Leadership - More Insights from Sir Terry Leahy
The 160 colleagues who attended the Business Teacher National Conference 2011 will never forget the hour we spent in the company of Sir Terry Leahy - one of Britain’s greatest businessmen. Here is a short video in which Sir Terry explains aspects of the Tesco growth story - BTNC2011 delegates will be familiar with a couple of the slides!
read more...»Where there’s muck there’s brass
On the face of it, this is a good end-of-term case study which is bound to raise a smirk or a grimace from most students, but actually there is a wealth of good solid business studies theory in it. In answer to the question “What to do with 12,000 tonnes of pig poo?” a farm in Gloucestershire has taken advantage of government grants to set up their own biogas generator, which enables them not only to provide their own power for the farm and farmhouse, but also to sell about 2.2 million kilowatts of electricity each year to the National Grid, and even better, to save money on fertiliser as the by-product has been broken down into a form that can be used on the fields. Even better, the process prevents huge amounts of methane from being released into the atmosphere - apparently each year it saves the equivalent of almost 9,000 return flights from London to New York.
read more...»Lessons from the Tesco Growth Story courtesy of Sir Terry Leahy
It was a delight to welcome Sir Terry Leahy, CEO of Tesco plc for the last 14 years, to the Business Teacher National Conference 2011. Sir Terry generously gave over an hour of his time to present his perspectives on Tesco’s growth strategy and to field a range of terrific questions from a packed audience at the Sir Henry Wellcome Auditorium.
read more...»Hardship on the High Street – what’s the problem?
We’re currently receiving daily reminders of the problems on the UK High Street. Today it’s Thorntons, following on from Jane Norman, TJ Hughes and Homeform, which controls Möben Kitchens, Sharps Bedrooms and Dolphin Bathrooms. Habitat, HMV, Waterstones – the list goes on and on. Do these high profile business failures threaten the High Street? And what is behind their problems?
read more...»Retrenchment for Thorntons following strategic review
The words “strategic review” should be enough to alert all business teachers to a potentially rich seam of teaching material. And today’s announcement of a significant retrenchment by Thorntons is no exception.
“Strategic reviews” almost inevitably follow the appointment of a new CEO. The process of a new leader evaluating the competitive position of a firm and its products/brands provides very often results in a shift in strategic direction (particularly where the new CEO has been appointed with a mandate to effect change).
read more...»A Festival for business
Each year festival season seems to get bigger and better, with this year’s Glastonbury a reminder of the scale of the business enterprise. Before you read on, have a guess at what are some of the biggest jobs for suppliers to the event.
read more...»CSR - £20m extra annual profit for M&S from Plan A
What a timely update! M&S has just announced an update on the progress of Plan A - its sustainability strategy. Lots of details about the extent of progress against the many targets and objectives set by M&S. However, the headline news is that the overall financial benefit of Plan A has increased to £70 million per year; up from the £50m profit effect which many students will have seen ex CEO Sir Stuart Rose mention in this video clip.
Where has this profit improvement arisen? Well, more efficient use of energy in shops and distribution centres saved the most money in 2010-11, netting M&S an £13.5 million cost saving, followed by packaging reductions, which saved £11 million.
Plan A is the strategy which M&S intends will enable it to achieve its stated aim of becoming “the world’s most sustainable major retailer by 2015”. You can watch a really useful video with M&S’s new CEO Marc Bolland describing the next stages in Plan A here
CSR & Strategy - Why the Cooperative Group changed to survive
A brilliant article here from the excellent UK team at Ernst & Young which features an interview with Peter Marks, the CEO of The Co-operative Group. Perfect for last minute revision for AQA BUSS4 students…
read more...»Leadership styles - the importance of listening
A fascinating video interview here with Angela Ahrendts, CEO of luxury brand Burberry. She talks to Richard Edgar of FT about the importance of listening, learning from mistakes and trusting instincts in a leadership role.
read more...»Lean and mean - from Toyota to Tesco
A nice short article on lean production here which traces the evolution of lean techniques from Toyota (who pioneered its use in the automotive industry) to a diverse mix of markets such as healthcare, grocery retailing and call centres.
read more...»Economic environment: Emerging Markets
We’ve lived through an extraordinary period in world economic history. Sustained economic growth outside the areas once seen as the ‘rich world’ - primarily Western Europe, the US and Japan – is reordering the global balance of economic power.
