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China is already the world’s biggest e-commerce market and almost half of the transactions on it are made using Alipay - an online payment system set up by Alibaba.
Nearly a decade ago Alibaba launched Alipay - China's answer to online payment giant PayPal. Today it's seen as the magic password at the gate of China's online commerce treasure trove.
Unlike PayPal, used by many Western internet companies, Alipay takes money up front and puts it in an escrow account. Vendors can be sure that payments made through it will be honoured.
This works so well because many Chinese are reluctant to trust strangers. The Alipay system helps build trust (guanxi) between buyer and seller. Simple!
This video shows Alipay in action.read more...»
"The 20th Century was about dozens of markets of millions of consumers. The 21st Century is about millions of markets of dozens of consumers."
So said Joe Kraus, founder of a search engine called Excite in the middle of the 1990s. Never heard of it? That's not surprising; in 1999 it was a $6.7bn enterprise with hundreds of employees, but a year later the dot-com bubble burst and it disappeared from the market place. But this quote is one of in an article about Peter Day's Radio 4 Archive programme to be broadcast tonight, and already recommended by Michael Owen in his blog below; forgive me for this repetition, but this is such a brilliant article that it really merits a second look, and hopefully between us we will convince you of that!read more...»
Innovation turns business markets upside down, it alters the price and use of resources, it creates and destroys revenue flows and profitability as well as the way we work.
Peter Day a former BBC presenter considers a significant changes in a BBC Radio 4 series this weekend. Consider how the internet, search engines and 3D printing or additive manufacturing might alter market production processes, job opportunities marketing and economies.
There is much to discover and discuss in his superb introductory article linked above. The broadcasts are linked here.
This is well worth watching A fantastic 20 minute speech & Q&A by Jeff Bezos, the founder of Amazon.com.
Lots of great insights into the early entrepreneurial journey of Bezos and Amazon, including an admission that his parents gambled a large proportion of their life savings into his high-risk start-up.read more...»
Here’s a nice summer concept to consider. Suppose the future is much brighter than we commonly imagine. In fact, so good that within a few years the common problems we associate with scarcity will be a thing of the past.
My holiday reading has taken me in this direction, and it’s a fantastic idea to grapple with. How will business and the economy adapt to deliver this Promised Land? And what will it mean when we get there?read more...»
A couple of topics here: I’ve chosen to make the main focus one of stock control, but this blog is obviously about the rise of the online economy too.read more...»
‘Feel free to browse’ often strikes me as an odd sign in many shop windows. Why wouldn’t I feel free to do so? Well, the answer should have struck me by now. Apparently, many ‘bricks and mortar’ retailers are feeling the pressure from ‘showrooming’ – when people see something they wanted in a shop, try it, check the price online on their smartphone, find it’s cheaper, and walk out.
I’ve just been reading about the phenomenon and was reminded of the sign I’ve used to illustrate this blog, which appeared in a shop window after the British camera chain went into administration. "The staff at Jessops would like to thank you for shopping with Amazon". (I think any discussion of tax avoidance can be saved for another occasion).read more...»
Another fascinating interview with a tech CEO here. Some great insights into how technological change is providing opportunities for his business.read more...»
What happens when we pop our digital clogs?
I'd like to think that my collection of Tweets and Blogs might be acquired by the British Museum and placed in a special room that you could all visit. My collection of fascinating photos on Facebook are surely destined to become a national treasure - possibly.
Or possibly not.
But what happens to everything you do online once you've passed to a different kind of social network in the cloud?
There are an increasing number of businesses who spot an opportunity here. And now Google has decided that it has the ability to offer services to help people manage their "Digital Afterlife".read more...»
Bigger is better, or so it seemed to the UK supermarkets over the last 20 years. Size seemed to offer all kinds of advantages (or ‘economies of scale’ in business terms). Many of those economies are still very present for the larger chains (especially with purchasing and technical benefits), but I’ve been reading that this mood is shifting. Since the early 90s, the UK's £160bn a year grocery business has understood that one of the key routes to success has been the ability to open more and bigger shops.
