Blue Ocean Strategy

Author: Daniel A. Frische
twitter: @DFrische5151

In 2005 W. Chan Kim and Reneé Mauborgne published the book “Blue Ocean Strategy”. They argue that whilst companies must fight for their share of existing market with traditional competition based strategies (Red Ocean Strategies), their performance will be limited by sticking to these strategies.

The Blue Ocean Strategy is based on the concept of creating a new market space with no (or little) competition. The book studied over 150 strategic moves made by various companies to move or create a business in the “Blue Ocean”. Companies did this by creating a new markets (Starbucks) or by innovating to make the competition irrelevant (MacIntosh Graphic User Interface).

In 1971 Starbucks charge $3 for a coffee in a touristy market place in Seattle. Considering the number of coffee you could make at home for $3 (£1.86) the idea of spend it on just one cup of coffee seemed absurd, but customers didn’t just come for the coffee. What Starbucks offered was a relaxing and sociable coffee bar where they could meet friends, buy a coffee and sit down to talk. Starbuck created a market for coffee shop focusing on a social and relaxed atmosphere that didn’t exist at the time.

Using Command-Line Interface (CPI) took lots of training and practise to perfect, so when MacIntosh created the first Graphic User Interface (GUI) it was set to obsolete it predecessor. MacIntosh released the first commercially computers using a GUI meaning most people could use a personal computer without being formally trained making it far more appealing than other systems, which later disappeared from the market.

Of course “Blue Oceans” attract many people to have a look and take a swim. Now, Starbucks is just one of a long list of successful coffee shop chains and the MacIntosh GUI is not alone either. An attractive market will always interest others to seek a stake in it, but it is necessary for firms to differentiated themselves from others and seek the blue oceans of new market if they want to sustain a high performance and competitive edge.

Property Price Analysis

Author: Rositsa Georgieva

Property Price Analysis

Cambridge property values have rebounded stronger when compared to the rest of the major cities in Britain according to property analyst Hometrack. Prices in Cambridge have risen by 32.5% higher compared to their peak in 2007 to reach £348,300 on average. These figures beat even London, where values sit at 29% above their peak at £398,700. The other cities that have surpassed their pre-crisis peak are Oxford, Aberdeen, Bristol, Portsmouth, Southampton and Bournemouth.

Cambridge is world-famous with its university and a booming biometrical industry, with AstraZeneca opening a £330 million research facility by the end of 2016 in the city. It is moving its London corporate offices with it. Also, the university is currently working on a massive £1 billion development which includes new research facilities, 3000 homes, new schools, shops and surgeries.

During last summer, property website Rightmove stated that Cambridge had the ''hottest'' market, with houses taking an average of 27 days to sell, compared to 39 days during the previous year.

Over the last year, London, Cambridge and Bristol have seen the strongest uplifts in values out of the cities looked at, while Glasgow and Leicester have seen the lowest increases, according to the findings.

Fourteen out of the 20 cities looked at recorded year-on-year house price inflation which was below the average seen across the whole of the UK. Across the country generally, the typical house price has lifted by nine per cent or £15,300 over the last year to reach £184,580.

The average London house price has increased by 18.1 per cent, or £61,000 in cash terms, over the year to September, while a home buyer in Cambridge would need to find 17.9 per cent or £53,000 more than they would a year ago.

Peter Day

Author: Isabelle-Caroline Kardos                                                                         

 

Peter Day is a Global Business Correspondent at BBC World Service, born in 1947 in England, Norfolk.

His father was the manager at HSBC, known as Midland Bank before 1999 in Lincolnshire. Peter Day studied at Oxford, English Language. Trained by the International Publishing Corporation in South Devon, he starts work at the Daily Record from 1970-1974 in Glasgow. He joined the BBC Radio News in 1974 in London, joining Business News in 1975.He left BBC to join TV A.M. as their economics and industrial correspondent. Later, he rejoined BBC to become a producer and presenter for the Financial World Tonight. He is a great broadcaster and he demonstrated this three times. He won the Harold Wincott Award in 1989, 2000 and 2002 and many other awards like The Work Foundation Lifetime Achievement in 2006.

He is a very open minded person, with great interpersonal skills; he still does interactive sessions with different leaders around the world and discussing about leaders power, socialization, nonprofits and activism. All his life was surrounded by news and media. He has also Global Business Audio Clips.

You can find here the link to his podcasts 

Vertical and horizontal integration

Author: Amanda Biernat

I will try to briefly explain the difference between vertical integration and horizontal integration.

Vertical integration – this type of integration occurs when a company is producing a certain product without any help of external businesses.

Following vertical integration rules can help a business to build a stronger, more valuable position in a market.

Example: Company producing pastries is responsible for creating recipe, pastry itself but also a packaging.

