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...»External influences: the threat that is China
Most A2 Business students have their sights firmly set on BUSS3 this week, which is very much as it should be. However, next week their attention will turn to the wider world of BUSS4. In planning for that, it looks as if the three-part series of reports about China that Newsnight will be running this week would be very useful, and worth recording or at least picking up on i-player.
read more...»International operations decisions - Adidas trainers for $1?
This makes an ideal example for students considering the challenges of international location in operations management for which they must consider global
markets, cost reduction and avoidance of trade barriers. Here is my plan for the case study and questions which could be set on it:
Could Adidas make a profit from selling branded trainers for $1? Certainly not in any of their developed markets – but since 2008 they have been working on a market development (Ansoff!) strategy which would give them access to the vast market in rural India with a social enterprise venture at a price that local people can afford. The goal of the project, the firm says, is not to maximise profits but to “tackle social issues” by creating jobs.
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.
A level playing field for football on TV
Pubs and clubs that want to show live football, cricket or rugby on Sky TV have to be extremely confident that it will raise their profits - the monthly cost of subscription runs to over £500 per month. For many, showing live sport is a way to keep customers coming to the pub rather than drinking at home, so may be the only strategy available to stay in business.You can easily see the benefit of finding a cheaper source of satellite broadcasts if possible, and this is the background to the well-publicised case in which Karen Murphy, landlady of a pub in Portsmouth, was taken to court by Sky and the Premier League for using a cheaper Greek decoder to bypass controls over match screening. The European Court of Justice has ruled that national laws which prohibit the import, sale or use of foreign decoder cards are contrary to the freedom to provide services.
read more...»Disposing of e-Waste
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 Panorama
read more...»Who is Britain’s biggest manufacturer? The answer may surprise…
The impact of the turbocharged emerging economies continues to grow and I was certainly surprised by the answer to this question. Having spent a long time thinking and reading about outsourcing and offshoring it’s easy to forget how the process runs in two directions. It’s not just that British firms have massive overseas investments – over the last few years foreign multinationals, many from the developing world, have been building up their bases here.
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,
The world’s biggest car market
You guessed it. The rise of the emerging markets continues apace, with the US car market now in 2nd place behind China.
read more...»Fresh doubts about outsourcing
For the second time in just a few months, The Economist gives several column inches to debating the merits of outsourcing: the idea that there are big benefits to be had from passing work, once completed by a firm, to a subcontractor who takes on that role.
read more...»Evan Davis ‘Made in Britain’ - and a new trade data tool to play with
I am cross-posting this item from the Economics blog because it should be of great value to A2 Business students as well as those studying Economics.
The first episode of a 3-part series, Made in Britain, was shown on BBC 2 last night, and was a really useful hour for business students. It examined how and why Britain has lost thousands of manufacturing jobs over the last two or three decades in the low-value part of the sector, with some film of outsourcing shot in China as well as plenty of archive material from this country, but argued that the move to high-end, low scale manufacturing has become Britain’s area of comparative advantage in industrial manufacturing. This included Evan being taken for a test drive in the new McLaren sports car, which was clearly an amazing experience - watch the clip to see his reaction! And this surely emphasises the Economic Importance of Manufacturing to the UK economy - see this link to Geoff’s blog on this topic! Sadly this episode is not to be broadcast again, but is available on i-player for another 21 days and is thoroughly worth watching. I will certainly be setting the recording machine for the next two programmes, on Mondays at 9.00 on BBC2 - episode 2 is to focus on how innovation can help keep Britain ahead in the global economy.
read more...»A2 Business: Six key global trends that are shaping business strategy
Students who can point to some overriding trends which help shape strategic direction and choices are much more likely to write interesting, persuasive and evaluative essays. This new report by consultants Ernst & Young is a pinch of gold dust for such students, as it examines in a reasonably accessible way six broad, long-term developments which shape business around the globe.
read more...»The rise of Asia - some comparative data to play with
Preparation for BUSS4 includes some study of emerging markets, and students could take a break from textbooks to play with this graphic from the BBC. It allows you to compare countries in terms of wealth, health, life expectancy, education and energy consumption, between 1970 and 2006.There is an explanation of each of the sets of data and where it came from, and you can select two factors and up to 10 countries to compare.
For example you can examine questions like “As Asia’s wealth increases, how much longer are people living?” or “Is increasing wealth leading to better education?” in order to get a picture of how development and markets in the Asian countries compare with the UK and USA. Worth a look to get a feel for the potential for UK businesses to invest in expansion into these developing markets, and some of the limitations for them there.
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...»An end to outsourcing?
