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Google and Youtube - One of the Best Takeovers in History?

Sunday, August 11, 2013

I've been updating my records of large takeovers and mergers in recent years and looking at whether shareholder value was created or destroyed by each deal.

One takeover which strikes me as being highly successful is that of YouTube by Google. Here is some evidence that supports that view.

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Friday, August 09, 2013

Here’s a nice summer concept to consider. Suppose the future is much brighter than we commonly imagine. In fact, so good that within a few years the common problems we associate with scarcity will be a thing of the past.

My holiday reading has taken me in this direction, and it’s a fantastic idea to grapple with. How will business and the economy adapt to deliver this Promised Land? And what will it mean when we get there?

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Measuring Innovation

Wednesday, July 24, 2013

I finished my academic year with a discussion of innovation, and new ideas. On an optimistic note, I've just seen that the UK comes second in a new ranking of global innovation.

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Planning for the (very) long term

Friday, July 12, 2013

Hopefully as summer approaches you are looking optimistically into the future, and planning a fun (and not-so-fun) programme to help you achieve your goals. But how far ahead should you plan? Weeks? Months? Years? What about decades?

Firms face the same dilemma, and it’s worth asking if the best plan is to carefully focus on the next 2-3 years - or some more distant point in the future. Should directors focus on quick results, or on making really big riches for their shareholders several years, or even decades, down the line?

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How recent Waitrose and ALDI location decisions give a good marketing insight

Tuesday, July 09, 2013

John Lewis are opening a store at Heathrow terminal 2, which will be the Partnership's smallest store, the first away from town and city centres and an important step in their international strategy. For a while I’ve been looking at the idea of place in the John Lewis marketing mix, and the business has clearly identified deeper trends in retail location.

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Marketing the budget hotel concept

Wednesday, July 03, 2013

It’s three years now since we got excited at T2U by the budget hotel concept (there’s a reminder link here) and the format seems to have been a success.  Imitation by Whitbread, with their new 'hub by Premier Inn' format suggests this is a successful innovation.

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Low cost airlines

Friday, June 21, 2013

Excellent BBC2 business documentary last night on the growth of low cost airlines 'Flights and Fights: Inside the Low Cost Airlines'. The programme explores how Ryanair and Easyjet have transformed the European airline industry.

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Stakeholder conflict in the battle over Royal Mail

Thursday, June 20, 2013

This is a long running story, in which Royal Mail is (probably) preparing to leave the public sector and become a private company - a process known as privatisation. Recently, rising profits at the business had made its privatisation seem more likely, but Royal Mail workers have just voted overwhelmingly against the government's controversial plan to sell off the 497-year-old postal service.

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BUSS4 in 6 Concepts/Theories: Analysing your Research Organisations

Thursday, June 06, 2013

A good visual way of analysing your BUSS4 research organisations for both Section A and B is to relate them to different concepts or models. (apologies for the drawings in the picture above)  To go even further could be to link elements of some of these models and concepts together which can give a more in-depth, holistic view of the organisations in relation to some key BUSS4 topics.  I have started to get my students to relate them to the following 6:

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BUSS4 in 3 words: What do they say about Leadership, Values and Culture?

The link between Leadership, Values and Organisational Culture will be a familiar one for BUSS4 students.  This video “Simon Sinek: How Great Leaders Inspire Action” from TED talks is a simple and really interesting way to make these links. It’s summed up by a “Golden Circle” and 3 words: What, How and Why

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Organisational Culture: When the Culture Needs to Change

At what stage does organisational culture need to fundamentally change?

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Are Premium, Differentiated Products the Answer to Compete Against Mass Production?

Saturday, June 01, 2013

A great example here of a European manufacturing business that is attempting to compete based on product differentiation compared with the cost leadership approach adopted by competitors relying on mass production techniques.

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Strategic Choice: Apple: Differentiation v Scale

A fascinating, short interview here with Tim Cook, CEO of Apple.

