Measuring changing shopping habits and inflation
As students learn about the impact of external economic influences such as inflation, it might be helpful to look at the changes the Office of National Statistics have just made to the way in which they calculate the average level of inflation for the UK. Each year they review the so-called ‘typical basket of goods’ that is bought by households, so that they can measure changes in the price of those goods over the coming year. This enables them to make sure that the prices they are monitoring are for the goods which are most relevant to the average household in the UK – the aim is to update the basket to reflect changes in our pattern of spending.
What business students can learn from how businesses have handled the recession
The actions taken by successful businesses during the UK recession provide a rich source of guidance for students wishing to improve their analysis and evaluation skills.
read more...»Revision Presentation - Revenues and Demand
In this revision presentation we look at the concept of revenue (sales) and customer demand. We look at the key factors affecting demand and provide some illustrations of how revenue is measured and calculated.
View revision presentation on revenues and demand
Pricing strategies and tactics under investigation
The Office of Fair Trading (OFT) is to undertake a detailed investigation into methods of advertising and pricing goods and services online. This should prove to be a really interesting report when it is published in the summer of 2010, making it essential reading for anyone wanting to understand the variety of advertising pricing tactics and strategies being developed online.
read more...»Ukraine 1 England 0 - A match to remember?
Whilst it might not have been the result we wanted, England’s match against the Ukraine on Saturday may become memorable for business reasons.
Whatever your view on whether England football matches should only be available to watch live on the internet, there is little doubt that there is plenty of scope for the topic to be used constructively in the business studies classroom.
Topics could include…
read more...»Protecting a brand - global giants struggle to fight off the counterfeit fakers
A super video here from the BBC which examines the significant growth of counterfeit goods flooding markets in the European Union.” A huge issue for global luxury brands - but do consumers really care too much if they are able to buy good quality fakes at prices substantially below those of the original brands?
More trouble in the skies
The ongoing turmoil in the airline industry continues, with the Irish national airline Aer Lingus announcing worse losses in this BBC news article
read more...»Demand and supply in action - tea prices surge
The new Edexcel GCSE Business Unit 1 specification encourages students to look at commodity markets to develop their understanding of how demand supply interact to determine market prices.
Here is an excellent example of how two significant shifts in the demand and supply curves can affect the global price of a commodity. Failing crops and surging demand for tea is pushing prices higher.
As a leading exporter of tea, Keyna is benefitting from the surge in prices, after suffering from higher production costs in recent years.
Microsoft and Google compete head-to-head
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...»U2 on Tour - Investment appraisal and capacity utilisation rolled into one!
A fantastic example of investment appraisal and capacity utilisation in this article in the Guardian, which describes the risks and returns of the new U2 tour.
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Stock control - de-stocking was over £5bn in Q1 of 2009
Fascinating evidence from the Office of National Statistics about what happened to firms inventories during the first three months of 2009. Data form the ONS estimates that the value of stocks held fell by £5.4bn during the quarter - a significant reduction. Students might consider why this happened. There will be a variety of causes:
- Deiberate attempts to reduce finished goods stocks by converting them into cash (perhaps by offering lower prices or promotional discounts)
- Closure (temporary or permanent) of production capacity
- Delays in ordering new raw materials and components as a way of conserving cash
Q&A - Explain the causes of inflation
There are two main causes of inflation:
• Demand-pull (when there is excess demand), and
• Cost-push (when costs rise)
Q&A - What is inflation and how is it measured?
Inflation is a sustained increase in the average price level of a country. The rate of inflation is measured by the annual percentage change in the level of prices.
read more...»BA posts a record loss
Truly awful trading figures from British Airways today, illustrating the severe competitive issues facing the airline industry…
read more...»Video case study - the effect of deflation on businesses
The latest data on inflation, as measured by the Retail Prices Index (RPI), sbows that prices are falling. What are the effects on the turnover of retailers? What is the impact on workers? A great video from the BBC provides ideal stimulus material for looking at this topic.
read more...»AQA AS Business Unit 1 - Possible Evaluation Questions
The following list is not intended as an exhaustive list of all the possible evaluative questions that might be set on BUSS1 – merely an indication of the key specification areas which lend themselves to longer, evaluative questions.
read more...»Q&A - How do changes in commodity prices affect businesses?
A change in commodity prices has too main possible effects on a business:
(1) An effect on sales revenue
(2) A change in raw material and other operating costs
Q&A - What are commodities and how are their prices determined?
A commodity is a product for which there is demand and which is supplied without any clear difference in product quality or standard.
An important feature of a commodity is that its price is determined as a function of its market as a whole – by the interaction of market demand and market supply.
read more...»Q&A - What is market demand?
