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Two very interesting stories regarding Google’s intentions of world domination (in a nice way) via innovation, product and market development.
Firstly, in an effort to “de-dorkify” the Google-Glass and appeal to a wider audience, Google have struck a deal with Luxottica (the makers of Ray-Bans and Oakley sunglasses) to design the wearable device. The deal looks promising and Luxottica’s share price increased 4% after the deal. At the same time, Google founder Sergey Brin has been denigrating mobile phones saying that they are socially isolating, with “people walking around hunched up, looking down, rubbing a featureless piece of glass”. This is a great example of how Google are trying to push what they hope is their next rising star by challenging accepted norms about how we currently interact.
Secondly, to “connect the two-thirds of the world's population which does not have affordable net connections”, Google has launched Project Loons, which consists of floating balloons laden with 3G equipment into the skies over lesser developed countries. The driving force behind this is of course altruistic, with an ancillary benefit being that billions more people will use Google services. Moved by this act of philanthropy, Facebook intend to do the same, but using solar-powered drones instead!
Perfect stimulus for discussions for Ansoff’s Matrix, Boston Matrix, Innovation, Competition, Overcoming barriers, CSR and Strategic planning.
A combination of excellent news articles from last week have helped my students and I to fully understand the size and scope of Alibaba. Former teacher (and self-confessed technophobe) Jack Ma’s online company has experienced exponential growth and led to fear and envy from some of China’s (and the world’s) biggest companies. However, in his modesty he has described himself as “a blind man riding on a blind tiger”, giving him instant legend-status in our eyes!
The attached presentation has videos, hyperlinks and infographics that allow students to focus on the various elements that have led to Alibaba’s potential $150bn valuation. Each slide focuses on a different section from the BUSS4 specification thus giving information on leadership, strategy, competition, diversification and the economic (electronic) environment.
Hope it helps.
Attached is a research task with videos based on three diverse entrepreneurs, two of whom are now millionaires. The Google Chrome adverts show the inception of the businesses (SBTV, The Cambridge Satchel Company and Frontside Skatepark), and additional articles allow students to see where they are now. The final task encourages students to analyse the determinants of success for an entrepreneur and assess which are the most important.
My students were particularly interested in Facebook’s acquisition of WhatsApp for the ridiculously high $19billion. We used the previous blog, then delved deeper and found a few great related articles; one explaining why it was a good price ($42 dollars for each of the 450m customers) but bad strategy and the other predicting that WhatsApp will not help them succeed in China. To summarise the two:
- WhatsApp is pro-privacy and data-free
- WhatsApp CEO Jan Kuom is sticking to his “ad-ban”
- WeChat – China’s domestic messenger service already has 300m customers and better functionality
- WeChat helps China’s economy and is subject to Chinese law (meaning “they” can keep tabs on the content).
- Chinese government banned Facebook, linked them with an act of terrorism and state media claimed that “80 percent of China’s net users felt Facebook should be punished”
- The government don’t want Facebook siphoning money and talent away from China’s domestic social media industry, most notably Weibo (China’s Twitter), whose profits have just jumped from $2.4m to $44.5m!
Segueing seamlessly to a social networking firm that seems to have secured a way into China; LinkedIn is trialing it’s Chinese language site via joint ventures with Sequoia China, China Broadband Capital and the aforementioned Weibo and WeChat!
Chief Executive Jeff Weiner said the deal has raised “difficult questions” for him, and has been forced to make various concessions in order to adhere to the Chinese Government’s censorship requirements, but believes that “LinkedIn's absence in China would deny Chinese professionals a means to connect with others on our global platform,"
Overall, these combined articles give students relevant ammunition for each of the research “bullets” as it covers success, failure, methods of operation and ethical implications of entering the Chinese market.
It would appear that social network firms need to network with Chinese social network firms if they want to become social network firms that operate in China. Simple really.
After Facebook’s acquisition of WhatsApp, I thought this made an interesting exam question. I've compiled a PowerPoint (Facebook_Whats_app.ppt) with graphs and hyper-links and asked students to research the facts behind the purchase. The main reasons seem to be:
- WhatsApp exponential growth was becoming a threat
- Facebook’s “determination to be the 'next' Facebook”!
- WhatsApp's comparative success in Europe
- Messaging companies becoming the social networks of choice for the young
- Google tried and failed
Whilst Facebook's share price fell and then recovered after the purchase, analyst Ian Maude stated "expensively buying every competitor does not feel like a long term strategy". Are Facebook, like Apple, losing their competitive edge?
Hope it helps.
I'd love to see the investment appraisal calculations on this investment project by Marks and Spencer. The Independent reports that M&S has invested around £150m as it relaunches its new website as part of a broader £1bn project to improve its logistics.read more...»
OUP is one of the country's major academic book publishers, and naturally enough it has commissioned and published new studies on the outbreak of the First World War. A new book 'Saving the City', by Richard Roberts, covers the financial crisis which broke out in Britain, after the assassination of Archduke Franz Ferdinand in 1914.read more...»
Retailing is a dynamic market, and firms which have been slow to adapt to changing technologies, falling real incomes, and different patterns of consumer behaviour have been losers rather than winners.read more...»
Here's a great Guardian article to bring you up-to-date: Seasonal trading news from Britain's biggest retailers have underlined the many radical changes that are taking place in the way we shop and buy.read more...»
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...»