The ‘emerging markets’ is a term used by commentators to group together some of these awakening giants. You may have heard of the BRIC economies - Brazil, Russia, India and China - a label that serves as a handy acronym to remind you of some of the key players. But there are plenty more. What does this mean for business?
read more...»Luxury goods giant Prada looks east to cash in on Asian boom
According to The Guardian, in what is the latest sign that the luxury world order is shifting east, Prada (which has operated out of Europe’s fashion capital of Milan for nearly a century) is looking to sell shares in Hong Kong. It is trying to raise as much as £1.6bn from selling just a 16.5% stake in the company. The Italian fashion brand drew gasps, as this valuation makes the business worth some £9bn.
read more...»Secrets of the Superbrands
There’s been loads of good business material in the first couple of shows in this three part series, so that it’s recommended viewing if you have some time over half term.
read more...»Waterstones to be sold as HMV struggles with cash shortfall
Back in January we asked what strategy should HMV employ next in order to create a viable long term business. The next move has proven to be selling its Waterstone’s book chain to a fund controlled by a Russian billionaire (who already owns 6% of HMV) for £53m.
read more...»Changing demand in the market for live music
Is this a blip in demand, or a shift along the product life cycle of the live music industry? According to this report in the Guardian, live music revenues in the UK dropped by 6.7% in 2010, after a decade of growth that saw income increase by 9.4% in 2009 and 13% in 2008.
The live music industry has enjoyed ten years of strong growth and this has supported the music publishing market at a time when revenues from recorded music have declined rapidly in the era of music downloads and file-sharing. Music festivals and arena tours have proved highly profitable. But are there signs that the market has matured and there will be less profit to be earned in a time when the live music industry has excess capacity (i.e. too many events chasing too few customers).
Some good evidence in the article that students could add to their notes, including a suggestion that the music industry is reluctant to invest in new artists (new product development). If many of the top-selling albums (digital or otherwise) in 2010 have been around for a while, that is good evidence of the publishers managing their products as cash cows rather than stars.
Strategy explained - Insights into Amazon
A quite brilliant deck of analytical slides here from Fabernovel which explain the business strategy of Amazon.com. Lots of detail, of course, but within this presentation is a gold mine of strategic insights into all aspects of Amazon. It would be interesting to simply give the link to your Year 13 students and ask them to highlight five key points or pieces of evidence that they can use to illustrate how a firm can be so successful online.
read more...»Retrenchment in action - Comet turns off the retail lights
This is a pretty terrible time to be a high street retailer of high-priced electrical items. UK consumers are reluctant to take their credit cards out whilst great uncertainty remains about rising unemployment, higher consumer prices and tight disposable income. The problem is probably even worse for a retailer without a strong online presence, and electrical retailer Comet seems to fit that profile. This article explains Comets new short-term strategy of retrenchment.
read more...»Tesco’s overseas strategy: next steps
You may have already taken an interest in Tesco’s strategy in the US and an article has come up in The Guardian in which it describes Tesco looking to overseas markets in order to make a ‘change of gear’.
read more...»Booming Billboards
It’s normally hard to say anything very interesting about billboard advertising, with students often adding it to a long list of potential advertising techniques. But change is coming.
read more...»HMV Strategy - Death of a Billion Downloads
Has the Internet killed the music store? HMV has £130m of bank loans and its profits are falling. Some analysts believe that HMV may even become loss-making in the near future - so how would it pay its interest and loan repaymements. No wonder the business is in crisis.
A superb new FT video examines how technology has fundamentally changed the business model of the traditional music and book store - and what the implications of this are for HMV’s business strategy. Can HMV develop a profitable niche in their existing market in order to survive?
Lots of scope for Boston Matrix and Ansoff Matrix analysis using this video - which describes how HMV has diversified into other consumer markets. But has it all happened too late? A cracking case study - and ideal research material for AQA BUSS4 students looking to add some topical and relevant research evidence for their section B essays this summer
Tesco - The right strategy in the US?
The world’s third biggest retailer, Tesco, has been open for business in the United States since 2007, trading under the brand name ‘Fresh and Easy’.
