PEST - IAG and BMI acquisition
International Airlines Group or BA and Iberia are trying to acquire BMI from Lufthansa.
A move which would allow IAG would gain c. 56 additional take-off and landing slots at Heathrow. Lufthansa had bought up most of BMI’s shares in 2008 but has failed to prevent the group losing money.
How to turn threats into an opportunity at Ryanair
Michael O’Leary, quoted in Management Today, describes the situation facing Ryanair towards the end of last year. He highlighted the threats from the EU recession and higher oil prices, but typically O’Leary found the opportunities more compelling: the “unfolding failure of the package tour operator model, significant competitor fare increases and capacity cuts, created enormous growth opportunities for Ryanair, as large and smaller airports across Europe compete aggressively to win Ryanair’s growth” he said.
read more...»Who has what it takes for this job description?
Here is a real job description for a job vacancy currently being handled by head hunters. The job? Head Coach for the England Rugby Team. A great example of how the functional areas of a business (in this case HRM) link through the the corporate (or strategic) objectives of an organisation.
read more...»The Business of Football - Everton explain where the money goes
This is superb - a really useful resource to help explain the concept of an income statement and cash flow too.
read more...»Thomas Cook begins down the long road of retrenchment
Here we go. Embattled tour operator, hotel owner and travel agent Thomas Cook has signalled the start of a prolonged period of retrenchment in a bid to ensure its short-term survival and long-term future. A terrific research case study for students to follow in the months ahead, but an awful lot of pain for stakeholders in the business, not the least thousands of employees who face an uncertain future.
read more...»Thomas Cook opts for a different generic strategy for success
Fans of Porter’s Generic Strategies (yes, that should include all A2 business students) should keep an eye out for an important strategic announcement from troubled tour operator Thomas Cook in the next few days. We’ll post an update to this blog when the details are made public.
read more...»Time for this Dragon to Cut Costs to Keep his Health Clubs Fighting Fit
The downturn in consumer confidence and spending is hitting just about every business in the retail and leisure sector - and even a Dragon like Duncan Bannatyne is not immune.
read more...»Pandanomics - Can Edinburgh Zoo Get a Return on its Cuddly Investment?
It was business class all the way for Tian Tian and Yang Guang on board the suitably-sponsored FedEx Panda Express (as this exclusive snap suggests!). However, will the Pandas prove to be a worthwhile investment for Edinburgh Zoo?
read more...»Optimism and expansion in consumer leisure markets
Consumers are cutting spending, unemployment is expected to rise over the next year and in a week of ever-gloomier forecasts for the economy, business and consumer confidence has been dropping like a stone. So what do Starbucks, Hilton and Marstons know that the rest of us don’t? All three have chosen this week to announce expansion in the UK - Starbucks with a market development move to open 200 drive-through outlets, Hilton with expansion of over 20 new hotels (part of a plan to open 110 across Europe) and Marstons with a market penetration plan to build 19 new pubs this year and a further 25 a year from 2012.
Good news all round - how nice to see some evidence of growth amidst all the dire news about the economy. But it is intriguing to see these plans just now - where do they get their confidence from?
Retrenchment not enough as the lights go out for Luminar
Britain’s leading operator of nightclubs has gone bust - in spectacular style. In the last year of trading, Luminar plc lost £200 million through its network of 75 nightclubs. The banks have finally pulled the plug and have appointed administrators to handle the closure/sale of the remaining business. Eleven clubs have already closed and buyers are being sought for the rest.
read more...»Consolidation on the cards as IAG claims deal to acquire BMI
Willie Walsh is at it again (on the takeover trail) - this time claiming success in IAG’s chase to acquire loss-making BMI (British Midland) from its current owner Lufthansa. Virgin Atlantic, the main competing buyer for BMI, will undoubtedly fight the deal, pointing to concerns that customers will suffer from a loss of competition as IAG (which includes British Airways) take control over even more slots at Heathrow.
read more...»Business studies lessons from Britain’s best pub
Step aside Heston Blumenthal and his pub (The Hinds Head in Bray). The couple who have invested their heart and soul into a pub near Hull have awarded the Michelin Guide’s coveted pub of the year award.
