OCR A2 Economics Unit F585 June 2013 | AQA A2 BUSS4 | AQA AS Applied BS03 | IB B&M Royal Danish Bearings | OCR AS Business F292 | OCR A2 Business F297 | OCR AS Applied F242 | OCR A2 Applied F247
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Runner’s Up League and Cup Double
How far did the management style of Roberto Mancini contribute to his removal after the FA Cup defeat?
Mancini was the most successful manager of Manchester City's 23 managers hired after the retirement of Joe Mercer in 1971. He took the club to 2 FA Cup Finals, and City thrashed Manchester United 6-1 on the way to winning the Premier League with almost the last kick of the 2011-12 season.
read more...»Strategy: Kazou Hirai and the Forgone Bonuses
For Sony's CEO Kazou Hirai - a promise is a promise.
Back in April 2012, when Kazou Hirai took over as CEO from Sir Howard Stringer, he pledged to restore Sony's troubled Consumer Electronics division to profitability within one year.
In a significant programme of retrenchment, Sony has shed over 10,000 jobs (about 6% of the workforce), sold off major property assets and substantially cut production at the heavily loss-making Sony Television business (which is a significant part of the Consumer Electronics division). The result is expected to be Sony's first corporate profit for five years when it reports final result for the year to 31 March 2013 in May. However, the Consumer Electronics division remains unprofitable - Sony has not met its objective.
The reaction by Hirai? It is reported that forty of Sony’s top executives, including Hirai, are to give up bonuses worth between 30 and 50 per cent of their pay. The decision will save Sony around $10m, which is not particularly significant in financial terms.
read more...»The role of Business culture in business turnarounds
This week's edition of The Bottom Line, hosted by Evan Davis on Radio 4, is about business turnarounds. The three guests this week have all been involved in rescuing companies and they share
their experiences, in which the culture of the organisation feature heavily. For those who are picking up on the tutor2u 10 companies to study, it is particularly useful as the first of these is Adam Crozier, Chief Executive of ITV
(and former CEO of Royal Mail). Different scale is offered by James Eden, Chief Executive and owner of
clothing brand Private White VC, and Nick Sanders, Head of Portfolio at
private equity firm Better Capital. Well worth getting students to listen and to write some compare-and-contrast notes.
Researching the Royal Mail - A Great Case Study in Change Management
Royal Mail is fast becoming a must-cover case study for advanced business students. Royal Mail is now well into a significant transformation programme under the leadership of CEO Moya Green. The business is preparing for and approaching privatisation and faces intense competition in the profitable parcels business.
So I thought I'd dig out a few links which might help students get started with exploring the Royal Mail case study.
read more...»Nokia: Is A Slimmed-Down, More Agile Business Starting to Sing?
A good update here from the ever-excellent Andrew Hill at the FT on the strategic progress being made by Stephen Elop at Nokia.
Is it really two years since Stephen Elop issued his infamous "burning platform" memo to the employees and management of Nokia which explained the dire strategic position the business was in?
Days later Elop announced his decision to partner with Steve Ballmer's Microsoft to use the Windows mobile operating platform. Tens of thousands of Nokia employees have lost their jobs since as Elop has pursued a dual strategy of aggressive operational retrenchment, closing 200 of its 500 locations worldwide.
The Nokia organisation structure has been significantly streamlined to encourage more effective teamwork and collaboration. The share price has risen strongly in the last 6-9 months (after sharp falls in early 2012) and Nokia's new product ranges seem to be better received.
I sense a turning of the tide for Nokia - and for business students it remains one to watch closely.
Nokia: Elop on Culture, Technology and the Economy
A brief interview here with Stephen Elop in January 2013 which will be useful for teachers & students following the progress of Elop's turnaround strategy for Nokia.
Nokia is currently going through a significant change programme. Elop explains how the firm has focused Nokia employees on three key behaviours that are expected to drive the change in culture that Nokia needs: accountability (taking responsibility), urgency (doing things quicker) and empathy (being less arrogant).
Elop also explains briefly how the external environment is providing increasing threats to Nokia which needs increased planning and thinking.
read more...»Findus hurdles to uncertainty
If you had lasagne last night you might be wondering if it was the last remains of the non-running hurdler "100% Pure Beef". Findus have a major problem to resolve after tests showed that their lasagne had been made from horsemeat.
read more...»
