I highly recommend that A2 business students read Tom White’s excellent blog about the demise of Kodak. I came across a couple of useful video clips which help explain the strategic mistakes made by Kodak and also suggest that the corporate culture at Kodak was a significant part in the failure of the business to adapt and change.read more...»
What a stunning video that is likely to become a permanent fixture on the schemes of work for many colleagues. This 6 minute video gives you a guided tour of VW’s “transparent factory”. Wow!read more...»
There have been plenty of recent blogs on the problems faced by struggling firms on the UK “High Street”. You’re all encouraged to think through these problems, perhaps using a framework like PEST analysis.
This blog adds a couple more perspectives, from recent articles in The Guardian and The Economist that paint a pretty grim future for the High Street - at least in its current form. All is not well for the out-of-town grocery chains either.read more...»
A fantastic quote here from the departing co-CEOs of RIm (owner of BlackBerry) as they depart for pastures new…read more...»
I bought twin-brother Geoff a Kindle Fire for Christmas (after he’d dropped several unsubtle hints in the festive build-up ). It seems I wasn’t alone. Some great data in this analytical feature indicates that tablet ownership in the USA almost doubled in December 2011 - January 2012; a significant growth in the user-based of tablet-style devices.read more...»
Ever heard of Coca-Cola? How about Google, Microsoft or IBM? What about McDonald’s? They sound familiar, and the amazing thing (to me) is that even in the 1990s, you would have heard Kodak mentioned in a list of the world’s five most valuable brands. Kodak was the Google of its day and by 1976 it accounted for 90% of film and 85% of camera sales in America. How the mighty have fallen, with the announcement that Kodak files for bankruptcy protection.
I was reading about Kodak’s decline and here are some of the key points that made an impression:read more...»
Innovation is a business topic in its own right, and it also crops up a lot when there are discussions about the benefits and drawbacks of size – or economies and diseconomies of scale, in syllabus terms. This is a rich thread for evaluation, although it’s probably fair to say that poor rates of innovation and change are often quoted as a classic ‘diseconomy of scale’. In other words, big business is supposed to be bad at it.
But more and more big firms are setting out to challenge this view and prove themselves as innovators. The Economist have also recently added to this side of the argument.read more...»
I have a feeling that the role of technology in business strategy is going to be a key topic for many business students and teachers in 2012, so this excellent podcast from BBC R4 Peter Day is well worth listening to…read more...»
This revision presentation focuses on the role of innovation and invention in a business as part of operational strategy.read more...»
Innovation is the successful implementation of a new idea, process or approach. But where do these creative, innovative ideas come from and how long does it take for them to be turned into commercial successes? I love this short, animated talk from Stephen Johnsonread more...»
Productivity – usually expressed in terms of output per worker – is a really important term in business. In fact, it’s up there near the top of the list of the most important measures of business efficiency. So is it good news that productivity continues to rise (at least in the US)? And what forces are driving this improvement?read more...»
Lots has been written already on this blog about the decline in demand for audio and visual material on physical media such as CD and DVDs. The associated decline in the financial performance of retailers such as Woolworths, HMV and publishers like EMI is also well documented.
This feature in the Independent is worth adding to students research notes, mainly because it provides some useful summary data on the absolute changes in demand for various music products and also the shift in market share enjoyed by digital media.read more...»
A neat, short video here in which we get a behind the scenes look at the way in which Sainsbury’s handles goods delivered to a main distribution warehouse in the busy build-up to Christmas. Some nice glimpses of technology in action - what is that over-sized watch that the warehouse employee is wearing? The flow of stocks is quite straightforward too. Goods come in at one end; they are automatically scanned and then sent to waiting delivery lorries at the other end. Simple - in theory!
According to The Economist you have spies in your wallet if you make use of one of the many ‘loyalty’ cards that are promoted by retailers.read more...»
THis video is perfect to illustrate Just in Time and Kaizen in action.read more...»
I’m half hoping that technology will be the focus for AQA A2 business students in 2012 and, if it is, then this article would make a terrific starting point for discussion and student research.read more...»
