If you want to understand inflation/hyperinflation watch this 6 minute clip of one of my favorite childhood programs...
Wednesday 28 November 2012
CPI vs RPI
http://www.thisismoney.co.uk/money/article-1693602/CPI-RPI-What-does-it-all-mean.html
Hi Guys
We are talking economy over the next few lessons. You just need to know about the effect of government spending and taxation decisions upon businesses. Also you will need to know how the economic climate will affect businesses in general.
You do not need to know the difference between RPI and CPI unless you are studying economics but you may be interested so take a look above.
There is a valid debate going on as to the unfairness of the chancellor linking pensions to CPI as it means state pensioners (Which means the poorest pensioners if they have no additional private/public pension) lose out because CPI rises more slowly and therefore the government saves money. Is this fair? Or given how many state benefits and advantages pensioners have is it just a way of saving money to spend on the more youthful, productive members of society?
I am being argumentative but you would be surprised at some of the rhetoric surrounding this online and in the popular press.
Hi Guys
We are talking economy over the next few lessons. You just need to know about the effect of government spending and taxation decisions upon businesses. Also you will need to know how the economic climate will affect businesses in general.
You do not need to know the difference between RPI and CPI unless you are studying economics but you may be interested so take a look above.
There is a valid debate going on as to the unfairness of the chancellor linking pensions to CPI as it means state pensioners (Which means the poorest pensioners if they have no additional private/public pension) lose out because CPI rises more slowly and therefore the government saves money. Is this fair? Or given how many state benefits and advantages pensioners have is it just a way of saving money to spend on the more youthful, productive members of society?
I am being argumentative but you would be surprised at some of the rhetoric surrounding this online and in the popular press.
Tuesday 27 November 2012
Peer Teaching
Theory X & Y - Mr Oates
Curent Economic Climate - Mr Oates
Measuring Profit - Medis
Limited & Unlimited Liability/Ownership - Mariah
Non-Profit Motives for entrepreneurs - Suleyman
Market Niches/Researching demand - Brendan
Product Trials/Test Marketing - Suleyman
Positioning/Market Mapping - Harley
Order in which we will teach the main topics highlighted for revision.
Curent Economic Climate - Mr Oates
Measuring Profit - Medis
Limited & Unlimited Liability/Ownership - Mariah
Non-Profit Motives for entrepreneurs - Suleyman
Market Niches/Researching demand - Brendan
Product Trials/Test Marketing - Suleyman
Positioning/Market Mapping - Harley
Order in which we will teach the main topics highlighted for revision.
Sunday 25 November 2012
Today's Specification Task
Task 1
Download the specification here and choose 3 areas you would like to go back over or learn more about.
Task 2
Write a comment with your three area in order of importance to you.
Task 3
Decide as a group who will teach each of the specification areas in the form of a 20 minute activity.
Download the specification here and choose 3 areas you would like to go back over or learn more about.
Task 2
Write a comment with your three area in order of importance to you.
Task 3
Decide as a group who will teach each of the specification areas in the form of a 20 minute activity.
Wednesday 21 November 2012
"Noates" so simple
Today I want you to work on your perfect exam answer. Ask Harley for advice if you need some.
Once this is done I want you to write up any and all notes you will need for the above section of the exam spec. This should include equations diagrams and theory notes. Use Tutor2U of another viable source such as the textbook. Do not use random wiki rubbish!
Task for the weekend: Create an 8 mark question and mark scheme for one area of the above section with your own case-study.
Tuesday 20 November 2012
Break Even... The FINAL!
"Let the pork see the pie..."
"Let the hamster see the wheel"
Face it guys we are pretty bored with break-even, or at least I am. Now that I know Harley is a cyber-bully also I am a little wary of him sending me nasty messages so we need to move on fast.
I have given you a mark scheme today to mark the break-even question you have each done. We are going to look at the answers and decide who has the best answer and post it on the blog.
Now the last activity we will do is based on a really cool resource on the Tutor2U blog. I have a bunch of questions in a blank worksheet. Can you answer the lot? Tough challenge... We will see how you react to timed pressure.
We have had soem struggles with margin of safety so I am hoping this will help you put those demons to bed. Also great chance for Mariah to get her hear around some of the equations and what-not. Although she came right back in and got 2/5 of the best answers in our exam question merry-go-round...
