Here’s a funny story to accompany a more serious post about the future of outsourcing – which is where a firm hires the services of outside companies to perform a business process currently completed ‘in house’.
Apparently one US worker hired people in China do his work. Having outsourced his job, 'Bob' would spend the day at work browsing sites on the internet. (If you believe it), the US-based software developer has been caught outsourcing his work to China for less than a fifth of his six figure salary - while he spent his time messing around on Facebook, LinkedIn, eBay and Reddit.read more...»
I adapted the title for this blog from an article and video clip I came across in the Telegraph, which contains the observation that "consumers forgot that Blockbusters still existed". I don't really think its demise was very hard to predict, and I think most of you will have seen this coming for some time.
But with the decline of Blockbusters - and so much other bad news on the High Street - I've decided to bundle together a lot of ideas and links to encourage students to work independently on this topic, to see if they can understand some of the forces putting pressure on our High Streets at the moment.read more...»
A directive from The US Federal Aviation Administration has stopped flights of the Boeing 787 Dreamliner, until the plane maker has satisfied the regulator that it has resolved problems with the aircraft’s battery systems. Boeing’s shares had dropped by 2% $72.80 (£45.50) after the announcement. The share price of GS Yuasa the Japanese battery maker had fallen 11% since 7 January when an electrical fire broke out on a JAL 787 at Logan International Airport in Boston.
This short video interview with Amazon.com founder and CEO Jeff Bezos is business studies gold dust.
Jeff Bezos was recently named Fortune Magazine Business Person of the Year for 2012. Here he talks about his long-term strategy for Amazon. Bezos has always maintained that the success of Amazon is based on long-term thinking, recognising that not every innovation or invention will work.
Bezos defines the success of Amazon as being based on the following cultures and beliefs:
- Start with the customer - Amazon's goal is to be the most customer-obsessed business in the world
- Have a willingness to invent
- Think long-term: allow 5,6,7 years before you expect to see financial returns on investment (Bezos is dismissive of short-term payback criteria)
- Be inspired by what competitors do, but don't be afraid of them ("your margin is my opportunity")
Do I sense a few green shoots emerging from Finland - the home of Nokia which recently lost its position as the world's largest maker of mobile phones (a position it had held for 14 years).
Readers of the business blog will be familiar with the story of Nokia in recent times. The arrival of a new CEO Stephen Elop and his famous "burning platform" speech which set out this new strategic direction for Nokia. We've documented the resulting strategy of retrenchment which led to the loss of 000's of jobs at Nokia around the world and Elop's decision to enter into a strategic partnership with Microsoft as he chose Windows 8 as the mobile operating system ("ecosystem") for Nokia's new range of smartphones.
2012 was a pretty bad year for Nokia in total. However, there is is some evidence that the launch of the Lumia smartphones may have heralded a change in fortunes for the business. The Guardian reports here about very strong sales for the Lumia phone over the crucial Christmas trading period. And in the short video interview with Stephen Elop below, you can sense the emergence of a quiet confidence that things might be getting better.read more...»
Have you ever looked out of your aircraft window and stared at the wing and thought: "I hope that doesn't fall off"? No? Well I have and I'm always reassured that the wing was probably made in a high quality factory in the UK.
Here's a chance to take a look behind the scenes of the wings being made by Airbus in the UK. A fantastic video here from the FT's Peter Marsh who kindly joined us for the recent tutor2u Global Economy CPD day.
Peter (well worth following on Twtter) visits the wing factory of Airbus/EADS at Broughton in north Wales. There he learns how the factory works on a process of continuous innovation in technology, and he assesses the impact on skills and jobs across the UK.
Sony is one of our favourite case study businesses and fantastic source of research insights for A2 students wanting to improve their understanding of business strategy. So we were pleased to spot this short video from the FT which evaluates the potential success of Sony's new smartphone - a so-called "super smartphone". Given that Sony only has a single digit market share in the smart phone market, can this new product provide Sony with something which will compete with Apple and Samsung?read more...»
