Score Draw and Soccernomics
Arjun Bali looks at the surprisingly low number of draws in Premiership Football and suggests that the Reds might have challenged more strongly for the title last year had Benitez been more of an economist!
read more...»Managing a global business in turbulent times
Over ten years at my current school I have been hugely fortunate to hear some tremendous speakers on a tremendously wide range of issues. Few have impressed me as much as Simon Henry, CFO of Shell plc in his talk to our Keynes (Economics) and the newly-formed Management Society last night. His talk was beautifully paced and considered; the responses to questions were candid and rooted in a deep understanding of energy industries where volatility has become the norm. Future shareholder value will depend largely on successfully breaking the cycle of volatility.
Simon Henry at the Keynes Society
Simon Henry the CFO of Shell plc is speaking at the Keynes Society this coming Wednesday evening at 8-45pm in Upper School, Eton College. He will be talking on the topic of ‘Managing a business in a time of change’. Teaching colleagues are most welcome to come along to this meeting and it may also interest A2 students applying to read Economics and Management or A2 Business Strategy papers. Please if you are planning to come along.
Hold the phone!
For those of you are thinking of buying an iPhone, you would probably do well to wait until Christmas it seems. The exclusivity agreement between Telefonica-O2 and Apple is set to expire in the next few months, which could lead to an all-out price-war in time for the festive season. As the exclusivity is removed, it should make the market more contestable, and the price should fall.
read more...»Jury’s Inn - An Example of Organic Growth
This BBC news article flags up that Jury’s has secured additional finance to support their expansion programme. These are challenging times for the UK hotel industry as recession has affected room occupancy rates from business and household customers. But Jury’s Inn has instigated an ambitious programme of new hotels - a strategy of internal or organic growth. urys said it would look at new developments in key markets such as London. It has already opened five new hotels across the UK this year.
New hotels have opened in Sheffield, Watford, Exeter, Swindon and Derby. Another hotel is due to open in Aberdeen later this year, with more to follow next year in Portsmouth, Glasgow, Newcastle and Bradford. A new hotel in Prague is due to open in September 2009. Jury’s Inn has traditionally placed itself in the affordable business hotel market segment.
Taking the pulse around the UK economy - are the anti-virals working?
Here is a whole feast of reports about the current state of the UK economy from the BBC – albeit some of them quite unpalatable. On the day on which the Labour Force Survey shows the biggest quarterly rise in unemployment since records of the ILO measure began in 1971, the BBC has a survey that shows that two out of three people know someone who has lost their job due to the recession, and 40% fear losing their own job. The survey is part of their feature ‘Taking the Pulse around the UK’ which is being covered on TV, radio and the website today. As well as the survey there is a series of video reports; in one from a Northampton market where a fruit and vegetable trader says he has never worked so hard for so little, while a clothes stall owner says she has altered the clothing she sells, stocking cheaper goods than before, in order to survive. In another, Hugh Pym summarises key indicators about the state of the economy, and a third has Stephanie Flanders debating the state of the economy with herself. The set of reports are well worth browsing through, and following the links to related items.
King of Shaves takes on Wilkinette
Will King, Founder and CEO of the fast-growing King of Shaves brand gave a superb presentation to the National Conference for Economics Teachers in London last week. The business was founded in 1993 and sixteen years later King of Shaves is making significant in-roads into the market for male and female shaving and grooming products. The battle against Wilkinette is well and truly joined but - as with most entrepreneurial success stories - the challenge of establishing a foothold in an oligopolistic market dominated by two corporate giants has not been smooth.
Revision: Moving Away from Profit Maximisation
The traditional theory of the firm which assumes that businesses possess sufficient information, market power and motivation to set prices or their products that maximise profits is outdated. A2 students need to understand the circumstances in which a firm / business will not seek to maximise profits (where MR=MC) - this revision note covers this issue:
read more...»Friends Reunited and the Winners Curse
I still get annoying emails from Friends Reunited to remind me that I haven’t logged on for nearly two years. The reminders just migrate into the trash folder, but I cannot be bothered to jump over the hurdle needed to rid myself of this site once and for all!
Just a few years ago Friends Reunited was heralded as the must visit social networking site but their position in the market has been irrevocably undermined by the emergence of Facebook, Bebo, MySpace and Linked In. The Independent today carries a well argued analysis of the demise of Friends Reunited as ITV prepares to sell the business for a fraction of the £175m it paid for the site in December 2005.
The crucial point is that FR has lost its ability to be relevant to a younger generation who want much much more from their social networking experience. According to market research experts Nielson, less than 10 per cent of visitors to Friends Reunited spend enough time on the site every month to be of significant value to advertisers. The Guardian reports that FR has seen unique users drop from more than 5 million three years ago to 1.7 million in December in the UK, according to comScore, and just under 2 million globally. The site has become peripheral to most web users.
Here is another good example of the Winners Curse where a suitor pays well over the odds for a business whose future revenue and profit streams have been badly exaggerated. When you think of digital media does ITV immediately come to mind? If the answer is no you have a clue to the failure of their strategy of breaking into the hearts and minds of millions of mobile internet users.
Negative mulitplier effects of a brutal outlook for carmakers
There seems to have been grim news from the car industry every day for the last week or so. Nissan and Jaguar are shedding jobs. In November Honda said they would shut down production for February and March, and today said they will extend that to cover April and May as well.
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