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Is Arrogance the Biggest Threat to Western Multinationals Succeeding in China?

Thursday, April 10, 2014

What does it take for businesses outside China to now succeed in China given the substantial changes that have taken place in recent years in the competitive environment there?

This short opinion piece from Dr Edward Tse in the South China Morning Post suggests that arrogance (on behalf of Western multinationals) might be one of the most significant impediments to success.

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Xiaomi - An Essential Student Research Update from Bloomberg

This article on Bloomberg Business about Xiaomi is perfectly timed for teachers and students wanting to update and extend their research on one of the fastest-growing consumer electronics brands in the world.

Back in September 2013 we wrote at some length about the growth strategy at Xiaomi which many in the media have labelled the "Apple" of China (and its founder and CEO Lei Jun the "Steve Jobs of China"). That's a label he rejects, by the way

Earlier this year we reported on how Lei Jun had set quite a challenging new corporate objective for Xiaomi - to sell 40 million smartphones during 2014.

The Bloomberg article suggests that Xiaomi may already be well on the way to achieving and possibly exceeding the 40 million phone objective, particularly as it has started to sell very well outside of China (a recent launch in Singapore sold out in just minutes). There is talk of trying to sell 100 million phones in 2015! Now Lei Jun's sights are set on nearby emerging markets such as Thailand, Malaysia, Indonesia and Vietnam.

Why is Xiaomi succeeding against strong competition?

The article argues that the attraction of the Xiaomi product is both from a design AND price perspective:

"Xiaomi’s appeal: It offers the technology and style of Apple or Samsung at less than half the cost." it claims, and this is supported by some comments from Xiaomi customers.

The article also provides some important background information on Lei Jun who is described as being "a world-class entrepreneur with vision, leadership and ambition to really build up a global company".

The comparison towards the end of the article between Xiaomi and Apple is also well worth a read - top evidence for a compare and contrast point for BUSS4 students.

China’s focus on Innovation, not Imitation

Monday, April 07, 2014

A great BBC article and video highlighting why China’s domestic mobile phone companies are now the greatest threat to Apple and Samsung’s success.

The extracts below will add weight to any argument that foreign mobile companies will struggle to succeed in the Chinese market.

  • Shenzhen, once a fishing village is now referred to as China’s Silicon Valley. It is home to Huawei, Lenovo and ZTE (three of the five largest mobile handset companies in the world) and a further 6000 handset manufacturers.
  • China produces more than half of the 2.5 billion phones sold around the world annually.
  • China now spends around $300bn (£182bn) a year on R&D, compared with a US spend of $450bn, and it is estimated to surpass Europe by 2018 and the US by 2022.

In the interview with Shi Lirong, Global President of ZTE (now the most innovative company in the world, filing 50,000 international patents last year), he lays out his three-pronged strategy of customer-focused innovation, recruitment of the best staff from around the world and the development of business partnerships.

Very impressive stuff!

Starbucks – Technology to order your Coffee… but Never to Serve it

Following on from Jim's blog updating us on Starbucks strategy, here is another great 4 minute CNN video interview with Howard Schultz in which he talks about his app that allows customers to order on-line. The factors leading to this are the rise in internet shopping and subsequent reduction in footfall in shopping centres, but will online-ordering reduce the impact of this? Schultz talks about the need for all retail businesses to completely transform the way they do business, and as always, Starbucks seem to be ahead of the curve.

He explains the benefit of technology and data to help him better meet the needs of the customers (and ultimately shareholders), but is adamant that robots will never serve the coffee as this will detract from the customer experience instead of enhance it.

Another gem of a video that covers strategic planning, innovation, technology and customer service.

Starbucks Update from Howard Schultz

Saturday, April 05, 2014

Starbucks - always one of the best BUSS4 research examples - continues to be a source of inspiration for business teachers and students. I picked up on this excellent Q&A interview between CEO Howard Schultz and Bloomberg Businessweek which is packed with useful research insights. 

Here is the article - well worth a read.

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Macroeconomic moves in China

Friday, March 28, 2014

I am cross-posting this from the Economics blog as I think it should be useful for BUSS4 students; in a rather low key report on the BBC website this week, I found the shock news that China had a trade deficit of $23bn in February. This is alongside the HSBC Purchasing Managers’ Index (PMI) which focuses on small privately owned businesses, and which gave a reading of 48.1 for March, compared to 48.5 in February - with any figure below 50 indicating a contraction in manufacturing activity. And today there is a forecast of the ‘official’ PMI, which looks at the larger state-owned factories; although this is slightly over the ‘expansion’ measure of 50, it is only predicted to come in at 50.3 - and is subject to a 0.3 downwards correction to allow for seasonal patterns, according to Louis Kuijs, chief China economist at the Royal Bank of Scotland.


