Imagine that you are Mike Coupe, CEO of Sainsbury's. Like the other major supermarkets, you are facing a market which is being shaken up by the food discounters, and declining profit margins as you engage in a price war. There is a growing shift to online retail, and although you had a record number of customer transactions in the week before Christmas, with the top-end Taste the Difference range and Christmas jumpers doing particularly well, in common with your competitors sales were generally down over the festive period. At the end of last year you were forced to report a loss of £290m in the six months to September, and you estimate that within the next five years, a quarter of your stores will have empty floor space and will be too big for your needs. You need a strategy for survival, and to gain some stable income streams which will make use of the assets that you have. What should you do?read more...»
Apple's revenue in 2014 was £160bn. To put that into perspective, it is more than the GDP of Portugal. The £12bn profit that they made in the last three months of last year is the largest profit ever made by a company, and the equivalent of that made by Tesco in ten years - and in the 2.44 minute report about all this on the BBC news tonight, they made another quarter of a million pounds.read more...»
A perfect (yet ridiculous) starter to introduce supermarket competitiveness. This Daily Mash mock-news-article lampoons the ironic concept of the “loyalty” card and highlights the desperate situation that the Big 4 are facing due to the unstoppable growth of the loyalty-card-less Aldi and Lidl.
It can be used as a spring board for discussions on customer loyalty, Unique Selling Points (or lack thereof), reliability of sources and strategies in the face of increasing competition.
To ensure students don’t quote the above article in their BUSS4 exam, below are some more serious ones from a reputable source!
Good news for UK manufacturing this week, as Jaguar Land Rover announce a rise in sales of 9% globally, with a quarter of those going to China, a 7% rise in the UK, as Land Rover have their best ever year and Jaguar their best for a decade.read more...»
The run up to Christmas has been seen as a good time to bury bad financial news, however Tesco's auditors, Price WaterhouseCoopers now face an inquiry over the preparation and auditing of Tesco accounts from 2012 onwards. The Financial Reporting Council is the independent disciplinary body for UK accountants and actuaries.
It is possible that this inquiry could lead to pressure to break up the oligopolistic nature of auditing, currently dominated by 'The Big Four', viz. Deloittes, Ernst & Young, KPMG and PWC. Ultimately it is up to the politicians to decide that this sector needs to be shaken up.
2014 has been a particularly grim year for Tesco, and it's new CEO, Dave Lewis, still faces the challenge of restoring shareholder and customer confidence.
The race to produce the best driverless car is on! Most of the automotive “big boys” are working on their versions, but it’s interesting to see the varied approaches taken by Google and Audi. Attached is a PowerPoint task that ask students to watch the 2 car “adverts” and analyse the risks and rewards of the different strategies.
Google are playing it safe, perhaps heeding the Harris Poll of 2,039 adults, in which 88 percent said they would be worried about riding in an autonomous, driverless car. Their car is round, cute, friendly and slow.
Audi have chosen another path… a much faster path! Their “piloted” car achieved speeds of 149mph and completed a lap of the Hockenheim F1 track a few seconds faster than the manned car.
Intriguing stuff that is certain to create great debate.
Have a fantastic Christmas!
Studying this year's research theme really requires students to have a solid understanding of the macroeconomic factors which affect the demand for products made by UK manufacturers. Yesterday, the ONS released the latest figures for changes in UK industrial output, which are worth spending some time on. Below I have extracted the key points of the ONS's report, and added some analysis of the reasons for the changes.read more...»
The case of Premier Foods and the 'pay to stay' payments that they were extracting from their suppliers gives an opportunity to use the Porter's Five Forces model to analyse the food manufacturing industry in the UK. Last week, BBC's Newsnight carried a report about Premier Foods, who manufacture many key brands including Ambrosia, Mr Kipling, Oxo and Bisto.
The online report comes with a 5-minute video clip which sets up the topic nicely. Newsnight's Laura Kuenssberg interviews engineer Bob Horsely, who had a contract to supply maintenance services to Ambrosia's factory in Devon. He received a letter from Premier Foods saying that "We are aiming to work with a smaller number of strategic suppliers in the future that can better support and invest in our growth ideas. We will now require you to make an investment payment to support our growth." When he queried this, he received another letter: "We are looking to obtain an investment payment from our entire supply base and unfortunately those who do not participate will be nominated for de-list." In other words, pay up or we won't buy from you any more.read more...»
A fantastic documentary for the Section A Research Theme (bullets 2, 4 & 5), that also ticks a great many boxes for the BUSS1, 2 & 3 specifications.
