Buffett Bets on the Railways
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!
read more...»Q&A - What is globalisation?
Globalisation is a process where an increased proportion of economic, social and cultural activity is carried out across national borders. The process of globalisation has significant economic, business and social implications.
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Q&A - What are the main causes of unemployment?
The causes of unemployment can be described under four main categories:
- Seasonal unemployment
- Frictional unemployment
- Structural unemployment
- Cyclical unemployment
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The lights go out for the nightclub market
Its bad news for shareholders of Luminar - but this news story is packed with rich potential for a business studies lesson…
read more...»Can you spot the next ‘disruptive technology’?
Another thought for those of you who like spotting trends and ways in which the changing technological environment can have a huge impact on firms.
In 1995, two researchers at the Harvard Business School invented a new term: “disruptive technology”. This is an innovation that meets the needs of a small segment of consumers better than the existing technology. Once a niche is established, the product can develop, become cheaper and eventually sweep away its rivals. Their problem is whether they should ignore the threat or switch to the new system.
read more...»How to beat the tourism competition? Be the “steepest”
Destinations fighting for a share of the visitor attraction market have to constantly invest in the visitor experience in order to create a point of difference. For Flamingo Land in North Yorkshire, the focus is on offering thrill-seeking visitors the biggest, the best and (in this case) the steepest ride available.
What better way to promote a new attraction than to invite a BBC journalist to take the latest investment for a trial ride and then for the video to become one of the BBC’s most watched in recent days?
Enjoy.
A dramatic fall in business investment
A significant piece of economic data yesterday that business students might consider as they develop their understanding of the business response to an economic slowdown…
Strategic business decision-making - Network Rail
Network Rail’s proposed £34bn development of a high-speed rail line from London to Scotland could prove to be a great example to use with students over the next few years.
Network Rail has just published Strategic Business Case for New Lines. It attempts to justify the business case for both adding new rail lines and also releasing capacity on the existing rail network. There is lots of useful information in the publication relating to:
- Stategic objectives
- Stakeholders and the impact of investment on them
- Investment appraisal
- Capacity management
- Forecasting revenue and demand
- Environmental considerations
- Sources of finance (who pays?)
Business angels take flight - just when small businesses need them
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...»Spare capacity prompts a fall in business investment
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.
