Drawing on their industry background and experience, Columbia Business School’s Chazen Fellows are a group of students selected to report on events and activities relating to international business. In the most recent edition of the Chazen Web Journal, two fellows explore competitive advantage in old and new industries — energy and social networking — in Latin America.
James Walsh ’10 examines the emergence of socialism in Venezuela and its effect on the energy industry. He brings a unique perspective to this issue: before business school Walsh worked in economic and market analysis at Citigroup, researching domestic and international economic issues. After he graduates, he plans to return to his native Texas to work on energy-related matters. Exxon’s decision to pull out of Venezuela, Walsh argues, was one that put the energy company at a “disadvantage relative to its competitors, who clearly still find operating in the increasingly difficult Venezuelan market profitable.”
Walsh says the larger geopolitical risk for the United States is less volatile and concludes that a symbiosis exists that is mutually beneficial. “The U.S. needs foreign oil and will continue to purchase it from Venezuela and other not-so-friendly regimes,” he writes. “Conversely, Venezuela needs the U.S. as the closest large-scale consumer of its energy resources and as a source of institutional and operational expertise in the exploration and production industry.”
This issue also features a report on an emerging industry in Latin America: online social media. Lauren Frasca ’10 examines the battle between Orkut and Facebook for social networking dominance in Brazil. She draws on her prior experience developing television and digital content for major broadcast networks, along with her business school studies and a newfound interest in Brazil.
Frasca argues that although Orkut currently has dominance in Brazil, it would be mistaken to overlook Facebook as a major player in the near future. Indeed, Orkut once had dominance in India as well, but “recent numbers released show Orkut’s unique visitors in India falling by 800,000 within the month of August, while Facebook grew its unique visitors in India by 700,000 during the same time period. Indeed, Facebook has launched a few strategies to aggressively pursue Orkut’s user base in Brazil.” While both companies also need to focus on monetizing their businesses, Frasca concludes that the number of users is as important. “The key battle in winning the social networking war is that of developing a scalable, profitable business model.”
Read more in the March issue of the Chazen Web Journal.
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