Leadership in the Workplace

Leadership is a necessary trait that a manager must carry and demonstrate. Different types of leadership are required for different situations. The different types of leadership are: coaching, super, and servant.

Coaching Leadership

Coaching leadership instructs followers on how to meet special organizational challenges they face. This type of leadership identifies inappropriate behaviors and suggests to the subordinate how they should change them. As the name indicates, this approach is much like a coach.

Super Leadership

Super leadership although it sounds like the best way to lead, it is not always the appropriate type. Super leadership is leading others by showing them how to lead themselves. A manager must teach them to think on their own, eliminate negative thoughts, and build self-confidence. If a manager does those things, the subordinate is more likely to lead her/himself.

Servant Leadership

Servant leadership is placing more value on helping followers achieve aspirations and fulfill personal needs. This type of leadership has been around the longest. A servant leader has multiple traits such as; a good listener, persuasive, empathetic, and consider themselves a steward of human resources.  Research has shown that this type of leadership has a lot of potential to lead an organization to success. 

Works cited:

Brown, Paul. "Leadership." Management 320. Barry Hall, Fargo. 2 Dec. 2015. Lecture.

Giving Tuesday

An annual event took place yesterday called Giving Tuesday. This event occurs every year on the tuesday following Thanksgiving. Local and national businesses partook in this event by raising money for charities around the country. Many companies use this as a strategy of Public Relations to create a positive company image. In Fargo companies like Valley Imports and Others Fair Trade Boutique. Valley Imports said they would match donations up to $5000 and donate those funds to Sharehouse.
Philanthropic type activities generated by corporations and business have a positive effect on the companies image. This can be used as a marketing strategy to generate the interest of consumers by creating awareness of a company and perhaps giving them a competitive advantage over companies who don't partake in philanthropic activities. Giving tuesday became an internet sensation yesterday by creating hashtags and by generating the interest of social media users. Many companies gained recognition by their donations. These donations  not only created a good reputation for the company  but also boosted sales with their donations.





Works cited:
Olson, Dave. "Inside Business: Groups Get behind Giving Tuesday Movement." INFORUM. N.p., 02 Dec. 2015. Web. 02 Dec. 2015.

What is Direct Marketing?

Direct marketing is one form of selling a product. This form of marketing gives the marketers a good amount of control over what information and impression the customer is getting. Direct marketing can come in many forms, Mail order, M-commerce, Telemarketing, and Direct Response Advertising.
Mail order can come in two forms, catalogs and direct mail. Catalogs are collections of products offered for sale and described in book form, usually consisting of product descriptions. An example of this would be the Sunday catalogs that department stores like Macys and Herbergers send out on an ongoing basis. Direct mail is a brochure/pamphlet offering a specific good/service at one point in time. An example of direct mail would be like the flyers Direct TV sends out to people that promote their prices.
Telemarketing is a form of direct marketing over the telephone. We have all experienced the annoying telemarketers that call the same time every day trying to sell the same product. A disadvantage of using this technique is nowadays there are "Do Not Call" lists.
Direct response advertising allows consumers to respond by immediately containing the provider with questions or an order. Direct response TV is an example of this with products such as Pay-per-view features on TV. Another example is Informercials which are segments that demonstrate and inform the audience about a certain product and often times will offer special prices if people "call within the next 20 minutes!".
M-Commerce is a promotional and other e-commerce activity that is transmitted over mobile phones/devices. An example of this would be SMS text messages that reach out to customers.

The technique that marketers choose to use is not always the same. There is no one definite way to market every product. The type of technique depends on the size of the audience and the product/service being sold.



works cited:
Pillai, Rajani. "Trade Promotion, Direct Marketing, and Personal Selling." Marketing 320. Barry Hall, Fargo. 1 Dec. 2015. Lecture.

Getting Paris Back on Track

As you recall last week I wrote a blog about the economic repercussions of the Paris attacks, now I am following up with how Paris should go about getting back on track. You can probably imagine tourism has slowed down significantly since the attacks in Paris. Tourism accounts for over 7% of France's GDP. Two weeks later Paris is still seeing sparse lines at stores, less traffic, and early Holiday sales in hopes to attract customers. The 4th quarter was not so great for the people who do business in France because of the attacks, long-term planning on the political and business fronts will likely increase the countries economy. Last week a survey was completed which involved American Business people who have conducted business in France and the results showed that France is actually perceived less bad as years before. France especially now relies on business people around the world to continue doing business in France because of the downfall of the economy. The survey results look hopeful for the French economy and the likeliness of long-term effects on the attacks are slim. If the percentage of people with a negative perception of the French Market continues to decrease, France will likely see better days ahead.