Packaging from different company (focusing mainly on providing boxes, bags etc.) could be easily provided but pastry company is trying to develop the whole product themselves, starting from the actual recipe finishing on packaging, labeling etc.

Horizontal integration- is a strategy that helps to increase a market share of certain company by buying or gradually taking over a similar business selling similar goods.

Example: Facebook and WhatsApp are both providing messaging services.

Facebook buying a WhatsApp is a great example of horizontal integration when one company buys another one that is strongly focusing on the same product/service.  

Nonaka

Author: Clare Toulson

Nonaka is a Japanese Organisation Theorist known for his studies of knowledge management, one of his theories being the SECI Process (four modes of knowledge creation; Socialization, Externalization, Combination and Internalization). This model as shown above focuses on the creation of knowledge and how it is transferred within businesses.

There are two broad categories of knowledge in this model, Tacit and Explicit. Tacit knowledge is something that is understood in one’s own mind but can be difficult to verbalise and explain to another person (e.g. mental models, concepts, intuition and innovation). Explicit knowledge is easily expressible and can be explained to others with less difficulty, such as facts and figures. The SECI model explains how knowledge is transferred within a business. This is a continual process which is represented by the spiral at the heart of the diagram.

1.       Socialization

An individual sharing their tacit knowledge through a shared experience, such as on the job training. Firms also use this to understand suppliers and customers and use that to their advantage.

2.       Externalization

A group of individuals share tacit knowledge and form it into explicit knowledge. This can be used to create new products or to improve the quality of existing products.

3.       Combination

The newly formed explicit knowledge is then processed, modified and collected to form new, more complex explicit knowledge and is spread throughout various group of the organisation.

4.       Internalization

The employees new explicit knowledge is transferred by training, as described in the socialization mode and the spiral of creating knowledge continues.

  

I believe this model is an extremely important concept within businesses, especially in the U.K where just over 75% of GPD lies in the service section. U.K businesses thrive on the skills and knowledge of people, this theory shows how a company can acquire an advantage over its competitors from the knowledge of its employees. The exchange of skilled workers tacit knowledge can give a business the upper hand that other companies will not have access to, this concept encompasses the value of skilled people in companies and why it is vital for HR to hire the right people.

Further reading:

http://www.sciencedirect.com.ezproxy.uwl.ac.uk/science/article/pii/S0024630199001156

http://jf8yq3yy9j.search.serialssolutions.com/?ctx_ver=Z39.88-2004&ctx_enc=info%3Aofi%2Fenc%3AUTF-8&rfr_id=info:sid/summon.serialssolutions.com&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=Conversation+with+Ikujiro+Nonaka&rft.jtitle=Reflections%3A+The+SoL+Journal&rft.au=Scharmer%2C+C.+Otto&rft.date=2000-12-01&rft.issn=1524-1734&rft.eissn=1536-0148&rft.volume=2&rft.issue=2&rft.spage=24&rft.epage=31&rft_id=info:doi/10.1162%2F15241730051091984&rft.externalDBID=n%2Fa&rft.externalDocID=10_1162_15241730051091984&paramdict=en-US

Submerged economy

Author: Ojo Harrison Oluwatobi

Submerged economy is a type of economy that the wealth and resources of a country is covered/ buried under the negative section of the economy.  The GDP(Gross domestic profit) plays a very big impact, because this is where the value of output produced with the  a country over a twelve-month period.   

The rest of Spain’s economy is either still or in debility, this new report shows that for GDP in 2012 24.6%, in 2008 6.8% higher.  

This report by Spain's Inland Revenue department titled The Cost of the Submerged Economy: Increased Fraud during the Crisis claims the black economy is valued at €253bn (£208bn) – €60bn more than in 2008.

Meanwhile, figures shows that Spain's GDP increased by 0.3% in the last quarter of the year 2013, up from 0.1% in the third quarter, this symbolises the prime rise in Spanish GDP since the start of 2003.

The Inland Revenue says the submerged economy has grew quickly in those sections impacted by unemployment and the eruption housing bubble, such as Andalusia, the Canaries, Extremadura and Castilla-La Mancha. The numbers for Extremadura, where unemployment stands above 30%, is 31.1%.

The report comments on the "serious moral problem when it comes to paying taxes", a situation that has put Spain's black economy high above Germany (13.1%), France (10.8%) and the UK (10.1%), although the rate in Italy, Portugal and Greece is closer to Spain's.

Shadow economic activity in Greece is equivalent to almost a quarter of national output, a study by the London-based Institute of Economic Affairs found. The research found that Greece's shadow economy was equivalent to 24% of GDP last year, which was one of the highest rates in Europe but lower than a decade earlier when it surpassed 28%.

