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Some spicy people to follow…

There are over 300 million twitter accounts and more than 500 million tweets are sent per day. That’s an impressive figure that works out at over 5,000 tweets per second.

It can be a useful tool for companies. They can use it to engage with their customers and potential customers by way of branding and promotional activities. They can also use it as a form of a helpdesk or customer support. The Dutch airline KLM for example uses Twitter and Facebook to enable customers to contact them and get a reply within an hour.

Most companies will use Twitter to promote items or get their message out but Twitter user @edgette22 has identified a secret the fast food giant KFC has been keeping within their Twitter account.

KFC is the world’s second-largest restaurant chain (as measured by sales) after McDonald’s, with nearly 20,000 locations globally in over 100 countries.

They also have over a million Twitter followers.

But they only follow 11 people.

And the 11 people they follow are a strange mix.

KFC follows:

Geri Halliwell, Mel B, Emma Bunton, Mel C and Victoria Beckham (in other words the 5 ladies who made up the Spice Girls).

They also follow Herb Scribner, Herb J. Wesson Jr, Herb Waters, Herb Dean, Herb Sendek and Herb Alpert.

Or to put it another way, KFC follow five Spice Girls and 6 Herbs.

Five spices and six herbs?

That sounds familiar as the secret recipe for KFC chicken is 11 herbs and spices.

Either the social media department of KFC were having a quiet day and decided to play a few games or it was a deliberate move to get people talking about KFC when their followers were noticed.

Either way, congratulations are due to whoever was behind the idea.

Pass the doughnuts…

Does your weight affect the amount of money you earn?

That’s an interesting question and researchers from the universities of Strathclyde in Glasgow and Potsdam in Germany have come up with a potential answer.

They analysed data from nearly 15,000 working men and found that men within that the recommended Body Mass Index (BMI) health range earnt more than those who were outside of the range.

Individuals who were underweight on the body mass index were found to earn 8% less than those who were in the top end of the healthy bracket. They found that the effect was more prominent in manual jobs where no doubt the extra strength of the guys in the healthy weight bracket helped increase their earnings.

What was perhaps surprising though was that there was also a difference in earnings in white-collar office jobs. They found that in the more middle-class occupations the rewards peaked at a BMI of around 21.

It wasn’t just men who were impacted though. The study also looked at the weight and earnings of 15,000 German women and found that the slimmest earnt the most and the obese the least.

Jonny Gifford, of the Chartered Institute of Personnel and Development was quoted in the press as saying “it is depressing that, in this day and age, looks are in any way a factor in how much people are paid”.

I have to agree with him as organisations should employ people on the basis of their abilities as opposed to how heavy they weigh.

Anyway, best dash as I’ve got a doughnut to finish…

Don’t worry, he’s ok…

A few years ago if a company wanted to advertise their products they mainly used the traditional media methods of TV, radio and print.

Nowadays the world is awash with viral marketing and social media promotion.

Although the main delivery methods used in advertising have no doubt faced rapid change I would argue that the basic technique of getting peoples attention and keeping it until the message is delivered in a memorable way is still key.

The “advert” below is in my opinion a great example of how advertising should be done.

It’s got the viral marketing angle to it as it’s great for viewing on phones and computers (and of course pausing and replaying it). It also works for the traditional TV ads.

What’s nice about it is that in less than one and half minutes it covers a range of human emotions. There are also no words spoken and the only text comes up at the end.

It also highlights the power of music in advertising. Three well known songs were used so there was no need to specially commission some song writing.

If you watch the advert without the music it has a far lower impact.

Have a look (and listen) and see what you think.

Oh and in case you get concerned mid way through don’t worry as it’s got a happy ending.

The interesting thing about this though is that it’s actually a fake advert. It was created by filmmaker John Nolan to showcase his animatronics skills.

John is clearly a creative genius when it comes to animatronics film making and I’m sure the big cheese companies would love to have somebody with his skills working for them.

What’s the link between almonds, PESTEL and water?

It wasn’t long ago that you only saw almonds in health food shops but things are changing quickly.

The health benefits of almonds are extensive. They are a rich source of vitamin E, calcium, iron and zinc to name just a few items. They can be eaten raw, made into almond oil or almond milk. They are one of nature’s super foods.

If almonds have been around for a long time, why is there suddenly such an interest in them?

If you link it to the environmental analysis model PESTEL you could argue that one of the areas within the “Social” element of PESTEL that has changed recently is that people are more health aware (if you are tucking into your burger and chips whilst reading this I should stress that health awareness doesn’t necessarily mean everyone undertakes healthy eating!)

However, it does seem that people around the world are eating significantly more almonds. So much so that there is a rush to plant almond trees.

The world’s almond crop is estimated to be worth nearly $5 billion per year and the centre of almond production is California where 80% of the world’s almond crop is produced. During the last three years alone 150,000 acres of almond trees have been planted in California.

Whilst the ever increasing number of almond eaters around the world are no doubt happy about this, there are a number of people who are far from happy.

California farmers have been removing tomato, melons and other crops to replace them with almond crops. There is a problem though as the almond tree require significantly more water than the other crops.

To produce a single almond requires about 4.5 litres of water. Multiply that by the millions of almonds that will be produced on the land and you can see what an impact it will have on the local water supply.

California has been suffering droughts for a number of years and in the past there have been certain water restrictions in place for individuals. So far, the almond growers have escaped these water restrictions but a number of activist groups have been set up and this situation could soon change.

Will we see a lot of thirsty almond trees in California in the near future….

Grab your goat and let’s go…

Creativity and innovation in any organisation should always be welcome and whilst technology is often at the forefront of innovation it is sometimes the really simple ideas that can create benefits.

Unfortunately, in this particular situation it didn’t quite go according to plan.

The initial idea was good. Officials in charge of the 1,200 acre Minto-Brown Island Park in Oregon in America were concerned that several invasive plants were taking over the park and killing off a number of the native flora including maple and hazelnut trees.

The solution put forward was to create a crack team of 75 goats who would eat the invasive plants such as the Armenian blackberry and the English Ivy which would then mean that the native flora would thrive.

75 goats were duly obtained from a company called Yoder Goat Rentals (as an interesting aside I wonder how many of you were aware that you could rent a team of goats. I certainly wasn’t.)

The goats got down to work but 6 weeks later the project was cancelled.

There were a number of issues.

Firstly, the goats were fairly relaxed about what they ate. In terms of the invasive Armenian blackberry for example they decided to eat the tasty blackberry leaves but left the prickly bramble. This resulted in the plant carrying on growing.

Secondly, they didn’t show any distinction between the (tasty) maple and hazelnut trees which they were supposed to be helping and the invasive plants.

Thirdly, the total cost of the 6-week pilot programme was $20,719 which was nearly 5 times the $4,245 cost for a normal parks maintenance man supported by a prison inmate work crew.

Finally, according to a report to the city council the goats “had a barnyard aroma”.

In summary, a nice try but it didn’t quite work. Still, as any successful business person will surely agree, you don’t progress unless you try. Better luck next time and at least the goats had a nice 6-week holiday in a lovely park…

More Change Please

Homelessness is a growing problem in a lot of countries but coffee company “Change Please” has come up with a brilliant business model that could help.

They’ve brought together the problem of homelessness with people’s love of coffee and have created a radically different coffee company that is now looking to expand around the globe.

Their whole focus is on helping people whilst at the same time providing an excellent cup of coffee to the end customer at a fair market price.

When it comes to suppliers, the coffee beans they use are from farms that support local communities. For example, one of their suppliers from Peru helps victims of domestic abuse and a supplier from Tanzania helps people injured by landmines.

