Jimmy’s Global Harvest
A warm woolly hat tip to Himesh Patel from the Heathland School, Hounslow for spotting this superb resource that will be available for a while on the BBC iPlayer. Himesh points out that Jimmy’s Global Harvest: Brazil on BBC1 last night was an excellent epsiode that explained how Brazil produces biofuels using its crop harvest. The show goes through the full production phase from harvest to final product. If you teach anyone sitting the AS Micro paper next week, it is extremely useful for the evaluation of biofuels as an alternative to traditional fossil fuel energy. In addition it is pitched at the correct level enabling access for all students. The link is here Pay particular attention from 22.12 mins (where the biofuel begins). Definately something to recommend students to watch.
Monopsony Power - 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 and economics topics in here, including an obvious starting point for discussing the ethical issues raised in the clip
Download student worksheet (including video link)
Race to the Market - Jacko Tribute Books
Here is a superb example of how profit seeking businesses react immediately to a market opportunity.Barely had the dust settled on the untimely passing of the King of Pop when publishers around the world sprung into action to deliver tribute books - but speed is absolutely of the essence for the publishing trade as the ‘market space’ for Jacko memorabilia is likely to fill up almost as quickly as the O2 arena when his tickets went on sale.
read more...»Video Case Study: Leyland DAF
One of the few remaining mass commercial vehicle makers in the UK is feeling the effects of the credit crunch. Monthly output is down, one of the two shifts has been halted and there are fears that job losses will extend to the wider supply chain.
Download the mini case study question sheet
Domino and Multiplier Effects
Paul Vallely has an in-depth report on the UK recession in today’s Independent. the front page alone is worth photocopying as a handout for its emphasis on the negative multiplier effects of small scale spending decisions that feed into lower demand, profits and jobs in supply-chain industries.
“It began with the banks. Then house prices began to tumble. In the months that followed, the shock waves spread, engulfing first high streets, then factories – and thousands of jobs. In this gripping account, Paul Vallely travels across Britain to meet the people whose lives – and livelihoods – have fallen victim to the domino effect that left a nation broken.”
Hamish McRae writes about the tax cutting pledges and their likely macroeconomic impact
Housing slump and negative multiplier effects
This article in the Financial Times is a good example of how a fall in demand and activity in one industry can have negative multiplier effects on related industries up and down the supply chain. Barratt Developments has announced that it is laying off twenty per cent of its workers and that “job cuts across the industry could reach 60,000 out of 300,000 people employed directly and indirectly in the sector. - The Chief Executive is quoted as saying that there would be a “secondary effect on the supply chain, comprising kitchen companies, solicitors, mortgage advisers, estate agents and so on,”
BBC: “More job losses at UK housebuilders”
The Guardian: “Barratt cuts 1,200 jobs to cope with housing slump”
Commodity prices and vertical integration
“Suddenly, it is not the customer who matters; it is the supplier. The stuff that arrives at the factory loading bay is now expensive; shortages and logistical logjams are playing havoc and the company that sells you a vital commodity is digging in its heels, refusing to renew a long-term contract without a big price increase. It is time to start thinking about vertical integration. Owning every segment of the production process from metal mine to packaging plant is an unfashionable idea, but in some industries it is coming back with a vengeance.”
A really good piece here from Carl Mortished on the increasing importance to companies of having a great degree of control over their supply chains through vertical integration. There is another feature here in Forbes magazine about the shift towards vertical integration in the steel industry, and one here about Google and vertical integration.
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