This article in the Telegraph takes us behind the scenes at The Pipe and Glass Inn in South Dalton, and there are some useful lessons for business students to pick up from the success of James and Kate Mackenzie. I jotted down the following (I’m sure your students will pick up some better points):
read more...»The business benefits of Olympic sponsorship
I am taking my A2 students to visit the Olympics site next week, and have just come across an excellent article published by the FT a week ago. Sponsorship of the event is huge, with the International Olympic Committee’s revenue from sponsorship running at around £1bn. What are the corporate and marketing objectives for those sponsors, and how do they ensure that their strategies will mean that it meets those objectives?
Sponsorship deals are arranged in tiers, from the IOC’s worldwide Olympic Partners who contribute around $100,000 each to tier one domestic sponsors of London 2012 who pay £50m on average,and Official Supporters (such as Cadbury’s and Thomas Cook), Official Suppliers (Holiday Inn, Glaxo). In the FT ‘Olympic sponsors seek podium for brands’ examines the objectives of those major Olympic Partners such as Visa and domestic sponsors such as Lloyds TSB, as well as considering why it may not suit some organisations, the danger of ‘ambush marketing’ crowding out the official sponsors, and whether it is as effective as providing backing for the World Cup. There is plenty here for students to analyse as part of their A2 Marketing course.
Movies and money: the top film franchises
OK Harry Potter fans: you love your hero (and friends) so much it’s very likely that you’ll push the Harry Potter ‘franchise’ up the Box Office rankings to the point where the movies’ total takings will rank as the 2nd biggest ever for any series.
So who is top? And why does Hollywood put so much effort into their sequel productions? Some good material in here for end of term quizzes…
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...»Whitbread goes for organic growth
Whitbread plc emerged as one of the clear winners during the recent recession in the UK and it appears to be putting its competitive advantages to good use by announcing an acceleration of its internal (or “organic”) growth strategy. This is a terrific case study on growth to use with students - it covers so many specification areas and is especially useful for AQA BUSS4 students who need to gather some evidence-based research data for their Section B essays.
read more...»Horizontal integration in action - Virgin grabs Esporta
A great example of horizontal integration and external growth on the news wires this morning. Virgin Active (which is majority owned by Branson) has agreed to pay £77.6 million in deal to buy 55 Esporta gyms - a move that will nearly double Virgin Active’s size in the UK. The scale of the takeover means that it will need to be cleared by the Competition Commission, but no signs as yet that the competition authorities will block the deal.
This is a good takeover for students to look at. Some of them may be familiar with the UK health club market and the Virgin Active brand in particular. A good starting point would be for students to consider the strategic rationale and direction behind the takeover. Hopefully concepts such as economies of scale and market share / market leadership would feature in their discussions. Virgin Active recently passed the milestone of having 1 million members in its club portfolio, although it did not open any new clubs in 2010, suggesting that it has been able to achieve decent organic growth without expanding the number of locations recently. Virgin Active currently operates a total of 194 clubs, in the UK, South Africa, Italy, Spain and Portugal. The Esporta takeover will double the number of health and racquets clubs that it operates in the UK.
Is the golf business coming out of the bunker?
For those of you grappling with the OCR A2 F297 Strategic Management case study (like us at T2U), the golf business might be on the list of things you’re wondering about. Or maybe you just think about golf anyway. As usual, the BBC is packed full of interesting background on the business of golf.
read more...»CSR - Sport and Business Rediscover the CSR Buzz
I’m indebted to Julie Turner from The Castle School at Thornbury for spotting this excellent BBC article which examines how businesses are returning to the support of local and junior sport as part of their CSR activities. Some great examples in here and links to follow up. Here is the link to the BBC feature.
Sustainability is an objective of the 2012 Games themselves - you can read more about this here.
CSR - Salad Slaves - Supermarkets and Corporate Irresponsibility?
A terrific and detailed video resource here from the Guardian - perfectly timed for students wanting something substantial to discuss as part of their research into corporate social responsibility…
read more...»Business Strategy: next steps for the budget airline industry
It’s amazing to think how over just 15 years, Europe’s budget airlines have soared to account for a third of all air travel in the region. But their growth is slowing. Here are a few ideas and a link to an article which outlines some of the approaches the industry might take in the years ahead.
read more...»Adding value (or “up-selling”) - the FlyLo Way
Another terrific clip from Come Fly With Me - this time featuring low-cost airline entrepreneur Omar Baba. Omar is the owner of the nation’s “eighth favourite low-cost airline” FlyLo. He has worked hard to make his airline the great success it is and knows that the frequent news stories about poor service and dangerous conditions are down to a biased and unfair media. And now Omar has a great idea to add value by providing a new premium service for customers on FlyLo’s flights…
read more...»Can this start-up win with pay-as-you train gym membership?