Meet the entrepreneur behind a fast-growing online service that in 2009 rejected advances from Apple’s Steve Jobs. Drew Houston, a brilliant software programmer, founded Dropbox.com....read more...»
This video features a personal message from RIM (maker of Blackberry) Founder and Co-CEO Mike Lazaridis on the BlackBerry service outage which enraged millions of Blackberry users in the UK and around the world. Why did he feel the need to publish the video? Because RIM spectacularly failed to handle the crisis that arose when the Blackberry server network collapsed, cutting off tens of millions of BlackBerry users for three and a half days. Service outage has triggered a wave of defections to rival handset makers such as Apple and Samsung - perfect timing for both as they launch new versions of their smartphones.read more...»
A super, data-rich video here from the Economist Magazine which is perfect for getting students to think about how consumer technology is changing in what Steve Jobs described as the post-PC era.read more...»
Tesco may have admitted defeat and pulled out of Japan after 8 years but they have found an innovative way to build their market share in South Korea. A fantastic example of listening to customers, ensuring they can buy what they want at a time and place convenient to them. In this case, by scanning virtual items using smartphones while using the subway.
This is a truly remarkable 10 minute video which is perfect for showing to business students as a way of illustrating how entrepreneurial flair (and a large dose of technological innovation) can result in a profitable product which is genuinely good for society. A big hat tip to Geoff for recommending it.read more...»
I love this article in The Independent which analyses the strategic issues facing Kodak - once the dominant brand in the photography market. Lots of useful examples in the article illustrating how Kodak has been unsuccessful in making the transition from the old analogue world (photo film which needs processing) into the digital world.
The Kodak example is a great one to use to illustrate the strategic choices and analysis that can be discussed using Ansoff and Boston as a decision-making framework. Porters Five Forces can be used here too to assess the nature of competition now in the digital imagery market. As one of the analysts is quoted in the article:
“Very few companies make that transition. The strategy has been to milk the old business for cash and reinvest in new businesses, but it is the new businesses that I have a problem with. The market for consumer digital cameras and inkjet printers is just so competitive.
Kodak’s journey is from being a dominant market leader into an also-ran in the many digital markets in which it has tried to compete. Ideal essay material for A2 students!
The share price of Super Group fell by 30% in just one day when management issued a warning to shareholders that profits will be well below expectations. Management blamed a new warehouse IT system which, they claimed, had left stores short of stock. They estimated that resulting loss of sales (customer demand, but no stock to sell) would knock £6m to £9m off its profit for 2011.
On the face of it, this sounds like a simple one-off technology problem. But is it? Might it be that SuperDry is expanding too rapidly (both in the UK and internationally?) A retail chain that grows so fast is bound to suffer operational problems. Not only do to the new retail outlets need computer processing facilities to link into the chain’s back-office systems; but a business like this needs the right number of experienced management to ensure that those stock control systems are working properly. Something, somewhere has broken down - with costly consequences. A great example to use in an exam answer or essay.
A broader strategic issue for SuperDry arising from their recent problems is examined here in the Independent. The SuperDry brand has been around for a while (since 1985) but it is only recently that the brand has moved from a distinct niche clothing segment to something more mainstream. As SuperDry becomes more popular, does it lose its appeal to the original customer segment?
The short video sums up some of his leadership characteristics, charismatic, driven, dictatorial and visionary.
Pubs and clubs that want to show live football, cricket or rugby on Sky TV have to be extremely confident that it will raise their profits - the monthly cost of subscription runs to over £500 per month. For many, showing live sport is a way to keep customers coming to the pub rather than drinking at home, so may be the only strategy available to stay in business.You can easily see the benefit of finding a cheaper source of satellite broadcasts if possible, and this is the background to the well-publicised case in which Karen Murphy, landlady of a pub in Portsmouth, was taken to court by Sky and the Premier League for using a cheaper Greek decoder to bypass controls over match screening. The European Court of Justice has ruled that national laws which prohibit the import, sale or use of foreign decoder cards are contrary to the freedom to provide services.read more...»
The recent about turn in strategy at HP, with the acquisition of Autonomy and an announcement that the PC division was up for sale appeared to be the result of a new CEO Leo Apotheker trying to make his mark on the company’s operations.read more...»
