Supply and Demand Dynamics

(9/29/2012)
When China was heavily investing in the infrastructure and factory expansion, US coal industry had a good time exporting coal to China. Now, China is confronting an economic soft landing (if lucky), and those good old days for US coal might be gone for a while. Probably only a high fuel price can help those coal miners.

Powder River Basin supplies 40 percent of coal in the United States

Japan's problem

(9/29/2012)
Reading an article from Washingtonpost.com: As Apple and Samsung dominate, Japan’s tech giants are in a free fall.

Japan's problem is not just in business, it is at the national level. So often, we see Japan has its own standard that is different from all other countries. They want to import to other countries, but don't want to buy imports from another country (because Japanese's products are the best). They ignore the economy of scale of globalization that is outside of Japan and rapidly expands in recent decades. So many Japanese tech giants were "innovating" for its own market and to become the leader in Japan market. Look at NEC and Fujitsu, they are PC leaders in Japan. But few consumers outside of Japan know them as PC makers. From the people, to business and the nation, they just overlook what is going on outside of Japan because they entered into a deadly self-breeding cycle for their diminishing future. 

Ignorance of social media

(9/28/2012) We moved into the era of social media in less than 12 years and many people are not aware of this big shift. While posting on social media, your words are not just circulating within a group of friends. Through the friends of friends, "politically incorrect" words spread like wild fire.

An CEO from a Montana ice cream company replied to his customer with no respect. the damage is not just between him and that customer. It becomes a social network sensation (maybe in a local level).

Two days after his improper remarks, the CEO of this ice cream company decides to step down. The power of social media. (9/30/2012)

The economics of video games

I am not a video game and have never played one. But this one looks very interesting. There is a news "The economics of video games" from the Washingtonpost.com.

Beer game.

(9/28/2012) This is a real beer game!

Today, we had our beer game. It was really fun (even though I am so exhausted now) and I forgot to take pictures. Next year, maybe.

Cyberattack Will Become A Reality One Day.

(9/27/2012)
Last week, there was a warning of cyber attack to the banking system. Today, we found out that the electricity grid has been intruded by hackers. No serious damage is done yet. Cyberattack in the Sci-Fi movie one day will become a reality.

Supplier Relationship -- Partners Or Enemies?

(9/27/2012) When the supplier relationship turns sour, the order cut from the dominant downstream customers' can be a trouble to the supplier. Recently, the smartphone lawsuit between  Samsung and Apple starts to dent the long term relationship between them (time of separation? well, that is impossible). Apple starts to cut nearly 50% of its LCD panel supply from Samsung. Apply turns its supply to LG and other Taiwanese suppliers. Luckily, compared to the $1B penalty of smartphone lawsuit loss, this is only a smaller dent to Samsung's revenue. Samsung is the world largest LCD panel manufacturer in 2011 and a leader in newest display technology. Even though Apple cuts its LCD panel supply from Samsung, Apple still heavily relies on Samsung to provide them flash memory chips (Samsung is also the world largest flash memory manufacturer), and processors. Apple and Samsung, partners or enemies? It will be both.

Well, from a long term perspective, Apple has to seriously consider the potential threat from its powerful competitor -- Samsung, and finds an alternative source for its critical components. Apple has a big ambition to launch Apple TV (rumored for a long time) and they cannot trust Samsung anymore. Under some under-the-table support (rumors), Foxconn (Apple's largest, and the world largest, contract manufacturer) has tried to invest the struggling Japanese LCD panel manufacturer -- Sharp. Different from Samsung that has its own brand consumer products, Foxconn is a "loyal" manufacturer for many PC and electronic product brands since Foxconn does not compete with their customers directly in the consumer market. Sharp has advanced display technology but is poorly managed in recent years. Foxconn's investment will help Apple to secure its future key component supply. At this moment (9/27/2012), this investment deal is stalled due to higher-then-expected loss in Sharp and disagreement of control power of Foxconn in Sharp's board (from several Taiwanese news reports without official's comments from Foxconn and Sharp). Let us wait and see how it will develop.

(10/22/2012) This is another interesting news. Amazon's cloud service is hit by real cloud (storms) in Virginia and many websites (Netflix, Pinterest, Instagram ...) are takend down. Do you see Netflix over there? You probably Amazon's video streaming is directly competing with Netflix, right? Let us see how long this business partnership will last.

(10/23/2012) The is a war between Amazon and top Brand suppliers. Top brand suppliers do not like to see their products priced lower than the lowest suggested retail price. Price competition among brand's distributors will undercut the brand's value and profit. However, on Amazon.com, there are many third-party sellers who are selling top brand products below he lowest suggested retail price. These 3P sellers can find the supply of top brand products from unknown sources and Amazon has a good reason not to interfere how these 3P sellers get their stock (that is one of reasons that many buyers go to Amazon to buy cheap brand products). The only weapon that the top brands can do is to cut the supply directly to Amazon (while they don't know to cut the supply for those 3P sellers on Amazon). So who will be the winner? Amazon? 3P sellers? or the top brands?

(3/19/2013) Amazon's sellers are furious for increasing fee for them to sell on Amazon. Will there be exodus of sellers on Amazon? Well it depends on how many other online marketplaces these sellers can switch and maintain enough successful sales if they choose to leave Amazon. This news shows a lot of details of Amazon's pricing schemes.

(3/22/2013) According to a Korean Publication, Apple will shift is LCD supply to two Taiwanese LCD panel manufacturers. These two tech big guys are drifting further away from each other.