Business U4 research (exam section B). To see the articles, click the orange link below the title of each scoop.
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Get on the case

Get on the case | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
The Pangbourne Pundit's insight:

Learn 1 successful & 1 failing case for each U4 topic, so you can explain why in depth (not describe), by comparing & contrasting firms. Remember, 1 case can cover several topics. Don't forget the vocab & theories.

 

Apply & evaluate, by using compelling facts or figures to 'prove' your argument. Write with a little passion!

 

Don't forget to state 2 factors your decision depends on, for evaluation marks..

 

Here's an example paragraph;
Effective leadership does inevitably improve performance, because Moya Green’s strategy of situational leadership, enabled her to achieve a £3.3bn valuation of Royal Mail during the IPO. 

By floating the company just before the unions undertook industrial action, she used an autocratic leadership style to avert a crisis, which would have undermined the share price. This hard HR management, which distrusted workers & compromised their autonomy, is redolent of McGregor’s theory X. It clearly improved performance, enabling the share price to instantaneously rise from 330p per share to 580p, thereby almost doubling the value of shareholders’ investment, creating a sizeable addition to government coffers, which could be used to reduce the budget deficit.

However, the effectiveness of her leadership is dependent on the buoyancy of the stock market, at the moment Royal Mail became a public limited company. Most flotations at this time also achieved a significant rise in market capitalisation. The success of her leadership may have been less assured during a recession.

 

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Successful retrenchment at Thomas Cook

Successful retrenchment at Thomas Cook | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
Shares in travel group Thomas Cook surge 14% after it announced details of its turnaround strategy, which will see it focus on internet sales.
The Pangbourne Pundit's insight:
Harriet Green refocused Thomas Cook online and boosted share price using a retrenchment strategy. UK’s second-largest tour operator hit in 2011 by a significant reduction in demand for its long-haul holidays (particularly Egypt). Several profits warnings led to a collapse in confidence with share price falling by over 90% in just a few days. Business has high debts but has agreed a £100m refinancing / lifeline from its bankers in return for agreeing to a significant rationalisation of the group. Thomas Cook’s Indian subsidiary to be sold + 200 more high street travel agencies to be closed. Objective is to reduce annual operating costs by £35m per year.
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Governments should intervene in takeovers - Pfizer & Astra Zeneca

Governments should intervene in takeovers - Pfizer & Astra Zeneca | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
AstraZeneca's days as an independent company look numbered, as the government engages in detailed talks with Pfizer on conditions it requires for the deal to proceed
The Pangbourne Pundit's insight:

AstraZeneca, accounts for 2.3% of UK exports, £2.8bn of UK R&D and 7,000 jobs.  Now it's under threat, as Pfizer attempts to buy it.

 

Pfizer is notorious for buying up rivals (Warner-Lambert & Wyeth in the US and Pharmacia in Sweden) & then scrapping jobs and R&D facilities. During  a previous takeover, it closed an R&D unit in Kent, culling 2,400 jobs.

 

Some might argue that Pfizer is seeking the tax benefits of a UK acquisition & plans to profit from the cost saving synergies it can achieve, from asset stripping. It has no interest in UK job creation.

 

The Government may be able to stop the takeover, by claiming that the British public interest is threatened, in terms of ‘national security’.  But shareholders might be tempted by the hefty amounts Pfizer is prepared to pay. 

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Ikea boosted by China and Russia

Ikea boosted by China and Russia | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
Ikea, the world’s largest furniture retailer, has increased sales 3.1 per cent in the last year, helped by particularly strong growth in emerging markets such as China and Russia.
The Pangbourne Pundit's insight:

Great case to illustrate growth in emerging markets, as a result of adapting stores to Chinese tastes. See the sleeping shoppers here http://www.scmp.com/news/china/article/1300942/ikea-last-cracks-china-market-success-has-meant-adapting-local-ways?page=all

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Change Management working at Thomas Cook, Rossignol & Game group

Change Management working at Thomas Cook, Rossignol & Game group | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
Evan Davis and guests discuss how to bring a business back from the brink.
The Pangbourne Pundit's insight:

Listen to this interview with the bosses of Thomas Cook, Rossignol ski wear & Game Group, They tell you how they turned crisis into success. 

