Hard times for Multinationals and Globalization

The return of economic nationalism and protectionism are leading towards a more difficult geo-political situation for large multinational corporations. Writers at The Economist suggest that the financial and operational advantages of globalism and off-shoring were already being eroded even before the election of Donald Trump.

The war of the supermarkets

2016 was the year of the supermarket wars as low-cost options Lidl and Aldi forged ahead in market share amid losses from some of the big four UK supermarkets, and it looks as though the trend is set to carry on in 2017.

Aldi's latest announcement that they will increase the minimum wage of their workers above the national living wage (thereby claiming that their employees will be the highest paid in the sector) is set to further increase their popularity. Looking at this from a business perspective (not ignoring that this may just be a genuinely magnanimous move), this is an excellent marketing strategy. Not only does is create goodwill towards the brand, but it also brings into question the actions of the other supermarkets. If Aldi can provide good quality products to consumers for a low cost (based on the fact that they regularly perform well in industry awards) while also paying their staff well, then why can't or don't their competitors?

The war of the supermarkets might be ongoing, but Aldi definitely seems to have won this battle.

Streaming places music industry on the road to recovery

Thanks to music streaming The US music industry is on track for a second consecutive year of growth for the first time since the late 1990s, before piracy and the internet corroded sales. The growth in streaming has tipped analysts at Macquarie to predict global recorded music revenues will double in the next decade, reaching $30bn by 2025.

Opportunities and challenges for expatriate workers

Alicia Clegg looks at the challenges faced by professionals returning to their home country after completing international assignments.

Is the Uber boom over?

A UK court this week ruled that Uber is in fact an employer - a decision which Uber is determined to appeal against, and clearly isn't happy with, given the ramifications of such a decision. At the minute, Uber is not globally recognised as having employees, but rather as having self-employed contractors - the difference of course being Uber's responsibilities and the workers' rights under Employment Law (as noted here in the FT).

The important part of this decision is that UK Employment Law allows a middle ground between the disputed terms, having ruled that the Uber drivers are 'workers' rather than employees or contractors. This seems like a fairly good model, straddling the line between the drivers' protections and freedoms, giving them some benefits but not limiting the flexibility which attracted so many to the role. The big question is will the ruling stand, and if so, will countries around the world follow the UK example? And if the ruling does stand, will this negatively impact on users?

Marmite divides opinions once again...

Now that Theresa May has given a definite date for triggering Article 50, the pound has once again dropped in value. While this doesn't necessarily affect many of us immediately (unless you're planning on going on holiday soon), the news that Tesco is currently in dispute with Unilever over proposals to raise prices is something we can all find relevant. Quite apart from the possibility of Marmite becoming hard to get hold of (I'm definitely on the love it side of the debate), there are other staples such as Ben&Jerry's and, for you students, Pot Noodles at risk.

As the FT asks, what does this mean for us as consumers? And is this a smart marketing strategy on Tesco's part? They certainly appear to be fighting for their customers (although no details have been released by either company). If it is indeed a calculated move to garner positive public opinion, then hats off to them - anyone who fights for my Marmite has my vote!

How to fix culture clashes in global teams

Alicia Clegg looks at examples in which the challenges to effective cross-cultural communication were identified.

Has Twitter lost its wings?

Twitter has been struggling for some time now to adequately define itself in the social media sphere and set itself up as a real contender for market share. There doesn't appear to be a concerted marketing strategy which has led to a stagnation in user numbers and confusion over its usage, which means that Twitter is struggling to clearly define its market share. Can it compete with successful rivals such as Facebook and Snapchat, or as The Economist argues, has it let its chance fly by?

Multinational businesses grow faster than emerging national economies

In a recent survey of the top 200 economic entities, many of the smaller emerging economies have been replaced by corporations. The slowdown of the Chinese economy has reduced the growth of many nations from Africa, Asia and South America, while large corporations continue to grow rapidly. The survey compiled Global Justice Now an anti-poverty charity reports that the 10 biggest corporations – including Walmart, Apple and Shell – make more money than most countries in the world combined.

Entrepreneurship in the USA

Recent figures published by the Kauffman Foundation indicate a continuing decline in new business formation in the USA. There is also a pattern of regional disparity, with just 20 counties generating half of net new businesses between 2010 and 2014. Several explanations have been suggested including high levels of personal debt, increasing regulation and difficulty of accessing venture capital.

Facebook bot platform to transform entire industries

Facebook wants businesses to adopt bots to communicate with their customers on its Messenger service, in the hope that opening up its artificial intelligence tools to companies will transform industries. By deploying bots within Facebook Messenger, people will be able to communicate with companies without having to remember extra usernames and passwords, and with the context of their previous interactions recalled by the software. Industries such as news and music have already been disrupted by social media, which has in many cases disintermediated their relationship with customers. If the new bots are successful, more industries including retail and online travel, could find themselves increasingly dependent on Facebook Messenger.

Emotional and creative skills may be more robot-proof in the next wave of automation.

