Published on: 13 Dec 2010
Christmas is fast approaching and for a number of companies this is their busiest time of the year.
It is also a time of opportunity. Or at least that’s what brothers Henry and Victor Mears thought was the case. In terms of legality and ethics though their business plan left a lot to be desired.
Two years after their ill fated Christmas business collapsed within days of opening they are currently in court facing a number of charges.
The background to the case is that they established a Lapland-style theme park in the New Forest region of the UK.
Their business plan indicated that they would make in excess of £1 million. With thoughts no doubt of the success of other theme parks around the world such as Disneyland and Lego Land they got hard to work on the Lapland-style park.
Promotional materials for the park advertised Christmas festivities including a bustling Christmas market, real log cabins and a variety of real “Christmas animals”.
All in all it promised to be a true Christmas spectacle for the parents and their excited children that planned to visit the park.
The promotional materials were so successful that nearly 10,000 advance bookings were made online.
Unfortunately for the crowds that turned up the reality of the park left a lot to be desired.
The ice rink didn’t have any ice in it. Instead of ice skaters gliding over the ice there was a muddy puddle. The real Christmas animals were pet husky dogs that were in such a bad condition that they were reported to the RSPCA (Britain’s animal welfare charity).
All in all it was a spectacular failure.
Businesses fail for a variety of reasons but this one never really got off the ground.
There’s a big difference between having a couple of pet dogs, a puddle and a plastic Polar bear compared with a Christmas extravaganza Lapland theme park.
The park was only open for 6 days before closing. The company behind it was subsequently liquidated with creditors owed £850,000.
Some people may feel that the only real highlight of the 6 days that the park was open was the far from traditional Christmas scene where some of the parents started fighting with a number of Father Christmas’s elves.
The end result is that the brothers have been charged with 8 counts of misleading customers. The brothers deny all charges against them.
The ExP authors will be taking a break from this blog for the festive season but we all hope that you have a fantastic holiday break and we’ll be back blogging in January!
Published on: 10 Dec 2010
Microsoft and Salesforce don’t exactly love each other.
Founded in 1999 by former Oracle executives, Salesforce is a very successful cloud based CRM (Customer Relationship Management) company.
There’s no love lost between them and Microsoft though and earlier this year Microsoft sued Salesforce claiming it had infringed a number of patents.
This week Salesforce held their annual conference in San Francisco with an estimated 20,000 people attending.
Microsoft couldn’t resist the temptation to undertake a bit of guerrilla marketing at the event (guerrilla or ambush marketing is where companies that are not officially at an event try to get their message across in an “unofficial way”).
The Segway’s had a prominent advert on the front encouraging people to sign up for Microsoft’s own CRM product, Microsoft Dynamics.
The text on the advert on the front of the Segway’s read “I didn’t get Forced! I got a cloud-based CRM solution that works the way I do.”
So how did Salesforce react?
In what can only be a classic way to react to guerrilla marketing, Marc Benioff, the CEO of Salesforce nicely turned the tables on Microsoft.
Salesforce tracked down “Bernard”, the actor whose face was on the Microsoft adverts on the front of the Segways. During Mr Benioff’s key note speech at the conference Bernard was invited onto the stage and asked if he would “come back” to Salesforce.
To great cheers from the audience he said that he would be very happy to return.
Mr Benioff seemed rather relaxed about the attempt by Microsoft to hijack the conference with their guerrilla marketing tactics. The video below captures the moment when he was on stage at last week’s conference with Will.I.am of the Black Eyed Peas.
He didn’t look exactly worried during his dancing and he certainly didn’t look as worried as his personal physician probably looked.
Published on: 06 Dec 2010
During the Icelandic volcano eruption earlier this year when air traffic was severely disrupted I travelled on a Stena Lines ferry. The staff were great – polite and very helpful.
There are certain things that employees look for in a leader.
Inspirational, empathetic and knowledgeable are just 3 of the characteristics that successful leaders often exhibit.
Mr Pim de Lange, the director of Stena Lines North Sea route which travels between ports in the UK and the Netherlands recently made comments in a Dutch newspaper where he referred to some of his team in less than inspirational ways.
The majority of workers on the North Sea route come from the UK, the Netherlands and the Philippines.
Mr de Lange was quoted as saying the workers from the UK were fat and covered in tattoos. He also said that it was difficult to find UK workers who were both young enough or fit enough for the physical demands that the job entails.