Once the coffee beans arrive in the UK, the people who roast them and serve them are people who have been homeless and sleeping on the streets. They are trained as baristas and work at one of the company’s locations. They are paid the Living Wage of £10.20 per hour and are given help in terms of opening bank accounts and finding housing.

Whilst the big coffee chains such as Starbucks and Costa Coffee are discussing introducing recyclable cups, Change Please has beaten them to it as all of their cups are 100% recyclable.

All profits are being invested in helping reduce the level of homelessness.

Things are going well for the organisation and they are planning on expanding the number of locations they operate from in the UK. They are also in talks to open in Australia and America with the same ethos of helping homeless people get back on their feet via a well and truly ethical cup of coffee.

They have also signed agreements with 2 big supermarkets, Sainsburys and Ocado, to stock packets of Change Please coffee beans.

It’s a common sound on the streets of cities in the UK to hear people asking if you have any “Change please”. With this fantastic business model for a coffee company, hopefully it will soon be a common sight to see the request for “Change please” replaced by coffee outlets called “Change Please”.

Did you break your fast this morning?

Did you have anything for breakfast this morning before you headed to work?

If I’d asked that question a few years ago the chances are that the reply would have been positive and brought back nice memories of what had been eaten earlier at home.

Things are changing though and according to a recent study for the Grocer magazine, nearly half of those surveyed who were between 16 and 34 skipped breakfast altogether. Even those who had breakfast were only likely to grab a croissant from a coffee shop on the way to the office or eat a breakfast biscuit.

The report said that “Millennials may be more clued up to food and health trends than older generations, but in terms of traditional breakfast there are empty seats at the table”.

Whilst skipping breakfast isn’t necessarily that good for your health, there are also financial health consequences for companies who produce breakfast cereals. In the UK, sales of cereal over the last 12 months are down by £40 million.

A number of companies are trying to regain some of these lost sales though.

Weetabix Limited, the company that produces yes, you guessed it… Weetabix, are now producing biscuits, bars and breakfast drinks that can be consumed on the go or taken to work to be eaten.

Weetabix has been made in the UK since 1932 but in 2012 was sold to Shanghai-based Bright Food.

Bright Food had hoped that as part of the general trend to more western eating habits in China, eating cereals would become more popular. Whilst sales of Weetabix have increased in China, the market share was disappointing as the traditional rice and steamed bread maintained their popularity for the first meal of the day.

Weetabix has now changed hands and was purchased by the US company Post Holdings for $1.7bn (£1.3bn).

Post Holdings already own the Shredded Wheat and Bran Flakes brands so the acquisition of Weetabix seems a good fit.

Back to breakfast on the go though and if you’re one of those people who struggle to get out of bed in the morning and miss breakfast then look on the bright side, if you’re getting into the office late then at least you’re closer to lunchtime.

A good excuse to buy another handbag?

How much do the Louis Vuitton handbags cost?

A lot is the simple answer but some recent research by Deloitte’s has shown that the price of luxury items varies significantly around the world and foreign exchange movements play a big part in that valuation.

According to Deloitte, in US dollar terms London is now the “cheapest” city to buy designer and luxury goods.

Since the Brexit vote in June, at the time of writing the pound has fallen by more than 17% against the dollar (i.e. you need 17% more pounds now to buy the same amount of dollars you would have received back in June).

According to the research, on 7 October a Speedy 30 handbag from Louis Vuitton costs £645 ($802) in London, €760 ($850) in Paris and $970 in New York. China was the most expensive place to buy it with the handbag costing 7,450 Yuan ($1,115).

Nick Pope, fashion and luxury lead at Deloitte, told the BBC that “the trend in luxury pricing in the UK is being driven mainly by the depression on the sterling – thus making the same item more affordable in the UK than in any other luxury market”.

Of course, if your income is in British pounds then the cost to buy the handbag in London remains the same. If however your income is in another currency such as US dollars then it is $313 cheaper to buy in London than in China for example. If you are stocking up on your luxury handbags should you be planning a trip to the UK?

It’s not just the ladies from outside the UK who are buying luxury handbags who could be benefiting from the exchange rate movement.

Any male readers may be interested to know that a Brunello Cucinelli cashmere V-neck sweater now “only” costs £650 ($843) in the UK compared with $942 in France and $995 in the US.

$843 for a sweater?

Please form an orderly queue as you rush to the shops to buy one. Or maybe two…

Grab your goat and let’s go…

Creativity and innovation in any organisation should always be welcome and whilst technology is often at the forefront of innovation it is sometimes the really simple ideas that can create benefits.

Unfortunately, in this particular situation it didn’t quite go according to plan.

The initial idea was good. Officials in charge of the 1,200 acre Minto-Brown Island Park in Oregon in America were concerned that several invasive plants were taking over the park and killing off a number of the native flora including maple and hazelnut trees.

The solution put forward was to create a crack team of 75 goats who would eat the invasive plants such as the Armenian blackberry and the English Ivy which would then mean that the native flora would thrive.

75 goats were duly obtained from a company called Yoder Goat Rentals (as an interesting aside I wonder how many of you were aware that you could rent a team of goats. I certainly wasn’t.)

The goats got down to work but 6 weeks later the project was cancelled.

There were a number of issues.

Firstly, the goats were fairly relaxed about what they ate. In terms of the invasive Armenian blackberry for example they decided to eat the tasty blackberry leaves but left the prickly bramble. This resulted in the plant carrying on growing.

Secondly, they didn’t show any distinction between the (tasty) maple and hazelnut trees which they were supposed to be helping and the invasive plants.

Thirdly, the total cost of the 6-week pilot programme was $20,719 which was nearly 5 times the $4,245 cost for a normal parks maintenance man supported by a prison inmate work crew.

Finally, according to a report to the city council the goats “had a barnyard aroma”.

In summary, a nice try but it didn’t quite work. Still, as any successful business person will surely agree, you don’t progress unless you try. Better luck next time and at least the goats had a nice 6-week holiday in a lovely park…

What’s in a name?

The Indian car manufacturer Tata Motors, part of the Tata Group, one of India’s largest conglomerates recently skilfully averted what could have been a major international marketing mistake.

Tata motors, who also own the Land Rover and Jaguar brands, are about to launch a new small hatchback car. They debuted it at the recent 2016 Auto Expo as the Zica (short for Zippy Car) but following the rapidly spreading Zika virus which has infected over a million people in Latin America and which was declared an international health emergency, they decided to change the name to avoid any unwanted links between the two names.

The car will now be launched as the Tiago and the change was impressively dealt with by the company. They reacted quickly to the similarity and ran a competition via social media for the public to choose the new name. Over 30,000 names were put forward in the competition but Tiago was selected by the public as the winner.

However, if you look up the definition of Tiago in the Urban Dictionary the top two definitions are firstly, “Tiago is a great Portuguese king” and secondly “Tiago is a sex God who is…”.

I’m not sure the Tata marketing guys looked at the Urban Dictionary before agreeing to Tiago but in any case, if you see a man driving a Tiago then surely he’s either the Portuguese king or a sex God…

Should this have been predicted?

Picture the scene. You set up a company with two of your university friends. Things are going well but as is often the case with start-ups the work is hard, the hours are long and there is no initial salary.

Chris Hill-Scott was one such entrepreneur who founded a tech start-up business back in 2008 together with fellow Cambridge University graduates Jon Reynolds and Ben Medlock.

