Toyota: Recalls after recalls

http://www.nytimes.com/2010/01/29/business/global/29toyota.html

Due to the problems with the accelerator pedals on vehicles, Toyota is facing a serious recalls, which expanded to Europe and China. Because Toyota was originally known for good quality, the damage has been largest of all problems the company has faced over the century.The committee said sudden unintended acceleration in all Toyota vehicles had resulted in 19 deaths in the United States over the last decade. That is nearly twice the number of deaths associated with similar events in cars built by all other automakers combined. The Toyota vehicles had resulted in 19 deaths in the US over the last decade. This number is twice the number of deaths that has occurred with cars built by all other automakers. Therefore, Toyota temporarily stopped the production of several models that have been recalled. The chairnman of National Highway Transportation Safety Administration required Toyota to show the document when they first learned about safety defects to investigate and resolve them. In addition, the Ford Company said that it had stopped production of some vehicles in China because they used the same accelerator pedals. However, Toyota has showed that it is welcomes the criticisms and investigation because they think ensuring safety of customers and restoring confidence in them is very important.

Response for the Extended Response Test

Response for the Extended Response Test

i am satisfied with my test score. For this in-class response test, I tried to memorize everything by writing the whole essay out. However, secause I started it on the day before, I could not fully memorize it. If I memorized it more, I think I could have done better. Also, I was solid about PED but was not sure about YED. I think I should have studied more on YED because I got stuck in the middle of the test re-thinking about YED, getting mixed up with PED. For the next in-class response test, I think I will prepare for it few days before and then memorize little by little. I take a lot of time putting things into my head so starting to memorize several days will help me a lot.

iphone arrived in Korea!

Iphone FINALLY arrived in Korea on November 28th. Apple has been hesitant to introduce iphone to the Koreans because Samsung and LG were dominating the mobile market until now. Also, so many Smartphones, computer-like cellphones, are dominating the mobile market and it would not be easy to survive among them. For iphone’s arrival, many reforms had to be made. The Korea Communications Commission granted a license to Apple to offer so-called location-based services, which include “functions such as maps and direction finders that are available on the iPhone.” South Korean law requires companies that provide such applications to obtain government permission. The commission also abolished “a rule that required all mobile devices to carry special software adapted to South Korea’s wireless Internet platform, which was an added cost for foreign manufacturers and viewed as a trade barrier.” I am very interested in the future change in the mobile market in Korea because non of the foreign phones such as Sony Ericsson survived in the market. I think that is the reason why Apple was very hesitant in releasing iphone in Korea.

Broken Japanese wings-JAL airlines

Once it was one of the largest companies in Asi but now American Airlines have offered them aid. JAL recently lost $15 billion and made them to seek a state bailout.

American Airlines is planning to tie up JAL and DELTA but them and their partners also argued that a JAL-Delta tie-up would face severe opposition in the United States “because of the stranglehold this combination would hold on Japan-USA travel, with more than 60 percent of the market.”

“Delta and the SkyTeam alliance offered a capital injection of $500 million as well as revenue guarantees and financing, taking the total value of their proposal to $1 billion.”

It seems like many companies are going for JAL although it is facing crisis. I think this is because JAL has been a big company for a long time that still has a big impact to Asia.

Sze Hunn Yap, a spokesperson for JAL, said that the airline had no comment on the offers. JAL’s president has said recently that he aimed to make a decision about the offers by the end of this year. JAL had $361 million loss last quarter. Over the past months they had to fire thousands employees and eliminate dozens of unprofitable routes in a bid to become more efficient. This reminded me of Ryanair and British Airways case. If JAL learn from what Ryanair has done, they might survive like how Ryanair did.

At least put the retoucher’s name on the credits

I have watched a video on The New York Times website.

Ms.Boyer is a mother of three children and is working as a photo retoucher. She crops, pastes, and photoshops images and makes it beautiful to be the front cover of a magazine. However, she thinks that photo retouching is very dangerous to the readers of the magazine.

