Uncertainty

1. Uncertainty Today you will learn: that businesses operate in an uncertain world. They take risks in order to rewarded in the long-term. Note the link with the ICT topic. You will be successful if you can: AO1: Identify possible reasons why the business environment is uncertain AO2: Explain the ways in which businesses can change existing business practices in order to be successful AO4: Evaluate the consequences to businesses of not making changes/taking risks

2. AO1: Identify possible reasons why the business environment is uncertain Reasons why the business environment is uncertain • Changing customer demands (eg tastes eg clothing, holidays, entertainment) • Changes in the economy • Other? Technology?

3. AO2: Explain the ways in which businesses can change existing business practices in order to be successful Business risk and reward • http://www.talktalk.co.uk/business-news/features-new/success-stories-last-ten-years.html This gives some interesting examples of success, but not why they succeeded. • Task: Look at http://www.innocentdrinks.co.uk/us/our-story# to find out more about why it is successful? In Innocent smoothie fashion create a PowerPoint to summarise its history, but you are only allowed to use up to 10 words (excluding the name of the company). Make sure you highlight what they have done to ensure success, despite several near failures.

4. AO1: Identify possible reasons why the business environment is uncertain Business risk and reward • But not every business has succeeded: Kodak: Files for bankruptcy protection in USA. Watch this summary of its demise. http://www.bbc.co.uk/news/business-16634652 (note it gained approval to come out of bankruptcy protection in August 2013). • What went wrong? • What would you have done? • Can you think of any other businesses that have suffered a similar fate. What happened? • On your own (using your group members for advice) answer the questions on one business failures example from http://www.slideshare.net/elton-pickford/business-modeldofail-10examples5reasonsenv22(see sheets on table) • ebi: • You need to explain your how your evidence shows that the business was successful. • You need to explain each factor actually caused the collapse. • You should attempt the stretch task.

5. AO1: Identify possible reasons why the business environment is uncertain AO2: Explain the ways in which businesses can change existing business practices in order to be successful AO4: Evaluate the consequences to businesses of not making changes/taking risks Tweeting • This is how businesses can create trends and keep in touch with the market. • This video is an advert for using Twitter to promote your business https://www.youtube.com/watch?feature=player_embedded&v=BGirUZq1WtQ. • What are the rewards? • What could go wrong? • Is this something a business should do? • Look at https://business.twitter.com/success-stories/tommyhilfiger and run through what they did. • It is not just for big businesses. It can also be used for small businesses: https://business.twitter.com/success-stories/eldora-speedway Task: Look at one example of Twitter success from https://business.twitter.com/success-stories and summarise what it did and what effect it had. Extension: what would you do differently. Why?

6. AO2: Explain the ways in which businesses can change existing business practices in order to be successful AO4: Evaluate the consequences to businesses of not making changes/taking risks Management buyouts Watch this http://news.bbc.co.uk/1/hi/england/8314852.stm to show a successful management buyout. See next slide for eg of Go Ahead. Follow this link http://www.bbc.co.uk/search/news/?q=management%20buyout&video=on&audio=on&text=on choose one management buyout and find out: • What is a management buyout? http://en.wikipedia.org/wiki/Management_buyout • Why did this management buyout take place? What would have happened if it didn’t? • How successful was it? Note: take care to be clear how you are measuring this success. Extension: Explain what could/should have been done to make it (even) more successful.

7. Go-Ahead How it started (from Wikipedia): • The Go-Ahead Group plc began as Go-Ahead Northern Limited in February 1987 on the privatisation of the National Bus Company, • Using a partial management buyout led by Martin Ballinger and Chris Moyes • Early expansion saw the acquisition of certain smaller competing bus operators in North East England (principally Gypsy Queen in 1989 and Low Fell Coaches in June 1992). • Go-Ahead Northern Ltd also became a National Express Coaches sub-contractor • Their target is to grow bus operating profit to £100m by 2016

8. AO2: Explain the ways in which businesses can change existing business practices in order to be successful AO4: Evaluate the consequences to businesses of not making changes/taking risks Takeover, producing different goods and diversification Porsche gets into a spot of bother: http://www.bbc.co.uk/news/business-25975459 Producing different goods: Nissan Leaf. Why bother? Has it worked? What about this idea? Is it better? http://www.bbc.co.uk/news/business-25721122 Diversification: http://www.wheelbirks.co.uk/on-the-farm

9. AO1: Identify possible reasons why the business environment is uncertain AO2: Explain the ways in which businesses can change existing business practices in order to be successful AO4: Evaluate the consequences to businesses of not making changes/taking risks Plenary: Adapt to survive • Though this is an old story it does show how businesses adapt: McCain’s has moved with the times. Read more to find out how: • http://businesscasestudies.co.uk/mccain-foods/how-mccain-responds-to-changes-in-the-external-environment/introduction.html#axzz2q57R2Zgo