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Alibaba - Ali you need know!

Sunday, March 23, 2014

A combination of excellent news articles from last week have helped my students and I to fully understand the size and scope of Alibaba. Former teacher (and self-confessed technophobe) Jack Ma’s online company has experienced exponential growth and led to fear and envy from some of China’s (and the world’s) biggest companies. However, in his modesty he has described himself as “a blind man riding on a blind tiger”, giving him instant legend-status in our eyes!

The attached presentation has videos, hyperlinks and infographics that allow students to focus on the various elements that have led to Alibaba’s potential $150bn valuation. Each slide focuses on a different section from the BUSS4 specification thus giving information on leadership, strategy, competition, diversification and the economic (electronic) environment.

Hope it helps.

Foxconn: Life away from the Factories in China

Tuesday, March 18, 2014

Sometimes it helps to understand a little more about the human dimension behind the products we take for granted.

So here, for a slightly different perspective to offer students, is a short insight from the NYT into the lives of Foxconn factory workers in China. 

What happens when they clock off from the production lines churning out iPads, iPhones and other consumer electronic goods? Take a look.

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BUSS4 Exam Coaching & Revision Workshops to Prepare for 18 June 2014

Sunday, March 16, 2014

We're all ready to go with our BUSS4 Exam Coaching Workshops for June 2014. It already looks like we already have several sold-out venues for intensive revision days dedicated to supporting students as the get ready for the BUSS4 exam on 18 June 2014. However, there are still places available in some locations - please check our online store for latest availability

The outline content of the five BUSS4 exam coaching sessions is shown further below together with some screenshots from the workshop booklet. Students attending the workshop also get a copy of my latest BUSS4 Revision Guide!

How to book places (subject to availability)

Email Janet Cahill with your confirmed numbers , or

Order online (including private individual students / groups), or

Download and submit the booking form

Please note that we DO accept private bookings from individual students / student groups - although these must be ordered and paid for before the places are allocated. No places may be bought on the day - advanced bookings only!

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China – has the “domino effect” begun?

Wednesday, March 12, 2014

Speaking at his annual address to parliament, premier Li Keqiang said “we are at a critical juncture where our path upwards is very steep… deep-seated problems are surfacing; painful structural adjustments need to be made”.

This comes at a time when there are reports of a potential sub-prime debt crisis in the “shadow banking” sector (worth between $604bn - $3.7 trillion, depending on the source).

Also, according to the Ministry of Human Resources, the number of job openings fell, with city jobs in Q4 falling 13.7% from the preceding quarter.

Finally, and perhaps most importantly, the first domestic corporate bond default happened last week. Energy company Shanghai Chaori Solar failed on a £9m interest payment. The state has previously bailed out Chaori and other such businesses, but chose not to this time, generating much speculation from analysts.

Many say it was a necessary move from the government to install a better risk culture, tackle China’s credit problems and starting with the “painful adjustments” necessary to decelerate growth.

However, Bank of America Merrill Lynch stated “We doubt that the financial system in China will experience a liquidity crunch immediately because of this default, but we think the chain reaction will probably start.”

This was echoed by Philip Li of China’s International Credit Rating, calling it “a domino effect”, and coupled with Robert Peston’s recent BBC article (and other sources below), should help students construct a strong case that the risks of operating in China now outweigh the rewards.

The Sunday Times - China faces it's Shadow Banks

Business Week - How Chaori will deal with the default

Forbes - Trouble for China?

The Telegraph - The value of the shadow banks

BBC - Is the shadow banking sector due to fall?

BBC - Robert Peston's How China fooled the world

China as the woman of your dreams… but is the feeling mutual?

Friday, March 07, 2014

“students never really cognitively understand something until they can create a personal metaphor or model”

To help students understand how a business can overcome the many barriers to success in China, we used the metaphor of trying to gain the affections of a beautiful, foreign (but very high-maintenance) woman… called China! The analogy worked surprisingly well and we compiled the pros and cons on the attached PowerPoint.