At our recent AQA BUSS1 revision workshops we had a session looking at the viability of the business concept behind The Gym - a growing chain of low-cost, no frills fitness clubs. According to this article on BBC Scotland it looks like the health club market is set for further challenges from new entrants.
one of the new entrants to the market is payasUgym. The payasUgym programme is due to launch at the start of 2011 and will let customers visit a network of clubs without having to pay membership fees. Gym-goers will “load” cash onto an online account which can then be used at various fitness centres. The easyJet entrepreneur Sir Stelios Haji-Ioannou is also said to planning to launch a budget fitness club in 2011 with monthly-only contracts costing as little as £15-a-month.
The payasUgym concept is an interesting one in that it utilises the existing capacity of the UK health club sector. The business is avoiding the need to raise the significant capital required to build health clubs. It is simply acting as a marketing channel for existing clubs. How sustainable is that business model? if a customer finds and uses a local gym that he/she really likes, what is to stop that gym from trying to recruit the member away from the payasUgym organisation? Students ought to be be able to identify other potential upsides and issues with this business model. A good one to analyse!
Advent stories (3) - Marketing for the super-rich
How would you define a market segment that is attracted to a hotel with an $11mn Christmas tree? The Emirates Palace Hotel in Abu Dhabi is one of the world’s few seven star hotels, with the most expensive suites costing over $10,000 per night. They have every facility you could wish for, from private beach to private cricket ground, and they also have a 43-foot high Christmas tree that cost $10,000.
read more...»Bruce Poon Tip exploits a huge Gap in the adventure market
A nice interview here with Bruce Poon Tip, the founder of Gap Adventures, which has become the world’s largest adventure travel company. Lots of cracking business studies in the reasonably short article, including some good examples of non-financial motivation techniques. For example, Gap Adventures has 800 employees on Twitter, and everyone gets time off in the morning and afternoon to tweet! I’m also taken with the comment about my former employer (TUI plc) - about how they destroy the soul and value of every specialist tour operator they acquire. He’s spot on with that observation! Well worth printing off and asking students why they believe that Gap Adventures has been so successful despite competing against a small number of travel giants like TUI and Thomas Cook.
You can read more about Bruce Poon Tip here
Euro Disney - an HRM & Finance Nightmare?
I forgot to blog about this article in the Independent last week, but revisiting it tonight makes me realise what a good one it is to show the students. As the introduction says, the management of Disney’s two theme parks in Paris have had to contend with quite a wide range of internal and external influences in the last year or so, including strikes, suicides and shareholder losses.
23 December 2009 saw the first ever strike at Euro Disney and things seem to have gone rapidly downhill since then. The article has lots of rich business studies material, including reference to the financial objectives been set by the shareholders, the effect of external shocks such as the recession, and lots of useful information on pricing strategy. The article also explains that, despite almost £1bn of capital spending, revenues at the parks remain flat, making the returns on investment particularly poor. Well worth a read and printing off for a lesson.
Cash flow problems put Pontins into administration
Pontins is the latest household name to fall victim to recession and the credit crunch. They have been put into administration, meaning that the future of the company is uncertain, for both staff and customers. The problem is that the banks are no longer willing to give them credit – so although they have customers willing to buy, they face the possibility of business failure due to a lack of cash flow.
read more...»Working with Suppliers - Thomas Cook Challenges Hotel Bills
First there was Serco threatening to withdraw their support if suppliers didnt accept a price cut. Now Thomas Cook - one of the duopoly of mass tour operators in the UK - has decided to flex its muscles and demonstrate its bargaining power with a key supplier group - holiday hotels. Is this an abuse of Thomas Cook’s market dominance?
read more...»The Price of a Pint
Nice quick question here: why does the price of a pint vary across the country?
read more...»Bankrupt Blockbuster: what went wrong?
You may have seen it coming some way off, but the US parent company of the Blockbuster rental company has gone into bankruptcy. Here are some ideas of what went wrong.
read more...»
