AQA BUSS4 Research Theme for 2015 - Manufacturing in the UK

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Never mind the price cuts

Thursday, January 08, 2015

Headlines about Tesco's latest price cuts and trading figures (down by 0.2% on like for like sales)  mask some other significant actions. 

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How extraordinary, how exceptional, how unusual.

Monday, December 22, 2014

The run up to Christmas has been seen as a good time to bury bad financial news, however Tesco's auditors, Price WaterhouseCoopers now face an inquiry over the preparation and auditing of Tesco accounts from 2012 onwards. The Financial Reporting Council is the independent disciplinary body for UK accountants and actuaries.

It is possible that this inquiry could lead to pressure to break up the oligopolistic nature of auditing, currently dominated by 'The Big Four', viz.  Deloittes, Ernst & Young, KPMG and PWC. Ultimately it is up to the politicians to decide that this sector needs to be shaken up. 

2014 has been a particularly grim year for Tesco, and it's new CEO, Dave Lewis, still faces the challenge of restoring shareholder and customer confidence. 

UK Manufacturing and Porter’s Five Forces

Wednesday, December 10, 2014

The case of Premier Foods and the 'pay to stay' payments that they were extracting from their suppliers gives an opportunity to use the Porter's Five Forces model to analyse the food manufacturing industry in the UK. Last week, BBC's Newsnight carried a report about Premier Foods, who manufacture many key brands including Ambrosia, Mr Kipling, Oxo and Bisto.

The online report comes with a 5-minute video clip which sets up the topic nicely. Newsnight's Laura Kuenssberg interviews engineer Bob Horsely, who had a contract to supply maintenance services to Ambrosia's factory in Devon. He received a letter from Premier Foods saying that "We are aiming to work with a smaller number of strategic suppliers in the future that can better support and invest in our growth ideas. We will now require you to make an investment payment to support our growth." When he queried this, he received another letter: "We are looking to obtain an investment payment from our entire supply base and unfortunately those who do not participate will be nominated for de-list." In other words, pay up or we won't buy from you any more. 

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Tesco’s fall from grace

Tuesday, September 23, 2014

Tesco's share price slid again today, although the firm has announced that the new Finance Director Alan Stewart started work three months earlier than expected. 

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Every little counts against Tesco

Monday, September 22, 2014

News about Tesco's troubles comes thick and fast, today's bad news about overstating profits has wiped off 11.59% of the share price. It fell by 26 pence to £2.03.  

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Market Segmentation for Politicians

Wednesday, March 26, 2014

Are you optimistically content or in long-term despair? This BBC article is a must for any students taking both Business Studies and Politics.

Pollsters Populous have created a test to tap into the mindset of voters, understanding that the traditional demographics such as age and postcode are too vague.

It segments the electorate into 6 categories and demonstrates the percentage of voters for each political party, stating that this will enable them to “craft TV ads, speeches and photo ops that appeal to the groups they need to win over."

Students can take the 3 minute test and evaluate the usefulness of this method of psychological market segmentation and suggest the messages that leaders must use to expand their voter/customer base.

Even St Anthony can’t change the culture at Barclays

Monday, March 10, 2014

In 2012 Anthony Jenkins (nicknamed “Saint Anthony”) succeeded Bob Diamond and promised to clean up Barclays and eradicate the worst excesses of the banking industry. Speaking to those who received huge bonuses for unscrupulous behaviour, he said “my message is simple: Barclays is not the place for you. The rules have changed. You won’t feel comfortable at Barclays and, to be frank, we won’t feel comfortable with you as colleagues”.

Despite this, profit dropping 32% to £5.2bn, and making 3,700 jobs cuts last year:

  • Jenkin’s himself pocketed just under £5m in shares
  • Staff paid over £1m increased from 428 to 481.
  • The bonus pool increased 10% to 2.4b

The justification for this? Many senior traders have left, or threatened to do so, and to keep hold of the top earners, he had to offer top pay. Had he not, the investment wing of Barclays would have plunged into a “death spiral”, with staff and high-value customers going elsewhere.

