification between West-Germany and East-Germany, West-Germany’s economy scale absorbed East’s and West supported a lot. However, Germans had some hard time after the unification because the economic gap between two countries was so huge. And the thing is, the gap between South Korea and North Korea is huger than the gap between West and East-Germany. Also, South Korea’s economic power isn’t that strong, compared to West-Germany’s at that time. This really is a serious problem. Also, even if the unification had gone well and South Korea has passed the struggling time due to the economic crisis caused by the unification, there is another problem. The people from North Korea who came to South won’t be able to adapt themselves into capitalism and competitive society, and they won’t be competitive enough to survive. Also, their characteristics won’t be progressive enough to motivate themselves to learn new skills and new lifestyle. So concerning all these problems, the unification in Korean peninsula doesn’t seem to be so optimistic.

As we look deeply into the reality of unification in Korean peninsula, we realize that it is not definitely optimistic and hopeful. It will bring many side effects to Korean economy. However, even though, that doesn’t mean that we should avoid the unification. The unification in Korean peninsula is a must. No one can deny this. So what we should do is to prepare for the unification, not to face a chaos after it. The most effective way to do that is to interact with North Korea in economic ways. We should motivate them to change their attitude toward economy, and we should help them to develop their ability to survive. This is the ultimate way to not face the economic crisis after unification.


Reference : http://news.naver.com/main/read.nhn?mode=LSD&mid=sec&sid1=108&oid=044&aid=0000067793

20700273 Entry 14

LG's music phone in China

          LG is pusing heavily on its music phone in China whereas they put a greater effort to promote their touch-screen phone in developed countries. The company stated that they would launch two new phones specialized in playing MP3 and distribute those models in countries like China, India, Thailand, Vietnam, Brazile, and Chile.

          The main reason why they are targeting China is that as the country gets developed and have more income annually, they would replace the low-end mobile device and purchase more high-tech goods with more advanced techonology. According to one research, LG already had shipped more than 23.6 million handsets in the first quarter of 2008 to China, compared to 16 million in the same period last year.

          As LG gains more of its popularity in those emerging countries, they are also planning to promote those touch-screen phones called "View." However, some experts advises that LG should remember even though the touch-screen phones are attractive, they do not appeal to everyone in the market; some people just want to have a cellphone that can simply dial and answer the calls.

          I still remember the time when Samsung first introduced its multimedia oriented cell phone to the market and instantly became the hit. When one of my friends started to carry the phone, everyone were almost immediately attracted by it and wanted to buy one for themselves. I think developing countries like China and India are now experiencing the same thing; younger generations are widening their eyes to more various materials and want to have a taste on many new technologies. However, I hope LG would never forget what they had planned for the first time and will keep its good work until it seizes its reputation in those developing countries.

Reference;

Cho, Jin-seo. "LG Bets Heavily on Music Phones in China" KoreaTimes. 2008/06/04

http://koreatimes.co.kr/www/news/biz/2008/06/123_25323.html

20601008 - 13th Entry