Why did Zavvi go under?

A very good example of the suppliers' role in survival. It would be interesting to read what the Zavvi executives did, since they started sensing that Woolworths were about to go on administration. Think of how their Value Chain Analysis and Five Forces Analysis would look like a few months ago.

By the way, one can only admire R. Branson's foresight...

Why did Zavvi go under?
By Martin Shankleman Employment correspondent, BBC News

Zavvi has joined a growing list of High Street casualties in the run-up to Christmas.
These include the closures of MFI and Woolworths, which were confirmed last week, while Whittards and The Officers Club went bust yesterday.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7799204.stm

The trouble with Starbucks

Very Interesting. Lots of stuff to consider: unsustainable growth, expansion strategies, international strategies.


The trouble with Starbucks
By Jenny Wiggins. Portrait by Charlie Bibby
Published: December 12 2008 11:43 Last updated: December 12 2008 11:43

On a dark December morning three years ago, Howard Schultz bounded into a coffee shop in Dublin and started shaking hands with people in red T-shirts and green aprons before peppering them with questions. “Are you all new with Starbucks?” he asked the staff. “Who are the customers, and have they been to Starbucks before?”

Read the whole article at: http://www.ft.com/cms/s/0/aa9831ce-c266-11dd-a350-000077b07658.html?nclick_check=1

Virgin unveils next-gen broadband

Example of product development. The broadband market has reached its maturity with no new customers available; and hence Virgin has developed a product development strategy (think of Ansoff's matrix). Reading the article, it is interesting to note how the competition is based on different technologies (impact of macro environment) which have a completely different approach (modem etc). I guess pricing and reliability will determine the winners as switching costs remain low.

Virgin unveils next-gen broadband

Virgin Media has launched its new 50 Megabits per second (Mbps) domestic broadband service.
It doing so it will be the first UK ISP to roll out a next generation broadband service that runs far faster than most others available to UK web users.

Read the whole article at: http://news.bbc.co.uk/1/hi/technology/7776139.stm

Owner of Five 'eyes bid for C4'

Note how the environmental factors 'from a funding gap as advertising revenue falls' influence network level strategies. Good example of vertical integration.

Owner of Five 'eyes bid for C4'

RTL, the German firm which owns channel Five, is contemplating a takeover bid for Channel 4, a report suggests.
It has asked investment bank JP MorganChase to examine the prospect of the move, The Sunday Times reports.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7782645.stm

Life in UK 'has become lonelier'

Another interesting Socio-Cultural factor.

Life in UK 'has become lonelier'

By Mark Easton BBC Home Editor

Community life in Britain has weakened substantially over the past 30 years, according to research commissioned by the BBC.
Analysis of census data reveals how neighbourhoods in every part of the UK have become more socially fragmented.

Read the whole article at: http://news.bbc.co.uk/1/hi/uk/7755641.stm

Online movie sales jump in the UK

Interesting Socio-Cultural factor.

Online movie sales jump in the UK

The number of people buying feature films via online download in the UK has jumped hugely in the past year, according to data from Screen Digest.
There will be a projected 412,000 transactions in 2008, a big jump from the 10,000 transactions seen in 2007.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7755296.stm

TUI Travel reports jump in profit

Cost cutting and competitive advantage of scale as a result of an M&A.

TUI Travel reports jump in profit

Europe's biggest travel firm, TUI Travel, has said its full-year pre-tax profit rose 43% to £319.7m ($489.5m) as a result of cost cuts.
The group was created last year through the merger of German operator TUI AG and Britain's First Choice.


Read the whole article at: http://news.bbc.co.uk/1/hi/business/7752211.stm

Nokia to end phone sales in Japan

Here is a case of withdrawal of an SBU due to the inability to respond to 'Pressures for Local Responsiveness'.

Nokia to end phone sales in Japan

Finnish mobile phone giant Nokia has said it will stop selling its handsets in Japan after struggling to grow its market share in the country.
Nokia said it would continue selling its luxury Vertu brand in Japan, and would dedicate its Japanese business to research purposes.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7752279.stm

Lunch with the FT: Tom Peters

Lunch with the FT: Tom Peters
By Stefan Stern
Published: November 21 2008 19:41 Last updated: November 21 2008 19:41

Outside the markets were tumbling, traders were panicking, and the end of the world seemed nigh. But inside, seated quietly in his favourite French restaurant, Tom Peters was calmness itself. This is not how most people would picture the world’s most famous management guru. Mention Peters to business types and they will recall spectacular (and noisy) stage presentations, filled with loud assertions, garish PowerPoint slides and rarely a pause for breath.

