Schultz on Leadership, Love and the Competitive Advantage of Culture
We know that the BUSS4 is a big fan of the Apple and Steve Jobs - and with good reason. As our BUSS4 Topic Tracker indicates, a previous essay question (Jan 2010) used the example of Steve Jobs to ask students to evaluate how easy it is for a Chief Executive to change a struggling business into a more successful one.
Steve Jobs shares much in common with another well-known entrepreneur and CEO - Howard Schultz (Starbucks). Both men founded, left and then returned to lead a turnaround of their respective businesses. Both have taken on the challenge of taking a business idea through rapid growth and then also manage a global brand in a much more uncertain external environment.
Might Howard Schultz feature in a future AQA BUSS4 essay choice? Its certainly possible and this article from Ernst & Young ought to be essential reading for any A2 business student who wants to build their understanding of Schultz and his leadership style and business strategy for Starbucks.
read more...»Growth strategy - Starbucks eyes the franchise model
As of 1 January 2012 there are 17,244 Starbucks outlets around the world. Not one of them is operated as a franchise - until now. Starbucks has announced that it is looking to the franchise model as part of its organic growth strategy, with the first franchise store likely to be opened in London later in 2012.
read more...»More perspectives on our changing shopping habits
There have been plenty of recent blogs on the problems faced by struggling firms on the UK “High Street”. You’re all encouraged to think through these problems, perhaps using a framework like PEST analysis.
This blog adds a couple more perspectives, from recent articles in The Guardian and The Economist that paint a pretty grim future for the High Street - at least in its current form. All is not well for the out-of-town grocery chains either.
read more...»Strategy Lessons from the Tesco Downfall
A highlight for me and many business teachers was the superb presentation given at the Business Teacher National Conference 2011 by Sir Terry Leahy who, just weeks earlier, had retired as CEO of Tesco leaving behind a stunning record of profitable growth.
Who would have thought that less than a year later, the shares of Tesco would fall by 16% in just one day (nicknamed “Tesco Thursday”) wiping £5bn off the value of Tesco shares. The sudden downturn in Tesco’s fortunes will be a rich source of business lesson material for months, perhaps years to come.
read more...»Tesco’s Big Price Drop - on the Stock Market, or, Porter and Ansoff in action
Such is the importance of Tesco’s and their dominance of the retail market that the effect of a 2.3% drop in their like-for-like sales knocked almost 16% off their share price yesterday. Perhaps not so much a reflection of the figures themselves - although they compare poorly with Morrison’s and Sainsbury’s both of whom managed to increase their sales over the same period - as the admission by the new CEO Philip Clarke that Tesco’s got their strategy wrong, both in the short and the long term.
read more...»Tesco takes it ‘easy’, controlling costs in its US operations
You may already know about Tesco’s overseas expansion strategy, and its Fresh & Easy venture in the States. The US expansion is taking place in challenging economic conditions and according to The Guardian, the business is ‘mothballing’ a second wave of Fresh & Easy stores, suggesting that the supermarket group’s loss-making US start-up has hit another bump in the road.
read more...»Business winners and losers from Christmas 2011
So results are trickling in from the major High Street retailers, with figures for their performance over this crucial trading period.
read more...»Revision Presentation - Business Location
This new revision presentation provides an overview of the factors that a business considers in choosing its business location. The presentation also considers issues such as multi-site location, industrial inertia and locating a business overseas (offshoring).
read more...»Technology and Consumer Media - A Neat Research Resource
Lots has been written already on this blog about the decline in demand for audio and visual material on physical media such as CD and DVDs. The associated decline in the financial performance of retailers such as Woolworths, HMV and publishers like EMI is also well documented.
This feature in the Independent is worth adding to students research notes, mainly because it provides some useful summary data on the absolute changes in demand for various music products and also the shift in market share enjoyed by digital media.
read more...»Warehouse woes - Superdry’s operations hit the finances
At the recent BUSS3 workshops we considered how a seemingly insignificant change in operations could have a potentially significant effect on the financial performance of a retail business if that change went wrong. We used the example of retailer Superdry to help make the point. And now the full cost suffered by Superdry as a result of their warehouse problems has been disclosed in the latest financial results from its parent company Supergroup.
read more...»Strategies to revive the High Street: Mary Portas reports
The woes of the UK High Street had begun long before the Credit Crunch and recession. It seems that a combination of factors (think PEST analysis) have combined to create the difficulties that are squeezing this traditional sector of business activity. Nobody has the answers to saving the High Street, but Mary “Queen of Shops” Portas has given it a go.
