Monday, 19 October 2015

What would higher interest rates mean for you?

Last week there was another round of suggestions that the Bank of England might raise interest rates sooner than expected. Following up from our previous story about China, we thought we would take a look at what a rate rise would mean for British businesses, and offer some recommendations to help your business prepare.



The BoE policymakers are confident that the UK can weather the storm that has engulfed China, and had knock-on effects in Brazil, Russia and the US. Beyond that, they believe that problems in the Eurozone won't affect the UK as badly - especially if Britain leaves the EU. This means that now may be the time to focus on your domestic market. Your business will be safe from turmoil abroad if you're able to find customers locally.


Beyond that, higher interest rates may mean consumers will be more likely to save their money. Now, this is great if you're a bank or a pensions company, but a problem if you're a retailer. You'll need great offers to entice customers out, and if that allows you to steal a march on the competition, that's all the better.

Finally, it may help you in the long run to save more of your company's own money. Because rates are only likely to rise when the economy has fully recovered and the BoE don't think it's at risk, your day-to-day operations may be able to continue as normal with you saving a higher proportion of your income than you are right now.

Thursday, 15 October 2015

Argos's challenge to Amazon

Argos has recently announced that it's going to offer same-day delivery on 20,000 of its products in a new service called Fast Track. This move seems designed to combat Amazon Prime's same-day service.

The two companies have long been rivals since Amazon's swish online store replaced Argos's bulky catalogues and complicated collection service in the hearts of many customers.

Fast Track looks like a great deal. Prices at Argos are broadly similar to Amazon, especially for cheaper items. And the delivery cost is only £3.95 (compared to £6.99 for Amazon Prime - plus another £79/year in Amazon Prime fees). What's more, Argos's service is countrywide, whereas Amazon Prime Now is restricted to parts of London.

James W Copeland / Shutterstock.com
Arguably, Argos's Fast Track is more useful. London is extremely well catered for shop-wise, so if you really need a new TV of a certain type, you can find one at a sensible price if you're willing to trek up and down Tottenham Court Road for a while. But if you live in the highlands of Scotland? Forget about it!

However, with Amazon Prime, you get access to Prime Video (formerly LoveFilm) - an online video streaming service with a similar range of titles to Netflix. Like Netflix, they've even started to branch out and make their own shows.

Here's what our consultant, Artur Oganov, said: 'On paper, at least, it looks like Argos are way ahead. All that remains to be seen is if they can deliver (no pun intended) on their service in remote areas.'



Tuesday, 13 October 2015

How is Tesco turning itself around?

After stories of profit warnings, falling stock prices and decreased market share, it's clear that Britain's biggest supermarket is in trouble. But Tesco has a new CEO and is trying to turn its fortunes around by making some changes.

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Most recently, Tesco has announced it's going to sell off its operations in South Korea. Like the ill-fated Fresh & Easy in the US and its Japanese efforts, these have been unsuccessful. In Tokyo, nearly half of Tesco stores didn't make a profit, and its Japanese market share was never above one per cent.

We think this is a good example of recognising your strengths and playing to those. Not everything you experiment with will be a success, and it's important to realise when you've started to throw good money after bad. The same lesson can be applied to any of your business processes if you analyse them correctly.

The other recent step is replacing vouchers for its Price Promise scheme with a direct price reduction at the till. At the moment, you get a paper voucher if your shop would've been cheaper at ASDA, Sainsbury's or Morrisons. This encourages you to come back to get the discount, and keep shopping in the same place. But our lives are already filled with bits of paper and they're easy to forget or lose. By automatically applying any discount, Tesco is taking the admin out of the process and streamlining it - another great lesson for your own business processes.

Our consultant, Artur Oganov, said, 'This is a good change. Anything that makes the process quicker is useful. And I think it will work for Tesco. People will always go there now, knowing they get the best deal right away.'

Thursday, 8 October 2015

What's the future for technology in business?

A recent study from Quinstreet Enterprise suggests that business leaders have identified Business Process Management, along with security and smart technology as their main focus for 2015.

What's more surprising, perhaps, is that they say that cloud and mobile technology is already mainstream and that companies need to look elsewhere to innovate.

Companies say that a lack of resources for IT and the fact that information technology is always getting more complicated the two major problems they have to deal with in the IT field.

We'll focus on BPM, which 22% of the 250 executives surveyed listed as their next major IT initiative.

According to the report, 'BPM is an investment that promotes automation and can help with cost cutting and controlling headcounts.' In this time of economic uncertainty, the latter two points are critical for all businesses, not just in the IT sector. As budgets decrease, being able to "do more with less" has become the mantra not just of the public sector, but the private sector too.

Our consultant, Artur Oganov, gave us his thoughts: 'The decline in cloud and mobile investment suggests that the data from those things is going to be pushed into companies' processes through BPM. Businesses will be able to automate more of their processes and improve their customer services. The fact that BPM makes businesses cheaper to run is also an important factor. Once you've laid out the money for cloud infrastructure, you have to make that money work for you and BPM can do that.'

Monday, 5 October 2015

Who's the latest challenger to Salesforce?

Today we're going to look at Base, a CRM startup who recently raised investment of $30m (£19.7m) to help it grow and challenge market leader Salesforce.com.

The advantages that Base has are few, but significant. It's a much smaller operation, so it's more agile and more easily able to adapt and make changes to meet changing customer demands. This has included geolocation on its mobile app, so you can see which businesses are near you, and what they're looking for.

Base focuses most of its work on the Cloud and the idea of Software as a Service. These two ideas have been critical for CRM in the last few years, and will only become more important. They're the foundation of Base's operation, but not Salesforce's.

Base lets users make calls from any device, including web browsers, and capture the information from them automatically. This simple innovation saves a lot of time.

Base takes itself seriously as a challenger to Salesforce. Its CEO, Uzi Shmilovici, has always made it clear that he wants his company to replace Saleforce.That's why Base, unlike many startups, hasn't tried to undercut Salesforce on price. He doesn't want to undersell his product, and that builds customer confidence.

Thursday, 1 October 2015

Is 140 characters enough?

There have been recent indications in the media that Twitter might allow users to write messages longer than 140 characters. The company has already removed the character limit for direct messages between users, so it's clearly not a question of data capacity.

PiXXart / Shutterstock.com
But the microblogging service (and, indeed, the whole idea of microblogging) is based on a short character limit. Originally, this was because many users posted tweets from their phones via SMS. But now most people use the Twitter app, so the limit is less of a problem.

So is it a good idea? I mean, if people wanted to post longer messages, wouldn't they just use Facebook instead? Well, Twitter is public by default. Anyone can follow anyone else (unless their account is restricted). On top of that, many celebrities have large Twitter followings that they'd struggle to get on another platform.

Twitter focuses on the here and now. The character limit may help people concisely describe current events - that's one of the reasons it's a great source of breaking news for many journalists. A longer message medium would lack the same immediacy and urgency of its content. And people are forced to be more creative with the character limit too. I like to say that restrictions breed creativity.

What are the potential benefits of removing the character limit? I asked our consultant, Artur Oganov. Here's what he said: 'One problem with Twitter is that it's hard to get nuance into your messages. And tone is a problem too, although that's true of any text medium. Longer limits could help people express themselves more clearly. But I don't think Twitter should lose its USP. If people know one thing about Twitter, it's the short messages. Users won't want that to change.'