UK companies conserve cash in the recession - bad news for shareholders?

Monday, February 08, 2010

“Cash is king” in a recession and in 2009 UK companies took the opportunity to retain as much cash as possible by reducing the level of dividend payments by around £10 billion (or 15%) compared with 2008.

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Strategies in a recession - pay freezes stay in place

One of the key actions taken by many businesses in response to the recent recession in the UK was to negotiate (or impose) pay freezes. A very useful article on the BBC reports the findings of a new survey from the Labour Research Department of negotiated pay deals done with trade unions in the UK which suggests that pay freezes are likely to remain a key feature of business life during 2010.

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Taking Demand-based Pricing To Extremes

Mansfied FC played their home match in front of a larger crowd than usual on Saturday.  The reason?  Well, the owners decided to use an extreme method of demand-based pricing. 

They scrapped the usual £16 admission charge, and allowed fans to “pay what they wanted”.  The result was an increase in their usual attendance of around 3,000 people, to a crowd of 7,261.  Although some fans paid as little as 3p, others paid as much as £50! 

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Teaching added value: introducing the world’s first zero-star hotel

Sunday, February 07, 2010

Looking for an alternative way of teaching the important concept of added value?  Why note try this jaw-dropping video interview by the excellent Richard Quest on CNN.  Richard took a look at a genuine no-frills segment of the travel industry...a zero star hotel.

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Business strategies as we emerge from the recession

A quick heads up on a five-part, daily series in the FT this coming week which examines the strategic options for UK businesses as they emerge from the recession.

It starts with a look at how business and marketing planning has been made harder for B2C firms by the increasingly unpredictable nature of UK consumers.

“In a series of investigations over the next five days, the Financial Times will examine the dilemmas companies face – from how to get finance to what to do about supply chains and opportunities for green business”

People without a subscription to FT.com will probably hit the FT’s paywall with this link, but here it is anyway.  Might be worth getting the FT print edition this week for this series though.

http://www.ft.com/cms/s/0/54ac38da-1406-11df-8847-00144feab49a,s01=1.html

Important Notice: BUSS2 & BUSS4 Workshops in London - A Change in Venue

An important note for colleagues bringing students to our intensive one-day revision workshops for AQA BUSS2 & BUSS4 in London on Tuesday 27 April.  Due to overwhelming demand, we have decided to switch the venue a couple of miles away to the brand new Vue Cinema complex at the stunning Westfield Shopping Centre.  This change provides several advantages:

- We are able to run two screens for both BUSS2 & BUSS4 on the same day
- The Vue Cinema at Westfield is Europe’s most advanced cinematic experience - the quality of the venue simply can’t be beaten
- There is fantastic parking & other transport access to the Westfield location: much better than our old venue at Fulham Broadway
- The student catering options at Westfield are superb too: we’ll be providing a buffet lunch for all teachers attending

We will notify the centres who have already made provisional bookings for London.  Please note - it is just a change of venue - not date.

Even allowing for the increased capacity, we are now 95% full at Westfield.  Whilst provisional bookings do change, I would urge anyone intending to bring students to the AQA days to make a provisional booking this week.  The best way is to use this online form:

http://tutor2u.wufoo.com/forms/aqa-business-revision-workshops-aprilmay-2010/

AQA BUSS4 Section B Practice Question - Dyson

During 2002 and 2003, entrepreneur Sir James Dyson transferred all of his business’ manufacturing activities to factories located close to hsi firm’s main suppliers in Malaysia.  The decision resulted in the loss of over 800 jobs in the UK.  However, the research & development activities of the business remained in the UK along with sales and marketing functions supporting the growing global brand.  The decision seems to have paid off for Sir James.  He controls the bulk of shares in his main holding company, which is unquoted and highly profitable and his net worth is valued at more than £500m by rich list compilers.

To what extent should strategic decision-making be mainly determined by the interests of shareholders rather than the broader range of stakeholders.  Justify your answer with reference to Dyson or other businesses that you know. (40 marks).

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AQA BUSS4 Section B Practice Question - ITV & News Corp

In August 2009, ITV plc sold website Friends Reunited for just £25m - four years after buying the social network site for £175m. Created by the merger of Carlton and Granada in 2004, ITV’s acquisition was similar to deals done at the same time by other traditional media companies looking to expand into emerging digital markets in order to bolster weak advertising revenues.  In July 2005, News Corp, the company run by media mogul Rupert Murdoch, paid £550m to buy social networking site MySpace.  However, in recent years, websites such as Friends Reunited and MySpace have experienced declining traffic and revenues as they have been overtaken by innovative sites wuch as Facebook and Twitter.