Extra Support
TC = FC + VC
Profit = TR - TC
Net Profit Margin
Extra Support
TC = FC + VC
Profit = TR - TC
Net Profit Margin
Tonight's Task
Answer the Levi Roots question on break even. Ensure you have self assessed /8 what you think you have got and why.
Monday 19 November 2012
Exam Question Merry-Go-Round
Everyone loves a merry-go-round right?
Well today all your dreams will come true because I am bringing a Merry-Go-Round to the classroom!
In a manner of speaking...
Today's task will involved 6 different 4 mark exam questions all based around the last 2 weeks worth of work. You will start by picking a random question and attempt to sketch an answer on a sheet of paper next to the question. You will then after a set time move around to another, check the other students answer and change/improve it depending. You will do this until you have seen all 6 questions on the merry-go-round!
I will play the clown....
Sunday 18 November 2012
Exam Question Plenary
Tough question here, lets see if we can work it out. Remember you need to show working to explain why you are correct!
Measuring the potential success of a business idea lesson 2
Dragons Den Case Study
As a group you have worked very well to produce revision notes and explanations for the key information covering the above topic.
Today you need to apply everything you have learnt as a group and draw together the data and information used both pre and post dragons den.
You need to:
- Identify the pricing strategy you used as a group justifying why you chose this method. Evaluate whether another strategy could have been used.
- Show the work you did estimating costs and profit. For the purposes of this exercise I will be charging you 50DHS rent for your stall and you need to pay 25DHS for the machinery lease (FC's).
- Now work out your break even revenue level and your desired margin of safety. Justify how you reached these conclusions.
- Complete a basic profit and loss and work out the gross profit margin and the operating profit margin.
You must work as a group to put these together however to add extra challenge Suleyman and Brendan must complete section 3/4 and Harley and Medis must complete section 1&2. This means you will be working out areas which you did not study last lesson.
The figures for section 1&2 are needed for 3&4 so Suleyman and Brendan should spend the first 5-10 minutes revising these areas and preparing the graphs or spreadsheets they will need.
Follow up Starter
Medis to produce a student led starter of Margin of safety and its importance to entrepreneurs.
Saturday 17 November 2012
Measuring the potential success of a business idea
Our focus this week will be on the below:
Earlier in the year we conducted a dragons den competition for which you were highly successful. Your challenge today is to prepare yourselves as a class to answer exam style questions on these three areas. We will use your dragons den information later in the week.
As part of this today you will start with the theory today dividing up to learn about the following:
Group 1 (Suleyman & Brenden)
Group 2 (Harley & Medis)
You each need to prepare a fully informative comment on this post covering everything we need to know about these areas for the exam.
In Mondays lesson we will begin with a break-even starter demonstrated by Harley and will be using the research and practical information gathered in your Dragons Den project to demonstrate your knowledge so make sure this data is gathered together in readiness.
Earlier in the year we conducted a dragons den competition for which you were highly successful. Your challenge today is to prepare yourselves as a class to answer exam style questions on these three areas. We will use your dragons den information later in the week.
As part of this today you will start with the theory today dividing up to learn about the following:
Group 1 (Suleyman & Brenden)
- Different Pricing strategy's ADV's & Dis-ADV's
- Revenue, Fixed & Variable Costs.
Group 2 (Harley & Medis)
- What is break-even revenue and how can an SME work it out?
- How do we work out "Desired margin of safety" and why is it important for entrepreneurs to consider?"
You each need to prepare a fully informative comment on this post covering everything we need to know about these areas for the exam.
In Mondays lesson we will begin with a break-even starter demonstrated by Harley and will be using the research and practical information gathered in your Dragons Den project to demonstrate your knowledge so make sure this data is gathered together in readiness.
Tuesday 13 November 2012
Boston Matrix
Introduction to the Boston Matrix
A business with a range of products has a portfolio of products. However, owning a product portfolio poses a problem for a business. It must decide how to allocate investment (e.g. in product development, promotion) across the portfolio.
A portfolio of products can be analysed using the Boston Group Consulting Matrix. This categorises the products into one of four different areas, based on:
•Market share – does the product being sold have a low or high market share?