To summarise, everybody loves China because…

  • She’s beautiful
  • She’s popular
  • She’s rich (14% of global GDP in 2010)
  • She has over 1 billion “things” to offer you

However, the problems are that…

  • She’s very picky and discerning (48% of foreign businesses have failed within 2 years - WeberShandwick)
  • She likes designer goods (“will purchase 20% of world’s luxury goods by 2015” - McKinsey)
  • You don’t speak her language or know what she wants
  • There are a lot of locals who do (35% of businesses feel comp from local is the 2nd biggest threat - The Economist )
  • Her parents are strict and probably won’t like you (Hostile government - 32% see the Chinese government as the 3rd biggest threat)
  • Her parents seem to prefer the locals (Protectionist approach – local businesses nurtured with fiscal and financial help)

So what do you do to succeed? The answer seems simple; learn why so many have failed, make sure you’re better than the rest, learn the language, culture and habits, give her what she wants and keep the parents happy!

This then led to application to businesses such as JLR, LinkedIn, KFC and Starbucks and what they did to build strong long-term relationships with the beautiful China.

Can WhatsApp help Facebook get into China? No! But LinkedIn seems to have found a way.

Tuesday, February 25, 2014

My students were particularly interested in Facebook’s acquisition of WhatsApp for the ridiculously high $19billion. We used the previous blog, then delved deeper and found a few great related articles; one explaining why it was a good price ($42 dollars for each of the 450m customers) but bad strategy and the other predicting that WhatsApp will not help them succeed in China. To summarise the two:

  • WhatsApp is pro-privacy and data-free
  • WhatsApp CEO Jan Kuom is sticking to his “ad-ban”
  • WeChat – China’s domestic messenger service already has 300m customers and better functionality
  • WeChat helps China’s economy and is subject to Chinese law (meaning “they” can keep tabs on the content).
  • Chinese government banned Facebook, linked them with an act of terrorism and state media claimed that “80 percent of China’s net users felt Facebook should be punished”
  • The government don’t want Facebook siphoning money and talent away from China’s domestic social media industry, most notably Weibo (China’s Twitter), whose profits have just jumped from $2.4m to $44.5m!

Segueing seamlessly to a social networking firm that seems to have secured a way into China; LinkedIn is trialing it’s Chinese language site via joint ventures with Sequoia China, China Broadband Capital and the aforementioned Weibo and WeChat!

Chief Executive Jeff Weiner said the deal has raised “difficult questions” for him, and has been forced to make various concessions in order to adhere to the Chinese Government’s censorship requirements, but believes that “LinkedIn's absence in China would deny Chinese professionals a means to connect with others on our global platform,"

Overall, these combined articles give students relevant ammunition for each of the research “bullets” as it covers success, failure, methods of operation and ethical implications of entering the Chinese market.

It would appear that social network firms need to network with Chinese social network firms if they want to become social network firms that operate in China. Simple really.



BUSS4 China - Cathay Pacific China Business awards

The airline Cathay Pacific has just announced their 9th annual business awards competition, for" British businesses which have successfully capitalised on opportunities to operate in China and Hong Kong". The scheme is run with the China-Britain Business Council and sponsored by HSBC and The Daily Telegraph - and is valuable for BUSS4 students as the Telegraph's information about it has a number of case studies and stories of businesses which are former winners of the awards. 

You can find out a little about 2012 winners Jaguar Land Rover (JLR), the business standards company BSI and the fair-trade Chinese tea producer Herbal Health, see why the CEO of Fired Up says that entering the Chinese market is essential for British business, and why the chief executive of the China-Britain Business Council says that he has his work cut out breaking down the misconceptions that surround doing business in the country, and bringing the real opportunities into the spotlight.

How China Fooled the World

Friday, February 21, 2014

We all know that the statistics about China's growth are awe-inspiring: a new power station every week, a new skyscraper every five days, and 30 new airports and 26,000 miles of motorways have been built in China in the last five years. Chinese outbound tourists are set to spend over £310bn on their travels this year - and that alone is a huge injection into the economies of other countries. A report last month showed Chinese investment in London real estate has risen more than 1,500 percent since 2010, increasing from 54 million pounds to more than 1 billion pounds at the end of the third quarter of 2013.

While Britain has been in the grip of the worst recession in a generation, China's economic miracle has surged forward.

Without this extraordinary growth, the depth of the slump in the developed economies would have been even worse; China's low cost output and their foreign exchange reserves have helped to keep the global economy growing at a time when any stimulus has been most welcome.

