Business Studies

Emerging Markets Case Study - Mothercare International Expansion

2009-11-07T12:41:00Z

Its sometimes quite tricky finding well-resourced examples of international expansion - but this is a good one. Mothercare has quietly adopted a strategy of repositioning its group by focusing on expansion into emerging markets like India, Russia and China using its two “global brands” (Mothercare and Early Learning Centre). It has set itself an objective of opening at least 100 international stores every year, using the franchise model of operation.

This streamed revision presentation provides a collection of stimulus materials which students could use to discuss Mothercare’s strategy. I have brought together some materials from a variety of sources, including press cuttings, annual reports and analyst presentations.

Launch streamed presentation on Mothercare’s International Expansion Strategy

School for Santas

2009-11-07T11:07:00Z

Here is a great example of skills training to meet a seasonal need, which was reported on the BBC website yesterday . A visit to santaschool.co.uk will enable you to register for one of the latest training courses.

Run in association with Dumfries and Galloway Council, Stuart Thompson is, for the second year running, offering a training course which has a very specific objective - to ensure delivery of unforgettable, quality experience to children of all ages. The training at Mabie Farm Park near Dumfries aims to help people take on the role in places like shopping centres and children’s parties and the website says that the training syllabus includes the History of Santa, voice training, costumes, make-up, roleplay etc. They also take bookings for personal home visits and reindeer hire - and the website is very carefully worded to ensure that the integrity of ‘the one and only Santa’ is maintained.

It is a spin-off of a business called Heatherbank Promotions which is an Entertainment Agency for Parties & Events, and strikes me as a great example of entrepreneurial product development!

Sainsbury’s and the electric vehicle superhighway

2009-11-07T06:21:00Z

This story seems like a good example of how understanding your customers can help to develop a competitive advantage. Sainsbury’s already claim that they are one of the country’s biggest users of electric vehicles, and are now encouraging their customers to follow their lead by installing vehicle recharging points for customers’ use at eleven of their London stores. They will not charge for the service, which presumably will enable customers to top up their cars for an hour or so while they do their shopping. Neil Sachdev, Sainsbury’s commercial director, said: “This will turn London into an electric vehicle superhighway, giving electric car drivers greater freedom.” According to the company’s press release, almost 70% of harmful particulate emissions in London come from road transport, whereas electric cars have zero emissions when being driven. Electric vehicles result in between 25% and 50 % less CO2 being emitted into the atmosphere and reductions could increase considerably as technology improves.

The announcement is enthusiastically supported by Boris Johnson, Mayor of London, who wants to turn London into the electric vehicle capital of Europe. “Central to this aim is the provision of charge points across the capital to ensure Londoners can go electric with the confidence that they can charge up where ever they are. I warmly welcome the arrival of Sainsbury’s network of charge points which will put half of all London’s population within three miles of a charge point.” Good PR for Sainsbury’s who may well have used some qualitative research into their customers’ life styles and interest in the environment to identify an opportunity to differentiate themselves from competitors in the fiercely competitive grocery market.

Critical Path Analysis

2009-11-07T05:07:00Z

CPA is probably my favourite topic to teach. I love it. This idea is not a magic bullet, but is a way to make it slightly easier. Who came up with this idea? One of my students.

I like to operate a slightly ‘Kaizen’ approach to my teaching. I always ask my students what they thought of an activity or how they think they would learn something better. I asked this question recently after teaching CPA and one of them came up with this really simple idea.

What I find is that when students first start to draw the diagrams, they end up in a right mess. Crossing things out, making changes, re-doing the est’s in the nodes etc etc. There notes look awful. How can they revise from that?

One of my students said that I should buy some fine liner pens and get them to draw the diagrams on the mini-whiteboards first. Then, if they get anything wrong, they simply rub it out and start again. Once I have checked their network and it is correct, they can copy it into their notes and they have a sparkling network diagram to revise from. Not only that, they have went back through it, consolidating their learning. Genius.