 

You need a simple, clear mission & structure & you must be close to the consumer.

 

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'Insult culture' as a point of diffference

'Insult culture' as a point of diffference | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
A Chinese eatery dubbed "London's rudest" has promised better service. Is insulting your customers ever a good idea?
The Pangbourne Pundit's insight:

A customer service driven culture isn't always appropriate.

 

As you'll see in this article, rude restaurants can sometimes attract customers, just because they are different (USP). But turning that into a long run competitive advantage, may be a challenge, as Wong Kei (yes it's for real) found out.

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Level crossing deaths force culture change at Network rail

Level crossing deaths force culture change at Network rail | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
Network Rail offers a "full and unreserved apology" to families bereaved by level crossing accidents, as MPs criticise its handling of deaths in the past.
The Pangbourne Pundit's insight:

When it all goes wrong, sometimes the culture HAS to change. Introspective arrogance will not help a company to succeed in the long run.


Network rail have promised to engage in more dialogue with their stakeholders. But perhaps the change in culture is too little, too late, for the families who were bereaved.


Culture should be managed proactively and critically.

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Democratic leadership & a culture of quality, drives success at Miele

Democratic leadership & a culture of quality, drives success at Miele | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
The Pangbourne Pundit's insight:

We'll start the leadership topic after half term & you'll have a hard copy of the Sunday Times' article. There's also more detail here http://www.thisismoney.co.uk/money/markets/article-2728236/CITY-FOCUS.html

 

Miele make upmarket (£2,500), high tech washing machines in Germany. They are private family company, jointly run by 2 family members. This makes for long term thinking (they keep hold of highly skilled workers during a downturn) and rapid joint decision making, which isn't slowed down by too many other stakeholder interests.

 

The 2 leaders have complementary skills and a united high quality culture. They have resisted moving manufacturing to low cost China, because proximity to the German factory helps them maintain quality and respond quickly to consumers. Their motto is continuous improvement and it permeates the whole company.

 

Sales were £2.6bn last year. Not bad for such a premium brand.

 

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Why companies must contingency plan. Iceland volcano cloud: The economic impact

Why companies must contingency plan.  Iceland volcano cloud: The economic impact | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
Which companies suffer - or thrive - under the volcanic ash cloud?
The Pangbourne Pundit's insight:

The Icelandic ash cloud cost airlines billions. But they weren't the only firms affected. Travel businesses & firms using air freight also lost out, whilst train & ferry companies picked up trade. All of these businesses needed a contingency plan to deal with the effects of the unexpected.

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PIP failed to plan for risk

PIP failed to plan for risk | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
Risk managers must protect business from catastrophic failure in a way that does not stifle growth, writes Alex Cardno
The Pangbourne Pundit's insight:

Plastic surgery providers failed to plan for the rupture of their implants. When the scandal broke, they faced millions of pounds of compensation claims & criminal convictions.

 

If they had proactively managed risk, they might have been more enterprising and have gained long term competitive advantage. Unfortunately, running a company which plans for risk, often  necessitates a change in culture, throughout the organisation - not an easy option. Moreover, acknowledging risk is often seen as holding back growth. 

 

More detail here http://www.bbc.co.uk/news/health-16391522

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How to achieve internal growth - 5 ways Justin King grew Sainsbury's

How to achieve internal growth - 5 ways Justin King grew Sainsbury's | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
Sainsbury's chief executive Justin King is to step down as head of the supermarket chain after 10 years of transformation. How has he altered its fortunes?
The Pangbourne Pundit's insight:

Use this case and Centre parcs, to contrast successful internal growth, with growth through acquisitions. 

