Click here to see cheap labour being used in Japanese restaurant.......as the saying goes, 'If you pay peanuts, you get monkeys'!
Happy Eid to all
Mr. Bentley
Wednesday 2 November 2011
Wednesday 19 October 2011
Business Start ups - the advantages and the issues
Click here for a link to the podcast
Matt Brittin - MD Google UK
Lara Morgan - Founder Pacific Direct (made a fortune in hotel toiletries)
Luke Johnson - serial entrepreneur (Pizza Express, The Ivy, Prada, best-selling author & FT columnist)
Some key points made (in broad order of discussion) [my points of emphasis in square brackets]
Starting a Business
Only 10% of people will ever start their business
Entrepreneurs need a “desire for gain”, not a fear of loss
Starting a business provides great freedom and creativity [than working for someone else] - links to motives for being an entrepreneur
But starting a business can be lonely - requires great self-motivation and persistence [qualities of an entrepreneur]
Most entrepreneurs who “make it” - have taken 10-15 years to build a success [rarely such a thing as an overnight success]
It is not really about the “idea” - it is about the execution of the idea [how important is the business idea?]
Business angels are under-rated - they are key to getting good businesses off the ground [sources of finance]
Friends and family finances - can cause emotional problems [a potential downside of raising finance from relatives!]
Retained profit was key to the growth of Pacific Direct - the main source of finance [a hugely important point - profits reinvested in a business for growth]
Bank funding is much easier to get when the business has a track record of profitable trading [banks see startups as high risk and are very unlikely to lend to them]
Setting up online enables a startup to check the viability of an idea much quicker, but a website alone is not enough
Do startups create jobs? Many online startups are run by just one or a few people [the govt is probably unwise relying on encouraging business startups as a way of reducing unemployment!]
Barriers to entry - are they lower for startups? [depends on which market a startup is trying to enter]
Startups have almost no chance in many markets - e.g. Google, Apple and Amazon dominate their markets [startups are better targeting a niche]
Online advertising - creates huge opportunities for startups because it allows targetted, measurable advertising [but online advertising just one part of a promotional mix]
A dramatic cultural shift in attitudes to entrepreneurship in the UK - many people turning to the idea of starting up - more advice, more role models [more competition for startups, but perhaps less risk]
Locations for startups - entrepreneurs benefit from working together / alongside each other [location benefits of collaboration]
Monday 3 October 2011
Leadership & The Golden Circle
Y12 BUS- great video on the impact different leadership can have on a business. Watch this week in preparation for Thu.
Sunday 2 October 2011
China - Helping or Hindering Economic Development in Africa
Y13 Business- following on from the video and discussion last week:
If Africa was a physical battleground between east & west during the cold war of the 20th Century, it can arguably be seen today as the ideological 21st Century battleground between the difference approaches to promoting economic development: the western aid model versus the Chinese trade model. Is the Sino-Africa relationship mutually beneficial? I certainly don’t claim to have a comprehensive answer to this but it has been interesting talking to Africans on my journey so far about their perception of this, particularly in Zambia…
China’s relationship with Zambia dates back to the building of the ‘Tanzam’ (Zambia to Tanzania) Railway in the 1970s. However, it is in the last 10 years that Sino-Zambian trade has really taken off, growing from just $100m (£63m) in 2000 to $2.8bn last year, according to the BBC. Last year China invested more than $400m (£250m) in Zambia’s mining industry, which is one of the major employers in the private sector.
Proponents of China’s approach rely on David Ricardo’s 19th Century theory of Comparative Advantage. Reformulated in modern trade theory as the Heckscher-Ohlin theorem, it states that a country has a comparative advantage in the production of a product if the country is relatively well-endowed with inputs that are used intensively in producing the product. Zambia’s comparative advantage lies in the resource sector, China’s in manufacturing and infrastructure construction. Copper in return for cheap toys, bicycles & new roads. The new infrastructure in particular should enable Zambia to more efficiently boost economic growth through trade both international & local.
A good deal for Zambia? In theory yes but it of course depends upon the terms of trade (the ratio of import to export prices) and over what time horizon we try to judge the relationship. In the short term, economic growth statistics (the World Bank estimates 6.4% real GDP growth in 2009-10 compared 1.7% for sub-saharan Africa) suggest a positive outcome. Over the longer term, sustainable economic development surely requires local employment & skill creation, in turn helping to boost the local economy through the multiplier effect.
As well as a question mark over the quality of Chinese imports (I commonly heard complaints of bicycles falling apart, for example!), the main criticism of Chinese investment in Zambia is that the benefits are not shared equally. The Zambian elite, with control over the valuable mining contracts, are enriched while the benefits to the poor are less obvious. In theory it should mean more jobs & income but the propensity of the Chinese managers to employ their compatriots rather than local labour, especially for construction projects, dilutes this benefit.
I’ve struggled to find any reliable statistic on employment creation, not helped by the fact that the ministry of finance official that I spoke to (fresh with a Masters from Birmingham University) was drunk! Evidence is therefore more anecdotal. The copperbelt region, host to the community schools that I’m supporting, has seen improved roads and a massive new football stadium. The latter, due to be opened ahead of last year’s world cup, has been built primarily using Chinese labour and is still incomplete.
As such, support for the Chinese at grassroots level amongst the people I spoke to is limited. It is no surprise that this is where Michal Sata, the Patriotic Front’s newly elected president, enjoys popular support.