Works Cited:
Karabell, Shellie. "Paris Now: How to Get Business Back on Track." Forbes. Forbes Magazine, 28 Nov. 2015. Web. 29 Nov. 2015.

Black Thursday & Cyber Sunday

By the looks of the title of this blog you must have thought I had the name wrong. Not this year! More and more stores are opening on Thursday (Thanksgiving) evening and allowing shoppers to shop. However stores have actually started to begin their "black friday sales" almost a week before actual Black Friday. Well-known stores like Herbergers and Macys have begun their Black Friday festivities nearly one week ago.
Cyber Monday also has been promoting the early bird sales that begin on Sunday instead of Monday. Walmart announced big sales will hit its website everyday in November leading up to Cyber Monday.  More than likely we will see both Black Friday sales and Cyber Monday sales continue weeks after the actual days if stores don't sell out of the products they intended to.
Although Black Friday is still an eventful day for shoppers, with continued extended sales offered by stores, we will start to see less and less popularity of just the Friday after Thanksgiving. Businesses seemed to have a hold on their prices in order to offer such large sales for such an extended period of time so it is likely we will see this trend continue into the next few years until the demand for Black Friday decreases.
The newest Holiday to add to the bunch is Small Business Saturday. As the name mentions, this is to promote shopping at small businesses on the Saturday following Thanksgiving. Small businesses are the only category of this infamous trifecta that are less likely to extend their sales weeks before and after the actual day. Now we have Thursday-Saturday to take care of all of our holiday shopping!

Works cited: "Friday Favorites - JK Style." JK Style. N.p., 20 Nov. 2015. Web. 24 Nov. 2015.

Freenomics

According to marketingbinder.com, Freenomics s a business model that encourages giving products away for free because of the increase in profits that can be achieved by getting more people to participate in a market. We as consumers don't quite grasp how a company can be successful by giving away products and services for free. The example that comes to mind when I think of freenomics is the free music app called Pandora. Pandora is a great example of how freenomics works. Although there is the option for subscribers to purchase ad-free listening for $4.99 per month, that is not how Pandora makes their profits. Pandora, and other freenomic operating businesses make their money because they have the ears of so many consumers listening to their streaming that advertisers will pay big bucks to get their advertisement streamed to listeners on pandora. Essentially, the more people that listen to Pandora the bigger the market gets which means the bigger the audience get which ultimately leads to higher priced advertisements. By offering free music services Pandora has earned profit into the millions in recent years. Freenomics turns out to be a win-win situation for consumers and Pandora.  This new business model has show quite the success over the last few years and will continue to grow as we enter into more and more technology driven markets.


works cited:
"Freenomics." Marketing Binder. N.p., n.d. Web. 23 Nov. 2015.

Science behind Black Friday

Black Friday has become the holiday after the Thanksgiving holiday. Driven by massive sales in nearly all retail store, consumers have cut their holiday of giving thanks short. Ironically they cut the thankful holiday short in order to get greedy in retail stores around the country. How are these companies able to offer such discounted prices year after year and still make a profit?
This diagram demonstrates how a typically company will operate on black friday:

As you can see the retailer will typically sell the product for double the money they paid for it. On black friday they will sell it for 1.5 times the money they paid for it instead of double. By doing this they end up selling almost 5 times more of the inventory which generates over double the amount of profit. So next Friday when you are out black friday shopping, ask yourself if you are really getting the deal you think you're getting. Chances are most marketing departments in companies won't set prices to match cost or lost money therefore they are still making a profit on your purchase.



Works Cited:
"Black Friday By The Numbers - The Accounting Degree Review." The Accounting Degree Review. N.p., n.d. Web. 17 Nov. 2015.

What is Beta?

Beta is a term used  in the financial and statistical industries. The greek term serves as a coefficient for both industries. In the financial industry Beta is a coefficient that measures stock's market risk. When it comes to stocks, there are two different types of risk, systematic and unsystematic. Systematic risk is unavoidable. Systematic risk reffers to recession or inflation of a market. Unsystematic risk can be eliminated because it is risk referring to product or labor problems. The unsystematic risk can be eliminated through portfolio diversification.

