Data watch - what happened to business investment in the UK recession?
A recession is typically associated with a reduction in business investment (capital expenditure). What does the data show in terms of the total capital spending by UK firms during the recent recession?
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Q&A - Is there an optimal level of gearing?
Gearing varies from firm to firm and from industry to industry. It is important not to rush to judgement about the gearing level of a business without considering other factors such as profitability, liquidity and the competitive position of the business.
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Revision Quiz - Gearing
A revision quiz here for A2 / Year 13 business students, including those preparing for AQA BUSS3. This ten question quiz tests understanding of the topic of capital gearing.
Launch interactive version of revision quiz on gearing
Download VLE Import Version (SCORM-Compliant Zip file)
Revision Presentation - Risks and Rewards to Enterprise
Entrepreneurs taking calculated risks expect to enjoy suitable rewards for their endeavour. But what are these risks and rewards? And how can an entrepreneur minimise risk?
Launch revision presentation on risks and rewards to enterprise
Survive and prosper - emerging markets in the global recession
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.
read more...»Emerging Markets - 10 Tips on Successful Market Entry Strategy
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…
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Innovation & Protecting a Business Idea - Classroom Video
A huge hat tip to Angela Aldridge for suggesting this terrific short video clip on the process of invention and innovation at Dyson. This has to be one of the most useful videos you’ll ever have as a lesson starter on product innovation....
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4 minutes with Stelios - insights into entrepreneurship
A lovely four minute interview by the excellent Working Lunch team with Sir Stelios Haji-Ioannou provides loads of useful insights for business students. This would make an ideal lesson starter for any lesson on risk-taking and the factors that drive entrepreneurs to act the way they do.
Revision Presentation - Managing Risk
This streamed revision presentation considers the issue of risk and what businesses can do to manage it
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…
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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Q&A - Outline the main costs and benefits of inflation
Inflation has many important costs and consequences for both society and business. However a stable and low level of inflation also provides some upsides for business.
read more...»Porter’s Five Forces hits the fish counter
Sustainability, ethics and corporate social responsibility all feature heavily in the news about bluefin tuna this week, as does the theory of Porter’s Five Forces in shaping business strategy. The bluefin is the victim of consumer trends – the explosion in the demand for sushi and for fresh tuna steaks to barbecue, as well as successful campaigns to persuade us to eat a more omega 3-rich diet to protect us from heart disease (and even to prevent eye disease, according to this report on Monday). But it is being over-fished to a critical point at which stocks are becoming completely unsustainable. A film which premiered in the UK on Monday makes the point very clearly - The End of the Line, a documentary based on a book by journalist Charles Clover, examines the mismanagement of bluefin fisheries as a microcosm of how we are hoovering the seas of their fish to the point at which species cannot be sustained and risk dying out altogether. It is generating much publicity for the issue, such as this article from the Times, in order to give it a higher profile.
Thinking Outside The Smaller Box
It can be a challenge to think of examples for the topic of “Thinking in Opposites”, or “What if...?” once the obvious ones of Marmite, Muller and Yorkie have been used.
However, Kleenex’s decision to rebrand it’s “Kleenex For Men” to “Kleenex Mansize” was coupled with a decision to change the size of the box. What motivated this move?
Apprentice Stars Lack Entrepreneurial Spirit
Sir Alan Sugar may be about to choose his next apprentice - but he is unlikely to be impressed with the owners of the Bridge Cafe. It is the cafe used by the losing team to lick their wounds before doing battle in the board room, but according to…
read more...»Do The Dragons Get It Right?
You don’t need me to tell you that Dragon’s Den is a great teaching resource for the new specifications. It covers risk, potential rewards, potential failure,aspects of finance, marketing and any number of other topics. Have you ever wondered where you can find out more about some of the products that have been featured?
read more...»Q&A - Describe the main qualitative methods of sales forecasting
Qualitative methods of sales forecasting rely less on data, and much more on the opinions and experiences of the people involved in the forecasting process.
read more...»Q&A - What factors influence the choice of a sales forecasting method?
The choice of forecasting method is influenced by key issues such as:
read more...»Sources of finance - the bank overdraft rip-off
We got a letter from the Bank of Scotland last week offering us a very generous bank overdraft for the tutor2u business…
read more...»Q&A - What are the main personal sources of finance an entrepreneur can obtain for a start-up?
In practice, most start-ups make use of the personal financial sources of the entrepreneur. This can be personal savings in the building society, a bank balance. It can be providing assets for the business (e.g. a car). It can also simply be working for nothing! The following notes explain these in a little more detail.
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 - What is a bank loan?
A bank loan is the most common form of loan capital for a business.
read more...»Q&A - What is unlimited liability?