After setting up the company and getting it off of the ground, Mr Hill-Scott decided that being an entrepreneur was not for him. He resigned as a director, left the business and transferred his shares in the company to Mr Reynolds and Mr Medlock in exchange for a bicycle.

We’ve all done things that we have regretted but in hindsight Mr Hill-Scott should have stayed in the company. He now works for the Government Digital Service creating websites and it has been reported that the average salary for that type of job is in the region of £55,000.

The two gentlemen he left behind in the company though have faced a different journey. The name of the company the guys set up is SwiftKey and although you may not have heard of the company, you have almost certainly used their technology.

SwiftKey developed the predictive text technology which suggests the next word a user is about to type on their smartphone or tablet. It has been incredibly successful and their software is used on more than 300 million smartphones and tablets around the world.

The company estimates that the software it developed has saved over 10 trillion keystrokes for its users. Let’s just think about that figure for a moment. 10 trillion keystrokes – that amounts to more than 100,000 years of typing time and represents an awful lot of thumb pain which has been avoided.

SwiftKey is an incredibly successful company and yesterday Microsoft purchased the business for £174 million (or in dollar terms, just over one quarter of a billion dollars).

Mr Reynolds and Mr Medlock will both make more than £25 million each whilst Mr Hill Scott will receive nothing from the sale as he transferred his shares in the business in exchange for a bicycle.

It’s not clear how much the bicycle is worth but I don’t think you have to be a technology expert to predict what words that Mr Hill-Scott was probably thinking when he heard the news the business he helped set up had been sold for £174 million and he had received nothing….

Let’s not run this up the flag pole…

Most of us have been there. Sat in a meeting when somebody decides to use “management speak” or “corporate jargon” to make something sound more impressive than it is.

You’ve probably heard of the phrase “think outside the box” but what about “let’s not boil the ocean”?

Michael Sugden, chief executive of the advertising agency VCCP, recently put together a list of the most irritating metaphors used in the corporate world.

He wrote in Marketing Magazine that the increased use of corporate jargon in recent years has resulted in meetings degenerating “into a quagmire of nonsensical verbal piffle”.

He put together his top 10 of the most annoying phrases and in reverse order the results are shown below.

Oh and in case you’re “not singing off the same hymn sheet” I’ve translated the “management speak” into English in the italics below the phrase.

10. Think outside the box
– come up with new ideas…

9. I may have a window for you
– I can see you on…

8. Content is king
–  first used by Bill Gates in 1996 to indicate that content would drive the success of the internet. It now appears to be used for random purposes in meetings…

7. Let’s not boil the ocean
– let’s not make this too complicated…

6. Level playing field
– keep things equal…

5. Let’s workshop this
– let’s spend far too long talking about this in a meeting…

4. Shift the dial
– to be honest I’m not 100% sure but possibly means talk about something else. Either way it sounds very dramatic in a meeting…

3. Let’s socialise this
– let’s talk about this…

2. Fail forward
– when something doesn’t work but we try to learn from it (if we still have a job after the error of course…)

1. Growth hacking
– again, I don’t think anyone is 100% sure what it means but it does sound very impressive…

So, there you go. A list of 10 phrases to [impress / annoy – delete according to how you feel about the phrases] your colleagues at meetings.

Using food to pay a fine.

It’s never a good feeling when you receive a parking ticket. You may only be a few minutes late back to your car but if you’ve been issued with a penalty notice then there’s not a lot you can do apart from pay the fine. Similarly if you park in an illegal place and are issued with a penalty notice then again you’ll have to pay the fine.

So is this fair? Well I guess it is as you can argue that public authorities have an obligation to maintain parking order on the streets and police officers and traffic wardens in most countries have the power to issue fines for inappropriate parking.

But it’s December and the festive season is nearly upon us. Surely therefore there should be some festive spirit and there should be some leeway given on parking fines??

“Letting people off of a parking fine because it’s Christmas!” – well, that’s certainly a debatable point and I can’t see that happening in a lot of places.

Over in America though one Authority is offering a middle ground when it comes to parking tickets.

The City of Lexington Parking Authority in Kentucky has launched a “Food for Fines” scheme.

From 16 November to 18 December, anyone who receives a parking ticket issued by the Lexington Police Department or parking authority will be able to pay for it using cans of food instead of cash.

The food donated will be passed to the local food bank where it will then be donated to people in need (there are 4 food banks in Lexington and they provide over 120,000 meals a day to people across Kentucky).

For every 10 cans of food donated, $15 will be taken off of the parking fine.

This is the second year the scheme has been in operation and Gary Means, Executive Director of LexPark said “Last year, citizens brought in over 6,200 cans of food as payment for over 600 meter citations”.

That’s an impressive figure and I wonder whether the local shops will be stocking up on very small cans of food in anticipation of a similar number of parking violations…

An impressive lady but competition is coming.

She’s an interesting lady.

Her full name is Barbara Millicent Roberts. She’s 56 years old and has had over 150 different careers including being a lifeguard, a doctor and a Spanish language teacher. Perhaps most impressively of all she travelled into space in 1965, four years before Neil Armstrong walked on the moon.

She’s managed to do all of this despite being only 29 cm tall.

The Barbie doll is the centrepiece of many a child’s toy cupboard and it’s been estimated that over a billion of them have been sold in more than 150 countries since they were first introduced in 1959.

There have been a number of business issues faced by Barbie recently. Even though there’s an Accountant Barbie, I should in fact clarify that and say that there have been a number of business issues faced by Mattel, the owner of the Barbie brand.

Some of you may have heard of Bratz dolls.

Bratz dolls were a competitor to Barbie dolls back in the early 2000s and they were pretty successful. They were so successful that by 2004 they had taken more than 40% of the UK toy doll market and had in fact also taken the top spot for sales of dolls which had been held by Barbie since records began 10 years earlier.

In 2006 Mattel sued MGA Entertainment, the owners of the Bratz brand as they claimed that the Bratz doll creator Carter Bryant was working for Mattel when he developed the idea behind Bratz.

In essence Mattel argued that as they were paying Mr Bryant to work on Mattel matters and not those of another venture the Bratz doll idea was Mattel’s and not MGAs.

Back in 2008 a Californian judge agreed with Mattel’s claim and told MGA to stop making and selling Bratz dolls and also ordered MGA Entertainment to pay Mattel $100 million in damages.

However, MGA weren’t happy with this decision and the case went back to court in 2011 where a federal jury delivered a verdict supporting MGA.

Now whilst the court cases between Mattel and MGA are all very interesting, if you’re a parent of a young daughter what is probably of more relevance is that the Bratz dolls are being relaunched onto the market this coming weekend.

So, if you’re queuing up with your daughter to buy a Bratz doll this weekend you can impress her with your background knowledge of who owns the brand as well as let her know that the UK doll market is the second largest and second fastest growing segment of the UK toy market and has grown 11% over the last year to reach £288m.

I’m sure she’ll be very impressed with your discussion and won’t at all be interested in the doll she’s about to get….

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

, , , , , ,

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…

Listen – your pets can make their own purchase decisions…

Who makes the purchase decisions in your household? Is it you, your husband or wife, or perhaps your dog?

Nestle, one of the world’s largest producers of pet food recently undertook an interesting marketing approach by producing adverts aimed directly at the pet as opposed to the owner.

TV commercials screened on Austrian television used high frequency tones which could be heard by dogs but not humans.

According to Anna Rabanus, Brand Manager of Beneful for Nestle Purina PetCare Germany, they “wanted to create a TV commercial that our four-legged friends can enjoy and listen to, but also allow the owner and dog to experience it together.”

