The textbook section on finance is sometimes a bit far from the mark when describing how firms (especially the biggest) raise finance in reality. Several years have passed since the ‘Credit Crunch’ of 2007/08 and big problems remain. Business lending has now been falling steadily for four years, and is 20% lower than in 2009.read more...»
When students start work and marketing I encourage them to come up with a product or service that appeals to 'everyone'. So far they have never come up with an example that really satisfies me. It seems that almost every product that is sold is tailored, in some way, to the needs of its target audience. That concept lies behind the idea of market segments, or groups of consumers who share the same buying habits.
If you enjoyed Jim's reference to the hilarious Bic biro for women (!) then you'll like my new favourite. And that's the point of my new market segment challenge!read more...»
This simply couldn't be worse news for two multinational giants in the global chocolate product market. Authorities in Canada have charged the food giants Nestle and Mars, together with a network of independent wholesale distributors, in an alleged conspiracy to fix prices of chocolates. Hershey is also involved - but they appear to have confessed to the illegal price-fixing activities and will be hoping for relatively lenient treatment in return for cooperating with the Canadian authorities.
Price-fixing is illegal - plain and simple. But it's also unethical. To be caught out price-fixing is to be caught acting against the interests of consumers. Not a good place to be if you are a global brand that values its reputation.
Nestle and Mars have both denied the alleged behaviour and have vowed to fight the legal action:
Nestlé said in a statement:
“Nestlé Canada will vigorously defend these charges. At Nestlé Canada, we pride ourselves on operating with the highest ethical business standards.”
Mars issued a similar promise to fight the allegations.
Time will tell whether price fixing has actually taken place.
But what is price-fixing?read more...»
A good visual way of analysing your BUSS4 research organisations for both Section A and B is to relate them to different concepts or models. (apologies for the drawings in the picture above) To go even further could be to link elements of some of these models and concepts together which can give a more in-depth, holistic view of the organisations in relation to some key BUSS4 topics. I have started to get my students to relate them to the following 6:
The link between Leadership, Values and Organisational Culture will be a familiar one for BUSS4 students. This video “Simon Sinek: How Great Leaders Inspire Action” from TED talks is a simple and really interesting way to make these links. It’s summed up by a “Golden Circle” and 3 words: What, How and Whyread more...»
At what stage does organisational culture need to fundamentally change?
A great example here of a European manufacturing business that is attempting to compete based on product differentiation compared with the cost leadership approach adopted by competitors relying on mass production techniques.read more...»
A fascinating, short interview here with Tim Cook, CEO of Apple.
Cook compares Apple's performance to its competitors, and explains his product strategy in an onstage interview.
His argument is clear. Apple's strategy is one of differentiation, not cost leadership based on market-leading scale. For Apple, it is not about making the most of each of the product categories in which it has a presence - it is about making the best in the market.
So, Samsung is now the clear global market leader in mobile phones (including the fast-growing smartphone segment). But Cook argues that Apple makes the best phone. Compare the iPhone 5 with the Samsung Galaxy S4 - is he right?
For students, an important question to consider is this - what the key advantages that a successful strategy of product differentiation can bring? And can it be sustained against the intensive competition that Apple is facing from the likes of Samsung, Google and Huawei?read more...»
If culture is like the DNA of an organisation, then you can argue that the culture of every organisation is unique. However, it is still possible to group certain styles or types of organisational culture. By doing, students are provided with an opportunity to compare and contrast - a vital exam skill!
Let's look at an obvious basis for comparison - strong versus weak culture.read more...»
The Co-Op has keen to highlight their ethical credentials as a key part of its marketing and positioning strategies. Supporters claimed that its mutuality was a more desirable form of ownership than PLCs.
The Banking Division has run into difficulties, and there have been significant changes in personnel within the last few weeks, in part as a response to major financial problems. On Friday there were reports that it had stopped offering loans to new business customers, and today The Independent on Sunday reported that The Co-Op Group's Finance Director Steve Humes had resigned. This followed the recent resignation of Brian Tootell after Moody's downgraded the Bank's bonds.
Mr Humes The Group Finance Director for the last two years, had been involved in managing the Co-Ops food operations, and may have had insufficient experience of its banking operations. Euan Sutherland the Co-Op's new CEO who was appointed in May, could be about to make significant changes in other key management positions.
The decision to stop lending to new business customer may imply that the there may be insufficient capital to support current obligations let alone new loans. The ethical bank may be about to meet its most serious crisis.
Do you have a set a core values? What deeply held beliefs shape the way you see the world and how you act?