Could ‘Made in the UK’ start making a comeback? According to The Economist, American multinational manufacturers are moving back to home, as building factories offshore becomes less and less attractive. Might the same thing happen in the UK?
read more...»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...»CSR - Chocolate the Bitter Truth
A year ago Panorama broadcast an investigation into the cocoa production industry - certainly a thought-provoking and topical case study for students looking for some extra research evidence on CSR and specifically ethical sourcing.
read more...»CSR and Business Legislation - The Bribery Act comes to town
From the first of July, businesses will have another piece of legislation to deal with when the Bribery Act comes into law. This was proposed and passed in 2010 just before the election last May, and in the last year the government have been determining the precise way in which it should be put into practice. There are good reasons for it, to establish the country’s position as a global leader in the fight against business corruption – the UK currently holds a strong position in the World Bank’s rankings of economies for their ease of doing business. A high ranking on the ease of doing business index means the regulatory environment is more conducive to the starting and operation of a local firm, and in June 2010 the UK was fourth on this register (behind Singapore, Hong Kong and New Zealand). London was ranked top amongst the Top 50 Cities for Doing Business, and the regulatory environment is a key aspect of this.
read more...»CSR - Evidence that Sustainability Works as a Business Strategy
This new report from KPMG couldnt have come at a better time for AQA BUSS4 students who are building their research notes ahead of the Section A essay on CSR. The excellent BusinessGreen website reports KPMG’s view that corporate sustainability strategies are delivering a wide range of commercial and operational benefits (BUSS4 bullet point 1) for many of the world’s leading companies, according to a major new survey of senior global executives. Lots of cracking data and other evidence here which students can use.
Triumph - A Classic Case of Niche Export Success
Many thanks to Allan Todd for spotting this superb article from the Independent which makes perfect reading for all our AQA BUSS2 & BUSS4 students in particular as they prepare for exams this summer. The article is about the boom in British motorbikes such as the Triumph and Royal Enfield Bullet who’s sales have defied the recession and growth in an ever decreasing market. BUSS2 students will latch on to the niche marketing and product range aspects with BUSS4 pupils being able to analyse the emerging market angle and the globalisation focus that is indicated in the article. A sample essay that Allan will practice with his pupils will be:
To what extent can successful marketing practices that Triumph, and any company that you have studied, defy a global recession or are other factors to be considered?
http://www.independent.co.uk/life-style/motoring/features/triumph-drives-brit-bike-boom-2269173.html
CSR - Adidas restate’s its CSR objectives
Lots of big announcements coming out relating to CSR at the moment, and this one is an example that might appeal to students and teachers looking for some more evidence for their CSR research. Global sports giant Adidas has launched an updated Environmental Strategy, publishing the details at the same time as their 2010 CSR report. Here is the direct link to Adidas’ announcement.
As we have been discussing at our AQA BUSS4 revision workshops, brands such as Marks & Spencer, Unilever and Co-operative Group have aimed to differentiate their brands and products by placing CSR (including sustainability) right at the top of the corporate objectives. Is Adidas attempting to follow suit?
Part of the revised Adidas strategy is a pledge to use 100% “better cotton” and improve its environmental impact on the cotton industry over the next seven years. The “better cotton” initiative aims to improve the environmental impact in the mainstream cotton industry by reducing the amount of water and pesticides used in farming the product.
A good quote in the announcement from Herbert Hainer, chief executive, Adidas Group, who said:
“Implementing environmental performance across our value chain is an important step to deliver sustainable operations over the long term.
At the same time, our environmental strategy creates a sustainable platform for future performance improvements and innovations, and is therefore essential for the success of our business.”
Lots of scope for using the Adidas strategy (and quote above) in essay evaluation. Sustainability is seen as both a long-term objective, but also essential to business growth (performance improvement and innovation).
Japanese earthquake – business aftershocks
As Japan struggles to get to grips with the scale of the human tragedy and the long term damage to its infrastructure, you may be thinking through some of the more immediate impacts on business.
read more...»CSR - Unilever’s Sustainable Living Plan
Unilever, one of the world’s biggest consumer multinationals, took a major change in strategic direction in November 2010 with the launch of its Sustainable Living Plan. The change was certainly of similar significance to M&S’s Plan A and the Co-op Group’s “Join the Revolution” which we’ve featured already here on the Business Studies blog. Here are some supporting resources which colleagues and students may find helpful if they decide to use Unilever during their research process:
read more...»CSR - An Interview with Paul Polman (Unilever)
A fantastic interview here in the latest (March 2011) edition of Management Today with Paul Polman - the CEO of Unilever. We featured Polman during our AQA BUSS4 CPD days recently and I was a little surprised that no-one in the audience recognised him! Perhaps the reason is that he keeps a relatively low media profile. But the impact he is having on the business strategy at Unilever is significant - and the firm should be a required research source for all BUSS4 students.
read more...»CSR - How Transparent are the World’s Oil Companies?
The impact of the Deepwater Horizon disaster continues to be felt for all stakeholders concerned. So it is no surprise that NGOs continue to focus on the CSR & ethical activities and policies of the world’s oil companies. A blog hat tip to Fiona Lerigo from Northampton College for spotting this terrific piece in the Guardian last week which reports on a new research into what the world’s oil companies do about corruption.
CSR - McDonalds and the Case for the Defence
I’m indebted to Ian Pryer for sending through some suggested links to video resources which help us strike a balance when using McDonalds as part of teaching corporate social responsibility.
read more...»CSR at the Movies - Black Gold
For this movie-inspired resource for teaching CSR (and globalisation) we go back to 2006 - to the launch of an award-winning movie about the global coffee trade…
read more...»