This is part of the bigger issue regarding European Commission’s rule to reduce banking bonuses, how George Osborne is fighting the decision and why, it would seem, he really didn’t need to as bosses of RBS (81% owned by tax payers) and HSBC also side-stepped the rule by giving large “fixed pay allowances” in the form of shares.

This story always provides great impetus for emotive debate on BUSS4 topics such as government intervention, culture, pay and leadership.

Government (or governing body) Intervention: Man City, Benefits Streets & Universities

Sunday, March 02, 2014

The attached PowerPoint (In_the_news_last_week_Gov_Int.ppt) links three current stories from sport, media and education and asks “should governing bodies intervene or should the invisible hand of free markets be left unchecked?”. In each case, students can discuss the merits and shortcomings of regulation in the respective industries, and explore the reasons for intervention in the first place.

The lesson works as a nice starting point and leads naturally to further research on Adam Smith and Milton Friedman.

Hope it helps!

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

Tuesday, February 25, 2014

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

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

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

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

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

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

Customer service in the rail industry

Saturday, February 22, 2014

Did you know that most train operating companies will refund 50% of your ticket for a delay of 30 minutes or more, and will double that if the delay is for an hour or longer? And that, if you are travelling by tube, Transport for London offers refunds if your journey is delayed by 15 minutes or more (although you won’t get a refund if the delay is caused by a security alert, “third party action” such as a strike or bad weather)? Most probably you didn’t, as a survey by the Office of Rail Regulation has found that more than 75% of rail passengers know “not very much” or “nothing at all” about what they are entitled to when services are disrupted.

The report also found that 74% of passengers felt that train companies do “not very much” or “nothing at all” to proactively provide information about compensation when there are delays. As Simon Gompertz found in this video report, there are plenty of ways in which the train operating companies could make the information available, whether through instructions on the back of the tickets and announcements on trains to use of technology through their websites or apps.

This poor standard of information for customers is now to be improved. The ORR will now oversee the development of a code of practice on provision of ticket retail information, which will be in place by the end of 2014 and will provide clarity on what information passengers can expect from their train companies, including information on the different types of fares, restriction, and key terms and conditions, such as compensation and refund rights.

The government are also making compliance with these requirements part of their new franchising arrangements, to add to the regulation of the industry.

In the meantime, if you have had a journey delayed recently and want to claim compensation, here’s some guidance on what you might be entitled to.

Cantona given another red card.

Wednesday, February 12, 2014

I'm rather bitter that Eric Cantona one of Manchester United's best former players has been banned by The Advertising Standards Agency today. 

Watch the clip and try to work out why this has happened.

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What is wrong with this advert?

Wednesday, January 29, 2014

What is wrong with this advert? Produced as part of a safety campaign by Cycling Scotland, the Advertising Standards Authority has banned it, so it can no longer be shown on tv.

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BUSS4 The impact of legislation relating to business, and the government’s Red Tape Challenge

Tuesday, January 28, 2014

Yesterday, David Cameron told the Federation of Small Business conference that more than 3,000 rules affecting business are to be scrapped or amended, saving more than £850m a year. BUSS4 students need '...a broad understanding of the scope and impact of legislation relating to business', and will be well aware that the legislation adds to business costs. Cameron is proud to say that his government would be the first in modern history to end a term in office with less regulation on the statute books than when it came into power.

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Business Ethics & CSR - GSK Promises to be Good

Wednesday, January 01, 2014

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

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Co-Op Bank Elastic Ethics, Political Interference & Blind Regulators

Wednesday, November 27, 2013

The recent trouble at the Co-Op Bank Group highlight numerous weaknesses amongst the management which have damaged its ethical reputation and USP. “Friendly” banks – that is, a wide variety of types owned by members and customers rather than shareholders – are hugely popular around the world, with an estimated 20 per cent of the market for deposits and loans in Europe alone.

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Furniture Retailers Carpeted for Misleading Pricing

Friday, August 30, 2013

The Office of Fair Trading is investigating potentially illegal pricing activities by six furniture retailers. It all relates to the use of price discounts.

