IB Business Management

I'm putting this here; it could easily be in the Microeconomic section of the board - however, it's an interesting piece from a marketing point of view.

Are loyalty discounts a good deal for consumers? Certainly pricing is an important part of the marketing mix but the Competition and Markets Authority are investigating the practice among concerns that it's not always in consumers' interests. 

It seems that two of the UK's leading supermarkets are on the point of leaving the banking sector, with Sainsbury's announcing that they are planning to wind down their involvement in the sector and Tesco reputedly considering the same. 

This represents a decision to focus on their 'core business' and reduces their revenue streams. However, it also highlights the facts that in an environment with higher interest rates, it's harder for smaller banks to operate profitably. 

Is this a sign of the future of retail, and an insight into the long game being played by Amazon in the sector. In this case, there are reports that up-market grocery retailer, Waitrose, is thinking of partnering with Amazon to sell its groceries online, joining Iceland, Co-op and Morrisons in having third-party deals with the online retailer. 

Waitrose are currently losing market share to discounters, Aldi and Lidl and this looks like a desperate attempt to lure back some of its customers. 

This could easily be a Microeconomic 'scoop', focusing on the role of profit and how we might define supernormal profit, however, I've put it here because Nils Pratley's analysis goes beyond this in looking at a key Business Management concept - Return on Capital Employed (ROCE) that proves a good guide to the extent to which the big supermarkets are profiteering. 

He seems to prove that by historic standards, the supermarkets are making about 3% profit, and whilst he doesn't deny that there appear to be parts of the market - notably milk - where something's awry. Profit margins and the Return on Capital Employed suggest that it might be branded food manufacturers, rather than retailers who are profiteering. 

I leave this here - a number of my Business Management set have written internal assessment pieces about the supermarket sector, and we've had a look at the performance of Morrisons in the wake of its takeover. 

I'm not going to go into too much detail my summary of the article, for fear of spoiling it - however, if you read it, are you thinking that this is a  successful business or one whose position is becoming increasingly precarious. 

A lovely example of the importance of marketing in getting a product flying off the shelf, the apparent rise in popularity of tinned fish can be attributed to many things, not least skilful marketing strategies - and you might use the 4Ps to analyse this as well as thinking about how social media has amplified this trend. 

However, I would also add that there are other factors in play - the changing macroeconomic environment and, perhaps, the fact that more 'exotic' forms of tinned fish have been a discount store - i.e. Lidl and Aldi - staple and their popularity might have been picked up on by more upmarket retailers. 

This could easily be on the Microeconomic section of my board, and look at the links to the theory of the firm. However, I've put it here because it also has obvious implications for the organisation from this perspective too.

There are many that have suggested that since its sale to a US-based private equity firm, Morrisons has lost its way, and this is an attempt to right the ship. However, in becoming more market-oriented, and asking for consumer opinions, does it risk further muddying the message and straying even further from its mission statement? Or might speaking to the ordinary consumer help ground the business in the traditional values that it always used to espouse. 

I hadn't spotted this before - however, the Wall Street Journal has looked at the rise of Aldi in the US, highlighting the ways that the German discounter has become the fastest growing chain.

You should hopefully be aware of its strengths: a narrow product range, a real focus on reducing costs and offering value for money, particularly Aldi's ability to leverage private label brands.  The flipside of this is that Aldi's reputation for cleanliness isn't on a par with other stores. 

French supermarket chain Carrefour has adopted an upfront policy of highlighting products which have experienced shrinkflation. Shrinkflation, of course, describes a situation where products are smaller than they used to be but still the same price. 

You might be surprised by this - but it could be a marketing boon; it might suggest that the store is both reluctant to do this, and honest with its customers.   

An insight into an form of marketing, in this history of supermarket discounts, and customer loyalty, starting with Green Shield stamps and ending with the current strategy of offering loyal customers discounts on their shopping. 

However, the supermarkets are canny - in offering these discounts they are better able to track the shopping habits of their customers. 

Just the very best sort of article for Business Management students, with the Guardian looking at the fate of Morrisons since it was taken over by the giant US private equity firm Clayton, Dubilier & Rice (CD&R) for £7bn.

It looks at a range of issues: the marketing mix, brand perception, the way in which the deal was originally financed and the implications of all of this for Morrison's performance, perhaps most obviously in relation to its declining market share.

Or course, the counter-factual is that the company could have gone in this direction irrespective of its new owners, but it's a fascinating look at how organisational cultures can collide. 

I've put this here, rather than on my Microeconomic board in the hope that some of my Business Management students might want to read it. It's a lovely example of how firms in the supermarket sector are looking for new ways to compete, although I wonder whether the ill-fated rollout of Tesco's Jacks brand might also apply in this instance.

Is Asda likely to be successful in the convenience store market, or will it, as Tesco's attempt did, result in damage to its brand image.