It’s not a Lamborghini it’s a Volkswagen…

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When it comes to cars, things used to be simple. Most brands were known for a certain type of car.

For example, Mercedes produced luxury limousine cars, Porsche produced sports cars, Toyota produced mid range cars and Land Rover made 4×4 off road cars.

But that was a while ago and things have changed dramatically within the car industry.

The famous Maserati sports car brand for example is working on the Maserati Kubang and as the photo shows it’s clearly not a low slung sports car.

It’s a 4×4 off-roader and whilst there’s a good chance that the only time it will actually go off road is when the owner parks on the pavement it’s definitely more 4×4 than sportscar.

So why the introduction of the new product? (For those of you studying the various strategy papers then why the product development in Ansoff’s Matrix?)

Well it seems that they are hoping to follow in the footsteps of Porsche whose off road Cayenne model has proved to be a best seller.

As well as introducing new types of cars the car industry has also seen a number of major conglomerates appear with some serious car brands within them.

When people used to talk about Volkswagen for example they were generally referring to the ubiquitous VW golf but the Volkswagen Group is now home to far more cars than VW cars.

The VW Group with its headquarters in Germany is the largest carmaker in Europe and nearly one in four new cars bought in Europe are VW Group cars.

So does this mean that 25% of the new cars have VW badges on them?

Far from it in fact as the following car brands are all part of the Volkswagen Group:

Audi, Bentley, Bugatti, Lamborghini, Scania, SEAT, Skoda and of course Volkswagen.

So all of the above car makes are in fact part of the VW group.

Now if you’re an executive working for the VW Group and were offered a company car which one would you choose.

Now let me think.

Bugatti or Lamborghini. Which one would I go for…

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

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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…)

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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 a break. Have a fish and chip flavoured chocolate bar…

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Nestlé’s Kit Kat is one of the world’s best selling chocolate bars.

It is estimated that over 400 Kit Kat fingers are consumed every second worldwide and every 5 minutes enough Kit Kat fingers are produced to out stack the Eiffel Tower.

Whilst most people associate Kit Kat with its red wrapper alongside the classic wafer and chocolate taste, Nestlé actually segment the market rather nicely in a number of countries. They produce a range of flavours which are only available in certain countries according to local tastes. In simple terms they are dividing the market (segmenting) and then adjusting the marketing mix accordingly.

In Japan for example, Nestlé recently launched 19 new flavours. These flavours reflect the food specialities of certain districts and are only sold in these specific districts.

For example, you can buy a yubari melon flavour Kit Kat in the Hokkaido district, a strawberry cheesecake flavour in the Yokohama district and a cherry flavour one in the Yamagata district.

Different flavours are available in other countries (segments). For example, peanut butter flavour can be bought in Canada.

Now, originating from Scotland where my favourite dish was crispy cod and chips my obvious question to Nestlé is:

“When will a fish and chip flavoured Kit Kat be released in Scotland?”

I feel it’s only a matter of time so if any marketing executives from Nestlé are reading this then over to you…

You get a safe hotel and a great bed. The towels and TV will cost you extra but what about the toilet paper?

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The Tune Hotel chain has just opened up its first hotel in the UK. The chain already has 7 hotels in Malaysia and 2 in Indonesia and they claim they offer 5 star beds at 1 star prices.

Their policy is to offer the essentials that people look for in a hotel such as safety, cleanliness and comfortable beds whilst at the same time removing a number of “extras” that some customers don’t necessarily want.

With rooms starting at £35 it certainly offers great value for London hotels. It wouldn’t suit everyone’s taste though as some of the things that people take for granted at a hotel are not included in the standard price.

There are a number of optional extras that guests can purchase. A towel for example can be provided for £1.50 per stay whilst the use of a hairdryer will set you back £2. If you want to watch TV you’ll need to pay £3 a day.

If you’re the type of person that likes to take your own towel to a hotel or is relaxed about whether or not you wash then you could end up with a very cheap room.

Whilst this hotel wouldn’t be everyone’s “cup of tea” (incidentally there are no coffee or tea making facilities in the rooms) there will certainly be a market for people that only want a clean and safe hotel room to sleep in and are not bothered about the extras.

In the past we’ve blogged about the BMI Weymouth hospital that was adopting a differentiation approach to business. With Tunes Hotels adopting a hospitality industry equivalent to the low cost airline models of Easy Jet and Ryan Air, this is a great example of either a cost leadership approach or Bowman’s no-frills strategy.

Guests can rest assured though that toilet paper is included in the price and is not an optional extra.

So what made me think of the marketing mix in the shower this morning?

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I’m lucky enough to be teaching in Asia at the moment. The students are great and I’m convinced they will pass their exams (if any of them are reading this then good luck in the exam!)

shower-headI’m staying at a lovely hotel and this morning in the shower I was reminded of marketing and the 4 Ps. The shower gel that is provided by the hotel is a well known international brand and I’ve bought it myself before.

What was different about it though when comparing the product (one of the 4 Ps) as purchased by the hotel and the product when purchased by me as an individual? The aroma and texture was exactly the same whereas the packaging was different. The key difference being how the packaging was designed in terms of the ease with which the gel could be poured.

Whether it was me but the version I personally bought appeared to dispense the gel a lot quicker than the hotel version. The hotel version took a lot more effort to get the gel out.

It’s maybe my imagination but if the design of the packaging that is on the public product is in fact different then it would encourage me to use it up quickly and buy a replacement. The packaging on the version that the hotel was using however would “discourage” guests from using a lot of gel and hence save the hotel the cost of replacing the gel as quickly as with the “standard public packaging”.

I’m not sure whether this was a deliberate policy of the shower gel manufacturer but if it wasn’t then maybe they should be considering it…

Do you ever feel tired at work? If so, then maybe you should…

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…wear a tie.

Japan is famous for the long hours that some of their office workers undertake but there is now an invention that will maybe ease things a little bit for hardworking office staff.

A new tie called “Nemuri Tie” is now on sale in Japan.

Nemuri Tie means pillow tie in Japanese and if the advertising is anything to go by it will enable hard pressed office workers to grab a quick sleep at their desk.

It’s a relatively simple design in that it’s a normal looking tie but it’s got an inflatable pillow in it which can be blown up to provide a handy place to rest your head when you fancy a nap.

It can be inflated when the user is wearing it so there’s no need to keep on taking your tie off and putting it back on every time you fancy a sleep.

The Sleep Tie is currently on sale for just under £20.

It’s not clear whether the tie is stain proof for anyone that dribbles in their sleep.

My new shoes, Nike and Corporate Social Responsibility

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My new year’s resolution was to get back into jogging. My friends never believe me but a couple of years ago I even managed a half marathon but unfortunately work and my like for food meant that the weight went on and the exercise took a back seat. On 1 January this year I made a resolution to get back to exercise. It’s nearly the end of February and the good news is that I’ve kept it up so far!

So much so in fact that I’m in need of some new running shoes. I’ve used Asics shoes for years but this evening had a quick look at the Nike site to see what was there.

Being an accountant though I couldn’t resist having a look at the site for some other information rather than just the latest products.

Back in the 1990s Nike was in the news for a number of wrong reasons. There were reports that some of their suppliers were allegedly paying their employees a pittance and some were working in sweatshop conditions. A BBC report also uncovered child labour practices at one of their suppliers in Cambodia.

Supply chain management is key to any successful business. Nike, as one of the world’s leading brands had to act fast to ensure that their brand wasn’t damaged by the bad publicity. They acted quickly and by all accounts resolved any issues that may have been present with their suppliers.

What is interesting though is that in today’s business environment the supply chain is no longer “hidden away” but is now arguably used to prove “best practice”. Nike have not only ensured compliance with best practice but have an “open book” policy on their website where you can find out comprehensive details of their CSR activities. Have a look here and there’s all you’d want to know about Nike’s CSR policies.

Now of course, I should really get off the computer, stop eating biscuits and get out there running…

Can you be fired for being too attractive?

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Picture the scene. You’re the boss. You’re married and you find your assistant very attractive. Your wife finds out about this and demands that you fire your assistant.

Do you:

a) Tell your wife that you don’t like your assistant and hope she believes you,

b) Admit it and then ask you assistant to leave and pay her a fair termination payment, or

c) Fire your assistant because she was an “irresistible attraction”?

Bizarrely enough, a court in the US state of Iowa has just unanimously ruled that it is legal to fire employees if they are seen as an “irresistible attraction” even if the employee hasn’t done anything wrong.

The background to the case was that lawyers for 53 year old Dentist James Knight argued that he fired his 32 year old assistant to save his marriage and that this did not represent discrimination.

In other words, he didn’t discriminate against his employee because she was good looking but rather it was in the interest of saving his marriage.

I can’t help thinking that maybe the dentist and his wife got the better deal out of this compared to his assistant as the background to the case was that the dentist had worked with his (attractive) assistant for 10 years but his wife only found out about some “personal texts” between the two of them towards the end of the 10 years.

After the texts were discovered the dentist then complained to his wife that he found his assistant’s clothing too tight and distracting (an interesting point to note here is that he didn’t complain to his wife about this for 10 years until his wife found the text messages but hey ho let’s just move on).