Now, whilst it’s not clear whether that many dogs had read the TV listings to know that the adverts were going to be on or in fact whether the dogs themselves were already engrossed in the latest episode of Animal Cops Houston on another channel and missed the adverts, it certainly was a novel approach to advertising by Nestle.

This wasn’t the first innovative pet food advertising that Nestle had undertaken though.

Last year, Nestle Purina launched an award winning “Stop sniffing” campaign that enabled dogs to sniff the scent of Beneful dog food from special posters on advertising boards in German towns and cities whilst out for a walk with their owners.

Although not related to Nestle, a few years ago there was another advertising campaign which utilised the sniffing habits of dogs.

Small posters scented with… (let’s just say a smell produced by dogs that other dogs find attractive) were put on lampposts at ground level.

Whilst the dogs stopped to sniff these posters there was a bigger poster at human eye level advertising the Animal Planet TV channel which was aimed at the dog owner that was stood there waiting for their dog to finish sniffing.

Luckily for the advertising production team the smell that was put on the small poster to attract the dog was artificially created in a laboratory.

Is now a good time to eat more chocolate?

It’s Easter weekend and in many countries around the world people celebrate by giving each other chocolate Easter eggs.

There could be some worrying news though for people who enjoy eating these chocolate eggs as well as anyone who enjoys eating chocolate in general.

chocolate-pricesThe price of chocolate is rocketing and in the last year alone cocoa prices have risen by 20% and it seems that the price rises will continue.

So, what is causing the increase in chocolate price?

The answer is that it is a simple case of supply and demand.

In December, the International Cocoa Organisation said there could be a 150,000 tonne deficit in the amount of cocoa beans produced in 2014.

There is a significant lead time in cultivating cocoa crops so the supply of cocoa will remain relatively static. In addition, the supply problems are being compounded by prospects of an El Nino weather pattern which can result in crop damaging dry winds in some of the leading cocoa growing countries in West Africa such as Ghana and the Ivory Coast.

Demand on the other hand is surging.

According to Euromonitor the value of chocolate consumption in major emerging markets such as Asia and Latin America will grow at more than double the rate of the world average in the next 5 years.

It’s estimated that consumers in the Asia Pacific region will eat 1.096 million tonnes of chocolate by 2018. This represents a 27% increase from 2013 and compares to a 5% increase in Western Europe (the biggest current buyer of chocolate) over the same period.

So in conclusion, there are supply problems, rocketing demand and higher chocolate prices seem inevitable.

What better excuse therefore is needed to buy that extra chocolate bar now before prices rise?

It looks like Saturday could be a record day…

When I was younger I can remember queuing with friends to get the latest album by my favourite group. At the risk of showing my age though it’s been a long, long time since I last did that.

It’s not because I don’t like music anymore but rather that it’s now so much easier to buy music online.

PrintThings have changed quite dramatically for the music industry when it comes to their distribution methods.

In my youth it was pretty simple. Record companies would distribute the albums via the record shops.

Fast forward several years and over the last decade music has been increasingly distributed online via platforms such as iTunes and Amazon. There’s also the not insignificant impact of illegal downloads of music.

Even if you still want to buy the more traditional CD versions of the albums rather than the digital version, then supermarkets such as Tesco sell the leading CDs at very cheap prices.

The high street music shops have struggled to stay alive. Several high street music shops such as Virgin Megastores, Our Price and Zavvi have all gone out of business.

Students of strategy though would not really be surprised by this as according to Michael Porter’s generic strategies there are two main ways of competing. Namely, cost leadership or differentiation.

In simple terms, cost leadership is where a company can produce something at a lower cost than its rivals whilst differentiation is where an organisation can charge a premium for its product as it’s “different”.

A high street chain of music shops is going to have a significantly higher cost base compared to companies that sell music over the internet. Property costs are going to be significant and will make it impossible for high street record chains to ever win the cost leadership battle.

Whilst it’s not looking good for the big chains of record shops what about the smaller independent record shops? Clearly they could never compete via cost leadership so what about differentiation?

On Saturday the seventh annual UK Independent Record Store Day will be held.

More than 240 stores have signed up to this year’s Record Store Day and tomorrow’s event is aimed at reinvigorating interest in the independent music stores.

At last year’s event people were queuing to get into the shops. Not to buy the cheap music but to savour the atmosphere, talk to people who were interested in similar types of music and to buy some of the more unusual music.

Hopefully this differentiation approach will work as in my opinion it will be a sad day if all the independent music shops disappear and we can only buy the music online or at a supermarket when buying our weekly shop.

Things will now be different for you if you eat chocolate…

Sometimes it’s the simple ideas in business that work.

24 years ago in April 1990, the retailer Poundland was set up. On the face of it their approach was pretty simple – all the items in their shops would retail at £1 (hence the name “Poundland”).

tobleroneThey now have over 500 stores and sell 3,000 different products which all retail at £1.

They have been incredibly successful and the company has just been floated on the London Stock Exchange with a value of £750 million.

Whilst the concept of everything in the shop being on sale for £1 has advantages such as creating a “value image” which has been successful in the recent economic downturn, there are clear challenges when it comes to what £1 can buy today compared to 24 years ago and importantly what £1 will be able to buy in 24 years time.

Looking at the 4Ps model then it’s clear that the Price has to remain at £1, Promotion is minimal with word of mouth being the preferred method and Place needs to be in the right location as people will not travel a long distance to buy something for £1.

That leaves Product.

People are attracted to Poundland because it sells recognised brands at a discount price so they can’t really switch to unknown brands. They have however identified an approach to maintaining their margins on well known products including the chocolate bar, the Toblerone (the chocolate bar with the hidden logo shown here).

Poundland have agreed with Kraft that a smaller Toblerone is produced. It is only slightly smaller than the standard bar – about one triangle shorter.

Importantly though, by reducing the size of the bar it enables the price to be held at £1.

It’s not just at Poundland where chocolate bars have been changing.

The chocolate industry as a whole is currently facing a number of challenges with Cocoa prices being very high.

So what do chocolate manufacturers do? Do they increase the prices to keep their margins or do they amend the product?

Well it seems that both Nestlé and Cadbury have been quietly shrinking the size of some of their chocolate bars on the market whilst at the same time pushing up some of their prices to maintain their profit margins.

A couple of years ago, some chunks of Cadbury’s famous Dairy Milk Bar were removed and the bar was reduced in size from 140g to 120g

Now whilst on the face of it some consumers may feel a bit cheated by this move it could arguably prove beneficial for waistlines.

Interestingly as well, will we see Poundland stocking a one chunk £1 Toblerone in a few years time?

Are things looking up after this advert?

The advertising profession is consistently under pressure to come up with new ways of promoting a product.

British Airways PlcOgilvy, a global creative agency, has recently developed a pretty impressive advert for British Airways.

These adverts utilise interactive digital screens and are located in certain areas in London including Piccadilly Circus. The nice thing about these advertising boards is that they interact with the British Airways planes flying overhead.

The system on the advertising boards tracks British Airways planes as they fly above the boards and interrupts the display to show a child on the screen pointing towards the actual plane flying above. The screen then shows details of where the plane is flying to.

The aim of the promotion is to remind people how magical flying can be by looking at it from a child’s perspective. Richard Tams, a British Airways spokesman was quoted as saying “we’ve all had conversations with friends and family wondering where the planes are going and dream of an amazing holiday or warm destination and this clever technology taps into that and reminds people how accessible the world can be.”

A video of the board in action can be seen below.