But, as Robert Peston explains in 'How China Fooled the World', the vast majority of this expansion has been built on credit from the 'shadow banking' system. There are huge developments of housing which have been built and bought up by investors at inflating prices, but which lie empty. As a result, the Chinese economy now has huge debts and there are doubts as to whether much of the money can ever be paid back. This sounds horribly reminscent of the bubble which built up immediately before the credit crunch in 2007-8 - but on an unimaginably bigger scale. What will happen to the rest of the global economy, if China is no longer there to support it?

There is only another 7 days to watch this excellent programme on i-player, and it is really worth devoting an hour to at the end of half term - could be very useful for several of the bullet points for June's BUSS4, particularly the second  - the risks and rewards involved in trading with or operating in China - and last - how business strategy might be affected by developments in China.

Robert Peston's blog also has a supporting article. - which you can find here.

The Slowing Chinese Economy - Rebalancing Has Implications

Wednesday, February 19, 2014

The rate at which China's economy has grown in recent years (as measured by the growth in GDP) is slowing. China's economy is still growing - but slower - and this has significant implications for both domestic and overseas businesses in China as well as the rest of the world trading with China.

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What Happens to Your Old Phone, Tablet or Lappy? China and E-Waste

Ever wondered what happened to that old Nokia mobile phone that used to be your pride and joy. Or that Nintendo portable console that was your companion on many a long journey? If you disposed of them rather than (like me - keep them in a box in the spare room) then chances are your e-waste found its way to China.

This video clip highlights the significant amount of recycling of e-waste that is conducted in China. For the operators themselves it is a significant business opportunity, However, there are some important social costs involved too.

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Some BUSS4 Section B Essay Questions to Ponder and Plan

Wednesday, February 12, 2014

Here are some practice BUSS4 Section B Essay Questions which could be used for revision / essay planning practice.

I've taken account of what has been asked in Section B up to now and also the current Section A research theme on China.

Here they are. If I come up with any more, I'll add them to this blog!

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Huawei Invests in Innovation to Fuel Growth

Tuesday, February 11, 2014

We have blogged about Huawei several times recently. Huawei is a terrific, though controversial example, of a fast-growing Chinese business with global ambitions which poses an increasing competitive threat to established multinationals.

For example, in this blog entry we reported on how Huawei is investing heavily in innovation and new product development: 62,000 of its 140,000 staff work in research and development, and it has 23 R&D centres around the world.

Two recent news articles highlight how this investment in R&D is starting to bear fruit, even if (in the case of 5G the returns are still a few years away)

There has been much media attention recently about the roll-out of 4G mobile networks (thing Kevin Bacon strolling through the streets extolling the virtues of EE). However, Huawei already has its eyes on the next (5G) generation of mobile networks which offer the prospect of data speeds up to 1,000 times faster than the current performance. That's some prize for the successful developers and Huawei is investing over $600m into the research necessary.

5G mobile networks might be 5-6 years away, but a more short-term opportunity looks like the impending competitive battle for wearable technology. The Wall Street Journal reported yesterday on plans by Huawei to take on Samsung and (potentially) Apple by launching a smartwatch at an upcoming technology convention in Barcelona.  Another example of Huawei's ambition to compete on the global stage, particularly in consumer electronics.

Globalisation Takes Another Step as McDonald’s Opens in Vietnam

Sunday, February 09, 2014

It has arrived there somewhat later than its major competitors. However, McDonald's has finally open its first outlet in Vietnam. It is a significant moment for an icon of globalisation, not the least given the historical connection between the USA and Vietnam.

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Sony, More Retrenchment and the Boston Matrix

Sony’s embattled CEO Kazou Hirai and his Board have been reviewing their product portfolio in recent months and the result is a strategic choice to remove two “dogs”.

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BUSS4 - The Section B Essay Questions So Far

Friday, February 07, 2014

We've had quite a few BUSS4 exam papers now and it is always interesting looking back over the choice of essay titles for Section B to get a feel for the style and focus of what is on offer! It is also interesting to note which topics have been covered by the essay options in Section B! 

