AQA A2 BUSS4 Strategy & Economic factors
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Can Nokia Reinvent Itself Again?

Can Nokia Reinvent Itself Again? | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
The company has been down and out before, but it’s always found a way back.
Mr Billinghurst-Bright's insight:

Read the additional story on Nokia being sold to Microsoft - http://www.bbc.co.uk/news/business-23940171 (Video included)

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Three reasons Tesco is in trouble

Three reasons Tesco is in trouble | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
Food retail analyst Bruno Monteyne discusses Tesco's sharp fall in sales as it faces increasing competition from rivals.
Mr Billinghurst-Bright's insight:

Excellent short radio clip with analysis on Tesco and their failing strategy. Brilliant links to Porter's Generic Strategies. They are in a very competitive market and are not cheaper than Aldi, Lidl or Asda (Cost Leadership) and are not better quality than M&S or Waitrose (Differentiation). They are trying to be all things to all people and are failing to do any of them successfully.

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Coffee switch a Whitbread winner

Coffee switch a Whitbread winner | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
Former brewing giant Whitbread has carved out a huge new business with coffee shops and budget hotels after turning its back on beer.
Mr Billinghurst-Bright's insight:

A vital example of successsful diversification and strategic change by Whitbread. Previously known for beer it switched from this low growth market into budget hotels and coffee which has been very profitable for them.

 

Other important reading:

Whitbread buys Coffee Nation vending machines - http://www.bbc.co.uk/news/business-12618232

 

Drinks group puts focus on the High Street. Whitbread buys Costa Coffee

http://www.heraldscotland.com/sport/spl/aberdeen/drinks-group-puts-focus-on-the-high-street-whitbread-buys-costa-coffee-1.661005

 

Costa Coffee profits rise again

http://www.theguardian.com/business/2014/apr/29/costa-coffee-profits-whitbread

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Dyson profits double thanks to R&D investment

Dyson profits double thanks to R&D investment | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
Dyson is already an icon of British inventiveness, and the company says its latest soaring financial results vindicate a strategy committed, above everything else, to research and development (R&D).
Mr Billinghurst-Bright's insight:

TOPIC: Research & Development, Recession, Differentiation

 

A perfect piece of evidence to show investing in R&D can pay off even during difficult economic conditions.

Competitor reactions, cost involved, customer expectation, staff skills level of risk and the chance of a return are all important issues to consider with this topic. Would this strategy work with all companies?

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High Street casualties

High Street casualties | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
Which retailers have been hit hard by the consumer slowdown in the past year?
Mr Billinghurst-Bright's insight:

TOPIC: Recession

 

A good article from Feb. 2013 listing retailers who have struggled/failed on the UK high street with reasons why. Lots of recession examples in a short space of time. 

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JCB workers take pay cut to avoid layoffs

JCB workers take pay cut to avoid layoffs | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
Thousands at manufacturing firm vote to accept four-day week to prevent loss of 350 jobs
Mr Billinghurst-Bright's insight:

TOPIC: Recession

 

Good example from 2008 of staff taking pay cuts so firm can keep jobs during the recession.

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Panasonic makeover brings profit surge from auto parts, homes divisions | Reuters

Panasonic makeover brings profit surge from auto parts, homes divisions | Reuters | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it

 a firmTOKYO (Reuters) - Japan's Panasonic Corp said its quarterly earnings more than tripled, extending its renaissance as a maker of high-tech parts for cars and energy-efficient homes with few

Mr Billinghurst-Bright's insight:

TOPIC: Strategic decision making, diversification, restructuring, Ansoff's matrix, Porter's generic strategies

 

A great example of a firm successfully restructuring away from difficult consumer electronics markets like smartphones; dominated by firms such as Samsung and Apple. Rather than try and compete with these giants with the high costs involved (e.g. R&D and promotion) Panasonic has decided to make other areas its core business such as high-tech parts for car manufacture and homes. This strategy appears to be paying off moving Panasonic from heavy losses to profit, but has come at very high costs in the short-term.

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May Summers-Perkins's curator insight, February 10, 2014 3:04 AM

Diversification in order to compete against big rivals  

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Nissan's Ghosn warns UK over EU exit

Nissan's Ghosn warns UK over EU exit | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
Nissan will reconsider its investment in the UK if Britain leaves the European Union, chief executive Carlos Ghosn tells the BBC.
Mr Billinghurst-Bright's insight:

TOPIC: EU, Government intervention, Globalisation

 

This is a very significant story when it comes to the UK's place in the EU. It is also a worry for the UK government and a strong argument in favour of remaining in the EU. Nissan employs 6,500 people in its Sunderland plant. The plant is one of the most productive car plants in Europe, producing more 'cars per man' than any other factory.

If the UK were to leave the EU, then Nissan would have to "reconsider our strategy and investments for the future".

CEO Mr Ghosn's empire stretches around the globe. He understands trading blocks, the merits of free trade, the consequences of trade barriers and tariffs.

Would the Sunderland plant close if the UK were to leave the EU? It may not be that extreme but it is likely that it would in years to come, no longer be the main focus of Nissan's European operations, continually winning new models and investment?

