AQA unit 4 - some really good evidence here
Wake up to Money, which is broadcast every morning at 5.30 on Radio 5, is often a good source of stories and anecdotes. It was particularly good today - and the excellent news is that you don’t have to set the alarm for that unearthly hour to hear it as you can download the Podcast. It will be well worthwhile for all AQA unit 4 students spending 20 minutes taking notes from today’s programme - they will start with a useful preview of the release of the updated GDP figure for quarter 4 of 2010, giving some good background data.
The interview that follows, with the CEO of Pret a Manger is gold dust - he talks about the figures that Pret have just released which show a big rise in sales and profits, despite rising commodity prices and a tough climate on the high street. His description of the relations with suppliers and marketing mix strategies that Pret have followed to allow them to achieve this through the recession should be noted and quoted as evidence in BUSS4 essays.
Finally, figures out this morning from the Internet Advertising Bureau show online advertising grew nearly 13% last year and now accounts for 25% of all advertising spending in the UK, and some more background is given for that data. Here is another little nugget that could be useful to prove to the examiner that candidates really know what they are talking about when it comes to strategic management - so please do use the links below!
Wake up to Money 29th March on i-player - available for 6 days from now
Wake up to Money podcast
Brief TV interview with Clive Schlee of Pret a Manger (...but the radio interview covers more ground)
Report about the study by the Internet Advertising Bureau (IAB)
The UK Economy - Economic Growth GDP
Perhaps the most important economics chart for business students to understand is the one which illustrates the changes in the value of economic activity over time. The interactive chart maps the percentage changes in UK GDP each quarter.
read more...»The UK Economy - Consumer Spending
Consumer spending makes up a significant proportion of the value of UK GDP, so changes in consumer confidence and spending have a direct impact on UK economic growth. How has consumer spending changed over recent economic cycles? Here is an interactive chart (which updates with ONS data once published) which will help students see the overall trends in total UK consumer spending…
read more...»The UK Economy - Share Prices
The vast majority of companies in the UK are privately owned and the shareholders do not trade their shares on a quoted stock exchange. However, the share of many of the UK’s largest firms (and many international firms too) are traded on the London Stock Exchange. The prices of shares in individual firms move up and down throughout he trading period, as does the FTSE-100 index - a statistic which is often quoted in the media as representing how the overall stock market performed from day to day…
read more...»The UK Economy - Exchange Rates
Students come face to face with exchange rates when they take a holiday abroad or buy goods online from international stores. But they also need to appreciate the effect of changes in exchange rates on business. What happens when a currency strengthens (appreciates) against another? Who wins if the Pound falls in value against the Euro or the US Dollar?
The following chart provides students with up-to-date data on how the Sterling exchange rate has fluctuated in recent years against two key trading currencies - the Dollar and Euro. Can they describe the trends shown on the chart and then go on to explain some of the potential business implications?
read more...»The UK Economy - Business Investment
Business investment is a key part of economic activity. Firms invest in capital spending for a variety of reasons - for example to increase capacity, improve efficiency and take advantage of new technology. So what has happened to the value of business investment in the UK economy over recent years? The interactive chart below shows the quarterly value of business investment (in £ms) over recent decades. The chart updates once the latest ONS data is available, so bookmark this blog entry if you would like to be able to check latest trends in business investment.
read more...»The UK Economy - Inflation (CPI)
All business students need to have an understanding of the topic of inflation, which measures the rate of change in prices. In the UK, the main official measure of inflation is the CPI (consumer prices index) and the chart below illustrates how the rate of CPI inflation has changed in the last couple of decades.
Students ought to be aware that the Bank of England currently has a target rate of inflation of 2 per cent per year. Where is the CPI measure in relation to this target? Hover your mouse over the chart and you can see how CPI has generally been above the BoE target since May 2006. Indeed, at the time of writing (March 2011) CPI is exactly twice the target (at 4%) with the UK economy facing additional inflationary pressures from rising energy and commodity prices.
read more...»The UK Economy - Unemployment
What will happen next to unemployment in the UK? Unemployment started rising from January 2008 during the previous recession and has plateaued at just under 8% of the working population. Will the economy grow sufficiently strongly to allow unemployment to start falling, or will the impending public sector spending cuts mean that unemployment starts to rise again during 2011. The chart below will update automagically once the monthly unemployment statistics are published by the ONS, so bookmark this blog entry if you would like to point students to the latest data and trends in UK unemployment.
read more...»The UK Economy - BOE Base Interest Rate
What is the base interest rate currently in the UK economy? How does the current base rate compare with recent years and further back?