Whilst Zambians have arguably answered the question with their ballot papers, the debate about China’s involvement will nevertheless continue. As Dambisa Moyo has eloquently argued, the Western aid model supported by the Washington Consensus has failed Africa, weighed down by burdensome conditionality and self-interest amongst the ruling elite. Whilst the conditionality is no longer, it seems that self-interest amongst the politicians remains. It is this that arguably remains the major constrain on development in sub-saharan Africa. Let’s hope Mr Sata is different. I’m now in Malawi for the next few
weeks. It enjoyed a similar per capita GDP to singapore in 1960. Today, the east Asian tiger is some 20 times richer than its African cousin, with the latter currently having to re-negotiate another IMF aid package. During my Journey around this ‘warm heart of Africa’, I’ll be trying to understand why.
If Africa was a physical battleground between east & west during the cold war of the 20th Century, it can arguably be seen today as the ideological 21st Century battleground between the difference approaches to promoting economic development: the western aid model versus the Chinese trade model. Is the Sino-Africa relationship mutually beneficial? I certainly don’t claim to have a comprehensive answer to this but it has been interesting talking to Africans on my journey so far about their perception of this, particularly in Zambia…
China’s relationship with Zambia dates back to the building of the ‘Tanzam’ (Zambia to Tanzania) Railway in the 1970s. However, it is in the last 10 years that Sino-Zambian trade has really taken off, growing from just $100m (£63m) in 2000 to $2.8bn last year, according to the BBC. Last year China invested more than $400m (£250m) in Zambia’s mining industry, which is one of the major employers in the private sector.
Proponents of China’s approach rely on David Ricardo’s 19th Century theory of Comparative Advantage. Reformulated in modern trade theory as the Heckscher-Ohlin theorem, it states that a country has a comparative advantage in the production of a product if the country is relatively well-endowed with inputs that are used intensively in producing the product. Zambia’s comparative advantage lies in the resource sector, China’s in manufacturing and infrastructure construction. Copper in return for cheap toys, bicycles & new roads. The new infrastructure in particular should enable Zambia to more efficiently boost economic growth through trade both international & local.
A good deal for Zambia? In theory yes but it of course depends upon the terms of trade (the ratio of import to export prices) and over what time horizon we try to judge the relationship. In the short term, economic growth statistics (the World Bank estimates 6.4% real GDP growth in 2009-10 compared 1.7% for sub-saharan Africa) suggest a positive outcome. Over the longer term, sustainable economic development surely requires local employment & skill creation, in turn helping to boost the local economy through the multiplier effect.
As well as a question mark over the quality of Chinese imports (I commonly heard complaints of bicycles falling apart, for example!), the main criticism of Chinese investment in Zambia is that the benefits are not shared equally. The Zambian elite, with control over the valuable mining contracts, are enriched while the benefits to the poor are less obvious. In theory it should mean more jobs & income but the propensity of the Chinese managers to employ their compatriots rather than local labour, especially for construction projects, dilutes this benefit.
I’ve struggled to find any reliable statistic on employment creation, not helped by the fact that the ministry of finance official that I spoke to (fresh with a Masters from Birmingham University) was drunk! Evidence is therefore more anecdotal. The copperbelt region, host to the community schools that I’m supporting, has seen improved roads and a massive new football stadium. The latter, due to be opened ahead of last year’s world cup, has been built primarily using Chinese labour and is still incomplete.
As such, support for the Chinese at grassroots level amongst the people I spoke to is limited. It is no surprise that this is where Michal Sata, the Patriotic Front’s newly elected president, enjoys popular support.
Whilst Zambians have arguably answered the question with their ballot papers, the debate about China’s involvement will nevertheless continue. As Dambisa Moyo has eloquently argued, the Western aid model supported by the Washington Consensus has failed Africa, weighed down by burdensome conditionality and self-interest amongst the ruling elite. Whilst the conditionality is no longer, it seems that self-interest amongst the politicians remains. It is this that arguably remains the major constrain on development in sub-saharan Africa. Let’s hope Mr Sata is different. I’m now in Malawi for the next few
weeks. It enjoyed a similar per capita GDP to singapore in 1960. Today, the east Asian tiger is some 20 times richer than its African cousin, with the latter currently having to re-negotiate another IMF aid package. During my Journey around this ‘warm heart of Africa’, I’ll be trying to understand why.
Entrepreneurs Must Have A Dream
Indian entrepreneur Lord Gulam Noon believes that there is money for people to start their own business in the uncertain financial climate, but warns "you must have a dream".
Speaking to the BBC's Justin Rowlatt, the self-made food magnate offered his advice to entrepreneurs in Britain who may be nervous about starting a business, warning "if you don't take risk, you risk even more".
Click Here to hear the interview.
Wednesday 28 September 2011
Tuesday 27 September 2011
Sunday 25 September 2011
Effective Evaluation Tips for A Level
The most important skill that candidates need to show off in their AS/A2 exams is an ability to effectively evaluate. Evaluation statements put candidates in the top mark band on most of the bigger questions.
At the end of longer questions, the examiner is hoping that you will provide a judgement. It might be a question asking if it’s wise for a firm to relocate, or invest in a new production line. There’s rarely a straightforward ‘correct’ answer to these questions. Instead, you’re being tested on your ability to say “hmmmm ..... well the answer depends on this and this. But if such-and such were true, I might change my answer”.
That’s the basis of a good evaluation: that your final answer depends on a variety of things. Here are some ideas:
- A range of factors to consider. An interesting question or case study will be expecting you to sift through some difficult choices, situations and issues.
- A range of views to consider. Remember that decisions often look different from the rival perspectives of different stakeholders.
- A range of timescales in which events unfold. Most significant decisions will have both short term and long term consequences.
- A range of questions that still need to be asked. It’s often smart to point out that the wisdom of any decision rests on several unknowns. Say what new facts might come along that would change your decision.
- A range of value judgements to be made. Different people often come to different judgements because they have different values and subjective opinions.
