MINDSETS - Creative Confidence (Week 7)
QUESTION 1
Why is culture important?
PUTERI HANNAH BINTI MOHAMED DAUD IBRAHIM (TP077710)
Corporate culture can be defined as the values, beliefs and norms that form the identity of a company and determine how a company's employees and management should interact and perform. Company culture is considered important because it can increase employee engagement. This can motivate and inspire employees to be more engaged in the work they are doing and increase productivity (Wong, 2023). Company culture builds a strong brand identity because people will normally make assumptions of a company based on the interactions inside or outside of the company. Businesses with a strong brand identity are said to attract more business attention and new employees. Apart from that, company culture is important because it can reduce turnover. A survey carried out by a company called Cengage Group found out that 31 percent of the employees who left their positions in the company said that it
was because “the company’s mission did not align with my values” (Heinz, 2023). This shows that when a company has a weak work culture, the employees will tend to quit and find jobs at a company that has a strong company culture. To conclude, we can say that corporate culture is something that should not be taken lightly by any company so that they are able to build a cohesive and productive work culture in the company.
QUESTION 2
Do you think Facebook overpaid for WhatsApp? Why?
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In my opinion, I think that Facebook did not overpay for WhatsApp. There are few points that can show Facebook did not overpay for WhatsApp. First, Facebook found out that WhatsApp could assist and help them to increase their customer base and user growth. At first, Facebook also made a mobile application called Messenger that has the same features as WhatsApp. Although Facebook reaches350 million users, the number of active users in WhatsApp is still greater than Messenger where WhatsApp had 400 million active users at that time. Apart from that, WhatsApp had more international users compared to Facebook. Even though the company is in California, WhatsApp still has a large number of non-American users using it (Edwards, 2014). Thus, Facebook increases its customer base and expands its international exposure by acquiring WhatsApp.
Secondly, the price per user in WhatsApp is not that high. According to Cook (2014), it stated that Facebook paid less per user for WhatsApp ($35.56) than Google for YouTube ($48.53). It is because WhatsApp had an engaged user base of 450 million that clearly pulled down the price per user. Therefore, it can be said that Facebook did not overpay 19 billion dollars for WhatsApp.
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In the year 2014, Facebook opened its wallet and shelled out a whopping $19 billion to acquire WhatsApp. Most people say Facebook overpaid because WhatsApp’s financials did not look like a company that was worth $19 billion (Kerravala, 2014). In my opinion, however, he definitely made the right choice. At the time Facebook had its own messaging application called Messenger. This application is actually being affected by some other applications such as Line, WeChat and so on. People use Messenger because Facebook forces users to download this application for messaging otherwise users will choose other better options. According to Statista, data shows that Messenger's active user is 200 million in the year 2014, and WhatsApp has over 600 active users monthly in the year 2014which proves that Messenger is not more popular than WhatsApp (Statista, 2023). Thus, Facebook needs to acquire some marketable software to fill the gap of lost Messenger users which is WhatsApp. WhatsApp can share almost anything such as short messages, pictures and location information. Such a versatile piece of application living up to expectations with 3 billion monthly active users in 2024 and becoming the most popular messaging app in the world (Turner, 2024). In conclusion, this acquisition was not overpaid because it allowed the company to enter a new market and get ahead of the curve, which is very rare to get it.
QUESTION 3
What are some of the problems bringing in new investors?
WENDY KOH XIN HUI -TP077721
Investment can be defined as an asset or income that is committed to generating a better financial benefit in the future. Simply put, individuals try to involve themselves in the investing field to allow money to grow and earn more profits. Investors can grow their wealth in different forms of investment performance including financial returns and assets. Investors will choose financial return as they want to get the investment in the form of interest and dividends from banks. Some of them will
choose to buy tangible assets including estates for rent to gain more income.
However, there are some problems with bringing in new investors including a lack of certainty, a lack of investor education, high cost of investing, and being perceived as unengaging. The lack of certainty means poor returns and the investors are forced to take risks. Generally, everyone is risk-averse and unable to accept uncertainty. The lack of certainty will make the investment process complicated and tough as the companies are unable to predict the return. Lack of education can be defined as some new investors having no concept of investment and it will make it difficult to understand the full risks and rewards. The high cost of investing is not affordable for most of the new investors. Commonly, new investors are still in the stage of understanding all the concepts and hence they are unable to afford the high cost. Being perceived as unengaging as the system does not provide an online fundraising platform.
References:
Wong, B., JD. (2023, August 15). What is company culture? Definition & Development Strategies. Forbes Advisor. https://www.forbes.com/advisor/business/company-culture/
Heinz, K. (2023, February 24). Why is organizational culture important: 4 key benefits. Built In. https://builtin.com/company-culture/why-is-organizational-culture-important
Edwards, J. (2014). Why Facebook had no choice but to pay $19 billion for WhatsApp. Business Insider. https://www.businessinsider.com/why-facebook-paid-19-billion-for-whatsapp-2014-2
Cook, J. (2014, September 6). These charts show why Facebook may not have overpaid for WhatsApp. GeekWire. https://www.geekwire.com/2014/charts-shows-facebook-may-overpaid-whatsapp/
Facebook Messenger: monthly active users 2017. (2023, August 25). Statista. https://www.statista.com/statistics/417295/facebook-messenger-monthly-active-users/
Turner, A. (2024, April 8). How Many Users are on WhatsApp? User Statistics (2024). BankMyCell. https://www.bankmycell.com/blog/number-of-whatsapp-users/#:~:text=Our%20estimates%20show%20that%20WhatsApp,in%20China%2C%20and%20Facebook%20Messenger.
Kerravala, Z. (2014, February 20). Did Facebook overpay for WhatsApp? Network World. https://www.networkworld.com/article/748104/cisco-subnet-did-facebook-overpay-for-whatsapp.html
Abhishek. “Investment Meaning | Types and Objectives.” Max Life Insurance, August 2023, https://www.maxlifeinsurance.com/blog/investments/what-is-investment.
Funds. “Challenges in attracting new investors.” Funds Europe, 23 March 2020,
https://www.funds-europe.com/challenges-in-attracting-new-investors/
Alejandro. 7 Ways For Entrepreneurs To Find Investors And Raise Millions, 9 November 2018,
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