Tesco’s entrance into the US market was a long time coming, with the company studying US shopping habits for 20 years. The team even sent out researchers to live with 60 American families for two weeks to discover the products they bought and they food they ate.
Tesco is showing faith in the (currently) loss-making chain by announcing a store opening spree in northern California.
read more...»Discounters move into UK shopping malls
According to The Guardian, pound shops, discount fashion chains and fast-food outlets are moving into shopping centres in increasing numbers, changing the face of Britain’s malls.
read more...»Kate & Wills - A Short-term boost to demand
You might be like me - totally disinterested in the Royal Wedding on 29 April 2011 and almost certain NOT to buy any wedding souvenirs, memorabilia and associated tat. However, there are still plenty of people who will be happy to dip into their disposable income to join the celebrations. As this video explains, the wedding is estimated to boost UK retail sales by around £600m, with a range of different retailers and tourism enterprises well placed to benefit…
read more...»AQA unit 4 - some really good evidence here
Wake up to Money, which is broadcast every morning at 5.30 on Radio 5, is often a good source of stories and anecdotes. It was particularly good today - and the excellent news is that you don’t have to set the alarm for that unearthly hour to hear it as you can download the Podcast. It will be well worthwhile for all AQA unit 4 students spending 20 minutes taking notes from today’s programme - they will start with a useful preview of the release of the updated GDP figure for quarter 4 of 2010, giving some good background data.
The interview that follows, with the CEO of Pret a Manger is gold dust - he talks about the figures that Pret have just released which show a big rise in sales and profits, despite rising commodity prices and a tough climate on the high street. His description of the relations with suppliers and marketing mix strategies that Pret have followed to allow them to achieve this through the recession should be noted and quoted as evidence in BUSS4 essays.
Finally, figures out this morning from the Internet Advertising Bureau show online advertising grew nearly 13% last year and now accounts for 25% of all advertising spending in the UK, and some more background is given for that data. Here is another little nugget that could be useful to prove to the examiner that candidates really know what they are talking about when it comes to strategic management - so please do use the links below!
Wake up to Money 29th March on i-player - available for 6 days from now
Wake up to Money podcast
Brief TV interview with Clive Schlee of Pret a Manger (...but the radio interview covers more ground)
Report about the study by the Internet Advertising Bureau (IAB)
Profit and Pizza - A Great Lesson Resource on Margins and Mark-ups
I’m indebted to Innes Robinson over on the terrific GCSE Econ blog for spotting this article which may become a staple ingredient of business studies lessons for years to come. The Daily Mail has lifted the lid on the business model of the pizza delivery business to provide us with some super data on revenues and costs which can be the basis for a lesson on margins, mark-ups, adding value and more besides…
read more...»CSR - Insights from the Leader of the Revolution
A fantastic video interview here with Peter Marks, the CEO of the Co-operative Group, which was named as the UK’s most socially-responsible firm by the ICAEW in 2010.
read more...»Howard Schultz - A Changed Starbucks. A Changed C.E.O
Perfect timing for all A2 Business students (and an essential addition to any self-respecting scheme of work) - this New York Times article takes an in-depth look at the roll CEO Howard Schultz has played in the business strategy at Starbucks.
read more...»Partners in profit - the JLP way
We’ll be asking many of our students a simple question over the next few months. Is profit good? Is profit maximisation a strategy for greed? I wonder how the partners at John Lewis might respond to that question…
read more...»CSR and Equality - Walmart accused of gender discrimination
Walmart is the worlds largest private sector employer; it employs 2.1 million people worldwide and nearly 900,000 of them are women. They claim that they have “strong policies against discrimination and these policies are there to ensure women are promoted and paid well” - yet in 2001 the average female Walmart manager earned $14,500 less than their male counterpart.
In the US Walmart is now facing a lawsuit from six of their female employees who believe they and Walmart’s other female staff were paid less and missed out on promotion because of their gender.
This story is worth reading - could be a valuable piece of EVIDENCE to quote in BUSS4 essays about social responsibility towards employees, and the need for government intervention to assist with ensuring those responsibilities are met.
Barbie’s expansion problem
The Barbie ‘concept store’ in Shanghai has closed down after just two years. It serves to illustrate how hard it can be to transfer brands and business models internationally.
read more...»