This got me thinking though and whilst the technology is certainly very impressive and the creative brains that thought it up deserve a round of applause, I do wonder whether all the rain we’ve had in the UK recently will result in the child on the digital screen merely pointing towards a dark raincloud with a plane nowhere to be seen.

Fancy nipping down the pub for a quick pint and maybe grab a latte and a croissant?

When I was in my teenage years, pubs in England were a very distinctive place; dark, smoky, slightly smelly, overwhelmingly male and mostly shut.

A legacy of previous societal norms meant that women rarely went into pubs unless they were with men.

A legacy of World War One legislation meant that drinks could not be served after 10.30pm or 11pm.  This generally meant a few hours of seriously intensive binging from about 8pm to 11pm, mostly on two nights per week.

croissantThis state of affairs was not great for earning a commercial return.  Pubs often occupy prime sites at expensive rental.  Trying to recover the operating costs of a business when the assets are only utilised for 10% of the time is a challenge and a half.

The first marketing innovation was to make pubs far more female friendly.

Curtains over windows were abolished in favour of plate glass windows.  Pubs started to sell a choice of wines.  The smoking ban came in.

Women were far now more likely to go to a bar with friends because the environment seemed less intimidating.  Unsurprisingly, where groups of young women went, groups of young men followed.

Doctors worried about the effects of all this on the nation’s health, but the tills kept ringing.

Laws governing opening hours were relaxed a few years ago, with some predictable, but probably transitional, issues of overindulgence, as a nation used to nanny closing the bar at 11pm now continued to serve, as people continued to drink at the, erm, efficient rate the previous law had dictated.

JD Wetherspoon runs a chain of bars in the UK, mostly in sites that previously were not bars. Car showrooms are a particular favourite choice of location because of the big windows that attract passing impulse customers.

They have started to open their city centre bars early in the morning, in an attempt to attract an extra crowd.

Some chains have slightly different staff uniforms in daytime and the evening; pseudo-Parisian coffee bar by day; unfussy drinking den by night.

The result is that JD Wetherspoon claims to sell 400,000 breakfasts per week (only McDonalds are bigger, with 600,000).

A recessionary environment means that customers have become open to the idea of hanging out in Wetherspoons with a cheap latte instead of a more expensive option in Starbucks.  It has achieved this growth remarkably quickly, as it only started to open for breakfast last year.

It’s a wonderful example of innovative business change, asset utilisation and absorption costing.

So, what’s this all about? Are things changing? Is it a load of bear or a load of bull?

The major stock markets around the world have been bear markets for the last couple of years but with the end of the recession looking like it’s here we should soon see a switch to a bull market.

Analysts around the world will be arguing one way or another on the timing of the recovery but where do the terms “bear market” and “bull market” come from?

There are two main views on the origin of these terms.

The first view is based on the methods with which the two animals attack.  A bear for example will swipe downwards on its target whilst a bull will thrust upwards with its horns. A bear market therefore is a downwards market with declining prices whilst a bull market is the opposite with rising prices.

The second view on the origin is based around the “short selling” of bearskins several hundred years ago by traders. Traders would sell bearskins before they actually owned them in the hope that the prices would fall by the time they bought them from the hunters and then transferred them to their customers. These traders became known as bears and the term stuck for a downwards market. Due to the once-popular blood sport of bull and bear fights, a bull was considered to be the opposite of a bear so the term bull market was born.

Whatever the actual origin of the terms though I’m sure most people will be relieved when we return to a bull market.

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…

Congratulations to William and Kate but I bet Prince George won’t…

Congratulations to William and Kate on the birth of their son, George. Or to give the young Prince his full title, His Royal Highness Prince George of Cambridge.

All of us at ExP wish him a long and healthy life but I wonder whether he’ll ever use something which most of us use on a regular basis.

You’ve all used a computer and the “qwerty” style keyboards which are named after the first row of the letters of the top row of the keyboard are things that we currently take for granted.

product-life-cycle_sThe interesting thing though is that 20 years ago keyboards weren’t very common and my feeling is that in 20 years time they also won’t be very common.

This means that we are living in a small window of time where humans use keyboards. Our grandparents never used them and I’m sure that our grandchildren won’t be using them in the future.

Our grandchildren will no doubt ask why we were hunched over a strange machine with our hands like claws!

Switching to business terminology and you can argue that keyboards are at the maturity stage and fast approaching the decline stage of the product life cycle.

The reason I’m convinced the keyboards will soon be on their way out is that we’re currently trialing some voice recognition software in the office and it’s very impressive.

A few years ago I tried an early version of similar software but it wasn’t very good. The version we are trialing at the moment however is completely different and in fact I’m dictating this article with this software. It’s very hood good indeed.

So that’s my prediction. Keyboards are at the maturity/decline stage of the life-cycle and we will be the lucky few in the history of mankind that had the pleasure of using the keyboard.

Anyway, back to Prince George though and he’s got far more exciting things to think about in the next few years than worrying about the lifecycle of keyboards. There’s the small matter of learning to walk and talk first.

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?

There’s nothing fishy about this…

It’s an unfortunate fact of life that some suppliers at the beginning of a supply chain often do most of the work but tend to lose out when it comes to their share of the revenue.

fish-supply-chain-boatTake the supply chain for fish for example.

The fishermen go out in their boats in all weathers to fish, sometimes risking life and limb.

The price they receive for their catch is often a very small fraction of the final selling price when the fish is on the shelves of your local shop.

The reason for this is that various distributors, middlemen and not to forget the large supermarket chains are much more powerful than the small firms of fishermen and as a result they can negotiate a larger part of the “revenue pie”.

A recently launched online platform though has nicely cut out the middleman when it comes to the fresh fish supply chain.

Ilovebluesea.com in America has been set up to link smaller fishing boats with the end user and its brilliance lies in its simplicity. The benefit of the approach for all parties is nicely illustrated by the image below from the Ilovebluesea.com website.

fish supply chain525

The fishermen get a higher price and the end customers know that the fish he or she is about to eat is fresh from the sea.

If the end customer happens to be studying business or finance they will also no doubt appreciate that the fish on their plate is not only from a sustainable source but has travelled via a very short supply chain.

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.

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…

Who do the Big 4 want to win the US election?

It hardly seems like 4 years ago that President Barak Obama became America’s 44th president but here we are with just a few weeks to go before the next US election takes place.

Whilst there will be plenty of arguments for and against each candidate over the next couple of months I came across an interesting website which summarises the political donations made by companies in America.

The website opensecrets.org was created by the Center for Responsive Politics which tracks money in politics.

After quickly using the search function on the site it was straightforward to identify the amount of money that the Big 4 have donated to the election campaigns for President Obama and his Republican opponent Mitt Romney.

The donations as at the time of writing are:

Donations made to Barack Obama / Mitt Romney by the Big 4:

Deloitte (Obama: $291,056; Romney: $286,110)

Ernst & Young (Obama: $38,350; Romney: $158,925)

KPMG (Obama: $24,498; Romney: $67,250)

PwC (Obama: $55,033; Romney: $266,650)

Total (Obama: $408,937; Romney: $778,935)

I’ll leave it up to you to perform your own analytical review on the above figures and to decide who the Big 4 appear to want to win the next US election and of course it’s probably got nothing to do with Barack Obama’s plan to increase the marginal rate of tax on high earners and Mitt Romney’s proposal to reduce taxes for high earners…

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…

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.

Do you want to become Lady Gaga’s Accountant?

We get a weekly report on the phrases that people are searching for when they visit our website.

As well as the search terms that would be expected on our site such as “ACCA courses” or “CIMA courses” there are also some more unusual ones.