So, in summary a 53 year old man found a 21 year younger woman attractive. His wife found out and to save the marriage the younger employee had to go.

Rather than make a reasonable termination payment it was decided to fire the younger woman because she was too attractive!

The fired employee then took the case to court where in the opinion of probably a lot of people a bizarre decision was made by the court that this did not represent discrimination and was acceptable.

So, in Iowa it looks like it’s acceptable to fire a lady if she’s too attractive.

Oh and in case you’re interested, the decision was made by Iowa’s high court which contains only men and not women…

Surely everybody should get this benefit at work?

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Having a motivated team in the office is key to any business. As well as a salary component, a person’s remuneration package could include other benefits such as flexible working days, health insurance and access to an executive jet.

I mentioned access to an executive jet because surely all of you have got regular access to the company jet to whisk you off to exotic places??

Bloomberg has reported on a Philadelphia lawsuit by a former pilot of the fashion giant Abercrombie & Fitch’s corporate jet.

To cut a long story short, the 55 year old former employee is claiming that he was discriminated against when he was replaced by a younger man.

As will soon become apparent, my guess is that he may well have been replaced by not only a younger man but by a better looking younger man.

It’s been reported that according to papers submitted to the court, Michael Jeffries, the chief executive of Abercrombie & Fitch insisted that models were hired to work as stewards on the plane.

These models stewards had to be clean shaven and wear a uniform of Abercrombie & Fitch polo shirts, boxer briefs, jeans and flip flops.

As well as insisting on male models being stewards it also claimed that if Jeffries, his partner Matthew or any other guest made a request they should respond by saying “no problem”.

The other thing which I personally think should be a benefit provided to all employees is that Jeffries was also able to take his 3 dogs with him on the jet and there were even detailed instructions on the seating arrangements for his dogs when they travelled with him.

So there you go. The next time you’re discussing your annual review in the office feel free to say that as well as salary, healthcare, and flexible working arrangements you want access to the company jet with male or female models of your choice employed as stewards or stewardesses on the plane.

Oh, and don’t forget to insist on jet travel for your 3 dogs…

To be on the safe side, let’s play football without a ball…

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A school in the UK where a number of top footballers went to when they were children has banned leather footballs for health and safety reasons.

Malvern Primary school in Liverpool where England and Liverpool player Steven Gerrard studied has just announced that in order to reduce the risk of injury to children whilst playing football at break-times leather footballs will be replaced by foam sponge balls.

Whilst health and safety is vitally important for both private companies and public institutions such as schools there will be a lot of people who will feel that maybe this is a step too far.

When I was a child I played football at school with a leather ball and I must admit that I never really felt overly threatened by the ball or exposed to personal danger as a result of (sometimes) being in the close vicinity of it.

Also, if I’m honest I was so bad that I would stumble over the ball whether it was leather or foam.

The argument by the school is that as there are children from the age of 4 to 11 present then there could be a risk of injury if one of the younger ones was hit by a leather ball.

There is also the other view that playing football with a foam ball will discourage children from playing and hence undertaking some form of exercise which as a result could increase the health and safety issues from obesity in children.

Looking on the bright side though, when the 2030 World Cup Finals take place with a foam ball at least England will have a chance of getting past the first round. That is of course as long as it isn’t raining during the finals in case by then they are not allowed to play in the rain.

24% of you may have to do things differently…

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According to our IT guys, over the last 3 months 24% of you that visited our website used the Mozilla Firefox web browser.

The other main browsers used were Internet Explorer, Google Chrome and Apple Safari.

Personally I use the Firefox browser and am very happy with it (well, to be honest as happy with an internet browser as any normal person should be…)

However, things may be changing and there probably are some very worried people at Firefox.

Whilst nothing public has been said I’m sure the senior guys at Firefox are scratching their heads trying to find a solution to a potentially massive problem.

The problem isn’t because their browser is weak. In fact, far from it as apparently a lot of IT specialists love the Firefox browser due to its various add-ons.

No, the problem lies in the fact that it’s a single product company and there’s currently a move away from computers to Smartphones. In terms of the product lifecycle the Firefox product is arguably at the maturity stage and heading towards the decline.

In the UK the number of Smartphones now being sold is greater than the number of computers. Today’s average Smartphone is now more powerful than the typical computer found on your desk only a few years ago.

So, why is this switch to using Smartphones to access the internet a problem for Firefox?

Well, last week’s announcement by Nokia of their new Lumia 800 and the Lumia 710 Smartphones showed that they have dropped their own operating systems and will be using Microsoft’s new Windows Phone 7.5 system.

This system will use the mobile version of Internet Explorer to access web pages on the move.

The other browser big boys already have their Smartphone relationships. Google’s Android system is on HTC and Samsung phones whilst Apple iPhones use the safari browser.

So, in terms of Smartphone romances there are:

HTC/Samsung + Android (Google Chrome)

Apple iPhone + Safari

Nokia + Microsoft (internet explorer)

Unfortunately for Firefox that leaves them desperately looking for the Smartphone love of their life and there aren’t too many potential partners out there looking for a date…

You can remove this barrier to entry but it may well kill you…

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Any organisation that can create a barrier to entry which prevents new competitors entering the market can, in theory, keep prices high.

Economies of scale (think Airbus or Boeing), branding (think Apple) and distribution channels (think Coke) are all excellent examples of barriers to entry but one of the toughest barriers to break through are government licenses.

If a licence is needed to operate in that industry then that is the ultimate barrier. After all, without the license the company can’t operate.

Japan is the home of sushi and as you would expect some of the top sushi restaurants can be found in Tokyo.

Sushi is fish and we all know that fish is healthy for you. It may come as a surprise then that one particular sushi delicacy in Japan could end up killing you rather quickly if it is prepared incorrectly.

Certain parts of the poisonous blowfish are considered by many to be the ultimate in sushi. It tastes gorgeous although to be honest I’ve never tried it so I’m taking somebody else’s word for this.

I’ve never tried it because I’ve never had the opportunity although even if I did have the opportunity I would have a few doubts. The reason is that as well as the edible parts of the fish, some of the organs of the fish are filled with poison called tetrododoxin which is more deadly than cyanide.

Now, if you’re eating blowfish then one thing for sure is that you want the chef to know what he or she is doing. You don’t want them making a little slip of the knife and including by mistake some of the poison as before you have a chance to say “does this fish taste a bit funny to you?” you would be on your way to a quick death.

The Japanese government have therefore heavily regulated this part of the sushi industry and there are only a handful of locations that have a licence to prepare and serve blowfish.

In October though new laws are coming into place which remove the need for a licence (or to use business strategy terminology, remove a barrier to entry).

So the good news for anyone that fancies trying some of the blowfish is that it’s likely to become a bit cheaper after October. The question though is whether price will be the key decision making factor when people are deciding to eat a meal which if prepared incorrectly could quickly kill you…

Is this segmentation or discrimination?

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The banking profession has had it pretty rough over the last few years. Whether you refer to it as the credit crunch, the liquidity crisis or the banking crisis it’s been tough for the banks and a number of banks have had to be rescued by government funds.

There’s also a lot of competition between the banks and a French based bank, Societe Generale, has attempted to win new customers by introducing an innovative product targeted at a particular segment of the market.

In simple terms segmenting the market is ….. wait for it ….. splitting it into ….. wait for it ….. segments (not the most detailed explanation in the world but hopefully it gets the point across!).

These individual segments can then be targeted using the marketing mix (the 4 Ps).

See if you can guess which segment of the market Societe General are targeting with their pink and gold coloured “Pour Elle” bank card.

First of all if you understand French then the name of the bank card may give you a few hints but if not then two of the main items within the “Product” component of the mix are:

1. Handbag theft insurance of up to Euro 200 and

2. A hotline where card holders can call out an electrician, locksmith or handyman free of charge twice a year.

Yes, the new bank card seems to be well and truly targeted towards French male accountants the female segment of the market.

A nice move by the bank but surely this is discrimination as what’s to stop a man wanting handbag insurance or being able to call out an electrician?

Well the good news for any men out there that are interested in these things then there’s no discrimination as the card is available to both men and women and in fact it’s been reported that approximately 5% of the holders of the “Pour Elle” bank card are men.

Would you have been quick enough to think of this?

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Sometimes people can be in the office and come up with a great idea. Whoever it was that came up with this idea at the Fiat office in Sweden should in my opinion get a bonus.

There are creative guys in many offices but my feeling is that what happened below was more of a “thought of on the spot” idea rather than a project that was planned weeks ahead.

The Google “Street View” website is a great site and enables people to (as the name suggests!) see the street view of many locations around the world.

The panoramic photos on the site are taken by special Google Street View cars that have roof mounted cameras on them.

Over in Scandinavia it looks like a creative individual at the Fiat offices in Sweden saw that a Google Street car was in the area and followed it before getting ahead of it and quickly stopping outside the main entrance to their rivals, Volkswagen.

Anyone who currently does a search on Google Street view for Volkswagen Sodertalje offices in Sweden will see an image of a lovely red Fiat 500 parked right outside the main entrance to the Swedish Volkswagen offices.