At the end of longer questions, the examiner is hoping that you will provide a judgement. It might be a question asking if it’s wise for a firm to relocate, or invest in a new production line. There’s rarely a straightforward ‘correct’ answer to these questions. Instead, you’re being tested on your ability to say “hmmmm ..... well the answer depends on this and this. But if such-and such were true, I might change my answer”.
That’s the basis of a good evaluation: that your final answer depends on a variety of things. Here are some ideas:
- A range of views to consider. Remember that decisions often look different from the rival perspectives of different stakeholders.
- A range of timescales in which events unfold. Most significant decisions will have both short term and long term consequences.
- A range of questions that still need to be asked. It’s often smart to point out that the wisdom of any decision rests on several unknowns. Say what new facts might come along that would change your decision.
- A range of value judgements to be made. Different people often come to different judgements because they have different values and subjective opinions.
Thursday 15 September 2011
Wednesday 14 September 2011
Who is Britain’s biggest manufacturer? The answer may surprise…
Very interesting article for Unit 3 students. Is this globalisation personified?
Tuesday 13 September 2011
Unit 1 - Entreprise and Entrepreneurial Skills
As you are in the process of setting up your own enterprise, this revision PowerPoint from Tutor2u might have some useful tips.
Risks and Rewards for Enterprise
View more presentations from Jim Riley
Saturday 3 September 2011
Tuesday 9 August 2011
An example of a niche market - those who hate environmentally friendly products!
This promotional strategy goes beyond those who are neutral towards buying products that are environmentally friendly - the advertising is likely to put off those who don’t usually factor the environment into their purchasing decision.
I’m assuming that the entrepreneur knows his or her target market and there are enough of those customers to make a profitable business. And I guess that’s all that matters...I hope it is a very small niche!
I’m assuming that the entrepreneur knows his or her target market and there are enough of those customers to make a profitable business. And I guess that’s all that matters...I hope it is a very small niche!
Monday 27 June 2011
Unit 3: The Future of Food Retailing? Tesco in South Korea
Here is a fascinating short video on the techniques and tactics adopted by Tesco as they sought to become South Korea’s number one offline and online food retail store.
This is really useful for the Unit 3 examination. Emerging markets and Business Strategies are a key feature.....
This is really useful for the Unit 3 examination. Emerging markets and Business Strategies are a key feature.....
Friday 17 June 2011
Unit 4: Nokia - Strategy for change
In this note, we’ve outlined some of the main strategic issues facing Nokia and linked to recent supporting resources which students should examine. A well-prepared student getting ready to wow the examiner with relevant evidence-based research in an essay should be ready to include Nokia in an answer!
Background resources:
Does Nokia need an upgraded CEO (July 2010) - great for setting out the strategic issues prior to appointment of Stephen Elop
Nokia - a problem of culture? Tom White’s excellent blog piece on the cultural challenges / issues
Stephen Elop and the Burning Platform memo - business strategy gold dust - this should appear in every essay on strategic change!
Leadership & Strategy - “Welcome to Nokia” - Links to a Reuters special report on Nokia and its new CEO
Key features of the recent Nokia story:
- Finnish conglomerate turned itself into the world’s leading mobile phone company in the 1990s. So Nokia has already been through one (successful) change programme, turning itself from an unfocused conglomerate into a focused mobile phone producer. Can it change again?
- Global market leader in mobile phones - but not smart phones
- Still profitable, but revenues under pressure
- September 2010: Appointed new CEO - Stephen Elop - to drive strategic change
- February 2011 - Elop issued the famous “burning platform” memo bluntly explaining the serious strategic challenges facing Nokia
- Elop outlined results of his strategic review on Feb 11 2011 - making it clear that Nokia had to undergo a substantial programme of change
- Elop announced a strategic partnership with Microsoft in March 2011 to jointly develop smartphones using the Windows mobile platform - ditching Nokia’s previous investment in its homegrown Symbian platform
- Elop has swept away many elements of Nokia’s previous organisational structure - a significant process of delayering
- Elop has refocused the business on leadership (managers taking decisions and responsibility) and markets (innovation driven by people competing in key mobile phone segments)
- Decision-making has been delegated to local/national teams rather than relying on decisions by an overly-centralised senior management team
- Goals and incentives for the senior leadership team are now more transparent
- The new strategy brings clarity and a sense of direction to Nokia - but will it be enough to achieve a successful turnaround?
- Global market leader in mobile phones - but not smart phones
- Still profitable, but revenues under pressure
- September 2010: Appointed new CEO - Stephen Elop - to drive strategic change
- February 2011 - Elop issued the famous “burning platform” memo bluntly explaining the serious strategic challenges facing Nokia
- Elop outlined results of his strategic review on Feb 11 2011 - making it clear that Nokia had to undergo a substantial programme of change
- Elop announced a strategic partnership with Microsoft in March 2011 to jointly develop smartphones using the Windows mobile platform - ditching Nokia’s previous investment in its homegrown Symbian platform
- Elop has swept away many elements of Nokia’s previous organisational structure - a significant process of delayering
- Elop has refocused the business on leadership (managers taking decisions and responsibility) and markets (innovation driven by people competing in key mobile phone segments)
- Decision-making has been delegated to local/national teams rather than relying on decisions by an overly-centralised senior management team
- Goals and incentives for the senior leadership team are now more transparent
- The new strategy brings clarity and a sense of direction to Nokia - but will it be enough to achieve a successful turnaround?
Why did Nokia need to change?