One recent such unusual search term was “How do I become Lady Gaga’s accountant?”

Now this is a good question but unfortunately if you’re the person that’s hoping to become Lady Gaga’s accountant then sorry but we don’t quite know the answer to that one.

What is interesting about the music industry though is that things are changing for the top artists around the world.

Music trade magazine Billboard has just published their annual list of the top revenue generating music acts in the US.

The top 10 includes some of the newer artists such as Taylor Swift (No. 1 with $35.7m) and Adele (No. 10 with $13.1m) but it also includes some of the more experienced artists such as U2 (No. 2 with $35.1m) and Bon Jovi (No. 7 with $15.8m).

These are pretty impressive amounts of income especially when you consider that they only represent the US income sources and also do not include revenue from sponsorships or merchandise sales.

The income profile of top music acts has changed over recent years though.

Whereas a decade ago the dominant proportion of income would have come from sales of CDs the big earner for most of the artists nowadays is concert and touring revenue.

U2 are the kings of making money from tours and their recently completed “360° Tour” which ran from 2009 to 2011 grossed an incredible $736 million and over 7 million people saw them in concert on the tour.

Back to the person that searched for how to become Lady Gaga’s accountant though and it remains to be seen whether the person searching for the answer was an individual student or a business development partner at a firm of accountants…

(here are your free ACCA and CIMA online courses)

Would a pizza encourage you to get a vasectomy…

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Companies often offer incentives to encourage people to sign up for their products or services.

BOGOF is a term that’s well known in marketing circles.

It stands for “Buy One Get One Free” and as the phrase implies it is a sales promotion encouraging people to buy a product or service. If they pay for one they’ll get the other one free.

In a somewhat unusual approach to promoting a particular service, a doctor in Massachusetts in America is currently offering a free pizza with every vasectomy.

Now, call me old fashioned but the decision as to whether or not you get a vasectomy should in my opinion be driven by other factors other than the offer of a free Spicy Meat Feast Deep Pan Pizza.

Evan Cohen, the manager of Urology Associates who are offering the promotion was quoted as saying that March is the most popular month for vasectomy operations.

Apparently the Spring weather offers a more comfortable recovery period than other months and also for sports lovers March has what is known as “March Madness” when the NCAA’s college basketball tournament takes place. This tournament features 68 basketball games on television throughout the day and evening for most of March.

So, there you go. Who needs a BOGOF promotion as what better incentive can there be to have a vasectomy done that sitting at home with your feet up watching basketball and eating a free pizza??

The TV commercial by Urology Associates advertising the free pizza offer is below.

McDonalds: “I’m loving it” or “I’d rather eat my own diarrhea”?

So, it’s good and bad news for the fast food giant McDonalds.

They recently released their latest annual results and things are looking good for them.

Global comparable sales increased 5.6% and consolidated operating income increased by 14%. The split in individual geographic regions showed the US up 6%, Europe up 15% and APMEA (Asia Pacific/Middle East/Africa) up 27%.

McDonald’s Chief Executive Officer Jim Skinner said that they are planning on opening 1,300 new restaurants this year.

Interestingly two of the reasons that McDonalds appears to be doing well despite there being a recession on in lots of countries is that firstly families are trading down from going to the more expensive pizza restaurants such as Pizza Hut and Pizza Express and secondly people are buying McDonalds coffee instead of the more expensive Starbucks and Costa Coffee.

The financials are looking good and that’s the good news.

The bad news is that McDonalds don’t seem to have quite mastered the art of using the social media site, Twitter.

They launched a 24 hour promotional campaign on Twitter whereby they paid for promoted tweets to be inserted into the streams of Twitter users.

The campaign was designed to highlight happy farmer stories and they used two hashtags (for non Twitter users hashtags highlight key words in a tweet).

One of the hashtags used was #McDStories and it was hoped that this would generate lots of positive stories from McDonalds fans.

The hashtag though was hijacked by critics of McDonalds who bombarded the site with negative tweets about McDonalds.

Put it this way. The vast majority of the tweets with the #McDStories hashag in it are extremely unlikely to be seen in any future McDonalds publicity drive.

Some of the tweets that won’t be featuring in the next McDonalds advertising campaign include:

@Memphidelity: “McDialysis? I’m loving it!”

@flatfootphil: “A nice juicy Fillet o’fish. With added worm. Still alive. Nice. Never again.”

@Alice_2112: “Hospitalized for food poisoning after eating McDonalds in 1989. Never ate there again and became a Vegetarian. Should have sued.”

@MuzzaFuzza: “I haven’t been to McDonalds in years, because I’d rather eat my own diarrhea.”

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”.

Will you be sat next to the love of your life or an obnoxious smelly person?

More and more companies are using social media such as Facebook to engage with their customers and potential customers.

KLM, the Dutch airline, has just introduced a new initiative which could make your next flight with them very interesting.

They are allowing their passengers to link their Facebook profiles to their check-in information.

This in effect means that when you check in you can view the Facebook profiles of other people on your flight who have agreed to show their profile.

If you like the look of them or think that they would be interesting to sit next to for the flight then you can choose a seat next to that person. KLM call it the “meat and seat” service.

A quick discussion in the office this morning showed opposing views on this one. Some thought that it would be a great opportunity to meet new and interesting people whilst others thought it would be a bit creepy for someone to select you to sit next to.

Either way, it’s certainly a novel approach by KLM in terms of integrating social media into a core function of their business.

Personally, I think it’s a great idea and I shall straight away set up a Facebook profile identifying myself as extremely overweight, opinionated and loud mouthed as well as suffering from severe personal hygiene problems.

With any luck that will mean that the seat next to me will be free and I can read the newspaper in peace and quiet…

The team here at ExP are now taking a break over Christmas and we’ll be back blogging in January but we will be posting on our Facebook page though and with no requirement to check into a flight, our Facebook page can be found here.

Thanks to all of you that read our blog and we’ll see you in 2012!

Does $300m mean bigger is better?

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Here’s an interesting development. MP3 players such as the iPod Nano are getting smaller and smaller but due to advances in technology the sounds that they emit are getting better and better.

Whilst music fans are appreciating the portability of the smaller MP3 players together with the flexibility of having quality music players on their phones there’s a trend at the moment of the headphones getting bigger and bigger.

It used to be bigger players and smaller headphones but now it’s the other way around.

As is often the case it’s the fashion conscious younger generation that are driving the change.

HMV, the UK chain of music shops where people used to flock to to buy the latest CDs has unsurprisingly seem a dramatic drop in sales of CDs as more and more people are now buying their music online via Apple iTunes for example.

There is some short term hope for HMV though at least in terms of their sales of headphones and it’s been reported that their sales from headphones and other technology will shortly exceed their sales of CDs and DVDs.

Now these headphones aren’t cheap. Some of the better known high end headphone brands such as Dr Dre go for in excess of £350. That’s quite a lot when you consider the iPod Nano that the headphones could be plugged into retails for less than £100.

Manufacturers have started to segment the market nicely for headphones with for example the Bob Marley Reggae inspired “House of Marley” headphone range recently being launched by Bob Marley’s son Julian.

So, what’s next on the horizon in the business world when it comes to headphones?

I mentioned one of the best known brands of headphones Dr Dre earlier and you’ve no doubt heard of HTC which offer very good Smartphones and are in competition to Apple and their iPhone.

Well, earlier this summer HTC paid $300 million for 51% of a US company called Beats Electronics. What’s the main brand that Beats Electronics has? Yep, none other than Dr Dre.

This could be quite a smart move by HTC.

