Marketing analysis: the UK supermarket battleground
Once again the BBC have posted up a clip that clearly and concisely (in two and a half minutes) neatly sums up the marketing challenges faced by the main UK supermarket chains: store locations, types of store, products, promotions, target markets … and prices.
On that point, there’s also more detailed news published recently about Waitrose matching Tesco prices, getting marketing mileage out of the John Lewis ‘never knowingly undersold’ pledge.
read more...»OCR F297 case study: impact of the economic environment on the housing market
In just the last few days we have learnt that the economy has entered a ‘double dip’ recession, with the economy essentially stagnant since the peak of the economic crisis passed in summer 2009. What does all this mean for the UK housing market – the central focus of the OCR F297 A2 case study?
This blog contains extracts from the F297 case study toolkit, as well as some extra comments, links and analysis.
read more...»Economics for Business: Is an economic recovery underway?
A ‘crossover’ blog here, since most Business students will be spending at least some of their time thinking about the external environment that firms operate in. For most businesses, the dominating external issue has been the deep recession – a long period in which the UK economy has struggled. Analysis from The Economist suggests that the economy has taken so much damage we’re basically back to where we were in late 2003! A pretty depressing thought, but there are some signs that things might be picking up.
What follows is a link to an article giving reasons to be optimistic, and to a short series of blogs from last year that take you through what you need to know about economic ‘fundamentals’ at A2 level.
read more...»Trouble at Travelodge: ratio analysis helps explain why
The development of the budget hotel sector has been very interesting to follow, and the latest chapter sees Travelodge looking for financial assistance as it steadily sinks under a mountain of debt and rising costs. Here are some fairly simple numbers to show you how ratio analysis can be used to measure the size of the problem.
read more...»Takeovers in the UK - the long-term trend
I’ve been delving into the datasets on the ONS site to pick up some evidence about the scale of takeovers and mergers involving UK businesses. Having worked in M&A during the 1990’s and early 2000’s, I remember the various short-term peaks and troughs of activity that the takeover market seemed to go through. However, I wanted to get a better sense of longer-term trends. Here’s what I found.
read more...»Tesco’s Big Price Drop - on the Stock Market, or, Porter and Ansoff in action
Such is the importance of Tesco’s and their dominance of the retail market that the effect of a 2.3% drop in their like-for-like sales knocked almost 16% off their share price yesterday. Perhaps not so much a reflection of the figures themselves - although they compare poorly with Morrison’s and Sainsbury’s both of whom managed to increase their sales over the same period - as the admission by the new CEO Philip Clarke that Tesco’s got their strategy wrong, both in the short and the long term.
read more...»Tesco takes it ‘easy’, controlling costs in its US operations
You may already know about Tesco’s overseas expansion strategy, and its Fresh & Easy venture in the States. The US expansion is taking place in challenging economic conditions and according to The Guardian, the business is ‘mothballing’ a second wave of Fresh & Easy stores, suggesting that the supermarket group’s loss-making US start-up has hit another bump in the road.
read more...»Business winners and losers from Christmas 2011
So results are trickling in from the major High Street retailers, with figures for their performance over this crucial trading period.
read more...»Strategies to revive the High Street: Mary Portas reports
The woes of the UK High Street had begun long before the Credit Crunch and recession. It seems that a combination of factors (think PEST analysis) have combined to create the difficulties that are squeezing this traditional sector of business activity. Nobody has the answers to saving the High Street, but Mary “Queen of Shops” Portas has given it a go.
Why not try this exercise for yourself?
Firstly, use a form a marketing analysis like PEST or the Porters’ 5 Forces model to identify where the problems lie. Secondly, make 3 recommendations to either firms or governments as to how they might resist the decline (there’s some background here to help). Then read on…
read more...»CGI modelling gauze and effect
Photographs of flawless models with tiny waists, perfect bums and endless legs, may hold the attention of consumers, but is it ethical to use computer generated images to promote a firm’s clothing ranges?
