On Saturday Apple officially launched the iPhone 4 in China. They also opened up two new flagship stores in Shanghai and Beijing.
China is the world’s largest mobile market with more than 800 million subscribers so it would seem to make sense that Apple sell their products there.
Why has is taken them so long to launch the iPhone 4 in China though? After all, the iPhone 4 was originally launched in the US back in June and in countries such as Australia, Netherlands and Singapore in July.
The handsets themselves are manufactured in China so it’s not as though they haven’t had any experience of doing business in the country.
There are various reasons why companies have phased product roll outs in different countries. The sheer scale of a “global launch” for a company like Apple would be extremely challenging. Having sufficient inventory in stock on global launch day would not only be a logistical nightmare but would probably be physically impossible.
An additional challenge for Apple is that they need to agree matters with their strategic communication service providers in each territory (in other words, the mobile phone operator they will be partnering with in each particular country). This also takes time.
Anyway, from now onwards we’ll be seeing the iPhone 4 in China but anyone that has been to China recently though could be forgiven for thinking that the iPhone 4 has already been in the country for a while.
A significant issue for Apple is the increase in the number of iPhone clone companies.
As well as clone companies that produce illegal fake copies of the phone there are also businesses that produce reasonable quality phones which are very similar to the iPhone. They are designed so that they try not to break any patent protection that Apple has set up. I’m sure though that Apple’s patent lawyers are monitoring these products very closely!
A quick search on the internet for example shows websites selling products such as the HiPhone, the Ephone and the Ciphone. With prices starting at less than $100 there will be a significant number of people opting for these items.
Oh, and in case you were wondering the photo above is of the Hiphone.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-09-27 03:35:162010-09-27 03:35:16Do you own a iPhone or is it a Hiphone, an Ephone or a Ciphone?
Tesco, one of the leading UK supermarkets, will commence selling the erectile dysfunction drug Viagra.
Viagra has been a huge success for Pfizer. It’s one of their blockbuster drugs and millions of the little blue tablets have been sold over the last 10 years.
One of the drawbacks though for a lot of men that want the drug is where to get hold of it from. In the UK you generally need either a doctors prescription or to risk buying it from potentially suspect internet sites.
Tesco are one of the most successful supermarket chains in the world. In strategic Ansoff’s Matrix terminology they have done very well with market development (4,811 stores in 14 countries with an amazing 2,482 stores in the UK alone) together with product development (an estimated 40,000 product lines ranging from pizza to petrol to perfume).
Tesco are about to add another product line to their offerings and from next Monday shoppers will be able to pick up Viagra from over 300 Tesco stores.
As finance people we know all about the challenge of getting pricing decisions right.
Tesco are not the first mainstream chain of stores to stock Viagra. Last year, the high street chemist Boots became the first store in the UK to sell Viagra without a prescription. You can currently buy 4 of the blue pills from Boots for £55.
A price skimming or premium pricing strategy for Tesco wouldn’t really work as the Viagra market is a mature market. Tesco has instead undertaken a classic penetration pricing strategy whereby they price the product at an attractive price with the aim of growing its market share.
From Monday, you will be able to buy 8 of the blue pills at Tesco for £52.
Whilst the per tablet charge at Tesco is a lot lower than what can be found at Boots, £52 is still a significant amount of money. There’s a recession on and times are hard for a lot of people. Only time will tell whether Tesco made the correct pricing decision.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-09-24 20:55:512010-09-24 20:55:51Is this your shopping list: bread, milk, eggs and Viagra?
Things have changed. You won’t be hearing much about PricewaterhouseCoopers any more.
Is this breaking news? Does this mean that we will be talking about the Big 3 rather than the Big 4?
Should PricewaterhouseCoopers partners and staff be rushing to recruitment consultants to get another job?
There’s no need to panic as all is well with the company. What they have done though is undertaken a rebranding exercise.
The company has commonly been referred to as PwC since it was established via a merger back in 1998 between Price Waterhouse and Coopers & Lybrand. With effect from Monday though they will now officially go by the name of pwc.
As part of a multi-million pound make over not only will the company be known as pwc but the corporate logo and corporate colours have changed.
The new logo incorporates the letters “pwc” in lower case along with a 6 rectangle symbol in shades of orange and red.
According to pwc, the brand was refreshed “in order to strengthen, and modernise how it represents its worldwide network to its clients, its people and the communities in which it operates.”
Global brand consultants Wolff Olins designed the logo in collaboration with PwC employees and clients. The complete rebranding process reportedly took two years.
From a personal point of view, I like the new logo and orange/red spectrum colours which I think are nice fresh, clean colours.
What about people from some of the other accounting firms? My guess is that they must be relieved. With KPMG having blue/white, Ernst & Young black/yellow and Deloitte navy/green it must have been a relief all round that pwc went for orange/red.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-09-22 16:41:062010-09-22 16:41:06Has the Big 4 become the Big 3?
PricewaterhouseCoopers is a great company. It’s one of the top companies in the world and it’s also a truly global company. The latest reported figures show over 160,000 PwC people working around the world including 8,500 partners.