Channel 4’s Inside Rolls Royce charts the production of the Celestial (a one-off showpiece car that has more bling than Liberace, as well as an optional £20,000 picnic hamper!). It covers many topics within Human Resources, Operations, and Marketing, but my highlights are as follows:
- The front of house manager who checks the length of the grass
- The relentless quality control that almost breaks a man
- The marketing of the new Rolls Royce Wraith in Abu Dhabi, which includes hand selected movers-and-shakers from the city getting to test drive it around the formula 1 track
The documentary is available via this link (if you don’t have a C4 account, it takes only 2 minutes to register) and I’ve created a worksheet with 29 questions (numbers correspond to the minutes) intended to promote discussion about a brand synonymous with British excellence.
Hope it helps
Would free food make you work harder? Google think that it would, and so do many other employers. Is it true that Google have a rule that no employee should ever be more than 150 feet from a food outlet in the office? There is the story in this article, of an employee in California who practically moved into the office, sleeping in his car just outside and living on the perks and extras available in the building, which he managed to do for a full 60 weeks.read more...»
If you are running a hotel these days, one of the most important aspects of your marketing mix must be the 'free' publicity that you get through review sites like TripAdvisor. Most of us would prefer to check the reviews posted by other travelers before booking a hotel we don't know - while you will always find some extreme views, the average rating and trend of the comments left are very helpful. So too are the responses that some of them add to the site, so that you can see how they deal with criticism. It takes 'word of mouth' marketing to a new level, and is not directly within the control of the hotel's management; the only thing they can do is be aware of the impression they are making on their clients, and try to ensure that their standards are fit-for-purpose and will generate the right sort of comment to encourage more travelers to choose them.read more...»
Based on the Channel 4 programme by the same name, I created this worksheet that asks students to predict the wages of various professions, and where they fall on the income distribution chart. They can then watch this short clip which gives them the answers, leading to great discussions and potential research on any of the following:
- The taboo of wages and why we struggle to make accurate predictions
- The rich-poor divide and Pareto’s Law
- The importance of education
- The determinants of wages
- Taxes and benefits
- Money and happiness
Hope it helps.
There must have been a siege mentality at Tesco recently, as they are locked in hand-to-hand battle with Asda and Sainsbury, and find that they are outflanked by Aldi and Lidl. Whether that justifies some of the tactics being employed to regain the upper hand, or the financial relationships they have had with suppliers for the last few years, is being investigated by the Serious Fraud Office, and is increasingly coming under public scrutiny. What could be the worst outcome for them: a serious fine which erodes their already-battered budgets, a change in accounting practices forced on them by the outcome of the SFO investigation, a real shift in the supplier/buyer power relationship that has so far seen Tesco, the buyer, with huge advantage, or a significant change in public trust and their relationship with their customers?read more...»
The need for supply chains supporting UK manufacturing to be significantly strengthened has been highlighted by a new research report from the CBI and consultants AT Kearney.read more...»
An important contribution to the debate about the UK's industrial strategy was made by the CBI in October 2014 and much of what was said is directly relevant to students researching the opportunities and threats facing UK manufacturing.read more...»
If a business sees a market segment in which sales are predicted to double to the scale of 15% of the total market in the next five years, you would expect them to be quick to find ways to enter it. However, if you are Sainsbury's, and have a carefully nurtured image and market position to protect, you might baulk at rushing into the discount segment of the market, in case it interfered with that image or cannibalised your market.read more...»
Competitiveness - and specifically the need to be cost-effective - is at the heart of a significant announcement by one of the UK's most significant manufacturers Rolls Royce.read more...»
Advocates of the transformative power of 3D printing (or additive manufacturing to give it the formal name) will be excited by this fascinating example of how it might be used in the near future.
An architectural consultancy in the Netherlands is using 3D technology to build an entire house!read more...»
The strategic challenges facing Royal Mail and its renowned CEO Moya Greene are explored in this superb FT video report (below) from Andrew Hill which takes a look at Royal Mail just a year after the business was privatised.read more...»
A simply stunning video report here from the FT which introduces the work of an innovative UK manufacturer - Smartkem - which is looking to innovate in the emerging printed electronics sector.read more...»
Can technology provide a viable, scaleable alternative to livestock farming? I must admit, after watching this report from Tim Bradshaw of the FT, that it looks like it could!read more...»
Facing intensive competition in the smartphone market, Sony is turning its attention to a different consumer electronics market - wearables.read more...»
Prepare yourselves for a shock; Red Bull does NOT give you wings, and have had to pay over $13m in compensation for saying so. I would assume the latter statement caused more astonishment than the former, and so I looked into previous false advertising cases and compiled the attached game called Court Out.
There are 10 case of false advertising, students have to decide which businesses were “court out” and had to pay damages, which advertising campaigns “got away with it” and which one is an urban legend. On the final slide is Graham’s “Spectrum of Analysis” in which students must evaluate which ones they felt were the most or least culpable.