•Market growth – are the numbers of potential customers in the market growing or not
How the Boston Matrix is Constructed
The Boston Matrix makes a series of key assumptions:
•Market share can be gained by investment in marketing
•Market share gains will always generate cash surpluses
•Cash surpluses will be generated when the product is in the maturity stage of the life cycle
•The best opportunity to build a dominant market position is during the growth phase
How does the Boston Matrix work?
The four categories can be described as follows:
•Stars are high growth products competing in markets where they are strong compared with the competition. Often Stars need heavy investment to sustain growth. Eventually growth will slow and, assuming they keep their market share, Stars will become Cash Cows
•Cash cows are low-growth products with a high market share. These are mature, successful products with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars
•Question marks are products with low market share operating in high growth markets. This suggests that they have potential, but may need substantial investment to grow market share at the expense of larger competitors. Management have to think hard about “Question Marks” - which ones should they invest in? Which ones should they allow to fail or shrink?
•Unsurprisingly, the term “dogs” refers to products that have a low market share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in. Dogs are usually sold or closed.
Ideally a business would prefer products in all categories (apart from Dogs!) to give it a balanced portfolio of products.
The main values of using the Boston Matrix include:
•A useful tool for analysing product portfolio decisions
•But it is only a snapshot of the current position
•Has little or no predictive value
•Does not take account of environmental factors
•There are flaws which flow from the assumptions on which the matrix is based
However, the model can be criticised in several ways:
•Market growth is an inadequate measure of a market’s attractiveness
•Market share is an adequate measure of a products ability to generate cash
•The focus on market share and market growth ignores issues such as developing a sustainable competitive
•advantages
•The product life cycle varies
Summary
Questions - Construct a Boston Matrix for the following companies:
McDonalds
Tesco
Coke
Emirates Airlines
Finally, all of you need to put together a Boston Matrix for Tim Hortons...
A business with a range of products has a portfolio of products. However, owning a product portfolio poses a problem for a business. It must decide how to allocate investment (e.g. in product development, promotion) across the portfolio.
•Market share – does the product being sold have a low or high market share?
•Market growth – are the numbers of potential customers in the market growing or not
How the Boston Matrix is Constructed
The Boston Matrix makes a series of key assumptions:
•Market share can be gained by investment in marketing
•Market share gains will always generate cash surpluses
•Cash surpluses will be generated when the product is in the maturity stage of the life cycle
•The best opportunity to build a dominant market position is during the growth phase
How does the Boston Matrix work?
The four categories can be described as follows:
•Stars are high growth products competing in markets where they are strong compared with the competition. Often Stars need heavy investment to sustain growth. Eventually growth will slow and, assuming they keep their market share, Stars will become Cash Cows
•Cash cows are low-growth products with a high market share. These are mature, successful products with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars
•Question marks are products with low market share operating in high growth markets. This suggests that they have potential, but may need substantial investment to grow market share at the expense of larger competitors. Management have to think hard about “Question Marks” - which ones should they invest in? Which ones should they allow to fail or shrink?
•Unsurprisingly, the term “dogs” refers to products that have a low market share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in. Dogs are usually sold or closed.
Ideally a business would prefer products in all categories (apart from Dogs!) to give it a balanced portfolio of products.
The main values of using the Boston Matrix include:
•A useful tool for analysing product portfolio decisions
•But it is only a snapshot of the current position
•Has little or no predictive value
•Does not take account of environmental factors
•There are flaws which flow from the assumptions on which the matrix is based
However, the model can be criticised in several ways:
•Market growth is an inadequate measure of a market’s attractiveness
•Market share is an adequate measure of a products ability to generate cash
•The focus on market share and market growth ignores issues such as developing a sustainable competitive
•advantages
•The product life cycle varies
Summary
Questions - Construct a Boston Matrix for the following companies:
McDonalds
Tesco
Coke
Emirates Airlines
Finally, all of you need to put together a Boston Matrix for Tim Hortons...
Suleymans Sources of Finance Starter
A fantastic starter activity given by Suleyman which tested student understanding of the main sources of finance for businesses. Apologies for it being compressed. I will also post his slides later on at the weekend probably more for the teachers! I will be using his starter in the inspection next week...