Although unemployment stands at around 26%, it is an open secret that this figure disguises the large numbers working in the submerged economy.

In spite of the high levels of fraud, there is only one Spanish tax inspector for every 1,928 taxpayers, compared with 860 in France and 729 in Germany.

Outsourcing

Author: Feven Mekere

Outsourcing is the process of transferring work that needs to be done by the company to another external parties rather than doing the work internally (Schienerjans, 2005,p3).Any part of a business activity can be outsourced. It’s the delegation of noncore operation or jobs from internal production to an eternal entity.

Outsourcing can result in an organisation quickly earn benefits through expertise and enhanced control from an external entity.  . In reality organisation that embrace outsourcing and leverage their resource to focus on the core of their business are known to be the market leaders of tomorrow. This is because the relevance of outsourcing it said that it exist high opportunity of cost saving for an organisation thus this increase the chances of success for an organisation.

According to outsourcing institutes 30% of the organisation is engaged in some form of outsourcing including the federal Government.

Taking the federal Government as an example of the outsourcing process the agency  core business is governing however its information technology is also an important part that needs to be carefully done  however the organisation  is not present to do that which is why the federal agency use outsourcing their information technology in order to save time to focus on house resources and core function to improve quality of information and to increase flexibility.

The federal government stated:”Successful outsourcing enables organisation to focus on what they do best and accomplish their mission”.

Another example could also be DELL computers, the company produces their own product but they sometimes buy some of their computers from another manufacturer in order to save production cost.

References

Burkholder.N  ( 2008) “ Outsourcing the definitive view application and implication “ 10^th edition ‘ John Wiley& Sons’.

Schiederjan.A , Schiederjan.D, Schierdjan.A ( 2007) “ Outsourcing Management information system”  Ideal Group Publishing .

Gross Domestic Product

Author: Charlotte Brazil

GDP means Gross domestic product  and can be defined as the value of a country's overall output of goods and services, typically during in one financial year at market price.

GDP can be estimated in three ways-1. Expenditure basis - how much money was spent2. Output basis- how many goods and services were sold 3. Income basis- how much income/ profit was earned

The  four main components marking up GDP are: agricultural; production; construction and services. 

In the UK the service industry accounts for 77.8% which is more then tree quarters of the output approach to the measurement of GDP. In the UK as we are a primary based service industry run country we spend more time and money on trading staff and resources required to improve the service industry.

The service industry provides lots of jobs for residents in the uk  in industry such as - transport storage ,communications- distribution, hotels , restaurants and catering -business services and finance - government and other services 

Die of success

Author: Natasha Cole

Success overload is a term that is used to express what happens when you gain too much success.  This can be businesses that gain lots of success with an initial start up idea, however managers and decisions makers within the company, neglect to take into consideration the environmental changes, and therefore can become resistant to change.  As this occurs the business can fail quickly as it does not respond to in changes and stays stagnant and fully focused on the original idea that made them successful.   

Elsass, Priscilla M.(1993)The paradox of success: Too much of a good thing?  The Academy of Management Executive 7.3 (Aug 1993)

UBER

Autor: Jose Ruizalba

As discussed today in class, now waiting for the post from one of our students that showed a great knowledge about the topic.
In the meantime see what The Economist is reporting:
A court in Frankfurt lifted a temporary nationwide ban it had imposed last month on Uber in Germany, allowing the app-based taxi service to continue operating. The judges ruled that the association representing the interests of conventional taxi-drivers, which sought the injunction, had not filed its case in time, though they were sympathetic to its arguments.

Author: Jose Ruizalba

Phones 4U, a British retailer, sought bankruptcy protection after EE and Vodafone, two of Britain's big network operators, pulled their business from its stores. Retail chains selling multiple varieties of phones and network packages blossomed along high streets in the 1990s, but with margins squeezed and competition more fierce than ever, network operators have an incentive to cut out the middlemen and sell through their own outlets. (From The Economist)

The Importance of Training and Development at Employment

Author: Harey Vigneswaran

Training at the workplace has seen a magnificent growth over the last two decades. Generally most new jobs require a level of training and orientation. Many employers quite literally dedicate the first days or weeks to adjust to the new environment.

Employees also place a much higher emphasis on growth opportunities, that flourish through the provision of training. Recent graduates have been particularly drawn by opportunities to develop their employability by signing up to apprenticeship or internship programs, that are designed to gain experience, while contributing to the success of the company.

The latest GDI submission indicates that 78% of UK based companies fall within the service sector. This utters the need for a competitive advantage for companies in providing a superior service to be able to sustain a business in the current market condition.

The way this is currently being achieved is through one of two ways; the provision of more advanced equipments and the provision of training. Since upgrading and investing into equipments and machineries can despite its advantages have a long lasting financial burden, many companies decide to invest into up-skilling their work force. Not only does this boost financial results over the long term, but also presents an immediate benefit of more satisfied employees.