Cook compares Apple's performance to its competitors, and explains his product strategy in an onstage interview.

His argument is clear. Apple's strategy is one of differentiation, not cost leadership based on market-leading scale. For Apple, it is not about making the most of each of the product categories in which it has a presence - it is about making the best in the market.

So, Samsung is now the clear global market leader in mobile phones (including the fast-growing smartphone segment). But Cook argues that Apple makes the best phone. Compare the iPhone 5 with the Samsung Galaxy S4 - is he right?

For students, an important question to consider is this - what the key advantages that a successful strategy of product differentiation can bring? And can it be sustained against the intensive competition that Apple is facing from the likes of Samsung, Google and Huawei?

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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. 

Organisational Culture - The Crucial Importance of Core Values

Saturday, May 25, 2013

Do you have a set a core values?  What deeply held beliefs shape the way you see the world and how you act? 

Your core values underpin the way in which you behave, act, and how you live your life. So, if someone asked you to list your two most important values, what would they be?

I ask the question because the concept of core values is essential to understanding organisational culture.

Indeed I would hope that the role of core values would feature in many high-scoring BUSS4 essays for students answering questions about organisational culture – they are important!

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Organisational Culture: Tony Hsieh on Zappos, Core Values and Culture

Thursday, May 23, 2013

If students are looking for a research example of a business that is truly built around a deliberate attempt to create and nurture a strong organisational culture, they need look no further than online shoe retailer Zappos.

Tony Hsieh - the founder of Zappos (bought by Amazon a couple of years ago) wanted to build a business based around a simple idea. That it - if you get the organisational culture right - then everything else that you need to be successful will fall into place.

Is he right?

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Strategy, Change & Culture: Moya Greene Seems to be Delivering!

Tuesday, May 21, 2013

“Our strategy is delivering. The transformation of Royal Mail is well underway”.

That’s the view of Moya Greene, CEO of Royal Mail, as she announced the full year results for Royal Mail to 31 March 2013 today.

As students who attended our BUSS4 Exam Coaching Workshops will recall, I think that Royal Mail is one of the very best research case studies to use for both Section A (organisational culture) and Section B essays in the BUSS4 exam.

The latest financial results of Royal Mail Group are packed full with useful insights and data which could be used effectively to support paragraph points in a BUSS4 essay.

Here are just a few examples:

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Runner’s Up League and Cup Double

Thursday, May 16, 2013

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

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Strategy & Technological Change: Will Google Glass be as Big as the Smartphone?

Could Google Glass have as transformational effect on our lives as the smartphone? Yes is the answer - according to leading venture capitalist Marc Andreessen - who explains why in the CNN video below.

Rory Cellan-Jones from the BBC has also been examining Google Glass. In this article Rory asks whether Google Glass is the most exciting technology product of recent years, or whether it might turn out to be the 21st Century equivalent of the Sinclair C5!

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Strategy & Leadership - Harriet Green at Thomas Cook Outlines Her Strategy

We've previously highlighted the arrival of Harriet Green as the new CEO of Thomas Cook as a great research example for business students. New CEOs - particularly those recruited externally - tend to dive straight into "strategic reviews" which then result in changes in strategic direction, disposal of non-core businesses etc. Harriet Green is no exception. And in this YouTube clip, she outlines her proposed strategy for the ailing travel industry business.

The clip is almost two hours in length. However, it is the first section (from about 3 minutes 30 in) which is particularly interesting and relevant for business students. You get a strong sense of Harriet Green's personality from the presentation and a clear statement of her strategic objectives for the business.

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Emerging Markets Strategy - JCB Exploits the International Opportunity

Monday, May 13, 2013

Students looking for a great example of how a UK business can transform its fortunes by focusing on the opportunities in emerging markets need look no further than JCB.

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3 Businesses That Have Thrived during the Economic Downturn

It is now six years since the global financial crisis triggered a prolonged downturn in economic activity. The UK economy, like other developed economies, has struggled to escape from a period of stagnant economic growth.

