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Luxury Goods - The Decline in Global Demand

Friday, October 17, 2014

It seems that all is not well in the global market for luxury goods. There is increasing evidence of a slowdown in demand for luxury products. One reason is slower economic growth in the emerging economies. The geo-political environment isn't helping either, with unrest in the Ukraine and Hong Kong contributing to consumer unease.  Add in the worries over the Ebola outbreak and a clampdown on public corruption in China - it is not hard to see why demand for luxury goods is weakening.

But, is there another underlying reason - are consumers also getting fatigued with some luxury brands?

This useful FT video explores the issues.

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Choosing a Business Location: Manufacturing in South-east Asia?

Monday, September 22, 2014

Where should multinationals base their manufacturing operations? What are the risks involved in changing location? How can these risks be mitigated? 

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What do you mean by ‘Business Class’?

Saturday, August 30, 2014

Which airline boss has said for many years that “an airplane is nothing more than a bus with wings on”?

Of course, the answer is Michael O'Leary, the CEO of Ryanair - Europe's biggest budget airline. 

But, as Ryanair's passenger figures show that 25% of their customers are actually travelling on business, they have decided that now is the time to introduce a 'Business Class' service.

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Strategy – Multinationals Should Beware the “Local Dynamos”

Thursday, July 31, 2014

The world’s largest multinationals are in a constant search for revenue and profit growth, with many targeting emerging markets as the best source of growth that will satisfy their shareholders.

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Ikea in China - The Classic Long-term Success Story Built on Localisation

Tuesday, June 17, 2014

I suddenly realised that, whilst we've featured Ikea prominently in our exam coaching workshops for a couple of years, we haven't linked to the wealth of resources that are out there to help tell & explain Ikea's strategy!

Here is a selection of the best - certainly contains everything you need to gather relevant evidence for why Ikea is such a timeless case study.

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Starbucks’ Long-term Investment in Leadership of the Chinese Coffee Shop Market

Friday, June 13, 2014

How on earth is Starbucks making a success of its push into China? China is a tea-drinking nation. In fact, China has the world's oldest and largest tea-drinking culture. Chinese people hate coffee – they say it tastes so bitter it is like tasting medicine.

But, look at the evidence. Starbucks has been in China for 13 years, with an initial presence in the major tier 1 cities Beijing, Shanghai and Guangzhou. Starbucks expects China to become its second-largest market by 2014 aiming to have 1,500 outlets throughout China by 2015. The number of staff employed by Starbucks in China is forecast to rise from 12,000 to 30,000.

According to the latest Euromonitor report, Starbucks has a 60 per cent share of China's emerging coffee house market, well above its closest competitor.

That sounds like a success story. So how has it done it?

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From Startup to Global Competitor - Insights into Xiaomi

Saturday, June 07, 2014

This is a terrific article from BusinessWeek on the growth strategy of Xiaomi, a Chinese business that is fast-becoming one of the countries best-known global brands.

Lots in the article (and the related video which I have added further below) for business students to note - I have jotted down some of the things I spotted below.

We've written before about Xiaomi and it is certainly an important business to watch - take a look at the other business blog articles on Xiaomi.

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Tesco in China “20% of something is better than 100% of nothing”

Thursday, May 29, 2014

My students and I invariably use Tesco as our shining example of failure in China (and failure after the departure of a long-term leader, and failure due to over-diversification, and failure due to neglect of their core market, and failure due to complacency over smaller competitors). However, Tesco today finalised the deal with China Resource Enterprise which gives them 20% of the largest food retailer in China. This BBC article could be used as a nice evaluation point to show that in the long term, Tesco could still be winners in China.

Tesco have kept a healthy foothold in the world’s largest food market, and due to China’s efforts to rebalance the economy towards consumption, the market is due to grow by 50% over the next three years.

More interestingly, Tesco appear to have learnt from their error and won’t try to “go it alone” in India. They have announced a joint venture with JLR’s parent company Tata Group to initially open 12 stores. From what we know of Tata (and the Indian market’s rapid growth forecast), it seems possible that Tesco may still recover from their recent slump.

JLR, Lady Gaga and Abu Dhabi go Galactic!

Monday, May 05, 2014

Virgin Galactic is Richard Branson's dream to provide suborbital space flights to space tourists by 2015, and it provides a wealth of Business Studies concepts for AS and A2.

Firstly, the premium price of £150,000 to £250,000 (the cost of decent Rolls Royce to you or me) means it has a very specific target market; over 700 space tourists have signed up, with one third from America (the other two thirds come from over 50 different countries), most are millionaire men in their 50s and are definitely not risk-averse. Akin to Branson, many stated the moon landing of 1969 as the reason for their purchase.