He did however rush to apologise for the comments later and stated that the comments were taken out of context.
In summary though, it’s probably not the best way of motivating your team and I guess he may not receive a lot of Christmas cards from his UK workers whatever shape or size they are.
Published on: 03 Dec 2010
If you give investment advice in the UK and your employer provides you with a mobile phone the chances are that from next year all your calls will be monitored and recorded.
Fixed phone line calls involving financial business such as share purchases are already recorded but the UK’s financial watchdog, the Financial Services Authority (FSA), recently announced that the recording of calls would be extended to recording conversations held on company provided mobiles.
In an attempt to crackdown on insider trading activities all calls on fixed line and company issued mobiles will be recorded and kept for 6 months.
Insider trading is the illegal activity of using information which isn’t in the public domain to make a personal gain or avoid a personal loss.
For example, if you’re working with a client that is about to make a takeover bid for another company and you purchase shares in the target company before the takeover attempt becomes public knowledge, the chances are that the share price will increase and you’ll make a nice but illegal profit.
By recording mobile phone calls the FSA feel that that the incidence of insider trading will decrease.
Some of the banks have a number of concerns about the new scheme.
One global investment bank has estimated that it will cost £2.6 million per annum to record all the calls made per year on company issued BlackBerry devices.
The interesting thing is that the recording requirement only refers to company issued mobile phones.
Therefore, if you order a take away pizza from your company mobile your menu chioce will be recorded.
My guess is though that any financial advisor currently considering undertaking illegal insider dealing activities has no doubt worked out that they could buy a personal anonymous pay-as-you-go phone from one of the mobile phone providers for as little as £4.95.
Published on: 01 Dec 2010
Christmas shopping for me is normally a last minute rush before the shops close on 24 December.
This year though I was determined to be organised and last weekend headed off to hit the shops in London’s West End.
It was a pleasant surprise to find that arguably the two most famous shopping streets in London (Oxford Street and Regent Street) were car free as they had been shut to traffic to encourage early Christmas shopping.
Although the streets were closed to traffic the number of shoppers made up for it. It also seemed as though every other shopper walking along Oxford Street was carrying a Primark shopping bag.
For those of you that haven’t heard of Primark, they are a very successful budget clothing brand with 145 shops in the UK together with an additional 62 shops in 6 other countries.
They compete via a classic cost leadership strategy whereby they keep their costs low by way of a variety of business techniques including for example:
• Purchasing stock in huge quantities so as to benefit from economies of scale;
• Only stocking items in popular sizes so as to avoid “using up” valuable shop space with items that don’t sell so well;
• Minimising advertising spend (why pay models and magazines when they can let their prices do the advertising for them?);
• Not playing any music in its stores (why pay licence or royalty fees to artists?).
As well as focusing on cost leadership they are masters at “fast fashion”. In other words, they manage the supply chain to get the fashionable styles into the shops as quickly as possible so that they match the very latest designs that are seen on the catwalks and in the fashion magazines.
Gone are the days of fashion having 4 distinct seasons as far as Primark is concerned.
With so many people carrying Primark bags last week then my suspicion was that they were doing very well with their sales.
Press reports yesterday did indeed indicate that Primark did very well at the weekend.
It was reported that they had their most successful one day single shop performance in their 41 year history on Saturday.
The tills at their Oxford Street branch rang up to the tune of £820,000 in the one day.
Whichever way you look at it that’s a pretty good figure for one day’s worth of sales at a single shop.
Their cost leadership approach to strategy seems to be working. As well as their success on Saturday, their reported profits for the 53 weeks to 18 September 2010 showed profits increasing by 35% to £341 million on sales up 18% to £2,730 million.
Published on: 26 Nov 2010
You will have needed to have put in a significant amount of work over the last few months to cover all of the main areas of the syllabus.
Now whilst no training company knows for sure what will actually be in the exams next month our ACCA exam tips identify areas which we believe you should have covered particularly well.
Being properly prepared though isn’t just applicable for people who are trying to pass their professional exams.
If your chosen method of progressing in life is to be a getaway driver for a gang of jewellery shop raiders then I guess there should also be an element of preparation.
A shop raiding gang in Essex in the UK put 19 year old Mohammed Alasow in charge of being their getaway driver.
