Thursday 26 November 2009

Borders bookshop goes into administration

The well known bookshop chain Borders has gone into administration and a buyer will now try to be found for the all or some of the 45 stores. The chain has suffered from increased competition from online retailers and supermarkets and recently, the business had experienced severe cash flow problems and several suppliers had stopped or reduced its credit levels. The chain employs 1,150.


Sunday 22 November 2009

25 years since British Telecom was privatised

British Telecom's roots go all the way back to 1848 when it became the worlds first telecommunications company. However, by the 1980s, a decision was taken to privatise it and increase innovation within the new company to benefit customers as well as raising money for the government (£3.9billion).

The launch of BT shares on the London Stock Exchange was a big event and initially, the shares were priced at 130p each. The launch was aimed at small investors and was the first to be targeted by a widespread marketing campaign. By the end of their first day, the price had reached 170p.

Over the years, the now privatised BT has had to defend itself against allegations of preventing competition from it's very dominant position and Oftel (now Ofcom) was created to ensure it didn't abuse it's position.

With privatisation came the need to maximise profits and job numbers have been cut. In 1984, BT had a staff of 241,000 - it now employs 107,000. Revenue has grown from £6.8billion 25 years ago to £21.4billion. However, a pretax profit of £990 million in 1984 became a £134 million loss in 2008. The share price 25 years on sits at around 145p, roughly the same as when it launched.

Even niche marketing can't protect businesses in this recession

The owner of a famous niche store in London's Covent Garden, specialising in American men's clothes which had been open for 29 years and survived 2 recessions, has decided to close his business in February 2010 and will sell everything, even the fittings, when a closing down sale starts in December. The owner decided that the business was not financially viable to continue.

Some interesting issues in this story which relate to what we study in Business Management:
  • The reluctance of banks to lend to businesses is one reason given for the business closing down - without finance, supplies can't be purchased or orders met. Staff may not get paid and general expenses may become difficult to pay e.g. electricity, etc.
  • This business operated in a niche market - it had little competition as it sold brand name goods not found elsewhere in the UK. Customers were loyal to the exclusive clothes.

Tuesday 17 November 2009

No growth in Scottish economy in 2010

Gloomy news from a recent analysis by Strathclyde University which said that Scotland would recover more from recession more weakly than the rest of the UK, with almost no growth during 2010. Unemployment could peak next year at 234,000.

Reasons for the slow return to growth include:
  • Scotland's reliance on a large public sector in comparison to the rest of the UK. This means there is a smaller private sector base from which to grow as well as the impending squeeze on public spending.
  • The service sector - financial services, property and business services - had also performed poorly in recent months.
  • Lack of size and capability in the manufacturing sector to take advantage of low exchange rate and increasing global demand.
  • Scots being more likely to save than others in Britain, which would slow growth.
The poor figures has increased the possibility that the recession in Scotland will last longer than it does across the rest of the UK.

Friday 13 November 2009

Business Management Revision Material

I have been creating lots of revision material for the Intermediate Business Management pupils using ClassTools, a teaching website. It is support for their upcoming BICs Nab. However, it may be useful for pupils at all levels of Business Management and in particular, for those who find it difficult to just sit and read notes. You can find it by clicking on the Intermediate Business Management page of the blog.

If there are any other things you think that would be useful to help people study, let me know and I will see if we can create them. Any feedback appreciated!

Monday 9 November 2009

First virus hits Apple iPhone


My S4 Administration class have been learning about ICT related legislation and we have had a lot of discussion about the Computer Misuse Act 1990 and how it was aimed at hackers and one of its main offences was the release of viruses.

Now it seems that the Apple iPhone has its first "worm" which causes the phone's wallpaper to change to a picture of 1980's singer Rick Astley, with the message "ikee is never going to give you up". At present it only affects phones where the user has removed Apple's protection mechanisms so they can run any software. Although not harmful at the moment, there is concern that more malicious versions may follow which would do worse things than simply change your wallpaper.

The hacker, a 21 year old Australian called Ashley Towns, told Australia's ABC News Online that he only created the virus to raise the issue of security.

Tuesday 3 November 2009

Intermediate Admin - Revision slides

As promised, I have posted some theory slides which might be of use for your upcoming end of unit test. Click on the Intermediate Admin link on the menu to take you to the slides. Speak to me if you have any problems.