Over the lifetime of the specification, you would hope that all the major topics in BUSS4 would feature in some way. After the June 2013 paper, there are still three core topics that have not yet been the focus of at least one of the three Section B essays, namely:

  • Retrenchment (touched on briefly in the Section A research theme in 2010 on strategies in a recession)
  • Takeovers and mergers (Section A research theme for 2012)
  • European business (the forgotten child of BUSS4?)
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Exiting China When the Risks Don’t Justify the Rewards

Wednesday, February 05, 2014

This article in Forbes is a useful example of a multinational that has decided that China is no longer an attractive business opportunity.

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Lenovo Takes on Samsung and Apple in the Global Smartphone Market

Sunday, February 02, 2014

Lenovo has agreed to buy smartphone manufacturer Motorola from Google for $2.9bn.

As Puneet Pal Singh from the BBC explains in his excellent analysis of the deal, this is not the first time that Lenovo has used an acquisition to accelerate its growth (a good example of "external growth). 

Back in 2005 it acquired the desktop and laptop business of IBM which immediately catapulted it into the global top division of computer manufacturers. Now, Lenovo is the world's largest manufacturer of computers and it has set its sights on building global market share in mobile devices, particularly smartphones and tablets.

Overnight, the takeover of Motorola puts Lenovo into third place globally, overtaking Huawei, which itself also has global leadership ambitions. Regular readers of the business blog might also ask - where are Sony and Nokia? The answer, of course, is falling fast as competition intensifies.

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China and Western Multinationals - End of the Gold Rush?

Are the good old days over? Is the gold rush of multinationals into China at its end?

I think this is a very useful leader article in The Economist which ought to be part of the research notes for aspiring BUSS4 students looking at China.

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Anti-Corruption Drive in China - Bad News for Luxury Brands?

The Year of the Snake proved a challenging one for major bureaucrats in China who had previously enjoyed a lavish lifestyle. However, a new focus on rooting out corruption amongst China's public servants, is catching up with corrupt officials. As senior public servants fall into line with the new, stricter regime, demand for certain luxury products is falling in China! In this video from the FT, Ben Marino examines the changes and the possible implications for businesses that have relied on lavish spending. 

A great example of how a change in the political environment can impact directly on business!

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BUSS4 - the tutor2u Ten for 2014

Saturday, February 01, 2014

Each year we attempt to pick a manageable selection of businesses which offer the potential for AQA BUSS4 students to combine some Section A (China) and Section B research.

Here are our suggestions for 10 firms to follow for BUSS4 students wanting to deepen their understanding of real businesses as they prepare for the two essay questions this summer. In a couple cases we’ve grouped firms together, so the total number of businesses is actually more than 10!

The tutor2u 10 is chosen entirely subjectively, based on the following criteria:

Each entrant should ideally have;

- Accessible media coverage

- Good mix of written, audio & visual research materials

- An international/global dimension

- Potential for “compare and contrast”

- Rich sources of relevant evidence for AQA BUSS4 research theme for 2014 (China)

- Reasonable expectation of examiner familiarity

The list is shown below, with a brief comment on the reason for selection.

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BUSS4 China’s Development - Past Present and Future

Friday, January 31, 2014

Here are some notes from a talk given by Liu Xiaoming, Chinese ambassador to the UK at the Marshall Society economics conference in Cambridge in January 2014.

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Localisation - How Design is Helping Starbucks Take A Global Brand into Local Markets

Monday, January 27, 2014

You have a global brand. But, to maximise its strength in global markets, you need to take account of the local customer needs and wants. That is the essence of the concept of "localisation" and few global brands take this approach more seriously than Starbucks.

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Localisation - the foundation of British Airways Strategy in China

very useful article here in Marketing Magazine which describes how British Airways (BA) has approached its strategy of penetrating the market in China.

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Seeing through the Smog - Clean Energy Business Opportunities in China

The pollution problems that affect China are well-documented and they show little sign of going away.  However, heightened public anger at pollution - and a growing political will to deal with the issue - has created opportunities for firms with the expertise to take a share of China's fast-growing clean-technology market.

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Rolls-Royce Cars in China - Demand for Luxury Sustained

Sunday, January 19, 2014

The crackdown on corruption in China doesn't seem to be having much of an effect on demand for Rolls-Royce motor vehicles - perhaps one of the most obvious examples of conspicuous consumption. 

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Google Buys Smoke Detectors, Thermostats…and Some of Apple’s Innovative Culture

The announcement of Google's takeover of smart home-appliance maker Nest for $3.2bn is potentially hugely significant for Google.