This interactive chart courtesy of our friends at Timetric updates within 15 minutes of the interest rate decision made by the Bank of England Monetary Policy Committee - bookmark this blog page so your students always have access to the latest data. And if you scroll down to the bottom of the blog entry you will see a listing of many of our new Timetric charts - updated as we add more to the range.
read more...»The amazing ITV recovery ... or is that TV advertising recovery?
ITV’s recovery continues. It’s a topic that I’ve covered a few times, with ITV returns to profitability in 2010 (after confidently predicting its demise in 2008).
This, after all, seems to be less of a story about strategic decisions made by ITV and more about the spectacular recovery of TV advertising after the collapse of 2008.
read more...»Britain is back in recession (well, consumers think we are)
What behaviours do consumers exhibit when they believe the economy is heading for (or is in a recession)? These fascinating insights from the latest trading update from Wal-Mart owned Asda give us some clues about how British consumers view the economic situation in Spring 2011.
read more...»Nestle - using branding & productivity to overcome commodity price increases
A huge amount of lesson material for both business & economics lessons here. The background to the video clip is the rapid increase in the global price of commodities such as cocoa & sugar together with energy costs. However, despite the soaring costs of raw materials, Nestle has so far been able to avoid passing on the cost to its customers. Why is this? Could it be the economies of scale that Nestle enjoys from being one of the world’s biggest food producers? Might the popularity of its brands mean that customers are less likely to switch to alternatives if Nestle attempts to increase its selling prices?
British exports - what does the government do to help?
Following on from Jim’s blog on Wednesday about exports (Exporting – no thanks – we’re British, there have been some interesting reports in the last couple of weeks emphasising the ways in which government tries to encourage exports, which could be the source of some investigation work for students around the the theme of The Relationship between Businesses and the Political Environment, and political decisions affecting trade and access to markets.
read more...»Commodity prices in action - soaring Copper
The Edexcel GCSE business unit 1 specification makes clever use of commodities as a way of introducing students to the core concept of how prices are determined by fluctuations in demand and supply. This article in the Telegraph provides a topical example of how the price mechanism is operating to push the global price of copper skywards…
read more...»The business impact of weak consumer spending
In the UK consumer (or household) spending makes up around three quarters of GDP. So the fortunes of a significant number of firms are closely tied to the strength of consumer spending. For shareholders or managers of such businesses, this article in the Guardian will not make happy reading.
The article summarises some recent evidence from a selection of important consumer markets which suggest that consumer confidence in the UK is as weak as it has been for many years. Faced with increasing uncertainty about jobs, higher fuel and food prices and saddled with debt, UK households are cutting back on discretionary spending. That’s bad news for manufacturers and retailers of “big ticket” items like new cars, carpets and entertainment systems.
You know that UK consumer spending is weak when the “bell-weather indicator” of John Lewis Partnership reports falling sales. JLP reported a second consecutive week of falling sales last week, with demand for electrical goods particularly weak.
Government and the Economy lesson plan
This lesson plan and associated resources, which are produced by the Citizenship Foundation, explain the credit crunch and also the Chancellor’s annual Budget. They are a great way to introduce students starting on AQA unit 4 to the thankless task that a Chancellor of the Exchequer has in trying to decide the best way to raise tax revenue and cut spending.
read more...»The Economic Environment
The last few years of choppy waters and a tougher business climate has pushed the economic environment further up the agenda for Business students. Firms look back with nostalgia for the NICE era (with non-inflationary, continuous economic expansion) that began around 1992 but came to a shuddering standstill by 2008.
Here are a few links (outside T2U) that might help you illustrate the changing economic environment. I’m starting with The Guardian, whose business website is catching up with other sources, and is a site I now regularly visit.
read more...»Training, social immobility and tuition fees - KPMG’s blueprint solution
KPMG has been quick to announce a new trainee scheme for school leavers which it says it will introduce in September 2011. They plan to recruit around 75 school leavers who will study accountancy at Durham, as part of a six year programme with the firm, leading to both a degree and a professional chartered accountancy qualification from ICAEW. KPMG envisages that in due course school leaver schemes of this type may account for the majority (in excess of 400) of its annual trainee chartered accountant intake.
read more...»HR implications of business expansion: the UK supermarket sector
The UK grocery giants have weathered the recession – and the weather – in reasonably good shape and are set to create at least 32,000 jobs this year amid one of the biggest store-opening sprees in the history of UK grocery retailing, according to The Guardian.