I love the annual CES (Consumer Electronics Show). Coming at the start of each calendar year, CES is a showcase for some major new product launches by global players like Sony as well as by smaller, niche manufacturers of consumer products. T
For example, take this new product: the iPotty. The Daily Mail has this description of the product which seeks to forge a creative link between a popular electronic item (the iPad) and a core need for parents - help with potty training.
Parents of toddlers will know that their offspring can spend a surprisingly long time "on the pot" waiting for some relevant output. So does it make sense to provide the little ones with some mental stimulation at the same time?
Priced at £25, the iPotty clearer doesn't come with an iPad. But will it take off? Of is this just another product innovation that proves to be a flush in the pan?read more...»
This afternoon The High Court appointed PricewaterhouseCoopers as Administrators of Jessops the high street camera retailer. The company has debts of £80m.read more...»
The use of robots on production lines is well established. But this excellent video from the FT explains how sophisticated robotic devices are making the switch to other markets, particularly the medical market.read more...»
A nice example here to help explain and illustrate the impact of technological change on the product life cycle.
This article in the Telegraph reports a 20% decline in UK sales of MP3 players during 2012 compared with 2011. Total sales in 2012 were £381million, a fall of £110million. According to one Mintel market forecast, annual sales could slump further to around £25million within the next 5 years as the market penetration of smartphones continues to make the MP3 player less relevant to consumers.read more...»
A fantastic video here from the team at the FT who explain the link between Big Data and the crucial role of design and innovation in creating products and services that people want.
Companies are battling to cope with an avalanche of valuable information as big data becomes fundamental to their business models. Ravi Mattu, the FT's business life editor, reports on how important good design is to getting consumers to give up their data and the benefits the numbers can bring.read more...»
The huge rise in online shopping brings opportunities for new businesses - but also the imperative need for efficient and low-cost operations. Profit margins are squeezed for all businesses, and retailing online, rather than through expensive high street shops, provides a valuable way of achieving that cost objective - but only if the orders can be supplied efficiently. As Net-a-Porter chief executive Mark Sebba says, "If we don't focus on the customer, then we're lost. So what does the
customer want? The customer wants an absolutely impeccable service and
she or he wants the product really as soon as she or he can possibly get
I steered clear of the topic of Black Friday this year. Perhaps it’s not as hyped as it was. Instead, this year the media has been making a lot ‘Mega Monday’ or ‘Cyber Monday’, emphasising the growing role of internet retailing in the UK.read more...»
Royal Mail has reported a huge increase in half-year profits as growth in parcel deliveries made up for a continued fall in the number of letters being sent. This is something of a surprise to many as the business had looked to be in long term decline. The chief executive has summed up the way in which the firm has found success: "Royal Mail has experienced the negative impact of e-substitution, which is driving the structural decline in the traditional letters market. Conversely, we are seeing the positive impact that online retailing is having on our parcel volumes”.
Now that operations are in profit, this might speed up the business’ move from the public sector and into the private sector – a move referred to as privatisation. A future for the Royal Mail in the private sector was referred to in a previous blog. Here’s an update, and a reminder of some of the strategic issues at stake.read more...»
Followers of the Business Blog and attendees at our BUSS4 revision workshops will know that we're big fans of Sony as a case study in business strategy. And this resource - an interview by BusinessWeek with Sony's CEO Kazou Hirai - provides another useful addition to the research resources which students ought to use if they want to develop their understanding of the strategic challenges facing Sony and the options Hirai is choosing.read more...»
Amazon is increasing its share of many consumer retail segments in the UK and it is fast becoming an almost dominant player in the market for seasonal demand at Christmas. In this Telegraph article, we get a behind-the-scenes perspective on the scale and complexity of the Amazon retail opportunity here in the UK.