- Almost everyone who understands the challenges facing Nokia agrees that change is unavoidable
- Nokia had missed the major change in its market - the smartphone revolution
- Nokia had continued to focus on mobile phone devices (hardware) rather than mobile phone applications (software)
- The product life cycle of Nokia’s products had shortened dramatically as others (Apple, Google Android) developed smartphone platforms and an associated “ecosystem” of apps. The consumer transition from traditional mobile phones to smartphones has been dramatic, and caught Nokia off-guard
- Nokia has faced intense competition from mobile phone producers in emerging markets who can make fast, cheap handsets at the lower end of the mobile phone market
- Many in Nokia regret that the business had become too product-led rather than customer-led; a missed opportunity
- Poor leadership and complacency (bred from success in non smart-phones)
- The wrong culture - over-consensual; lacking innovation and entrepreneurial spirit
- Complex, overly-bureaucratic organisational structrure with poor accountability
- Nokia had become “clogged with bureaucracy”
- Decisions being made within the firm were often cancelling each other out!
- “A series of committees, boards and cross-functional meetings held-up decisions
- Nokia had missed the major change in its market - the smartphone revolution
- Nokia had continued to focus on mobile phone devices (hardware) rather than mobile phone applications (software)
- The product life cycle of Nokia’s products had shortened dramatically as others (Apple, Google Android) developed smartphone platforms and an associated “ecosystem” of apps. The consumer transition from traditional mobile phones to smartphones has been dramatic, and caught Nokia off-guard
- Nokia has faced intense competition from mobile phone producers in emerging markets who can make fast, cheap handsets at the lower end of the mobile phone market
- Many in Nokia regret that the business had become too product-led rather than customer-led; a missed opportunity
- Poor leadership and complacency (bred from success in non smart-phones)
- The wrong culture - over-consensual; lacking innovation and entrepreneurial spirit
- Complex, overly-bureaucratic organisational structrure with poor accountability
- Nokia had become “clogged with bureaucracy”
- Decisions being made within the firm were often cancelling each other out!
- “A series of committees, boards and cross-functional meetings held-up decisions
Stephen Elop’s response as the New CEO
On his first day at Nokia: Elop sent an email to all employees asking three questions:
- What do you think I need to change?
- What do you think I need not or should not change?
- What are you afraid I’m going to miss?
- What do you think I need to change?
- What do you think I need not or should not change?
- What are you afraid I’m going to miss?
The email generated thousands of replies and the responsess suggested that Nokia’s corporate communication had failed; many complaints of management indecision and staff frustration.
The “burning platform memo”:
- Laid out the challenges facing Nokia in smartphone and also lower-end mobile phone markets
- Standing on a burning (oil) platform can force someone to make a major change in behaviour
- Standing on a burning (oil) platform can force someone to make a major change in behaviour
Elop’s comments on Nokia in the memo:
“We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.
“There is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.”
“The Shenzhen region of China is able to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us in emerging markets.”
“Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem.”
“We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally.”
“There is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.”
“The Shenzhen region of China is able to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us in emerging markets.”
“Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem.”
“We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally.”
Issues for Elop
- Is his strategic change too late? Will Apple and Google (Android) have gained too much market share before Nokia can make a success of its strategic partnership with Microsoft
- Elop’s background - he is the first non-Finn to run the company in its 145 years of existence (a source of cultural conflict, or an advantage?)
- Is the crisis at Nokia sufficiently serious/grave to ensure that all necessary changes (including to the firm’s culture) are made in time?
- Elop’s background - he is the first non-Finn to run the company in its 145 years of existence (a source of cultural conflict, or an advantage?)
- Is the crisis at Nokia sufficiently serious/grave to ensure that all necessary changes (including to the firm’s culture) are made in time?
How Nokia links in with Unit 4;
New leadership (internal causes of change): an outsider arrives to shake up the way Nokia does business!
Retrenchment (closing down Symbian) followed by strategic partnership with Microsfoft (another major internal cause of change)
Strategic decision-making / corporate planning: Nokia’s decision-making had become ineffective - too slow; inconsistent
Technology (smartphone ecosystems) as a source of change: consumers no longer buying a handset; they are buying apps that run on phones
Culture as a constraint on change management: will Nokia’s conservative, bureaucratic culture get in the way of rapid, fundamental change?
Changes in strategic direction: the change from a focus on products (phones) to software applications (phone “ecosystems)
Impact of competition from emerging markets: the effect of faster, cheaper competitors
Globalisation of markets: Nokia’s new objective of supply “the next 1 billion mobile phone handsets” resulting from rapid demand growth in emerging economies
Globalisation of markets: Nokia’s new objective of supply “the next 1 billion mobile phone handsets” resulting from rapid demand growth in emerging economies
Business and the competitive environment: emergence of stronger, more successful competitors (Apple, Samsung, RIM, Google, LG)
Tuesday 14 June 2011
Unit 4: Mothercare - A change of Strategy
There is plenty for students to get their teeth in to here, in particular:
* retrenchment in the face of an economic downturn and increasing competition
* more emphasis on developing overseas markets
* a focus on on-line business and wholesale business
This could easily be a future case study for Unit 4.
There is also an article in the Guardian on this which has a bit more detail (Click here)
The subject of reducing High Street presence can also be seen in the recent appointment of Mary Portas as the new tsar to try to revitalise UK town centres (Click Here).
Monday 13 June 2011
Unit 4 - Top CSR performers in UK
Some topical evidence here from BITC. This is the publication of their latest rankings for the CSR performance of 300 of the UK’s largest businesses... For all that Morissons says it does, it does not make the top companies (neither does any of the other supremarkets!)
The BITC describe their Corporate Responsibility Index as follows:
“The Corporate Responsibility (CR) Index was first launched in 2002 following consultation with more than 80 organisations and key stakeholders. Since then it has become recognised within the UK and abroad as one of the leading benchmarks for responsible business. Over 300 large businesses have used it as a management tool since 2002, with many using it consistently year on year.”