Beta coefficient shows a stock's volatility relative to the market and indicates how risky a stock is if the stock is held in a well- diversified portfolio. Beta measures the systematic risk of an asset. The average Beta is = 1.0 which is the Market beta. If Beta is less than one, the stock is considered less risky than the market. If Beta is greater than one, the stock is considered more risky than the market. If Beta = 0 it is independent of the market.

Beta measures the light blue section.

To estimate beta we must run a regression of the security's past returns against the past returns of the market. The slope you get is going to represent the beta coefficient. What if you get a negative slope? Yes that is also possible too. If the slop is negative, the correlation between the stock and the market is negative. This is a very unlikely situation.

works cited:

Tian, Rulin. "Risk and Return." Finance 320. Barry Hall, Fargo. 16 Nov. 2015. Lecture.

Paris attacks

Not only were the terrorist attacks by ISIS an extremely devastating series of events for the people of Paris at the time of the attacks, but they are also having a huge effect many days after. The people of Paris and the businesses of Paris are suffering right now. Shortly after the city of Paris began to set up for the Christmas market and hang lights throughout the city, the city was attacked. Today, many of the shops and stalls remained closed by official order and stores resemble ghost towns. Shops lacking customers is a very small tragedy in comparison to the loss of a life but is an indicator of Paris's lack of economic recovery after the attacks. Most people who were looking to travel to Paris over this holiday season are now steering away from traveling. Not only are tourists afraid to travel to Paris and walk the streets of the city, but the people of Paris are also fearful to walk the streets by shops and they want to avoid crowds. It is too soon to say how long the repercussions of the attacks will continue to be present, but its safe to say that for now the economy is suffering and many businesses will not see as many sales as previous months even though the Holidays are among us. Tourism represents 8% of the French economy and with many hotel cancellations, event cancellations, no foot traffic, and people remaining isolated, the French economy is sure to suffer.


works cited:
Jolly, David, Jack Ewing, and Doreen Carvajal. "After Paris Attacks, Waiting for Shopping and Culture to Come Back to Life." The New York Times. The New York Times, 16 Nov. 2015. Web. 16 Nov. 2015.

Branding a product.

In marketing, companies face a question when they release a new line or create a new product. The question is whether or not to keep the same brand name as the rest of the products or to use a completely different brand name. The term used to describe the continuous use of the brand name is called brand extension.
Brand extensions are useful when the company already has a good reputation therefore that reputation carries over to the new product too. Brand extension helps to gain a market share quickly because the brand is already established and people trust in the products. A firm is also able to set their prices a little higher right off the bat if they extend the brand name because of the value that the brand carries.
A new brand name comes in handy when a firm needs to rebuild the reputation and disassociate with the previous brand because of negative views. This strategy also differentiates a companies products by giving them different names. For example, the company dodge introduced the model of truck called the Ram, they eventually turned Ram into its own brand name because it differentiated the truck from the other cars dodge sold.
There is no right way for every situation a company faces. The strategy to be used should depend on the type of product being introduced, companies reputation, market share, and price.


works cited:
Pillai, Rajani. "Branding." Marketing 320. Barry Hall, Fargo. 5 Nov. 2015. Lecture.

Human Resources in a Firm

If you have ever applied for a job in an established firm/company, you've probably dealt with the Human Resources department. Personally speaking, I have always wondered what the human resources department of a company does.

HR has 3 goals:
1. Attract an effective workforce.
-Internal vs. external hiring.
-Looking for a good fit.
2. Develop the workforce.
-Training and Education.
3. Maintain the workforce.
-Compensation, Benefits, etc.
As you can tell, HR is centered around finding good employees, developing them, and maintain them.

If only their job was that easy! HR not only has to hire employees they feel are a good fit for the company, but they have to make sure they are not violating any laws while doing so. One of the biggest issues they face is discrimination. Discrimination is making job related decisions on non-job related criteria. Whether they intend to or not, many HR departments could have faced legal action on the basis of discrimination. If a firm is 15 people or greater they are subject to legal action when the criteria describes a protected group. To avoid potentially facing legal action firms will take affirmative action( sometimes required by a court) and give preference in hiring and promoting to members of protected groups.


Works Cited:
Brown, Paul. "Human Resources." Management 320. Barry Hall, Fargo. 8 Nov. 2015. Lecture.

Price Skimming

Price skimming is when a marketer sets a price relatively high with the intentions of eventually lowering it over time; it is a form of price temporary discrimination. A company might consider using the strategy of price skimming when first entering a market for a number of reasons.