Read the whole article at: http://www.ft.com/cms/s/0/823c7caa-b75b-11dd-8e01-0000779fd18c.html?nclick_check=1

Lively no more

Here is a case of 'withdrawing' as a strategy. Google has abadoned a strategy at the early stages of implementation. The launching of 'lively' was a Resource Based View case, however it is interesting to note that now Google is trying to focus its resources on its main activities. It is also worth mentioning that the withdraw from 'lively' comes together with the launch of the 'SearchWiki'.

To read more on this issue: http://www.google.com/hostednews/ap/article/ALeqM5jhRCjkHwh_oq8QOuell_PEkgqTagD94IT2080
http://blogs.ft.com/techblog/2008/11/its-the-data-stupid/

Daewoo leases African plantation

Vertical Integration.

Daewoo leases African plantation

South Korean firm Daewoo has unveiled plans to plant corn on one million acres of land in Madagascar, to sharply cut its reliance on US imports.
Daewoo is leasing the vast tract of land - half the size of Belgium - for 99 years and hopes to produce 5 million tonnes of corn a year by 2023.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7737643.stm

M&S resorts to one-day sale move

That's an example of 'market penetration' strategic options.

M&S resorts to one-day sale move

Marks and Spencer is to hold a one-day, 20%-off sale on Thursday, a move that analysts see as a sign that the retailer is continuing to struggle.
The move will see M&S go head-to-head with Debenhams in an effort to entice customers after dismal October trading.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7737281.stm

UK recession to be 'tougher and longer'

These forecasts are quite interesting in terms of the planning horizon.

UK recession to be 'tougher and longer'
The UK economy is expected to contract for another three quarters before beginning a slow recovery through 2010

Kathryn Hopkins
Monday November 17 2008 09.20 GMT

Recession in Britain will be tougher and longer than previously thought, the Confederation of British Industry warned today, with the economy expected to contract by 1.7% next year.
It also expects unemployment to hit 9% in 2010, leaving almost 3 million people out of work.

Read the whole article at: http://www.guardian.co.uk/business/2008/nov/17/recession-cbi

Virgin Atlantic plans Gatwick bid

That's a good example of a strategic alliance in the form of a consurtium to bid for Gatwick. It is interesting how the potential synergies developed are described as a 'marriage made in Heaven'; they might have experienced marriages made in Hell in the past!

Virgin Atlantic plans Gatwick bid

Virgin Atlantic and Easyjet are planning a joint bid for Gatwick airport, which has been put up for sale by its owner, BAA.
Virgin is talking to a group of interested parties about a bid for the airport, valued by analysts at up to £2.5bn.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7728863.stm

Panasonic aims to take over Sanyo

That's an example of 'overcapacity' and 'product/market' M&A. Interesting to note that the statement of intention is signed by both CEO's and refers to synergies.

Panasonic aims to take over Sanyo

Japanese electronic rivals Panasonic and Sanyo are starting alliance talks, which could result in Panasonic taking over the smaller company.
Panasonic said it wanted to make Sanyo its subsidiary, effectively creating Japan's largest electronics maker.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7714994.stm

Barclays' Mideast backlash

Here is an example of how a strategic option can be found not acceptable. This option seems to be feasible and suitable, but the board of directors will have to consider its acceptability before selecting it.


Barclays' Mideast backlash

By Peter Thal Larsen and Kate Burgess Published: November 1 2008 02:00

Barclays was last night facing an investor backlash as shareholders balked at its plans to raise about £7bn in a deal that could leave almost a third of the British bank in the hands of two Middle Eastern investors.
Shares in Barclays fell 13 per cent to 178.9p even as the bank defied sceptics by succeeding in tapping private investors for the funds it needs as part of the recapitalisation of banks.

Read the whole article at: http://www.ft.com/cms/s/0/30efb40e-a7b9-11dd-865e-000077b07658.html

Understanding the Crisis in the Markets: A Panel of Harvard Experts

A worth watching video.

