The Times 100 Business Case Study News

PEST analysis

Gordon Wilson - gordon@mb-a.biz — Tue, 07 Jul 2009 00:00:00 GMT

Organisations carry out a PEST analysis to assess the external factors that can have an influence on their internal operations. This is particularly prevalent for organisations such as the Legal Services Commission, which gives legal aid to people with work or social related issues. Without the government providing funds for this aid, the Commission would not exist. Other external factors such as a change in laws or the economy can also affect how it carries out its work.

The LSC chooses to analyse its external environment as part of its overall plan. External factors affect people in all types of situations. It can be difficult to imagine that a will could be subject to external influences even though it sets out your personal wishes. Nevertheless, following the recent death of Michael Jackson, his will is causing a conflict of interest. Jackson chose two non-family members to manage his wishes for his estate and the guardianship of his children. However, lawyers of the Jackson family have already applied for control of his estate. Contesting the will could mean the matter is settled in the superior court. (The Times, 2nd July 2009)

Some external factors can have more of an impact than others at any one time whether it is business or personal. The key message is to balance the factors and assess the level of risks from each of the PEST areas.

Working options

Gordon Wilson - gordon@mb-a.biz — Tue, 30 Jun 2009 00:00:00 GMT

Jamie Oliver is well-known as a chef through a variety of TV programmes including, 'The Naked Chef' and 'Jamie's Italy'. He is also a best-selling author and entrepreneur, having set up a chain of restaurants which give disadvantaged young people the opportunity to train and build a career within the catering industry. Jamie's other achievements include being national campaigner for a host of food and farming related issues such as 'Jamie saves our bacon' calling for the better treatment of pigs, as well as teaching people to cook. Jamie Oliver is a one-man multimedia industry and a brand. (The Times 29/06/2009)

A varied and high-profile career can come at a price. Being involved in so much does mean sacrifices on personal time. As individuals, it is important to assess our work-life balance. Some businesses such as Lloyds TSB and the Audit Commission have adopted approaches to flexible working to achieve this.

Lloyds TSB carried out research with employees to find out about their commitments and leisure activities to enable the business to devise a plan of working options. The aim of this was to create flexible working patterns for its employees to fit with their personal needs and those of the business. This in turn helps to reduce absenteeism as employees are able to balance their family commitments. Alternative working patterns motivate staff giving them a sense of belonging and reducing staff turnover. The business benefits because it has a contented workforce who want to work for and stay with the business.

In contrast the Audit Commission created flexible working patterns due to its changing employment needs. As an independent body it inspects and audits a number of public sector services which can generate varying amounts of work. It offers different patterns of employment such as permanent, contract and fixed term posts and the option of homeworking. These provide flexible solutions to both business needs and those of its employees.

Standards and innovation

Gordon Wilson - gordon@mb-a.biz — Tue, 23 Jun 2009 00:00:00 GMT

Standards are vital to any area of work - industrial, scientific and commercial to ensure the product or service is recognised by the user / purchaser as meeting the relevant requirements.

If you are creative and have the means to develop an idea, it can be beneficial to involve organisations such as the British Standards. This organisation publishes guidelines on safety and efficient practices when developing a product which provide a framework for the development of new products. This has a two-way benefit for both the consumer and the innovator. For the consumer it gives confidence that the products they are buying are safe and reliable. For the innovator it means that what they are developing will meet the need of consumers.

Developers who follow guidelines for best practice can build a good reputation for their products. Professor Jo Bradwell, who specialises in medicine at Birmingham University set up his own business to develop tests and equipment for various medical problems. The products have gained such interest that Professor Bradwell is close to selling one part of the business to a European rival. It is expected that some of the money from the sale will be re-invested into the business. Other divisions of the business have also attracted the interest from other rivals and trade investors. (The Times 21/06/2009)

Managing the business objectives

Gordon Wilson - gordon@mb-a.biz — Tue, 16 Jun 2009 00:00:00 GMT

Leadership is vital for giving a business direction. Managers need to present clear messages to their staff about what the business wants to achieve. They are also responsible for making decisions and motivating staff which in turn helps an organisation reach its overall goals. Enterprise Rent-A-Car is an international car rental company which aims to provide the same high levels of service for its customers across its global outlets. It achieves this through using a variety of management styles to both empower its employees whilst underpinning the business objectives.