Measurement of profit
Yesterday we went over basic profit and loss plus the calculations for Gross and Operating (Net) profit.
Today we want to discuss ways in which profit can be improved by a firm. For this I will use the below profit and loss account despite you not needing to know how a profit and loss account is put together yet.
Spot the difference?
Monday 12 November 2012
Profit Lesson
Y12: Learning Objectives:
You must be able to to define 'Gross Profit/Operating Profit' and Profit Margins [Grade E]
You should be able to explain why profit is important to a business [Grade C-B]
You could start to judge how profit can be improved within a business [Grade A]
Learning Activities You need to read through the worksheet that goes through the basics of profit. This is knowledge and it is vital you understand the formulas.
The link to the worksheet is here: Once you have looked over the key terms on the worksheet - in your groups: You need to find some news articles that mention the terms profits/profit margins.
Once you have found a good news article - you need to create a comment with the article and then create 3 exam questions that cover all the learning objectives mentioned above. Use your group members names when commenting.
Sunday 11 November 2012
Profit Lesson
Y12:
Learning Objectives:
You must be able to to define 'Gross Profit/Operating Profit' and Profit Margins [Grade E]
You should be able to explain why profit is important to a business [Grade C]
You could start to judge how profit can be improved within a business [Grade A]
Learning Activities
You need to read through the worksheet that goes through the basics of profit. This is knowledge and it is vital you understand the formulas.
The link to the fronter worksheet is here:
Once you have looked over the key terms on the worksheet - in your groups:
You need to find some news articles that mention the terms profits/profit margins.
Once you have found a good news article - you need to create a word document with the article and then create 3 exam questions that cover all the learning objectives mentioned above.
Drop into the folder on Fronter with your group names as file names.
Wednesday 7 November 2012
Y12 - Something for the weekend...
I want you to consider the below and make notes on what you learn:
Which sources of finance are more suitable for:
- Start-Ups
- Sole-Traders
- SME Ltd's looking to grow
- Large Ltd's looking to grow
Why is a venture capitalist not always a suitable source for smaller organisations compared to business angels?
Y12 Exam Question Lesson
Using last lessons exam question you need to peer assess each others answers.
For the 6 Mark Questions you are looking for Knowledge (2 Marks) and Application (4 Marks) in the students explanations.
For the 8 Marker we are looking for 2 Knowledge, 2 Application, 2 Analysis, and finally 2 Evaluation.
I will assess the marking myself. Remember the marking will be done in word and uploaded to fronter. Use the add comment function.
For the 6 Mark Questions you are looking for Knowledge (2 Marks) and Application (4 Marks) in the students explanations.
For the 8 Marker we are looking for 2 Knowledge, 2 Application, 2 Analysis, and finally 2 Evaluation.
I will assess the marking myself. Remember the marking will be done in word and uploaded to fronter. Use the add comment function.
Tuesday 6 November 2012
Equity Finance
I got asked by a student what Equity Finance was today in class. I gave a pretty awful explanation...
My explanation tried to make the link between what equity means and how that might be used to finance the business...
Think of equity as the amount left when you take liabilities away from the assets of a business. Now think of Equity finance as when you sell shares in your business in return for shareholders owning part of your equity. The new shareholders get entitled to dividends or a share in the profits and the original owners lose some control of the business.
Now you can raise equity finance by issuing share to existing shareholders (Rights Issue) which means you avoid having to bring in new shareholders as a LTD company.
You might also decide to issue shares to new shareholders on the stock exchange either by floating your business for the first time to become a PLC or as an existing PLC. This is the way to get the largest amount of investment however there are risks involved. Plus it puts you under a lot of external and internal scrutiny just look at Facebook and the negativity around their share prices of late!
Another way might be to keep (retain) profits in a business rather than issue dividends to your shareholders. This might not be popular with them but if it is being used to fun growth and invest in the business in return for larger future profits then shareholders will likely be happy enough to accept that.
Remember business have a legal obligation to deliver the maximum possible value/return to shareholders!
Tutor 2 U also has a round up on Equity Finance and if you look on the right hand side after reading the article they have links to a lot of additional information on the other sources of finance for businesses. Remember to focus on SME's for the moment...