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The recipe for takeover success

The recipe for takeover success | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
The Pangbourne Pundit's insight:

Take 2 complementary firms (such as Disney & Pixar), with a protectable point of difference (Pixar's computer animation genius & Disney film & merchandising muscle) & you'll achieve synergies.

 

As well as the article above, click here (from 53 secs to 9mins 37;  http://www.bbc.co.uk/programmes/b04ykd7k) to listen to an interview with the head of Disney animation. He explains how buying Pixar, Lucas Films (Starwars) & Marvel, reinvigorated Disney, after a crop of failures in the 1990's (had they reached the decline stage in their product lifecycle?). Pixar's former employees helped Disney to embrace a more relaxed culture, driven by creativity (although it took some time). They released your favourite Frozen song, on utube, allowing people to adapt it & helping to underpin its status as the highest grossing film of all time. In the ancien regime, Disney would never have countenanced such relinquishment of creative control, or have allowed a decentralised structure, where Pixar, Marvel & Lucas could work unhindered by bureaucratic control. However, Disney hasn't changed entirely. It retains its merchandising expertise. This Christmas every shop was packed to the rafters with Elsa merchandise. The synergies achieved in these acquisitions have enabled Disney to move out of decline & into the extension phase.

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So, do takeovers & mergers enhance performance?

This streamed revision presentation looks at the impact of takeovers and mergers on the performance of the businesses involved
The Pangbourne Pundit's insight:

As we've seen elsewhere in the blog, for Disney & Pixar, Ben & Jerry's & Unilever, and Cadbury's & Green & Blacks (https://www.marketingsociety.co.uk/the-library/green-blacks-take-niche-brand-big-league) - performance was enhanced.

But for Morrisons taking over Safeway, Daimler & Chrysler,

and Clinton Cards & Birthdays Group (http://www.tutor2u.net/blog/index.php/business-studies/comments/takeovers-and-mergers-the-failed-takeover-behind-clinton-cards-collapse) the results weren't so rosy.

You might want to know why.....

See slides 6 & 7 on the slideshare link above for other examples.

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AO; White goods king who is Bolton’s answer to Mark Zuckerberg

AO; White goods king who is Bolton’s answer to Mark Zuckerberg | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
The Pangbourne Pundit's insight:

A great case for change (planning for future capacity), growth (flotation), leadership, culture & use of technology.

 

By providing faster customer service than Dixons, Appliances Online has outpaced the established retailer. As an online business, it also benefits from not having the fixed costs of shops. 

 

AO has enough capacity to cope with growth into mainland Europe and runs a high tech operation, which gives it competitive advantage.

 

The success of AO's recent float, is based on the fact that  over half of UK household electrical sales, will be online, in the next 2 years. 

 

AO has a 'driven' culture. The company's founder is a blunt Northerner, who is hungry for success. He came from nothing and wasn't at all academic. He works hard and makes sure his team parties hard - there's a free bar at Christmas.

 

 More examples of how his leadership motivates his team here http://www.thesundaytimes.co.uk/sto/business/Retail_and_leisure/article1390951.ece

 

BUT, things may be going awry

http://www.thetimes.co.uk/tto/business/industries/retailing/article4365648.ece

 

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Governments should intervene - Kraft & Cadburys

Governments should intervene - Kraft & Cadburys | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
Irene Rosenfeld, pictured, promised to save the Somerdale plant in Keynsham near Bristol, which produced its final bar of chocolate a year ago.
The Pangbourne Pundit's insight:

When the US food company Kraft bought Cadbury's, they promised to keep the Bristol plant. 

 

A week after the deal went through, they announced the closure of the plant, with the loss of 400 jobs.

 

You could argue that these job losses should this have been prevented by government intervention

 

For contrasting case studies, use Appliances Online and Miele to argue that government intervention is superfluous, when you have competitive businesses, with strong USPs..

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Tesco set to withdraw brand from China

Tesco set to withdraw brand from China | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
UK supermarket in talks with China's biggest retailer, which means the Tesco name is likely to disappear from the country
The Pangbourne Pundit's insight:

An opposing case showing why emerging markets do not guarantee success. Tesco's clubcard just wasn't suited to the Chinese consumer.