It took his colleagues a mere 20 seconds to break open the shop window with a pickaxe and sledgehammer. They managed to grab £9,000 of jewellery and jumped into the getaway car where Mr Alasow put his foot down and the car shot off at speed.
Alas for the poor driver and his friends the car didn’t get very far as it ran out of petrol and stopped in the middle of the road a few miles away.
Things got even worse for the gang as a kindly policeman stopped to see if they needed some help and spotted a sledgehammer, masks and jewellery on the back seat of the car. Fast forward a few months and they were recently jailed for 8 years.
Now being a getaway driver and forgetting to fill the car with petrol doesn’t really indicate a thorough preparation for the role.
Back to a more respectable profession and in terms of last minute preparation for the ACCA exams then we advise that if you haven’t done so already to print off a copy of our free ExPress notes from www.theexpgroup.com and review them in the run up to the exam. These notes cover the key areas of the syllabus and are a perfect last minute revision aid.
Also, don’t forget that the exam papers will be marked using scanning technology. The scripts will be completed as normal by students but will be marked on screen by the markers.
It’s important therefore that you use a black pen in the exams. If you use anything else such as coloured pens or pencils there is a risk that the scanning technology may not pick up your writing.
Good luck with your final revision and click here for the links to the our ACCA exam tips.
Published on: 22 Nov 2010
A few years ago things were fairly simple when it came to deciding what was a computer and what was a phone.
A computer tended to fill a room and a phone was attached by a wire to the wall.
Then along came mobile phones and laptop computers.
It was still possible to tell the difference though. You held the phone to your ear to make calls and you used your fingers to type on the computer keyboard.
In April of this year the Apple iPad was released. This was a tablet PC and although if you were clever you could make internet based phone calls it wasn’t possible to make calls via a mobile network.
Samsung have just released their 7-inch Android-powered tablet here in the UK. This is slightly different to the iPad in that it is designed to make calls and is now available on all the major mobile networks.
So, is it a phone or a computer?
In fact do we care anyway?
Well, if you’re a lucky person that has been provided with a Samsung galaxy tab by your employer then yes, you probably will care whether it’s a phone or a computer.
For UK tax purposes, a phone provided by an employer is a tax free benefit (i.e. you will not be charged income tax on it). A computer on the other hand is a taxable benefit and generally the value on which tax will be applied will be equal to 20% of the cost of the computer.
So, in summary, if you were provided with a Samsung Galaxy Tab phone by your employer it’s tax free.
If however you’re provided with a Samsung Galaxy Tab computer by your employer you will be taxed on it.
Unfortunately for any individuals in such a position this guidance by the UK tax authorities indicates that it is likely to be taxed on the employee.
As well as a tax discussion, the Samsung Galaxy Tab also provides an interesting example of some of the challenges companies can face when launching products in different countries.
There is a button marked “Porn” clearly visible on the screenshot.
This isn’t what you may think though and doesn’t provide a short cut to adult related content.
It is in fact an abbreviation that Samsung initially used for the “home button”. “Porn” was used as an abbreviation of the word “Pornire” which means “start” in the Romanian language.
Samsung quickly changed the abbreviation following its launch.
Published on: 19 Nov 2010
What did you have for lunch today? Did you manage to get out of the office or did you grab a quick sandwich at your desk?
If you’re a stockbroker working at the Hong Kong stock exchange then the chances are you had a rather nice long lunch.
The Hong Kong stock exchange has one of the shortest “opening hours” out of the major stock exchanges.
It is open for business 4 hours a day and also enjoys a rather pleasant 2 hour lunch break.
It also does fairly well when looking at the opening hours of the other major stock exchanges around the world:
- London, Paris and Frankfurt – 8.5 hours
- New York – 6.5 hours
- Australia – 6 hours
- Tokyo – 4.5 hours
For anyone that has lived or worked in Hong Kong this may come as a bit of a surprise as it’s one of the busiest most frenetic cities in the world.
Alas, it seems that their 2 hour lunch break is now under threat.
A consultation paper has recently been issued and it is raises the proposal of:
- Starting half an hour earlier at 9.30am (surely it’s virtually impossible to have a nice breakfast if you have to be in the office at 9.30?)
- Reducing the lunch break from 2 hours to an almost impossible to fit in a 3 course meal and a bottle of wine timescale of 1 hour.
- Luckily there are no plans to change the closing time of 4pm so the brokers will at least have a reasonable time to get ready for dinner.
