The Inside Job : Storyville

This documentary was about the global economic crisis of 2008. It begins by examining how Iceland was highly deregulated in 2000 and the privatization of its banks. When Lehman Brothers went bankrupt and AIG collapsed, Iceland and the rest of the world went into a global recession. 

I found it overwhelming how selfish and corrupt the banking and political organizations in the United States were back in 2008. Very respected and trustworthy members of Wall street took advantage of their situation as being influential in the economic market and scammed many Americans into billions of dollars so they could take the money for themselves and treat themselves to multi million pound yachts, jets houses etc. This had a huge multiplier effect on the economy and resulting into a worldwide recession. Unfortunately, this left countries in up to $20 trillion worth of debt which I believe is an absolute disgrace as the poorer countries could not handle there circumstances.

The blame of this crisis is put down to the deregulation of Iceland back in the early 2000's. Deregulation is the removal of regulations or restrictions, especially in a particular industry which in this case was were financial institution such as banks and geothermal energy companies. In my opinion Iceland did not need to apply deregulation as it was a stable democracy with a high standard of living. The government privatised Iceland's 3 largest banks and finance took over and 'wrecked' Iceland as they managed to borrow 120 Billion dollars that they spent on own personal gain. The financial institutions took advantage of this situation and started fixing things that would favour them.  This then caused corruption within the public causing protest and upset resulting in Iceland facing a downhill spiral. In my opinion I'm disappointed that Iceland could screw over there own people the way they did as banks are supposed to be trustworthy when holding your earnings but once the banks collapsed and went bust a lot of people lost there whole life savings.


Now I will explain how Wall Street were involved, The term Wall Street is used as a collective name for the financial and investment community, which includes stock exchanges and large banks, brokerages, securities and underwriting firms, and big businesses. This is how they can have such a large influence because they control so many different financial markets. This documentary showed me how selfish and addicted to money people can become. This was aligned with banks who were taking huge risks who evidently could not afford to take and this is why it ended in such a disaster. As a quick summary 4 of the largest banks in America and several insurance companies allied with each other to deregulate loan company allowing them to invest depositors money. They seen this as a gap in the market, they took advantage of public losses for there own personal gains.
The corruption started in 1981 by large companies such as Merrel Lynch. By the end of the 1980's hundreds of saving in loan company's had failed, people were sentenced to jail in these corporations but also some were adopted by presidency and are still there today, so it's very clear to me where the problem lies... and it makes me feel as if the problem has not been solved. It shows these big leaders such as CEO's of big corporations and even political figures care more about themselves. When it all goes down hill it doesn't cross my mind for two seconds that they care about the peoples money they risk!

They're were many documents and statements made by very reliable sources throughout the years that were dismissed and not even got a second look at which were all warning signs of the corruption that was happening. For example in 2005 the chief economist of IMF wrote how firms are not acting as normal and taking far too much risk which will highly result in them destroying there companies. Also the FBI were highly alerted about fraud in mortgage companies, reported in inflated appraisal. They argued they looked into these cases but people thought this was nonsense and I can only but feel they were brainwashed and turning a blind eye to these cases.

The reality of this is, the people who suffered the most were genuine members of society who lost life earnings when they couldn't even protect themselves from the horror these greedy so called 'leaders' and 'traders' put them in, by outright scamming them for own personal gain by taking they're money and risking it all on the very slight chance it would return. I have gathered there is too much political power in America over ruling the public.

Blog 4 - McDonald’s third-quarter sales top expectations

All-day breakfast and healthier food options boost burger chain’s US performance. McDonald’s is the world’s largest restaurant chain with more than 34,000 restaurants worldwide and employing 1.8million people, so any change on its menu will have an effect worldwide.
This year, McDonalds have decided to introduce an 'All day breakfast' to there menu. I am a massive fan of breakfast food such as sausage, bacon and egg but I'm never usually hungry in the mornings, I wouldn't be able to eat a full meal. Now its 'all day' makes it a lot more flexible for me as I can eat it around my time and when I'm hungry rather than before 10:30 like McDonalds used to offer. It helps the customer enjoy the experience and there's no restrictions on what they can order as McDonalds priority is too please the customer at all times. Chief executive Steve Easterbrook said "Customers today are more informed and demand greater choice and variety when they dine out. That’s why we’re evolving the McDonald’s experience to provide more high quality, affordable food and beverage options and convenient solutions for customers on the go”. By McDonalds thinking in this way it allows them to explore more options and build there menu to it's full potential.

I would class myself as a healthy person and will always try and eat my 5 fruit and vegetables per day. The problem when making meals is they can take quite a lot of time to make which is a struggle to fit into my busy schedule. I'm very conscious about what I eat so I tend to stay away from fast food restaurants but, McDonalds state they "removed artificial preservatives from a number of menu items to win back consumers looking for less processed, healthier food." I'm very happy about this as I can pick up a healthy meal within 5 minutes saving me more time in my day and without the stress of cooking it myself. I believe McDonalds have done this to target customers such as myself who need a quick, cheap meal that's healthy at any time of the day, this will attract more customers and engage with a wider audience.
A suggestion I could make to their menu is introducing healthier meals rather than removing artificial preservatives, this would help attract more customers and not promote McDonalds as just a fast food restaurant. 