However, despite the weak economy, many UK firms have succeeded in significantly growing their revenues and profits.

Here are three examples of such businesses. Their strategies for success are different – but there are also some similarities.

Can you compare and contrast these three – and also identify some other businesses that have enjoyed similar success despite the tough economic environment?

You might also consider:

  • What factors have driven revenue growth at each of the three businesses?
  • Has their growth strategy been based on organic or external development?
  • To what extent has their growth been driven by international expansion?
  • Do you think their recent success can be sustained?
  • What factors might that continued success depend on?

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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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Investing in Workforce Skills and Culture - the University of John Lewis

Tuesday, May 07, 2013

I've become increasingly convinced from recent discussions with major accountancy firms and other major employers  that workplace learning is going to challenge the preeminence of universities and colleges when it comes to obtaining higher level qualifications. The emergence of some industrial-strength Higher Apprenticeship programmes recently is a sign of that. And so to is the news that John Lewis Partnership is to extend its programme of workplace learning to offer Level 6 (university degree level) qualifications for some of its management.

This story would provide the basis for some excellent analysis by students exploring how and why John Lewis Partnership has decided to extend its internal training programmes.

Some clues can be found in extracts from the JLP press release: for example;

"Our partners give us our competitive edge, and if we want them to stay with us for the long term, we need to make sure that they have the right skills to meet the challenges we face in an evolving retail environment."

The so-called "University of John Lewis" will also offer a number of other development initiatives through its ‘skills programme’, which will include training in product knowledge, line management and leadership. read more...»

Ethics, supply chains and consumer responsibility

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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The problems of overnight success – and how to prepare for growth

Saturday, May 04, 2013

I’ve come across a great article and video clip about the problems faced by a company whose business boomed overnight.  A nice problem to have, and an interesting problem too!

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Strategy: Kazou Hirai and the Forgone Bonuses

Wednesday, May 01, 2013

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...»

Strategy: Profiting from the Smartphone Revolution

Monday, April 29, 2013

Consumers around the world are falling in love with mobile devices, notably smartphones and tablets. However, as this excellent short FT video explains, many businesses (including leading brands) are struggling to adapt to the migration of consumers from desktops and laptops to mobile devices.

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BUSS4 - Want Good Analysis? Think How & Why?

How & Why. These are the two important words for students preparing for BUSS4 and as they practice their essay technique.

So, why is that? And how can they be used?

The source of their importance lies in the skill of analysis…

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Strategy: Organic Growth Powers Whitbread’s Success

Expect lots of coverage this week about the growth strategy being pursued by Whitbread plc.

Whitbread used to have a pretty diverse product portfolio including the brewing of beer and the operation of David Lloyd health clubs. However, in recent years Whitbread had rationalised its portfolio of businesses to focus on two markets where it believes it can achieve sustainable and high sales and profit growth. And it has backed that strategic focus with heavy investment. If only other UK firms would do that!

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What does Apple plan to spend $100bn on?

Wednesday, April 24, 2013

Some interesting finance news here, since Apple don’t plan to spend their famous cash mountain on a conventional purchase.  Instead, they plan to raise dividends and buy back their own shares.  Why?

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Organisational Culture: The Frugal Billionaire who Founded Ikea

Tuesday, April 23, 2013

It is often claimed that the organisational culture of a business is formed and developed in the "shadow of the leader".  And perhaps nowhere is this more true than the organisational culture of Ikea which was founded by Ingvar Kamprad. 

Here is a some evidence which helps explain the concept and also tells us more about the core values that have been used to build the Ikea business.

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Strategy: Ikea Diversifies into Hotels

Let's face it. Nearly all of us associate Ikea with flatpack, affordable furniture. The Ikea brand has become a global success and, as we reported on the business blog recently, the Ikea format is well-positioned to achieve further success in key emerging markets.

However, Ikea's business portfolio is not just about furniture retailing.