Brilliant! A great bit of creative thinking and guerrilla marketing by Fiat.

To be honest it’s probably pretty good for Volkswagen as well. After all, there are now no doubt more people who have seen the image of their offices in Sweden than would have been the case if a Volkswagen was parked outside instead of a shiny new red Fiat 500.

If you’re a single lady, should you get a red car?

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Despite car companies spending millions on R&D and new product launches one of the first questions people tend to ask if you say you’ve bought a new car is “what colour is it?”

Up until recently the most likely answer to that question would have been “silver”.

However, after 10 years at the top of the popularity car colour charts silver has fallen to the number 2 position.

The most popular car colour according to leading transportation coatings company, PPG Industries, is now white.

According to their figures 21% of this year’s new cars across the globe have been finished in white.

There are however some regional differences. Namely:

Asia/Pacific – silver 25%, white 23% and black 17%

Europe – black 26%, white 19% and silver 16%

North America – white 20%, silver 19% and black 18%

According to a PPG survey, more than 75% of car buyers said exterior colour was a factor in their purchase decision but as the above figures show though there doesn’t appear to be a huge variety in colours with the 3 main colours of white, black and silver dominating.

But what about the colour red though? After all, our ExP logo has a big red dot in the middle so we like the colour red.

Well, an interesting study in the European Journal of Social Psychology has identified that if a lady wants to make herself more attractive to men then she should consider wearing more red colours.

The study concludes that

“In two experiments, we investigate an analogous effect in humans, specifically, whether red on a woman’s shirt increases attraction behavior in men. In Experiment 1, men who viewed an ostensible conversation partner in a red versus a green shirt chose to ask her more intimate questions. In Experiment 2, men who viewed an ostensible interaction partner in a red versus a blue shirt chose to sit closer to her

No doubt the marketeers are already onto this so does this mean that we’ll now see car companies starting to promote red cars for single ladies?

Would it make the news if you lost your laptop and mobile phone? It would certainly be a risk…

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Some people have a lot of free time.  Some of them use it for recreational purposes and others use it to make requests to UK government bodies under the Freedom of Information Act.

An interesting Freedom of Information Act discovery that was recently published on, perhaps surprisingly, the BBC news website is that BBC staff lost laptops, mobile phones and similar devices last year to the value of £241,019.  That is really rather a lot of laptops.

The fact that somebody saw fit to make the request of the BBC shows how diverse the Corporation’s stakeholders can be and how surprisingly interested seemingly external or unconnected stakeholders can be.  Having to admit to losing property that ultimately belongs to the public of such a high value doesn’t do much for reputation.

Using the TARA (transfer, avoid, reduce, accept) framework for risk management much beloved of the ACCA Paper P1 examiner, an appropriate response to this risk might be to try to “reduce” it.  This is because it is something that is likely to happen, but would probably be assumed to have limited impact on the business.

However, if something changes, such as the introduction of legislation that allows the public to obtain answers to questions that the BBC would really probably prefer weren’t asked, the reputational damage risk may become greater.  This would then lift the TARA response to “avoid”, since the impact on the business would now be high and probability high.  This may mean that the policy changes from providing smartphones for staff to requiring them to buy their own and pay part of their bill in expenses.

It’s just a little illustration of how stakeholders can have surprising effects on a business.

So then, do you know where your laptop and smartphone are right now?  Go check.

Is it better to spend a penny or save a pound?

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Love them or hate them but low cost airlines such as Ryan Air and EasyJet are here to stay.

Since low cost airlines entered the airline industry 20 odd years ago they have shaken up the industry.

Easyjet for example now carry more passengers than any other UK airline and the Irish airline Ryanair long ago surpassed the Irish national carrier Aer Lingus in terms of revenue and passenger numbers.

These airline’s business models are classic no-frills low cost models where passengers don’t pay a lot but in return don’t get a lot.

In effect they only get the flight and they have to pay for everything else. Ryanair passengers for example that don’t print out their boarding card at home are charged the princely sum of £40 to have it printed at the airport.

There are reports though that Ryanair are considering taking the no-frills approach to a new level.

To keep the cost of training crew and maintaining spares at a minimum, Ryanair only have one type of plane – a Boeing 737-800. This model of plane has 3 toilets on board but Ryanair want to remove 2 of these toilets so that they can fit an extra 6 seats on the plane. This will then free up space for 6 more fee paying passengers.

Their existing capacity on their standard plane is 189 so removing 2 toilets will raise their passenger capacity by 3%.

Ryanair have reportedly said that the additional revenue generated by this extra passenger capacity could result in the average price of a flight ticket being reduced by £2. There would of course no doubt be extra profit for them as well from these extra passengers.

This extra revenue for them would be pretty good but if you look at it from another viewpoint there could be some uncomfortable logistical issues on board.

With 195 passengers and 6 crew all sharing the one toilet there could be a fairly long queue of people going down the aisle of the plane waiting for the toilet to be freed up.

The risk of a certain type of mid-air accident will no doubt increase although the real worry of course is if you see both pilots at the back of the queue hoping up and down with their legs crossed…

Look on the bright side. At least it smells nice…

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Have you ever dropped a cup of coffee at work? What about spilling a glass of water?

Maybe a more interesting question to ask a forklift truck driver that (currently) works for the Kerry Logistics in Australia is “have you ever dropped a container full of 462 cases of a customer’s wine that were worth £664,000 and all the bottles were smashed?”

Unfortunately for this unlucky forklift truck driver the answer is yes.

The container held 2010 Mollydooker Velvet Glove Shiraz bottles of wine produced by winemaker Sparky Marquis which sell for £122 each.

Mr Marquis told reporters that he was “gut wrenched” that the wine bottles had been smashed. The container held one third of his winery’s annual production and was destined for delivery to the United States.

There are two important business lessons to be learnt from this.

Firstly, always make sure that valuable items are insured. Sensibly the wine was insured so the winemaker won’t be out of pocket.

Secondly, there’s no harm in having a sense of humour.

Mr Marquis was quoted as saying that when the logistics company opened up the container “they said it was like a murder scene.” With a touch of classic Australian humour he added “but it smelled phenomenal”

Author Robert Louis Stevenson once wrote “Wine is bottled poetry”.

I can imagine the words that came out of the forklift driver’s mouth when the container was dropped were anything but poetry.

Can a bottle of Coke save a child’s life?

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Coca-Cola is one of the worlds’s largest companies and is certainly one of the best known global brands.

The company is good at lots of things and one thing they are extremely good at is working with their bottlers and managing the Coke distribution channel.

Coke-CSR-exampleAfter all, the distinctive Coke bottles and cans can be seen in shops in all corners of the world. They certainly can get their products to the distribution outlets.

I came across a report the other day involving an inspirational person called Simon Berry.

Simon spent some time working in Zambia as an aid worker and quickly spotted that one of the major causes of death amongst children in that area was from diarrhoea. It’s a shocking statistic but in some countries, 1 in 9 children die before their 5th birthday from simple preventable causes such as dehydration from diarrhoea.

The sad thing is that there is a relatively cheap and easy cure for this life taking disease. A simple mix of oral rehydration salts and zinc supplements can provide the appropriate immediate nutritional and hydrating fluid that is necessary to save a child’s life.

The big problem though is that this cheap and easy cure isn’t in the remote villages that need them.

Simon and his team started looking into ways of getting the life saving medicine to the remote villages that needed them.

A fantastic solution has been identified. Namely, to produce the medicine in packets that would fit into the spaces between the bottles in the Coke crates. As a result, the medicine can be delivered alongside the Coke bottles without taking up any additional space (and hence without increasing the cost of transporting the Coke).

The photo above shows a father and his lovely daughter together with one of the specially designed anti-diarrhoea kits that fit into a Coke crate.

In my opinion this is an absolutely brilliant idea – life saving medicine being delivered via Coke’s world class distribution channel without taking any additional space up on the delivery trucks. A great partnership between the commercial sector and the Not-for-Profit sector where all parties win.

The idea is currently being piloted in Zambia and more details can be found at colalife.org.

Congratulations to all concerned for such a great project.

Would you have done this with a new car launch?

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If you were in charge of a car company and you were going to launch a new car model, how would you do it?

all-new_range_rover_sport_daniel_craig_nyc_260313_LowResLand Rover has just released the new version of their Range Rover Sport model and they appear to have launched it pretty well and have “ticked all the boxes” as they say in management speak.

First of all let’s think about the Range Rover Sport – what type of car is it and what image is the company trying to portray about the brand?

Some would argue that it’s a rough, tough, 4×4 off-road car that is also sporty and “sexy” so that it can be driven to sophisticated events.

Who better therefore to launch such a car than James Bond??

Sorry to disappoint a lot of you but James Bond doesn’t really exist. The actor Daniel Craig who plays James Bond in the famous 007 films however does exist so why not use him?

Now that the lead person in the launch has been identified where shall we hold the launch?

In a nice bit of segmentation, Land Rover identified which urban area has the highest concentration of Range Rover Sport sales and lo and behold it’s New York (now, whilst some of you may well be thinking that New York has lots of roads so just how important is it to buy such a powerful off road vehicle if you live there but let’s just ignore that discussion at the moment and move on).