Training also promotes safety and health amongst employees and helps employers to comply with local laws and regulations. Areas that are of particular interest to companies are sexual harassment, business ethics and diversity. Research shows that a training program can reduce the employers liability significantly when found guilty of criminal misconduct.

A well prepared training program also enables all employees to benefit of the same experience and knowledge. The provision of consistency is fundamental to expanding a business and obtaining quality of service and products, particularly for large businesses.

Evidence suggests that a well trained work force is a fundamental asset to a company to operate efficiently and productively while maintaining a high level of workers satisfaction.

Employee Training in the UK

Author:  Leo Hidalgo

            

The service industry is made up of both small and large companies profiting off an array of intangible products, or services, and typically includes hotels, restaurants, transport, distribution, education, retail, communication, finance, government etc.. with the greatest contributors to growth being business services and finance sectors. The service industry in the UK contributes around 77.8% to the national GDP and the Index of Services increased 3.3% since last year.

            

            The most important asset of the service industries is People. The salesmen, doctors, technicians, drivers, waiters, accountants, consultants, realtors, travel agents, teachers, and everyone in a call center. They are not only the face (or voice) of their employer but could possibly be perceived as the whole organization. It is through them that customers gain access to information or help and ultimately the intangible product. In other words, one bad experience with one bad sales rep. could be enough to permanently stain that customers view of the entire company. Naturally, it is in the organizations best interest to make sure every single employee can be firm but polite, well informed and level headed to every single customer in order to build and maintain a strong and favorable reputation.

           

            To achieve such consistency, companies have to invest in the training and development of all of its employees, which makes it one of the greatest expenses an organization must shell out. From 2012 to 2013 around £42.9 billion was spent on employee training across all sectors, averaging approximately £2,550 and 6.7 days spent per employee trained. Interestingly, there seems to be a negative correlation between the size of the company and the time/money spent on training and development. According to some, this could all just be a waste of money, given that the more classic and widely implemented training practices are proving to be counterproductive. One of the biggest setbacks may be that most employers wrongly believe that their employees are already as good as they should be.

           

            One solution many employers have turned to is ‘off-the-job’ training, or even outsourcing training. Even though this may reduce total costs, it is only a short term solution and more employers should be concentrating on light, continuous training practices in order to truly establish and reinforce the organizations core values and operation philosophies. Today, more than ever, certain sectors have to concentrate on sensitivity training. This not only entails politically correct terms for different ages, races, religions, and sexual orientations but also a more empathetic front when dealing with those living with metal or physical handicaps, the homeless and anybody that could be perceived as ‘different’.

            In a quickly changing world where streamlining automating and reducing human contact has been the trend in several of the service sectors (tourism, banking, customer service etc…), offering an Amazing customer service experience could be enough to give one organization a huge advantage over its competitors.

References:

BBC News (17 september, 2014) Customer service ratings revealed by Which?. Business News, [Online]. Available at: http://www.bbc.co.uk/news/business-29223073 [Accessed: 25/09/2014].

Freeman, C. (2014) Disney's Focus on Employees to Focus on Customers. HR Focus Bloomberg BNA, 91(7) [Online]. Available at: http://web.b.ebscohost.com.ezproxy.uwl.ac.uk/ehost/pdfviewer/pdfviewer?sid=46f9078c-c36d-436f-a0cc-ac4562197a82%40sessionmgr115&vid=1&hid=127 [Accessed: 24/09/2014].

Jones, J. (2013) UK Service Industries: definition, classification and evolution. Office for National Statistics, [Online]. Available at: file:///Users/leonorhidalgo/Downloads/ukserviceindustriesdefinitionclassificationandevolution_tcm77-325207.pdf [Accessed: 24/09/2-14].

Medland, D. (September 2013) Money spent on training is often wasted, claim authors. Financial Times, [Online]. Available at: http://www.ft.com/cms/s/0/697f3742-09a5-11e3-ad07-00144feabdc0.html#axzz3ELf9Rq2y [Accessed: 24/09/2014].

Office for National Statistics (2014) Index of Services, May 2014. [Online]. Available at: http://www.ons.gov.uk/ons/rel/ios/index-of-services/may-2014/stb-ios-may-2014.html#tab-GDP-impact-and-components [Accessed: 25/09/2014].

Winterbotham, M., Vivian, D., Shury, J. & Davies, B. (January, 2014) The UK Commission’s Employer Skills Survey 2013: UK Results  . UK Commission for Employment and Skills, [Online]. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/327492/evidence-report-81-ukces-employer-skills-survey-13-full-report-final.pdf [Accessed: 25/09/2014].