Video Case Study - The Supermarket Bullies?

Many thanks to Janis Thompson at Bristol GS for suggesting this terrific 3-minute video on the battle between supermarkets and their hard-pressed suppliers.  A great range of business topics in here, including an obvious starting point for discussing the ethical issues raised in the clip

Launch BBC video

Download student worksheet (including video link)

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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…

Working with suppliers - the grocery battle

The relative bargaining power of retailers and suppliers is sure to be tested during the recession, particularly in the highly competitive grocery supermarket sector wher consumers have demonstrated their preference for better value for money.

Small firms fighting the economy blues

The BBC has returned to the 10 small firms they are following through the recession to find out how they fared during December, and how they are feeling about prospects for the next year. The results are surprisingly upbeat; several are actually feeling more optimistic than they did a month ago, and report a better-than-feared month in December. The main concern for many of them is the availability of finance from their banks, in some cases for themselves and in others for their customers and their suppliers, and rising costs of supplies is a worry too. 

Ripple effects of a brutal outlook for the car industry

The global lack of demand for new cars was brought home to my Business Studies pupils last week when we heard that our annual visit to the Jaguar car factory in the Midlands had to be cancelled due to an unscheduled plant shutdown for the second half of January. 

Making a mint from “out-of-time”

This is one of the most unusual entrepreneurial stories I’ve seen that has come out of the credit crunch.  The FT reports on the stunning success of a business that profits from obsolete stock…

A Devastating Blow for the Irish Economy

Dell’s decision to close its manufacturing capacity in Limerick and transfer production to a low-cost location in Lodz in Poland will come as a severe blow to the Irish economy....

Zavvi joins the casualty list

Retailer Zavvi (formerly Virgin Megstores) finally went into administration yesterday afternoon after prolonged speculation that it was in financial difficults.  The statement made on Zavvi’s website says much about the reasons why this business failed.  This is a good example to use for centres preparing for the new AQA AS Unit 2 (working with suppliers, managing cash flow etc)

On 27 November 2008 Entertainment UK Limited (EUK), the Zavvi UK’s main supplier, went into Administration.  Since this time, the Group has been unable to source stock in the usual way and has been forced to enter into new trading arrangements.  The Directors understand it is unlikely that EUK will be sold as a going concern and the Group has continued to experience significant difficulty in obtaining stock on favourable credit terms. In addition, the Group has recently experienced a material fall in revenues due to the abrupt downturn in consumer spending. As a result of the above factors the Group began to experience significant cash flow pressure and ultimately became unable to pay its debts as they fell due.

More available here from the BBC web site and also from the Guardian

Bracing ourselves for a series of retail business failures?

A bold (perhaps reckless) prediction in the Sunday Times today.  “Up to 15 national retail chains are predicted to go bust before the middle of January 2009"…

Video case study - falling demand for organic milk means a poor return on investment

This is a great video to use as a way of illustrating how a sudden change in market demand can reduce the returns made on business investments.  In this example, many dairy farmers have invested into turning their operations into organic milk production (to win a share of the growing and higher margin organic milk market).  However, the credit crunch has led to a sharp fall in demand and the main milk wholesaler (Dairy Crest) has reduced the farmgate price paid to its suppliers.

Download student worksheet (pdf) and video link

How Small Businesses are Handling the Downturn - An Update

This excellent series on the BBC website has a new update. The idea is a clever one - track the monthly views of 10 small businesses, operating in a variety of sectors.  As we progress through the coming difficult months, it will be interesting to gauge the mood of the 10 entrepreneurs concerned.  The November reports (now available) make very useful reading for Business Teacher and Students.  I particularly like the selection of a “key current concern”.  These vary from hoping that suppliers will remain in business to finding the right quality staff.  Much to discuss with students simply from these brief insights.

Revision quiz - Working with Suppliers

The importance of a business working effectively with suppliers is now featured in several business studies specifications.  Here is a quick revision quiz that covers the key points.

Launch interactive quiz on working with suppliers

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…

The Primark Question

Over recent years, this topic has come up as ‘the most asked question’ in Business and Economics lessons.  Specifically, is it ‘ethical’ to buy low priced goods produced in poor countries?  My personal answer is an emphatic ‘yes’.  It’s hard to see how our refusal to open some markets to free trade – particularly in agriculture – helps the world’s poor. 

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