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Retrenchment in China for Global Cosmetics Brands

The challenges for businesses outside China gaining a profitable share of fast-growing markets in China have been illustrated by two recent announcements by leading multinational cosmetics firms - L'Oreal and Revlon.

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Samsung: Boston Matrix, Culture and Dividend Yield

Saturday, January 18, 2014

These two pieces of video evidence on South Korean multinational giant Samsung are pure business studies gold - particularly for students preparing their evidence for AQA BUSS4.

Samsung is a highly diversified multinational that is the most significant firm in the South Korean economy.  It has achieved a strong record of improved profitability, quarter after quarter, as demand for its product portfolio has grown, particularly mobile devices. However, in January 2014 it announced that it expected to suffer a fall in profits, It expects to make an operating profit of 8.3 trillion won ($7.8bn; £4.8bn) for the last quarter of 2013, down 18% from the previous three months.

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China and Chocolate - Can the Global Big Five Exploit the Opportunity?

Demand for chocolate products in China is growing fast, but from a very low base. Nevertheless, the "Big Five" global chocolate firms are now all firmly focused on capturing their share of what promises to become one of the world's most valuable chocolate markets.

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BUSS4 Section A Briefing 2014 China - CPD Briefing Days: Two Dates Left in Feb 2014

Sunday, January 12, 2014

Section A Research Theme Briefings: Two Extra Days Added

We have added two extra overflow days for colleagues wanting resource-packed support for the AQA BUSS4 Research Theme on China (June 2014). These are in London on February 5th and Manchester on February 6th.

Our BUSS4 Section A CPD Briefing Days follow the popular and successful approach adopted in recent years, to include:

  • Teaching resources designed to introduce and develop the research theme, focusing on relevant examples and effective sources of student research materials
  • Activities designed to develop essay writing technique
  • Suggestions for ways in which the 2014 research theme can be integrated into the teaching of the remaining Section B topics
  • Other ways in which a linear approach can be taken, integrating some elements of BUSS3 with BUSS4 Research Theme and Section B

The dates and locations for our BUSS4 Section A China Briefings are:

LONDON (A) Monday 30 September 2013 SOLD OUT

LONDON (B) Tuesday 1 October 2013 SOLD OUT

BIRMINGHAM Wednesday 2 October 2013 SOLD OUT

MANCHESTER Thursday 3 October 2013 SOLD OUT

LEEDS Friday 4 October 2013 SOLD OUT

NEWCASTLE Monday 7 October 2013 SOLD OUT

LONDON (C) Wednesday 5 February 2014

MANCHESTER (B) Thursday 6 February 2014

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A Simple, Stretch Corporate Objective for Xiaomi - Double Sales in 2014!

Saturday, January 04, 2014

How simple is this? Xiaomi - the Chinese manufacturer of smartphones - has set a challenging growth objective for 2014. It wants to double the number of phones it sells from just short of 20 million in 2013 to 40 million in 2014.

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Supply Chain Quality in China - Wal-Mart, Five-Spice Donkeys and Foxes

Thursday, January 02, 2014

I suspect this example might find itself appearing in more than a few BUSS4 essays on China in summer 2014 - and why not?  

Wal-Mart's business in China has been hit by a quality problem that has echoes of the UK horse meat scandal.

It is reported that Wal-Mart has recalled a "five-spice donkey" meat product in China after tests showed that it contained DNA of other animals - namely fox meat.

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Business Ethics & CSR - GSK Promises to be Good

Wednesday, January 01, 2014

The global pharmaceutical industry is under threat, like never before, for the way that it markets its products.

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Wal-Mart in China - Refocuses Strategy on Affluent Consumers with Sam’s Club

Wal-Mart - the world's biggest retailer - has struggled to establish itself in China. However, the world's second-largest economy must still remain an attractive and strategically important opportunity for Wal-Mart, particularly given its need to find better growth and returns to offset maturing performance in the US.

This FT article (and accompanying video below) describes how Wal-Mart is is refocusing its growth strategy in China by using its Sam's Club chain to target affluent Chinese consumers in the main Tier 1 and Tier 2 cities.

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Apple (Finally) Signs the Deal with China Mobile - 700 Million New Potential Customers!

Monday, December 23, 2013

It has been along time coming (a six year negotiation), but Apple has finally signed the deal that enables it to connect to hundreds of millions of increasingly affluent consumers in China.

