As 2012 draws to a close, we asked MBAs around the world to tell us what they thought were the biggest business stories this year.
So, what got MBA students discussing and arguing in and out of class? As expected, they touched on criminal activities in banks, and forgot to mention the Eurozone crisis because, let’s face it, that’s not news anymore. It's more like weather.
We did get a surprising entry about the iPhone accessories industry in China. Read on to find out what made the list!
The Facebook IPO
Abed Abu-Snaineh, from the Warwick Business School MBA class of 2012, called it “the most thrilling story of 2012”. According to Abed, it was fascinating because it was the biggest IPO in the history of technology and internet companies. The fact that it faced a number of roadblocks including overpriced shares, computer malfunctions on the day of the opening which lead to millions of dollars being misplaced, and accusations of Facebook executives assisting insider trading made this even juicier!
Apple v. Samsung
These law suits captivated nearly everyone who is interested in technology, patents and Apple. Konstatin Danilov, an HEC Paris MBA, and Abed Snaineh told us that the patent war between these two companies were a big deal because Apple is one of the most innovative companies in the world, and Apple together with its close rival Samsung produce more than half of the smartphones sold in the world.
The patent rulings were significant because of the different judgments produced in different jurisdictions. Abed said, “It gave a good idea of how international business law differs. It also raises questions about the state of global intellectual property rights”.
The 18th National Congress of the Communist Party of China
Li Fan, an MBA student at the Shanghai Advanced Institute of Finance (SAIF), chose the power handover in China as one of the biggest news stories of 2012. In late November 2012, Xi Jinping replaced Hu Jintao as the Community Party General Secretary. Li Keqiang was also elected as the Premier-in-waiting of the State Council (he will take up the role in March 2013). This transfer of power to a new generation of Communist leaders happens once every ten years and will have a tremendous impact on the growth trajectory of China’s economy.
After many years of high speed development, the Chinese economy now faces new growth challenges. Li Fan believes that Xi and Li are from a more open generation of leaders who can implement the reforms that China needs to grow. He is confident that they will lead a China that continues growing at a remarkable rate.
Trial Economic Reforms in Wenzhou
Li Fan also touched on the economic reforms trials in the southeastern city of Wenzhou in March 2012. The reforms allow residents of Wenzhou to invest privately overseas and set up loan firms. Li believes that this is the beginning of a deep reform that is set to take place in the Chinese financial system. He believes that it will also bring great opportunities for MBA students who want to focus on finance.
The Election of Barack Obama as President of the United States
Li Fan believes that President Obama’s second term is good news for China than since he doesn’t have the pressure of trying to get elected for another term in office and can focus on making economic policies with less regard for trying to be re-elected. “This will be good for both the US and Chinese economies”, said Li.
Warwick Business School's Abed had a different perspective on President Obama’s re-election. He said, “Obama’s election shows that people still want the assurance that the governments are overseeing the economy. There are more global risks now such as climate change, economic and political instability, mass unemployment and these are blurring the lines between public and private”.
The Barclays Libor Scandal
Abed told us that the Barclays Libor scandal was viewed by many commentators as the financial crime of the century. To him, the timing was interesting because people had just started to regain confidence in the markets when it occurred. Barclays lost $3 billion in just one trading session. The scandal also had a lot of impact on policy makers with the UK government springing into action to tackle it. It did however raise considerations over the role of the Bank of England and the Financial Services Authority (FSA).
The Sudden Demise of Monitor Group
This new story was selected by both Warwick's Abed and and HEC Paris' Konstantin. Most MBAs who are interested in consulting have surely heard of Monitor Group. The consulting firm was formed in 1983 by Harvard Business School luminaries including Michael Porter, whose Five Forces strategy is taught at business schools the world over. The firm became one of the most desirable destinations for MBA grads, known for its exciting clients, ideas-based culture and fat salaries. After facing criticism and fines for its involvement with fomer Libyan President Gaddafi in 2011, the firm filed for bankruptcy in November of this year as part of a takeover by Deloitte. There is speculation as to what caused it - we leave you to judge!
The iPhone 5 and What it Meant for China’s iPhone Accessories Industry
Chinese University of Hong Kong MBA Sebastian Bujnoch told us that in China and Hong Kong, any news related to the release of the iPhone 5 was devoured by product design executives. This was because all the accessories for the phone had to be re-designed and re-engineered.
The accessories industry for the iPhone is vast: cases, screen protectors etc, nearly all of them made in China. Companies who want to make money in that market need to have first mover advantage on the specifics of the new phones.
Seb told us that Apple normally changes the iPhones dimensions every two years: the iPhone 3 and 3S were almost identical in size and didn't create a rush to buy new accessories. The same was true of the iPhone 4 and 4S. So the launch of the iPhone 5 was a big deal for phone accessory makers!
Accessories suppliers in China eagerly awaited the September launch of the iPhone 5 and big players in the industry even sent their staff to to the US to buy the new model, which is thinner and has a bigger screen. The employee would then take the next flight back to China with her precious cargo to have the phone scanned in 3-D to obtain the outside dimensions. New cases were designed and produced at breakneck speed to be shipped to the US the next day!
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