To what extent should large, established companies focus on organic rather than acquisitive growth as a way of exploiting opportunities in fast-growing markets?  Justify your answer by reference to ITV, News Corp or other businesses that you know.  (40 marks).

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AQA BUSS4 Section B Practice Question - BAA & the Heathrow Third Runway

In January 2009 the Government gave the go-ahead to BAA building of a third runway at Heathrow Airport. Subject to meeting environmental criteria, the new runway should be built by 2020, adding an estimated 400 flights a day at Heathrow and increasing annual passenger numbers through the airport from 66 million to around 82 million.  The decision was welcomed by British Airways, the Confederation of Business Industry and the Trades Union Congress, but is strongly opposed by environmental campaigners and some local community groups.

With reference to the main stakeholders in the construction of a third runway at Heathrow, to what extent do you believe that the decision is in the best interests of BAA? (40 marks).

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AQA BUSS4 Section B Practice Question - Royal Bank of Scotland

In 2007 The Royal Bank of Scotland (RBS) and two other European banks (the Belgian-Dutch bank Fortis and Banco Santander of Spain) paid more than €71bn to acquire Dutch bank ABN Amro. The consortium paid three times the book value of ABN-Amro, which at the time was already expensive for a bank based in a mature European country. Two years later, RBS and Fortis were both nationalised as part of a bank bailout, partly due to the heavy losses incurred by ABN-Amro. Using the example of RBS or another business you know, discuss whether large-scale takeovers inevitably lead to a loss of value for shareholders of the acquiring company. (40 marks).

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AQA BUSS4 Section B Practice Question - British Airways

Question 2: Cultural Resistance to Change

Willie Walsh, the combative CEO of British Airways, has faced significant industrial action as he implements a change programme designed to improve the competitiveness of the airline. To what extent do you agree that resistance to change is largely determined by the prevailing culture in an organisation?  Justify your answer with reference to British Airways and/or other businesses you know.  (40 marks).

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AQA BUSS4 Section B Practice Question - Starbucks

Question 1: A Change of Leadership

Howard Schultz rejoined multinational coffee chain Starbucks as Chairman and CEO in 2008 after 8 years away from the business he had turned into a global brand. His aim in 2008 was to achieve a turnaround in the financial performance of Starbucks which many observers believed had grown too big and lost its innovative edge.  Do you think that a change of leadership can be relied upon to guarantee a significant improvement in performance?  Justify your answer with reference to Starbucks and/or other organisations you know. (40 marks).

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The 40 Schoolboy Errors Made by Startups

Saturday, February 06, 2010

This article is 100% gold dust for teachers and students covering the business startup process (AQA BUSS1 in particular)…

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Government support for apprenticeships

Offering apprenticeships is one way that businesses can go about training new employees in practical skills. However they are also often criticised as simply a cheap way of hiring labour for a couple of years, with no guarantee of employment for the apprentice at the end of the training period. The government is trying to increase the number of apprenticeships on offer as one way of tackling youth unemployment and the skills gap that we have in the UK economy, by offering grants to small businesses who take on an apprentice. This video report looks at the history of apprenticeships, with some lovely footage from the sixties, and the benefits that the scheme could bring, along with the fact that there is still no guarantee of a full-time job at the end of it, and so could be useful for students of both unit 2, looking at recruitment and training, and unit 4 looking at the relationship between business and government.

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Licence to Chill

Friday, February 05, 2010

BUSS1 has been and gone, however, this is still a cool story about copyright.

A small refrigeration company has been ‘forced’ to change its name from 007 refrigeration to 700 refrigeration after being contacted by MGM who say that the using 007 and the slogan licence to chill is an infringement of copyright. A case of corporate bullying or a justified action by a multi-million pound business?

A nice little story that would make a good starter to a lesson.

The article can be accessed here.

UK Recession - Some Winners and Losers

Here’s a useful stimulus resource from the Telegraph that would be good scene-setter for students embarking upon their research for BUSS4 in June 2010 / Jan 2011.  The article attempts to identify a series of winners and losers from the recent recession in the UK.  Its a mixture of personalities, businesses and industries.  But useful none-the-less

View Winners and Losers from the UK Recession

The Biz Quiz - 5 February 2010

The 5 February edition of The Biz Quiz can be found below:

Launch interactive version of The Biz Quiz

Download printable handout version

Download VLE import edition

Who would you place as the 50 emerging business leaders of the world?

Wednesday, February 03, 2010

We all see some of the more media savvy business leaders on the news, but who are the leaders that will shape the global economy of the next 20 to 30 years?

If you think through the business leaders that you might have covered in your course so far, I wonder how many of these faces you would recognise?