They are building up their technology and design on the Smartphone side of things and by buying Dr Dre they are getting a sudden jump up in headphone technology.

Will this be the sweet sound of success for HTC?

Are the BRIC nations building a wall?

10 years ago today the term “BRIC nations” was introduced by Jim O’Neill of Goldman Sachs

It represents an acronym for the 4 largest developing countries that have the potential to become some of the world’s most influential economies and whilst the people of Burundi, Rwanda, Iceland and Costa Rica may well hope that one day their economies will become powerhouses it’s the nations of Brazil, Russia, India and China that are leading the way.

The BRIC nations represent over 40% of the world’s population and it’s estimated that China will have more middle income families than the US by 2013 and India will have more by 2020.

If you think about it that’s a lot of middle income families that will be wanting to buy a lot of middle income products.

There has been an interesting trend though and that is that many companies saw the BRIC nations as the “factories” of the world where products would be produced. Some also saw a huge market opportunity where European and American firms could target sales as these nations became wealthier. Manufacturers of middle income products such as electronics equipment and cars were no doubt licking their lips in anticipation.

There has however been a movement towards intra-BRIC trade. For example, India and China are major importers of energy whilst Brazil and Russia are big exporters of resources.

As a group the BRIC nations are becoming more economically mature but is there a new challenger to the BRIC nations?

Well up step CIVETS, a group of countries that represent 8% of the world’s population and whilst the acronym isn’t as catchy as BRIC, the CIVETS group have combined economies that are growing faster than the BRIC nations and have suddenly caught the attention of a lot of investors.

For those of you that are good at geography see if you can guess what CIVETS stands for…

It’s Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa.

Will passing your ACCA or CIMA exams make you slimmer?

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According to a report released yesterday by Eurostat, if you’re in the UK and you’re speaking to a woman then there is a 24% chance that she is obese (or to use less technical terminology, she is very fat).

At the other end of the “fat scale” are ladies from Romania who have the privilege of being the “slimmest nation” in the EU with only 7% of Romanian ladies being classified as obese.

So nearly 1 in 4 ladies in the UK are obese. From an environmental analysis point of view this increase in the number of fat people over recent years is a classic movement in the “Social” part of PESTEL analysis.

As well as having serious implications for the health of those individuals that are overweight the movement towards “fat nations” can have serious implications for businesses over the medium to long term.

In the private sector, Airlines for example will need to invest in bigger seats and spend more on fuel costs to move all this heavier weight around the world.

The public sector will also be impacted with for example hospitals needing to have stronger and bigger beds.

One interesting thing I noticed within the Eurostat report though was the following statement:

The share of obese persons also varies according to the educational level. For women, the pattern is again clear: the proportion of women who are obese falls as the educational level rises in all Member States.

Wow – this is interesting as surely it means that the cleverer you are, the less likely you are to be fat?

So does this means that all your hard work spent improving your educational levels by studying for ACCA and CIMA not only helps your career but also reduces your chances of being obese??

This must be an additional incentive for studying and it also provides a great excuse for any gentlemen that are reading this.

After all, if your wife or girlfriend happens to catch you looking at a slim lady then all you have to say is that you were simply “admiring her intellectual ability”…

What would you do if your credit card balance was this big?

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Sometimes it’s difficult to get a feel for economics and the concepts and amounts involved.

A friend sent me an email that’s doing the rounds on the internet and it emphasises rather nicely the issues behind the financial problems that the US currently faces.

It moves away from “grown up economic terms” to instead use an example about the US financial problems which people will find easy to understand.

They may also however find it a bit shocking.

The US financial position can be succinctly stated as:

1.    US Tax revenue: $2,170,000,000,000
2.    Fed budget: $3,820,000,000,000
3.    New debt: $1,650,000,000,000
4.    National debt: $14,271,000,000,000
5.    Recent budget cuts: $38,500,000,000

Now, if you simply remove 8 zeros and imagine it is a household budget you’ll get the following:

1.    Annual family income: $21,700
2.    Money the family spent: $38,200
3.    New debt on credit card: $16,500
4.    Outstanding balance on the credit card: $142,710
5.    Total budget cuts: $385

There. It’s easy. Who said economics was difficult?

Now, how do we go about extending the credit card limit again?

What is about 20% of your height and could make some companies very happy?

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Here’s a good question – what is about 20% of your height and could help a number of fashion companies to increase their sales by a significant amount?

The answer is a “mini-me”.

Top fashion brands such as Burberry, Barbour jackets and Ugg boots have all seen increases in sales of certain items of clothing recently and some people are putting it down to the ex-Spice Girls singer, model and husband to David, Victoria Beckham.

Mrs. Beckham recently took time out from shopping to give birth to a baby daughter called Harper.

Photos in the press show that baby Harper is not only a cute looking baby but that she also follows her mum in the fashion stakes.

Now whilst Harper is only a few weeks old and therefore doesn’t get overly involved in detailed discussions with her mum as to what she will wear, the photos show that mother and daughter are wearing matching outfits.

This has resulted in a boom for sales of “mini-me clothing”.

A fashionable mum who owns a Burberry trench coat for example can now buy a mini version of exactly the same coat for her young daughter for £375.

If mum wears the trendy Australian Ugg shoes then the lucky baby daughter can also own her own pair for £104.

Anyone with young children will appreciate that they grow at a remarkable rate and this got the accountant in me thinking about the “cost per hour of use ratios” that will apply to these clothes purchases.

Unless your dad goes by the name of David Beckham then I think the resulting figures will be a bit of a shock…

Are you a better negotiator than your child?

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Although the recession that has hit many countries around the world appears to be coming to an end, there are still millions who are impacted by pay freezes and higher prices.

It was recently announced however that one particular segment of the population has seen some good news this year.

For the first time in 7 years, “pocket money” given to children by their parents has increased.

The annual Halifax Bank pocket money survey results have been released and it’s good news for children.

This year, the typical child in the UK receives pocket money of £6.25 a week. This works out as an extra £18.72 a year and is a 6% increase on the previous year.

There were some interesting findings in the survey.

For example, there is a difference between the amounts that boys receive compared to girls. Boys now receive an average of £6.41 a week which is 32p more than the average for girls.

Just over 50% of the children polled believe they receive the right amount of pocket money whilst 43% of the children think they deserve more money (some interesting wage negotiations are no doubt ahead for these 43% when they start working as an adult!)

A total of 1,202 children aged between eight and 15 across the UK were questioned as part of Halifax’s research.

Flavia Palacios Umana, head of savings products at Halifax, said: “It is encouraging to see the amount of pocket money children receive has increased from last year, this gives kids the chance to save their money as well as spend it … teaching children important financial life lessons by using pocket money will quickly give them understanding of basic financial issues and more important the consequences associated with making and spending money.”

Is this a sign that the recession is definitely over or is it a case that children have become better negotiators with their parents?

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Forget about face creams. The easiest way to make yourself better looking is…

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… to open up Photoshop and edit your photos.

Julia Roberts is a beautiful woman but wasn’t quite good enough for the cosmetics company L’Oreal.

She was used in adverts for some of their products but in the words of L’Oreal her photos were submitted to various “post production” alterations. In other words her photos were digitally altered to remove any wrinkles that the actress had.

British politician Jo Swinson wasn’t overly impressed with this and complained to the UK Advertising Standards Authority (ASA) arguing that airbrushing created a false impression of what the face creams could do.

The Julia Roberts advert was for Teint Miracle foundation by Lancôme, one of L’Oreal’s brands. Rather than promote the benefits of “Photoshopping images”, the advert claimed the foundation recreated the “aura of perfect skin”.