Why not try this exercise for yourself?
Firstly, use a form a marketing analysis like PEST or the Porters’ 5 Forces model to identify where the problems lie. Secondly, make 3 recommendations to either firms or governments as to how they might resist the decline (there’s some background here to help). Then read on…
read more...»Straight-talking answers to business questions - the examiners might hate some of this!
I just love the regular series in the Telegraph in which business questions are answered by John Timpson, the Chairman of retail group Timpson. Here is yet another superb selection of three problems solved!
read more...»Behind the scenes of a Sainsbury’s warehouse at Christmas
A neat, short video here in which we get a behind the scenes look at the way in which Sainsbury’s handles goods delivered to a main distribution warehouse in the busy build-up to Christmas. Some nice glimpses of technology in action - what is that over-sized watch that the warehouse employee is wearing? The flow of stocks is quite straightforward too. Goods come in at one end; they are automatically scanned and then sent to waiting delivery lorries at the other end. Simple - in theory!
CGI modelling gauze and effect
Photographs of flawless models with tiny waists, perfect bums and endless legs, may hold the attention of consumers, but is it ethical to use computer generated images to promote a firm’s clothing ranges?
Marketing and the supermarket ‘price war’
You’ll be well aware that this Christmas the supermarkets are trying hard to lure customers with bargain prices. Pricing is of course a vital component of the marketing mix, perhaps especially so in the current economic climate. Investigative journalists on the BBC show Panorama have been digging deeper; to see if the supermarket offers are all they seem…
read more...»A peak inside Santa’s Grotto…sorry, the Amazon.co.uk Warehouse
A recent report suggested that about 25% of Christmas presents will be ordered online in 2011 and many of them will be picked, packed and despatched from this modern-day version of Santa’s grotto - the amazing Amazon.co.uk warehouse. This photo-stream provides some snapshots of activity at Amazon UK’s distribution hub in Swansea, which opened back in 2008 and must now be one of the busiest workplaces in the UK!
Of course, we all know that the real Santa continues to use his highly-trained and efficient Elves for the present selection and distribution functions for children. But students may appreciate seeing what goes on behind the scenes for the grown-up’s presents. I’m told that Amazon is the official outsourcing partner for Santa for this important customer segment…
read more...»Woman pepper-sprays rival bargain hunters. So what is ‘Black Friday’?
I don’t think this term had really crossed over the Atlantic and into our consciousness until a few years ago. Black Friday is both a date (it follows the American Thanksgiving festival, and marks the traditional start to Christmas shopping) but it is also a business occasion. Retailers try to create a buzz with significant discounts to draw in customers. But the ‘black’ bit comes from the phrase ‘being in the black’. When you stop being ‘in the red’ you are getting out of debt. Being ‘in the black’ means to have a financial surplus, or profit.
Stated simply, Black Friday is said to be the day in the calendar year when US retailers have covered all their fixed costs and achieved break even. They are in the black. Now the race is on to secure a healthy level of contribution towards profit before the end of the year.
Read on for photos of stampedes, accounts of pepper-spraying crazy ladies etc.
read more...»Empty Shelves at Sainsbury’s - You Decide!
A busy supermarket in the south of England at 1130am on a Sunday morning. The store is pretty full but one aisle at Sainsbury’s Taplow (near Maidenhead) was almost completely empty of food. Why might this have happened? I am sure your students will have plenty of ideas drawn from their understanding of retailing.
Perhaps Sainsbury’s only have themshelves to blame? !!
The Rise and Fall and Rise of Gerald Ratner
I had a fun evening with Gerald Ratner last week, he was speaking at the Entrepreneurship Society at our school.. Business teachers of a certain vintage and distinction will know the Gerald Ratner story well, at the time it was just about the most remarkable tale of business success and then rapid collapse that one could think about!