Can’t take the credit for this one, but it just shows that Kaizen actually does work, as long as you have a ‘motivated workforce’

Enjoy.

I want to tell you a story

2009-11-07T04:53:01Z

This is a great activity for revision and developing skills of application and analysis.

Every so often, I play a game with my eldest daughter which involves her picking up 5 or 6 random objects from around the house and then making up a story with all the items included. She loves it (developing thinking skills from the start I am).

Anyway, how do I integrate this brilliant game into my teaching? Easy.

After I finished the first part of AQA BUSS1 (the non finance section), I had 18 key words on the board (1 for each member of the class). Totally random they were, things like entrepreneur, sole trader, gap in the market, market research, sampling, adding value. You get the idea.

Then, I got the class to tell me a story using all the key words. I started off with the student at the front and each student took it in turns to add the next part of the story using a different key word. The results were amazing. All students were involved and all the key terms got used.

What I like about this is that it forces the students to find links with the different elements of the entire specification, bringing in different concepts. I love it. Going to do it again when I have finished BUSS1, using all the finance stuff as well.

I also did it with my Year 11’s prior to their mock exams.

You could also make it even more interactive. Get the students to come up with the words. Each one has to come up and write 1 key word on the board. Once they have finished, the story begins, and everyone loves a good story......

The Biz Quiz - 6 November 2009

2009-11-06T05:55:00Z

Back after the half-term break, the Biz Quiz has 10 new questions on this week’s business news:

Launch interactive version

Download printable pdf handout version

Download SCORM-VLE ZIP file

Survive and prosper - emerging markets in the global recession

2009-11-05T13:13:00Z

The Economist Intelligence Unit has just published a report that seeks to examine the business opportunities within emerging markets in the context of the current economic climate. They have surveyed over 500 companies during July and August 2009 to identify the issues and concerns of businesses that either already operate in emerging markets, or are actively considering doing so.

Lots of detailed and useful insights in the report. Perhaps most useful for students are some of the summarised responses to survey questions. I have highlighted some of those below:

The surveyed asked businesses:

What have been the main reasons for your company investing in emerging markets in the past two years?
The three top answers were:
- Opportunities for rapid market growth
- Lower cost base
- Competitive pressures in the home market

Another survey question was:

Which of the following government-related obstacles present the greatest challenges to your business operations in your main emerging markets?

Respondents identified these are the greatest challenges:

- Unclear bureaucratic regulations
- Political risk
- Macro-economic instability
- Weak intellectual property rights

Interestingly, the majority of companies surveyed remained optimistic about the growth prospects for emerging markets over the next few years; a large proportion expect their emerging market revenues to grow substantially:

Emerging Markets - Strategies for Doing Business in China

2009-11-05T11:49:00Z

The UKTI service is a superb support for businesses looking to expand into international markets, and they’ve just released a detailed guide to Doing Business in China. Its quite a detailed, 45+ page document, but it includes some expert guidance on factors for businesses to consider - particularly if they are looking to invest in China for the first time…

I have picked out some useful bullet points from the guide that might be useful for students preparing for the AQA BUSS4 (Jan 2010) exam on investing in emerging markets:

QUESTIONS A BUSINESS SHOULD BE ABLE TO ANSWER BEFORE ENTERING THE CHINESE MARKET FOR THE FIRST TIME:

BUSINESS RESOURCES AND CAPABILITIES
What are the unique selling points for your product or service?
Do you know if there is a market for your product in China?
Do you know if you can be competitive in China?
Do you have the time and resources to handle the demands of communication, travel, product delivery and after-sales service?

BUSINESS AIMS
Do you wish to buy from China, sell to China or both?
Do you wish to establish your own company presence in China, for example through a representative office, wholly foreign-owned enterprise (WFOE) or joint venture?
Do you need to be involved in China at all?

KNOWLEDGE
Do you know how to secure payment for your products or service?
Do you know where in China you should start?
Do you know how to locate and screen potential partners, agents or distributors?