Link to the video: http://alumninews.harvard.edu/2008/10/03/understanding-the-crisis-in-the-markets-a-panel-of-harvard-experts/#more-90

Ryanair set for £8 flights to US

This is one of the few cases that the company will expand operations and businesses to overcome recession.


Ryanair set for £8 flights to US

Budget airline Ryanair is to offer flights to the US for eight pounds, by buying planes from struggling rivals.
The plan will be revealed when chief executive Michael O'Leary announces the firm's quarterly results on Monday.


Read the whole article: http://news.bbc.co.uk/1/hi/business/7705169.stm

Nissan profits slump on high yen

The impact of the exchange rate.

Nissan profits slump on high yen

Nissan has reported a 41% fall in half-year profits after it was hit by the high value of the yen and the "severe decline" in the US car market.
Japan's third-largest carmaker made a net profit of 126bn yen ($1.3bn; £803m) between April and September, down from 212bn yen a year earlier.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7701398.stm

BMI being taken over by Lufthansa

Here is a good example how one network level strategy (strategic alliance) has changed to another (M&A). The point of interest in this story is the fact that it is not a deliberate strategic option by Lufthansa but an emergent strategy.

BMI being taken over by Lufthansa

UK airline BMI is being taken over by Germany's Lufthansa.
Lufthansa is buying the 50% of firm owned by BMI chairman Sir Michael Bishop, who forced the purchase under a long-standing agreement.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7697261.stm

Ryanair to close base in Valencia

Considering that Ryanair is the 'supplier' for the Valencia Airport and/or the local Authorities; then this serves as a very good example of the 'suppliers' power.

Ryanair to close base in Valencia

Budget airline Ryanair is to close its base at Valencia in Spain with the loss of 70 weekly flights, it has announced.
The move will affect 750,000 passengers a year and 750 jobs in the region could be lost, according to the airline.

Read the whole article at: http://news.bbc.co.uk/1/hi/uk/7688509.stm

How do pound shops cope with inflation?

Lots of interesting stuff in this article. Firstly, it is worth noting the growth of 'price leader' strategies at times of economic downturn. Secondly, pound-shops' business model is very interesting and seems to depend on size and relationship with suppliers. (Who would have thought that Colgate is Poundland's supplier?)

How do pound shops cope with inflation?
By Anthony Reuben

Eighteen years since it opened its doors, some people are still struggling with the "everything is a pound" concept.
But enough people seem to be getting the hang of it to have boosted sales of the two biggest chains: Poundland with 191 stores and 99p Stores with 60.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7680302.stm

What is a recession?

After a talk with some of the students it seemed to me that recession is not clearly understood; that's why I am posting this link from BBC which is a quite easy to read text. I am sure that there are lot more scientific sources in the library.

Q&A: What is a recession?

The dreaded R-word - recession - is in the air as every day seems to bring more gloomy economic news.
Many commentators are now openly talking about the current slowdown turning into a recession.
But how do economists define a recession and when will we know if the UK is going through one?

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7495340.stm

Tougher climate target unveiled

That's an interesting announcement. In theory, tougher climate targets have significant effects on UK business; in practice though, this target is very long term, hence until this target is 'operationalised' with shorter term targets, the effects will be so visible.

It is also useful to note that the aviation and shipping emissions are not included. Could this be interpreted that these industries are not ready for such radical measures? Is this an opportunity for any companies?

Tougher climate target unveiled

The government has committed the UK to cut greenhouse gas emissions by 80% by middle of this century.
Climate change and energy secretary Ed Miliband said the current 60% target would be replaced by a higher goal.

Read the whole article at: http://news.bbc.co.uk/1/hi/uk_politics/7673748.stm

Mark Zuckerberg on facebook's long term direction

It is very interesting to note the clear strategic direction set up by Zuckerberg; at this stage they are not interested in capitalising on the existing success, hence profits are not the first priority! He believes that the sustainability of the facebook will depend on its members (asset/resources) and not on the financial returns (another type of asset/resource). This interview also serves as a good example of the differences between mission and vision for a company.

To see the interview: http://news.bbc.co.uk/1/hi/technology/7664384.stm

M. Porter on 'what is not a strategy'

Porter explaining the difference between steps to achieve a strategy and the actual organisational strategy.