First of all the good news. Their turnover in the UK rose 4% to £2.33 billion.
Their profit before tax in the UK however fell 3% to £665 million.
This fall in profit was put down to some significant investment during the year including recruiting 1,750 staff, appointing 57 new partners and moving into a new environmentally friendly office in London (incidentally, there’s a previous blog entry on the proximity of a PwC office to a Ernst & Young office here).
As maybe a positive sign on their view as to which direction the economy is heading they also stated that they were planning on creating 800 new jobs in the UK over the next year as well as continuing with their significant graduate recruitment by taking on 1,200 new graduate level joiners.
Now onto the exciting bit that I’m sure lots of people are interested in and that is what is the average payout for each of the 820 PwC UK partners?
Although it was down by 2% on the previous year it was still a healthy average figure of £759,000 per partner.
PwC’s UK chairman, Ian Powell, was reported as receiving £3.6 million.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-09-08 18:20:412010-09-08 18:20:41PwC in the UK have just released their results. So how much did each partner make?
Binge drinking in the UK is a major problem. City centres at the weekend can be full of people that are literally trying to drink as much as possible in as short a period of time. Violence and health issues often ensue.
As well as the disturbances to local residents there are also the costs both health-wise to the drinkers and financially to police forces, hospitals and society at large arising as a result of this binge drinking.
As a potential solution to this problem, the government is currently investigating whether to ban free or cheap drink promotions. One of the ideas being discussed is whether to make it illegal to sell alcohol below cost price. In other words to prevent businesses offering “loss leaders” on drinks so as to encourage higher spending at a later date.
If you’re an accountant, and assuming you’re not reading this in the middle of an actual binge drinking session yourself, this raises an interesting discussion on what exactly is meant by “below cost” and in particular the term “cost”.
The major alcoholic drinks manufacturers produce a range of drinks. Diageo for example produce drinks as varied as Smirnoff vodka, Johnnie Walker whisky and the famous Irish stout Guinness.
Identifying the cost of each particular drink would be challenging exercise. Whilst they no doubt have sophisticated management accounts which allocate overheads and indirect costs in certain ways, there would be a clear debate as to which was the “correct” allocation of these costs.
Apportioning overheads such as head office costs, R&D and marketing to individual products would result in a certain amount of flexibility in terms of identifying the cost figure to use for “below cost” purposes.
One solution to this inherent problem of identifying the cost of individual products has been proposed and that is setting the minimum cost of the drinks as equivalent to the duty and VAT that needs to be paid on the particular drinks.
So, the next time you’re out having a quiet drink with some non finance friends feel free to start a discussion about how much each of your drinks cost to make. You can then explain about the various possible methods of allocating indirect costs. Then again, talking about management accounting cost allocation whilst out with your friends may result in your non finance friends starting a binge drinking session themselves…
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-08-30 10:10:442010-08-30 10:10:44“There’s no such thing as a free lunch” but will there be such a thing as a free drink or cheap drink in the future?
Asset valuation is a tricky business. It is, however, a skill that accountants are often commissioned to use. It’s also a useful one to have when making personal decisions, such as whether to buy a home or not.
Some people would argue that a major driver of the current economic slump in many countries is the collapse of house prices.
In a number of countries, house price bubbles were enormous. There are lots of motivations for buying a home; principally as a place to live, a store of value for the future; certainty come retirement (when the mortgage is paid off so housing costs drop only to be maintenance).
Another motive has been speculation. In my opinion, speculation in house prices is a bad thing, since it drives up house prices. This means that new houses are not affordable for the young. The more that house prices go up, the greater the transfer of wealth from the economically active young to the less economically active old.
Unsustainably high house prices cause uncertainty in an economy and when a crash eventually happens, it can cause people to be locked into homes with loans greater than the value of the asset (negative equity). As well as a source of human misery, negative equity reduces labour mobility, which is bad for the economy as whole.
The Economist newspaper tracks house prices in different countries, using a method based on rental yields. The assumption here is that rental markets react more readily to underlying supply and demand conditions. If one had $500,000 to invest, would one use it to buy a house which could then be rented out, or buy other investments such as bonds? If the rental yield (rent / initial value x 100) is less than the yield on bonds, then the house price is overvalued. It’s a simple enough methodology that can give some revealing results.
A couple of years ago, this analysis suggested that UK property prices were 35% overvalued. A crash followed. There have been property crashes and recession in many countries where speculation is a big motive to buy property. The alarming thing is that a recent analysis (Economist 10 July, page 75) revealed that properties are under and overvalued in certain countries:
UK: 33.8% overvalued (following a hard-to-explain recovery in house prices)
USA: 6.5% undervalued
Spain: 50.4% overvalued
Australia: 61.1% overvalued
Germany: 14.5% undervalued
Ireland: 15.7% overvalued.
This may be poor news indeed for the economy of countries with very overvalued property. With these sorts of valuations, mortgages may become unaffordable the moment that interest rates rise to above the rock bottom levels we have at the moment. This could release very big downward forces in the economy and dampen out any economic recovery.