Explaining changes in business performance with the help of Radio 1
I had been guilty of listening to radio 1 in the past on my cycle in, very useful to get starter ideas or discussion points for GCSE business-Recent changes in the radio 1 product strategy has meant I have switched back to radio 4 (I wish 5 live was on FM!) so good news for my economics class, not so good for my GCSE class! In the Daily mirror today, was a very accessible rport on audience figures- I plan to use it for GCSE to consider segmentation and product extension, for As to support marketing and A2 to support strategy -In the document which I have had put onto TES I have also included some questions on the data to give A level students (and the quicker GCSE students) a chance to number crunch.
Answer are on the final page- Please check before use!
Van Houten abandons the CD
Koninklijke Philips Electronics N.V appointed Frans van Houten as Chief Executive in April 2011. The new CEO has reviewed the group's operations, and has taken decisions to reshape the firm.
read more...»
Planet Money
My students know that I love the radio. Many a spare half an hour can be whiled away with a podcast of The Bottom Line (which returns on Thursday/Saturday this week), or More or Less, or Peter Day’s World of Business. And the great thing about this form of learning is that it can overlap with other tasks – there’s no opportunity cost! Listen to a business/economics podcast whilst at the gym, going for a run, doing the washing-up, whatever…
But whilst Radio 4 is well-scouted territory, but one students might not be so familiar with is NPR’s Planet Money. This show, from America’s public radio, is quite close in style to R4’s More or Less with a more of a business focus. 2 fifteen minute shows are podcasted a week.
This edition is a great place to start.
Changing the Organisational Culture - Clean Up or Clear Off!
Is it possible for a new CEO to achieve significant change in the culture of an organisation? Managers and employees at Barclays are about to find out!
read more...»Now Blockbuster fails ... is the High Street dying?
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...»The HMV story
A lot of people will be saddened - but probably not shocked - by the news that HMV looks like it may be the latest casualty amongst big-name retailers. There's a lot of coverage of this story, so I've put together several links and questions to encourage you to consider some independent research on what's gone wrong, and what may be the way forwards from here.
I'm enjoying using Storify at the moment, and the links and suggestions for the HMV story are all posted here.
Retrenchment Strategy - Are Things Looking Better for Nokia and Stephen Elop
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...»Jessops goes into Administration Is the Niche Market a Tomb?
This afternoon The High Court appointed PricewaterhouseCoopers as Administrators of Jessops the high street camera retailer. The company has debts of £80m.
read more...»Do big profits mean that Royal Mail will leave the public sector?
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...»Deal or No Deal
As the October 10th deadline approaches, the board of BAE face significant difficulties to
complete the proposed merger with EADS.
Apple One Year On
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..
Retailers that have collapsed in 2012
This isn't meant to be depressing, just a possible stimulus for a discussion about businesses that have failed already this year.
read more...»BAE EADS - Will the merger stall or take off?
The BAE EADS merger proposal ought to help pupils attempt develop analytical skills using PESTLE, SWOT or stakeholder models. Can you use these management tools to develop your analysis and evaluation and go beyond application and understanding?
The New Wii U
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.....
Up Up and Away
British Aerospace (BAE Systems) and EADS announced that they are discussing a merger.
Revision Quiz - Change Management
This new revision quiz provides 10 questions on change management each time it is launched. The questions will change each time.
Launch Revision Quiz - Change Management
Leadership and Change: CEOs have less time to Succeed
An interesting evaluation point here for students who need to consider the potential for new leadership to achieve strategic change. Will a new CEO be given enough time to develop a successful, sustainable long-term strategy?
read more...»The buck stops here or here or here.
The allegations of price fixing of Barclay’s LIBOR rates have led to the resignation of The Chairman Marcus Aegis on Sunday night, politicians, and journalists wondered if Bob Diamond, The Chief Executive ought to be on his way out instead.
read more...»Bank computer glitch gives an insight into contingency planning and the importance of cash flow
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...»Retrenchment in the Public Sector
The business news is full of stories covering the retrenchment strategies of various private sector firms such as Nokia, Sony, Thorntons, HP and others.The large job losses involved generate lots of headlines and in-depth analysis of whether the retrenchment strategy will work. We’ve been tracking some of these stories for students using our ResearchBuster on Retrenchment.