Your core values underpin the way in which you behave, act, and how you live your life. So, if someone asked you to list your two most important values, what would they be?
I ask the question because the concept of core values is essential to understanding organisational culture.
Indeed I would hope that the role of core values would feature in many high-scoring BUSS4 essays for students answering questions about organisational culture – they are important!read more...»
It is relatively easy to identify evidence on how organisational culture can be an intangible asset of a business - a source of competitive advantage and a key reason for a business enjoying industry-beating financial performance.
However, the reverse can also be true. If organisational culture is managed incorrectly or (worse) left un-managed, it can become dysfunctional or toxic. In these situations the organisational culture of a business can become a liability, not an asset. It can even lead to the failure of the business.read more...»
If students are looking for a research example of a business that is truly built around a deliberate attempt to create and nurture a strong organisational culture, they need look no further than online shoe retailer Zappos.
Tony Hsieh - the founder of Zappos (bought by Amazon a couple of years ago) wanted to build a business based around a simple idea. That it - if you get the organisational culture right - then everything else that you need to be successful will fall into place.
Is he right?read more...»
Right. That's it. I'm off to work at Ikea. I just know I'd fit in...read more...»
“Our strategy is delivering. The transformation of Royal Mail is well underway”.
That’s the view of Moya Greene, CEO of Royal Mail, as she announced the full year results for Royal Mail to 31 March 2013 today.
As students who attended our BUSS4 Exam Coaching Workshops will recall, I think that Royal Mail is one of the very best research case studies to use for both Section A (organisational culture) and Section B essays in the BUSS4 exam.
The latest financial results of Royal Mail Group are packed full with useful insights and data which could be used effectively to support paragraph points in a BUSS4 essay.
Here are just a few examples:read more...»
From the employer's point of view, a zero hours contract is a great example of the benefits of the flexible labour market. They allow the employer to change the number of hours an employee works each week, with more shifts offered when they are busy, and fewer when they are not; costs can therefore be controlled and matched more exactly to revenue. They are particularly popular with the fast food outlets like McDonalds and Subway, and high street chains like Boots and Sports Direct. Those employers draw heavily on the younger end of the labour market, with many of their staff being students who are looking for flexible shifts that work around their study hours; for them a zero hours contract may work well. However it is also important to consider whether this will have a detrimental effect on the business's culture; with a high proportion of staff working irregular hours it may become much more difficult to instil a culture and sense of identity with the organisation.
How far did the management style of Roberto Mancini contribute to his removal after the FA Cup defeat?
Mancini was the most successful manager of Manchester City's 23 managers hired after the retirement of Joe Mercer in 1971. He took the club to 2 FA Cup Finals, and City thrashed Manchester United 6-1 on the way to winning the Premier League with almost the last kick of the 2011-12 season.read more...»
Could Google Glass have as transformational effect on our lives as the smartphone? Yes is the answer - according to leading venture capitalist Marc Andreessen - who explains why in the CNN video below.
Rory Cellan-Jones from the BBC has also been examining Google Glass. In this article Rory asks whether Google Glass is the most exciting technology product of recent years, or whether it might turn out to be the 21st Century equivalent of the Sinclair C5!read more...»
We've previously highlighted the arrival of Harriet Green as the new CEO of Thomas Cook as a great research example for business students. New CEOs - particularly those recruited externally - tend to dive straight into "strategic reviews" which then result in changes in strategic direction, disposal of non-core businesses etc. Harriet Green is no exception. And in this YouTube clip, she outlines her proposed strategy for the ailing travel industry business.
The clip is almost two hours in length. However, it is the first section (from about 3 minutes 30 in) which is particularly interesting and relevant for business students. You get a strong sense of Harriet Green's personality from the presentation and a clear statement of her strategic objectives for the business.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...»
Can Apple's CEO Tim Cook provide the right leadership to sustain the firm's reputation for innovation?
That's the question posed in this short Businessweek article which looks at three key factors which may determine whether Apple's innovative culture can be sustained and nurtured.
It's a good piece and well worth reading not just as an example of analysis and evaluation!read more...»
This new revision quiz on Breakeven Basics is designed for GCSE & equivalent courses.
This new revision quiz on Cost-Effective Operations is designed for GCSE & equivalent courses.
This new revision quiz on Effective Customer Service is designed for GCSE & equivalent courses.
Students looking for a great example of how a UK business can transform its fortunes by focusing on the opportunities in emerging markets need look no further than JCB.read more...»