On the plus side, the USA looks to have reacted quickly, albeit brutally, to the changed economic circumstances and it might be a good time to sell your home in Australia (cash out your investment while it’s arguably overvalued) and buy somewhere in America. If you can get a visa. Oh, and a mortgage!
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-08-11 15:18:212010-08-11 15:18:21Forget the sunshine, the beaches and the fantastic food – if you live in Australia sell your house and move to America…
Steven Perkins, a 34 year old commodity broker, attended a company golfing weekend, had a bit too much to drink over the weekend and then took the Monday off of work.
This in itself didn’t justify being fined £72,000 earlier this week by the Financial Services Authority (FSA) and being identified as “an extreme risk to the market when drunk”.
It was what he did on the Monday evening that caused all the excitement.
After the golfing weekend, Mr. Perkins felt the need to carry on drinking and started drinking again on the Monday lunchtime. Late that night in a drunken stupor he bought 7 million barrels of oil using $520 million dollars belonging to his then employers PVM Oil Futures.
Because the purchases took place in the middle of the night other traders around the world thought that there was something major happening in the oil market and as a result the price of oil shot up by $1.50 a barrel in less than 30 minutes. Through the alcoholic haze Mr. Perkins gradually increased his bidding price each time to push the price up until at one stage he was responsible for nearly 70% of the global market volume.
He tried to gradually sell down his position in the morning but no doubt with a very dry mouth eventually admitted everything to his employer.
His drunken night time purchases resulted in PVM losing £6million, him being fined £72,000 and banned from the industry for five years. Plus of course, an almighty hangover.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-07-02 12:30:022010-07-02 12:30:02You know you’ve had too much to drink when your eyesight goes blurry, you slur your words and you spend half a billion dollars…
First of all congratulations to all CIMA students that received their exam results yesterday and were successful. Your hard work paid off so very well done! We’ve heard from a number of you that were successful and those are always the best type of emails to receive from students!
If your results weren’t as expected though and you didn’t pass then better luck next time.
Various papers have performance management within the syllabus. A rather unusual method of managing performance was recently reported by the press.
Japan’s Keihin Express Railway Co., in an effort to promote a friendlier customer service, has implemented something called “smile scanners” at its stations to assess the smiles of their employees!
Employees have to look into a camera every day and have their smiles scored by a computer that analyses their facial features and gives feedback. The quality of the smile is reportedly rated on a scale ranging from 100 to zero.
Is it effective? Can the scanner distinguish between an artificial and a genuine smile? The jury is still out.
While we at ExP love technology, we’re not sure we would submit to such assessment, at least not before our morning coffee!
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-01-22 02:16:342010-01-22 02:16:34CIMA results and performance with a smile…
One item that people should be aware of is that management accounting and financial management are similar to the extent that they are both concerned with resource usage. But there are differences.
I was lucky enough to have recently flown on the new Airbus A380 super jumbo and that got me thinking about some of the financial management issues that Airbus face. Designing and producing the A380 must have been a phenomenal exercise and a real testament to man’s engineering skills. It’s capable of carrying over 800 passengers and has a range of nearly 15,000 km. It’s a fantastic machine.
But what has this all got to do with the difference between management accounting and financial management? One difference is that management accounting tends to deal in short-term timescales whereas financial management is generally more concerned with the longer term. Whilst the longer term is generally considered to be more than one year be aware that certain industries and companies have a distinctly longer “long-term”.
From inception to delivery the A380 took nearly 10 years and the long term view taken by Airbus is certainly longer than some businesses in for example the IT or fashion industries. Some of the businesses in these industries have distinctly shorter “long-terms”.
Anyway, despite the millions spent on design and development of the A380 there was one disappointing thing about my flight and that was I fell asleep during the film and missed the ending…
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-01-18 18:41:062010-01-18 18:41:06Remember the short term and long term
Pricing is an important area of ACCA and CIMA. There are a variety of pricing methods discussed in the syllabus including customer based pricing and competition based pricing. Broadly speaking, the former is based on the amount that customers would be willing to pay for benefits whilst the latter involves setting prices based on the prices of competing products.
In the UK, the Toy Retailers Association has just released their list of the top 12 toys that they expect to be most in demand in the UK this coming Christmas.
The interesting thing about the list is that the average price of the toys is just over £26. This compares to an average price of £32 in the Christmas 2007 list. This represents a fall of nearly 20%.
Has this fall been driven by cost savings by the manufacturer on labour or material? Or maybe reductions in transport and storage costs?
My guess is that the toy manufacturers are aware of the recession and the impact on parents buying power (customer based pricing issue). They are also aware that the toy industry is an extremely competitive industry and at the moment their competitors will be offering cheaper products (competition based pricing).
Either way, I’m sure that there won’t be a lot of children debating this issue on Christmas day when they open their presents!
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2009-11-04 12:06:182009-11-04 12:06:18Thinking of Christmas already?
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