However, students need to be aware that retrenchment strategies are not just reserved for the private sector. Public sector organisations have been affected just as much by decisions to reduce and change the scope of operations and activities. Here are a few useful research examples to add to student notes.
read more...»AQA BUSS4 Revision Presentations
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...»More Retrenchment at Nokia (June 2012)
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...»Nokia and Strategic Change - the Essential A2 Business Case
I can’t think of a better case study than Nokia for students to research as an essential part of their advanced business studies. Nokia is a global brand, a market leader and a firm rich in heritage. But it is now battling for survival in a strategic crisis caused by a range of external and internal factors that are core to A2 and similar business strategy specifications. In this note, we’ve outlined some of the main strategic issues facing Nokia and linked to recent supporting resources which students should examine. A well-prepared student getting ready to wow the examiner with relevant evidence-based research in an essay should be ready to include Nokia in an answer!
read more...»BUSS4 - a clash of culture and a failed takeover
BUSS4 students really need to read this one - it offers good, strong evidence of the problems of takeovers and mergers including difficulties integrating businesses successfully. Last year Hewlett Packard bought Autonomy, a Cambridge software company, for $10bn. This year they have a 31% fall in profits and plan to cut 27,000 jobs (about 8% of their workforce) by end of 2014 in order to reduce costs by up to $3.5bn (£2.2bn) a year. As many business reports say, the move was part of a “productivity initiative designed to simplify business processes” and is down to their inability to keep up with products such as the iPad which eats into HP’s laptop sales.
HP haven’t announced where those staff cuts will be made yet, but a key news announcement yesterday was that Mike Lynch, who founded Autonomy and built it from a small start up founded with a loan of £2,000 from a man in a pub to the UK’s leading technology company, is to be replaced. HP seems to offer a classic case of Charles Handy’s Role culture with layers of bureaucracy which, critics say, has stifled the entrepreneurial spirit of Autonomy’s Power culture which focused on Mike Lynch who was used to making his own decisions and still based on a simple start-up structure. A BBC Business Correspondent reports that
“His drive and entrepreneurial flair was fundamental to the growth of the firm. Although many people found him difficult and demanding to work for, he was held in awe by rank-and-file staff. (compare Steve Jobs - similar comments are made about him.) That’s why Autonomy’s 300 Cambridge staff are worried about the future. One man, who declined to be identified, said: “Without Mike, we have a grim outlook. He was the reason many people work here. A brain drain of senior people is already under way.”
In that brain drain 20% of Autonomy’s staff have recently left including the President and Chief Finance Officer. The Independent reports on the culture clash saying that
“Autonomy hasn’t been performing the way the computer giant had hoped. HP wants big deals, sealed quickly, and the Autonomy style of working just hasn’t fitted in” - this article is really worth reading for its analysis of the problems in this takeover and others in which the entrepreneurial flair which brought small businesses to the attention of large ones has caused difficulties in achieving the business growth and synergies which were dreamed of.
Other useful resources on this story - a BBC video report examining the reasons for HP’s diffuculties and the management style at Autonomy, and a profile of Mike Lynch from The Telegraph. As Lord Sutch would say, business studies gold dust!
Mazda make light of formal tie up with Fiat
In the 1980s and 1990s, Ford embarked on a series of takeovers Jaguar, Volvo, Land Rover, all of which were sold off to meet the firm’s liabilities. It also had built up a substantial stake in the Japanese Mazda company, holding almost 1/3 of the share capital, making a successful bid by rival multinational car makers less likely.
Today’s business news included an announcement that Mazda was forming an alliance with Alfa Romeo develop a new two-seater rear-wheel-drive sports car.
read more...»Rising to the top of the milk
Two cooperative firms Milk Link (Moo milk, Gervik, Caradog cheese) and Arla Foods (brands include Cravendale, Lurpak and Anchor) are to merge.
read more...»Epic fail: how to do really badly
This is a light hearted one, aimed particularly at those of you preparing for exams. It’s got nothing to do with exams really, just reflections on Disney’s mega flop “John Carter” in The Economist, which is said to have made a loss of over £200m and cost the boss his job.
Are there any common patterns behind famous marketing failures?
Vodafone and Cable and Wireless Worldwide
Cable and Wireless Worldwide has 20,500km of fibre-optic cables in the UK, owning this would mean that Vodafone doesn’t have develop a network from scratch, estimated at £5bn. Vodafone like other mobile operators needs additional capacity to cope with the increased use of smartphones - downloads of music, video, photos etc.
read more...»Predictions of a dramatic change in the way goods are produced - and how it may change business
Those of you who are looking at business production, or operations management, (especially in A2 courses) will certainly want to read this week’s Economist either in the library, or by getting their own copy from the newsstand.