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Rated: 54321 (5/5), based on 1 review

Quality at Toyota and the huge cost of a product recall

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More tough times for Japan’s flagship corporate giant, Toyota.  This is the firm that gave the world lean production, an approach that was so revolutionary in its time that it prompted a five year study by MIT academics resulting in the famous book ‘Machine that Changed the World’.  Just as famous was the revolutionary concept of Total Quality Management (TQM), which is also closely associated with Toyota.  What has gone wrong?  Toyota Motors says its massive vehicle recall due to an inbuilt fault could cost it up to $2bn (£1.25bn) in lost output and sales.  And that may be looking on the bright side.

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BSkyB: Britain’s Most Admired Company. Really?

Towards the end of 2009, Management Today magazine announced the winner of their annual “Most Admired Company” Award. The lucky recipient was BSkyB (!)

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Masking the product life cycle

Tuesday, February 02, 2010

Forgot about this unusual way of delivering the theory of the product life cycle. Thanks Darth for reminding me.

A while ago, I made myself a number of ‘masks’ to illustrate the various stages, swapping them to describe each different stage.

I have a mask of a baby (introduction); a one of a toddler (growth); a one of a mature male (no mask needed but I have one anyway) and one of the grim reaper.

When I discuss the different stages I just slip on the mask.

Makes delivering the theory a ‘tad’ more lively and it sticks in the kids minds.

Isn’t that what ‘learning’ is all about?

AQA BUSS2 & BUSS4 Revision Workshops in April & May 2010 (New Venues Added!)

Monday, February 01, 2010

Provisional bookings can now be made for our popular programme of intensive one-day revision workshops for AQA AS Business (BUSS2) and A2 Business (BUSS4) in late April 2010 and early May 2010.  As you may be aware, AtoZ Training are no longer running Spring conferences , so we expect that our AQA revision days will be heavily over-subscribed. As a result, we’ve added three new venues to the programme - Leeds, Newcastle & Belfast. We are also attempting to add overflow capacity to our London, Manchester, Bristol and Birmingham days.

Here are some details of how to ensure that your students are able to attend the best revision days available for AQA Business Studies - BUSS2 & BUSS4.

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AQA BUSS4 - Research Theme for 2010 - UK Recession

The AQA BUSS4 research theme for the June 2010 and January 2011 sittings has been released.  The theme is The Recent Recession in the UK.

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Rated: 54321 (5/5), based on 1 review

Companies that thrived in the UK recession - theme activity

The UK recession had many losers, but some winning businesses and industries too.

Can you identify any themes in this ist from MSN Money? The link has a brief write-up on each, although they lack in genuine analysis they might serve as a starter activity:

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Recession Tracker for UK Economic Data

As students entering AQA BUSS 4 start on their research into the Recent UK Recession, they may like to use this BBC Recession Tracker to get to grips with the latest data on GDP, inflation, interest rates, jobs and house prices. It is updated every time a new piece of data is released and has links to useful related articles like ‘GDP Explained’ and ‘Understanding Inflation’.

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Opportunities for Poundland in the recession

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Students taking AQA BUSS4 this summer are asked to research the recent recession in the UK, and the first research bullets requires students to consider “how the recession can create opportunities and threats for businesses and industries”

Here the BBC are reporting that Poundland and other everything-for-a-pound stores are expanding fast from 380 stores ten years ago to 742 at the end of 2009.

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Common sense in recruitment gives way to political correctness gone mad

The Sunday Times carried this story yesterday - does it make you laugh or despair? An agency trying to recruit a hospital cleaner approached Jobcentre Plus - the government offices run by the Department of Work and Pensions to help the unemployed to find work. The agency asked them to advertise the vacancy and to add that applicants ‘must be very reliable and hard-working’. But Jobcentre Plus have refused to display the advert because the phrase may discriminate against unreliable applicants.

Isn’t that the whole point??

I won’t be in work today because my mother-in-law didn’t die at the weekend as expected

Happy National Sickie Day everyone!