Now it seems as though the major players have come round to thinking that size is not necessarily what matters, because shoppers are changing their habits fast. Has the “space race” run its course?read more...»
Many AS Business candidates are asked about this question, and perhaps one of the most helpful ways of looking at this topic is seeing what happens when things go wrong. The latest headache was a short disruption only this week at RBS, and is covered by the BBC and The Guardian.read more...»
Teleworking is a great concept to discuss in Business Studies, as the topic covers everything from organisation to leadership, motivation and business culture. Recently I wrote about trouble for teleworkers, following after the findings of a report that suggested that many potential teleworkers fret that time away from the office means missing out on promotion opportunities. Apparently, the report by the London Business School finds that companies still reward ‘presenteeism’; telecommuters are less likely to be promoted because they aren't present in the office.
Now we learn that Yahoo are to place severe restrictions on opportunities for teleworking, promoting more interesting debate and coverage. For one thing, the boss of Yahoo is female. You might think this point irrelevant, but to many commentators, this is yet another angle to a fascinating debate….read more...»
The FT today publishes a great report on the culture at Amazon's Rugeley distribution centre. An interesting insight into the culture of a cost focussed and highly effiecient business that is described by founder Jeff Bezos as: "Our culture is friendly and intense but if push comes to shove, we'll settle for intense."read more...»
My students know that I love the radio. Many a spare half an hour can be whiled away with a podcast of The Bottom Line (which returns on Thursday/Saturday this week), or More or Less, or Peter Day’s World of Business. And the great thing about this form of learning is that it can overlap with other tasks – there’s no opportunity cost! Listen to a business/economics podcast whilst at the gym, going for a run, doing the washing-up, whatever…
But whilst Radio 4 is well-scouted territory, but one students might not be so familiar with is NPR’s Planet Money. This show, from America’s public radio, is quite close in style to R4’s More or Less with a more of a business focus. 2 fifteen minute shows are podcasted a week.
This edition is a great place to start.
Here’s a funny story to accompany a more serious post about the future of outsourcing – which is where a firm hires the services of outside companies to perform a business process currently completed ‘in house’.
Apparently one US worker hired people in China do his work. Having outsourced his job, 'Bob' would spend the day at work browsing sites on the internet. (If you believe it), the US-based software developer has been caught outsourcing his work to China for less than a fifth of his six figure salary - while he spent his time messing around on Facebook, LinkedIn, eBay and Reddit.read more...»
I adapted the title for this blog from an article and video clip I came across in the Telegraph, which contains the observation that "consumers forgot that Blockbusters still existed". I don't really think its demise was very hard to predict, and I think most of you will have seen this coming for some time.
But with the decline of Blockbusters - and so much other bad news on the High Street - I've decided to bundle together a lot of ideas and links to encourage students to work independently on this topic, to see if they can understand some of the forces putting pressure on our High Streets at the moment.read more...»
The huge rise in online shopping brings opportunities for new businesses - but also the imperative need for efficient and low-cost operations. Profit margins are squeezed for all businesses, and retailing online, rather than through expensive high street shops, provides a valuable way of achieving that cost objective - but only if the orders can be supplied efficiently. As Net-a-Porter chief executive Mark Sebba says, "If we don't focus on the customer, then we're lost. So what does the
customer want? The customer wants an absolutely impeccable service and
she or he wants the product really as soon as she or he can possibly get
I steered clear of the topic of Black Friday this year. Perhaps it’s not as hyped as it was. Instead, this year the media has been making a lot ‘Mega Monday’ or ‘Cyber Monday’, emphasising the growing role of internet retailing in the UK.read more...»
