MicroEconomics

Intel chips and smartphones?

2011-06-12T13:19:00.000-07:00

Intel has noticed that different types of chips found in smartphones may start to hurt Intel's business. Since Intels chips in PC's have slowed down due to the rise in demand of smartphones this will cause negative numbers and loss of market for Intel. They want to get their chips into the smartphone industry to compete with ARM's marketable licensing. Other competitors are able to challenge Intel but Intel has the servers. Chips for smartphones are way less expensive than chips for PC processors. Intel already has servers that help run other mobile devices this would just be their way of expanding their technology and stretching their production posibilities curve outward. If they could get into the smartphone market they could become unstoppable. According to their research smartphone shipments have increased over 80%. Intel could start looking for a way to create a low cost and energy efficient processor. Intel still powers PC processors and hopes to find a way into the smartphone market. As Intel starts to invest more into this, competition could rise causing them to have to spend more to be in the lead if that will be possible. It seems that Intel, already globally known, could expand growth more and diversify to help sustain losses in the PC market. Would Intel computer chips in smartphones be a good idea? It seems that the cost of smartphones could boost tremendously if so. This could be the opportunity window that smartphone chip company's need to boost their business. There would be little competition if they suddenly acheived that access into the market. It could speed up phone connection at the cost of convenience.

McDonalds Stock

2011-06-05T13:28:00.000-07:00

      This slow and steady giant is making its way through any economic situation and making more money as it makes new trails, sort of like a lake harvestor. Even through the midst of a healthier American living environment, Mcdonalds proves to show that it is much needed and is not going anywhere anytime soon. Everytime one item on the menu is over used and forgotten they simply add another menu item to replace it. This company seems like it is the biggest fast food chains around, it is not invincible of course but it has rooted itself a fine foundation.

      McDonalds stock (MCD) is currently sitting at 80.54 per share. This share, last year to date was at about 67.25 on June 5th 2010 thats a 13.29 difference per share in one year. Even looking back further would show that it has been on the rise slowly like a ninja. It is not a huge difference in pace, but it is steadily rising, positively. This could be an interesting stock to keep your eye on. It probably will never generate millions of dollars but it can be nice to hold onto for a while and watch it grow like a Mcgarden.

Specialization vs Diversification

2011-05-29T11:04:00.000-07:00

    Specialization is the use of resources to focus production on one or few number of goods and services. This type of business puts its focus primarily on perfecting a certain type of product or service to ensure that it is top notch and exceeding the bsic version of that same product or service.

    Diversity is the expanding of a certain item or idea in order to reach out to more potentials.

   A great example of specialization would be a Starbucks or Fossil. Both companies offer a product or service that is "above the norm" in quality. Starbucks coffee is rich in flavor due to its coffee beans used to produce the product. Less quality beans would produce less quality coffee tastes. It could take years to acquire a great relationship with a good quality bean distributor and use trial and error to determine what works and what doesnt work. Starbucks offers their product at a higher price because the quality is better and has specialized in the coffee industry. Fossil is another example. Fossil has been making high quality watches since 1984 and have specialized in creating watches that can exceed other brands that make watches as an extra thing to do. Their higher price relfects their knowledge in the watch industry and becasue they have been around for a while they can also somewhat determine what works and what does not work. They are not the oldest. Different "tastes" can hurt these companies such as the lack of use for watches due to the rise in technology. Since many people have cell phones this deters the use for watches because all cell phones come with the time as a basic commodity now. They can become an iconic accessory to some people. A possible way to overcome would to create the watches to do more than just tell time to offer more of an incentive. Starbucks has faces a problem with lower prices from competitors that want to establish themselves as a new place to get coffee for a lower price. The quality for these competitive coffees is not as good as Starbucks but the lower price can lure customers to switch. It might be hard for Starbucks to match these lower prices because they have been sustained on the current prices for some time but their good quality coffee will endure the test. Overall, specialization is great thing and a dangerous thing. All strategies have risks, but it seems specialization ensures more direct connection and can depend on a better foundation for future changes in the economy, as opposed to diversifying to reach more markets. Companies like McDonalds that try to reach every market and customer can appeal to more and charge a lower price but offer lower quality but more quantity.Which is better?

Is specialization better than diversifying?