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Video case study - substitute goods benefiting from the recession

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A cracking little video from BBC Look North featured some typically gritty Northern characters, some low-priced rabbits and a chimney sweep - the perfect combination for a business studies resource.  The video is particularly useful as a way of illustrating how the recession encouraged consumers to switch their demand to substitute goods that offered better value for money.  Personally, I prefer stewing steak to rabbit anyday, but I’m a convert to the idea of repairing products rather than simply disposing of them and buying new…

Download student worksheet (pdf) and video link

9 business survival tips for getting through the recession

Businesses were not short of advice - good, bad and downright daft - for getting through the recession.  This piece in the Telegraph had some pretty sensible suggestions for what entrepreneurs and managers needed to do…

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Strategy in a recession - Fusion Systems

A terrific article and audio interview clip on the BBC site that makes a great resource for business students preparing for AQA BUSS4 (UK Recession)…

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Business priorities in a recession

Some great articles below are well worth reading to provide insights into how firms amended their strategies during the recession…

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Flexible working thrives in the recession

A very useful article in the Guardian takes a look at how flexible working arrangements thrived during the UK recession as employers tried to find ways of reducing production capacity and operating costs without always resorting to compulsory redundancies…

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What business students can learn from how businesses have handled the recession

The actions taken by successful businesses during the UK recession provide a rich source of guidance for students wishing to improve their analysis and evaluation skills. 

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Leadership sets the culture for a thriving retail brand

Sunday, January 31, 2010

Wow - this article is just made for students who would appreciate an up-to-date, but definitely non-textbook example of how to use HRM effectively in a retail business…

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Rated: 54321 (5/5), based on 1 review

Revision Presentation - Income Statement Basics

This revision presentation outlines the basic structure of the income statement and also explains the meaning of “profit quality”

Launch revision presentation on Income Statement Basics

The Biz Quiz - 28 January 2010

Saturday, January 30, 2010

Here is the latest edition of The Biz Quiz
Launch interactive version

Download printable pdf version
Download VLE import zip file

Revision Presentation - Balance Sheet Basics

The basic structure and content of a balance sheet is explained in this revision presentation:

Launch revision presentation on Balance Sheet Basics

Business ethics - good news for IBM, Intel and M&S but not so good for Ryanair

Ryanair seem to have no difficulty in maintaining a high media presence, but the publication of an new ethical reputation survey doesn’t contain good news for Michael O’Leary and his team

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Revision Presentation - Profit and Cash

Profits are not quite the same as cash flow in most businesses - though they are often close.  Students often get confused between the two.  This revision presentation outlines the essential differences.

Launch revision presentation on the difference between Profit and Cash

Revision Presentation - Improving Profit

What options are available to a business that wants to improve its profitability? Should the business focus on revenue, costs or a combination of both?

Launch revision presentation on Improving Profits

Revision Presentation - Measuring Profit

This revision presentation provides an introduction to the measurement and interpretation of profit, focusing on the net profit margin and return on capital.

Launch revision presentation on measuring profit

Revision Presentation - Improving Cash Flow

What are the causes of cash flow problems and how can a business manage its cash flow more effectively?  This revision presentation looks at those questions, covering topics such as the basics of working capital management, bank finance, factoring, sale and leaseback and sale of assets.

Launch revision presentation on Improving Cash Flow

Revision Presentation - Using Budgets

This revision presentation looks at the essentials of using budgets.  It considers the role played by budgeting and explains the nature and use of variance analysis

Launch revision presentation on Using Budgets

Strategic Planning and the World Economy – two great (free) data sources from The Economist

Friday, January 29, 2010

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The thought provoking Economist World in 2010 magazine that you will have seen on the newsstands has two sections I always take a close interest in.  They are world in figures: industries and world in figures: countries.

Very helpful if you’re looking into the strategic fortunes of a particular industry, or researching global markets in both the rich world and emerging economies.

Measuring labour productivity - Google revenue per employee

Although it doesn’t appear too often in the textbooks, a common approach to measuring efficiency and labour productivity in real-life business is to track revenue (or sales) per employee…

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Enliven your lessons with the Compendium of PowerPoint Games

Thursday, January 28, 2010

The team that brought you Wipeout, HeadHunter, Marketing Mixtures and Auction House have been hard at work for months.  And now you can get to create fantastic lesson resources with the first Compendium of PowerPoint Games.

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Video case study - New Balance quality in a successful UK factory

This has to be one of the best short business videos ever produced by the BBC.  Absolutely perfect for some great business studies lessons…

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Stakeholders in action - the Bournville demonstration

A nice visual example of stakeholder action in the Guardian today - pictures from the demonstration staged by Cadbury employees and their family & friends in protest at the Kraft Foods takeover.  Some great quotes in this article too A good example to use when illustrating the different stakeholders in a complex business like Cadbury.  Of course, the stakeholders that really matter (the business owners) were nowhere to be seen!. 

Source of finance - SMEs turn to the private alternatives to banks

Wednesday, January 27, 2010

A fascinating piece of research on the sources of finance used by small businesses has hit my desk this morning.  Great materials for Edexcel/AQA GCSE Unit and for AQA BUSS2 - the textbooks look even more outdated now!

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Rated: 54321 (5/5), based on 1 review



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