Lady Gaga

In her quest for a new USP, Lady Gaga will be swapping her meat suit for a space one and be first earthling to sing live from space, ensuring that she maintains her outlandish, cutting edge image.

JLR & Virgin

These 2 iconic British brands are expanding the empire, and for BUSS4 students, the long-term partnership between JLR and Virgin, with their “shared vision of pioneering spirit, technological innovation and sense of adventure”, provides information for almost every section of the specification.

The CNBC article focuses on the technological innovations in JLRs new concept SUV.

In this short video, Richard Branson discusses his dream and vision, how JLR will aid Virgin in creating a completely new market and, to show that it’s not all about profit and pride, he hopes it will inspire future generations to pursue careers in engineering and science.

Abu Dhabi and beyond

Finally, Abu Dhabi state-controlled investment fund paid $280 million for a 32% stake in the business, in return for "regional rights to launch Virgin Galactic tourism and scientific research space flights from the United Arab Emirates capital". It sees this as an Investment opportunity to progress from an international tourism hub, to an inter-galactic one, with this article suggesting Virgin space hotels in galaxies far far away!

China’s exports losing low-cost advantages

Thursday, May 01, 2014

Boston Consulting Group have produced a fascinating new report which investigates the competitiveness of the world's top 25 goods exporting nations. Their press release highlights significant changes in the world order over the last decade. The newly-minted BCG Global Manufacturing Cost-Competitiveness Index incorporates four factors: energy costs, productivity, wages and exchange rates. That analysis shows that Mexico now has lower manufacturing costs than China, while Brazil is now one of the highest-cost countries, and the UK is the cheapest location in western Europe.


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China V India - Who will “emerge” victorious?

Friday, April 25, 2014

Hostile government, the threat of a financial meltdown, slowing growth, higher wages and an ageing population. Is China still the best option for foreign investment? 

Compare this to India's younger, cheaper workforce, more welcoming government and forecasted largest middle-class population by 2030.

To allow students to analyse and evaluate the benefits and drawbacks of investment in China , I've attached a research task based on India that gives key economic and demographic information, and looks at the "Indian strategies" for the following Tutor2u BUSS4 Top Ten businesses: JLR, Starbucks, KFC, Apple, Samsung and Ikea.

Good luck with the revision this term!

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.

Google Glass, Geeks and Loons – Overcoming Barriers for Product and Market Development

Wednesday, April 02, 2014

Two very interesting stories regarding Google’s intentions of world domination (in a nice way) via innovation, product and market development.

Firstly, in an effort to “de-dorkify” the Google-Glass and appeal to a wider audience, Google have struck a deal with Luxottica (the makers of Ray-Bans and Oakley sunglasses) to design the wearable device. The deal looks promising and Luxottica’s share price increased 4% after the deal. At the same time, Google founder Sergey Brin has been denigrating mobile phones saying that they are socially isolating, with “people walking around hunched up, looking down, rubbing a featureless piece of glass”. This is a great example of how Google are trying to push what they hope is their next rising star by challenging accepted norms about how we currently interact.

Secondly, to “connect the two-thirds of the world's population which does not have affordable net connections”, Google has launched Project Loons, which consists of floating balloons laden with 3G equipment into the skies over lesser developed countries. The driving force behind this is of course altruistic, with an ancillary benefit being that billions more people will use Google services. Moved by this act of philanthropy, Facebook intend to do the same, but using solar-powered drones instead!

Perfect stimulus for discussions for Ansoff’s Matrix, Boston Matrix, Innovation, Competition, Overcoming barriers, CSR and Strategic planning.

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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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.

BUSS4 China - Cathay Pacific China Business awards

Tuesday, February 25, 2014

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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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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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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Apple v Samsung Research task

Monday, February 03, 2014

Does the combination of Apple’s falling sharing price and market share, their perceived lack of innovation post-Jobs and Samsung’s cross-licensing deal with Google spell trouble for Apple?

Attached is a 10 slide PowerPoint (Apple_V_Samsung_Research.ppt ) with infographics, hyperlinks, videos and questions that can be used to help students research the two tech giants.

As with the “Will Google rule the world” post, the lesson covers most of the following BUSS4 topics:

  • Mission statements & corporate objectives
  • Globalisation and emerging markets
  • Technological change
  • Leadership
  • Culture

Hope it helps!

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 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 - the foundation of British Airways Strategy in China

Monday, January 27, 2014

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

Saturday, January 18, 2014

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

Wednesday, January 01, 2014

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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Combat flip flops - bad for running, worse for fighting

Sunday, December 15, 2013

This is the tag line of a US start-up business whose story appeared on the BBC website this week, and it is a great story.

