Not long after the news of the new Google operating system (see Microsoft and Google compete head-to-head comes another big news item: Microsoft and Yahoo!, the world’s biggest software firm and its leading online portal respectively, have reached a deal for a ten-year web search and advertising partnership. The combination is likely to create a serious rival to Google, the online giant that dominates both of these markets.read more...»
There is a perfect storm brewing in the newspaper industry around the globe. Dramatic falls in advertising revenues coupled with a rapid migration of readership from paid-for newsprint to free-to-read digital is destroying the business model of many regional and national newspapers. Here is a thought-provoking piece which considered what the successful newspaper of the future is likely to be. I like the concept of a nichepaper - where readers are prepared to pay for the value added from specialist and passionate journalists and other writers.
An article in The Sunday times suggests that the value of Friends Reunited might be even lower than initial estimates as ITV looks to dispose of the one-time Internet darling.read more...»
It will take more than this to reduce its enormous losses, but British Airways has decided that meals on short-haul flights after 10.00am are for the chop…read more...»
Here is the latest move in the battle for position, power and profitability in the market for digital downloads. Spotify the music streaming service based in Sweden has submitted an application to Apple for their iPhone that will allow their premium service users to search for music on the Spotify playlists and download their free library of songs onto their mobile phone.
Spotify say that the free application for the iPhone has met all of the developer guidelines required by Apple. The application will not allow users to buy music from the iTunes online store and herein lies the stumbling block! Will Apple really allow potentially one of its major rivals in the market place to find a home on the ultra-popular iPhone? Their dominance of the mobile phone music market looks too strong and too profitable to allow this new application. Spotify has become tremendously popular within a short space of time - it is claimed that they have over two million users in the UK alone.
*The advertising-funded version of Spotify is free of charge
*The premium service costs Euro 9.99 a month
*Apple has already approved several other music services such as Last.fm, Deezer and Pandora but these are much smaller competitors
*Music technology experts say that one of the main advantages of the Spotify application for the iPhone is offline play - push a button to download your Spotify playlists containing up to 3,333 songs to the app for playing whilst not connected
Here Rory Cellan-Jones from the BBC test drives the new Spotify application
And this Guardian editorial sings the praises of being able to listen to music without paying over the odds
Update: In August 2009 Apple announced that it had approved the bid for an iPhone app from Spotify. Details here
Hedging is a way of reducing uncertainty over the future path of volatile inputs such as the cost of fuel. One the most important decisions that an airline can take is the extent to which it uses hedging to lock in the price of a barrel of kerosene for a period of six or twelve months.
Ryanair provides a good example of how this can have a decisive effect on profitability. Late in 2008 Ryanair was hedged into paying the equivalent of $125 a barrel for kerosene just as the world price price of oil was collapsing to below $40 a barrel - the result was higher operating costs and a Euro 150 million hit on profits. For 2009 around four-fifths of Ryanair’s fuel requirements are locked in at $62 a barrel which with oil prices nudging up towards $70 a barrel will give the airline much needed breathing space as the recession affects demand for seats and forces many airlines to cut prices still further to maintain a profitable level of load-factor (the percentage of seats on each flight that are filled).
*Ryanair is now Europe’s largest airline having overtaken Lufthansa and British Airways
*In the last twelve months nearly 60 million passengers have flown with the airline
*With a market capitalisation of £4.6 billion, Ryanair is larger than the German flag carrier and easily more than twice the size of BA.
*Ryanair has a 28% stake in rival Irish airline Aer Lingus and has tried several times to take it over - so far without success!
The Big Question feature in the Independent is a reliably regular source of useful and interesting background articles. There is often an economic / environmental /social / business perspective to their choice of topics in the news. And the Indy handily provides some vivid graphics that can serve well as student handouts or a prompt for a data response question. Here is a brief selection of recent features
Why is inequality rising in the UK? (July 2009)
Can the G8 meet its climate change targets? (July 2009)
Hundreds of applicants are expected for a job where the main criteria for the job will be the ability of the job applicant to scare the living-daylights out of the interviewer…read more...»