Establishing the brand

Marketers often want to base their brand off of quality or status. Price skimming is a great way for marketers to reach their target market by establishing how their brand is perceived.

Perceived Quality

There are many different ways that consumers perceive quality, price being the most obvious. Usually when something is more expensive it is also better quality (or so we think). Using a price skimming strategy provides a perceived idea that the quality is greater than something that is similar but less expensive.

Attract the status driven customers

The status driven customers are always concerned about the price but not in the way that most of us are, they want the price to be high. This group of customers is all about looking prestigious and wealthy. Price skimming creates those high priced items that the status driven customers are looking for and "HAVE" to have.

Early Adopters

In the PLC (product life cycle) some of the quickest people to purchase a new item to the market are the early adopters, these people are generally willing to pay more than the later majority of purchasers. If a marketers sees that his/her firm is one of the only firms in the market he/she will use price skimming because he/she knows that they have control over the pricing of that market and have no competition.

Recover costs

As you can imagine startup costs for a business are not cheap. Price skimming can quickly recover those research and development costs that occur when starting a business or entering a market with a new product. 

Works Cited:

Brookins, Miranda. "What Are the Benefits of Skimming Pricing Strategy?" Small Business. N.p., n.d. Web. 09 Nov. 2015.

Informational and Operational Efficiency

In the world of finance there are many different markets which exist. For instance we have the commonly known markets such as the stock market and the bond market. Another aspect of the financial markets are the efficient markets which relate to stocks and bonds. Efficient markets are ones in which security prices are current and fair to all traders, and transactional costs are minimal. Within the efficient markets there are two forms: operational and informational.

Operational efficiency refers to the speed and accuracy with which trades in the market are processed. Many of the markets have developed systems to aid with operational efficiency. NYSE has developed the SuperDOT computer system and the NASDAQ has developed the SOES. These types of systems match buyers and sellers in a very efficient way by doing so at the best available price for both parties.

Informational efficiency refers to the speed and accuracy with which information is reflected in the available prices for trading. This type of market consist of 3 hypotheses that make up the EMH (efficient market hypothesis); weak form, semi-strong, and strong form. The weak form is implying that the market is efficient and that the price (of a stock) reflects all information and historical prices have no impact on the current price. Semi-strong form assumes that the stock price reflects all public information and financial statements therefore that information is not useful. Strong form assumes that the price of the stock reflects all private information, public information and historical information therefore insider information is not useful.

Overall the efficiency markets are as they sound: efficient. The main goal is to create speed and accuracy and assume that the prices of the stocks reflect all relevant information to the potential buyer.

Works cited:
"Weak, Semi-Strong and Strong EMH - CFA Level 1 | Investopedia." Investopedia. Investopedia, 18 Apr. 2008. Web. 03 Nov. 2015.

The product life cycle

The product lifecycle is a concept that explains how products go through four distinct stages from birth to death: introduction, growth, maturity, and decline. The product lifecycle is a very important cycle for marketers to know before introducing a new product to the market. The strategies marketers use varies depending on the stage of the cycle it is in. Here is a brief overview of what the stages of the product life consist of and how prices, sales, profits, goals, and marketing strategies change throughout the life of a product.

Introduction Stage
The introduction stage is when a single company produces a single product. The purchasers of the product in this stage are usually the eager first-time buyers. The sales at this point in the cycle are increase at a slow but steady rate yet the profits are still negative due to the research and development startup costs. Pricing strategies are usually high to recover those R&D costs or else low to attract a large consumer base. Marketing in the stage is all about informing the consumer about the product.

Growth Stage
In the growth stage new competitors enter the market creating different variations of the product. The goal of the marketers is to encourage brand loyalty. Sales are now rapidly increasing while profits start to see positive numbers and often times peak. The pricing may need to be reduced if it started off high because of competitors. Marketers promote heavy advertising to seek a competitive advantage.

Maturity Stage
Now the products contain new features and most of the sales come from replacing the products. Marketers are now seeking to attract new users who are maybe late to jump on the product wagon. The sales however start to decline and the profit margins narrow. The prices are set in order to maintain the marketshare. Marketers are now advertising for the purpose of reminding consumers about the product.

Decline
During the decline stage the number of variations for the product decreases and the goal for marketers is to remain profitable and make the decision of whether or not to keep the product. The sales and profits are now declining and the product prices are quite reduced. There is little to no marketing during this stage because of decreased profitability.