John Paulson’s Hedge Funds Return 19% in a Down Market

A good example that the uncertainty of the future is not necessarily a threat.

John Paulson’s Hedge Funds Return 19% in a Down Market
Investors said the Paulson Advantage Plus fund was one of the best performers so far this year, with a net return of 19.44% for the year to the end of August. The fund made 158.75% last year and, through a combination of investment gains and new capital, has grown from about $100m (€70m) at the start of 2007 to almost $9bn, Financial News Online can exclusively reveal.

Read the whole article at: http://www.efinancialnews.com/homepage/content/2452026834

Northern Rock cuts savings deals

This is a very interesting case, as it shows the power of goverment owned (or nationalised) companies against competition. Similar concerns have been expressed in the past for the power of BBC.

Northern Rock cuts savings deals
Northern Rock has withdrawn a number of savings deals to new customers to ensure it does not abuse any competitive advantage.
The nationalised bank is one of few financial institutions that has a 100% guarantee for the safety of customers' savings, as it is government-backed.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7647914.stm

BMI's no comment on merger rumour

Entry through a merger

BMI's no comment on merger rumour
UK airline BMI has declined to comment on newspaper speculation that it has been approached by Abu Dhabi carrier Etihad over a possible merger.
Etihad first went to BMI in the summer over a potential deal which values BMI at £600m, the Sunday Times reported.

Read the whole article: http://news.bbc.co.uk/1/hi/business/7615507.stm

GKN buys Airbus plant for £136m

Stronger links for the UK economy with Airbus

GKN buys Airbus plant for £136m
Part of the Airbus factory in south Gloucestershire is being sold to engineering company GKN for £136m.
The firm is to buy the manufacturing operation at the Filton site, which makes wing components for Airbus.

Read the whole article at: http://news.bbc.co.uk/1/hi/england/bristol/7616110.stm

Business travellers boost Virgin

Business travellers boost Virgin

Virgin Atlantic boss Steve Ridgway

Record numbers of business travellers have boosted profits at Virgin Atlantic despite sky-high fuel prices.

The airline, 51% owned by Sir Richard Branson, saw pre-tax profits hit £34.8m ($64m) in the 2007/2008 financial year, up from £6m the year before.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7581576.stm

Penguin targets lonely bookworms

Interesting strategic alliance and synergies development

Penguin targets lonely bookworms
Penguin has launched an online dating website with Match.com to bring lovelorn literature fans together.

Members will be asked to list their favourite books in their profile and will be able to search for suitors with similar literary tastes.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7577132.stm

Halifax to close 53 estate agents

Strategic options and concentration on the core business

Halifax to close 53 estate agents
The Halifax has said it is to close 53 of its estate agency branches in a move that will lead to the loss of 100 jobs.

The firm said the closures followed the "significant decline" in the number of house sales over the past year.

Following the changes, the Halifax said it would focus on its core markets in the Midlands and North where it would operate 151 branches.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7576610.stm

BAA 'should sell three airports'

BAA 'should sell three airports'
BAA may have to sell three of its seven UK airports because of concerns about its market dominance, the Competition Commission has said.

The watchdog is recommending that the airport operator should have to sell two of its three airports in the South East - Heathrow, Gatwick and Stansted.

Read the whole article at: http://news.bbc.co.uk/1/hi/business/7571613.stm

BA seals alliance with American

BA seals alliance with American
British Airways says it has sealed an alliance with American Airlines that will allow the two carriers to fix fares, routes and schedules together.

The move will also include Spain's Iberia, which is merging with BA.

With aviation fuel prices near record levels and spending on air travel slowing, airlines are looking at ways to cut costs.

To read more:
http://news.bbc.co.uk/1/hi/business/7560790.stm

Never trust an economic forecast

An interesting article on forecasting and environmental scanning.


Never trust an economic forecast
By Tim Harford
Published: August 9 2008 01:20

When people discover that I am an economist, they rarely ask me for my views on subjects that economists know a bit about – such as how to respond to climate change or pay less at a supermarket. Instead they ask me what will happen to the economy

Read the whole article at: http://www.ft.com/cms/s/0/867c0148-6353-11dd-9fd0-0000779fd2ac.html?nclick_check=1