Royal Mail has reported a huge increase in half-year profits as growth in parcel deliveries made up for a continued fall in the number of letters being sent. This is something of a surprise to many as the business had looked to be in long term decline. The chief executive has summed up the way in which the firm has found success: "Royal Mail has experienced the negative impact of e-substitution, which is driving the structural decline in the traditional letters market. Conversely, we are seeing the positive impact that online retailing is having on our parcel volumes”.
Now that operations are in profit, this might speed up the business’ move from the public sector and into the private sector – a move referred to as privatisation. A future for the Royal Mail in the private sector was referred to in a previous blog. Here’s an update, and a reminder of some of the strategic issues at stake.read more...»
When you get a Dominos Pizza delivered you're very much dealing with a local provider. Hopefully it arrives within 30 minutes, piping hot and you are happy. What you don't really see with that delivery is the incredibly complex, data-driven IT systems that Dominos provides to its franchisees around the globe.read more...»
Big Data - remember that term because it is important. Big Data is the term that is used to describe the rapid growth of data from our movements, choices, activities and transactions.
According to estimates provided by IBM, every day, we create 2.5 quintillion bytes of data — so much that 90% of the data in the world today has been created in the last two years alone. This data comes from everywhere: sensors used to gather climate information, posts to social media sites, digital pictures and videos, purchase transaction records, and cell phone GPS signals to name a few. This data is big data.
If Big Data is so important in the world of business, how come you may not have heard about it?
To you and I, big data is probably best understood as the enormous datasets held by businesses, governments and other large organisations whose activities affect millions of us. Big data is used to determine your recommended friends on Facebook, suggested purchases on Amazon and the point at which your mobile phone network offers you a freebie to keep you on side.
A key question is, how can Big Data be used by businesses to make decisions?read more...»
Retailer Argos has announced a 5 year "transformational plan" which is ideal case study material for A2 business students and I would suggest is essential reading for students taking more specialist units in retailing.read more...»
Homeworking, teleworking or telecommuting – various terms are used to describe the phenomenon of working away from the traditional office. It’s a great Business Studies discussion point, because there’s so much you can consider in terms of business organisation, leadership, management and motivation. It’s probably fair to say that the idea has (so far) failed to reach the level of acceptance that boosters promised twenty years ago.read more...»
You might find this small and very simple website an interest if you are teaching about how the big software and e-business businesses make their money. If you or your students want to know how companies like Google or LinkedIn make their revenue (or in Instagram's case, don't make their money!) - try this intuitive and icon-based website which tells you which methods each uses to generate revenue.
This is particularly relevant if you are teaching unit 12 (Internet Marketing in Business) on the BTEC National in Business. Each individual 'pop-up' summary per company also gives you a link to sites containing further information. It's a bit US-centric but many of the firms are relevant to UK internet markets.
Or should that be 520 million? That’s the amount that one trader apparently spent, in dollars, in a drunken night betting his company’s money on oil price movements. He initially lost almost $10m (hence the title of this blog).read more...»
With the launch of Rovio Entertainment's new game Bad Piggies this interview looks back on the early days of the technology and marketing phenomena that is Angry Birds. This case study provides a good discussion topic for entrepreneurism and business start ups with a business the students have a good understanding of.
It sounds very sinister (especially if you already have suspicions about Tesco) but it seems to be more about the firm’s response to booming internet orders.read more...»
Entrepreneur Richard Reed looks for the next generation of start-up superstars, setting aside up to a million pounds to invest in three of the big ideas pitched by 500 hopefuls. Episode 1 of the excellent Be Your Own Boss was shown on BBC Three and well worth recording to use as part of any unit on entrepreneurship and enterprise.
500 people have been given £100 each by Richard Reed. That's a very speculative investment of £50,000 by Reed to gain some insights into potential business ideas that might start to generate a return on the risk he's already taken.
What do you think of some of the business ideas featuredread more...»
A fascinating article here from John Naughton in the Observer which asks whether Microsoft has lost the key competitive edge that made it so successful for so long - innovation.read more...»