Marketing and the supermarket ‘price war’
You’ll be well aware that this Christmas the supermarkets are trying hard to lure customers with bargain prices. Pricing is of course a vital component of the marketing mix, perhaps especially so in the current economic climate. Investigative journalists on the BBC show Panorama have been digging deeper; to see if the supermarket offers are all they seem…
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?
EntrepreneursLIVE! 2011 - Speaker Line-Up
[updated 17 October 2011]
News of the confirmed speakers for our popular EntrepreneursLIVE! 2011 events taking place in London (14 Nov), Birmingham (15 Nov) and Manchester (16 Nov). We will update this blog entry with the final confirmed speakers once they have cleared their diaries for the day!
Don’t forget that students attending EntrepreneursLIVE! 2011 can also enter the Breakfast Enterprise Challenge on the day. Details here
read more...»Shoppers switch stores as income patterns change
Some of the UK’s biggest grocers lost market share to cheaper rivals in the last three months as household incomes came under further pressure, according to this useful article in the Guardian
read more...»The most popular Business Studies blog entries in September 2011
With over 4,500 business studies blog entries now available, there is a long tail of content for blog readers. However, the following were the top 20 blog entries in September 2011 based purely on page views.
Have a browse to see if there is something you missed…
read more...»Premium market segments: Waitrose at Canary Wharf
Further evidence that the economic downturn hasn’t affected everyone equally: there are still groups of high income consumers out there. Effective marketing requires firms to target groups of consumers with similar buying habits – or market segments. Waitrose are gambling on their target market with a £15m refurbishment of their Canary Wharf store, featuring delights such as wines at up to £425 a bottle.
read more...»Hardship on the High Street – what’s the problem?
We’re currently receiving daily reminders of the problems on the UK High Street. Today it’s Thorntons, following on from Jane Norman, TJ Hughes and Homeform, which controls Möben Kitchens, Sharps Bedrooms and Dolphin Bathrooms. Habitat, HMV, Waterstones – the list goes on and on. Do these high profile business failures threaten the High Street? And what is behind their problems?
read more...»Business investment: the UK corporate cash pile
“Plan A” is that the economy grows rapidly, pulled along by high levels of demand from business investment and rising exports. The government and consumers can spend less and pay back debt.
There are plenty of potential problems with this route map to recovery. But there’s good news too. I was amazed to see data on how much cash is being hoarded by UK firms – potential fuel for the kind of expansion we’re hoping for.
read more...»Cash flow and trade credit - putting the squeeze on suppliers
An interesting article here in the Telegraph which highlights the problem of late-payment of supplier invoices as firms look to find ways of improving their cash flows. Businesses of all types use trade credit as a key source of short-term finance - it is perfectly acceptable and a normal part of doing business. What is less acceptable (from an ethical point of view) is deliberately stretching the time taken to settle amounts owed to suppliers, often well beyond the agreed date.
The article explains that, based on the three months to December 2010:
“Large companies turned the screws on suppliers, paying their bills 36.7 days later than agreed terms, up from 35.9 days in the final quarter last year. But small companies recorded the largest increase in their late payments, taking on average more than 22 days to settle invoices – three days longer than the same period last year.”
Why are firms taking longer to pay? A good question for students, who ought to be able to identify some advantages and disadvantages of extending trade credit beyond agreed contractual terms. Is the increase a sing of worsening cash flow problems? Are suppliers not chasing hard enough for payment? Was it the disruption caused by the snow? Many firms may have tried it on by explaining that they had “sent the cheque” but that it was “stuck in the post & snow”.
The Year of Corporate Philanthropy
This new government initiative is very well timed for AQA BUSS4 students!
Culture secretary Jeremy Hunt is aiming to kick start a culture of corporate philanthropy this year to fill the gap left by public spending cuts. In this radio report, lasting just under 4 minutes, Will Gompertz reports on the aim to bring together the need for sponsorship of the arts or sport, with a corporate desire to be seen to get involved in the Big Society and provide that support.