The Platinum (top) standard firms are as follows:
At the next level down is the Gold Standard, achieved by the following businesses:
The BITC describe their Corporate Responsibility Index as follows:
“The Corporate Responsibility (CR) Index was first launched in 2002 following consultation with more than 80 organisations and key stakeholders. Since then it has become recognised within the UK and abroad as one of the leading benchmarks for responsible business. Over 300 large businesses have used it as a management tool since 2002, with many using it consistently year on year.”
The Platinum (top) standard firms are as follows:
At the next level down is the Gold Standard, achieved by the following businesses:
Saturday 11 June 2011
Unit 3: Outsourcing
Most recently we are witnessing a trend for service sector businesses to follow suit. In recent times we have seen Norwich Union, Abbey National, Tesco, British Airways and National Rail Enquiries all transfer parts of their operation overseas.
There are three main drivers promoting outsourcing as a business strategy:
(1) Technological change – Information, communication and telecommunication costs are falling - this makes it easier to outsource service and manufacturing operations to sub-contractors in other countries. Technological advances now promote “Just in time delivery” inventory strategies for the delivery of components and finished products and encourage the development of “virtual manufacturing”. Communication costs are dropping sharply - the average price of a one minute international call was 74% lower in 2003 than in 1993.
(2) Increased competition in a low-inflation environment - which increases the pressure on businesses to achieve lower costs as a means of maintaining market share.
(3) Pressure from the financial markets for businesses to improve their profitability.
For many large businesses, there are cost advantages to be gained through doing business via a call centre located overseas. Outsourcing is not simply confined to service sector industries. Many manufacturing businesses are using outsourcing as a means of reducing their costs, providing greater flexibility of production levels at times of volatile demand and also in speeding up the time it takes to get their goods to market, especially new products.
Tuesday 7 June 2011
Unit 3: Economic environment: Emerging Markets (introduction)
The ‘emerging markets’ is a term used by commentators to group together some of these awakening giants. You may have heard of the BRIC economies - Brazil, Russia, India and China - a label that serves as a handy acronym to remind you of some of the key players. But there are plenty more. What does this mean for business?
This fascinating graphic asks where will the next $10 trillion (that’s $10,000 billion, or $10,000,000 million) of world income come from. Forecasters anticipate that this might be achieved as soon as September 2013. You’ll see that much will come from some surprising sources. (If you need a guide to the idea of GDP, try here)
On one level, the rise of the emerging markets is not so amazing. It’s just the world going back to ‘normal’. What was probably odder was that there was a time when a tiny country (e.g Britain) produced 10% of all the income in the world. At the height of America’s relative power it was producing over 20% of the entire world’s income. It’s not surprising to see power shift back towards Asia, as this is where the majority of the world’s population lives.
What does this mean for business? - More and more consumption is coming from the emerging markets, with obvious implications for firms as they look abroad for export opportunities.
- As poor countries become richer, wages and costs in those economies start to rise. That makes them less immediately attractive as places to ‘offshore’ business production. Increasing growth from new sources also puts price pressure on globally traded resources like oil.
- The rising giants are producing powerful new multinational companies that increasing seek to compete in markets once dominated by the familiar rich world companies we have grown up with.
But you may wish to also consider that:
- At the moment, most of the population of emerging markets are still pretty poor, by our standards. It will take another couple of decades before average living standards (and shopping habits) come to resemble ours. Diversity is a tough issue for international business.
- Sadly, low levels of income and employment remain a reality for far too many people. This continues to be a significant ethical, political and business issue. Firms will still have to wade through a maze of tricky issues as they seek to move production into countries like Vietnam or Kenya. The public often views company behaviour in this area with suspicion (see the Primark Question).
- Things might change. Events in the Middle East (see the politics bit of PEST analysis) have shown how potentially unstable many of the emerging markets remain.
Monday 6 June 2011
Unit 2 & 4: Motivation at work. Keeping staff happy....
Click here for the clip: How to spruce up the work place
Back before the recession, firms like Google were looking to attract applicants (and presumably keep the staff that they had) by hyping up the ‘delights’ of their wacky workplace (see video clip). The reporter in the video clip above uses the word ‘gimmick’ when describing the HQ of hip firm Trunki .
What do you think? (Would it motivate you to work?)
Of course, there’s nothing new in the desire businesses have always had to create workplaces that maximise employee productivity. You might have heard of the famous Hawthorn Effect and it’s an issue worth giving some consideration to.
Students should also think about the possible business implications of encouraging staff to work from home.
This issue is addressed by the BBC at why can’t everyone telework?. Also click on this link which looks at the question is ‘working from home’ a skive?
Labour Markets - Women get paid less than men shock!
Thanks to Sami for finding this little gem from the Economist. Sorry Lara, you are destines to a life of poverty...unless you marry a rich Turkish dude!
Female students expect lower salaries across Europe
WOMEN earn on average 17.5% less than men in the European Union. No surprise then, that female university students in Europe expect to earn less than men once they graduate. According to a recent report by Universum, a Swedish consultancy, women studying in the top European institutions expect to earn on average around €8,600 ($12,400), or 21% less than men, (men expect a graduate starting salary of €40,898).
Women and men seem to differ in workplace and career aspirations, which may explain why salary expectations differ. Men generally placed more importance on being a leader or manager than women (34% of men verses 22% of women), and want jobs with high levels of responsibility (25% v 17%). Women, however want to work for a company with high corporate social responsibility and ethical standards; men are more interested in prestige (31% v 24%).
Female students expect lower salaries across Europe
WOMEN earn on average 17.5% less than men in the European Union. No surprise then, that female university students in Europe expect to earn less than men once they graduate. According to a recent report by Universum, a Swedish consultancy, women studying in the top European institutions expect to earn on average around €8,600 ($12,400), or 21% less than men, (men expect a graduate starting salary of €40,898).
