Sunday, July 30, 2006

I am lovin it !

The classes for stage 2 start tomorrow. We have the Career Advantage Program for a few days.

As I sit back and blog , I realize that there were a few subjects in Stage 1 that I simply loved reading. Microeconomics, Business Strategy, HR & OB and Macroeconomics were the most interesting subject. These subjects expanded my thinking.!

The greatest benefit of reading Macroeconomics was that I seem to understand the newspaper much better when I read it now.Also, I have a good understanding of economies worldwide.I can now expalin why the Japanese interest rates should be hiked from zero interest rate,what Zimbabwe should be doing to curb the 1000% inflation rate, if China will land up with issues for having a fixed exchange rate policy, why Bernake is hiking the interest rates in US for the 17th time and if Canadian economy will benefit by hosting the 2010 Vancouver Winter Olympics.

I liked HR & OB for the simple reason that it brought in a new angle to my thinking process.Trasnformational leader is what I intend to be when I enter the corporate world.!

Microeconomics was clearly the favorite subject for me in stage 1. Before joining this program, I hardly knew anything about it. But I have developed a keen interest in the concepts taught in this class.I enjoyed every Microeconomics class.

The Microecon subject was so interesting (especially the lecture notes) that I read all the newspaper articles, did the pre reading before the classes for that subject - something that I am really happy about. I even participated in every case discussion and
brought my views on the subject. I also happen to win some class prizes for participation ( a Wine bottle, a baby food !)

The professor at Queen's MBA program challenge the student's intellectual thinking by constant questioning, analysis and thus creating the right mindset in us . Thus, we would become sound business leaders in the future who can handle any situation.

I remember what the Microeconomics professor said " A manager is a person who makes decisions that direct resources and the behavior of individuals for the purpose of achieving a stated goal. Economics is the science of making decisions in the presence of scarce resources. Resources are simply anything used to produce a good or service, or, more generally, to achieve a goal. Decisions are important because scarcity implies that by making one choice, you give up another."

I learnt a great deal in Microeconomics . I learnt what competition means. A small example: McDonald’s in Princess Street in Kingston, Canada and the Burger King in Les Rambles in Barcelona, Spain? Are they competitors? Clearly not. Therefore, to the notion that products be substitutes, we need to add another dimension: that they are sold in the same geographic market.

As I enter the corporate world again after a year, I am pretty much sure that I will not be expected to prove my strategic decision mathematically, but yes game theory does has given me an essential tool that will help me understand opportunities that competitors may not. I learnt about Prisoner's Dillema,Game of Chicken, Bertrand Oligopoly, Cournot Oligopoly, Hotelling Beach.

I understood what vertical intergration meant, what horizontal integration is. What could organizations do to get economies of Scale, economies of scope and economies of learning !

I had fun reading about the NPV value of our MBA program, analyzing the Opportunity Cost and sunk costs associated to taking decisions. I understood the concept of economic profits and the cost of equity Capital.

As I sum up this post on my favorite subject in Stage 1, here are a few articles that we had for class discussion in Microeconomics. Read it...and am sure you'll enjoy it !

Laurel without Hardy? A Lesson for Business

The beauty business:Pots of promise

Walmart-How big can it grow

Google - Fuzze Maths

The internet is eroding privacy:They're watching you

Is Google the new Microsoft

How Islamic inventors changed the world

Thinking Big:Banks the world over are scrambling to become larger

Internet Advertising- The ultimate marketing machine

One of the best examples from the Prof that I liked was on Product Line Extension

Take Starbucks for example, any Starbucks.

The price list looks something like this:
Hot Chocolate $2.20
Capuccino $2.55
Caffe Mocha $2.75
White Chocolate Mocha $3.20
20oz Capuccino $3.40

or, translating:

Hot Chocolate - no frills $2.20
Capuccino - no frills $2.55
Mix them together - I feel special $2.75
Using different Powder - I feel very special $3.20
Make it huge - I feel greedy $3.40

Starbucks isn’t merely seeking to offer a variety of alternatives to customers.
It’s also trying to give the customer every opportunity to signal that they’ve not
been looking at the price (i.e., they are not price sensitive). It doesn’t cost much
more to make a larger cup, to use flavored syrup, or to add chocolate powder or a
squirt of whipped cream. Every single product on the menu above costs Starbucks
almost the same to produce, down to the odd nickel or two. By charging wildly
different prices for products that have largely the same cost, Starbucks is able to
smoke out customers who are less sensitive about price. Starbucks doesn’t have a
way to identify lavish customers perfectly, so it invites them to hang themselves with
a choice of luxurious ropes.


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