The arguments in favour of adjusting the opening hours are to enable it to tie in with the mainland Shanghai exchange opening hours.
In what can only be described as “hardly the surprise of the century” it was reported that 70% of the Hong Kong Securities Professionals Association members that were asked their opinion on the proposals felt that the 2 hour lunch break should remain.
Closing for lunch isn’t something that you find in the majority of stock exchanges elsewhere around the world.
If for example you wanted to get the views of somebody from London who had actually experienced the London stock exchange closing for lunch you’d have to find a very elderly broker. The London Stock exchange last closed for lunch 60 years ago in 1950.
Published on: 17 Nov 2010
When I was younger I was given some good advice.
“Never write something about somebody else in an email that you would feel embarrassed about if that message ended up pinned to the office noticeboard”.
The thought behind this was that it’s easy to fire off an email but once it’s sent it can quickly be forwarded by other people and isn’t always guaranteed to remain confidential.
A certain male member of staff at the pwc Dublin office will no doubt from now on be thinking twice before he hits the send button on any of his messages.
A couple of weeks ago on what must have been a quiet afternoon in the office he sent an email to 14 male colleagues.
Sending emails to colleagues isn’t in itself a bad thing but the message was in fact asking his friends to rate the attractiveness of some recent female new joiners to the firm.
It also included staff photos of the ladies in question, all of whom were trainee accountants.
The subject line of the email was “this would be my shortlist for the Top 10”.
A colleague replied an hour later after obviously undertaking a detailed peer review and came up with a somewhat un-gentlemanly comment about whether one of the ladies justified being in the top 10.
Such is the ease with which emails are sent that within a few days the message had been forwarded to thousands of people and had “gone viral” around the globe.
My guess is that over the years the majority of employees in most companies have at one stage or another got together over a drink after work and debated the attractiveness of their colleagues.
Taking photos from the staff directory and emailing them though is probably on a different level. pwc are understandably taking this matter seriously and have reportedly launched an investigation.
Now before any ladies out there start accusing this of being purely a male problem it’s worth reminding people about former Deloitte employee, Ms. Holly Leam-Taylor.
In an email sent last December Ms Leam-Taylor’s message entitled “Deloitte first year analysts Christmas awards” asked her female colleagues to vote on which men in the office they considered to be the most attractive.
This message also “went viral” and became a global internet hit.
The conclusion to this article?
Well I guess it’s not to preach about whether or not you should make top 10 lists but rather if you do then don’t put it in an email as it may well end up being pinned on a global noticeboard.
Published on: 15 Nov 2010
It hardly seems possible that the bank run on the UK bank Northern Rock happened over 3 years ago but last week some people thought that there was a similar run on the Spanish bank BBVA.
A bank run occurs when a large number of people with deposits at a particular bank head to branches of the bank to get their money out as quick as possible.
It often follows a rumour about problems with the bank and can lead to a self fulfilling prophecy.
Large numbers of people withdraw money. This can cause liquidity problems at the bank which in turn causes more concern which leads to more people rushing to withdraw their money which leads to liquidity problems with leads to….. and so on until a vicious circle develops.
A bank makes its money from lending.
If it just keeps depositors money without using the deposits to generate revenue by for example lending to borrowers then the bank is in effect just a safe deposit box for the deposits.
In the great depression of the 1930s sudden withdrawals by panicky depositors caused liquidity problems to such an extent that a number of healthy banks were forced to close.
Nowadays, as long as the bank is solvent, any short term liquidity problems should be resolved by borrowing cash from its central bank as a “lender of last resort”.
Bank runs can still happen though and last week the queues of people outside of BBVA bank in Madrid caused rumours that resulted in the share price falling sharply.
It took a while for the markets to identify what was going on and it wasn’t so much a bank run that was causing the queues but rather a “fun run”
There was a 10km fun run sponsored by BBVA and joggers were queuing up to get their race numbers and t-shirts from the bank for the run on the Sunday.
Unfortunately rumours quickly spread around the financial markets that there were large queues outside the bank and in the jittery post financial crisis atmosphere the share price plummeted by nearly 4%.
Luckily a hour or so later the markets realised that the bank withdrawals were race t-shirts rather than cash and the share price recovered.
Finally, to test your knowledge of the financial markets there are two pictures in this blog entry. One shows a bank run whilst the other shows a fun run. Can you tell the difference…