So, launching a new product that is sexy with a rough and tough yet luxurious image – what could be better than James Bond and New York City?

The official launch event involved Daniel Craig driving the car through closed off New York streets whilst live video footage of journey was shown on the internet around the world and can be seen below.

In fact now that I’ve seen the video it looks like “James Bond” was so impressed with the new car that he forgot to stop off and pick up one of his famous Bond Girls to join him for the ride as he arrived at the event all by himself.

Do you know the link between fashion, strategy and Ostriches?

What do you normally do when you go on holiday? Do you a) visit some historical sights, b) relax and put your feet up or c) buy a £5,500 handbag?

designers-financial-statementsTwo luxury fashion brands have just released their financial results and for one of them tourists have had a significant impact.

Fashion retailer Ted Baker had some great results and reported an 18% increase in revenues to ₤255 million while pre-tax profit increased by nearly 20% to ₤29 million.

The luxury handbag manufacturer Mulberry on the other hand has issued a profit warning forecasting annual revenue of £165 million and pre-tax profits of £26 million, both of which are significantly below analysts’ forecasts of £177 million and £31 million respectively.

Interestingly though if you look purely at the pre tax profit margin for both companies the Mulberry ratio of 16% is better than Ted Baker’s 11% but the market reacted badly to Mulberry’s announcement and their share price fell by 18%.

If you look behind the figures there are some interesting strategy issues which may give some clues behind what the market thinks of the prospects of the companies going forward.

A lot of the success of Ted Baker over the last year can be put down to a classic Ansoff’s Product – Market mix market development strategy (Ted Baker stores were opened on New York’s trendy Fifth Avenue as well as in Canada, China, Germany and the Netherlands).

This expansion into new territories is likely to boost Ted Baker’s earnings in the medium term and should be good news for their shareholders.

Mulberry however issued a statement saying that whilst their sales over the Christmas period were in line with expectations, their sales in the 10 weeks after Christmas were lower than expected. This was mainly put down to there being fewer big spending tourists from Asia visiting London than expected in this period (a classic external environmental PESTEL impact).

fashion-designers-financial-resultsThese high spending tourists from the Asian market have historically been major buyers of the luxury Mulberry handbags, including the £5,500 bag made from Ostrich leather.

Mulberry’s trading update was accompanied by a statement from Bruno Guillon, their chief executive officer and amongst other things he stated:

“We are focused upon optimising the distribution network and adapting our tactical marketing strategy to drive international brand awareness.”

“Optimising the distribution network” and driving “international brand awareness” – are we about to see a market development strategy from Mulberry?

If they get it right then it could be good news for their shareholders. As for Ostriches around the world however then maybe it’s not so good news…

Surely somebody should have registered this website?

Oh dear. Some unfortunate news for the world famous Michelin Guides.

Michelin Guides were first published in 1900 and are annual restaurant guides published by the top French firm Michelin.

michel-platiniNow, whilst the company has an undoubted level of expertise in reviewing restaurants, what they don’t appear to have is a similar level of expertise in registering websites.

One of the critical success factors for a lot of businesses nowadays is an up-to-date, informative and easy to find website.

Unfortunately for Michelin Guides though if you go to www.michelinguides.com you won’t find any details of the famous French firm or their products. Instead you’ll find some rather unusual photos of Michel Platini, the former French international football player and the current president of the Union of European Football Associations (UEFA).

It’s been reported in the press that 28 year old Adam Mascall managed to buy the domain name for £6 and has set up a humourous website which pokes fun at the UEFA president.

The website contains photos of Michel Platini which have been changed to show him in various “guide” situations. Mr Mascall claims that the website is a homage to Michel Platini and reads “Michel in guides” rather than “Michelin Guides”.

The French firm are understandably not happy about this and have threatened legal action against Mr Mascall. As at the date of writing though www.michelinguides.com doesn’t have any information on restaurants but does have some rather fetching pictures of Mr Platini.

So in conclusion, the business lesson to be learnt from this is to make sure all important website names for your business are registered and re-registered when they expire.

Otherwise you take the risk of a 1980s French Footballer appearing in front of your customers rather than your products…

Forget your Gucci handbag, you’ll just be scratching the surface…

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We all know that the pharmaceuticals industry is big business.

The industry is facing considerable challenges however, with a large proportion of the “blockbuster” drugs due to come off patent in the next few years.

risk-exampleDrug companies are all too aware that they might well need a big breakthrough soon in order to sustain their historical levels of shareholder return.

A lesser known threat to the industry, and more direct threat to us individually, is the rapid growth in fake prescription drugs.  Patents protect a patent holder against a legitimate business from copying their product.  It’s not much use against criminality.

Fake Gucci handbags may be an annoyance to Gucci, but nobody dies when they are purchased.  Fake drugs can be sufficiently dissimilar to the real product to allow diseases to build up resistance to the genuine drug.  An overdose may be fatal in the short-term; an under-dose may be fatal in the longer-term.

So there’s a significant incentive for all concerned to maintain integrity in the production and logistics chain that gets the genuine drugs to those in need.  Countries where prescription drug usage is culturally common and poorer countries are probably most at risk.

A Ghanaian company, mPedigree, has come up with an ingenious and simple solution.  Working in conjunction with bona fide drugs manufacturers, it assigns a code to each packet of pills.  This is then added to the box, in the form of a scratch card.

When customers buy the product, they scratch off the scratchcard style covering on the box and then send a free text message / sms with that code.  If the product’s codes are genuine, a text message is immediately sent back to verify their authenticity.  If not, the customer knows that they have just been sold a potentially dangerous dud.

Of course, there will be risks to this process, such as criminal elements infiltrating the process of allocating codes, but this is a smaller risk to contain than the wider risk of fake drugs, but this is a process that an auditor could even give an assurance opinion on.

Given the worldwide very high penetration of mobile phones and the cheapness of text messages, this is a fascinating solution to a big problem.  Maybe in future it could be refined to also warn if drugs are genuine but beyond their sell by date (time expired drugs can also become dangerously lacking in efficacy).

What a wonderful, simple idea.

What does your car number plate tell us about you?

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The US state of California has a lot going for it.

car-advertisingIt has some of the most scenic coastline to be found anywhere in the world, some great wine and with Hollywood and Silicon Valley it  has a wealth of artistic and creative minds.

What it also has however is a budget deficit of around $20 billion.

Arnold Schwarzenegger, the former actor and now the Governor of California certainly has a challenge on his hands to reduce the deficit.

One idea that is being discussed though is in my opinion really rather clever and introduces us to a potentially new form of advertising medium.

The State is considering introducing digital adverts onto car number plates. The idea is that the digital plates would look like normal plates when the car is moving but after it has been stopped for more than a few seconds at traffic lights or in a traffic jam the device would switch from showing the car registration number on the plate to showing a digital advert.

When stationary the registration number would still be shown but would be smaller and the advert would take the dominant position.

In effect, the car would become a mobile billboard with significant advertising revenue being generated for the state. Advertising Agencies in California are no doubt licking their lips in anticipation at the opportunities that this would offer in terms of creativity.

Whilst on the subject of creative adverts involving vehicles I think that the following advert for Copenhagen Zoo that appeared on a bus in the Danish capital will take some beating.

For those of you with a nervous disposition rest assured that it’s only art work on the outside and not a 100 metre long Boa Constrictor taking on a bus.

What’s in a pair of shoes? Quite a bit if it’s a Jimmy Choo shoe but…

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With celebrity clients such as Angelina Jolie and Victoria Beckham, Jimmy Choo is one of the most famous shoe brands in the world.

It is a real success story having been started 14 years ago by Tamara Mellon, a former editor at Vogue magazine, with a loan from her father of £150,000. There are now reports that it could be sold for up to £500 million.

Ms. Mellon started the business after meeting a shoe maker called Jimmy Choo during her time with Vogue. Mr Choo used to make a small number of handmade shoes which the magazine used for photo shoots. Ms. Mellon saw the potential in scaling up the business and 14 years later there are now over 100 stores around the world with prices for some shoes being well in excess of £1,000.

So, why has the business been so successful?

Whilst design and quality are obviously key features, the brand arguably took off when famous celebrities such as Julia Roberts and Beyonce started wearing them.

But it’s not just shoes that they sell. They have also expanded into items such as handbags, sunglasses and scarves.  In business speak this is referred to as “brand extension”.

A further example of brand extension is also in the pipeline for Jimmy Choo. Last year they signed a licence agreement with Inter Parfums for producing and distributing perfume under the Jimmy Choo brand.

Another well known footwear manufacturer is Cat®. They are renowned for producing tough, hard wearing “work boot style” footwear.

The brand itself came about as a brand extension of Caterpillar® Inc, the construction and mining equipment manufacturer.

The key thing that needs to be present for brand extension to be successful is the “fit”.

Glamorous Jimmy Choo shoes work well with fashionable sunglasses and high quality perfumes whilst the “toughness” of Caterpillar® Inc equipment works equally well with rugged work boot style footwear.

