Latest results show superb performance of JLR (bullet point 4)

29 May 2012: Jaguar Land Rover, the Indian-owned car manufacturer, has reported a 34% rise in profits after sales hit a record high. In 2011-2012 the group made pre-tax profits of £1.5bn, up from £1.12bn the year before. The figures were booted by sales in China which jumped 76%.

The BBC report is below:

http://www.bbc.co.uk/news/business-18256728

Eating the Elephant

I have recently looked back on an article I had published in the Business Review last year on the research topic to see if there is anything that can help you with your revision. The article was called "Eating the Elephant". I have tweaked parts of the article to make it relevant to this year's research topic.

In your revision remember the importance of wow examples :- examples with real depth that would make the examiner go “wow, this student has really done some great research!” Rather than having dozens of examples against each bullet point look for a few really meaty examples against each bullet point (“wow examples”) which linked in with some business studies theory. The inclusion of appropriate counter examples can be especially helpful, particularly if you can explain the difference between the counter-example and the main example. For instance, if discussing a takeover where due diligence was lacking (e.g. RBS/ABN Amro) it could be good to contrast it with an example where a lot of ground work was done before the merger to help it go smoothly (e.g. in the BA / Iberia merger Willie Walsh has claimed that work done prior to the merger in helping to resolve cultural differences was fundamental to the merger's success)

Business Studies theory

You now know a considerable amount of business studies theory and it is essential you don’t lose sight of that. BUSS4 is supposed to be “synoptic” i.e. it brings together the content of the other three units. Consequently, rather than treating the research topic as an entirely separate exercise, try to link the theory into your research whenever you can. For example, if talking about the motives for Tata's takeover of JLR in 2008 why not bring in the fact Tata is a conglomerate business which, almost by definition,  has a strategy of diversification (Ansoff matrix: new products, new markets)

And finally ………….

 In BUSS1, 2 and 3 you have been taught business studies and have done well to survive the course up to this point. Your challenge in BUSS4, particularly in the research task, is to show the examiner that you “live and breathe” business studies. In other words, you need to convince the examiner that you have absorbed the theory and are able to come up with commercially-savvy answers of your own which you can illustrate with a handful of carefully chosen, detailed, real world examples. It may sound like a tall order at this stage; but with a measure of determination and organisation, students can surprise themselves with how well they can perform on the research topic.

Kraft: experience in the cholcolate industry

Something that surprising cropped up in your latest timed essays made me think I ought to make it clear to you all that Kraft had plenty of experience in the chocolate industry before their takeover of Cadbury. Some of the brands in their vast portfolio included Milka, Tobelerone and Terry's.

You can get a feel for the size of the Kraft brands versus the Cadbury brands prior to the takeover by following the link below:


http://www.guardian.co.uk/news/datablog/2010/jan/05/cadbury-kraft-brands-takeover-chocolate-data

Tata: master of the gentle approach

Some cracking quotes in this businessweek.com article on Tata’s approach to takeover & mergers – a very strong contrast to the Kraft approach which we heard from the presentation at RGS. Just a few of the quotes which appealed to me were:

"Tata: master of the gentle approach"

"The Indian giant has found a way to acquire companies across the globe—and still tread lightly"

"More strategic partner than vulture capitalist"

"In all its deals, Tata has been careful to signal its respect for workers"

"It chooses its targets carefully" (due diligence)

"Tata is unusual in that it hasn't laid off any workers or shuttered any facilities following its overseas acquisitions (though it has had layoffs at home in the past decade)"

"Tata buys companies overseas not to reduce costs but to improve [its own] capabilities"

"With its overseas acquisitions, Tata typically leaves executives in place……. allows Tata to stay focused on bigger strategic issues"

You can read the full article here:

http://www.businessweek.com/magazine/content/08_08/b4072064372042.htm

An Anglo-Indian success story

The last major case study we are going to consider is the Tata takeover of Jaguar Land Rover in 2008. Compared with some of the other mergers and takeovers we have studied this is a “good news” story. It is a great example to know really well as it can be applied to so many of the bullet points. You can read some useful reports from the Daily Telegraph by clicking on the links below:

Jaguar Land Rover to create 1,000 jobs

10 Nov 2011

Jaguar Land Rover boosted by Chinese demand

14 Nov 2011

8,000 apply for 1,000 new Jaguar jobs within seven days

17 Nov 2011

JLR to create 1,500 jobs in Merseyside

03 Jan 2012

A bit of personal research here. I had an appointment at the local Halifax branch in Tewkesbury High Street last week and asked the financial advisor what had been the biggest change for him following the merger (bullet point 5 - impact and reaction of stakeholders….). He said the biggest change had been to their computer based administrative systems. He explained that these had not been phased in but had been introduced in a “big bang” on 12 September 2011. He explained how lots of Lloyds’ staff had come over to the Halifax branches at that time to help Halifax staff with any difficulties. All Halifax staff were given workbooks and computer based training and had two days off the job training – a hugely impressive investment in staff training to make it work. Without doubt the transfer of 38 million customers onto a single administrative platform (and the way Lloyds Banking Group got the Halifax staff engaged with this process) is an impressive example of managing change. One you could use for quite a few of the bullet points (e.g. bullet point 2 – the problems of M&T, bullet point 3 - the factors influencing the success of M&T etc.)

Claudia's wow paragraph

Apologies for putting Claudia in the spotlight, but I asked her to type up this wow paragraph from her essay on bullet point 3:-

"One of the major factors which can seriously influence the success of mergers and takeovers is due diligence. If due diligence is not done thoroughly, the prospect of a merger or takeover may not be as positive as the bidding company thinks. For example, when RBS acquired ABN AMRO, they did not carry out satisfactory due diligence. They did not realise how many sub prime related investments were associated with ABN AMRO, and these investments went bad after the takeover had gone through, causing terrible consequences for RBS. Eventually, £1.5 billion had to be written off. If thorough due diligence had taken place before RBS made their offer, RBS could have walked away from the deal and the situation could have been avoided".


C Pallett, 2012