September 2014

These boots are made for walking, or should that be, these boots are made for getting off quickly?

Published on: 30 Sep 2014

Students of the “people papers” within the various professional exams should be aware of the joint responsibility for “health & safety” within an organization.

In other words, a number of legal systems around the world place the responsibility for health and safety on both the employer AND the employee.

Employers have various obligations such as providing safe equipment to use. For example, they should undertake regular electrical checking of any IT equipment that is used.

Employees’ duties include being responsible for their own health and safety and not acting in a manner that may endanger a colleague.

A product from Levi Strauss, the famous jeans and clothing company has a nice link to health & safety.

One of the styles of boots sold by Levis are based on the shoes that were worn by Californian railway workers in the 1800s. Their design is such that they are easy to get off. This enabled any railway worker that got his foot stuck in the tracks as a train was speeding towards him to get his boot off quickly so as to avoid being hit by the fast approaching train.

An early example of health & safety at work!

I wonder though how many people that buy these boots at the Levi’s stores work on the railways? Either way, it’s always nice to be able to easily kick off your boots after a hard day of chatting to friends!

IKEA and Porter’s value chain analyis (and the hot-dog at the end…)

Published on: 20 Sep 2014

At the weekend I bought some furniture at the local IKEA. For those of you not familiar with IKEA it’s a very successful home furnishings group with over 650 million people visiting 300 stores in over 35 countries last year and producing sales of Euro 23 billion. They specialise in “flat pack”, self assembly furniture.

I’m a great fan of IKEA. You know exactly what you are getting with them. A great design, good quality and a reasonable price. IKEA make a great strategy case study and I’ll no doubt be referring to them as this blog progresses. I’ll highlight a couple of things I liked about the whole experience of shopping with them and them briefly link it into a strategic model.

As any of you that have been to an IKEA store before will verify, a trip there can turn into a day long event if you’re not careful. You are guided through a labyrinth of nice displays which will get your design thought processes working nicely. You are then funneled towards the checkouts tils where straight afterwards if the fancy takes you you can enjoy one of the classic IKEA hot-dogs!

Using Porter’s Value Chain when analyzing IKEA and linking it to my purchase shows what worked for me. (See our free P3 ExPress notes for more detail on the value chain)

I didn’t want to spend too much time at the store so what was useful for me was in that their website was very user friendly and easy to find what I wanted. They had up to date stock levels and estimates for the next few days. I could simply go to the website, highlight the item I wanted along, identify my local store and it would tell me the actual stock levels.

Each box within the Value Chain has numerous items in it but for me this element of “sales and marketing” was exactly what I wanted.

Another part of the Value Chain which is important for IKEA but I’m relieved to say I didn’t need it was the “after sales service”. As well as the normal guarantees and warranties that are provided, IKEA have a helpline for people to call if they get stuck when building the self assembly furniture. This could prove to be a key component of the value chain!

This is only a brief post about IKEA and the Value Chain but I always tell my students to look out for real life situations that link to the syllabus. Ok, so my purchase of furniture at IKEA is not the most exciting thing in the world but for anyone who has struggled to put together flat packed furniture “after sales service” component of IKEA’s value chain could save a frustrated hour or so!

Have you ever wondered why you can only find the one sock?

Published on: 10 Sep 2014

There are good bosses, there are bad bosses and there are, well let’s put it this way, slightly strange bosses.

socksAmerican Apparel founder Dov Charney famously once attended a staff meeting wearing a single sock… and nothing else.

In what was almost certainly one of the more memorable workdays for the other people at the meeting, Mr Charney fine-tuned his outfit by leaving both his feet bare (I’ll give you a couple of minutes to work out where his only piece of clothing, the sock, was strategically placed).

Mr Charney has been in the news again recently as he has been sacked by his fellow board members after claims of sexual harassment. It’s not been reported what the allegations of sexual harassment were in respect of but it sends an important message that even if you’re the millionaire founder of a global brand you still can’t get away with sexual harassment of your staff.

On a separate note, there is still no news on whether any action will be taken by the “fair treatment for socks” action group.

Location, Location, Louboutins.

Published on: 06 Sep 2014

There’s a saying that the best place to open a restaurant is next to a really good restaurant. The reasoning behind this is that people who go to the existing restaurant will see the new restaurant and are more likely to try it out.

When well-known organisations move to an area there can be lots of other businesses that benefit.

louboutinConde Nast, the publishers of numerous magazines including arguably the world’s most famous ladies fashion magazine Vogue, are just about to complete a move from times square in midtown Manhattan to the new World Trade Centre in the South of Manhattan.

According to reports in the New York Times, local businesses offering services such as hairdressing, manicures and lunchtime spas were feeling very pleased with themselves that the 2,300 mainly female staff of Conde Nast would be working in the same local area as them.

Unfortunately though the definition of “local area” isn’t the same for all people and the NYT reported that a number of businesses who originally thought they would be well-placed to serve the employees because they were only a 15 minute walk from the new offices have now realised that 15 minutes is too far.

And the reason 15 minutes’ walk is too far?

Well the reason has been put down to the fact that most of the employees of Conde Nast are wearing fashionable high heel shoes such as the £545 Louboutin shoes pictured above.

As any self-respecting Louboutin loving female (or Louboutin loving male for that matter) knows very well, it just isn’t possible to walk more than a couple of minutes in your killer 6 inch heels.

Not even if it means missing out on the new organic Amazonian vegan Bulgar wheat facial that the trendy spa 15 minutes’ walk away is offering.

This crackdown has caused a bit of a headache.

Published on: 02 Sep 2014

When governments try to crackdown on corruption and bribery it is normally good news for the “good people” and bad news for the “bad people”.

ShuiJingFangUnfortunately for Diageo, the world’s largest spirits maker, they haven’t done anything wrong but have been caught up in an anticorruption drive in China.

Diageo make the world-famous Johnnie Walker whiskey and Smirnoff vodka but they also make the Chinese spirit “Baijiu”. To most people outside of China, Baijiu is unknown but for people in China it’s extremely well known and is considered to be an expensive luxurious drink.

Chinese president Xi Jinping has led an anticorruption drive which has seen businesses reducing the level of luxurious gifts that they give out. Expensive watches, fine food and expensive cigars were all commonly gifted by companies to encourage business and win favours.

The Baijiu drink was also commonly bought by companies to give away as gifts but following the anticorruption clampdown sales have collapsed in the last year.

Diageo owns nearly 40% of Shui Jing Fang, the Chinese company that manufactures Baijiu and the sales of Shui Jing Fang fell by nearly 80%. As a result, Diageo has written down the value of the investment in Shui Jing Fang by £264 million.

The ExP Group