Works cited :
Solomon, Michael R., Greg W. Marshall, and Elnora W. Stuart. Marketing: Real People, Real Choices. Upper Saddle River, NJ: Pearson Prentice Hall, 2006. Print.

Drones and the Economy

A new business is about to enter the delivery market. We currently have ground delivery and air delivery and in 2017 we will have drone delivery. Google expects to be delivering packages to customers some time in 2017. Google is currently in talks with the Federal Aviation Administration to discuss an air traffic control system to fly the drones under 500 feet.

Using drones for package delivery could dramatically change the dynamics of the delivery industry. Companies such as UPS and Fedex could see some competition among the companies that offer drone delivery. I would not be surprised if all delivery companies develop some sort of drone delivery. The idea of drone delivery is to make deliveries much quicker and cheaper than ground or air delivery.

Not only will drones be used for package delivery but one drone company claims that 90% of the drones will be used for farming purposes. Farmers will use drones for precision crop-dusting and seeding and scanning the crops for health related issues. Drones could result in farmers using less pesticides in the crops. Another thing that farmers need to do to be successful is to scout their crops to make sure they look good and that there are no bad weeds surrounding the crop. Drones can aid in this process by viewing the crops from 200 ft and snapping images and videos to report back with results.The drones are likely to create up to 100,000 jobs in 10 years because of the use of them in the farming industry.

Although drones seem to be something that is unrealistic, it is becoming more real everyday. In about 2 years some of us may have drones dropping packages off at our homes, some of us may have drones checking our crops and lastly, some of us may be working for a company in a drone department dealing with drones every day. As technology advances so does our economy and competitive markets.

Works cited:
"Google Wing Will Begin Drone Deliveries In 2017, Exec Says." Popular Science. N.p., n.d. Web. 03 Nov. 2015.

Departmentalization

In a business you must have some sort of structural organization in order to operate. Business structures are to be thought of as a triangle; the tip being top management, corporate CEOs, Presidents, Vice presidents etc and the bottom being more lower level functions such as a sales person, accountant, production worker etc. In a business the departmentalization methods can vary.

 In a functional structure, you group jobs together base on their performance of like activities. For example, you still have your top management near the tip of the triangle but there is a cut off line near the top where functional jobs break out where you'll find marketing, production and staff functions. Functional structure creates an efficient use of resources such as in the jobs and it eliminate redundancies. Specialization is also a benefit because the jobs are grouped together based on their performance of like activities therefore each department is specialized. 

In a divisional structure, you group jobs together on the basis of product, geography, and customers.We still see top management at the tip of the triangle and a divisional breakout near the top. Below the divisional break out we see the categories of product, geography and consumer instead of staff functions. As we move down the triangle we see another break out, this time it is a functional breakout. So this is where we see the functional jobs such as production, marketing, and staff lines. A divisional structure is very responsive and flexible due to its multiple levels of jobs and functions. We also see better functional coordination due to the breakdown of jobs. When we look at the entire triangle we see a lot of division of jobs and functions which helps each department to develop goals. As we move up the triangle we see general managers develop much before they would had they been in a functional structure.

There is no one right way of structuring a business. Certain structures work better for certain companies depending on size, type of business, and foundations of the business. Each structure has it's pros and cons but qualities of each type can make a business of similar nature run completely different if  one is divisional and one is functional.

Works Cited:

Brown, Paul. "Organizing." Management 320. Barry Hall, Fargo. 28 Oct. 2015. Lecture.

Why businesses fail.

Being a student in the business field looking into potential career opportunities I have considered it all. I have considered owning my own business one day and while looking into some statistics I came across a quite alarming one: 8/10 businesses fail within the first 18 months. That's 80%! I was dumbfounded when I read this statistic. I couldn't stand to just leave it at that, I was dying to read into why this was an accurate fact. After researching I found the following results discussing the reasons why:

• Not building a strong relationship with customers. Customers are your business, without a customer base a business does not exist. Many businesses fail to meet customer needs because they fail to maintain a good understanding of their customer.
• No differentiation. What makes your products/services different than what's already out there? Differentiation is a slow but sure killer of a new business.
• Failure to communicate. So lets say you've mastered the differentiation you now need to communicate it to your customers. Customers won't buy things that they have never heard of simply because they don't know it's out there.
• Management failure. If your management fails to complete duties or quits their job you have to step in and fill that position. As a business owner you are the highest manager and overseer of the business. You have to know how to fill each roll if it needs to be filled.
• Unable to make a profit. If you are unable to make a profitable business model your business will surely come crashing down. Minimize your start up costs by limiting your cash outflow. You need to think and move quickly in order to best act on your investment. 

works cited:

Wagner, Eric T. "Why Businesses Fail." Forbes. Forbes Magazine, 12 Sept. 2013. Web. 27 Oct. 2015.

