ADMS 1010 Final Exam Fall 2011
The case studies on Canadian companies show a consistent pattern of how a Canadian
business innovates, rises to a position of pre-eminence but eventually falls and / or it sold
to foreign owners.
Pick any two of the companies outlined in the case studies of the text Eaton‟s, Massey
Harris, Inco, Vincor, RBC, General Motors).
A. Discuss Key factors that
- made them successful and took them to a position of leadership
- led to problems or an inability to maintain their leadership position.
b. In your opinion, do you think Porter‟s diamond or the Stern Diamond better explains the
rise and decline of Canadian firms we have studied? Please give justification for your
c. What could we learn form the success and weaknesses of these other companies that
would help us understand initial successes and current difficulties of RIM? See below.
Research in Motion: Lessons Learned
November 29,2011 about :BIMM
Disclosure: I am long AAPL, SIRI, MSFT.
It‟s a foregone conclusion that Research In Motion (RIMM)
has lost the battle in the smart phone and devices market to Apple
(AAPL) and alternatives on Google‟s (GOOG) Android
platform. But what lessons can investors learn from a
demise that seems inevitable? In a recent article, I
suggested that the company is Palm 2.0. But in searching for
lessons, this comparison is more relevant than you might otherwise think. Because RIM did
to Palm exactly what Apple is now doing to RIM – this is what ultimately allowed Palm to
then be scooped up by HP (HPQ) for pennies on the dollar. There have been many companies who have largely invented markets as RIM did and then
allow others to steal away the business. You don‟t have to look farther than the
aforementioned companies as prime examples. Apple has claimed that Microsoft (MSFT)
stole away Windows or the graphical user interface idea, which it was then blamed to have
stolen from Xerox (XRX).
Google came out of nowhere and took away the search business from the once invincible
Yahoo (YHOO). At one point AOL (AOL) grew so big in its early entry into social networking
that it bought media giant Time Warner (TWX). Now not only has it become an obscure
brand, I don‟t know too many people who would admit to still using it. At one point the
built-to-order PC business was dominated by Gateway until Dell (DELL) figured out how to
do it better. There are also examples where duopolies such as Sirius (SIRI) and then XM
Satellite Radio unite for self preservation.
So clearly in these examples the obvious lesson is that corporate theft is as American at
apple pie/ perhaps “theft” is a bit of a stretch unless you were long Apple prior to 1999.
But at the very least and as in the case of many societies, “survival of the fittest” is truly
the mantra on the market. but as also in the example of Apple, “what was once old can
also be new again.” but the question for RIM investors remain: Does it have what it takes?
After all, there is not a Steve Jobs-type on the payroll.
What Could Save RIM?
Honestly, aside form an acquisition, I just don‟t see how it can remain solvent, especially
considering the disaster that was its recent earnings report. It reported second quarter
results that only confirmed what may investors had feared-the run has long been over and
is likely not to return. Tis product portfolio is no longer resonating with formerly loyal
The company reported 10% declines in sales. Management pointed out that unit shipments
came in “slightly below” forecast and attributed the disappointing trends to lower demand
for its older phone models. OK, this is not news. The disappointment was that it failed to
offer investors any idea as to how it plans to reverse the trend.
But it realizes that where it is unable to sell and he profitable, perhaps it can save. The
company is trying to slash expenses and increase profits by cutting an unspecified number
of jobs as part of a “cost optimization program.” It also announced plans to buy back as
much as 5% of its outstanding common shares.
With $2 billion is cash, RIM is not going away tomorrow and I think the company has an IP
estate that could yet deliver competitive devices. Even with y doubts for its ability to
survive, I have to remind myself that a decade ago very few people thought the Apple or
even Motorola (MMI) had anything special left until their devices hit the market.
While the comparisons to Apple will likely convince some investors to take a chance that a
RIM recovery just might be possible, former Palm inventors will remind those that are
currently long RIM of the lesson that teaches “what goes around comes around.” Question2
In the first part of the course, we studied the National Policy. Over the rest of the course
we saw the growth of Foreign Direct Investment (FDI) in the Canadian economy and a
tremendous growth in foreign ownership.
a. Discuss the positive and negative influence of FDI on the Canadian economy.
b. The author of the text states that the National Policy (tariffs in particular) may have
been responsible for the large foreign ownership of the Canadian economy. Do you
believe this is true? Why or why not?
c. What do your conclusions mean in the context of the government‟s policy on FDI in
the wireless industry in Canada? See below.
Canada Wireless Foreign Ownership Decision Could See Rates Drop
OTTAWA - Canadians should expect lower prices after Ottawa announces its decision on foreign