It is now six years since the global financial crisis triggered a prolonged downturn in economic activity. The UK economy, like other developed economies, has struggled to escape from a period of stagnant economic growth.
However, despite the weak economy, many UK firms have succeeded in significantly growing their revenues and profits.
Here are three examples of such businesses. Their strategies for success are different – but there are also some similarities.
Can you compare and contrast these three – and also identify some other businesses that have enjoyed similar success despite the tough economic environment?
You might also consider:
- What factors have driven revenue growth at each of the three
- Has their growth strategy been based on organic or external
- To what extent has their growth been driven by international
- Do you think their recent success can be sustained?
- What factors might that continued success depend on?
That may be over-stating it a bit, but it's not often that the BBC's Political Editor calls a football manager "...the mastermind of one of Britain's greatest brands." Nick Robinson is clearly somewhat biased, as a self-confessed Man United fan, but the piece he wrote on Thursday to justify his off-the-cuff comment, in which he did jokingly suggest that Sir Alex Ferguson was 'the greatest living Briton', suggests that students of leadership, management and business culture should reflect on what led to his success.
One of the strengths and a key component in the Co-Op Bank's USP after recent banking problems - sub-prime lending, collapse of Northern Rock and LIBOR rate fixing, was its emphasis of ethical banking.
This revision quiz looks at the basics of stock management and its role in lean production.
This new revision quiz provides 10 MCQs on the topic of business and the environment. Ideally suited to GCSE students.
This revision quiz has ten questions on the basics of consumer protection in the UK:
This new blog entry from the HBR is useful research material for students wanting to develop the link between organisational culture and competitive advantage.read more...»
Students attending our BUSS4 exam coaching workshops on Organisational Culture will be familiar with Jeff Skilling - the former CEO of Enron which collapsed so spectacularly over a decade ago.
The Enron collapse was closely linked to a strong, through ultimately toxic organisational culture that developed at Enron, which was an online energy trading business that rose quickly to become the 7th most valuable firm in the US.
The culture at Enron, described so powerfully in the film The Smartest Guys in the Room (and Broadway play of the same name) was a tough culture - a VERY tough culture. Students may recall the infamous policy of "rank and yank" in which 15% of Enron staff were dismissed each year as a result of Jeff Skilling's PRC (Performance Review Committee).
Skilling rose to the position of CEO in 2001 only to abruptly resign six months later. Soon after that, Enron collapsed in one of the most notorious corporate scandals of all time.
Jeff Skilling was sentenced to 24 years imprisonment back in May 2006 after he was found guilty on 19 counts of securities fraud, conspiracy, insider trading and lying to auditors.
However, it now looks likely that Skilling will end up serving only 10-11 years of his sentence. The news clip below explains why in more detail as does this news article from the BBC.read more...»
I've become increasingly convinced from recent discussions with major accountancy firms and other major employers that workplace learning is going to challenge the preeminence of universities and colleges when it comes to obtaining higher level qualifications. The emergence of some industrial-strength Higher Apprenticeship programmes recently is a sign of that. And so to is the news that John Lewis Partnership is to extend its programme of workplace learning to offer Level 6 (university degree level) qualifications for some of its management.
This story would provide the basis for some excellent analysis by students exploring how and why John Lewis Partnership has decided to extend its internal training programmes.
Some clues can be found in extracts from the JLP press release: for example;
The so-called "University of John Lewis" will also offer a number of other development initiatives through its ‘skills programme’, which will include training in product knowledge, line management and leadership. read more...»
"Our partners give us our competitive edge, and if we want them to stay with us for the long term, we need to make sure that they have the right skills to meet the challenges we face in an evolving retail environment."
The horrific Bangladesh factory disaster has highlighted a number of business issues and proved a stark reminder of the global effects our purchasing decisions may or may not have on people halfway around the world. Tom White has already put up a blog with some initial thoughts; I thought I’d pose some further questions and examine some of the issues raised in that post.
A great starting point would be to listen to the ever-reliable Business Daily, from the BBC World Service. Their programme In the Balance invites guests to debate a topical business issue, and this week, the Rana Plaza disaster was under discussion.
One of the first questions to ask is to examine the extent to which firms which are supplied by such factories are responsible. There were more immediate causes, of course, such as the owner’s actions and the culpability of local regulation and enforcement (or lack of). But this is not the first time there have been such disasters, nor are the poor conditions in such factories surprising. So is it right that chains such as Primark continue to use such suppliers? Isn’t it their fault, with their demands for low prices and increased flexibility to meet the needs of the fast fashion market? Do they have a responsibility to ensure fair and safe working practices in factories they don’t own and which they are merely customers of? A lot of people would argue that yes, they do. But isn’t that the same as arguing we as consumers should audit the supply chains of the shops which we buy from? Primark is as much a customer as we are.