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Burberry blames currency effects for pre-tax profits slide - FT.com

Burberry blames currency effects for pre-tax profits slide - FT.com | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
Burberry, the UK luxury retailer, reported a double-digit fall in pre-tax profit, blaming adverse currency movements, but said it was confident in the face of the softening global environment for the luxury sector. The company said on Wednesday that
Mr Billinghurst-Bright's insight:

TOPIC: Economic factors, exchange rates, UK manufacturer

 

Impacts of exchange rates on a well established UK manufacturer who use a combination of UK production and offshoring..

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ResearchBuster: Retrenchment

Most businesses aim to grow - but not all succeed - and many are forced to reduce the scale and scope of their business activities as a deliberate act of strategy.  This is known as “retrenchment” and A2 students should have an understanding of some examples of retrenchment in action. .
Mr Billinghurst-Bright's insight:

Lots of retrenchment examples here.

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How Superdry became 2010's £1bn fashion success story - Telegraph

How Superdry became 2010's £1bn fashion success story - Telegraph | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
If any businessman should be raising a glass this week and allowing themselves a moment of warm reflection on the year gone by, it is Julian Dunkerton.
Mr Billinghurst-Bright's insight:

Interesting details about Superdry and its rapid growth.

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What went wrong at JJB Sports?

What went wrong at JJB Sports? | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
As an example of what can go wrong at a previously successful retail business JJB Sports - which has fallen into administration - has few rivals.
Mr Billinghurst-Bright's insight:

TOPIC: Recession, Management decision making, Porter's Generic Strategies, Finance & Gearing

 

A good example of what can happen when a firm has high gearing from a serious of acquisitions and then a recession arrives. Sales dropped and they were unable to finance this debt well.

 

Although this was a major problem JJB's main reason for failure in the long-term has been poor management and being stuck in the middle (Porter's Generic Strategies). 

 

JJB never differentiated themselves successfully. As Michael Porter said to gain sustainable competitive advantage you must pursue Cost Leadership by being the cheapest/lowest cost or make yourself stand out with a distinctive USP through Differentiation.

 

JJB's two main rivals did this. Sports Direct focused on offering the best possible value for money (Cost leadership). While JD Sports is at the fashion end of the sportswear market (Differentiation). Both are very focused while JJB was not.

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UK recession: winners and losers

UK recession: winners and losers | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
As Britain finally exits recession, we assess which sectors and companies have thrived, and look back at those that did not make it
Mr Billinghurst-Bright's insight:

TOPIC: GDP & Recession, Strategy

 

A Guardian article from 2010 that gives an overview of which sectors and firms did well and those that struggled during the recession. Good for gaining a range of examples quickly.

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Should a new boss come from within a company?

Should a new boss come from within a company? | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
Microsoft has chosen a 22-year company veteran for the top job. Is appointing an internal candidate as chief executive a good idea?
Mr Billinghurst-Bright's insight:

TOPIC: Internal causes of change, leadership, progression, human resources

A good article focusing on Microsoft highlighting the benefits of appointing a manager from within the business.

 

What do you think?

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Blockbuster and Barratts enter administration, threatening 3,000 jobs

Blockbuster and Barratts enter administration, threatening 3,000 jobs | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
Film rental chain's brief revival under Gordon Brothers withers, while shoe retailer failed to attract £5m investment needed
Mr Billinghurst-Bright's insight:

TOPIC: Economic conditions, Inflation, Recession, Strategy, Porter's Generic Strategies

 

This is an example of weak retailers failing as a result of poor strategy and difficult economic conditions. This section adapted from the full story sums it up:

The retail collapses reflect ongoing troubles in the economy as inflation has continued to outstrip low wage increases, whittling down consumers' spare cash. This year has seen the failure of many struggling weaker retailers sped up by the economic downturn, including music retailer HMV, Jessops camera shops and bed specialist Dreams.

The Barratts brand and its products were not strong enough to compete with clothing retailers such as Primark, New Look and the supermarkets, which now sell footwear as well as clothing. Blockbuster, meanwhile, is based on an "outdated concept" that has been overtaken by downloads and TV subscription services.

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Primark sales surge boosts owner ABF

Primark sales surge boosts owner ABF | AQA A2 BUSS4 Strategy & Economic factors | Scoop.it
'Remarkable year' for Primark helps Associated British Foods raise profits 22% to £4.27bn for the year
Mr Billinghurst-Bright's insight:

TOPIC: CSR, Ethics, Porter's Generic Strategies

 

Primark is an excellent example to use when discussing corporate social responsibility (CSR) and its importance in business strategy in BUSS4. Despite lacking the ethical credentials that other rivals, such as Marks & Spencer have with their Plan A, it still continues to achieve "remarkable" profit levels. Does this show that consumers do not care about CSR or as Michael Porter stated in his theory that if a business pursues cost leadership it will create a sustainable competitive advantage.

 

Primark's continued strong performance comes despite their involvement in the Rana Plaza factory collapse in Bangladesh in April 2013, which killed more than 1,100 workers. A Primark supplier occupied the second floor of the eight storey building.

 

Success has also been achieved despite Primark's focus on the high street and not online, in contrast to other retailers and their previous negative media attention and pressure group action regarding sweatshop labour.

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