The capacity of Amazon to process so many orders so accurately really is quite staggering, particularly given the volume of customer orders that are processed at the busiest time in the run-up to Christmas. I particularly noted the role that complex search algorithms play in organising the way that orders are picked and despatched. A key economy of scale is that the same technology is used in all Amazon's distribution centres worldwide.
An earlier article in the Telegraph explained how Amazon UK is expected to recruit around 10,000 temporary staff this Christmas, with the best-performing staff being asked to become permanent employees as new distribution centres are opened.
You can't necessarily spend your way to success. That's one interpretation of the latest survey of global innovation. The top spenders on R&D don't feature as strongly as you might expect when it comes to a firm's reputation for innovation.
For the third year running, Apple has been named as the world's most innovative company, followed by Google, 3M and Samsung. However, when it comes to the highest spenders on R&D, the list is headed by Toyota, Novartis, Roche and Pfizer.
So consumer technology firms come highest in perception of innovation whereas automotive and health firms spend most on R&D. Of course, the two measures are somewhat different. You might reasonably expect firms like Apple, Google & Samsung to have very high awareness of their record on innovation given the nature of their new product development - they're hardly ever off our screens! The business and consumer media are less interested (I suspect) in the day-to-day innovations of drugs companies.read more...»
This is pretty fundamental stuff, but essential background to an understanding of how digital technologies are changing the external environment facing businesses.
The increasing use of modern network technologies is changing people's daily social and economic lives. Today, anyone and everyone can engage interactively in digital spaces. This animated video from the research team at Deutsche Bank explains the major shifts in the use of digital technology which are helping to cultivate a more collaborative digital society. The implications for businesses are pretty profound, not the least in relation to innovation and the open sourcing of technologies and ideas.
When you get a Dominos Pizza delivered you're very much dealing with a local provider. Hopefully it arrives within 30 minutes, piping hot and you are happy. What you don't really see with that delivery is the incredibly complex, data-driven IT systems that Dominos provides to its franchisees around the globe.read more...»
I like the short animation animation below by the team at dunhumby. Dun who? dunnhumby is a United Kingdom-based Retail media group, best known for being key to the creation of Tesco Clubcard. Currently a subsidiary of Tesco, the company employs approximately 2000 people in 30 countries. dunhumby runs a 40-terabyte database, selling information to companies including Procter & Gamble, Coca-Cola about consumer preferences. If you are reading this blog entry, it is highly likely that you are in that database somewhere!
The video describes how the use of Big Data analytics can potentially help businesses personalised the products and services offered. To be able to do that, a business needs to have insights into yout behaviour and preferences. Insights are created from the analysis of data - a great example of Big Data in action.read more...»
Big Data - remember that term because it is important. Big Data is the term that is used to describe the rapid growth of data from our movements, choices, activities and transactions.
According to estimates provided by IBM, every day, we create 2.5 quintillion bytes of data — so much that 90% of the data in the world today has been created in the last two years alone. This data comes from everywhere: sensors used to gather climate information, posts to social media sites, digital pictures and videos, purchase transaction records, and cell phone GPS signals to name a few. This data is big data.
If Big Data is so important in the world of business, how come you may not have heard about it?
To you and I, big data is probably best understood as the enormous datasets held by businesses, governments and other large organisations whose activities affect millions of us. Big data is used to determine your recommended friends on Facebook, suggested purchases on Amazon and the point at which your mobile phone network offers you a freebie to keep you on side.
A key question is, how can Big Data be used by businesses to make decisions?read more...»
I was once told a story about a manager (but I don't know if this is an urban myth) who had a particular method for short-listing candidates for jobs. This manager would take the top half of a pile of applications and put them in a shredder and then state that the company should not employ anybody so unlucky.
Whilst the 1990s was awash with stories of the use of graphologers making judgements about candidates based upon their handwriting (I never use a little circle to dot my 'i's any more - this indicates an untrustworthy personality, apparently), the modern method is the use of software to score potential employees. In an era of high unemployment and therefore large numbers of applications this would seem to be a logical, if slightly 'big-brother' move forward.The BBC have put an interesting report on their website today that discusses the rise of the use of such software to short-list candidates and, as well as being useful to students studying recruitment they may find the tips on how to improve job application success very valuable.