The battle between Microsoft and the EU competition commission seems to have gone on for an age. In the latest move Microsoft has agreed to contact European users of its Windows software to a choice of Web browsers. The browsers featured in the ballot would be determined by market share; the five with the highest—at the moment, Internet Explorer, Firefox, Apple Inc.‘s Safari, Opera and Chrome—are almost certain to be displayed. What is critical is the number of web users who then decide to switch to an alternative browser and click on an option for Microsoft IE to be removed as the default web browser. My default choice is now Firefox from Mozilla. Windows 7 is due for release on the 22nd of October.
The Telegraph has an engaging piece here on ten ways in which the recession is changing Britain - from the explosion in the use of discount vouchers (real and virtual) to stay-cations, rising demand for sewing machines, takeaway pizza, discount food retailers and buses, consumers are showing resilience and ingenuity in responding to the challenges of the downturn. Smart businesses have taken advantage of the opportunities.
This is one of my all time favourite starter activities..a belter if you have an interactive whiteboard.read more...»
Accountancy is under huge pressure: it’s widely felt that inadequacies in the way firms have kept their books contributed to the credit crunch mayhem of last autumn. That’s probably a bit unfair, but what is seen to be the problem and what are the proposed solutions?read more...»
How do you eat your ready meal dinner or Sunday lunch? Evidence of changing social habits suggests that we are increasingly turning into a nation of one-handed eating…read more...»
Fascinating research issue by the CIPD today sheds light on an important topic in HR management - absenteeism…read more...»
As sterling is so much weaker than it was a year ago, anyone travelling abroad for their summer holidays is going to find that their spending money buys far less. One result of this is that fewer of us are travelling abroad – see Innes Robinson’s piece ‘Recession hits Tenerife beaches’ on the GCSE blog, with its link to a video report on the BBC website showing glorious empty beaches, and the business closures, cancelled flights and growing unemployment in Tenerife as a result. Another result is that holiday makers will feel that their spending budgets are under pressure, and finding the best exchange rate could make a big difference. The BBC found that the cost of buying 500 euros varied hugely, from £423 to £463, which really makes shopping around worthwhile.
Imagine, for a moment, that you are a top European footballer, perhaps from Italy, Spain or Portugal – something like Cristiano Ronaldo but better looking and more modest. Now imagine that two years ago you signed for a top Premiership club, perhaps Chelsea or Manchester United, for a transfer fee of around £25million plus a weekly salary of £100,000 – a reasonable and modest sum, given the quality of your football. When you started to play in the UK the top rate of tax was 40%, so after the first week when you benefitted from the lower tax rates on the first £40,000 or so of your annual pay, you have paid £40,000 income tax per week. But next April the top rate is set to rise to 50%, so your net (or take-home) pay will fall by a further £10,000 per week. Will you have to start watching your spending a bit more carefully?
The better business game from BT is a useful resource for helping students to think about some of the ethical issues involved in running a business, and balancing the responsibilities of a business with the need to make money.
After 35 years of providing TV listings, sports results and weather forecasts, the analogue information service known as Teletext is to be closed…read more...»
You won’t find this source of finance in any of the new A Level Business textbooks, though it is likely to be an increasingly popular option for quoted companies who want to raise substantial new financeo over the next year or two…read more...»
The swine flu pandemic has the potential to cause substantial disruption to the operations and workforces of many businesses - large and small. Forget the media hysteria. Employers around the UK are now being given direct advice on how to prepare for the potential storm…read more...»
I’m not convinced that this business start-up is for real. But the story comes from the US, and its featured on the venerable BBC, so it must be true…read more...»
The Guardian takes a guided tour round the HQ of the Internet’s hottest property - Twitter. Some interesting observations on corporate culture, the need for focus and fast decision-making etc. The reader comments below the article suggest that many Guardian readers are not enthusiastic supporters of Twitter though!
The new Edexcel specifications introduce Market Mapping as a GCSE topic, and it is a great way of getting students to put forward their own views and then justifying them. It’s also a useful way of helping students to recognise that there are no concrete answers in business, and that their market map may not be the same as other students.
