Price Indexing and Economic Politics

1. I wonder if sometime in the future the price index theory will have to be rewritten or deeply readjusted: A German woman whom I met in Paris is greatly pleased with her studies there, yet she complains about the cost of living. She suggests that a good point of comparison is canned soda, which in Germany sells for about .75 euros while it averages nearly 3 euros and is around 4.50 euros plus tips in restaurants and upscales places, in general. Price indexing has been one of the bottlenecks the euro had to confront in its early stages and cause both cultural and socio-economic tensions in relation to commodities such as gas and oil, and was a factor is the French nay vote over the EU constitution. I believe that the price of gas was cheaper in countries, such as Spain, and much more expensive in Germany; therefore, making a budget to travel driving your own car or by renting a car may not be an easy task. As I recall from my study on money exchange, in the earlier stages the euro was weaker against the Japanese Yen and the dollar when not existing as actual notes, currency bills or hard coins. This has made it more difficult for other currencies such as the American dollar and British pound to take any advantage from the real diversity of values of the euro in each one of its instances. In relation to the soda market, almost a clear duopoly, as initially described by Cournot, it clearly suggests that the euro has brought great economic tensions and that working towards leveraging the prices to a more realistic value could objectively improve the economic politics in the international landscape. This is so certain that historically money exchange can greatly affect developing countries, such as South American countries, but much more African nations, which have no realistic revenues from their exports or related investments. However, conversely it may benefit European investments in developing countries, some of which are using the euro as standard in lieu of the American dollar, in particular, in the hospitality business.

2. The irrationality seems to be taking care of the South American politics and diplomacy. While Venezuela has been widely investing in war aircrafts and other related hardware for quite sometime, it is probably neglecting that a few years from now oil may become a deprecated commodity due to disrupting technologies. With the current comprehensive research on bio-fuels, solar, and other termal forms of energy, and the development of electric vehicles and other relevant powering technologies, it is quite likely that there will be less demand for oil and that this commodity will become part of a vertical specialized market rather than as it exists today, widely horizontal. Rather than warefare, I wish that there is more thought towards the planning of a country whose educational system is slightly below the average South American country as I have directly learned from friends and relatives who have had the learning experience there. My greatest concern is that the name of the economic system should no longer be an issue to disrupt the world peace. Even presidents Reagan and Gorvachev had the opportunity to fingerpoint one-another in relation to the positive and negative aspects of each system. The point is that the world needs more rational leaders and fewer arrogant dictatorships or alike. Indeed, I also believe that democracy should prevail over the socio-economic system itself.

Good News from Apple!

Everyone at Apple is applauding Steve Jobs’ return to work as CEO, after his recovery from a liver transplant. As apple consolidation as an American icon enhances in the new millennium, its product line, its creativity, and the company image provides a clear path for those who ever dream of starting a company in a garage as Jobs and Wozniak did just a few decades ago.

An important aspect of Apple growth has been product diversification and strategic channeling. About 25 years ago, just out of college, I had been trained by Xerox Corp., as the sole responsible distributor for Apple. But just a few months later I worked directly for a national Apple distributor using the new Apple Center strategy, which adjusted and reconverted to become what is today’s Apple Stores, which attracts the unique Apple nation worldwide. But as I recall as a former employee, the company had quality and customer satisfaction as the main differentiator among competing vendors.

This brief writing has been inspiring in my controversial MBA study of Harvard University papers on Apple, which encounter in discrepancy with my own personal experience. As I indicated in that study, I found out that Harvard study was rather focused in negative impressions of the company that were rather subjective. For instance, one of the most recent versions of the paper called the iPod “an instrument of deafness” while for the overall user is an instrument of fun, relaxation or excitement, but in all scenarios not such an instrument as described by Harvard study. I believe I had spent a significant amount of time researching the company business model, beyond my perception that Apple had been designed to excel as the company of the century.

Today’s Apple business model is unique and consistent, and it has over achieved a position in a preferred microcomputer and innovative technologies markets.
A little bit of Blogs Through Pictures: The following are the slides accompanying my research, as part of my strategic management study.