My explanation tried to make the link between what equity means and how that might be used to finance the business...
Think of equity as the amount left when you take liabilities away from the assets of a business. Now think of Equity finance as when you sell shares in your business in return for shareholders owning part of your equity. The new shareholders get entitled to dividends or a share in the profits and the original owners lose some control of the business.
Now you can raise equity finance by issuing share to existing shareholders (Rights Issue) which means you avoid having to bring in new shareholders as a LTD company.
You might also decide to issue shares to new shareholders on the stock exchange either by floating your business for the first time to become a PLC or as an existing PLC. This is the way to get the largest amount of investment however there are risks involved. Plus it puts you under a lot of external and internal scrutiny just look at Facebook and the negativity around their share prices of late!
Another way might be to keep (retain) profits in a business rather than issue dividends to your shareholders. This might not be popular with them but if it is being used to fun growth and invest in the business in return for larger future profits then shareholders will likely be happy enough to accept that.
Remember business have a legal obligation to deliver the maximum possible value/return to shareholders!
Tutor 2 U also has a round up on Equity Finance and if you look on the right hand side after reading the article they have links to a lot of additional information on the other sources of finance for businesses. Remember to focus on SME's for the moment...
Sources of Finance L2
Hi Y12
Stage 1
I want you to complete the questions set by Mrs Oates after reading the Tiffinbites article she posted. Just focus on the key outcome questions.
Stage 2
Now download this exam question worksheet. You need to complete it for homework if not completed in class due for Thursday.
Monday 5 November 2012
Next lessons student led starter
Next lesson I want Suleyman to lead a starter activity on:
- Identifying the difference between internal & external sources of finance.
- Explaining the drawbacks to each source of finance.
- Judging the sources of finance suitable to a start-up business
The resources used will be posted along with a video of the activity as it happens to help with revision later on.
Sources of Finance Lesson
Sunday 4 November 2012
Business Plans
http://www.tutor2u.net/blog/index.php/business-studies/comments/business-planning-teaching-resources
Information on business plans!
Tiffinbites -
Have a read of this article about Jamal Hirani - the founder of Tiffinbites
http://www.guardian.co.uk/business/2008/aug/29/fooddrinks
There are a variety of business concepts that come out of this. In your groups - read through the article and come up with some answers to the following questions.
Revision Questions
What were Jamal's motives for setting up his business?
What was one key characteristic that Jamal showed?
What type of market is Jamal operating in?
Key Learning Objective:
Identify one source of finance that Jamal used to set up his business. [Grade D/E]
Explain the advantages and disadvantages of this type finance [Grade C/B]
Discuss at least 3 other types of external finance that Jamal might be able to use [Grade B/A]
The last learning objective will need some research in textbooks!
Saturday 3 November 2012
Obama Vs Mitt Romney: Who will win?
I hope you have all heard about a big election going on across the Atlantic Ocean. The ripple effects of this result will be felt all around the world as the worlds superpower decides who it will ask to guide its economy for the next 4 years. There are many issues being fought over in the election which you can see here. However, for many it is a straight choice between a republican candidate accused of flip flopping and a democratic president accused of not bringing forth the promised change of his first election. America will make its choice and we will just have to wait and see. The BBC has an awesome Poll tracker you can use by just clicking the image above but you can see just how close the race is!
When it comes to economics these two candidates have quite polar views (depending on the crowd being addressed by Mitt Romney sometimes...) and although we might think it will not affect us Americas economy is so large it allways will. They have a great deal of debt especially to China and so they need to be paying this off. They are also responsible for a great deal of global demand for products and services along with producing a lot themselves. The world needs a growing US economy, the question is which candidate will give us this? I can't be biased here but I have an opinion. Do any of you have one?
Friday 2 November 2012
Corporate Social Responsibility
Starbucks have paid next to no taxes in the UK by declaring that they are making a loss in their UK stores. This despite apparently telling investors that the UK market is highly profitable...
Make up your own mind but it raises the question of corporate social responsibility. This is something we will discuss in class next term, personally I don't like Starbucks regardless and I will make sure I do not spend my money in their chains until this gets cleared up. I want company's to pay their fair share of UK taxes as I once did!
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