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...»Coming to a petrol station near you - Little Waitrose
A good example here of how an established brand can pursue an organic growth strategy by targeting new locations which serve a new customer base…
read more...»Premium market segments: Waitrose at Canary Wharf
Further evidence that the economic downturn hasn’t affected everyone equally: there are still groups of high income consumers out there. Effective marketing requires firms to target groups of consumers with similar buying habits – or market segments. Waitrose are gambling on their target market with a £15m refurbishment of their Canary Wharf store, featuring delights such as wines at up to £425 a bottle.
read more...»Strategies for success on the beleaguered high street
This is a gem! A terrific article that is packed full of materials which students can use to develop their understanding of the strategic options open to high street retailers who are struggling with a significant downturn (once again) in consumer spending.
read more...»Tesco pulls out of Japan
Even the might of Tesco cannot overcome the cultural differences between the UK market and the Japanese market for groceries. They moved into the Japanese market in 2003, as part of their objective of global growth, but have now decided that they cannot grow big enough there to generate the economies of scale that they need to make the business profitable - and with the change of focus in their objectives away from growth and towards greater profitability, this no longer fits with their strategy.
The reasons for the difficulty of gaining the growth that they need seem to be due to big differences in the way that people do their grocery shopping in Japan. Gavin Rothwell, research manager at groceries analyst IGD, is quoted as saying “The retail market is fragmented and there are many strong regional players, often family-owned. Convenience stores dominate, particularly in the city centres, and a culture of ‘immediacy’ supports large numbers of vending machines/kiosks.”. Tescos are not the only major western retailer to have failed to break these habits, as Carrefour and Boots have also tried to break into the market but pulled out, and Wal-Mart are reportedly struggling. So this story emphasises the risks that businesses take when they try to use the market development sector of Ansoff’s matrix to sell a well-established product into a new and unfamiliar market - and suggests that some markets are more impervious to globalisation than others,
Tesco and Retrenchment
Tesco and retrenchment - not two terms that are often (if ever) found together - until now. Lots in the reports in the media about Tesco’s decision to put its poorly performing Japanese business up for sale. This article in the Guardian even uses the term “retrenchment” - perfect material for an A2 business studies lesson or discussion!
read more...»Wi-Fi - Adding value to a latte or cappuccino
Coffee shops, as those who frequent them, are more than coffee shops. They are an intrinsic part of a neighbourhood. A place to meet friends, pass some time, and increasingly conduct business. Many self-employed people will base themselves in their local coffee shop at regular intervals - some even spend all day there. So part of the value that a coffee shop can add to its customers is the provision of extra services which make the experience more enjoyable or useful. In my book, as in the case of hotel rooms, Wi-Fi access is an example.
read more...»Taking Italian to the Chinese - Pizza Express Expansion Strategy
With the success of Pizza Hut, Dominos and Papa Johns, it seems that consumers in China have an appetite for Italian fast food. But is there enough demand to make the market opportunity sufficiently attractive for a more mid-market brand such as Pizza Express? This superb article in the Telegraph features an interview with Justin Kennedy, the owner of the Pizza Express franchise in Hong Kong and Shanghai.
An opportunity for Kenndy to open the first Pizza Express in Shanghai arose five years ago when a suitable retail location became available. But growth since then has been slow - just one more outlet opened. Is now the time that that the rate of organic growth can be accelerated as the rising incomes of a Chinese middle class make the Pizza Express product more affordable? The growth objective seems to be pretty modest - up to about 10 restaurants in the next few years.
Lots of interesting material in the article. The trading format has essentially been imported directly from the UK - there seems to be little reflection of local tastes and preferences.
Growing the brand in China also seems to have its fair share of headaches - not the least finding suitable trading locations and also recruiting staff with suitable skills and experience.
Marketing to the elderly
Not all marketing is aimed at the young and ultra hip (like T2U readers). It’s worth remembering that there are other market segments (groups of consumers with the same buying habits) well worth the attention of companies keen to meet the wants and needs of a particular target group in society. Japan is perhaps the best example of a rich country with a relatively large group of affluent older people. The Economist has an article about the Ueshima coffee shop chain who have geared their marketing strategy to this target market.
read more...»Tesco adapts to the South Korean market
We all know about the success and dominance of Tesco in the UK where it has a market share of around 30%. Globally it is one of the biggest retailers in the world and it now has stores in 14 countries. This clip is a great example of how Tesco have adapted to the South Korean market where it is the market’s number two, with fewer stores than the number one company.
read more...»High growth, fast-track firms that end on the scrapheap
A fascinating piece of research here which provides some great counter-arguments for students who want to evaluate the risks facing fast-growth businesses.
read more...»