Of course students need to be familiar with the market being mapped. That usually means food (e.g. the crisp market, chocolate market), mobile phones, or TV. So this example from the Channel 4 website, which maps the channels that are considered competitors of E4, may prove to be useful.
Where does M&S’s lochmuir salmon come from? How can you double the size of a chicken breast in 40 seconds? Does the chicken in a Birdseye ‘Great British Menu’ prepared meal come from Brazil, and would it matter to you if it does? Was a bag of ‘organic salad’ washed in organic water before it was packed? I am kicking myself for not having set the DVD recorder for this programme on BBC1 at 9pm last night. Initially it focuses on marketing techniques used to persuade consumers to buy food products through suggestion of the origin of the ingredients. Are the marketers clever, devious or unethical here? Later the programme moves on to a more serious investigation of food fraud - deliberate misrepresentation of the ingredients used in food products. Food scientists are, apparently, developing all sorts of techniques to hide the DNA evidence of what is in our food, but others are fighting back by using the same technology as that used to identify extinct animal special such as Tyrannosaurus Rex to identify the source of protein used in our food. Some of the opinions sought from consumers shopping in British markets are clearly manipulated by the producers of the programme to get a good old-fashioned ‘Disgusted of Tunbridge Wells’ response to what marketers might call imaginative promotion. Elsewhere there is evidence that fraudulent labelling is used to imply that products made from halal chicken actually contain beef and pork. If you missed the programme, it is worth watching on the i-player.
A very useful video which highlights the opportunities and issues facing UK businesses looking to do business in Chinaread more...»
I’m more than surprised that global confectionery giant Mars hasn’t launched a new brand for 20 years (according to the FT). But that has just changed with the arrival of a new chocolate product aimed fairly and squarely at women…read more...»
Mike Southon is essential reading in the FT on a Saturday and his latest entry makes some really useful points for business students…read more...»
An interesting article from Andrew Stone this morning in the Sunday Times highlights the growing funding problems faced by small business who are looking for external investment by business angels…read more...»
Forget those boring textbook examples of batch production - loaves of bread, school dinners, building a house etc etc. Here is a great pictorial example of batch production in action…read more...»
It’s getting close to the end of term, so if you follow this blog you will get a link to a Mitchell and Webb comedy clip that neatly expresses my sentiments about ‘alternative’ medicine. This year the government has taken some first steps to regulate a business worth around £4.5 billion, with ‘treatments’ ranging from aromatherapy and energy channelling to yogic healing. Apparently 1 in 5 Britons has visited one of the 150,000 alternative therapists in the UK.read more...»
A fascinating insight into some new technologies that are enabling a Cambridge-based firm to grow, despite the impact of the global downturn…read more...»
Here are some puzzle-style starter activities based around a collection of well-known UK retailers…read more...»
A dramatic shake-up for the information-technology (IT) industry is coming. Google is promising to release an operating system (like XP or Vista) for personal computers. This represents a direct attack on Microsoft, the world’s biggest software firm.read more...»
Here is an activity that my students are buzzing about.
So, so simple but so, so effective.
Rather than giving a crossword out of key terms at the start of the lesson, how about giving them a completed crossword and asking them to write in the clues?
I tried this yesterday and the results were amazing. You could really see the students thinking and the level of differentiation was incredible. There are lots of crossword creators on-line, and the cool thing about this is, you don’t need to come up with the clues. Let the students do the work (I’m sure that is what teaching is supposed to be about!)
A nice video clip from the BBC website examines the direct and indirect economic effects enjoyed by businesses in Wales as the Ashes cricket series comes to Cardiff: A good example to use as students consider the effect on demand of external influences.
Our Business Teacher Discussion Forums are now fully live. We’re hoping to make the discussion boards into a lively and useful source of help, debate and materials for Business teachers in the UK and overseas.