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Change management; Tesco faces conflicting pressures to change

Change management; Tesco faces conflicting pressures to change | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
The Pangbourne Pundit's insight:

Some big shareholders are demanding that Tesco offer deeper price cuts, in response to Morrisons £1bn discounting investment & the growth of Aldi & Lidl.

 

But other investors believe this will result in a price war and undermine the value of profits & the share price, 

 

The article doesn't mention the growth of Waitrose & M&S, at the premium end of the market - but this certainly isn't Tesco's territory.

 

Tesco has some big decisions to make.

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Failed change management, leadership & culture; Co-op to report worst results in history

Failed change management, leadership & culture; Co-op to report worst results in history | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
Co-op Group is selling its farms and may sell its pharmacies, as the first stage of its reorganisation, following losses in 2013 expected to exceed £2bn.
The Pangbourne Pundit's insight:

Even the CEO (Euan Sutherland) couldn't change the Coop. Despite a £3.66m pay package, he has definitely left the building. The culture clash between his radical reforms and the conservative values of the Co-op, just didn't fit.

 

It has emerged that despite saving the bank from nationalisation, the Co-op board waged war against Euan; leaking details of his salary & plans to sell the pharmacies & farms,

 

The board lack business skills & make all the decisions, denying the 8 million Co-op members any real say. This is a democracy in theory, but an autocracy in practice. (Also an example of Handy's power culture model). It's ripe for de-layering.

 

The catalogue of failures is embarrassing;  the Somerfield acquisition resulted in staff swearing at customers, because they knew redundancies were on the cards, the Britannia takeover was disastrous, the bank had a £1.5bn black hole & its former head was allegedly a drug user. Was this scripted by Hollywood?

 

With dire current results, is the Co-op un-leadable? (In October 2014, it appointed its 3rd Chairman in 18 months) Will the banks foreclose on its debts, given the lack of direction? (They plan to float the Bank, to raise some badly needed cash). Or could it adopt a John Lewis model - democratic, but decisive -with employee profit sharing, as the impetus for staff to provide good customer service? I sense the need to retrench.

 

Quick update - by March 2015, the Co-op bank's losses had shrunk from £1.3bn to £264m, largely due to smaller pay outs than forecast, for misselling payment protection insurance. But, 57 bank branches wil close this year, Co-op failed the Bank of England's stress tests last December & they've sold off 80% of the bank, to an American investor, in order to raise cash. Rentrenchment still a work in progress. 

 

There's another article here (http://www.thesundaytimes.co.uk/sto/business/Finance/article1387580.ece).

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Leadership can build a positive culture at AKQA

Leadership can build a positive culture at AKQA | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
Leadership has an indisputable role to play in engaging staff to give their best, as Edwin Smith discovers in conversation with a top business executive
The Pangbourne Pundit's insight:

AKQA is the world's no.1 digital ad agency & is lead by Ajaz Ahmed.

 

He manages the corporate culture using a small team of leaders, who embody the meritocratic (if you work hard you have a chance of doing well), empowering behaviour he values. He also has clear objectives and an autocratic intolerance of inappropriate behaviour.

 

Ahmed uses a mini MBA to train his staff, to embody the culture and makes sure that he is seem to practise what he preaches - thus motivating staff.

 

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Moya Green mixes democratic & dictatorial leadership, to float Royal Mail, despite the culture

Moya Green mixes democratic & dictatorial leadership, to float Royal Mail, despite the culture | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
The Pangbourne Pundit's insight:

One for after half term - you'll have a paper copy.

 

When postal workers hesitated over when to go on strike, Moya Green pushed through the flotation (becoming a plc) of Royal Mail, before the posties could walk out and wreck it. (Hard HR, autocratic).

 

But she also set up a blog to respond to employee concerns & spent much time on the shop floor, understanding the realities of the organisation (sort HR, democratic).