Oxford university’s Carl Benedikt Frey and Michael Osborne say almost half of the jobs in the US are at high risk from computerisation in the next two decades, together with two-thirds of those in India and three-quarters in China. The new phrase is “EQ”, which stands for emotional quotient (or emotional intelligence). “The high-skill, high-pay jobs of the future may involve skills better measured by EQs than IQs

Decline in global trade may be a long term structural trend

Until 2007 international trade had been growing at twice the rate of global GDP. Falling traffic had been explained as a consequence the financial crash and then the slowing of growth in the Chinese economy. Now some experts perceive a permanent shift in the fundamentals driving globalization Economists at the McKinsey Global Institute see increased automation and the uptake of 3D printing as factors that may be reducing demand for international trade in physical goods.

Threats to Samsung and Apple in China market from domestic competitors

Charles Arthur reports on the market for smartphones in China. For the iPhone China has recently been the market with the most potential for growth, accounting for one third of global smartphone sales. However the rapid market expansion of Chinese firms including Huawei, Xiaomi, Vivo and Oppo have already pushed Samsung out of the top 5. Samsung was more vulnerable to competition on price from handsets using Android software. Apple with its iOS software and distribution through China Mobile has so far maintained its premium pricing. However with declining growth in China, the demand for prestigious high cost Apple products may also suffer due to the reduced spending power of luxury end consumers in China.

My Final Ever Blog Post

After two wonderful years at Middlesex I am moving on to new pastures. I hope the readers of this blog and the students i have met and taught have enjoyed the experience as much as I have. And best of luck to my successor and whoever takes over the blog.

Some final new round-ups. The US Box Office has seen film going records shattered and certain to be helped by the boost of Star Wars. This video focusing on stressors for the emergent markets in light of low oil prices and a possibly raise in the Federal Reserve rate. In contrast, this video looks at the reaction of Business to the climate change deal agreed in Paris. Chicago Booth business school is collaborating with Ballet dancers and finally a piece from Forbes on what Entrepreneurs should do during the holiday season. FInally, Merry Christmas, thank you and best wishes for all your futures.

Nearly made the end of term!

I am sure you are all feeling the pressure and looking forward to the end of term and on that note I have included some fun reading recommendations towards the end of this blog post. First up a piece on the Climate Change meeting in Paris, please do explore the Financial Times very good coverage of this hugely important summit. Relatedly, here is yet another piece looking at the on-going emissions and corruption scandal at Volkswagen which continues to run and run. Is Yahoo Marissa Meyer's 'difficult second album'cir and is this problem common across the sector? Now two interesting videos, one of the history of Bitcoin and one on the growing challenges faced by the Banks.

On a more light note, this is an interesting piece from The Harvard Business Review on what kind of thinker are you and why that might be as useful to know as your personality type. Some Christmas reading recommendations from Bloomberg and finally the Financial Times weekly quiz. Have a good weekend!

Lower Banking Tax, Digital Disruption and Falls in UK Prices.

Excluding the impact of levies the Banks have paid the lowest proportion of tax this year since 2008. Worldpay are aiming to fill a gap left by high street banks in providing loans to small business. This is a fascinating piece about investing in technology companies and when and when people lose money. There has been a record fall in UK shop prices and this video explores that fact and finally a piece looking at digital disruption and the online estates agent Purple Bricks.

News Quiz, Google. VW and UK Autumn Statement

This is a really interesting piece of analysis looking at how Google is trying to change the function of apps. Here is a comprehensive and in-depth look at the UK Autumn Budget statement which is very worth examining in detail. This looks at Amazon's ads for the nazi-themed Man in the High Castle and how innovative marketing can seriously backfire. Finally Volkswagen's trouble deepen as the admit to using a second illegal device and face a probe into tax evasion.

Fancy the FT weekly news quiz just for fun?

The Business Show Olympia 3rd & 4th December

City Business Library will be exhibiting at the Business Show at Olympia, London, on 3rd & 4th December. 

Tickets are officially running low with the organisers confirming there are are now less than 1,000 remaining! This is an unbelievable opportunity to network with thousands of other businesses and access hundreds of seminars, exhibitors and masterclasses that are all there to help you grow your business. Don't forget it's completely free to attend so make sure you get yourself to Olympia, London on 3rd & 4th December.

Register here. 

It's hard to write a round up this week with so much news focusing on atrocities in Lebanon, Turkey, Nigeria, France and now Mali. But I do have some interesting pieces on other topics for those of you who want to read other news. Firstly bad news for the London property market as Asian and Russian buyers lose interest. Could this be the beginning of the end with the property boom? This analysis of Royal Mail as a private company is rather interesting and worth a watch. Amazon has launched a platform to tap into the UK start up sector and help people market their products. This fascinating if depressing article looks at a new study suggesting that the gender pay gap actually widens as women are promoted. The UK will phase out coal power, how will this affect the energy market and the UK as a whole?Finally the biggest diamond in more than a century has been found in Botswana,