It has all the best elements of entrepreneurialism, and would be very much at home on Dragons Den. Matthew Griffin, a US soldier spots a rather obscure similarity between two markets which could not be more different - the US and Afghanisan; a change of career gives the opportunity to start up a business; he gains funding and support from family and friends; he makes successful prototypes but then has stumbling attempts to find a reliable manufacturer - which result in setting up production at home in the garage; he has orders but difficulty in finding the capacity to meet the current level of demand; and the set-backs he meets result not in abandoning hope but in seeking alternative solutions to the problem.

Ultimately the business has strong social entrepreneurship objectives, as it aims to bring jobs and security to factories in Kabul. It is selling, and has many orders on its books, which it cannot fulfil from the garage at home. The idea is to find funding to take a mobile flip-flop factory to Afghanistan, and it that is successful, Mr Griffin hopes the concept can "be extended to other former combat zones, to help provide employment and boost their economies". In the meantime, Combat Flip-Flops continues to also sell both sarongs and scarves that are made by Afghan women.

If you are still looking for a Christmas present ideas, this could be the answer. Although at around $70 a pair they are not cheap!

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 - 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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China’s Economy - Addicted to Debt?

Much of China's recent economic growth has been financed by debt, particularly bank loans. When the global economic slowdown bit, China responded with a massive programme of infrastructure investment that was funded through debt. The FT video below examines the implications of this approach.

Debt is starting to take a toll on China, its people and businesses. So long as China was able to grow incredibly quickly, China was able to finance its debt. However, it might prove harder to sustain that as China's economy enters a period of slower growth.

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Crocs Takes on China’s Copycats

An interview here with the CEO of Crocs - John McCarvel.

Crocs counts China one of its biggest markets, but its sales are threatened by lookalike products from many Chinese companies, highlighting the risks of businesses outside China losing some of their intellectual property when they trade in China.

Why is it important for Crocs to fight counterfeiting in China when many other businesses don't bother? McCarvel explains that the reason lies in Crocs being a mass-market product which has invested a lot in its brand. It is worth fighting for!

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The Five Biggest Challenges to Doing Business in China

Saturday, November 02, 2013

A terrific six minute video here which highlights and then explains five key challenges for a business outside China wanting to do business in China. Well worth a watch. An underlying theme across the challenges is how businesses outside China can reduce or manage the risks involved in entering Chinese markets. China poses quite distinct risks, particularly around the lack of information, the different culture of doing business, the role of government and the importance of local relationships.

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Starbucks Pricing Strategy Under Attack in China

Where would you expect a Starbucks latte to be cheaper - in a coffee store in downtown New York or in a Starbucks store in China? Keep in mind that per capita incomes in China are around one tenth of those in the United States.

The answer may come as something of a surprise!

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The Empty Cities of China

Monday, October 28, 2013

This video report from Australia's SBS programme is 15 minutes long but is well worth viewing.

A couple of years ago the channel's cameras first reported on the phenomenon of "ghost cities" in China - the result of vast investment in housing, commercial and other property infrastructure to support the process of urbanisation in China. Whilst demand still exceeds supply in the major Tier 1 and Tier 2 cities in China, in other places whole cities have been built with almost no-one to live in them. Quite extraordinary. Take a look.

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BUSS4 China - Osborne and Johnson in China

Tuesday, October 15, 2013

With the high-profile visits of George Osborne and Boris Johnson to China this week, there is a glut of resources available on the BBC website which could be very valuable to BUSS4 research.

Here are links to just a selection:

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Haier Delayers to Encourage Innovation and Teamwork

Sunday, October 13, 2013

A fascinating and useful profile here from The Economist of Zhang Ruimin, the Chinese entrepreneur who has guided Haier through a successful strategy of international expansion.

Ruimin challenged the preconception that Chinese manufactured goods could be produced very cheaply but to a poor quality. His relentless focus on higher production quality has enabled Haier to become the world's largest producer of "white goods" such as washing machines, fridges and freezers.

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A Golden Hour on Radio 4 Archive

Saturday, October 12, 2013

"The 20th Century was about dozens of markets of millions of consumers. The 21st Century is about millions of markets of dozens of consumers."

So said Joe Kraus, founder of a search engine called Excite in the middle of the 1990s. Never heard of it? That's not surprising; in 1999 it was a $6.7bn enterprise with hundreds of employees, but a year later the dot-com bubble burst and it disappeared from the market place. But this quote is one of in an article about Peter Day's Radio 4 Archive programme to be broadcast tonight, and already recommended by Michael Owen in his blog below; forgive me for this repetition, but this is such a brilliant article that it really merits a second look, and hopefully between us we will convince you of that!

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