Here is a graph to show the evidence of the growth in sales since McDonalds introduced the all day breakfast and healthier options to their menu. I believe the reason there sales risen was because it targets a wider audience, especially with the healthier foods for vegetarians, people on diets or people who fancy a healthy snack. In the future to help McDonalds maximise their profits they should start introducing more recipes to there menus, I have a family member who is celiac and there is not many options on the menu for him as he can only eat gluten free food and the majority of there food comes in bread or containing some sort of wheat. An estimated 1 in 133 Americans are celiac which is about 1% of the population, this could open doors to a lot of potential customers and that I believe something McDonalds should consider.

Business Nightmares with Evan Davis

In this weeks blog I had to watch a documentary covered by Evan Davis who uncovers the inside stories of mistakes that triggered some of the business world’s most spectacular falls and impacts. It shows plans and ideas that seemed good at the time for these business's turn into catastrophes for their company and either failed on a permanent basis or just for a period of time. In this blog I will address the problems made by these businesses and discuss where they went wrong with their decisions and strategy.

Firstly, the second largest sweet (candy) and chocolate company in the world - Cadbury, who employ 70,000 people in 50 countries, made a huge mistake which massively backfired when they decided to set up a scheme to make children fit and healthy. They introduced sport coupons with every chocolate bar meaning schools could buy sporting equipment and provide training sessions for the children to keep active and in sport helping reduce obesity rates. But they in fact persuaded them to eat more sweets and chocolate and with problems such as the current obesity rates this did not sit well with the general public. Consumers are much more likely to buy your product and engage if your business has a positive reputation which mean for Cadbury a loss and decline in sales.
Its extremely difficult for Cadbury to promote their products in a healthy way as they specialise in products with high content of sugar and fat. I believe a way of overcoming this is too advise their customers on the intake of sugar and fat and advise how much you should eat per week for example, as customer will hopefully stick to these guidelines and obesity will be reduced.
It was clear to customers that Cadburys were doing this scheme to benefit themselves and not the customer, which lead to harsh criticism and bad reports. This resulted in customers not being fooled into buying more chocolate juts to be given sporting equipment. This promotion ended the following winter and the 'get active' promotion was no longer. A benefit to take from this situation for the future in terms of Cadbury's is too think will this actually benefit the customer because if it doesn't we will be hugely effected by harsh criticism from customers which will be blown out of proportion by the media massively effecting the credibility of our company as a whole.
My personal opinion on this situation is that Cadburys did not expect such bad publicity and were naïve to think they could pull the wool over their customers eyes. This is a simple business mistake of making a decision and not expect the decision to go as planned and think about the 'What if's?'

Another case in this documentary was the company 'boo.com', they were a European company founded in 1998 and operating out of a London head office, which was founded by three Swedish entrepreneurs, Ernst Malmsten, Kajsa Leander and Patrik Hedelin. Within 18 month Boo.com went from concept to catastrophe, going through nearly £100 million worth of investment. The company's vision was for it to become the worlds first online global sports retail site.
Their proposal to investors was too become the largest working retail site once their website was uploaded within 6 months and investors could cash in there shares on the stock exchange market once they became a PLC. They waned to offer brand new features never seen before such as spinning images with new on the market technology. They didn't secure a private contract to offer all these amazing features such as changing and offering different currency for different countries as this had never been done before, so they decided to do it themselves. They had evaluations of projection between $300-$400 million without one customer visiting their site yet.
As pressure mounted they were rushed into launching there site still with not being 100% ready and was instantly recognised as a company who weren't ready. The list of fixes to complete were increasing. Unfortunately the stock market collapsed 8 months on and the company had to go into liquation.
From this I realise it makes a lot more sense for entrepreneurs and start up business to make plenty small steps to give you time and organise how you will fund your next step, this helps minimize risk instead of taking one massive launch and being to far deep into a list of problems. I believe if Boo.com were to spend longer on getting investors and making sure everything is right before launching there website they could still be here today as they tried to do to much at once and did not have a stable enough business plan.
The end of boo.com came on May 18th 2000, when investor funds could not be raised to meet the spiralling marketing, technology and wage bills.

Blog 2 - Amazon takes on Apple, Spotify with streaming music service

Amazon.com is well known for it's Kindle, light fasting shipping and selling virtually anything online, but now they are entering a new and growing market of streaming music. They are willing to go head-to-head with the likes of Apple and Spotify with a music streaming service, as studies show customers are increasingly abandoning digital downloads in favour of streaming music due to the better quality of music and cheaper way of accessing songs. I feel Amazon are the perfect company to get involved in this market as they're already established worldwide with around 244 million current customers meaning they can target their own customers straight away saving on marketing and advertisement costs by simply sending out an email informing each customer on the new service at the cost of nothing.
They have got the start-up capital and experts to create such a feature to make it really professional and to compete massively with the current streaming services such as Spotify and Apple.


