AS Business Unit 2, Chapter 31

http://www.youtube.com/watch?v=-xC_dZhbGro

1. Who is this advert aimed at?
2. What is its purpose?
3. What are the benefits of stocking ragu?

http://www.youtube.com/watch?v=SHcm1ec7CcY

1. What was the advert attempting to do?
2. Who was it aimed at?

Vue for you?

Cinema Giant Weighs Up £400m Auction - potential buyers saught for the Vue Cinema chain.

• http://news.sky.com/skynews/video/Business-News?videoCategory=Business+News
• http://www.guardian.co.uk/business/2010/feb/18/vue-film-richards-westfield

What are privat equity firms and why might they be interested?

Starbucks strategy and growth

Coffee Shops thrive through the recession

http://www.tutor2u.net/blog/index.php/business-studies/comments/starbucks-the-famous-strategic-change-memo-from-2007/

http://news.sky.com/skynews/Home/Business/Starbucks-Plans-To-Open-New-Stores-In-Uk-And-Ireland-As-Profits-Rise/Article/201004415613030

And for the visual learners: http://news.bbc.co.uk/1/hi/business/8334993.stm

Interesting suggestion that customers may be trading down from other lunchtime or business venues

Procter & Gamble Go for Growth as the recession ends

P&G are one of the largest consumer goods firms in the UK. Emerging with secure finances from the recession has allowed them to launch an aggressive marketing strategy in an attempt to increase market share in it's key markets.

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/7575115/Procter-and-Gamble-to-raise-ad-spend.html

Points to consider for higher level analysis and evaluation

• What market structure do they compete in?
• How would this affect their chances of success in this strategy?
• What else could they consider?

Current Economic Performance

http://news.bbc.co.uk/1/hi/programmes/the_daily_politics/8640034.stm

Stephen Alambritis, from the Federation of Small Businesses, on the economic data as CPI inflation was up by more than expected to 3.4% in March, and unemployment rose to 2.5 million in the three months to February - the highest level since 1994.

The Nissan L:eaf

Motoring Reviews

http://www.wired.com/autopia/2010/03/nissan-leaf-ev-price/
http://www.telegraph.co.uk/motoring/news/5977911/Nissan-gives-electric-car-the-go-ahead.html

Gordon Brown should realise electric cars are a battery-powered nightmare

http://www.telegraph.co.uk/comment/personal-view/5126987/Gordon-Brown-should-realise-electric-cars-are-a-battery-powered-nightmare.html

Alternatives

The G-Wizz - £15,795

Homework
Analyse Four reasons for Nissan to Launch the LEAF

Pizza Express - exercise

This national firm has survived the recession by using the sustained use of a BOGOF promotion limited to Pizzas.

I asked that the 13-2 BS explain the benefits of such a promotion.

• You should consider the obvious: the incentive to customers of a lower priced meal; the impact on the sale of other items (kids meals; starters; puddings; drinks).
• Analysis of issues such as Breat Even; meeting direct costs; cash flow; plus HR benfits (can you analyse this?) and Op. Man. - working the assets.
• You should also consider the impact of sustained sales promotion on Brand value (you might consider the impact on Innocent Smoothies).
• Pizza Express is a private limited company. Is that relevant?
• What else could they have done?
• On balance, was this the best method? (and why?)

Whilst there is help here, your answer should be in more formal business language, with issues analysed in detail.

Evaluation - mitigation and exacerbation (making worse)

Evaluation is a critical skill in the coming U4 examination. All of you can comfortable manage the direct evaluation that I call "So what?" style.

In the examination a question based around the RECESSION theme may bring in some other external factor. We introduced the impact of the volcanic activity as such a random factor.

We identified that the fall out from the volcano has affected the airlines, BAA, other businesses supporting the industry as well as those engaged ion IMPORT and EXPORT.

But: How bad would it be and what could be done?

Firstly, firms exiting the recession may have fared badly. Their cashflow may have been WEAKENED by few customers, lower priced tickets necessitated by increased competition for customers.

The volcanic activity would worsen their plight. No flights means no revenue. The overheads still have to be paid, this would cause a period of NEGATIVE cash flow (- this is where AT would have been correct). This could push firms who had survived the recession into administration or towards commercial partnership with other firms (perhaps BA and Iberia would have merged earlier). In this way the Volcanic activity therefore exacerbates the cash flow problems.