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Ethics & Competition: Chocolate Price Fixing in Canada

Thursday, June 06, 2013

This simply couldn't be worse news for two multinational giants in the global chocolate product market. Authorities in Canada have charged the food giants Nestle and Mars, together with a network of independent wholesale distributors, in an alleged conspiracy to fix prices of chocolates. Hershey is also involved - but they appear to have confessed to the illegal price-fixing activities and will be hoping for relatively lenient treatment in return for cooperating with the Canadian authorities.

Price-fixing is illegal - plain and simple. But it's also unethical. To be caught out price-fixing is to be caught acting against the interests of consumers. Not a good place to be if you are a global brand that values its reputation.

Nestle and Mars have both denied the alleged behaviour and have vowed to fight the legal action:

Nestlé said in a statement:

“Nestlé Canada will vigorously defend these charges. At Nestlé Canada, we pride ourselves on operating with the highest ethical business standards.” 

Mars issued a similar promise to fight the allegations.

Time will tell whether price fixing has actually taken place.

But what is price-fixing?

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The Ethics Bank

Sunday, May 26, 2013

The Co-Op has keen to highlight their ethical credentials as a key part of its marketing and positioning strategies. Supporters claimed that its mutuality was a more desirable form of ownership than PLCs.

The Banking Division has run into difficulties, and there have been significant changes in personnel within the last few weeks, in part as a response to major financial problems. On Friday there were reports that it had stopped offering loans to new business customers, and today The Independent on Sunday reported that The Co-Op Group's Finance Director Steve Humes had resigned. This followed the recent resignation of Brian Tootell  after Moody's downgraded the Bank's bonds.

Mr Humes The Group Finance Director for the last two years, had been involved in managing the Co-Ops food operations, and may have had insufficient experience of its banking operations. Euan Sutherland the Co-Op's new CEO who was appointed in May, could be about to make significant changes in other key management positions.

The decision to stop lending to new business customer may imply that the there may be insufficient capital to support current obligations let alone new loans. The ethical bank may be about to meet its most serious crisis. 

Business response to the economic environment: zero hours contracts

Saturday, May 18, 2013

From the employer's point of view, a zero hours contract is a great example of the benefits of the flexible labour market. They allow the employer to change the number of hours an employee works each week, with more shifts offered when they are busy, and fewer when they are not; costs can therefore be controlled and matched more exactly to revenue. They are particularly popular with the fast food outlets like McDonalds and Subway, and high street chains like Boots and Sports Direct. Those employers draw heavily on the younger end of the labour market, with many of their staff being students who are looking for flexible shifts that work around their study hours; for them a zero hours contract may work well. However it is also important to consider whether this will have a detrimental effect on the business's culture;  with a high proportion of staff working irregular hours it may become much more difficult to instil a culture and sense of identity with the organisation.

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Co Op Bank’s USP vanishing trick

Friday, May 10, 2013

One of the strengths and a key component in the Co-Op Bank's USP after recent banking problems - sub-prime lending, collapse of Northern Rock and LIBOR rate fixing, was its emphasis of ethical banking.

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Ethics, supply chains and consumer responsibility

Tuesday, May 07, 2013

The horrific Bangladesh factory disaster has highlighted a number of business issues and proved a stark reminder of the global effects our purchasing decisions may or may not have on people halfway around the world. Tom White has already put up a blog with some initial thoughts; I thought I’d pose some further questions and examine some of the issues raised in that post.

A great starting point would be to listen to the ever-reliable Business Daily, from the BBC World Service. Their programme In the Balance invites guests to debate a topical business issue, and this week, the Rana Plaza disaster was under discussion.

One of the first questions to ask is to examine the extent to which firms which are supplied by such factories are responsible. There were more immediate causes, of course, such as the owner’s actions and the culpability of local regulation and enforcement (or lack of). But this is not the first time there have been such disasters, nor are the poor conditions in such factories surprising. So is it right that chains such as Primark continue to use such suppliers? Isn’t it their fault, with their demands for low prices and increased flexibility to meet the needs of the fast fashion market? Do they have a responsibility to ensure fair and safe working practices in factories they don’t own and which they are merely customers of? A lot of people would argue that yes, they do. But isn’t that the same as arguing we as consumers should audit the supply chains of the shops which we buy from? Primark is as much a customer as we are.