Women and men seem to differ in workplace and career aspirations, which may explain why salary expectations differ. Men generally placed more importance on being a leader or manager than women (34% of men verses 22% of women), and want jobs with high levels of responsibility (25% v 17%). Women, however want to work for a company with high corporate social responsibility and ethical standards; men are more interested in prestige (31% v 24%).
Saturday 4 June 2011
Wednesday 1 June 2011
Unit 4: Motivation - Classic Video - Try and link to Morissons
These two videos are an excellent intro to motivation.
Jumping for the Jelly Beans is Herzbergs explanation of his two factor theory and the video has been conveniently split into two parts.
Part one covers the basics of the two factor theory whereas part two covers his explanation of job enrichment therefore allowing these two videos to be used over two lessons.
Part two also has a reall useful summary of the importance of hygiene factors.
What makes these videos really cool is their grainy 70’s look. (Miss Meeajan wasn't even born when these were made!)
Video One:
Video Two:
Jumping for the Jelly Beans is Herzbergs explanation of his two factor theory and the video has been conveniently split into two parts.
Part one covers the basics of the two factor theory whereas part two covers his explanation of job enrichment therefore allowing these two videos to be used over two lessons.
Part two also has a reall useful summary of the importance of hygiene factors.
What makes these videos really cool is their grainy 70’s look. (Miss Meeajan wasn't even born when these were made!)
Video One:
Video Two:
Wednesday 18 May 2011
Unit 4: Economic environment – Unemployment
There’s some indication that the UK unemployment picture is improving (Unemployment drops to 2.46m) but it’s still a pretty bleak picture out there. What does this mean for business?
Like all good evaluative responses in business, the short answer is “it depends”. There’s a clear upside as well as a downside. On one hand, higher rates of unemployment will tend to hold down demands for wage increases, which are typically the largest cost for most UK businesses. On the other hand, lower wages and less spending power in general is bad for many of the traditional High Street retailers and service providers.
Other points you might like to consider are:
- Higher rates of unemployment strain the government’s finances. The Treasury receives less in income tax and VAT, for instance. At the same time, welfare expenditure rises. This increases the likelihood that at some point, the government will have to cut expenditure in other areas, and/or raise taxes (see debt bombshell).
- Many firms don’t sell direct to the public (they sell to other businesses or government organisations like the NHS). To some extent that shields them from the immediate negative consequences of unemployment.
- Think carefully about the income elasticity of demand for a firm’s products. Stated simply that means asking how demand for goods/services responds to changes in consumers’ income. Some firms have been devastated by the recession, rising unemployment and falling incomes (such as electrical retailer Comet). Others have enjoyed a boom (Poundland).
- Unemployment tends to have a strong regional component see the jobs map on the BBC economy tracker. For this reason, any discussion you have about the impact of unemployment on firms might well also ask about where they are located, and the local circumstances they find themselves in. Some firms in regions with very low levels of income (almost always because of high levels of unemployment) have the possibility of getting UK/EU government aid as an incentive to expand and hire workers.
- Eventually, the economy will recover to full health and many firms will be anxious to hire rapidly to deal with an upsurge in demand. Unfortunately however, unemployment may leave a long term mark. Many formerly unemployed workers will need extensive retraining – much of it provided by firms – before they take up places as effective and productive staff.
Like all good evaluative responses in business, the short answer is “it depends”. There’s a clear upside as well as a downside. On one hand, higher rates of unemployment will tend to hold down demands for wage increases, which are typically the largest cost for most UK businesses. On the other hand, lower wages and less spending power in general is bad for many of the traditional High Street retailers and service providers.
Other points you might like to consider are:
- Higher rates of unemployment strain the government’s finances. The Treasury receives less in income tax and VAT, for instance. At the same time, welfare expenditure rises. This increases the likelihood that at some point, the government will have to cut expenditure in other areas, and/or raise taxes (see debt bombshell).
- Many firms don’t sell direct to the public (they sell to other businesses or government organisations like the NHS). To some extent that shields them from the immediate negative consequences of unemployment.
- Think carefully about the income elasticity of demand for a firm’s products. Stated simply that means asking how demand for goods/services responds to changes in consumers’ income. Some firms have been devastated by the recession, rising unemployment and falling incomes (such as electrical retailer Comet). Others have enjoyed a boom (Poundland).
- Unemployment tends to have a strong regional component see the jobs map on the BBC economy tracker. For this reason, any discussion you have about the impact of unemployment on firms might well also ask about where they are located, and the local circumstances they find themselves in. Some firms in regions with very low levels of income (almost always because of high levels of unemployment) have the possibility of getting UK/EU government aid as an incentive to expand and hire workers.
- Eventually, the economy will recover to full health and many firms will be anxious to hire rapidly to deal with an upsurge in demand. Unfortunately however, unemployment may leave a long term mark. Many formerly unemployed workers will need extensive retraining – much of it provided by firms – before they take up places as effective and productive staff.
Tuesday 17 May 2011
Monday 16 May 2011
Unit 4: Morrisons - it's on Facebook!!!
Saturday 14 May 2011
Unit 4 - Online shopping & Morissons + practice Question
Here are some questions you should attempy also...
Evaluate the effectiveness of Morrison's marketing mix. (30 marks)
Below is a simple plan that you might want to follow when attempting the question....
What is included in the marketing mix? Think about the theory that needs to be included.
Analyse Morrison’s marketing mix
Introduction
Point
Application
Analysis
Evaluate
Point
Application
Analysis
Evaluate
Point
Application
Analysis
Evaluate
CONCLUSION
Unit 4: Strategy explained - Insights into Amazon
A quite brilliant deck of analytical slides here from Fabernovel which explain the business strategy of Amazon.com. Lots of detail, of course, but within this presentation is a gold mine of strategic insights into all aspects of Amazon.