To prevent any class action law suits against me, I would say it is a relatively fun and engaging game that should promote discussion and evaluation and might help students understand the fine line between good marketing and mendacity*.
*learning not guaranteed but I hope it helps!
Surveys of manufacturing businesses in the UK often ask what aspect of government policy would be most helpful to manufacturers. High up the list of priorities come a better-trained and educated workforce, lower taxes and greater financial incentives to invest in R&D. However, there is one factor that nearly always comes top - energy pricing.read more...»
It seems that all is not well in the global market for luxury goods. There is increasing evidence of a slowdown in demand for luxury products. One reason is slower economic growth in the emerging economies. The geo-political environment isn't helping either, with unrest in the Ukraine and Hong Kong contributing to consumer unease. Add in the worries over the Ebola outbreak and a clampdown on public corruption in China - it is not hard to see why demand for luxury goods is weakening.
But, is there another underlying reason - are consumers also getting fatigued with some luxury brands?
This useful FT video explores the issues.read more...»
As we all know, the mean streets of my adopted home town of Solihull share many similarities with Dr Dre’s Compton and Jay-Z’s Brooklyn, so I always take a keen interest in their progress.
This PowerPoint task asks students to research two of hip-hop’s biggest stars, use Ansoff’s Matrix to organise the many roles and businesses that they are involved in and then discuss how their contrasting strategies have impacted on their net worth.
Is Jay-Z’s “empire [building] state of mind” the best strategy, or is Dr Dre’s focus on music “still” the way to make the most money? Students can use the evidence that they have collated to complete the evaluation question on the final slide.
Hope it helps!
If you've noticed the story about the Wongo TV advert that was banned recently for failing to clarify the level of interest charged on their loans, you may find this activity of interest. Using a technique called 'Wordsnake' developed by our own Graham Prior, the activity lists 5 businesses with adverts banned by the Advertising Standards Authority in 2014 (other than Wonga).
At first glance it appears to be a wordsearch as you see a grid of what appears to be 100 random letters. However, the name of the business 'snakes' around the grid rather than being up, down or diagonal as in a normal wordsearch.
Students are given a clue about the the business hidden in the grid. Who can be the first to spot the answer and call out its location?
If the answer is not obvious at first, the teacher can press the space bar and the letters reveal themselves one at a time.read more...»
This production line in York makes 5 million Kit Kat bars every day. What is involved in the manufacturing process? Have a break and take a look!
The short video focuses on the local sourcing of milk from Scotland which supplies the ingredient preparation (crumb) plant at Girvan. Reference is made to the concept of "food miles", an important idea linked to resource sustainability.read more...»
The FT produce some superb videos that are ideal for use in the Business & Economics classroom - and this one on the UK steel industry is another excellent teaching resource - particularly for students researching UK manufacturing.read more...»
As BUSS4 students start on their research into UK manufacturing, one piece of data that they should keep an eye on is the CIPS Purchasing Managers Index. This is produced monthly by the Chartered Institute of Purchasing and Supply by surveying managers responsible for purchasing materials in manufacturing industries, and so it gives an indication of the level of activity. A reading above 50 (shown by the red line on the graph above) shows growth in activity, below 50 shows a decline.read more...»
BBC Radio 4 has a 5-part series this week which follows eight budding entrepreneurs on a course in Leeds, specialising in how to run their very own Fish and Chip shop. I caught the first episode yesterday; with each episode only 15 minutes long, it seems like a very good set of programmes for students who are beginning a Business studies course, as it covers a wide range of the issues that they will be learning about.read more...»
The Chinese internet giant, ran by former English teacher Jack Ma, has become the biggest initial public offering (IPO) in History.
Having studied them last year, I considered buying shares in them, hemmed-and-harred, and didn’t. What a mistake! Shares started at $68 and rose to $92.70, an increase of 38%. Had I invested my spare £5mil (left-overs from the Apple shares I bought in 1999), I would have been up by a cool £1,900,000!
I used this as a way to introduce Public Limited Companies, but also linked it to risk and reward, raising finance and working out percentage increase.
Hope it helps
Tesco's share price slid again today, although the firm has announced that the new Finance Director Alan Stewart started work three months earlier than expected.read more...»
News about Tesco's troubles comes thick and fast, today's bad news about overstating profits has wiped off 11.59% of the share price. It fell by 26 pence to £2.03.read more...»
A fascinating video here from the excellent Peter Marsh of the FT which explores the complexity of manufacturing operations at the world's largest eyewear maker Luxottica.
You probably haven't heard of Luxottica, but you will almost certainly be familiar with their broad product range. Luxottica's best known brands are Ray-Ban, Persol and Oakley. It also makes sunglasses and prescription frames for a multitude of designer brands such as Chanel and Prada, whose designs and trademarks are used under license.