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Reflections on the Bangladesh factory disaster

Monday, May 06, 2013

You may not want to dwell on this topic, which is so terrible that I am sure your first reaction to what has happened will have been highly emotionally charged.  The scale of the tragedy only seems to grow, with the situation perhaps made worse by the realisation that these events are very typical of working conditions in many countries.

I've been putting together some links to encourage a bit of reflection on what, if anything, we can learn.

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Political Risk: Global location and PEST analysis

Friday, March 22, 2013

Sometimes students get a bit stuck on the politics part of PEST analysis.  How are businesses affected by politics?  Lots of examples come up on the T2U Business blog.  Firstly, politics is the law, and business legislation has a dramatic impact on firms.  Then comes a bewildering array of regulations and tax implications.  If you think that's complicated, consider the difficulties of making international location decisions.  (I was wondering what might have brought BMW to the UK last year).

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Findus hurdles to uncertainty

Friday, February 08, 2013

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.

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Virgin Mary crisps withdrawn by Pret.

Saturday, February 02, 2013

Selecting a memorable brand name for a product is fraught with linguistic and cultural difficulties. A week ago, Pret A Manger had launched a spicy tomato flavoured crisp " Virgin Mary", based on the non-alcoholic version of a Bloody Mary cocktail.

After complaints from members of Protect The Pope, a Roman Catholic presure group; Pret A Manger’s CEO Clive Schlee removed the product from sale and apologised to The Church, he announced that the unsold packets of crisps will be offered to the homeless.  Although no laws were broken, and no politician had expressed concern, it highlights difficulties associated with a firm's ethical behaviour - whose ethics, whose values drive what is acceptable to society.

The new product drew attention to the brand, but it illustrates the importance of PEST analysis and Delphi techniques before a product is launched, it also indicates the influence of new media and blogs used by pressure groups to influence opinion and commercial decisions.

Planet Money

Tuesday, January 22, 2013

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.

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Stakeholder conflict - the battle over rewards of work

Saturday, January 19, 2013

Investors vs Managers vs Employees - a classic example of stakeholder conflict - is to be examined in a 30-minute radio programme on Monday evening, spotted by my colleague David Wright and of potential value to teaching Business Studies as well as Economics. Radio 4’s Analysis series will be looking at “ the relative power of executives has grown and is now reflected in their own much higher financial rewards and enhanced esteem. And if both workers and investors want to increase their influence and their share of the rewards how might they go about it?”.

The programme will also look at the power that trades unions held in the 1960’s and 70’s, and how that power was lost. Looks like a useful half hour: BBC Radio 4 on Monday 21st January at 8.30pm.

Dreamliner or nightmare

Thursday, January 17, 2013

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.

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BUSS4 Culture and Leadership: Walsh vs Branson - again

Tuesday, December 18, 2012

Looking ahead a little to teaching BUSS4 topics next term, the ongoing spats between BA and Virgin Atlantic provide a consistently rich seam of resources for exploring the themes of business culture and leadership. And in the last few weeks, they have done it again. Willie Walsh and Sir Richard Branson have been sniping at each other in an entertaining and characteristic manner.

It started with reports that Branson might sell some of his 51% share of Virgin Atlantic. Walsh suggested that Virgin would not be around as a brand in five years time. Branson was in conciliatory mood; he responded that he would not bother to sue Walsh for his comments on this occasion but instead he would put up £1m, to be distributed to BA staff should Virgin Atlantic cease to exist, if BA agreed to pay Virgin Atlantic staff the same amount should the brand still exist in five years. Rather more aggressively, Walsh's counter-offer is a knee in the groin, on the basis that he considered the loss of £1m would not hurt Branson's personal fortune, whereas the physical assault would be equally painful for either recipient.

Some more background to the altercation is needed for any student wanting to use this example as evidence in an essay; it will only count as anecdote without accompanying analysis. This article will offer that background, along with a brief history of previous bickering and legal challenges between the two airlines - essential detail to strengthen student analysis.

Possible industrial espionage reveals the value of Dyson’s innovation

Wednesday, October 24, 2012

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.

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Crash and burn BAE EADS merger collapses

Wednesday, October 10, 2012

According to Robert Peston of the BBC the BAE EADS merger proposal has failed. Analysts, shareholders, staff and suppliers amongst others expect BAE's board to find a new strategy.