A good thing about Amazon releasing this feature is that it adds more competition to the market, the advantages of a competitive market for me as the consumer is that businesses will constantly price cut each other trying to make their service the cheapest, along with constant quality improvement and more variety of songs as this will all try to help attract more customers such as myself. As a student myself who is very interested in music with a wide variety of taste it's important for me that I can access all these songs at a cheap price and with the introduction of Amazon music I believe it will help me achieve this.
U.S. streaming revenue grew 57 percent to $1.6 billion in the first half of 2016 so it makes sense that Amazon want to be involved in this market as it's a growing market already making astounding amounts of revenue with arguably only two main competitors; Spotify and Apple.

Launched in 2007, Amazon Prime is an annual membership programme which offers users unlimited access to a bank of movies, films, music and e-books, for a fixed monthly fee with around 63 million members. Amazon music "plans to undercut major rivals by offering members of its “Prime” service in the US a subscription for $79 a year or $7.99 a month, below the $9.99 per month charged by many of its competitors, including Spotify, Apple, Tidal and Google Play." Customers who aren't subscribed to Prime will pay $9.99 which is similar to it's competition. This is a great marketing technique of trying to encourage customers to subscribe to Amazon prime as it offers cheaper services and in the long run will help customers save money while generating huge profits for the company. Amazon chief executive Jeff Bezos said the new service, known as Amazon Music Unlimited, “brings real value to the millions of people who are already Prime members", and will also encourage them to subscribe to this streaming service rather than their current one as they're already paying for Prime allowing them to have the access to cheaper music.
I feel like Amazon are really taking advantage of the use of prime and benefiting they're regular and loyal customers by offering them this deal, it benefits both the customer and the business as the customer gets cheaper music and Amazon will generate high profits. My thoughts are that in the future they will expand this feature and offer more variety on packages and savings on money which will attract a lot more customers and I believe they will take over the streaming market ahead of Spotify and Apple in the next 5 to 10 years.

Why nobody downloads anymore? As a student myself I find streaming a lot cheaper, its more accessible and there's more variety in music. So there is no reason for me to download when streaming offers all these great qualities

As a conclusion to this I feel Amazon will fit right in this market and offer a whole new diversity to the industry and improve quality of not only there application but their competitors too and help customers maintain quality music at a cheap price. In terms of what else could Amazon music introduce in the future? I believe they could offer a music video feature where customers can see a matching music video to the song. They could provide a DJ feature which allows you to mix in your own songs and remix originals to help you get the effect like your an actual Dj. These are all features that could be introduced to help them be put one step ahead of competition and attract more customers.

Here is a SWOT analysis on Amazon music to help me evaluate the situation:
STRENGTHS
- They can use they're already established brand to promote this new feature
- If it became a success they could make a lot of marginal profit
WEAKNESSES
- They lack a Unique Selling Point
OPPORTUNITIES
- The music industry is growing rapidly
- Streaming is a lot more effective than buying and downloading music
THREATS
- There is a lot competition already who are very successful
- Artists may complain as their album sales fall again

As a conclusion to this I believe Amazon should go ahead with this new feature as I have summarized more positive than negative points.

Tesco: Register Change and Brexit Leave

Due to the recent vote made by millions across the country which resulted in the UK leaving the EU; it has had a massive impact on the economy and the price of sterling, this has had a multiplier effect on every big organisation including the worlds largest supermarket Tesco. Tesco has 6,902 shops worldwide and transacts around 78 million shopping trips per week so it's clear that any effect on their business will affect a lot of people worldwide and especially in the UK.
This article states "the consequent higher prices are expected to damp shoppers’ spirits.", this will effect the relationship between the business and customers and will most likely result in Tesco loosing sales and declining their profits which are currently high at "£994m group operating profit before exceptional items"; as customers will simply not want to pay these prices when their is so much competition out their offering better deals.

As a student I have to budget my money to be able to live and will always go for the cheapest option, I do regularly shop at Tesco but now I may have to go elsewhere if Tesco have to increase their prices to help maintain their profits as I simply wont be able to afford it. This has had a big impact on me as I will now have to travel a further distance to do my shopping with the budget I allow myself or if I want to carry on shopping at Tesco's reduce the amount of 'Tesco Finest' items I buy which is their better quality food, and stick to their own basics brand 'Tesco Value'.

As an economical factor, the result in Brexit will have effected the costs of Tesco. The UK was a free market throughout the EU to import and transfer goods so this will be why their prices are increasing as they will still need to maintain the current profits they're making with now more costs to pay so the only way to do this is increase prices to raise more capital.

As a conclusion I believe Tesco will lose customers and their sales will decline as people simply wont  pay these higher prices if they can go to Tesco's competitors and get products cheaper such as the supermarket of the year Lidl. Unfortunately the Brexit decision to leave the EU has had a multiplier effect which has turned negative for Tesco.

I have attached a fishbone diagram to this blog (Next Page) as it helped me explain in more detail the cause and effect that Brexit has impacted on Tesco. I learnt this in a recent lecture and found it was a great way to explore ideas so I applied this model to this case.