In total, Luxottica is estimated to have around 80% of the global market for eyewear. It is also a vertically-integrated business with over 7,000 retail outlets around the world, many them trading under the Sunglass Hut brand.
Luxottica has six plants in Italy and two in China.
In the video, Peter Marsh introduces the concept of networked manufacturing. This concept is explained further by this excellent Economist article. The close integration of marketing (new product development & brand / product portfolio management) with operations is a key theme explored in the video.read more...»
Where should multinationals base their manufacturing operations? What are the risks involved in changing location? How can these risks be mitigated?read more...»
Cashflow Cluedoh!, our free murder mystery game for business teachers, has just reached the 20,000 download level! Grab this popular lesson activity below.read more...»
An interesting and inspirational story for all AS Business Studies students. Nick d’Aloisio wrote an app called Summly at his parents’ home when he was 15. At 17 he sold it to Yahoo for £20million. He now works for the internet giant in California, project managing the rebranded app News Digest… whilst still sitting his A-level exams!
The young entrepreneur is now deliberating whether or not to go to University. Attached is a short research task with videos and articles that asks students to create a balanced, evaluative argument about the pros of cons of Nick going to university. They must then apply the same question to themselves to see how the reasons differ.
It works well to introduce the key skills of application, analysis and evaluation, whilst learning about one of the UK’s most successful young entrepreneur.
There is nothing that better epitomizes the concept of being entrepreneurial than trading - buying and selling - hopefully profitably!
That's the idea behind The Trading Game - an interactive teaching and learning resource developed by tutor2u.read more...»
As an interesting way to introduce 3 of the 4 functional areas (and illustrate to students that business studies concepts are everywhere), I used these 3 news stories about how different religions have changed their strategies this year.
Pope Francis stamps out corruption in the Vatican Bank - By refusing to “do business” with certain unscrupulous customers, the profit at the Vatican Bank has dropped from £68m euros to just £2.3m. A strong move from Il Papa, but should a church make any profit at all?
Jehovah’s Witnesses change their marketing strategy - Instead of the door-to-door approach, Jehovah’s witnesses are trying to increase awareness of (and recruitment to) their “brand” by targeting train stations and shopping centres. Will this new tactic prove successful?
Church of England vote for women bishops - Traditionalist believed that as Jesus only “employed” male apostles, only men should lead the church. A recent vote has put an end to this misogyny, but one member of the church said “This is a show for the media. It's the end of the Church as we know it”. Should the church be exempt from the Sex Discrimination Act?
The lesson has now ended. All go in peace.
The story of Apple, from inception up until 2011, is told beautifully in this 50 minute BBC documentary (available on Netflix or via this link) and literally covers all 15 sections in the BUSS1 specification (and quite a few from BUSS2 too). As an added bonus, I’ve created this 30-question worksheet to keep students focused.
A fantastic insight into one of the biggest companies in the world, a ready-made lesson... and chance for you to put your feet up for an hour!
Hope it helps!
A great video here from the Royal Institution which illustrates how technology and manufacturing move together through the process of new product development.
The location for the video is a JCB engine factory and our guide explains how technological change impacts on the development of the next generation of high-powered diesel engines.read more...»
With brilliant timing to coincide with the first bullet-point for the new AQA BUSS4 research theme, today's Deloitte Monday Briefing focuses on Technology and Human Welfare. The piece considers the paradox between the very considerable effect that communication technologies have had on our daily lives, and the far less noticeable effect on output; measured productivity – effectively the efficiency of production – has improved far more slowly than the capacity of computers.read more...»
Which airline boss has said for many years that “an airplane is nothing more than a bus with wings on”?
Of course, the answer is Michael O'Leary, the CEO of Ryanair - Europe's biggest budget airline.
But, as Ryanair's passenger figures show that 25% of their customers are actually travelling on business, they have decided that now is the time to introduce a 'Business Class' service.read more...»
The first lesson of the year with any group is always difficult – usually by the time I get to know their names, hand out the textbooks and go over the course outline we are all in need of a fun activity.read more...»
Over the last couple of days I have been watching balloons take off at Bristol's Balloon Fiesta. An evening out with friends, and a few pints may have inspired Don Cameron to take a risk, but a love of aeronautics or flying helped.read more...»
A superb article here from The Economist that should be essential reading for all students required to develop their understanding of corporate social responsibility (“CSR”) and, specifically, the concept of sustainability.read more...»
The use of innovative design as a source of competitive advantage lies at the heart of this entrepreneurial success story - detailed here in an excellent Guardian interview.
It is always good to see twin brothers succeeding in business! And the Joseph twins seem to have combined their talents very effectively to help re-invigorate their family business.read more...»
If you are looking for a good recent example of how takeovers can destroy returns for shareholders (of the investing business), then add Morrison’s purchase of Kiddicare to the list!read more...»