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Deal or No Deal

Monday, October 08, 2012

As the October 10th deadline approaches, the board of BAE face significant difficulties to complete the proposed merger with EADS. 

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The Collaborators

Wednesday, October 03, 2012

Rather than merge with a rival, car firms may form alliances in the development of new products.

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BAE EADS - Will the merger stall or take off?

Tuesday, October 02, 2012

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?

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Up Up and Away

Wednesday, September 12, 2012

British Aerospace (BAE Systems) and EADS announced that they are discussing a merger.

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Legal environment: health and safety in the workplace

Monday, September 10, 2012

Often students are looking around to see how firms are affected by the legal environment that they operate in.  All UK firms, big and small, are influenced by health and safety regulations, which might be starting to change.

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The buck stops here or here or here.

Tuesday, July 03, 2012

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.

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Libor Isn’t Working

Thursday, June 28, 2012

Barclays have been fined for fixing prices or interest rates. The London Interbank Offered Rate (Libor) interest rate is used to price loans and savings rates.

Savers might have received lower interest on their deposits from 2005, and borrowers may have been forced to pay more on their loans.

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Retrenchment in Greece - Carrefour sells out for one euro

Saturday, June 16, 2012

The Greek economy contracted 6.5% in the first quarter of 2012. Carrefour, the massive french supermarket which is the world’s second largest retailer, has been operating in Greece in a joint venture with local partner Marinopoulos since 1999 and had 41 hypermarkets, 287 supermarkets and 479 convenience stores in Greece and Cyprus. They made 2.2 billion euros of sales there last year, but are thought to have made a loss of 440 million euros on that revenue.

A fall in sales of a further 16% in the first quarter of this year has now convinced Georges Plassat (a new CEO who took up his post last month) that it is worth taking a loss of 220 million euros to get rid of the business by selling it to the Joint Venture partner for just one euro, and the stock market clearly agrees with him as shares in Carrefour rose by 2.8% in Paris. Here is an example of a new CEO quickly making a decision to mark a change in strategy. Reuters quotes an un-named analyst who implies that the company needs to focus on its core business: “Greece was a market which had been dragging on them. They have their hands full with other projects. It’s better for them to concentrate on saving their French operations.”

M&S took a similar decision last month when they took a 44.9 million pound write-off on their Greek business. French bank Credit Agricole is transferring assets to France from its Greek subsidiary Emporiki bank. Given the deep uncertainty about what will happen to the Greek economy, a business strategy of retrenchment is looking like one which may gain momentum amongst overseas investors.

Revision Presentation - Government Intervention in Takeovers and Mergers

Thursday, June 14, 2012

This revision presentation outlines the reasons why governments might support or intervene in takeovers and mergers

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Contingency planning and the break-up of the Euro

Wednesday, June 13, 2012

The textbooks often find it hard to come up with a topical example of contingency planning which has widespread application - but I suspect that the possible break-up of the Euro zone is a good one. In fact I think this has to be the best example of a possible future event which is of such significance that almost every sizeable business needs to consider contingency planning.

With that in mind, this pdf document from accountants Deloitte provides some useful evidence of how contingency planning works. Its a detailed document and certainly not worth printing or reading in full. I have jotted down some examples from the document further below to illustrate the role that contingency planning plays for this potentially significant risk.

The key for students is to use examples like this to help develop the depth of their analysis. By using the Euro crisis, they are also able to demonstrate the use of relevant, independent research in their answers.

Let’s take a look…

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The decline of the PLC?

Thursday, May 31, 2012

For most teachers and students, the Public Limited Company is seen to be the dominant type of private sector firm in the economy.  But could that cease to be true?  It’s not just the disappointing launch of Facebook as a PLC that has dented enthusiasm for this form of legal structure.  A recent Economist article argues that the PLC may already be some way into a long term decline.

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Shareholder conflict: the story so far – and its relevance to evaluation

Thursday, May 10, 2012

Two themes wrapped up together here.
Firstly, you will be sure to have noticed references to a ‘Shareholder Spring’ in which normally quiet and docile shareholders have been increasingly resistant to executives’ claims for ever higher rewards.  There’s a link to a very handy summary below.
Secondly, this serves as a reminder of one of the several ways in which you can boost the evaluative component of your answers.