This is a really useful two-minute video snippet of a conference presentation by Procter & Gamble's CEO Bob McDonald.
He explains that the aim of Procter & Gamble is to move to a zero waste production environment. He makes a clear link between sustainability and productivity. If P&G's factories can operate more efficiently with substantially reduced waste, then it ought to be a win-win arrangement for both shareholders and society stakeholders.
P&G is a multinational manufacturer of a diverse portfolio of product ranges including personal care, household cleaning, laundry detergents, prescription drugs and disposable nappies.read more...»
You may not want to dwell on this topic, which is so terrible that I am sure your first reaction to what has happened will have been highly emotionally charged. The scale of the tragedy only seems to grow, with the situation perhaps made worse by the realisation that these events are very typical of working conditions in many countries.
I've been putting together some links to encourage a bit of reflection on what, if anything, we can learn.read more...»
Pedal power has been around for a while. But are turbo-charged eBikes the way forward? The specifications of electric bikes are impressive - but will the price put potential customers off?read more...»
A terrific video here from Jonathan Moules, the Enterprise Editor of the FT, which showcases some creative choices of business location in London.
This would make a great stimulus piece for a lesson on startup business location - what are the attractions of some of the unusual locations featured?read more...»
I’ve come across a great article and video clip about the problems faced by a company whose business boomed overnight. A nice problem to have, and an interesting problem too!read more...»
For Sony's CEO Kazou Hirai - a promise is a promise.
Back in April 2012, when Kazou Hirai took over as CEO from Sir Howard Stringer, he pledged to restore Sony's troubled Consumer Electronics division to profitability within one year.
In a significant programme of retrenchment, Sony has shed over 10,000 jobs (about 6% of the workforce), sold off major property assets and substantially cut production at the heavily loss-making Sony Television business (which is a significant part of the Consumer Electronics division). The result is expected to be Sony's first corporate profit for five years when it reports final result for the year to 31 March 2013 in May. However, the Consumer Electronics division remains unprofitable - Sony has not met its objective.
The reaction by Hirai? It is reported that forty of Sony’s top executives, including Hirai, are to give up bonuses worth between 30 and 50 per cent of their pay. The decision will save Sony around $10m, which is not particularly significant in financial terms.read more...»
Consumers around the world are falling in love with mobile devices, notably smartphones and tablets. However, as this excellent short FT video explains, many businesses (including leading brands) are struggling to adapt to the migration of consumers from desktops and laptops to mobile devices.read more...»
How & Why. These are the two important words for students preparing for BUSS4 and as they practice their essay technique.
So, why is that? And how can they be used?
The source of their importance lies in the skill of analysis…read more...»
Seeking a way to make costs, revenue and profits interesting for my business students and get them digging deep into the reality of cost control, revenue generation I developed the "Shocker or Cracker?" activity.
This requires students to conduct independent research within the classroom using their own electronic devices (laptop, tablet or samrtphone) and helps to generate a healthy sense of competition.
There has been increasing debate about the merits of adopting a Bring Your Own Device (BYOD) policy within schools and colleges so I thought I'd give it a go...read more...»
Expect lots of coverage this week about the growth strategy being pursued by Whitbread plc.
Whitbread used to have a pretty diverse product portfolio including the brewing of beer and the operation of David Lloyd health clubs. However, in recent years Whitbread had rationalised its portfolio of businesses to focus on two markets where it believes it can achieve sustainable and high sales and profit growth. And it has backed that strategic focus with heavy investment. If only other UK firms would do that!read more...»
Here is an updated revision presentation on aspects of the economic environment for UK businesses in the late spring of 2013.read more...»
Whenever you are investigating a firm’s accounts – perhaps using ratio analysis – you quickly realise that the answers you’re generating only really make sense when you compare them against something, like last year’s figures, or those of a rival.
My students are looking at a case study (OCR F297) in which a firm is making a return on capital of approximately 11%. We were wondering if that was a ‘good’ return or not. I’ve come across an article that directly answers that question, and raises some other points that offer a revealing insight into the health of Britain’s businesses.read more...»
Some interesting finance news here, since Apple don’t plan to spend their famous cash mountain on a conventional purchase. Instead, they plan to raise dividends and buy back their own shares. Why?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...»