Will we see Jimmy Choo expanding their brand into mining equipment? Somehow, I don’t think so.

If you wear a fluorescent jacket at work you’re not necessarily an engineer.

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Health and safety procedures can be vital for safeguarding workers.

If you happen to be driving by the town of Els Alamus near Barcelona in Spain though don’t automatically assume that the workers in the road wearing the yellow vests are repairing the highway.

Women wearing very little clothing and standing by the roadside on the outskirts of major towns and cities are a common sight in Spain. There are an estimated 300,000 women working in the country as prostitutes.

Sex workers in the town of Els Alamus though have recently faced a significant number of fines.

Surprisingly, these fines were not for the prostitution itself as this is currently legal in Spain.

Instead, they were fined for breaching a 2004 law which states that workers on major highways must wear high visibility clothing. A classic health and safety policy which helps protect road workers and drivers from harm.

Not to be outdone by the legislation the sex workers have simply decided to wear fluorescent vests when looking for their customers.

Looking on the bright side for these ladies, the wearing of bright yellow vests not only enables them to satisfy health and safety rules but it also makes it easier for the reported one in four Spanish men who have paid for sex to spot them.

It’s not until you qualify that you appreciate it.

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ACCA P3 and CIMA E3 are great papers. Students often say to me that they love them but strangely enough they only realise this once they have qualified!

This may sound a bit confusing but the thing with these papers is that they are genuinely interesting. With the pressures of passing the exams as well as work and family life however it’s often the case that students cannot appreciate the interesting areas within the subject until they’ve got the exams out of the way.

Over the years one major area that has distinguished the good students from the not so good students is the ability to be aware of what is happening in the economy and the business world and to link this in to the exam subject matter.

This doesn’t have to be hard work. It’s not an ongoing test but rather the ability to look at everyday news and link it to the concept of strategy. For example, it was recently reported in that despite there being a recession in the UK  the cinemas were having the highest admissions for over 7 years. Year on year, the attendance at cinemas had increased by over 5%. It’s argued that the reasoning behind this is that it’s one of the cheaper forms of entertainment. People are therefore cutting back on certain more expensive forms of entertainment in favour of the less expensive versions.

Having read this in the news the good students would then ask themselves what other businesses could be doing well in the recession and what ones will suffer.  Linking this to the exam, is there an easy mark or two to make a note of the industry the case study company is involved in and how the recession will affect it? Will it be in a strong position when the recession comes to an end?

Showing an awareness of what is happening in the real world and linking it to the exam will go down well with the examiner.

When is a foot not a foot?

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Fast food is big business but for Subway, the world’s largest restaurant chain with 38,000 restaurants in 100 countries, something isn’t quite big enough.

Subway is famous for their “Footlong” sandwiches whose name implies should be a foot long (12 inches / 30 cm).

Their “Footlong” has been the backbone of their advertising for a number of years and any company’s advertising should be accurate and shouldn’t be misleading.

Well up step Australian Subway customer Matt Corby who purchased a Footlong and measured it before eating it. He then took a photo and posted it on Subway’s Facebook page with the request “subway pls respond”.

The photo is shown above and as can clearly be seen the Footlong isn’t in fact a foot but is 1 inch short at 11 inches.

Was this evidence that Subway had been deliberately misleading their customers by calling it a Footlong when it should have been called an “11 inch long”?

Does the extra inch matter?

Well, things took off quickly on Facebook and there were soon more than 100,000 likes and over 5,000 comments to Matt’s post. The shock discovery that the Footlong was an inch short of bread soon spread around the world.

Subway quickly supplied the following statement to the Chicago Tribune newspaper:

“We have redoubled our efforts to ensure consistency and correct length in every sandwich we serve. Our commitment remains steadfast to ensure that every Subway Footlong sandwich is 12 inches at each location worldwide.”

Is this going to be a good enough solution to the problem of the missing inch of bread?

Unfortunately for Subway within hours a number of lawsuits were filed in America in connection with the missing inch.

One of the lawsuits filed by Mr Buren from Chicago for example is claiming that the Footlong sandwich product is false advertising and as a result he is suing the company for $5 million.

Now, I’m an accountant and not a lawyer but if he’s successful the $5 million will buy an awful lot of 1 inch pieces of bread…

Should Ernst & Young have done this?

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I think truth and honesty in business are vital.

I can therefore say in all truthfulness and honesty that I think Ernst & Young is a great company.

They have some tremendous people working for them and the students I’ve met over the years have all been fantastic.

If I’m really honest and truthful though I have to say that in my opinion there is a bit of a question mark over some of the performances in the video below.

The video was apparently taken at an EY recruitment day event and I’ll leave it up to you to decide whether you think that EY did a good job on the song-writing side of things and whether the employees that joined in with the singing, hand clapping and swaying with such rhythmic precision should stick to doing consulting and client work.

Now to be fair it has to be said that the recruitment event where the EY song was filmed was held 12 years ago so things have no doubt changed since then with the recruitment techniques used. It’s not clear though whether there was a slump in people applying for positions with EY 11 years ago.

Now, all of you that have just had a great weekend and are reading this in the office on a Monday morning, join together and start singing “Oh Happy Days, Oh Happy Days…”

What have James Bond and accountants got in common?

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James Bond – fast cars, fast women and saving the world. It’s all in a day’s work for 007.

A lot of the readers of this blog are accountants and as accountants we all know from personal experience that driving fast cars, entertaining fast women and saving the world can be a very tiring business.

So, what better way to unwind at the end of the day than with a drink of Mr Bond’s famous “shaken, not stirred” vodka martini?

Mr Bond has been drinking his vodka martinis (shaken, not stirred) since the Dr No film was released 50 years ago.

Anyone that goes to see the latest Bond movie Skyfall that was released last week though won’t see him drinking the famous “007 drink” but instead will see him drinking a nice cool Heineken beer.

We’ve highlighted before how good Heineken are at guerrilla marketing and the latest Bond movie is a great example of product placement.

Product placement is where a company’s products are “placed” into films and TV shows. They aren’t explicitly advertised but rather it’s a more discrete promotion where people “subconsciously” see the product.

Heineken no doubt paid a significant amount of money to have their product in the hands of the legendary spy and I have to say that it works well.

After all, a quick meeting in the office today amongst the male members of the team came to the conclusion that the photo above of bond girl Berenice Marlohe holding a bottle of Heineken beer was one of the finest examples of post-modern contemporary photographic artwork.

One final thing though and now that you’ve driven your fast car, entertained a fast woman and saved the world today, before you settle down tonight in front of the TV with your slippers and you reach for your Heineken beer, remember that a bottle of beer doesn’t react well to being shaken or stirred…

Guess who’s going to Myanmar?

Such is the spread of large accounting companies around the world that there are very few countries left where you can’t find an office of one of the Big 4 or mid tier companies.

Myanmar in Asia was until recently one of the few countries that hadn’t had the pleasure of international accounting companies being present.

Things are changing though and the people of Myanmar (also known as Burma) will shortly be seeing the KPMG logo on offices as KPMG has just announced that they will be the first Big 4 company to open up offices in Myanmar.

According to KPMG, Myanmar is widely seen as the “next economic frontier” in Asia and recent easing of international sanctions against the country has “sparked a great deal of interest from investors globally”.

Kaisri Nuengsigkapian, CEO of KPMG in Thailand has led the initiative to extend operations to Myanmar and says that “Myanmar is the second largest country in Southeast Asia, and literally at the center of opportunity in the region. Investors are flocking to the country and are excited about the possibilities they are finding.”

Initially the company will be offering Tax and Advisory services with the plan being that Audit services will follow later (presumably not to audit the tax advice given by their colleagues though…)

So, congratulations to KPMG for being the first and how long will it be before the others join them?

By the way, the photo above shows Taung Kalat in Myanmar and is not a photo of KPMG’s new offices.

Who was taking the biggest risk?

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Ok, so he jumped from a height of 39 km (24 miles) and he’s travelled faster than the speed of sound but surely Red Bull was taking more of a risk than Felix Baumgartner.

If you were like me and were one of the millions around the world who last night watched the inspirational (or some would say mad) Austrian break world records by parachuting from the edge of space then I think the risk was surely with Felix.

As I watched it I was so impressed. Not only by the bravery of Felix but also the technology that allowed people around the world to watch live footage from the edge of space.

If you look at some business concepts around the event though there are a couple that spring to mind.

First of all, whilst it turned out to be a huge success for the sponsors Red Bull, if there had been some problems for poor Felix and he didn’t make it back to earth in one piece the negative publicity would have been pretty bad (admittedly not as bad a feeling for Red Bull compared to what Felix would have felt but still pretty bad none the less).

The business risk of undertaking such a stunt by Red Bull would no doubt have been reviewed in detail and numerous precautions put in place. One simple precaution was that the live footage was in fact with a 20 second delay so that in the unfortunate event of something going dramatically wrong, the live feed could be cut before millions around the world saw Felix explode into thousands of small pieces live on TV.