Stocks vs. Bonds for dummies.

Lets say you have hit the point in your finances when you would like to consider investing your money. You have heard of both stocks and bonds but don't really understand the differences between the two and the benefits of both. I am here to tell you in layman's terms what the difference between stocks and bonds is. 

When you purchase stock, you are buying into the company and are part owner of the company. When you purchase bonds you are not purchasing ownership you are just considered a creditor. Stocks have no maturity date while bonds have a predetermined maturity. Stocks however generate variable periodic income and bonds generate fixed periodic income. When you invest in stocks you do not know how many payments you'll receive over the time of ownership. When you invest in bonds you know how many payments you'll receive over the life of the bond. Bonds also have a set end value (par value) that you'll receive at maturity. Stocks do not have a set end value because they do not have a set maturity. Stock's rate of return remains unknown until you sell the stock (hint: buy low sell high). Bond's rate of return is known if it is held to the maturity, this is known as the Yield to Maturity or Yield to Call depending on the type of Bond. 

As you can probably now gather, stocks are a very unpredictable investment therefore posing a higher risk. Bonds are a very predictable investment therefor posing less risk. It seems like Bonds would be an obvious choice when investing money but that is not the case. The higher the risk of investment the higher the potential yield could be. If you are looking for a safe and secure investment, bonds are a great choice. If you are looking for a riskier and potentially higher yield investment, stocks are a good choice. The benefit of bonds vs stocks is that if the company goes bankrupt, you still get your initial investment and promised money where as if you owned stocks, you would be out the money. The benefit of stocks vs bonds is that you have the potential to earn more money over the course of your ownership.

What makes a monopoly?

A monopoly is defined as the exclusive possession or control of the supply or trade in a commodity or service. Monopolies are also illegal in the United States. Although most businesses ideally work toward a monopoly almost never accomplish it and that is a good 
, legally at least. In layman's terms a monopoly is when one business is the only supplier 
(for the most part) of a certain good and has complete control over price. Governments try to eliminate monopolies by enforcing antitrust laws. Antitrust laws are designed to prevent monopolies and monopolistic practice. 

What classifies a monopoly?

• One producer controls supply of a good.
• entry of new producer is highly restricted and/or prevented.
• Price-fixing: company controls price.
• Market share greater than 50%.

Well-known monopolies in history.

• Standard Oil
• Salt Commission
• De Beers
• AT&T
• Cable TV
• Hudson Bay Company

All of these companies at one point have held a monopoly over the market they do business in and have since been split up or no longer exist.

works cited:

Holmes, Alex. "10 Greatest Monopolies." The Ministry of Fear. N.p., 27 Jan. 2009. Web. 22 Oct. 2015.

"Monopoly Definition | Investopedia." Investopedia. N.p., 24 Nov. 2003. Web. 22 Oct. 2015.

Credit Card Chips

We jokingly talk about microchips being programmed into everything nowadays. Well now our credit cards will have microchips programmed in them, we can only imagine what's next. To many consumers confusion, many banks have mailed out new credit and debit cards for consumers to replace their current one. Microchip credit cards are a completely new thing for the United States. 

What does this mean for consumers?

For the most part consumers can go along their merry way buying and using their cards just as before. However, there is a slight learning curve to the new cards. Instead of just swiping a magnetic strip they will simply insert their card to a machine for a couple of seconds and potentially prompted to sign or enter a pin number.

What does this mean for companies?

Retailers reacted quite negatively to this change. For retailers this could mean potentially millions of dollars spent on new machines that are compatible with the new credit cards. For higher end stores that sell more expensive items there is more liability therefore more urgency to get these new devices. 

Why the switch?

The switch to the microchip cards vs. magnetic strip is due to more security. With retailers like target and others having issues with customer security the need for a more secure transaction is needed. The new cards work in a way such that every transaction is given a unique code making it less more difficult for hackers to commit fraud. 

Works cited:

Jones, Charisse. "Ready or Not, It's Credit Card Chip and Dip Time: What You Need to Know." USA Today. Gannett, 01 Oct. 2015. Web. 22 Oct. 2015.