[For the highest evaluation a solution to the problem may be appropriate.]

Something that mitigates the impact could be suggested. The Government could subsidise the Airline, if the candidate developed this to identifie such a subsidy would need the agreement of the EU, the candidate would score very highly. Perhaps an awareness of the need to preserve jobs as a reason for the EU to act would add value to the answer.

To maximise the score the candidate would need to clearly say that the subsidy would lower the Airlines costs, and therefore increase its chances of survival. This is critical as it is the solution to the problem.

Recession hangovers...

Cashflow video from the BBC

Government help with businesses coming out of recession
http://news.bbc.co.uk/1/hi/business/8483633.stm

Late payments cripple small business
http://news.bbc.co.uk/1/hi/puffbox/hyperpuff/business/2010/toyota_recall/8622111.stm

Pay dirt for pandering to the rich..

Acting rich: recession sees roaring trade in champagne and Louis Vuitton handbags

http://www.guardian.co.uk/money/2010/apr/13/rich-recession-designer-luxury-brands

Cut backs in non-monetary pay...

Abercrombie & Fitch

http://www.guardian.co.uk/business/andrew-clark-on-america/2010/apr/13/retail-air-transport

Sales down 28%, world recession and still they make a profit!

Sony Ericsson - make profit!
http://news.bbc.co.uk/1/hi/business/8624450.stm

Smart Phones - recession proof?
http://news.bbc.co.uk/1/hi/business/8292101.stm

Girl Power

From T2U Monday, April 12, 2010 by Debbie Gordon



There is no doubt that the recent recession has been a painful time for most businesses - but some have managed to come out on top. Here is a great article about four female entrepreneurs who have been recognised for their outstanding achievement over the last year and nominated for Veuve Clicquot Businesswoman of the Year Award and four case study exam style questions for you to practice with.


http://news.bbc.co.uk/1/hi/business/8583691.stm


Perfect case study material for BUSS4 on the recession, and as possible ‘essay’ style questions for exam practice here are a few examples for you to try out your extended exam style. Remember to PEE with conviction throughout your answer!
1) With reference to article above and your own research, discuss the view that retrenchment is inevitable in a recession. (40 marks)
2) With reference to article above and your own research, discuss the view that experienced leadership is the key to surviving a recession. (40 marks)
3) With reference to article above and your own research, evaluate the strategies businesses might deploy in response to the recession. (40 marks)
4) With reference to article above and your own research, evaluate the different range of management approaches to decision making in a recession. (40 marks)

Padded Bras, Ethical Behaviour and Pressure Groups

The sexualisation of girls is an ethical issue. Primark has withdrawn their padded bikini tops aimed at seven year olds. They were accused by thhe Children's Society of "premature sexualisation" and "unprincipled advertising" that is damaging to children's well-being.

The firm's PR department have rushed to mitigate the damage with the statement that "Primark will donate all the profits made from this product line to a children's charity, and apologises to customers for any offence caused."

Details here:

http://news.bbc.co.uk/1/hi/uk/8619329.stm

Help for Heroes

A novel approach to sales promotion with this broadening of distribution channels:

http://news.bbc.co.uk/1/hi/uk/8614620.stm

Invest to succeed...

This article looks at how a firm can use its relative strength in a recession to bolster its market position.

http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article7036976.ece

• The firm is owned by Associated British Foods (ABF). What does this suggest about risk management within its owners?
• How would this help it meet the challenges in a recession?

Cadbury

Cadbury did well out of the recession - people like chocolate and pizza when they are miserable according to sales. The firm has been taken over by Kraft in a debt finance deal.

Its latest strategy is this: http://news.bbc.co.uk/1/hi/business/8611228.stm

Can you spot the strategy?

Why might this strategy be likely to succeed?

Corus - again!

http://business.timesonline.co.uk/tol/business/industry_sectors/industrials/article7086769.ece

Recession Survival Strategies Cost UK SMEs £16bn

Strategies to save business cost money, this one from T2U.net

http://www.tutor2u.net/blog/index.php/business-studies/comments/recession-survival-strategies-cost-uk-smes-16bn/

Top 10 Brands

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/7544908/Top-ten-grocery-brands-in-pictures.html