In March 2013, Ikea announced that it is to partner with Marriott International to open a chain of three-star hotels. The chosen brand name for this joint venture between Marriott and Ikea is Moxy Hotels.

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Strategy: Ikea’s Global Brand & Local Knowledge Drives Expansion into Emerging Markets

Monday, April 22, 2013

A superb article here from Reuters which examines the challenges facing Ikea as it accelerates its expansion into key emerging markets, notably China and India.

On the one hand, Ikea aims to exploit its global brand by applying the core retailing concept (epitomized by the store racetrack layout, flatpack goods etc) and core values that have enabled to it to become the world's largest furniture retailer.

However, Ikea also needs to be sensitive to the specific customer needs and wants in each national market if it is to meet customer expectations and compete effectively.

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Strategy: Kazou Hirai’s First Year as CEO of Sony

Kazou Hirai took over as CEO of Sony on 1 April 2012 replacing Howard Stringer. Hirai inherited a business with many problems and experiencing heavy losses. What has he done in his first year?

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Starbucks - Up Close and Personal with Howard Schultz

Lots of great information from Schultz here and insights into his business strategy. Many insights too into Schultz's personal background and his views on what it takes to be a successful entrepreneur.

Put simply, this interview has everything! Organisational culture; entrepreneurship; CSR; emerging markets; retrenchment; ethics.

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Strategy: eBay bets on Mobile Payments and PayPal

Another fascinating interview with a tech CEO here. Some great insights into how technological change is providing opportunities for his business.

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Luxury Cars and Emerging Markets = a Winning Product

A simply stunning video here from the FT which is perfect for students wishing to gather some evidence on industries, firms and brands that have thrived despite the prolonged economic downturn in developed economies.

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Nokia: Has Elop Found Himself with a Problem Child and Dog?

Thursday, April 18, 2013

Has Nokia got a problem with its product portfolio? The market seems to think so. Nokia's shares down 13% today on news of disappointing sales for the first three months of 2013.

Nokia has enjoyed some recent success with its Lumia smartphone range. However, sales of its traditional more basic feature phones are very weak and facing intense competition in emerging markets against low-cost competitors.

So, Nokia's smartphones are doing well, but Nokia has only a small market share in a fast-growing market. If we were applying this to the Boston Matrix, Nokia's smartphones would probably be considered to be "problem children" or "question marks".

What about Nokia's feature phones. A falling market share (once the market leader) but in a low-growth market. That looks like a "Dog" in the Boston Matrix - or at least on the way to becoming a dog (maybe a puppy?).

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Organisational Culture: The Business of Business is People - Says Herb

Monday, April 15, 2013

Here is one of my all-time favourite video clips for business studies, featuring one of my business heroes - Herb Kelleher.

Herb who?

You might not have heard of Herb Kelleher. However, I highly recommend that you take a little time to find out more about him and the business he founded - Southwest Airlines. It is a fantastic example of a business which has identified organisational culture as a source of sustainable competitive advantage.

Kelleher identified the need for an employee-centered culture at Southwest as the way in which his airline could deliver outstanding customer service. Put simply, Herb believes that the "business of business is people".

In this short, five minute video, Herb explains why putting employees at the centre of Southwest's culture is so important to him.

About a minute into the video, Herb demonstrates a superb example of "analysis" using a logical chain of argument. The argument goes something like this:

...If the employees come first, then they’re happy…. A motivated employee treats the customer well. The customer is happy so they keep coming back, which pleases the shareholders.

A simply stunning video, that stands the test of time.

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Can Healthy Fast Food be Turned into a Global Success?

Saturday, April 13, 2013

A great video to share here with your students and pose the question - can a fast food chain based on healthy eating succeed?  

Students at tutor2u's EntrepreneurLIVE 2012 events met Vincent McKevitt, the entrepreneur behind Tossed, a healthy-eating fast food chain based in London.