Dominique Issermann, a French fashion photographer, thinks that Ms. Boyer has not only misunderstood the problem, but also the nature of photography itself. “There is this illusion that photography is ‘true,’ ” she said. But a camera can easily distort reality through the use of a different lens without any retouching. “As soon as you frame something you exclude something else,” she said, adding that photographs are “a piece of reality, but the reality of the world is different.” In family photos, for instance, “Someone always says, ‘That doesn’t look like you at all.’ ”

Almost all of the pictures that is inserted into magazines are photoshopped and the retouchers are well off because of that.  These days, people consider beauty and appearance very importantly and that lead to a increase the “artists’s” income.

Initiative- Deflation of the Japanese economy

http://news.bbc.co.uk/2/hi/business/8369767.stm

The Japanese government has warned the country that deflation is back from 2006. According to the article, “deflation is the opposite of inflation, meaning that the general level of prices in a country is falling.” Because the price falls, the consumers might like it but it actually brings a negative outcome.

i have searched more on the Internet about deflation. From a site of Federal Reserve Bank of San Francisco, i have found that “deflation creates incentives to save and postpone spending because prices will be lower and purchasing power greater in the future.” As a result, this circle leads to a pattern of less spending and increased unemployment and weakens the economy. Also, the site has mentioned that Japan presents an example of the negative effects of deflation in the Japanese economy. Therefore, I think Japan is a country that is very sensitive to the price change of goods and that is the reason why the government made a statement that the country is in a ‘mild’ deflationary situation.

Deflation of the Japanese economy is actually a positive economy change for me because as a Korean dormie, I will have a benefit when changing Korean money (Won) into Japanese Yen. Also, I would be able to buy more things because the prices of the goods sold in Japan would decrease.

Oprah

Oprah’s supply curve is inelastic. Since she is a woman who has an enormous effect in the States, produces magazine, has her own tv show, and works as an actress, her supply curve has to be inelastic. If I were Oprah and the tax I have to pay is 45% of the income, I would stop supplying or lessen the supply. I would think that my work is worth more than 55% of the income.

Downfall of Hovis

From the drop of its sales, it has been shown that Hovis bread is an elastic good.  Because of the economic recession Hovis raised the price of the bread but that lead to the fall in demand. Hovis bread is very sensitive to the price and that is the reason why the demand of the bread had fell dramatically after the price change. The original Hovis consumers substituted the expensive Hovis to other breads due to the change in preferences. If Hovis breead was inelastice, it would not have been damaged but since Hovis is an elastic good unlike other breads, it had negative consequences. If Hovis lowers the price back to how it was, the consumers would come back to them again.

JAL going down

Because of the global economic recession, JAL is going through a big financial crisis. To a lot of people, plane ride is a luxury good and they have decided to reduce the number of going on the plane. Therefore, JAL is constructing a new solid business program to bring a big change. First, there will be changes in the domestic network. JAL will operate more jets on domestic routes and look for further areas for cost cuts. For the international network, highly efficient aircraft are replacing old and big planes that consumes a lot of fuel. Cost will be reducted by bringing a change in maintenance, flight operations, cabin crew, airport operations, sales and other operations. They are finding a way to maximize profit even with cost reductions.

Cheap Flights to Europe!

a) The article suggests that the European air travel is price elastic in demand.  BA changed its stragety by reducing the number of economy seats and increasing the cost. On the other hand, Ryanair added more routes and lowered the price.

b) Due to the increase in the aircraft routes,  low ticket price, and the landing place, (far from the city)Ryanair profited the most. Also, the buses or train services meets each flight and it attracted people even more.

c) Ryanair planes landed outside far form the city so they could have more planes land faster. Also, they do not give out peanuts and asks the passengers to tidy up their seats. In that way, Ryanair can save money and make the price cheaper.