Red Bull is an energy drink that has a brand image of “speed and adventure” and have sponsored numerous events such as aerobatic flying and extreme mountain biking. This was their most ambitious event yet though and its success has been reported as being equivalent to £100 million of advertising spend.

In other words, the publicity that Red Bull got from the event was equivalent to them spending £100 million on advertising.

The second business issue that occurred to me was that I saw the event live on YouTube and I wasn’t the only one. A record number of 8 million viewers saw the event live on YouTube.

Is this going to be the way forward for viewing live events?

Will more and more events be shown live on YouTube and will more and more people watch things on YouTube?

If you’re working in the strategy department of a TV company for example then you should definitely be reviewing the rise of importance of sites such as YouTube.

On the subject of YouTube I’m delighted that we’ve recently put some free ACCA, CIMA and FIA courses onto YouTube at www.youtube.com/theexpgroup

One thing for certain though is that we will never get anywhere near the number of YouTube views that Red Bull’s historic event received but then again making our videos wasn’t quite as dangerous…

Is this the best or worst resignation letter ever?

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Here’s an interesting question. If you resign from your job, what should your resignation letter look like?

Should it be simple, brief and straight to the point or should it be sent to the whole office and include various accusations about your boss including a certain, how shall we say it but, adult liaison in a meeting room with a colleague?

Well if your name is Kieran Allen then the second option appears to be the correct answer.

Mr Allen used to work for MEC, one of the leading media agencies in London. Yesterday he resigned and his resignation letter contains some pretty juicy accusations.

Now whilst this isn’t the first resignation letter that contains some juicy accusations it is the first resignation letter with juicy accusations that has gone viral on the Internet and as a result has been seen by millions around the world.

To avoid a knock at the door from some lawyers, I’ll keep the manager’s name anonymous (although if anyone wants to see the full letter then a simple search on the Internet will reveal it!) but Mr Allen claimed that he left MEC after 2 1/2 years of “loyal service” because of the treatment he received from his manager.

Mr Allen claimed he was forced to take time off work due to stress after being overloaded with work by the manager and he claimed the manager made him feel like a complete outsider on his return.

We’ve all been overloaded with work at some stage or other so this is initial claim isn’t that exciting.

The more interesting accusations though were when he claimed in his letter that the manager “regularly made sexist and other bigoted remarks” and “took a female colleague out for a drink on the day he interviewed her, then took her back to the MEC offices that night and had sexual relations with her in the meeting room on the 3rd floor”.

Mr Allen then went on to say that all of these allegations were “common knowledge throughout the team”.

Some people will applaud Mr Allen for his resignation letter whilst others (no doubt including his manager) will say that he should have kept his issues to himself.

Either way there are some serious lessons to be learnt from all of this. For example, it’s probably advisable to make sure you knock on the door of the meeting room on the 3rd floor at MEC before opening it…

Should this former Deloitte accountant become a doctor?

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One of the key attributes of finance and business people should be ethical behaviour. Note that I say “should be” as not everyone seems to agree with this approach.

Former Deloitte UK employee Nahied Kabir seems to have a slightly different view of what is acceptable in terms of ethical behavior.

Here’s a quick multiple choice question for you to see how ethical you are compared to Mr. Kabir.

Question – You’re struggling a bit with your professional exams and your employer’s policy is that if you don’t pass your exam within 2 attempts you’ll lose your job. Do you:

a) Focus your efforts on passing your exams. Or,

b) Focus your efforts on forging two doctor’s certificate.

Now, in my opinion (and hopefully in your opinion as well!) the correct answer is (b) (a).

Alas for former Deloitte employee Mr. Kabir he chose option (b).

In summary, Mr. Kabir failed an exam twice and at a meeting to discuss terminating his employment contract with Deloitte he produced a forged doctor’s note.

Deloitte let him sit the exam again and he passed this time. He then had a further 3 exams to sit and you guessed it he failed all 3.

At the next meeting to discuss things with Deloitte he claimed that he failed due to the ill health of his mother. He then produced a second forged doctor’s note from another doctor claiming his mother was suffering from ill health.

Proving that as well as being a pretty rubbish accountant he was also pretty bad at forging letters, the forged letter from the second doctor was exactly the same as the forged letter from the first doctor with the exception of only 4 words!

It’s probably no surprise to you that Mr. Kabir is now no longer working with Deloitte and the accounting body he was sitting his exams with (ICAEW) have published their report on the disciplinary action they took against him.

Again, it’s probably no surprise that he was “declared unfit to become a member of ICAEW”.

There’s no news yet whether Mr. Kabir is planning a successful career as a bank note forger…

Would you prefer to read it or watch it?

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Marie Claire is one of the leading women’s magazines in the world. It was first published 75 years ago in France and now has various editions around the world.

Although I must admit that I haven’t read a copy in detail I’m told by some of the ladies in the office that it’s a good mix of fashion, beauty and health.

Next month’s issue though is going to have something which has never been seen before in a UK women’s magazine.

Now, I’m not talking about a woman’s magazine writing about the latest football results or the new Range Rover car that has just been released. No, instead I’m talking about a pretty innovative advert.

On pages 34 and 35 of next month’s magazine there will be a 45 second video advert. Yes, that’s right – a 45 second video will be embedded into the pages of the magazine so that when the relevant pages are opened the video will start to play.

Very impressive.

The video advert is produced using technology by US company Americhip and will be for a perfume by luxury fashion house Dolce & Gabbana and reportedly will feature two models posing near a coastal scene.

There’s a constant challenge for advertisers to identify eye catching adverts and this video advert embedded within the magazine will certainly be eye catching.

It will also no doubt be very expensive and the cost of including the video advert has not been disclosed. Interestingly the company that will be paying for the advert is Proctor & Gamble as they are the company that produces the perfume under license from Dolce & Gabbana.

Oh and before you all rush out to buy the magazine it’s worth checking that your copy includes the advert as due to cost reasons not all copies will have the advert in it. If you are lucky enough to get hold of a copy with the video in then it will no doubt be a good read or should I say a good watch.

Tennis star’s balls fall out of his shorts…

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Adidas and Puma are two of the top sportswear brands in the world.

Interestingly though they were actually started by two brothers.

In the 1920s in Germany, brothers Adolf and Rudolf Dassler set up a shoe making business but soon fell out with each other and went their separate ways.

Adolf (Adi) Dassler kept the original company but renamed it Adidas (named after his first name and part of his surname) whilst Rudolf left and set up Puma.

Since the split there has been intense rivalry between the two companies and over the years there have been some famous examples of both of them trying to outdo the other in terms of publicity.

For example, back in the 1970s at the start of the 1970 World Cup final, arguably the world’s best ever footballer famously stopped the referee with a last minute request to tie his shoelaces just before the kickoff. The result was that millions of TV viewers saw Pele tie up his Puma football boots.

An early example of “guerrilla marketing” and priceless publicity for Puma.

More recently there was some rather unusual publicity for Adidas.

At the recent Wimbledon tennis Championship in London, the unlucky losing finalist Andy Murray had a few problems with his shorts.

Adidas pay a significant sum to Murray to sponsor him and in return he wears Adidas tennis gear, including Adidas shorts.

In his Wimbledon match against fellow Adidas sponsored tennis player Marcos Baghdatis, he lost two points after a tennis ball fell out of his Adidas shorts mid-point (Murray puts one tennis ball in his pocket whilst taking his first serve in case he needs to take a second serve).

Luckily for Murray he went on to win his match against Baghdatis but for Adidas it could have been an embarrassing problem had he lost because of the design of their shorts.

Adidas reportedly said that the error in the depth of the pockets was due to the shorts being handmade.

There’s a saying that there’s no such thing as bad publicity and to be honest this has probably turned out ok for Adidas.

More people are probably now aware that Adidas sponsor Murray and they will no doubt change the design of the pockets so there’s no danger of the public seeing one of Murray’s balls popping out of his shorts in the future.

Are you strong enough to buy this?

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Now let me think. Drinking lots of beer and running as hard as you can into a metal vending machine. What could possibly go wrong?

In today’s competitive business environment it’s normally the case that companies want to make it as easy as possible for their customers to buy their products.

Over in Argentina though a beer company has taken an unusual (but in my opinion a brilliant) approach to selling beer.

In fact, if you’re talking in strategic exam business terminology, an unusual approach to the outbound logistics found within Michael Porter’s value chain.

Salta beer has designed a vending machine for all the rugby fans out there.

In order to get your can of beer dispensed from the vending machine you put your money in and then you have to body slam into the vending machine as hard as you can.

The nice twist to this is that there is a meter on the vending machine which is similar to the “hammer strength tests” that used to be found at old carnivals and fairgrounds. In other words, the beer will only be dispensed if you can run into the machine with a hard enough force and reach the “strength meter”.

It’s been designed to appeal to rugby fans who are used to seeing rugby players tackling their opponents.

The machine can be seen in action below and the next time you are sat down in a quiet Argentinean bar enjoying a relaxed drink lookout for the big guy behind you taking a long run-up and heading with his shoulder down towards the vending machine…

It doesn’t matter how good your answer is, if the markers can’t……

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It doesn’t matter how good your answer is, if the markers can’t read your handwriting you won’t get the marks. It’s as simple as that.

