December 2010

‘Tis the season to be jolly (plus of course to fight with elves…)

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).

The other “real animal” on show was a plastic toy polar bear which had been placed a distance away in amongst the trees.

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!

You’ve got to jump around like you just don’t care…

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”).

Microsoft hired a number of people to drive outside the conference venue in specially adapted Segway vehicles.

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.

If you’re overweight, lazy and have a tattoo then maybe this is the perfect job?

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.

They’ll know what pizza you ordered but what about that illegal activity…

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.

The sound of the tills ringing was music to their ears even though there was no music in the shop…

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.

The ExP Group