Apologies that this is my first post in a while as I’ve been volunteering in Thailand. This week in business we saw a new ‘world’s richest man’ for a brief moment, as well as some high profile acquisitions. The stories this week demonstrate some clear strategic direction for some well known firms.
Products getting smaller: This week, the Office for National Statistics released that many well-known products are shrinking. For a few years now, many social media users have been mocking Cadbury’s ‘Freddo’ chocolate bar; jokes about how the size of the bar has shrunk whilst the once considerably low price has risen have been rife in recent times. Several manufacturers of the products that have shrunk significantly have claimed they have reduced the size of their products to make them affordable, in the midst of rising costs of raw materials. Some have questioned, as would I, whether these costs are rising at a rate significant enough to warrant making products smaller.
Michael Kors purchase Jimmy Choo: High end firm Jimmy Choo, known for luxurious fashion products, were bought for just under nine hundred million pounds by Michael Kors. This may come as a shock to many, as Jimmy Choo is a much more luxurious brand than its new owner. This deal has happened because Jimmy Choo have been struggling in recent years in terms of sales. Expect the Jimmy Choo brand to pursue product and market diversification in the near future.
Italian bank gets hacked: Unicredit suffered security breaches that they state could have affected 400,000 customers. Whilst they claim the breach was not deep enough to allow unauthorised transactions, their share price still fell following the announcement. At a time where consumers in all markets are becoming increasingly wary of handing over important information due to troubles of this kind, an attack like this can only lead to more distrustful customers.
Steady economic growth: It was released this week that the economy grew by 0.3% in the second quarter of the year. This growth was led by retail, as well as revenue from film viewings. It was also stated that poor performance in manufacturing and construction sectors prevented the economy’s growth being more significant.
Amazon profits fall: The profits of the online retailer fell significantly in the second quarter of the year. This is due to investment in overseas expansion into new markets and countries, such as India. Amazon ensured this was not a worry, as sales increased in mostly all areas of the business. However, this news saw the share price fall significantly, making founder Jeff Bezos lose his shortly lived claim to being the richest man in the world.
Starbucks increasing presence and control in China: Starbucks have agreed to buy out the other half of their joint venture in China, and have stated they will have full ownership of all stores. New chief executive Kevin Johnson claims that this move is to deal with the decline in growth in the United States. Starbucks has suffered from decreasing footfall in US malls and high streets.