There have been some real difficulties handling transactions at RBS, with warnings that disruption to normal banking services may last for several weeks. This is a real headache – not just for RBS who stand to lose millions because of the problem, but for their customers who face a host of difficulties.
Here’s a good opportunity to think through what some of the issues might be.read more...»
As a follow up from the recent blog entry on sources of finance in the internet age comes the story of “Pebble” - a watch that connects to the iphone. Their quest for finance on kickstarter.com was successful beyond their wildest dreams! This is a great example of the use of “crowd-sourcing” as a means of raising finance.read more...»
Most of you will be familiar with the crucial concept of appraising business investments. This means taking a cold, hard look at a business proposal (in this case buying Facebook shares) and seeing what kind of return you are likely to get on that investment.
With Facebook shares only days away from public sale, analysts are busy trying to piece together the information that’s necessary to advise people one way or another. This seems like a great opportunity to get you thinking. What do you need to know before deciding whether to invest? Here are a few links to get you started…
The Facebook takeover of Instagram for $1bn has generated a huge amount of media interest. The takeover is a great topical example for A2 business students looking at takeovers, and these video clips provide all they could possibly need in terms of looking at the motives for the deal and also the potential revenue synergies for Facebook.read more...»
The problems on the high street, and our changing shopping habits have been much discussed recently. But “bricks and mortar” retailing isn’t dead yet. Combine landlords with vacant shop sites (often in desirable locations), entrepreneurs (perhaps active online, but not used to face-to-face contact with customers) and an appetite for experimentation - and you get the phenomenon of the ‘pop up shop’.read more...»
A wonderful topical video clip here from the BBC which introduces pupils to the pros and cons of setting up a Franchise. Four minutes long, the video is perfect as a lesson starter for just about every business course that requires students to develop their understanding of business startups.read more...»
Last year I started my A2 students on the topic of business strategy by looking at the UK newspaper market. Analysis of their position paints a pretty bleak picture, but the industry has a successful record of innovation, so it was interesting to compare their strategies for survival. A year later, and the success of one paper’s strategy is becoming apparent.read more...»
Born into poverty; can’t spell for toffee; no qualifications. So why is this serial entrepreneur a multi-millionaire?read more...»
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...»
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...»
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...»
Meet the entrepreneur behind a fast-growing online service that in 2009 rejected advances from Apple’s Steve Jobs. Drew Houston, a brilliant software programmer, founded Dropbox.com....read more...»
This is 30 minutes of business studies gold dust. Evan Davis brings together three superb speakers for this edition of The Bottom Line to discuss the nature of startups in the UK and also the related topic of innovation and adaptability. Some terrific insights here for all A* students and I would highly recommend that you download the podcast for your own enjoyment too.read more...»
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.
This is a great BBC News Clip on what happens to our electronic waste when we no longer need it. WASTE MANAGEMENT appears in many syllabuses nowadays and waste disposal is becoming a more regulated and expensive aspect of a business’s operations. This video clip shows what happens when the costs rise and businesses try to find cheaper ways to dispose of that waste. Here is another BBC clip from Panoramaread more...»
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...»
A great example here of a major change in strategic direction. Guardian News & Media has announced a “major transformation programme” to reduce the business’ reliance on print-based publishing and aim to make it a “digital-first” publisher. This is an excellent example to use for students wanting to explain the impact of technological change creating the need for significant shifts in strategy.read more...»
There’s lots of press coverage of this corporate milestone, with commentators wondering what conclusions can be drawn from the exceptionally long life of this business giant. In particular, it’s interesting to think which of today’s technology champions will be around in 100 years.read more...»
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...»
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...»
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
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)
I can see the scene in a few years: Business teacher tries to look cool in the classroom by referring to a social networking medium, now long dead. I’m referring to MySpace, once a giant of the field and now entirely eclipsed by Facebook.
What’s also interesting are the attempts at a product extension strategy, now the management have come to accept that they are definitely in the decline stage of the product life cycle.read more...»