As well as having the requisite technical knowledge students must have the necessary exam technique to ensure a pass. One of the more common complaints from markers is that sometimes the handwriting on exam scripts is so bad that they simply cannot read the answers. If they cannot read the answers then they cannot give you any marks.

Whilst it’s probably a bit late now to radically change your handwriting style, there are some simple steps you can take to make your script more readable. An easy one is to leave a gap between each paragraph. This breaks up the text on the page so that it doesn’t look too cluttered and will be easier for the marker to read.

Another point is to practice writing answers under exam conditions. Some of the papers are “written style” papers rather than a numerical one so you must get used to writing under exam conditions. The last time you probably wrote for 3 hours was at the last exam session! Everybody tends to use computers more and more these days and it’s relatively unusual to be writing significant amounts by hand. Practice writing answers under exam conditions and then give your answer to a friend or family member and see if they can understand it!

This was brought home to me the other day when I was talking to my niece. When I mentioned that as a child I used to write notes to fellow students and pass them around the class, she looked at me as though I was a dinosaur. Nowadays they don’t handwrite them but instead send phone text messages to their fellow students. Writing by hand will soon become a thing of the past…

Which is more important to you – the first or last bag?

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It never ceases to amaze me. You’re at an airport, you check-in and then wave goodbye to your luggage. When you arrive at your destination you expect your luggage to arrive on the luggage carousel at the same time you.

I met an old friend last week who was telling me about a situation he faced a few years ago when working on a project at an airport.

The aim of the project was to improve the business process of unloading the bags from the plane and getting them onto the luggage carousel.

This is something we take for granted but the logistics involved are not always that simple and passengers can quickly get frustrated if they don’t get their luggage within a few minutes.

One of the Key Performance Indicators (KPI’s) in place to measure the efficiency of the process was the time it took to get the first piece of luggage from the plane to the luggage carousel.

Now whilst this may sound like a sensible KPI, it was also used to determine the bonus that the luggage handlers would get (the quicker the luggage was delivered the higher the bonus).

Unfortunately for the management of the airport it was also open to abuse.

It may seem obvious now but what was happening was that the baggage handlers were getting the fittest member of their team to literally grab a bag from the hold of the plane and run to the carousel so that the time between landing and the “first luggage on the carousel” was minimal.

Meanwhile, all of the remaining pieces of luggage would be unloaded at a much slower pace.

The end result was happy baggage handlers but unhappy passengers!

Needless to say management soon identified this and the KPI was changed so that it was now the time taken to unload the last bag rather than the first bag that was important.

Would Michael Porter sleep in this bed?

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Michael Porter is arguably the world’s most famous management theorist. His theories such as the 5 forces model and Value Chain Analysis are key parts of the syllabus for several ACCA and CIMA papers.

His generic strategy approach of “differentiation” and “cost leadership” has been around for a number of years and whilst there is a clear argument that a significant proportion of companies are nowadays trying to combine both approaches by aiming to differentiate the product or service whilst at the same time focusing on cost reduction, there is one particular segment of the hotel market that almost certainly has to differentiate to survive.

The boutique hotel segment inherently struggles to compete with the big national and international chains of hotels on the cost leadership approach (these bigger hotel chains will have significant economies of scale for example).

Instead, they will need to be “different” in terms of for example location or “friendliness”.

When it comes to differentiation, the aptly named Jumbo Stay Hotel will be hard to beat for people that are keen on airlines.

Located on a disused runway at Stockholm Arlanda airport, the Hotel is in fact an old Jumbo jet that that has been converted into a luxury hotel. The Jumbo Jet hotel has 27 bedrooms with 76 beds but the best room has to be cockpit which has now been made into a luxury suite with panoramic views of the airport.

The upper deck of the plane which used to house business class passengers is now a cafe serving fresh food and drinks.

We’ve blogged before about Ryan Air’s cost leadership approach to their flights and it’s nice to see a differentiation approach to another part of the airline industry.

Is this the new face of Ernst & Young?

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I guess we’ve all done it at some time or another.

We’ve woken up one morning and due to too much work (or too much drink…) you look in the mirror and think “oh dear” (or some similar but slightly stronger words).

Well step forward Mr Ed Moyse and Mr Ross Harper who when they looked in the mirror recently saw the Ernst & Young logo staring back at them.

Now this wasn’t a drunken night out at an EY party that went wrong. No, it was a deliberate move.

The two entrepreneurial university students were thinking of ways to reduce the student debt that they had built up when they came up with the idea of using their faces as mobile advertising screens.

They set up their website – buymyface.com – and are selling their “advertising board” faces for one year.

One of their first clients was EY who paid them to display the EY logo on their faces during a skiing trip to the Alps so that EY could advertise to potential new recruits.

The idea seems to have caught on and according to their website as of today they have raised £34,000 from selling their unusual advertising boards.

Their going rate for a day’s advertising on their faces has also increased since they started their business.  They are now charging £600 for a day’s advertising.

EY seem to be so impressed with them that they have now become the main sponsor of the website.

Does this mean that at some stage in the future your accountants “uniform” of dark suit and white shirt will be accompanied by the corporate logo painted on your face?

Not the best way to start a presentation…

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The IT guys I’ve met in my career have all been very nice people. Admittedly they all seem to be slightly mad and do tend to talk in a strange language with lots of mentions of “coding this and coding that”.

To be fair though they all probably think I’m slightly mad when I talk to fellow finance people in my strange language about “SOCI this and SOFP that”.

If you talk to your IT colleagues though one thing that they tend to take very seriously is the level of security.

Now whilst there are lots of higher level security precautions present such as firewalls and anti-virus programmes there are also some more simple precautions that you should take.

Memory sticks (or USB or flash drives as they are sometime known) can all contain confidential documents and most memory sticks are not password protected.

It pays to double check what’s on the memory stick you’re carrying around with you in case it contains confidential documents and you lose it.

In a similar vein it’s always worth checking what other files are on your flash drive if you’re about to make a presentation.

Unfortunately for Father Martin McVeigh, a Catholic priest in Northern Ireland, he didn’t check what other files were on the flash drive he was going to use when he recently did a presentation to some parents of children at a local primary school.

According to media reports, whilst loading up his presentation for the parents, Father McVeigh inadvertently showed a slideshow of indecent pornographic images onto a screen.

The x-rated slideshow was on the memory stick that Father McVeigh had put into the computer to load up his intended presentation.

Father McVeigh was understandably a bit shocked at seeing the naked pictures on the screen (although to be fair probably not as shocked as the parents in the audience were) and according to the BBC website he was “visibly shaken” and “bolted out of the room”.

He later stated that he didn’t know how the images got onto the memory stick.

And the morale of the story?

Well, I guess that IT security is not just the higher level technical areas but also the more simple areas such as making sure you know what else is on your memory stick…

Everyone’s present but the class is empty…

KPIs (Key Performance Indicators) are ways of measuring Critical Success Factors in a business (Critical Success Factors are in effect items which an organisation has to get right in order to survive).

Could a t-shirt be part of a KPI though?

It’s not just commercial companies that need to focus on KPIs. Not for profit organisations should also be using them.

Schools are good examples of where KPIs should be used. Measures such as classroom utilisation and exam success should be monitored.

There’s also the subject of looking at the percentage of students that decide to take unauthorised absence from school (or to use a quant old English term, they decide to “bunk off school” and miss lessons).

A city in Brazil has just identified a novel approach to let parents know if their children are missing classes.

Approximately 20,000 students in the Brazilian city of Vitoria de Conquista have just started wearing T-shirts with a built in chip. This chip links with a receiver in class and if the student isn’t where he or she should be a message is sent to the parents to let them know the student isn’t in class.

This sounds very much like a high tech version of “clocking on and clocking off” which can be found at certain workplaces around the world where workers have to record their arrival and departure times.

Only time will tell if the chip enabled t-shirts will be a success and the relevant KPIs for the schools will improve.

Personally I somehow think that some entrepreneurial school-kid may start charging a fee for looking after t-shirts in class. He may well be found sitting in the classroom with a big pile of t-shirts next to him but no classmates…

How much paid holiday should you get?
Here’s an interesting question – if you were asked whether you wanted more paid holiday or not, what would you say?
The standard amount of paid holiday in most European countries is 4 weeks.
Over in Switzerland though there was a national referendum recently which amongst other things asked people to vote on increasing the minimum amount of paid holidays from 4 weeks to 6 weeks a year.
Now, let’s just pause there and think about this.
Be honest. If somebody said to you “Do you want 6 weeks paid holiday instead of 4?” what would you say?
My feeling is that there may be a fair few of you out there who would vote for the 6 weeks holiday.
Now holidays are important and are needed to enable people to “wind down” and “recharge their batteries” after working hard but businesses in Switzerland warned against increasing the holiday entitlement.
They mentioned that having more weeks of paid vacation would in effect increase the labour costs for businesses (they would be paying the same amount as before but for lower productivity).
This increased labour cost could put the economy at risk. Putting it another way, an increase to 6 weeks paid holiday could result in people losing their jobs and having in effect a 52 week “unpaid holiday”.
The votes were counted and two-thirds of the voters rejected the proposal to increase the amount of holiday and the minimum stays at 4 weeks.
Now go and grab two colleagues and ask them if they would want an extra 2 weeks holiday.
If you’re in Switzerland then only one of the three of you will be saying yes.