Retailer Argos has announced a 5 year "transformational plan" which is ideal case study material for A2 business students and I would suggest is essential reading for students taking more specialist units in retailing.read more...»
Many Business students get round to considering the importance of research and development (R+D) and innovation to firms. To many, it’s seen as a crucial component to business success. Firms often keep all kinds of secrets and guard them jealously. Now a story has emerged of a possible spy at Dyson, long seen as a key UK-based innovator.read more...»
Homeworking, teleworking or telecommuting – various terms are used to describe the phenomenon of working away from the traditional office. It’s a great Business Studies discussion point, because there’s so much you can consider in terms of business organisation, leadership, management and motivation. It’s probably fair to say that the idea has (so far) failed to reach the level of acceptance that boosters promised twenty years ago.read more...»
You might find this small and very simple website an interest if you are teaching about how the big software and e-business businesses make their money. If you or your students want to know how companies like Google or LinkedIn make their revenue (or in Instagram's case, don't make their money!) - try this intuitive and icon-based website which tells you which methods each uses to generate revenue.
This is particularly relevant if you are teaching unit 12 (Internet Marketing in Business) on the BTEC National in Business. Each individual 'pop-up' summary per company also gives you a link to sites containing further information. It's a bit US-centric but many of the firms are relevant to UK internet markets.
This article from todays technology pages on the BBC make for excellent reading about leadership by looking at Apple a year on from Steve Jobs' death..read more...»
Or should that be 520 million? That’s the amount that one trader apparently spent, in dollars, in a drunken night betting his company’s money on oil price movements. He initially lost almost $10m (hence the title of this blog).read more...»
With the launch of Rovio Entertainment's new game Bad Piggies this interview looks back on the early days of the technology and marketing phenomena that is Angry Birds. This case study provides a good discussion topic for entrepreneurism and business start ups with a business the students have a good understanding of.
It sounds very sinister (especially if you already have suspicions about Tesco) but it seems to be more about the firm’s response to booming internet orders.read more...»
Thousands of business students will be regular customers of Dominos but not many will be familiar with the complex, costly and vast scale of the IT system that Dominos uses as it grows the business around the world. Dominos has embraced the cloud and their US and European online businesses are growing quickly especially from mobile devices. This Financial Times video is a terrific short insight into the IT-driven nature of a business that touches millions of customers.
I love this kind of analysis. It's really done to help inform the investment community who like to get under the skin of the financial performance of public businesses - and there is no bigger business than Apple. But what wonderful material for us business teachers and students too!read more...»
If you're looking to use the new iPhone 5 as a good example of an extension strategy for a product life-cycle, it's worth remembering that another technology heavyweight is about to launch a re-imagining of a classic product. In November 2012, Nintendo are launching their new version of the Wii games console - imaginatively named the Wii U. However, whilst iPhone 4 users are looking to dust-down their eBay accounts to help subsidise the latest must-have gadget, the Wii U brings an extension strategy with a difference.....
This hilarious video clip perhaps proves just how strong Apple's reputation for product innovation is. The new iPhone 5 has been launched but is not yet available. So how will consumers respond when given an opportunity to hold and test it for the first time? There's only one catch - the phone they are given to examine is the iPhone 4s. Fascinating results...read more...»
Ahead of the impending launch of the iPhone 5, the strategic importance of the iPhone to Apple is nicely illustrated in this analysis on CNN Money.
CNN compare the revenues generated by the iPhone compared with the whole of Microsoft. In the year to June 2012, iPhone revenues were $74.3bn. compared with $73.0bn achieved in total by Microsoft.
The analysis also shows how the iPhone has become the most significant generator of revenues for Apple compared with all the other components of its product portfolio. It raises an interesting question which students might consider - is Apple becoming too reliant on the iPhone?