 

She has a wealth of experience in Canadian railways and postal services and she's not afraid of a challenge. Royal Mail was loss making in its key market (a law required them to carry competitors mail at a loss), had massive pension liabilities & was legally unable to raise prices, introduce new products or withdraw old ones! A really archaic, bureaucratic culture.

 

When it was floated, shares were listed at 330p, but instantly surged to 580p & Royal Mail joined the FTSE 100 (Britain's biggest companies by stock market value). So here's one leader who was very effective in the short term. Whether she can change the culture in the long run, is open to debate.

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Can firms thrive during a recession? Amazon & Dominos can

Can firms thrive during a recession? Amazon & Dominos can | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
Online retailer stuns Wall Street with 68% jump in profits - and news that the Kindle ebook reader is now the site's top selling product
The Pangbourne Pundit's insight:

Thanks to Alex for these great links.

 

Amazon has achieved remarkable growth due to successful Kindle sales overseas (please mention Ansoff here). 

 

Dominos has also done well, as consumers eat in (http://www.theguardian.com/business/2009/oct/01/dominos-pizza-sales-recession).

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Successful contingency plan - Cantor Fitzgerald

Cantor Fitzgerald

Cantor Fitzgerald, L.P. is a financial services firm. Founded in 1945, Cantor is a capital markets investment bank serving more than 5,000 institutional clients. The firm specialises in institutional equity, fixed income sales and trading, and serving the middle market with investment banking services, prime brokerage, and commercial real estate financing.

The Pangbourne Pundit's insight:

A sad example of a financial firm, who lost 658 employees in the 9/11 attacks, but were up and running again 1 week after the event.

 

The CEO actually lost his own brother.

 

This is a true story, even though the source is Wikipedia. Scroll down to the 'September 11 attacks' heading, to read it.

 

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Recession proof Center Parcs has acheived internal growth

Recession proof Center Parcs has acheived internal growth | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
The Pangbourne Pundit's insight:

Use this, with Sainsburys case study, to argue the case for successful internal growth. 


See the 2015 figures on page 3 & note that they are now expanding into Ireland. http://www.centerparcs.co.uk/images/pdfs/annual_review_2015.pdf

 

If you want to understand their added value strategy, click below. Read to the end, to find out how much a weekend in  a tree house costs. http://www.independent.co.uk/travel/uk/the-wood-life-after-25-years-has-center-parcs-changed-uk-holidays-for-ever-7582718.html

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Divergent cultures lead to merger failure

Divergent cultures lead to merger failure | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
How cultural issues and differences ended the Daimler-Benz merger with Chrysler of 1998.
The Pangbourne Pundit's insight:

A great case study, but there's a mistake, it was Daimler (not Chrysler) who was obsessed by quality.

 

Ben used some great evidence of failure in his essay;

Daimler bought Chrysler in 1998 for $38 billion. Cerberus Capital bought Chrysler for only $7.4 billion in 2007.

No synergies there then.

 

Here's another failure - airlines this time 

http://www.tutor2u.net/blog/index.php/business-studies/comments/mergers-in-action-all-systems-go-for-united

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Takeover creates synergy; Chinese car giant Geely gobbles up UK van maker

Takeover creates synergy; Chinese car giant Geely gobbles up UK van maker | Business U4 research (exam section B).                                                                                            To see the articles, click the orange link below the title of each scoop. | Scoop.it
The Pangbourne Pundit's insight:

The Chinese car firm Geely has bought a UK manufacturer of green vans (Emerald). Synergies mean that this makes perfect sense, Emerald gets access to Geely's substantial finances & provision of parts. Geely gets the green technology, which is a growth sector, as fuel costs rise & emissions regulations tighten. Emerald's vans have a USP - they can run for 400 miles - very good for an electric vehicle. Emerald's workforce of only 25 will all be retained. A perfect example of complementary businesses.

 

Geely has a long term strategy of growth through acquisitions. It has already bought a UK black cab producer & bought Volvo in 2010.

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