Its exactly 2,000 days since we started tracking the detailed second-by-second interaction of every visitor to the www.tutor2u.net web domain. So I thought I download some data on visitor volume to see if I could spot any trends or features…read more...»
A terrific article about Will King and his business King of Shaves in the Telegraph which I highly recommend to all business teachers.
Will King is trying to compete in what is effectively an monopoly market. One global brand dominates the worldwide shaving habits of men and women - Gillette. How can King of Shaves possibly compete against the might of such a business. To put things in perspective, Gillette is launching a new razor in the UK in late January 2011 and is expected to spend almost £50m on launch promotion alone. King of Shaves also has a new razor launching on the same day - but the firm has had just £4m of external investment since it was formed. Gillette has over 80% of the UK market.
The article is rich in business studies material. Lots of good data on market share (note how the use of volume data is mainly used). The shareholding structure of King of Shaves is described, as is King’s growth strategy into the huge US market (perfect Ansoff Matrix material). The references to pricing strategy are also really useful - lots of scope here to ask students to conduct some basic market research on pricing by the main brands in the UK shaving market.
You can follow Will King on Twitter here - something I also recommend
This analysis from the BBC website attempts to draw up an overall picture of the pattern of Christmas sales for different categories of retailers, and to seperate the effects of the weather from the effects of weak consumer confidence. Many of the points they make ring true - youngsters who received new bikes were disappointed because the icy conditions meant that they couldn’t use them for several days after Christmas, my nieces included - but did this really put people off buying them altogether? Surely if your child needs a new bike, and Christmas is the opportunity to buy one for them, you won’t change your mind just because it snows? Likewise I can attest to the problems caused by presents ordered online that delivery services then failed to deliver on time - but was this really a genuine result of the conditions making delivery impossible, or of the deliverers deciding that this was a good opportunity to avoid some of the overtime costs that would be incurred if they ensured that all deliveries were made on time?read more...»
The most recent financial reports on HMV are pretty grim. As The Guardian reports, its like-for-like sales in the music stores fell 13% in the last five weeks of the year and snow explains only a few percentage points of the decline. The problem is basic: HMV has too many shops and too many fierce online competitors.read more...»
It’s not just governments that fear the widespread sharing of secrets. Firms are beginning to realise that their confidential information is at risk too.
We’ve heard about the recent problems at Santander who have inadvertently distributed account details to the wider public. That was the result of a mishap. But what if companies begin to find that it becomes increasingly difficult to keep hold of sensitive information?
Ever wondered what it is like in Amazon’s warehouse? Here is a brief 1 minute guide which illustrates how Amazon’s warehouse in Scotland is organised. In effect it is just like an automated library! An interesting point made about Toy Story 3 and other popular DVDs and books. Amazon’s solution is to spread stocks of those items around the warehouse - otherwise it would have dozens of pickers (including many temporary workers during the seasonal peak in demand) all fighting to get to the same warehouse location!
Competition for online sales is strong, particularly in the electronics market. Last year figures from IMRG Capgemini showed that online retail sales hit £5.46bn in December, an increase of 17% compared with the same month the previous year and up 3.8% from November, and there are some suggestions this could be doubled this year. More research from GfK also showed that in cold weather, 22% of people switch to shopping online, where it is very easy to make price comparisons and shop around for the best deal. So the online retailers need to be as creative as they can to get us to their website, catch our attention and persuade us to make the decision to purchase.
Try this festive approach to that marketing process from Misco - an online game called Poke an Elf! See how many elves and reindeers you can hit with a candy cane, avoid hitting Father Christmas or you will lose points - and while the game is loading, you will find that a selection of Misco’s electronic products are brought to your screen! Looks like the basis of a Christmas marketing lesson to me.
Range Rover has signed up more than 40 global “trendsetters” to tweet about their forthcoming city 4x4. The idea came from an ad agency who are anxious to point out that “no one has been paid to tweet”. However, the lucky trendsetters did get a free loan, and in some cases were given, a Range Rover.read more...»