From being one of Britain’s most successful retailers - indeed the owner of the world’s largest chain of jewellry stores - a mis-placed joke in a lunchtime speech at the annual conference of the Institute of Directors at the Royal Albert Hall set off a chain of events that sent the Ratners brand into free fall.
read more...»Cut price cup cake deal goes wrong…...
This is classic business studies news article, packed full with learning for students!
‘Need a Cake’ is a small business in Reading owned by Rachel Brown, who has been in the baking business for 25 years and simply loves making and decorating cakes. Her website says “I can never remember a time, even as a child, when I did not enjoy creating innovative cakes.” The business employs eight people, and normal production is around 100 cakes a month. Mrs Brown thought she would like to try expanding a little, and decided to offer online vouchers for a discount deal in order to drum up some new customers - with disastrous results.
read more...»How loyalty cards are used to gather market research data
According to The Economist you have spies in your wallet if you make use of one of the many ‘loyalty’ cards that are promoted by retailers.
read more...»Lesson video - a day in the life of a supermarket
Ok. Once you get over the glossy, corporate feel, this five minute video would make a perfect starter for a lesson that uses the grocery supermarkets as a stimulus for discussion…
read more...»Greggs, Sausage Rolls and the Ansoff Matrix
Sausage rolls and pasties are on the move…and Ansoff would be proud….
read more...»Shoppers switch stores as income patterns change
Some of the UK’s biggest grocers lost market share to cheaper rivals in the last three months as household incomes came under further pressure, according to this useful article in the Guardian
read more...»Virtual shopping - Tesco in South Korea
Tesco may have admitted defeat and pulled out of Japan after 8 years but they have found an innovative way to build their market share in South Korea. A fantastic example of listening to customers, ensuring they can buy what they want at a time and place convenient to them. In this case, by scanning virtual items using smartphones while using the subway.
Selling Bread - Classic Adverts
The humble loaf has long been the centre of creative adverts on television often designed to pull at the heart strings, evoke a sense of place and tradition and remind us of the humanity that goes into making every single bap, french stick or loaf of white sliced.
Warburtons has established itself as the second most highly rated grocery brand in the UK - some distance behind Coca Cola but perhaps that will never change. Their adverts are beautifully crafted and might work a treat in lessons on branding and the effectiveness of television advertising. Here is a small selection of my favourites together with a short video on the background to a Warburtons marketing campaign to launch a new product
read more...»Stock problems at SuperDry hint at the problems of rapid growth
The share price of Super Group fell by 30% in just one day when management issued a warning to shareholders that profits will be well below expectations. Management blamed a new warehouse IT system which, they claimed, had left stores short of stock. They estimated that resulting loss of sales (customer demand, but no stock to sell) would knock £6m to £9m off its profit for 2011.
On the face of it, this sounds like a simple one-off technology problem. But is it? Might it be that SuperDry is expanding too rapidly (both in the UK and internationally?) A retail chain that grows so fast is bound to suffer operational problems. Not only do to the new retail outlets need computer processing facilities to link into the chain’s back-office systems; but a business like this needs the right number of experienced management to ensure that those stock control systems are working properly. Something, somewhere has broken down - with costly consequences. A great example to use in an exam answer or essay.
A broader strategic issue for SuperDry arising from their recent problems is examined here in the Independent. The SuperDry brand has been around for a while (since 1985) but it is only recently that the brand has moved from a distinct niche clothing segment to something more mainstream. As SuperDry becomes more popular, does it lose its appeal to the original customer segment?
Steve Jobs 1955-2011
Steve Jobs the co-founder of Apple Inc died today.
The short video sums up some of his leadership characteristics, charismatic, driven, dictatorial and visionary.
Marks & Spencer’s new look
A great article here for those of you with a passion for retail and an eye for design. M&S boss Marc Bolland is spending £600m on a revamp. The firm is wheeling out an array of props including mopeds and pasta machines as part of a refit of its shop floors, which will see stores within stores created for its clothing ranges and the return of delicatessen counters.
read more...»Waitrose Strategy Essay
This afternoon I made use of Jim and Tom’s recent blogs relating to Waitrose to have a fascinating strategy discussion with my A2 students.
read more...»