It looks like Vincent might soon be facing some competition from an ambitious Canadian startup Freshii which is also testing the idea that fast food can be healthy by building a chain of healthy fast-food restaurants in the U.S. and around the world.

Can the concept work? Why not? But what will it take to encourage more of us to switch from the instant satisfaction of a burger or fried chicken.

And can businesses like Freshii and Tossed compete with established multinational fast food giants like McDonalds and Subway who may simply alter their product offering if significant numbers of customers decide to start looking for a healthy-eating alternative?

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An Organisational Culture of Trust - Insights from John Lewis Partnership

Terrific insights here from Andy Street, the CEO of John Lewis Partnership, about how the concept of trust is so important in business success. Some short, sharp points here which help identify elements of the organisational culture at John Lewis Partnership and perhaps point to some of the reasons why JLP has been so successful in recent years despite the economic downturn. Essentially Andy Street sees trust as a source of competitive advantage. But it is hard won, and easily lost! Businesses - take note!

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Strategy in a time of austerity & poverty - three retailers tell their story

The effect of the economic downturn on small retailers, and how they are adapting, is explored in the powerful video below from the FT.

First up is a bespoke tailor trying to survive in a poor area that has been significantly affected by government spending cuts to welfare payments.

In the same location is a retailer of sporting goods. His business has changed dramatically in recent years, with demand much less predictable. Cash flow management has become much harder, so he has responded by cutting stocks and repositioning his retail product range. Can he survive against the likes of Sports Direct?

Finally, we see the effect on a furniture retailer of the emergence of pawnbrokers and other loan shops. 

For these retailers, costs are rising but sales are falling. The future for these high street retailers looks bleak. Can they survive? And if so, how?

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Are supermarket economies of scale beginning to fade?

Wednesday, March 27, 2013

Bigger is better, or so it seemed to the UK supermarkets over the last 20 years.  Size seemed to offer all kinds of advantages (or ‘economies of scale’ in business terms).  Many of those economies are still very present for the larger chains (especially with purchasing and technical benefits), but I’ve been reading that this mood is shifting. Since the early 90s, the UK's £160bn a year grocery business has understood that one of the key routes to success has been the ability to open more and bigger shops.

Now it seems as though the major players have come round to thinking that size is not necessarily what matters, because shoppers are changing their habits fast.  Has the “space race” run its course?

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Are Businesses Too Slow to Change?

Saturday, March 23, 2013

This is superb stimulus material for any business lesson strategic change and change management. The short animated video reports back on a recent Economist debate about whether businesses are too slow to adapt to change. It features some of our favourite examples and case studies, including Kodak and HMV. Some great quotes and simple, powerful ideas here.

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The role of Business culture in business turnarounds

Sunday, March 17, 2013

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.

Growth strategy - Tesco’s “Related-diversification” into Family Restaurants

Friday, March 15, 2013

Tesco's decision to acquire restaurant change has been described as "a very significant move". That's a nice piece of evaluation. So why has Tesco decided to diversify into the family restaurant market?

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Researching the Royal Mail - A Great Case Study in Change Management

Thursday, March 14, 2013

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.

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Culture and Strategy: A Selection of Company Vision and Values

Sunday, March 10, 2013

The stated mission, vision and values of a business should (in theory) provide a key insight into the strategy and culture of a business. Of course, it's not always the case that stated vision & values are consistent with the way a company does business (think...Enron). However, for many successful businesses there is a clear and sustained link between the two.

Set out below are a selection of web links that provide insights directly from the featured businesses into their vision, values and culture.

You'll recognise many of these from our BUSS4 Section A Revision Toolkit and we've also used some of these companies in our Exam Coaching Days for BUSS4 students.

read more...»

John Lewis staff celebrate bonus of nine weeks’ pay

Thursday, March 07, 2013

Not every retail business is struggling (the travel agent Thomas Cook have been added to that list recently).  For the second year running, John Lewis have paid their staff (or ‘partners’) a 17% bonus, as reported by the BBC and The Guardian.

read more...»

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