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A detailed look inside Apple’s Foxconn factory

Tuesday, April 24, 2012

A fascinating and detailed look here at working conditions at Apple’s main supplier in China. This 15 minute video raises a lot of issues which students can develop; particularly useful for any discussion around CSR, but also excellent for operations and HRM. In the video, ABC News Nightline goes behind the scenes of the FoxConn factory - the operation which makes iPads and iPhones.

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Revision Presentation - Business Legislation

Saturday, April 07, 2012

This comprehensive study presentation guides students through the relationship between business and legislation (the “L” in PESTEL” analysis). It outlines the main purposes of legislation in the business environment, including consumer protection, environmental laws, competition policy and health & safety. It also provides some recent case studies of firms and industries affected by changes in legislation.

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UK manufacturing - GlaxoSmithKline invests in 1,000 new jobs

Thursday, March 22, 2012

The relationship between business and the government - one important element of this is government support for business investment through fiscal policy (taxation), regulation and legislation. Yesterday Glaxo announced that they were investing £500mn in a new factory in Cumbria which will provide 1,000 much needed jobs. And this extract from the BBC article about this shows how government has helped to bring this about:
Glaxo said it was motivated specifically by Chancellor George Osborne’s confirmation in the Budget on Wednesday that the government would introduce so-called patent boxes.

These allow corporations to pay a lower rate of tax on profits generated from UK-owned intellectual property.

“The introduction of the patent box has transformed the way in which we view the UK as a location for new investments, ensuring that the medicines of the future will not only be discovered, but can also continue to be made here in Britain,” said Glaxo chief executive Sir Andrew Witty.

“Consequently, we can confirm that we will build GSK’s first new UK factory for almost 40 years.”

A useful little piece of evidence to use if writing BUSS4 essays on this topic.

Legislation forces Coke and Pepsi to change their recipe

Friday, March 09, 2012

Coke and Pepsi are estimated to have a 90% share of the global market for fizzy drinks between them and both fiercely guard the ‘secret recipes’ which protect their strength in the market. However, the state of California has added the chemical 4-methylimidazol to its list of carcinogens, and both companies use this ingredient to add chemical colouring to their drinks. If they continue to use it, they would need to add a cancer warning label to their cans and bottles, to comply with California laws - and neither want to do that.

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Business legislation - the cost to businesses

Monday, March 05, 2012

AQA BUSS4 students are likely to be covering Business Legislation and Business and the EU about now. News over the weekend about new regulations giving workers a legal right to extra time off work if they become ill while on holiday give a useful case study combining both areas, as the regulations are due to changes to the European Working Time Directive, and state that time taken off work for sickness, maternity and paternity leave must be given to workers in addition to their legal right to annual leave.

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Pub landlady wins TV football court case: a crucial insight into EU law

Friday, February 24, 2012

You might reasonably believe that a legal squabble about screening Sky football matches in the pub had little to do with Business Studies.  But in fact the recent ruling sheds a clear light on the single most important feature of the European Union to UK businesses.

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Bullet point 5 and stakeholders again

Saturday, February 18, 2012

Competitors and customers are both stakeholders, and can both be significantly impacted by a takeover or merger. Sir Richard Branson can always be relied upon to have a comment to make about anything that British Airways do, and he doesn’t let us down here as Virgin Atlantic have lodged a formal complaint on the proposed merger between IAG (owners of BA) and BMI to the European Commission.

Virgin has said passengers would be left with a “choice of one” on flights between Aberdeen and Edinburgh and Heathrow. There is some great data in this article about the complaint from both sides, about Virgin’s claims of reduction in services and increase in prices for passengers which are likely to result from the merger, and BA’s counter-claims about increases in viability of services between Heathrow and Scotland. There is clear reference here to bullet point 6 - the reasons why governments might support or intervene in takeovers and mergers - as well as Sir Richard calls on “regulatory authorities, in the UK as well as in Europe, give this merger the fullest possible scrutiny and ensure it is stopped.” Definitely one to add to the BUSS4 resources!

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