Would you have guessed that a whole host of companies are reporting bumper profits, even as the economy struggles?
Apparently so. Despite all the concerns about the world economy, many corporations have still been recording large profits which, on the whole, have been much better than analysts had forecast.read more...»
A very useful interview here with Tony Bates, the UK-born CEO of Skype which is in the process of being acquired by Microsoft. Technology firms and brands continue to be a superb source of business lesson case studies and examples. There is much in the interview which students ought to add to their notes - particularly A2 students wanting some research-based evidence for their exam essays.read more...»
Can a technology business achieve sustainable competitive advantage without making significant upfront investment in research & development (“R&D”)?
Samsung, with is engaged in a bitter fight with Apple in the smartphone and tablet computer market certainly sees the need to substantially increase its R&S spending. According to this article, Samsung plans to spend as much as $9.3 billion on R&S, which is equivalent to around 6-7% of annual revenues. That investment is not just on smartphones and tablets. Samsung’s product range includes a wide range of home appliances, television & audio devices, printers & software - a much broader range than Apple. Apple is estimated to have spent around $2.3 billion last year on R&D, a smaller percentage of annual revenues. So there is a real sense of Samsung attempting to at least catch up with its rival.
Students who have followed the story of Nokia’s strategic problems will be aware of the challenges facing competitors in the mobile phone market. Nokia CEO Stephen Elop has described the battle as essentially one of “eco-systems” (e.g. mobile operating systems and their associated apps). Samsung has built its success to-date by using Google’s Android operating system. It is thought that Samsung may decide to take on Apple (and Microsoft) directly by buying HP’s WebOS.
The media’s attention may have been on Nokia in recent months - not surprisingly given its significant problems. But watch out for Samsung to see if it can challenge Apple.
Sometimes averages can conceal the bigger picture. We all know that the business environment is tough, and the firms experiencing the most difficult trading conditions are likely to be those that have to cut back on the numbers that they employ. Here’s some international data to show which firms have cut their payrolls, and which are still expanding employment.
Of course, other factors may be at work, beyond the current levels of demand firms enjoy. Changing employment patterns often reflect other forces at work, especially technological and organisational change.read more...»
You guessed it. The rise of the emerging markets continues apace, with the US car market now in 2nd place behind China.read more...»
Founded in 2006; launched in 2008. So it’s taken the best part of five years for online music streaming service Spotify to travel from the point of concept to break-even. A good example of the need for investors in start-up businesses to have some patience whilst their investment grows to the scale where profits become possible…read more...»
Coffee shops, as those who frequent them, are more than coffee shops. They are an intrinsic part of a neighbourhood. A place to meet friends, pass some time, and increasingly conduct business. Many self-employed people will base themselves in their local coffee shop at regular intervals - some even spend all day there. So part of the value that a coffee shop can add to its customers is the provision of extra services which make the experience more enjoyable or useful. In my book, as in the case of hotel rooms, Wi-Fi access is an example.read more...»
As Steve Jobs exits the stage as CEO of Apple, here are some videos of the iconic product launches that have helped shape Apple into the firm and brand it is today. A fascinating trip down memory lane…read more...»
The resignation of Steve Jobs as CEO of Apple makes headline news today. There are some very useful profiles of Jobs and the success he has led at Apple in various online articles - some links are provided below.read more...»
When Stephen Elop announced his new strategy as CEO of Nokia he talked of a crucial “battle of ecosystems”. What he was referring to was the battle between Google (Android), Apple (iOS) and a potential third player in the competition to become the dominant operating system used to power smartphones and their apps. Elop decided to abandon further development of Nokia’s sum Ian operating system, preferring instead to partner with Microsoft in developing the Windows mobile system.
It looks like Elop and Microsoft might have a tougher battle on their hands than they might have imagined just a few months ago.read more...»
We all know about the success and dominance of Tesco in the UK where it has a market share of around 30%. Globally it is one of the biggest retailers in the world and it now has stores in 14 countries. This clip is a great example of how Tesco have adapted to the South Korean market where it is the market’s number two, with fewer stores than the number one company.read more...»