Activity: Read the presentation below and highlight five key points or pieces of evidence that illustrate how a firm can be so successful online. (really useful exercise as it could easily be a question on your unit 4 paper)
Students might be surprised by the sheer variety of businesses owned by Amazon. The business has diversified significantly since it launched its original online bookselling operation. Amazon’s growth has been both internal (organic) and external (via acquisitions).-
Another key point is that Amazon incurred substantial losses during a prolonged “start-up” phase. It invested to ensure that it had significant competitive advantage from its e-commerce platforms. The subsequent return on that investment is impressive.
Amazon’s revenue growth is particularly impressive. One slide compares the total revenue earned in the first five years. Amazon achieved $2.8bn, compared with $1.5bn for Google and just $0.4bn for eBay.
The essence of Amazon’s e-commerce business model can be summed up in three words (which underpin all its e-commerce activities):
- Convenience
- Low prices
- Large selection
Here is the streamed presentation via slideshare;
Activity: Read the presentation below and highlight five key points or pieces of evidence that illustrate how a firm can be so successful online. (really useful exercise as it could easily be a question on your unit 4 paper)
Students might be surprised by the sheer variety of businesses owned by Amazon. The business has diversified significantly since it launched its original online bookselling operation. Amazon’s growth has been both internal (organic) and external (via acquisitions).-
Another key point is that Amazon incurred substantial losses during a prolonged “start-up” phase. It invested to ensure that it had significant competitive advantage from its e-commerce platforms. The subsequent return on that investment is impressive.
Amazon’s revenue growth is particularly impressive. One slide compares the total revenue earned in the first five years. Amazon achieved $2.8bn, compared with $1.5bn for Google and just $0.4bn for eBay.
The essence of Amazon’s e-commerce business model can be summed up in three words (which underpin all its e-commerce activities):
- Convenience
- Low prices
- Large selection
Here is the streamed presentation via slideshare;
Amazon.com: the Hidden Empire
View more presentations from faberNovel
Wednesday 11 May 2011
Tuesday 3 May 2011
Unit 4: Morrisons strategic plan: now with possible questions attached!
Click here to access the Morrisons website. It is really useful to understand how they want to increase sales in a saturated market.
Key issues include:
Fresh & cheap
Vertically integrated
Skilled workers
See below for some possible exam style questions...(thanks to Miss Meeajan for these)
Key issues include:
Fresh & cheap
Vertically integrated
Skilled workers
See below for some possible exam style questions...(thanks to Miss Meeajan for these)
Unit 4: Exam style Questions
View more presentations from mattbentley34.
Monday 2 May 2011
All Units: Business Studies Revision Presentations
Tuesday 26 April 2011
Monday 25 April 2011
Unit 4: Morrisons Case study / Summary analysis
As promised, here is the link to the 13 page summary of the Morrisons case study....I think you should read this as a summary and use the 98 page tutor2u one as your major revision.
Click here for the link.
NB: Although the CPA numbers are correct, ignore the 'Dummies'. They are activities just like any other.....
Sunday 24 April 2011
Unit 2: Excellent revision aid..a must for all students
Click on the highlighted bit to access links to notes and case studies....
Saturday 23 April 2011
Unit 1: Excellent revision guide...a must read for all students
Click on the highlighted bits to send you to relevant notes/articles....
Unit 4: Updated resource bank: Excellent revision aid
Click on the highlighted bits to send you to notes and case studies on relevant articles...
Unit 4: Excellent resource bank
View more documents from mattbentley34.
Wednesday 20 April 2011
Exam Technique - How to answer big Questions...
This is a very simple structure that should help you answer questions that are over 12 marks. Here is a typical 16 mark questions from unit 4 (structure can be applied to all units):-
Do you think that going ahead with the expansion plans would increase Two Seasons Ltd ’s profits? Justify your view.
A really good way in which you can write a focused answer is to use the key words in the question at the beginning of each paragraph. For example:
One reason why going ahead with the expansion plans would increase Two Seasons profits is ......................
Another reason why going ahead with the expansion plans would increase Two Seasons profits is ..........................
However, a reason why going ahead with the expansion plans may not increase Two Seasons profits is ..............
Another reason why going ahead with the expansion plans may not increase Two Seasons profits is .........
Overall, going ahead with the expansion plans will/ will not increase Two Seasons profits because ................
This is a really simple structure to follow and one which will keep you fully focused on the question you have been asked. Obviously the quality of the response depends on your ability to come up with logical arguments, analyse and evaluate them, however, following this structure at least ensures you answer the question you have been asked.
Enjoy!
Do you think that going ahead with the expansion plans would increase Two Seasons Ltd ’s profits? Justify your view.
A really good way in which you can write a focused answer is to use the key words in the question at the beginning of each paragraph. For example:
One reason why going ahead with the expansion plans would increase Two Seasons profits is ......................
Another reason why going ahead with the expansion plans would increase Two Seasons profits is ..........................
However, a reason why going ahead with the expansion plans may not increase Two Seasons profits is ..............
Another reason why going ahead with the expansion plans may not increase Two Seasons profits is .........
Overall, going ahead with the expansion plans will/ will not increase Two Seasons profits because ................
This is a really simple structure to follow and one which will keep you fully focused on the question you have been asked. Obviously the quality of the response depends on your ability to come up with logical arguments, analyse and evaluate them, however, following this structure at least ensures you answer the question you have been asked.
Enjoy!
Saturday 16 April 2011
Unit 4: Holiday Questions to complete...
Have a go at the following quesions..
