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...»BUSS4 - Mergers & Acquisitions - one that went wrong. BMW and Rover
When BMW met Rover
For the BUSS4 exam this June, it is useful to understand why a merger may fail to work and a retrospective look at BMW’s acquisition of Rover back in 1994 provides a good illustration of several possible pitfalls.
Exchange rate: £1 above €1.20
The pound buys more euros now than since November 2008, according to a news clip on the BBC. Any Business Studies question with an international dimension gives you scope to talk about exchange rates. This might be a story for you to refresh in your revision, so that you can make a brief reference to it when you are looking to add application, analysis or evaluation to your marks.
read more...»BUSS4 - Three Ways to Evaluate Emerging Markets
The topic of emerging markets is hugely important for BUSS4 students. The economic growth and large populations of the ‘BRIC’ nations (amongst others) has meant many businesses, including some of the tutor2u twelve: have been targeting these countries as part of their strategies for growth. Examples include Starbucks who plan to have 1,500 coffee shops in China by 2015, and Apple as their Shanghai store sells more iPhones per square foot than any other Apple store in the world.
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...»A detailed look inside Apple’s Foxconn factory
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.
read more...»Vodafone takes over Cable and Wireless Worldwide
Last week the share price of Cable and Wireless Worldwide C&WW, slumped, after the Indian conglomerate Tata withdrew its bid for the company.
read more...»Competitiveness and organisational structure - a great example of delayering
Students familiar with the concept of delayering will know that the benefits of successfully reducing the number of layers in the management hierarchy are not just limited to lower costs. Of course, there can be significant cost savings from delayering, particularly if the roles concerned are highly-paid. However, the strategic rationale for delayering is also usually linked with the need to improve the effectiveness of decision-making and making the business more responsive to customer needs.
There is a great example of delayering which was in the news yesterday (19 April 2012) concerning a decision by insurance firm Aviva to remove an entire layer from their organisational structure.
read more...»Strategy - How Nokia was overtaken by Apple and Samsung
I like this short article from Channel 4 News which examines how Nokia’s competitive position has been severely weakened by the success of firms like Apple and Nokia.
read more...»Revision Presentation - Emerging Markets
This revision presentation provides an overview of the topic of emerging markets. It highlights some examples of how businesses have pursued a growth strategy in emerging markets and also how developed economies have seen investment coming in the opposite direction. A brief overview of the methods and benefits/drawbacks of international expansion is also provided.
read more...»Move over Apple, Samsung, Sony & Nokia. Here Comes China’s Huawei
A great article here for students researching the competitive environment in the consumer electronics industry. Students should certainly be familiar with the strategies of Apple, Samsung, Nokia, Sony and others. But have they heard of Huawei? It looks like they might soon, if Huawei is successful in its objective of grabbing a significant share of the smartphone and tablet markets.
read more...»BUSS4 M&A - the Benefits of Foreign Takeovers of UK Firms
Buried in this article about generating investment in Manchester are some gems of examples of why government might encourage foreign takeovers of British business. The article starts with an unlikely visit by Jim O’Neill of Goldman Sachs to the Manchester City stadium.
Famous for coining the term BRICS to describe the major emerging economies, O’Neill is equally famous as the leader of the Red Knights, who failed in their bid to buy Manchester United from the Glazer family in 2010 - the Glazer’s are accused by United supporters of failing to put enough cash into the club since they took it over. Sheikh Mansour, of Abu Dhabi, has poured money into Manchester City since he bought it in 2008 and there are ambitious plans to regenerate the whole area around the stadium.
read more...»Walmart targets leadership of the online shopping market in China
It’s been a diffcult time in China for global retail giant Walmart recently, However, as the BBC’s Sharanjit Leyl reports in this short video, Walmart hopes to capitalise on the growing number of Chinese who do their shopping online, as the ‘bricks and mortar’ competition between foreign supermarket operators in Chinese cities becomes more intense.
read more...»Starbucks acquisition provides the base for entry into the juice bar market
A great example to use here which combines takeovers/mergers and also Ansoff’s Matrix. Starbucks has used a recent takeover as the platform for the launch of a new store concept which it hopes will generate sales and profit growth outside of the core coffee market.
read more...»Starbucks chooses strategic alliance in bid to enter the Indian market
A significant example here of strategic choice when it comes to evaluating the options for growth. Starbucks has opted to enter into a strategic alliance with Tata Group as it attempts to establish a position in the Indian market.