We’ve got separate boards for various Business courses, including GCSE, AS/A2, BTEC First and IB Business & Management. You can visit them here
EU legislation which prescribes the required shape for a range of fruit and vegetables, is being relaxed. So can you now look forward to seeing a lot more “wonky” veg in the supermarkets? Or will the main grocery chains continue to source good-looking vegetables to meet the needs of customers who like their products to look just right?read more...»
We’re hard at work putting the finishing touches to a new collection of PuzzlePacks for the new GCSE Business specifications…read more...»
This will be a story that is worth following over the Summer. Leading coffee shop chain Coffee Republic is on the bring of going into administration according to the papers yesterday. A story of over-ambitious expansion, unprofitable growth through franchises, the impact of the credit crunch and a struggle to handle intense competition from from better-resourced rivals such as Starbucks and Costa Coffee. So far as I’m aware, Coffee Republic has never made a profit - though it has long been feted as an entrepreneurial success story…
Here’s a challenge you could set your students…read more...»
The undisputed kings of publicity are at it again. The Telegraph is reporting a story in the Sun (an interesting decision in itself) that Ryanair is considering offering standing room options rather than seats on some of its flights. Apparently it can increase the passenger capacity by up to 50% and reduce costs (unit costs per passenger?) by 20% by doing this. A good example to use with students who might want to consider the +‘s and -‘s from various business perspectives…
Just picked up on this detailed story in the Sunday Tmes last week which speculates about whether media mogul Simon Cowell is about to set up a business in partnership with retail magnate Philip Green. The two entrepreneurs are believed to have been plotting (sorry, business planning) the venture in Beverley Hills for a while. Much potential here for an interesting discussion with students about the potential upsides and downsides of putting two high-profile business people together. Are their skills closely and appropriately matched? (as suggested by the article). Or is this an argument and falling-out just waiting to happen?
Here’s an interesting twist on the recruitment and selection process. The standard business studies textbook waxes lyrical about the traditional job application form + advantages / disadvantages compared with a traditional CV. But the business featured in this news story is using the job application process to find out in a very practical way whether applicants can demonstrate they have the required attributes…Read on here
Knowing what your customers want is key to the success of any business. This is particularly true for so called “pound” shops; their customers are focused on value and price.
The importance of this is perhaps reinforced by the tale of two retailers who operate within the value market. Poundland has gone from strength to strength, as shown in earlier blog articles, and is set to open at least 30 new stores over the next 12 months.
InStore, on the other hand decided that their customers should move upmarket - and replaced the familiar £-stretcher fascia with the less familiar InStore fascia.
Our final Biz Quiz for 2008/2009. We return in the first week of September 2009!
The recession is creating a growing amount of spare productive capacity across many different markets and industries. From container ships to hotels and from steel plants to airlines, the fall in demand has lowered capacity utilisation and put a big squeeze on profits. That pressure on profit margins comes not just from weaker revenues. Keep in mind that many businesses have a large fixed cost component such as the overhead costs of operating a network. Thus when output is contracting, the average fixed costs of production increase.
Declining demand and rising productive slack inevitably cause a fall in planned investment spending - economists term this a negative accelerator effect. BBC news reports that British Airways is cutting capital spending in response to the slump in demand and mounting losses. “The airline said it had cut spending by 20% to £580m ($952m) from £725m, and had lengthened its schedule of orders for 12 Airbus A380 aircraft.”
Further evidence for the reverse accelerator affect comes from Japan where Japanese firms cut their capital spending by a record level in the first quarter of 2009. In contrast Stagecoach is increasing investment in a fleet of greener buses.
This is a story that will never end, to the great amusement of people with a slightly immature sense of humour. I might even be describing myself. In a globalised marketplace, words, terms or phrases that make perfect sense in their own language can be unintentionally crazy, daft or rude when they cross over into other cultures.read more...»
The BBC has confirmed that the new series of Dragons’ Den will air on Wednesday 15th July at 9pm on BBC2
This is a cracking starter/ plenary activity that goes down great this time of year.read more...»
Taking advantage of the sweltering temperatures outside whilst I write this, here is a mini case study in quality control…read more...»