IMPORTANT MARKETING QUESTIONS TO CONSIDER

Where is there greatest demand for my product?
Where is there greatest growth potential?
How easy will it be to market, distribute and sell my product in the regions I am considering?
Do I want to start in one of the rapidly growing coastal provinces of China, where there will be more experience of working with foreign companies, but also more competition and higher labour costs?
Do I want to start in one of the inland provinces, where there may be less experience of working with foreign companies, but also less competition and lower labour costs?
Should I enter the China market via Hong Kong, with its well-developed infrastructure and advanced financial and professional services sector?
Given that well over half of hi-tech related exports from China come from Taiwanese companies investing there, should I be looking to enter China via Taiwan?
What are the local/provincial authorities’ attitudes to international trade? Do they welcome it or do they have a reputation for bureaucracy and obstruction?
Are there any investment zones in the area and what benefits are on offer?

The guide goes on to provide a brief checklist for UK business people who are committed to investing in China:

- Leave your preconceptions at home.
- It’s all too easy to be dazzled or overawed by China, but keep hold of your business sense as tightly as you would anywhere else.
- Do your homework on the market and on potential partners.
- Patience is a virtue. Some things may take longer to set up than you think (especially if they involve bureaucracy), so allow for this in your preparations.
- Take a long-term approach, but don’t stick rigidly to your plans. Things often change rapidly and unexpectedly in China.
- Obtaining good quality independent legal and professional advice is essential.
- If your product is in danger of being copied or counterfeited, seek specialist legal advice on how best to protect your intellectual property rights (IPR).
- Don’t forget to carry out due diligence.

Emerging Markets - China’s Growth in Charts

2009-11-05T10:18:00Z

Here are a series of up-to-date charts which help illustrate the rapid economic growth in China and its effect on key consumer markets of interest to businesses in developed economies…

The charts illustrate well the rapid industrialisation experienced by China in the last 10-15 years, together with the emergence of large groups of consumers with disposable incomes which are being converted into demand for consumer goods like private cars and mobile phones.

I have put the charts into a Word document that you might find useful as a stimulus for discussion with students - perhaps by dragging one or more of the charts onto the whiteboard and asking students to :

(a) Identify the key information and trends shown
(b) Consider the possible implications for businesses in the UK

China_Consumer_Trends.doc

“Promoting mental wellbeing at work” - superb resource materials

2009-11-05T09:51:01Z

The UK National Institute for Health and Clinical Excellence(NIHCE) has today published a set of guidelines for employers on promoting mental wellbeing through productive and healthy working conditions.

The guidance focuses on interventions to promote mental wellbeing through productive and healthy working conditions, and describes mental wellbeing at work as being determined by the interaction between the working environment, the nature of the work and the individual.

The NIHCE website contains a superb set of guidance notes (aimed at businesses) covering all aspects of the promotion of mental wellbeing through productive and healthy working conditions, and offers Business Studies teachers plenty of resource materials for discussion on:

flexible working practices
the role of the line manager
hard and soft hr strategy
how small businesses can collaborate to pool resources

For a very brief overview and a couple of discussion starters visit HR Case Studies

To access the full set of materials/slide packs etc. (and there’s a lot!!) visit NHS: Promoting wellbeing at work

Buffett Bets on the Railways

2009-11-05T09:45:00Z

Ignoring seemingly better growth opportunities in emerging markets like Brazil, China & India, Warren Buffett has just made his largest investment yet - in a US railway!

The Times has an artice today contrasting the different investment strategies of Buffett and those of Asia’s main banks. The banks are swapping US dollar treasury bills for hoardes of valuable (but useless) gold. Buffett has decided to invest $34bn to take control of a very tangible product - the Burlington Northern Santa Fe (BNSF) railway. BNSF is an industrial railway - hauling heavy goods around the West of the USA.

Buffett has described his investment as an ““all-in wager” on the future of the US.

It might look like a dull investment. The growth prospects for BNSF are hardly exciting. But the investment is entirely consistent with a strategy that has made Buffett so successful.