Mr Hunt suggests that banks, which have suffered such a downturn in their public image, might find this a good way to rehabilitate themselves. But with an 18% drop in business donations, this is going to be an uphill task for the minister. What would their other stakeholders think?
This brief report could provide a good bridge from teaching the introductory topic of Stakeholders, to two of the new research themes on CSR for BUSS4 students:
(1) The potential benefits of Corporate Social Responsibility relative to the costs for businesses and stakeholders
(6) The extent to which governments should influence Corporate Social Responsibility
Government and the Economy lesson plan
This lesson plan and associated resources, which are produced by the Citizenship Foundation, explain the credit crunch and also the Chancellor’s annual Budget. They are a great way to introduce students starting on AQA unit 4 to the thankless task that a Chancellor of the Exchequer has in trying to decide the best way to raise tax revenue and cut spending.
read more...»The Economic Environment
The last few years of choppy waters and a tougher business climate has pushed the economic environment further up the agenda for Business students. Firms look back with nostalgia for the NICE era (with non-inflationary, continuous economic expansion) that began around 1992 but came to a shuddering standstill by 2008.
Here are a few links (outside T2U) that might help you illustrate the changing economic environment. I’m starting with The Guardian, whose business website is catching up with other sources, and is a site I now regularly visit.
read more...»How to find an export market
The main topic of this story on the BBC website is a new report by the British Chambers of Commerce, which says that while the UK’s service sector is suffering domestically, many manufacturers are enjoying an export-led boom. It gives a great example of clockmakers Smiths of Derby, who were suffering from a lack of domestic demand in the recession for their expertise in renovating and maintaining clocks around the UK from St Paul’s Cathedral to Arsenal’s Emirates stadium.
read more...»Can a specialist sports retailer survive?
I fear for JJB Sports plc. In the run-up to Christmas I’ve had cause to get involved in a lot of sports-related shopping, both online and on the high street! I’m not convinced that there is still a viable business model for a national chain of sports sports which genuinely specialise in sporting goods (equipment and clothing).
read more...»Britain’s changing High Street - Poundland, nail bars and empty shops
This report on the BBC website highlights the shift, in times of austerity, away from browsing the High Street for luxuries towards browsing the web for bargains - one result is that on average 14% of shops in the UK are vacant, a massive increase from 10.5% a year ago. But, as ever, the answer to ‘Is the British high street a good location for retail businesses?’ is “It depends….”
read more...»Raising finance: GM in colossal sale of shares
General Motors (GM) – for decades the world’s biggest carmaker – have broken the record for the largest ever sale of shares, raising a whopping £12.6bn. Their shares rose 7% to $35.99 in early trade in New York, having been priced at $33 by the company. The sale marks what looks like an astonishing turnaround after the firm had to be rescued by American taxpayers in 2008.
read more...»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...»Cash flow Clue-doh! The Mystery is Revealed…
Over 10,000 colleagues have now downloaded our cash-flow murder mystery activity - Cash Flow Clue-doh! And we’re getting an increasing number of enquiries asking what the solution is!
read more...»A declining market for branded consumer goods?
According to The Economist the consumer goods multinationals like Procter & Gamble (P&G) and its archrival Unilever, had a grim time last year: profits plummeted. This year has been only slightly better. Economies are still ailing, and the cost of raw materials is climbing. But there is something else happening. Basic consumer goods were long assumed to be more or less recession-proof. Shoppers may not be able to afford Dior dresses or Cartier watches, went the argument, but they still need loo paper and detergent. Yet people are finding ways to save money even on daily necessities.
read more...»Start-up businesses all the rage
An interesting short BBC article that reports that the number of new businesses set up in the UK during the first six months of 2010 was the highest amount in more than a decade. This was a 51% rise on the first six months of 2008, when the UK first went into recession.
read more...»