There are lots of potential constraints to business expansion, and the recruitment, induction, and training implications alone seem daunting.
read more...»How to find an export market
The main topic of this story on the BBC website is a new report by the British Chambers of Commerce, which says that while the UK’s service sector is suffering domestically, many manufacturers are enjoying an export-led boom. It gives a great example of clockmakers Smiths of Derby, who were suffering from a lack of domestic demand in the recession for their expertise in renovating and maintaining clocks around the UK from St Paul’s Cathedral to Arsenal’s Emirates stadium.
read more...»Retail Meets Monopoly - A Business Lesson Cracker
Here is a real treat for business teachers and students. A fantastic interactive resource from the ever-innovative Guardian Business team which invites us to move around the monopoly board of UK retailers. As each retailer announces its trading for the crucial Christmas 2010 period, we are asked to state whether the retailer was a winner or loser? Love it.
Starter activity - percentage changes and the VAT rise
Many thanks to Steve Whiteley for suggesting a topic starter activity that can help students practice those trick percentage change calculations.
read more...»A retailer’s worst nightmare - where are the customers?
December 2010 will go down as one of the worst on record for many high street / shopping centre retailers (and some online retailers too). This short video helps explain the problem. The experience of poor weather, coupled with the threat of further disruption has led many customers to simply abandon their traditional shopping binge. Remember that many retailers depend on the crucial Christmas period for the majority of their profits, since running a retail store involves significant fixed costs.
Could the external environment for retailers get any worse? Weather disruption has ruined a seasonally strong sales period. The impending rise in VAT to 20% in Jan 2011 will discourage customers, as will rising unemployment and low wage and salary growth. Add to that the continued depression in the UK housing market. Who would be a retailer?
2011 - A chance for retailers to slip in some sneeky price rises?
The latest inflation figures for the UK economy don’t make very encouraging reading - particularly for households affected by wage freezes or reductions ahead in 2011. But this article in Management Today suggests that prices may rise even faster in early 2011 for two related reasons - the increase in VAT to 20% and retailers looking to improve their gross profit margins whilst consumers are expecting price changes! Its a sneeky, but understandable tactic. You can imagine the scenario - the customer comments that prices seem to be higher than before Christmas; the obvious response is to blame Osborne’s VAT rise and hope that the customer doesn’t (or can’t) do the mental maths to check the explanation!
There are some excellent evaluation points made in the article which students could use to assess whether this pricing tactic will work. The retail market remains highly competitive and if some retailers don’t implement price rises then they may find customers are able to spot the emerging price differentials and switch their custom. But if you’re out shopping in early Jan 2011, watch out - and take your iPhone calculator with you.
Its curtains for UK consumer spending
Are you taking part in what many retail analysts are describing as a consumer spending binge this Christmas? It seems that consumers in the UK know that some tough times are around the corner, but are splashing out on one, last big Christmas before the real period of austerity starts to bite…
read more...»Recession-proof production at Fiat
Fiat’s Polish plant bucks the trend to post record production levels in the recession. Can they perform another miracle and resurrect Lancia?
read more...»Cash flow problems put Pontins into administration
Pontins is the latest household name to fall victim to recession and the credit crunch. They have been put into administration, meaning that the future of the company is uncertain, for both staff and customers. The problem is that the banks are no longer willing to give them credit – so although they have customers willing to buy, they face the possibility of business failure due to a lack of cash flow.
read more...»What does Britain export?
We’re all used to the idea of container ships arriving from Asia loaded with cargo, or tankers and pipelines delivering our energy imports. Students often ask me “what do we export”? Rather than giving a technical answer, there are a couple of very interesting examples here that got me thinking….
read more...»Royal Mail and Competitive Pressure
We’re following Royal Mail as one of our research firms over the next six months and two articles in the news this week provide some terrific business studies insights into the competitive pressures facing the firm.
read more...»Ikea’s UK flat pack sales are…well..flat
This is a great article for business students - literally packed full with key business terms and concepts.
Globally, Ikea’s sales grew by almost 8% in the year to Aug 2010, presumably fuelled by expansion into emerging markets. However, in the UK the sales growth has stalled, with revenues only growing by 1%.
On the face of it, that doesn’t sound too good. But the article has a catch. Ikea’s market share actually grew in the same period to 6%; which must mean that the value of the overall market fell. So Ikea UK out-performed the competition. A key question for students is…why? There are lots of answers and clues in the article for them to spot and discuss.