However, large organisations do not always manage their aims and messages well. The recent announcement from the FIA (the body that administers Formula One) to cap the budgets of the F1 teams has caused outrage amongst some of the teams. The aim of a capped budget was to encourage more teams to take part in the sport but the current teams argue that it would create a two-tier championship - those who agree to the budget cap and those who choose to exceed the limit. The FIA and leaders of the F1 teams are to meet in an attempt to resolve the issues. The F1 teams have suggested a set of rules as a way of managing the situation to achieve both the FIA's idea and satisfy the teams. (The Sunday Times, 14th June 2009)

If messages are to be accepted and adopted by those involved in a business or sports team, they need to be presented clearly and in the right way. John Howett, who runs the Toyota team, said: 'All our problems stem from one problem: there isn't a balanced and correct governance system in place.'

Promoting growth

Gordon Wilson - gordon@mb-a.biz — Mon, 08 Jun 2009 00:00:00 GMT

Businesses have different options to expand and grow their operations depending on their business objectives. A new business may need to borrow money from a bank in order to get started whereas a well-established business such as the Davis Service Group may generate funds from profits to buy-out another business. The Davis Service Group had several businesses in different sectors but was working in a mature market in the UK. Therefore, in order to grow, it concentrated its efforts in one sector of the business - textile maintenance. It expanded the business and its market by organic growth with the acquisition of Berendsen (a company operating in the same sector in East Europe and Scandinavia).

Alternatively a company like Go-Ahead grew organically by investing its profits back into the business to meet customer needs, give value for money and provide a reliable service.

For those businesses wanting to grow their operations. but lacking the funds to do so, they may seek financial help from a bank. However, banks have recently reduced their lending due to the current economic situation. Sir Alan Sugar has recently been appointed by the Prime Minister to encourage the banks to start lending to small and medium-sized enterprises. If a business has the potential to grow but not the money it needs to kick-start the growth, it is in effect being held back.

Sir Alan Sugar and a team of bankers will be hosting roadshows across the country, Sir Alan said, 'I can't put pressure on them but I can offer practical advice. The panel will act as a buffer between the banks and businesses. We can say "if it was my money I would invest with this company but not that company". The banks need a bit of teaching too.'

The role of stakeholders

Gordon Wilson - gordon@mb-a.biz — Tue, 02 Jun 2009 00:00:00 GMT

Any public or private organisation has many different internal and external stakeholders. Amway is a global enterprise made up of privately owned businesses which operate under the Amway brand distributing a wide range of personal and home care products. The Amway Business Owners who run these private businesses are both internal stakeholders as employees and external stakeholders as customers.

This situation can be true of many other organisations including the football club Newcastle United. The current owner Mike Ashley, founder of Sports Direct, started out as a fan (or an external stakeholder - customer) and then bought the club in 2007 becoming a shareholder (internal stakeholder). (The Times 1st June 2009)

Ashley has wanted to sell the club for some time but no buy-out materialised. Since the appointment of Alan Shearer as Team Manager, the prospect of finding a new buyer for the club is more attractive to potential investors. Shearer shows commitment by effectively working for nothing, and may compromise his salary in order to put plans in place to secure the future of the club. These plans are now in the hands of the club bankers.

The relegation of the club and potential change of ownership means the club needs to assess and plan its future so that stakeholders work in harmony. The role of one stakeholder is clear according to fans and the team, 'Internally, there is no debate about Shearer's suitability to the task. There is only one man to get us back up and that is Alan Shearer.'