read more...»Tata & Jaguar Land Rover - Culture and Strategy
For any colleagues and students researching the Tata Group takeover of Jaguar Land Rover in 2008 - this is a must-watch video interview. In fact, it has broader relevance to anyone wanting a concrete example of how to respect the culture of a takeover target as part of a long-term plan to increase shareholder value.
read more...»Can we learn lessons in business organisation from the mittelstand model
A business studies lesson gem from an unusual source here - the politics team at the BBC! Germans use the word “mittelstand” for the millions of middle-sized companies that form the backbone of their booming economy, and some in Britain reckon the model could teach UK industries a few lessons…
read more...»International expansion and culture - doing business in the UAE
The importance of understanding and adapting to the business culture in international markets is illustrated well in this new short video from the Telegraph. Some great insights packed into this short piece, including issues that you might find surprising!
Pub landlady wins TV football court case: a crucial insight into EU law
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.
read more...»Barriers to entry for business expansion to Brazil
Operating a business in a developing economy is cheap, right? That’s why the BRIC economies have a comparative advantage, right? Wrong! At least, not in Brazil. The FT report the high costs of setting up in such a booming economy, highlighted by the fact that it is cheaper now to get your shoes shined by a Brazilian in New York than by a Brazilian in São Paulo. So businesses wanting to expand to Brazil and get the benefits of its high growth rate need to be aware of the low margins they will make, at least at first.
read more...»Tata and the rise of Jaguar Land Rover
The Tata takeover of Jaguar Land Rover (“JLR”) in 2008 is one of our five “must research” deals for the AQA BUSS4 research theme in 2012. And this recent article provides students with some compelling evidence about how successful the takeover has been for Tata, the private Indian conglomerate that is now the UK’s largest manufacturer. The Telegraph reports that JLR made record pre-tax profits of £559m in the final three months of 2011 as demand for its premium cars soared in Asia. This follows on from JLR’s record profits of £1.1bn in 2010.
read more...»Video case study - finding success in an engineering niche
This excellent short BBC video looks at a case study of success in UK manufacturing. Granada Material Handling has addressed the issues raised the recession and international competitors. They have focused on a niche market of making lifting equipment for offshore wind farms. Is there a role for government to help UK manufacturers exploit these niche market opportunities? Or is it really about the entrepreneurial spirit of firms like Granada that is the key?
read more...»Private equity buyouts - Sunday Times supplement
Private Equity hasn’t really featured very strongly in the Business Studies syllabus before, but may come more to the fore this year in the study of mergers and takeovers. A supplement in yesterday’s Sunday Times which examines ‘private equity backed firms with the fastest growing profits’ is worth getting hold of, as it gives some help on the role of private equity in the M&A market.
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...»Integration, integration, integration
HP is an example of a firm which is struggling to integrate acquisitions, and the perils of diversification.
How to turn threats into an opportunity at Ryanair
Michael O’Leary, quoted in Management Today, describes the situation facing Ryanair towards the end of last year. He highlighted the threats from the EU recession and higher oil prices, but typically O’Leary found the opportunities more compelling: the “unfolding failure of the package tour operator model, significant competitor fare increases and capacity cuts, created enormous growth opportunities for Ryanair, as large and smaller airports across Europe compete aggressively to win Ryanair’s growth” he said.
read more...»Leadership in a multinational business - what leadership style works best?
This is an interesting blog entry from Pekka Viljakainen, an entrepreneur from Finland who sold his IT consulting business to a multinational Tieto. Some useful insights here for students wanting to develop their understanding of how the challenge of leadership changes as a leader’s responsibilities become more complex and cross-border.
read more...»Manufacturing strategy: Is China losing its competitiveness?
Is China still a competitive location for overseas manufacturing? Certainly the nature of manufacturing in China is chaining rapidly, as this 4 minute video from the Financial Times explains. It features European firms that moved their production to China several years ago. However, as wages in China have risen rapidly in recent years, it becomes less cost-effective to make low value-added products in China.
read more...»External influences: the threat that is China
Most A2 Business students have their sights firmly set on BUSS3 this week, which is very much as it should be. However, next week their attention will turn to the wider world of BUSS4. In planning for that, it looks as if the three-part series of reports about China that Newsnight will be running this week would be very useful, and worth recording or at least picking up on i-player.
read more...»