Q1) Explain how the Boston Matrix can contribute to Morrison’s corporate planning. (5 Marks)
Q2 What do you understand by the term, 'Mission Statement' and how do you think Morrisons use their statement to improve sales? (8 Marks)
Q1) Explain how the Boston Matrix can contribute to Morrison’s corporate planning. (5 Marks)
Q2 What do you understand by the term, 'Mission Statement' and how do you think Morrisons use their statement to improve sales? (8 Marks)
Thursday 14 April 2011
Motivate these workers!: The Worst Jobs in the World Matrix
So you think double Business last two periods is bad? Amusing look at some of the more unpleasant ways of earning a crust past and present found here in Lapham´s Quaterly. I have worked in a cream packing factory, worked nights packing fresh food and been a gravedigger. The experiences spurred me on to get some qualifications.... Wednesday 13 April 2011
Year 11 Business: What is Ratio Analysis
This would be useful revision for all Business Studies students.....
What is 'Ratio Analysis' all about?
View more documents from mattbentley34.
Monday 11 April 2011
Sunday 10 April 2011
Thursday 7 April 2011
Unit 4: Morrisons Mission Statement
This was the reply I got from their marketing department....
Catchy huh??????
On a serious note, what are the advantages of havng a mission statement?
Do you think this conveys the right message for all stakeholders?
Many organizations publish a statement of Mission for use by people inside and outside an organization.
Inside an organization a public declaration can be used to:
coordinate the decisions and actions of an organization.
inspire people in the organization to stretch and attempt more.
help workers anticipate customer needs, resulting in a higher level of customer service.
get people to act with a common purpose.
limit what an organization should not do .
Outside an organization:
A public declaration can inform customers of the benefits and advantages of what that organization offers.
It fulfills a requirement of many customers and lending organizations.
Mr B
'It is our aim to become the Food Specialist For Everyone'.
Catchy huh??????
On a serious note, what are the advantages of havng a mission statement?
Do you think this conveys the right message for all stakeholders?
Many organizations publish a statement of Mission for use by people inside and outside an organization.
Inside an organization a public declaration can be used to:
coordinate the decisions and actions of an organization.
inspire people in the organization to stretch and attempt more.
help workers anticipate customer needs, resulting in a higher level of customer service.
get people to act with a common purpose.
limit what an organization should not do .
Outside an organization:
A public declaration can inform customers of the benefits and advantages of what that organization offers.
It fulfills a requirement of many customers and lending organizations.
Mr B
Monday 4 April 2011
Sunday 3 April 2011
Unit 4: Morrisons Homepage
Saturday 2 April 2011
Unit 4: Stakeholders - Every Little Helps
Firstly there is an excellent video clip (Click here) which shows a number of stakeholder views. How many stakeholders can you identify? And can you spot the lengths supermarkets will go to to win over the stakeholders that could have influence over there plans?
And secondly, here are some articles about a proposed new Tesco to be built in a town 3 miles from where I live.
Article 1
Article 2
The first article is particularly interesting as it reveals that local people have actually lobbied the town council to have the new store come to the town rather than travel to neighbouring towns to do a supermarket shop. This in stark contrast to the public view usually put across in the media.
Wednesday 30 March 2011
Tuesday 29 March 2011
Unit 4: Strategies: Export or Not? Cheesemaker in a Pickle
Shepherds Purse Cheeses is a niche food producer that was set up as a classic diversification strategy by a Yorkshire farm and it has clearly been a success, with the product range of cheese being expanded.
The owners face a challenge though. The business has become quite reliant on sales of cheese to the major supermarket retailers and is tempted to expand into the (potentially) more lucrative US market.
This poses significant logistical issues for a product with a relatively short shelf-life. Should they go ahead? The business owners explain the potential opportunity and difficulties, before getting some interesting advice from the business advisers reading the case. Excellent evaluative comments that will help you guys when looking at decisions Morissons has to make....
I decided to look into this company and founf not only does it have a blog!!!, but also a facebook page....classic example of trying to reach out to new markets and consumers!
http://shepherdspurse.co.uk/blog/
Sunday 27 March 2011
Wednesday 23 March 2011
Unit 3/4: CSR - Visioning the Future (Great Videos)
I really recommend all students to take a few minutes out to watch this new video series from the BITC which has just launched “Visioning the Future”. Business studies gold dust!
Here is the short 2-minute introductory video;
This longer (12 minute) video showcases some of the CSR activities of firms in the UK. Lots of great examples of CSR in action here (e.g. Greggs) and some easy-to-spot evidence for Unit 3/4 questions:
Here is the short 2-minute introductory video;
This longer (12 minute) video showcases some of the CSR activities of firms in the UK. Lots of great examples of CSR in action here (e.g. Greggs) and some easy-to-spot evidence for Unit 3/4 questions:
Unit 4: Business Strategy; Northern Foods & Porters 5 Forces.
Check out this excellent strategy case study from the Economist in Feb 2011. It briefly analyses the strategic position of Northern Foods, a UK-based food manufacturer that has built its business around supplying own-label processed food products (e.g. ready meals) for the supermarkets.
The article is useful for many reasons, including capacity management, reasons for Mergers & Acquisitions, supplier relationships, profit margins.
It is also a great example to use when explaining Porter’s Five Forces Model, using the references to the different bargaining power wielded by the major supermarket groups and by multinational food brands like Nestle and Kraft.
The article is useful for many reasons, including capacity management, reasons for Mergers & Acquisitions, supplier relationships, profit margins. It is also a great example to use when explaining Porter’s Five Forces Model, using the references to the different bargaining power wielded by the major supermarket groups and by multinational food brands like Nestle and Kraft.
Thursday 17 March 2011
Leadership Resource - Every Little Helps
At around 8 minutes, it is perfect for the classroom.
Enjoy…
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