At the investigation L’Oreal conceded that certain ‘post production’ techniques had been used on the images but argued that the pictures were an accurate representation of her ‘naturally healthy and glowing skin’.

The ASA weren’t convinced by this and concluded that the adverts breached the advertising standards code for exaggeration and for being misleading. The adverts have now been banned in the UK. Interestingly though the ASA only covers the UK so it remains to be seen whether the adverts will still be used elsewhere around the world.

I’m not sure if Julia Roberts is too concerned with all of this though as she has reportedly been paid in the region of £15 million to represent the Lancôme brand.

With a payment of £15 million she won’t need any cream to get rid of the wrinkles but maybe will need some cream to sort out the “smile lines”.

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It’s the middle of summer so Merry Christmas everyone…

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It’s July. The sun is shining and for those of us in the northern hemisphere it’s the middle of summer. Even in London the clouds have gone away today and there are blue skies.

Surely therefore it’s a perfect time to start thinking about Christmas as it’s only a mere 5 months away?

July is probably a bit too early for most businesses to start promoting their Christmas items but the guys at Harrods think otherwise and they obviously know a thing or two about retail operations.

Harrods was established in 1824 and is probably the most famous department store in the world and tomorrow at 8am they are officially launching their 2011 Christmas range to the public.

Now I’m probably a typical male and the Christmas shopping will no doubt be done in a bit of a rush on Christmas Eve but Harrods seem to think there is a market for Christmas goods in summer (as well as autumn and winter).

It may not actually be such a crazy idea though as Harrods is a pretty unique shop. They have a significant number of international shoppers and if these people are visiting on holiday then they may well want to stock up on Harrods Christmas items whilst they are in the UK.

One of their new Christmas items this summer (!) is an exclusive “12 ice-creams of Christmas collection”.

The Christmas flavours of ice-cream include Christmas Pudding flavour and the slightly less appetising option of Brussel Sprout flavour ice-cream.

So in conclusion, Merry Christmas everyone and have a happy new year…

 

 

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Apple has beaten their profit expectations but is it for real?

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Steve Jobs announced Apple’s best ever quarterly results with revenue for the 3 months to 30 June up over 80% and profits up by 125%.

China is a market that recently has had significant growth potential for Apple and the latest results show that there was a 600% increase in revenue from China during the quarter.  Apple has reportedly said that there is an “incredible opportunity” in China at the moment.

This “incredible opportunity” will not come without its challenges though and there will be competition in China. Bizarrely enough it looks like some of this competition may well look rather familiar.

Whilst fake goods including fake iPhones are fairly common in parts of Asia it is unusual to have a complete fake Apple store.

27 year old blogger, “BirdAbroad” stumbled across an Apple store that looked familiar to start with but then turned out to be a complete fake.

As the photo above shows (courtesy of BirdAbroad) the store looks pretty real. In her words it was a “beautiful rip-off” and “they looked like Apple products. It looked like an Apple store. It had the classic Apple store winding staircase and weird upstairs sitting area.

The employees were even wearing those blue t-shirts with the chunky Apple name tags around their necks.”

The imitation Apple store was seen in the Chinese city of Kunming and reportedly the workers even believed they were working for Steve Jobs.

Alas for them the store isn’t an official Apple store though and highlights some of the challenges the real Apple will face.

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Should you get married if you’re a finance person?

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Marriage – that traditional bond between man and woman where they share their journey through life. Joining in together with the good times and the bad times but above all being a symbol of ultimate love between a man and a woman.

That’s all very nice but forget about all that romantic stuff, if you’re a finance person is now the right time to get married?

One of the cornerstones of a marriage is the gold wedding ring and they are likely to be getting more expensive in the near future as yesterday the price of gold hit a new all time high record price of $1,610 an ounce.

Why has the price suddenly shot up? Is it because the world has suddenly got all romantic and there has been a surge in demand for gold wedding rings?

The answer has nothing to do with weddings but rather the case that gold is seen as a “safe haven” for investments during times of global economic uncertainly.

With the current economic problems in Greece and thoughts that high debt countries such as Italy and Spain may get drawn into the crisis, investors are avoiding shares and government bonds and instead investing in gold.

So, looking on the bright side for those of you that are about to get married, although your wedding ring is likely to become more expensive to buy, not only will your “emotional wealth” hopefully grow after you get married but so will the value of the gold investment on your finger.

Then again, whether you’ll ever be looking to sell your wedding ring at any stage in the future is another discussion altogether…

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Get rid of the Michelin star and you’ll be a better restaurant…

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Running a successful restaurant is tough.

Whilst a good restaurant can me it look easy, there are a lot of things you need to get exactly right to be successful. Everything from the ingredients, the menu, the chef, the ambiance and the waiting staff have to be just right.

Plus don’t forget that it’s a very competitive industry with new restaurants popping up all the time.

Perhaps one of the best differentiators a restaurant can hope for is to earn the renowned Michelin star. This award it only given to the most elite of restaurants.

As with a lot of businesses that adopt Porter’s generic strategy of differentiation, creating differentiators comes at a cost.

La Lisita restaurant in the French city of Nimes is run by top chef Olivier Douert and received its first Michelin star in 2006. It has however just done something that many people would consider unthinkable.

Namely, they have voluntarily given back their Michelin star and reverted to a “standard” restaurant.

Surely this is commercial suicide?

Giving up the most prestigious award a restaurant can achieve can’t help the restaurant, can it?

In fact though they may well be better off as a result.

The restaurant has given up the star so that they can reduce their costs to a more reasonable level. There are several requirements for having a Michelin star. These include having a minimum ratio of one waiter for every five to six customers compared to a standard restaurant where the ratio is closer to one waiter for every twenty customers.

It was proving difficult for La Lisita to recover these additional costs as higher spending customers weren’t visiting as often as they were before the financial crisis so they decided to drop the star.

They are still planning on serving great food but under a slightly different model.

Could this be the first of many restaurants that obtain the Michelin star to prove that they can but then revert to a different model to make more money?

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Do you wear cheap chic or luxury clothes?

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Floods earlier this year caused significant damage to major cotton crops around the world. A knock on effect of this is there is now a shortage of cotton and as a result cotton prices are currently at record highs.

“Cheap Chic” is a business model adopted by various clothing companies where, as the name suggests, clothing is made as cheap as possible but at the same time designed to be fashionable.

We’ve blogged elsewhere about Primark’s techniques for producing cheap clothing and yesterday another leading producer of Cheap Chic released their results.

Hennes & Mauritz, or H&M as they are commonly known, released their latest figures and they weren’t particularly attractive. They showed a 3rd consecutive fall in quarterly profits.

One of the main reasons for the fall in profits was the high price of cotton.

At the cheaper end of the clothing market the cost of material as a proportion of total cost is a lot higher than when compared with luxury brands such as Prada and Burberry where the material proportion is a lot lower. These luxury brands will instead have a higher ratio of other costs such as design, branding and marketing.

Back to H&M though and they have decided not to increase their prices to offset the higher material costs. Instead, they have accepted lower margins.

This contrasts with other clothing companies such as Next who have increased their prices due to higher costs.

70% of H&M is controlled by the founding Persson family so they have the power to maybe take a more long term approach to this issue. They are reportedly accepting lower margins on individual items with the hope of recovering this by increasing their share of the market due to their lower prices.

To me this is an interesting strategic business debate on how to deal with the knock on effects a natural disaster can have on the retail clothing market. Only time will whether H&M have done the right thing in accepting lower margins or whether they should have increased their prices along the same lines as Next.

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