Press "Enter" to skip to content

Month: September 2013

Technology Giants Try to Match Apple’s Success

Over the past couple years, major technology companies have taken steps towards vertically integrating themselves in an attempt to imitate Apple’s success.  In order to manufacture smartphones and television set-top boxes, Google acquired mobile device maker Motorola Mobility.  Amazon created the Kindle Fire tablet to bridge hardware and e-commerce.  Oracle bought Sun Microsystems in order to create integrated hardware and software devices.  Also, Microsoft now makes hardware for its Xbox gaming system.  These are recent examples of technology companies trying to emulate Apple.

from Brewers Association US Breweries Operating as of June 2013 Brewpubs 1,165 Microbreweries 1,221 Regional Craft Breweries 97 Total US Craft Breweries 2,483 Large Non-Craft…

The Power of Mergers and Acquisitions

The article “Are We in Danger of a Beer Monopoly?” by Adam Davidson of the New York Times discusses the process of a company “building” its own monopoly in a market. Anheuser Busch-InBev (AB InBev) plans on merging with Grupo Modelo (maker of Corona) to increase its pricing power in the US brewing industry. In the past, AB InBev has been such a power that it has set pricing power in a “perfectly competitive” [jargon??] market. AB InBev has said that if competing firms lower prices, then Busch will set their prices lower, starting a price war. With AB InBev having the largest market share of the brewing industry, few firms have the ability to compete with this threat.

What Would Ronald Do?

I found an article by Venessa Wong in Bloomberg Businessweek entitled “This is What Would Happen If Fast-Food Workers Got Raises.” It helped explain why fast food employees should not be paid their requested wages of $15 an hour – not that the absurdity [see comments – it actually is not absurd!] of this notion needed an extensive explanation. It did, however, raise interesting questions about how a monopoly would react to these demands and how these demands would reflect a firm’s market power.