A classic example here of the potential (good and bad) for automation in a large-scale business. Foxconn, a manufacturer well-known to students and teachers who have researched Apple inc and CSR, is aiming to increase the number of robots used in its production processes from 10,000 currently to around 300,000. As a result, it wants to move “1,000,000 workers up the value chain” - i.e. provide them with work which is less suitable for automation.
Foxconn is a great example of economies of scale - the sheer size of their operations in China is stunning. Foxconn makes electronic products for many global brands, including the iPhone and the iPad. It is the largest exporter in Greater China and the second largest exporter in the Czech Republic. However, despite its scale, Foxconn is still under pressure to minimise unit costs in order to maintain profitability. Recently it has begun relocating factories to lower-cost locations in China.
You might think that Foxconn’s automation strategy might be implemented over the medium-term. Apparently not! The 300,000 production robots are expected to be in place by the end of 2012. A massive transformation in Foxconn’s operations.
Samsung and Apple are the world’s two biggest manufacturers of smartphones, and Samsung’s Galaxy Tab has become a huge-selling rival to the iPad, which has dominated the growing market for the touchscreen devices. Rather than focus on competing with each other on price or promotion, the two are focusing on features of their products and at each other’s throats at the moment over allegations of breach of patent. In the current round of claim and counter claim, Apple started it in April by accusing Samsung of copying its smartphones and tablet computers. Apple claimed that the Galaxy phones and tablets ‘slavishly’ copied its own designs for icons and other design features, while Samsung said that the look of their products was the results of market research and not copying. Later in April Samsung responded with their own claim that Apple was copying Samsung features in the area of wireless communications standards and mobile device user interface, and breaking patent legislation in five countries. The escalation has now reached the stage at which Samsung has asked the US International Trade Commission to ban the import of Apple products into the United States.read more...»
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...»
A great example here of a major change in strategic direction. Guardian News & Media has announced a “major transformation programme” to reduce the business’ reliance on print-based publishing and aim to make it a “digital-first” publisher. This is an excellent example to use for students wanting to explain the impact of technological change creating the need for significant shifts in strategy.read more...»
Students who can point to some overriding trends which help shape strategic direction and choices are much more likely to write interesting, persuasive and evaluative essays. This new report by consultants Ernst & Young is a pinch of gold dust for such students, as it examines in a reasonably accessible way six broad, long-term developments which shape business around the globe.read more...»
A2 business students need to understand the role that technological change plays in disrupting industry and competitive structures. The concept of a “disruptive technology” is a good one for students to use when describing how innovative based on technological advances/adoption can have profound implications for business strategy (and therefore act as a cause of business change).read more...»
There’s lots of press coverage of this corporate milestone, with commentators wondering what conclusions can be drawn from the exceptionally long life of this business giant. In particular, it’s interesting to think which of today’s technology champions will be around in 100 years.read more...»
A fantastic video here for A level business students - packed full with relevant concepts. You’ll want to use this again and again.read more...»
For many of us, the contact lens is a piece of slippery translucent material which, when finally placed in the eye, enables us to move around without bumping into things. A simple product with just one use? Think again…read more...»
When I first glanced at the link below my initial reaction was that the recession must nearly be over. When firms start to advertise the benefits of the office you could be working in, it’s usually a sign that they are having trouble finding recruits for their organisation. But watch it anyway as the clip raises several interesting points about how work place design could influence workforce performance.read more...»
Business students will be familiar with the need to understand how changes in the organisational structure of a firm might lead to an improvement in its profitability and/or competitiveness. However, few will have come across the term “Central Captains” when studying the potential changes in org structures…until nowread more...»
A quite brilliant deck of analytical slides here from Fabernovel which explain the business strategy of Amazon.com. Lots of detail, of course, but within this presentation is a gold mine of strategic insights into all aspects of Amazon. It would be interesting to simply give the link to your Year 13 students and ask them to highlight five key points or pieces of evidence that they can use to illustrate how a firm can be so successful online.read more...»
A terrific example of investment in new product development in the news - which links into many other core business studies topics too.read more...»