In 2012 Anthony Jenkins (nicknamed “Saint Anthony”) succeeded Bob Diamond and promised to clean up Barclays and eradicate the worst excesses of the banking industry. Speaking to those who received huge bonuses for unscrupulous behaviour, he said “my message is simple: Barclays is not the place for you. The rules have changed. You won’t feel comfortable at Barclays and, to be frank, we won’t feel comfortable with you as colleagues”.
Despite this, profit dropping 32% to £5.2bn, and making 3,700 jobs cuts last year:
The justification for this? Many senior traders have left, or threatened to do so, and to keep hold of the top earners, he had to offer top pay. Had he not, the investment wing of Barclays would have plunged into a “death spiral”, with staff and high-value customers going elsewhere.
This is part of the bigger issue regarding European Commission’s rule to reduce banking bonuses, how George Osborne is fighting the decision and why, it would seem, he really didn’t need to as bosses of RBS (81% owned by tax payers) and HSBC also side-stepped the rule by giving large “fixed pay allowances” in the form of shares.
This story always provides great impetus for emotive debate on BUSS4 topics such as government intervention, culture, pay and leadership.
This article uncovers some of the current challenges and changes in the UK’s oligopolistic supermarket industry, following the recent milk-induced price war. Whilst the ‘big four’ of Tesco, Sainsbury, Asda and Morrisons are in direct competition, there is huge interdependence between them, which translates into a high level of reactivity where changes in pricing can lead to these all-out price wars.
Image source: www.thisismoney.co.uk
Morrisons, the smallest of the four giants, has recently differentiated by opening an ‘innovations’ store. In the new concept store, they have reduced their number of product lines and now claim to provide 100% product availability due to a type of ‘just-in-time’ stock top-up system that utilises a ‘chilled corridor’ supplying each aisle. They also offer the opportunity for consumers to benefit from economies of scale through bulk buying… and now, Morrisons claim to sell the UK’s cheapest milk, following Tesco’s move to slash prices.
Morrisons are marching on and their innovations are part of a wider strategy to lower prices on all their core ranges to try and gain market share. Some might say it is about time they caught up; Morrisons only introduced their online shopping facility in January 2014.
The question now is: "with all the cost cutting and innovations, how will the top three react?”
“students never really cognitively understand something until they can create a personal metaphor or model”
To help students understand how a business can overcome the many barriers to success in China, we used the metaphor of trying to gain the affections of a beautiful, foreign (but very high-maintenance) woman… called China! The analogy worked surprisingly well and we compiled the pros and cons on the attached PowerPoint.
To summarise, everybody loves China because…
However, the problems are that…
So what do you do to succeed? The answer seems simple; learn why so many have failed, make sure you’re better than the rest, learn the language, culture and habits, give her what she wants and keep the parents happy!
This then led to application to businesses such as JLR, LinkedIn, KFC and Starbucks and what they did to build strong long-term relationships with the beautiful China.
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