Demand is the quantity of a good or service that consumers and businesses are willing and able to buy at a given price in a given time period.
Market demand is the sum of the individual demand for a product from buyers in the market. If more buyers enter the market and they have the ability to pay for items on sale, then market demand at each price level will rise.
read more...»Trading down - business class feels the pinch
Next time you step onboard Virgin Atlantic, Quantas, Lufthansa or British Airways, chances are you might end up sat next to a high-flying business person who’s feeling a little peeved at having to sit in economy.
read more...»Celebrity chef had the recipe wrong after all
An interesting piece in the Sunday Times this morning outlines what went wrong with the restaurant business owned and managed by celebrity chef Antony Worrall Thompson…
read more...»Q&A - What factors affect the demand for a product?
The demand for a product will be influenced by several factors:
read more...»Q&A - What is meant by adding value
Adding value is a key concept in busiesss studies. This note explains in more detail.
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Psychological pricing in action - the power of £0.01
We’ve heard much in recent weeks about the growing popularity of the £1 discount stores (Poundland etc). But what happens when a competitor comes along and offers everything at a much more psychologically-attractive price of £0.99?…
read more...»Video Case Study - Roadside Markets
I wonder whether we might see the emergence of more of these kinds of market as we experience a deep recession. This video clip describes how entrepreneurial stallholders are building a decent retail business in the fruit and vegetable market - by opening a market on the roadside. A good example of local markets in action (AQA Unit 1) and it goes onto explain how the produce & prices on offer are enabling the entrepreneurs to build quite a loyal customer base.
Download student worksheet & video link
The Corporate Jet Under Pressure
A great example of supply and demand + sources of finance, all rolled-into one…
read more...»The Grim Outlook for UK Unemployment in 2009
The business news in 2009 has got off to a pretty grim start. A revised economic forecast from the British Chambers of Commerce sees unemployment rising to 3.1 million during 2009, or approximately 10% of the workforce.
Is the latest supermarket “price war” just a public relations stunt?
An interesting article in the Independent today examines some of the claims being made by the main supermarket groups about the consumer-friendly price cuts…
read more...»Huge losses force Taylor Wimpey into drastic promotional activity
When shareholders approved the £5 billion merger of housebuilders Taylor Woodrow and George Wimpey, they probably didn’t expect that by the end of August 2008, the combined business would be worth less than £500 million.......
read more...»Economic environment - disposable income takes a dive
News of a really important economic development that business students will need to be able to understand. Consumer disposable income is falling under pressure from rising prices of essential items such as food and energy whilst wage rises are not keeping pace…
read more...»Working with suppliers - Matalan applies the squeeze
A good example to use in AQA AS Unit 2 (working with suppliers). Discount retailer Matalan has made itself unpopular with a group of small business suppliers by imposing another price cut…
read more...»Private shareholders suffer big losses from quoted company investments
With all the focus of the new AS Business specifications on business start-ups and small businesses, it easy to forget the importance of larger quoted companies. Private shareholders who have invested some of their personal wealth in the stock market have had a tough time according to some new research…
read more...»Cutting capacity to weather the housing slump
There was a great example last week of how to cut fixed costs and capacity to meet a sudden decrease in demand…
read more...»Starting a business - have your cake and eat it
The startups guides to setting up a part-time business are a rich source of material for teachers and students. The latest in the series guides us through the potentially sticky challenge of starting a cake-making business…
read more...»Lots of hot air over gas and electricity price rises
The newspapers are full of analysis and response to the significant increase in consumer gas prices announced by yesterday, followed swiftly by news that British Gas owner Centrica has just made a half-year profit of almost £1 billion…
read more...»The formula that proves celebrities have a product life cycle
If you are looking a for fresh approach to teaching the product life cycle, then this news could be just the thing you need…
read more...»Ryanair flies into the path of the economic storm
A dramatic opening line in an Guardian article suggests that bad news from Ryanair means that the “boom in European low-budget air travel has turned to bust”…
read more...»Have we reached the end of the low cost flying boom?
Its bank holiday weekend and ABTA estimate that almost 2 million people will be leaving the UK for an early summer break this weekend. But as they board their aircraft, the soaring price of oil may mean that this weekend’s great getaway is one of the last boom periods for the leisure flying market. Willie Walsh, CEO of British Airways certainly thinks so.
read more...»Belt tightening puts consumer spending under pressure
A key economic indicator for business students to understand is consumer spending. The amount that households spend on goods and services is an important driver of demand for most businesses we study, so a major change in consumer spending growth is a significant change in the economic environment.
read more...»Helping Business Students Understand Rising Inflation
A short two-minute news clip on consumer price inflation is a great way of updating our business students on the latest information on inflation. I really liked this one from Sky News this week.
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