They are predicting a new industrial revolution, with a potentially enormous impact on all industries.
Flaws in Tesco’s strategy
BUSS4 students can accumulate some useful evidence about changes in business strategy by examining the reasons for Tesco’s fall in UK profits, and their strategy to reverse the trend. There is an opportunity to do some ‘compare and contrast’ with the strategies of other businesses which are struggling to turnaround disappointing business results such as Nokia and others that have such as BA and Starbucks.
read more...»Life and leadership at BA after Willie Walsh
This is an interesting article that I came across while looking for updates on how industrial relations and strike threats have been progressing at BA over the last year or so - the article was published last September so apologies if you are already familiar with it, but I think it is well worth reading.
read more...»Organisational culture, strategy and performance in fewer than 1000 words
Tuning into the news last week I was not surprised to see the Met Police once again under the spotlight for all the wrong reasons (http://www.bbc.co.uk/news/uk-england-london-17636776). Described as suffering from ‘institutional racism’ by the MacPherson Report in 1999 it appears not a lot has changed at the Met police in the almost 20 years since the racially motivated murder of teenager Stephen Lawrence. So what exactly is going on?
read more...»Revision Presentation - Change Management
This revision presentation provides an overview of the topic of change management in the context of business strategy. It highlights the main theories on change management including Lewin’s Forcefield analysis as well as providing some examples of recent change management case studies
read more...»Revision Presentation - Business Culture
This updated revision presentation provides an overview of the concept of business culture, specifically in the context of strategic decision-making and change management.
read more...»Revision Presentation - Retrenchment
This updated revision presentation looks at the strategic topic of retrenchment. It provides an overview of the reasons and methods of retrenchment, some recent examples, and also considers the implication for change management.
read more...»Froth on the beer versus froth on the coffee?
A short BBC video on Whitbread’s huge strategic shift from brewing to retailing coffee and budget hotels.
Whitbread abandoned beer brewing and pub retailing and off licence sales, an industry in which had been a significant presence since 1742. By 2001, the sector had low profits growth and declining sales. Capital has been diverted into areas with higher growth coffee shops and budget hotels. Whitbread’s main brands include Costa Coffee, Premier Inns.
read more...»Takeover insights: Kraft & Cadbury - Justifying the Deal
This 10 minute interview in Autumn 2010 by Bloomberg with Kraft Foods CEO Irene Rosenfeld provides some useful perspectives on the strategic rationale behind the Kraft takeover of Cadbury. Obviously presented with a US business audience in mind, but still hugely useful for A2 business students (particularly AQA BUSS4) none the less…
read more...»Vestas – has the wind gone out of their sales.
Last Wednesday, Vestas the leading supplier of wind turbines posted a substantial operating loss of €166m on its operations. This has led to the resignation of the Chief Financial Officer Henrik Norremark, and the Chairman Bent Carlsen and two other main board directors. Norremark was about to be promoted to Chief Operating Officer, in control of the firm’s manufacturing operations.
read more...»Insights on takeovers and mergers from KPMG’s 2011 global survey
I’ve spent a day reading through a detailed analysis of global takeover and merger evidence (“M&A”) written by accountants KPMG in 2011. The report is both comprehensive and complex. However, it contains some useful insights for students and teachers researching the key strategic issues raised by M&A. I have highlighted and summarised some of the key findings below.
read more...»Buying-in to the Facebook culture
Want to buy shares in Facebook? The desire to buy-in to a business which has had such a revolutionary effect on communications will surely be huge. It almost feels like the emotional decision that football fans make when they buy shares in their beloved club. But the canny investor will analyse what they are investing in: is this a business decision in which they can examine the ratios and then the founder’s or directors’ mission statement, in order to assess their chances of gaining a suitable return on their investment?
read more...»Glenstrata - Glencore proposes merger with Xstrata
Yesterday morning’s business news has been dominated by the proposed merger of Glencore and Xstrata. Glencore’s 34% holding of Xstrata shares had made a third party approach for Xstrata very difficult if not impossible.
read more...»Mastering the art of merger integration
As the BUSS4 research topic reaches the students it is useful to be able to steer them towards something to get the process started. Finding something they can do alongside other work should help to motivate them as they feel their way into the topic.
read more...»Integration, integration, integration
HP is an example of a firm which is struggling to integrate acquisitions, and the perils of diversification.