Apple has agreed a deal with China Mobile - the world's biggest network of mobile phone users - to sell iPhones to the network. China Mobile, which has about 760 million customers, will begin registering orders for iPhone from December 25 2013 in a deal that is likely to add many billions of dollars of annual revenues for Apple.

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Bring Him Home - UK Manufacturing Turns to Onshoring

Monday, November 25, 2013

A fascinating survey has been released by the UK's Manufacturing Advisory Service ("MAS"). It reports that a growing number of manufacturing SMEs are bringing production back to the UK from overseas. This is a process called "onshoring" which, of course, is the reverse process to "offshoring".

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BUSS4: 10 Practice Essay Questions on China (Section A)

Sunday, November 10, 2013

We've been putting the finishing touches to our comprehensive BUSS4 Toolkit on China (Section A 2014) and trying to get our heads around how the examiner might pose the Section A essay titles.

Set out below are 10 practice questions you might want to have a go out - perhaps initially planning some outline answers and then having a go at writing a full essay response once you've completed a good amount of research.

We've put these questions into 10 exam-style mock exam papers (and provided suggested responses) as part of the toolkit.

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BUSS4 - China: Opportunities, Threats, Success & Failure

Thursday, November 07, 2013

This revision presentation highlights the key opportunities and threats faced by firms outside China looking to do business in and with China. It also provides examples of businesses that have succeeded in China and those that have struggled!

A fully editable and printable version of this presentation is included in our AQA BUSS4 2014 Toolkit on China which is being published on 8 November 2013.

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BUSS4 - China’s External Business Environment

Wednesday, November 06, 2013

This revision presentation looks at key aspects of the external environment for firms outside China looking to do business with China. It highlights key issues relating to: urbanisation; wealth, poverty & inequality; demographics in China; pollution & energy; Working conditions; corruption and protectionism

A fully editable and printable version of this presentation is included in our AQA BUSS4 2014 Toolkit on China which is being published on 8 November 2013.

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BUSS4 - Market Entry Strategies for China

Tuesday, November 05, 2013

This revision presentation provides an overview of the key considerations and options facing businesses outside China looking to enter the Chinese market.

A fully editable and printable version of this presentation is included in our AQA BUSS4 2014 Toolkit on China which is being published on 8 November 2013.

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Rising Costs and a Stronger Currency Hit China’s Manufacturing Competitiveness

A terrific article here from the FT which highlights the effect of rising wages and a strong currency on manufacturers in China. The supporting video below is also golddust for students wanting to build their understanding of how the economic competitiveness of China is changing.

Low-end manufacturing, which helped drive China's economic growth a decade or so ago, is now slowly moving out of China or moving inland (away from the higher cost coastal regions). Other emerging markets such as Bangladesh, Vietnam and Malaysia are taking up the slack for the production of products at the low end of the value chain (e.g. textiles, shoes).

The challenge for manufacturers in China is to move up the value chain - and many are taking up the challenge!

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BUSS4 - Key Features of China’s Economy

Monday, November 04, 2013

This revision presentation provides an overview of some of the key features of China's economy. It looks at China's economic growth; the impact of urbanisation and investment in infrastructure; China's record on poverty and the creation and use of China's substantial foreign currency reserves. It also looks at rising wage costs in China and the need for China to rebalance its economy reducing reliance on investment and increasing the role of consumption in economic activity.

A fully editable and printable version of this presentation is included in our AQA BUSS4 2014 Toolkit on China which is being published on 8 November 2013.

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Rising Wages in China: Causes and Consequences

Sunday, November 03, 2013

Wages are rising fast in China – many economists believe that China has hit a stage in its development at which demand for labour starts to grow faster than supply, creating labour shortages and pushing up the price of labour (something economists refer to as a Lewis Turning Point).

Why is this and what are some of the key business implications?

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China’s Rebalancing Act - A Balanced China is a Slower China

We used the FT video below during our recent CPD days on China and it is an excellent introduction to a core issue for students looking at the opportunities and threats for businesses looking to trade with and in China.

China's stunning record of economic growth has largely been driven by investment and exports. In particular, following the global economic slowdown in 2007-10, China responded by accelerating investment in infrastructure projects and the programme of mass urbanisation which has created the largest human migration in history.

A consequence of this approach is that China's economic growth can be said to have been "unbalanced", with the economy over-reliant on investment spending which cannot be sustained indefinitely.

China is now looking to "rebalance". That's a key term that I fully expect to feature in strong essays written by AQA BUSS4 students in 2014.

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