Buffett prefers to make his investment returns from companies that have (according to his report to Berkshire Hathaway investors)

a) a business we understand
b) favourable long-term economics
c) able and trustworthy management and
d) a sensible price tag

Emerging Markets - 10 Tips on Successful Market Entry Strategy

2009-11-05T08:31:00Z

PA Consulting’s head of emerging markets Dean White has contributed a recent article to The Times Business Section on how to expand into emerging markets. The article gives a ten point guide on how to overcome the risks that come with trying to expand overseas…

Lots of practical advice in the brief article - very relevant for students preparing for BUSS4 (Jan2010) on Emerging Markets too.

The article is here:

The ten tips in summary are:

- Research
- Have an exit plan
- Choose the right place
- Everything will be different
- Take a test run
- Don’t think like a colonialist
- Know the rules
- Relationships are critical
- Learn from others’ mistakes
- Employ the right people

Emerging Markets - Investing in Brazil 2009

2009-11-05T07:51:00Z

Students preparing for BUSS4 Jan 2010 (Emerging Markets) may find today’s special feature in the FT really useful. The FT carries a print special edition (also available online) on the opportunities for investing in Brazil.

Nominations sought for sexiest HR Professional!

2009-11-04T16:51:01Z

In response to the launch of the Farmers Weekly Britain’s Sexiest Farmer Competition (yes, honestly!), Personnel Today has invited members of the HR profession to unfasten a few buttons, slip into something seductive and nominate colleagues for the Sexiest HR Professional Award.

Sadly (or possibly fortunately!) the entries for HR Hunks and Top Totty are as yet rather thin on the ground.

However ... a seductive slide over to the HR Case Studies website will also allow you to visit the Farmers Weekly Site and ogle at Anna, Nuffy or Bertha (Bertha is a tractor, so don’t get too excited) and witness the growing debate in the HR community over whether the Personnel Today competition is harmless fun or risks portraying HR in an unprofessional light.

For those of you outside HR (which I assume is the majority!) please do post a comment if you could.

Thanks

HR Case Studies: Phwoarr! Nice legs, shame about the HR policies!

The recent success of Yum! Brands

2009-11-04T11:25:00Z

It’s supposed to be a tough environment for the fast food companies and – with their poor reputation for investing in their employees - it’s surprising to hear that one is implementing a training programme that is described as the “biggest culture-change initiative in the world today”, affecting all of the firm’s 1.4m workers spread across 112 countries. The business is Yum! Brands, once part of Pepsi, before it was sold in 1997.

Since then, its share price has risen fourfold and its earnings per share have grown by more than 10% a year for seven years in a row. It has also fulfilled its ambition to become truly global, with more than 65% of revenue earned outside America.

Yet according to a report in The Economist, the business isn’t standing still. It has come up with three big areas for improvement: selling more healthy items, offering a greater variety of drinks and changing menus according to the time of day.

But a big problem is handling the corporate culture problem – a typical diseconomy of scale. How can a firm with different brands and operations in different countries implement change? In China alone it operates in 600 cities.

The plan is to try to create a single global corporate culture that emphasises constant innovation, which is supposed to spread down the chain of command from Yum!’s 200 most senior executives to all restaurant managers and franchisees around the world. The plan is to get Yum! to make far quicker progress on its three initiatives than would have been possible in the past. Innovations tested in one country are quickly being adopted in others. British KFC outlets, for example, pioneered a breakfast menu which is now being offered in 12 countries. Taco Bell is also trying to sell breakfast, and Pizza Hut in China is pushing a teatime menu. There are numerous other examples too.

I am sometimes overcome with doubts when I read stories like this, half expecting to hear in a few years about a once praised business vanishing into oblivion. Let’s wait and see. You may remember a recent blunder by the firm: it tried to rebrand Pizza Hut as Pasta Hut. The move bombed and they had to quickly backtrack. A quick survey of my students reveals that a third hadn’t even noticed…..