How much paid holiday should you get?

Here’s an interesting question – if you were asked whether you wanted more paid holiday or not, what would you say?

The standard amount of paid holiday in most European countries is 4 weeks.

Over in Switzerland though there was a national referendum recently which amongst other things asked people to vote on increasing the minimum amount of paid holidays from 4 weeks to 6 weeks a year.

Now, let’s just pause there and think about this.

Be honest. If somebody said to you “Do you want 6 weeks paid holiday instead of 4?” what would you say?

My feeling is that there may be a fair few of you out there who would vote for the 6 weeks holiday.

Now holidays are important and are needed to enable people to “wind down” and “recharge their batteries” after working hard but businesses in Switzerland warned against increasing the holiday entitlement.

They mentioned that having more weeks of paid vacation would in effect increase the labour costs for businesses (they would be paying the same amount as before but for lower productivity).

This increased labour cost could put the economy at risk. Putting it another way, an increase to 6 weeks paid holiday could result in people losing their jobs and having in effect a 52 week “unpaid holiday”.

The votes were counted and two-thirds of the voters rejected the proposal to increase the amount of holiday and the minimum stays at 4 weeks.

Now go and grab two colleagues and ask them if they would want an extra 2 weeks holiday.

If you’re in Switzerland then only one of the three of you will be saying yes.

How would you start the biggest advertising agency in the world?

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What have the Olympics, The European Football Championships and the American presidential elections got in common?

Well, if you’re WPP, the world’s largest advertising and marketing group then they are all hopefully going to make it a bumper year for profits.

The WPP Group make a fascinating case study.

On Thursday they released their results for 2011 and they were pretty spectacular.

Pre tax profits in 2011 were 18% higher than the previous year and broke the £1 billion mark for the first time. Revenue also increased by a healthy 5% to exceed the £10 billion level.

2012 is also expected to be a good year for them as “high spending advertising events” such as the Olympics and the US presidential race are all taking place this year. 2013 could be more of a challenge for the company though as there aren’t any of these big spend events on the horizon.

So, WPP are the largest advertising group in the world in terms of revenue and they’ve got an interesting history.

The name WPP originates from “Wire and Plastic Products” which was a UK manufacturer of wire baskets and was nothing to do with advertising.

Back in the 1980s a gentleman by the name of Martin Sorrel (now Sir Martin Sorrel,) who was previously the Finance Director of advertising agency Saatchi & Saatchi, was looking for a listed company to use as a vehicle through which to build a worldwide marketing services company.

He invested in the “Wire and Plastics Products” company but had no intention of owning a wire basket manufacturing company.

No, instead he used it as a vehicle to buy up companies in the advertising field to create a global powerhouse in terms of advertising groups

As the picture above shows, there are numerous brands within the current WPP group and these include some of the world’s largest firms in the areas of advertising such as JWT, Ogilvy Group and Young & Rubicam.

So, there you go. Buy a company that makes wire baskets and you could end up running the largest advertising agency group in the world.

Liverpool win after an own goal by Adidas.

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Forget about the rivalry on the pitch between Manchester United and Liverpool. Forget about Luis Suarez refusing to shake hands with Patrice Evra at the game on Saturday.

No, the key question is who has got the biggest kit sponsorship deal in the world.

Manchester United’s kit is sponsored by Nike and until recently it was the largest kit sponsorship deal in the world. Liverpool however has just announced a new kit sponsorship deal which exceeds the Nike deal and makes it the biggest football shirt sponsorship deal in the world.

Liverpool’s kit used to be sponsored by Adidas but Adidas lost out in the new bid for sponsorship to American Sports Group Warrior Sports (who own the New Balance sports brand).

Adidas felt that Liverpool’s form over the last few years in the English Premier League hadn’t been that good and as a result didn’t bid as much for the sponsorship deal.

Warrior Sports though seem to have taken the view that Liverpool is a global brand as opposed to merely an English football club.

Liverpool FC has immense brand power overseas. Especially in Asia and the sales of their replica shirts are estimated to be nearly 900,000 a year.

There’s also an interesting observation in that their main sponsor of the shirt (as opposed to the kit supplier) is Standard Chartered.

The Standard Chartered bank isn’t present in the UK and therefore the bank’s sponsorship of the Liverpool shirt clearly isn’t aimed at the UK market but rather at the Asian, African and Middle Eastern markets where Liverpool have a strong following and Standard Chartered have a strong presence.

So, well done Warrior Sports for seeing the global appeal of the Liverpool brand.

As for Adidas, have they just kicked the ball into their own net?

Is the internet more important to you than being with your partner?

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With the start of a new year it’s often a time when people start thinking about new beginnings and even changing their job.

So what would you look for in a new job and what things are important for you?

An interesting study by Cisco shows that it’s not just salary that is important and for the younger generation that have been brought up with tech gadgets like Smartphones and social media sites such as Facebook there are certain things that are more important than extra cash in your pay packet.

Cisco’s Connected World Technology Report surveyed nearly 3,000 young professionals and college students aged from 18 to 30 in 14 countries and there were some interesting findings for any companies that are looking at the remuneration package that they should be offering new recruits.

The study identified that 33% of “college students and young employees under the age of 30 said that they would prioritize social media freedom, device flexibility, and work mobility over salary in accepting a job offer, indicating that the expectations and priorities of the next generation of the world’s workforce are not solely tied to money”.

So money isn’t everything in a remuneration package and in fact 45% of young employees said “they would accept a lower-paying job that had more flexibility with regard to device choice, social media access, and mobility than a higher-paying job with less flexibility”.

Whilst the report identified changes which could impact on staff recruitment there were also some more “personal findings”.

It found for example that 33% believed the “Internet is a fundamental resource for the human race – as important as air, water, food and shelter”.

Now, call me old fashioned but whilst the internet certainly is important, I personally feel the long term impact is slightly different when comparing your internet going down for two hours with for example your air supply being turned off for 2 hours.

In terms of the future of the human race there was also a slightly concerning finding where it was identified that “40% of college students aged 18 to 23 thought the internet was more important to them than dating or going out with friends”.

KPMG are into underwear and Deloitte are into shoes…

It’s a sign of the times but two of the UK’s highest profile high street shopping chains are in financial trouble.

La Senza, the luxury women’s underwear shop, has reportedly called in KPMG to help restructure the business.

Whilst some of the less professional male readers amongst you may well suggest that the first thing they should do is to undertake a reasonableness review of the lingerie brochures, the chances are that KPMG’s consulting work with La Senza will involve a lot more.

It’s possible that the retail chain will either get additional investment or perhaps more likely close a number of shops or even put the company into administration (this is where a company is controlled by an administrator who is independent from the directors and in effect decides for example whether the company can become a going concern again or whether it should be broken up or even liquidated)

Is it really a surprise though that the bottom has fallen out of the luxury underwear market?

With the onset of the recession many people are buying less luxurious underwear or simply making do with what they’ve got.

With the emergence of internet shopping there’s also the fact that the cost structure of these “bricks and mortar businesses” is significantly higher than retailers selling over the internet.

In simple terms, revenue is down but costs are still high. The end result is that a formerly profitable company has turned into a loss making business and La Senza is at risk of going bust.

Deloitte meanwhile have been appointed as Administrators of the shoe shop chain Barratts.

Barratts has nearly 200 shops in the UK and according to press reports Deloitte are said to be “working closely with suppliers to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors.”

Whilst it’s not good news for the employees of La Senza and Barrats, I’ve got a feeling that unfortunately there will probably be more retail companies facing trouble on the high street in the near future.

Is it better to be loyal or disloyal?

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We’ve all heard of the big coffee chains such as Starbucks and Costa Coffee and with their growth over recent years it’s become more and more difficult for the smaller independent coffee shops to compete.

Over in Singapore though a novel approach to competing with these “coffee shop big boys” has just been introduced.

Lots of businesses have a “loyalty card” programme whereby people earn various points each time they spend money with a company. They can then use these points to buy various items with the company.

The giant Tesco supermarket chain for example has one of the largest loyalty card schemes in the UK whereby “Tesco points” can be used to purchase Tesco products. Most international airlines also have loyalty programmes such as Sky team and Star Alliance where the points earned can be exchanged for free flights.

Antic Studios, a creative agency in Singapore has just come up with a new concept and it’s a “disloyalty card”.

The aim is to help a group of 8 smaller independent coffee shops in Singapore develop.

The idea is that an individual picks up a disloyalty card at one of the independent coffee shops. If they then visit the other 7 independent shops they get their card stamped and can then return to the original coffee shop to claim their free drink.

It’s a novel way of smaller companies who are in effect in competition with each other joining together to create awareness of themselves and encouraging people to try them out instead of staying with the big guys.

Smaller competitors working together to create stronger competition against the big coffee chains – a nice idea and well worth discussing over a cup of coffee.