A good piece in the Observer today which analyses the potential competitive developments in the global smartphone market in the run-up to Christmas 2012.read more...»
Do you still use an inkjet printer at home or at school? If so, you’re one of a dwindling customer base for the manufacturers and retailers of inkjet printers and accessories. And now there will be one fewer inkjet brands competing for the remaining demand. Lexmark has decided to exit the market; the move represents a significant retrenchment for Lexmark as it aims to refocus its business on more profitable market segments.read more...»
I have a hunch that technological innovation and change is going to be a key area of focus for business teachers and students this year. So this resource from the Economist - which contains some great quotes on the nature and purpose of innovation - is a handy addition.read more...»
It’s just a year since Tim Cook took over as CEO of Apple when Steve Jobs stepped down from the role ahead of his untimely passing. Succession planning at Apple had been carefully planned, but at the time many analysts, investors and the media questioned whether Tim Cook would be able to sustain the incredible growth story that had been masterminded by Jobs. So how has Cook got on?read more...»
A fascinating article here from John Naughton in the Observer which asks whether Microsoft has lost the key competitive edge that made it so successful for so long - innovation.read more...»
This is a good example of significant cost synergies being squeezed from a major takeover. Google, which acquired Motorola Mobility (a manufacturer of mobile phones) for $12.5bn, has decided to make 20% of Motorola’s workforce redundant. That’s around 4,000 employees who will lose their jobs.read more...»
The French are worried - in fact they can’t work it out. Just how are the TeamGB cycling team managing to dominate every other nation in winning 70% of the gold medals on offer at the Velodrome? Do TeamGB use “magic wheels”?
If they look carefully, the French will discover that the answer lies in a potent combination of factors that make TeamGB virtually unbeatable - great leadership (coaching); talented riders (raw materials) and an approach to gaining competitive advantage that is based on Kaizen - the concept of continuous improvement.read more...»
When a global brand is forced to cut the selling price of its flagship product by 50% just three months after launch, you just know something is badly wrong!
That is what Nokia has done in the crucual US smartphone market. The price of the Lumia 900 Windows Phone (first released in April 2012) has been cut from $99 to $49.99.read more...»
Microsoft’s takeover of AQuantive for $6.3bn in 2007 must now go down as one of the least successful acquisitions in recent history. In its most recent quarterly results, Microsoft has announced that it is “writing down” the value of its investment in AQuantive by $6.2bn (i.e. just about all of it), to reflect the significantly lower value of the business just five years on.read more...»
There have been some real difficulties handling transactions at RBS, with warnings that disruption to normal banking services may last for several weeks. This is a real headache – not just for RBS who stand to lose millions because of the problem, but for their customers who face a host of difficulties.
Here’s a good opportunity to think through what some of the issues might be.read more...»
A simply fascinating piece of analysis by the respected Asymco website here which breaks down the costs of each individual element of what goes into an iPhone. Has there ever been a better example of added value to show students - though they may be somewhat surprised by how much contribution is made on each iPhone shipped!read more...»
A good article here which analyses the strategic challenges facing Sony and its new CEO Kazou Hirai.
As we’ve reported recently on the Blog, Sony is now undertaking a significant retrenchment strategy, including the loss of over 10,000 jobs (or 6 per cent of its global workforce) over the next 12 months. That sounds a lot, although it ought to be put in some context - Nokia has made over 30,000 job losses since Stephen Elop began his retrenchment strategy!read more...»
Our BUSS4 blog has a series of streamed revision presentations which students may find helpful in supporting their studies ahead of the exam. They are listed below:read more...»
The problems facing Stephen Elop at Nokia just seem to get worse. His retrenchment strategy has been notched up another level with the announcement this morning of 10,000 further job losses (that’s about one fifth of the total at Nokia, excluding those who work at the joint venture with Siemens AG). Will this latest, dramatic move be enough to ensure Nokia’s survival?read more...»