There is a big downside to operating as a sole trader. It occurs because, in the eyes of the law, there is no difference between the person running the business and the business itself. When it comes to chasing money owed by a business, a sole trader has to settle up.
read more...»Cash flow management - chasing the late payers
AS and A2 students are likely to come across a scenario or two where the case study business is suffering from slow payment of invoices by customers who bought on credit (so called “trade debtors"). An interesting survey out today suggests that small businesses in particular are being more aggressive in chasing up long-standing debts - as the need to maximise cash flow becomes the number one business priority…
read more...»OCR 2880 (ACE) - Why build a railway line when a bus will do?
One of the strategic choices facing students in the OCR 2880 case study is a potential project to build a railway line linking the ACE airport to the national rail network. Here’s what the real-life airport behind the case study has actually done when faced with the same challenge.
read more...»Football finances under the spotlight
The troubled finances of football clubs comes under the spotlight again this weekend - this time in an article in the Observer…
read more...»Q&A - What can a business do to improve cash flow?
The most important part of improving cash flow is having a reliable and up-to-date cash flow forecast. This provides the information which highlights the main cash flow issues.
In terms of actions which management can take, here are the main options:
read more...»CelebAir - Price Elasticity of Demand Exercise
Peter & Jordan have abandoned their celebrity makeover business and have decided to move into a much less risky industry. So they have launched their own private airline - CelebAir. Can an understanding of price elasticity of demand help them make the right business decisions?
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Credit Insurance and Retailer Cash Flow
A fantastic 8-minute video from Newsnight is ideal for A2 students looking at the causes of cash flow problems - particularly for retailers…
read more...»Q&A - What is profit and why is it important?
Profit is a very important concept for any business – particularly a start-up. Profit is the financial return or reward that firms or entrepreneurs aim to achieve to reflect the risk that they take.
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Q&A - What are the disadvantages to a start-up of setting up as a franchise?
Whilst starting a business as a franchise is traditionally seen as a lower-risk approach, there are some significant disadvantages to consider:
read more...»Q&A - What are the advantages to a start-up of being a franchise?
For a start-up entrepreneur, there are several advantages to investing in a franchise:
read more...»Q&A - What are the financial objectives of a new business?
This note outlines the main financial objectives that are set by an entrepreneur.
read more...»Q&A - What are the characteristics of successful entrepreneurs?
Much research has been done to examine the personality and other characteristics of successful entrepreneurs to see if there is a proven method or route to success. You will find many lists of “what is takes to be an entrepreneur”, but they tend to say similar things. So here is a summary of the key findings!
read more...»Q&A - What motivates someone to start a business?
A student asks:
What motivates someone to start a business?
read more...»Q&A - What is an entrepreneur and what characteristics do entrepreneurs need to succeed?
A student asks:
What is an entrepreneur and what characteristics do entrepreneurs need to succeed?
read more...»A good example of over-optimistic sales forecasting
The games industry is a rich source of case studies for business studies. I liked this story about leading games developer Eidos which has had to admit that sales forecasts for its main product have proved to be over-optimistic…
read more...»Video Case Study - Exporters Benefit from a Weaker Pound
This super video clip is an excellent example of how the recent weakness in the Pound can generate sales opportunities for exporters. With a price advantage of around 25-30%, exporters with the right product and a suitable promotional mix can win significant new business during 2009 (we need them to!). A great video too for explaining in simple terms how an exporter can hedge the risk foreign exchange fluctuations. Certainly worth showing to the A2 students…
Download student worksheet (pdf) and video link
Sources of finance for SMEs - Banks Squeezing the Life out of Businesses
A timely and hugely relevant article in the Guardian today about how Britain’s banks are squeezing the life out of the UK’s small business sector…
read more...»AIG is nationalised at the last minute
In the end, the US authorities decided that AIG was just too big and too important to fail. So they nationalised it. The world’s largest insurance business is now owned by the US Government…
read more...»Insights into a good business idea from the thoughtful Dragon
Looking back through some newspaper clippings from earlier this year, I came across a really interesting interview with James Caan. In the interview, Caan makes some interesting comments which are of direct relevance for students embarking on the new AQA & Edexcel AS Business courses this week…
read more...»New owners for Pontins try to defy the product life cycle
Pontins, the UK holiday park business which was born in post-war Britain and thrived during the 1950’s and 1960’s, has just been bought for £46m by new investors. Can they turn reverse the decline in the traditional holiday park market?
read more...»Another Business that doesn’t ‘get’ the internet: Hollywood
There are plenty of websites that offers films for download to personal computers, iPods or other hand-held devices, or to burn to DVD. They look professional, with easy to use features, detailed descriptions of each movie, editors’ picks, customer reviews and screen stills. Even the prices are reasonable. The catch is – they’re illegal.
read more...»Egg withdraw thousands of credit cards: a wise precaution or public relations disaster?
But it now looks like the plan may have been intended to achieve something else: to target those customers who settle their debts every month and so generate no income for the bank. Now some MPs are demanding an Office of Fair Trading investigation. Egg’s decision may have dramatically backfired. The Observer newspaper, who claim to have revealed how consumers with blameless credit ratings are being refused credit cards report that the practice is spreading.
