MarketLine Blog

Posts written in July 2013

Truck Manufacturing market continues to fluctuate

MarketLine

Introduction The global truck manufacturing market produced fairly low growth in 2012. However the market has been fluctuating in recent years and this growth perhaps indicates that the market is beginning to move out of the economic difficulties seen recently. This is not the case world-wide with some markets producing more reliable growth than others. The truck manufacturing market is heavily reliant on commodity prices, and increases seen in the cost of products such as aluminum can have a direct impact on the cost price of finished truck products. Figures… Read more

SodaStream: Why it could have been a great buy for Coca-Cola or Pepsi

MarketLine

Although the rumors of a potential acquisition of SodaStream International Ltd. (SodaStream) by PepsiCo, Inc. (Pepsi) have recently been denied, the company remains a threat to both Pepsi and fellow soda incumbent The Coca-Cola Company (Coca-Cola). Crucially, it still has the potential to further disrupt the soda market through its challenge to traditional distribution models and enhancing consumer choice. However, the company’s razor/razorblade business model remains at odds with its competitors’, and would not have played well into either Pepsi or Coca-Cola’s long-term strategy. SodaStream’s focus on the environmentally friendly… Read more

Banking sector in Europe. Never ending recovery.

MarketLine

The Eurozone is still facing considerable financial instability according to a European Central Bank press release from July 13th. Austerity policies adopted by many European governments in the aftermath of the Greek crisis of 2010 increased its financial instability by suppressing the nascent economic recovery seen between 2009 and 2010. Fortunately, the prolonged assistance from the European Central Bank (ECB) reduced the level of bankruptcies in the financial system to a bare minimum. Fiscal policies, most notably tax increases and government cuts, that came in to force after the Greek… Read more

Global car manufacturing continues to motor

MarketLine

The global car manufacturing industry exhibited strong growth in 2012, although it should be noted that the situation differed greatly from country to country. Some of this growth was encouraged by certain government schemes to encourage the domestic manufacture and purchase of cars. One such example was the increase of import tax for cars in Brazil. In 2012, the levy imposed on cars produced outside of Brazil was increased from 25% to 55%, meaning that a Toyota Corolla that sells for $16,230 in the US costs the equivalent of $29,000… Read more

Global motorcycle manufacturing declined in 2012 but not in India

MarketLine

Persisting economic difficulties have had an impact on motorcycle manufacturers globally, particularly in Western Europe. An exception to this has been India, where motorcycle manufacturing has continued to grow rapidly despite difficult global economic conditions. The global motorcycle manufacturing industry declined by 5.8% in 2012, to reach a value of $62.1bn representing a compound annual rate of change of -0.1% for the period spanning 2008-2012. Europe, Asia-Pacific, North America and North America all experienced a decline in industry value in 2012, with on-going financial difficulties affecting global manufacture. India’s continued… Read more

Fukushima incident keeps the Global Nuclear Energy Industry subdued

MarketLine

Introduction: Political constraints have contributed to nuclear energy declining in 2012 in both output and volumes. Industry Figures: The global industry contracted by -7.4% in 2012, to reach a value of $137bn, indicating a compound annual rate of change (CARC) of 3.9% in the period 2008-2012. Asia-Pacific and Americas were primarily responsible for the decline.  Japan’s continued reactor shutdowns contributing to the catastrophic decline. Elsewhere, in the US, the largest nuclear energy market, companies are feeling cautious about any further investment in the current macroeconomic environment. In Europe, Germany has ordered the… Read more

Costa Coffee’s journey to become UK’s largest coffee shop chain

MarketLine

My colleague Nick Wyatt’s recent MarketLine blog paints a sombre picture of the UK high street, with bricks-and-mortar retail hit hard by the rise of online shopping and lack of consumer confidence. However, some high street outlets are experiencing a more positive performance: coffee shops, for example. The UK coffee shop sector has seen strong expansion in revenue and outlet volume for several years. Chief beneficiary of this trend has been Costa, currently the largest branded chain in the UK as measured by the number of outlets. It’s been around… Read more

Arctic Shipping; a future rival for the Suez Canal?

MarketLine

The melting of the Polar ice caps has opened the potential for a new shipping route which could cut thousands of kilometres between Asia and Europe, offering long-term hope for the shipping industry. The North Sea Route, a Russian regulated shipping lane between Murmansk in the Barents Sea and the Bering Strait, has seen over 213 applications to date in 2013, with 204 approved. Compared to 2012, where only 46 ships sailed, and two the previous year. Historically, the route was always limited by frozen waters. As climate change persists,… Read more

The UK high street and the need for change

MarketLine

In recent years, the UK high street has become synonymous with decay as once thriving town and city centers struggle to attract shoppers. The rise of e-commerce, ‘showrooming’, and reduced consumer spending and confidence are significant factors in the decline. If they are to enjoy a fruitful future, many retailers must embrace change and adapt the way they operate to suit 21st Century consumer needs. In recent years, the UK high street has become synonymous with decay. According to a report from UK TV station Channel 4, 25,000 town center… Read more

America and Europe remain the largest control systems markets but Asia-Pacific is growing at the fastest rate

MarketLine

Control systems, including programmable logistic controllers (PLC) and distributed control systems (DCS) are widely applicable and once installed, contribute towards better energy efficiency, increased productivity and safety. They can help companies achieve a competitive edge in a global scale. Currently, America and Europe are the largest markets for industrial control and factory automation; however, the emerging economies, mainly in Asia-Pacific and the Middle East, are growing at the fastest rate. These markets are expected to generate the largest revenue stream in the nearest future, as they pursue expansion and improvement… Read more

G4S: Further reputational damage leads to defiance from their new CEO

MarketLine

Security services company G4S has suffered another blow to their reputation as the UK’s Justice Minister Chris Grayling called in the Serious Fraud Office (SFO) related allegations of fraud of a potential £50m ($79m). The allegations relate to the charging of the government for their electronic tagging services. Both G4S and Serco continued to bill the government after tagged individuals moved abroad, returned to prison, or even died. The ministry believes there could be a case of over 3,000 “phantom” taggings, when it received billing for 18,000 offenders when it… Read more

Egyptian economy suffers after prolonged political uncertainty and instability

MarketLine

Hosni Mubarak being thrown out of power by a people hell bent on determining its own political future might have had a positive emancipative effect, but, wholly in terms of Egypt’s economy, the event was most definitely a negative one. First, the original revolution in 2011 took immediate negative effect on the Egyptian economy. GDP slumped as events in Tahrir Square and the fight for control of the country obviously diverted attention and effort from economic production: output fell nearly 4% in the first quarter of 2011, and it took… Read more

PayPal, online payments tycoon

MarketLine

PayPal is a convenient, secure online payment method which does not require disclosure of sensitive financial data. As of December 2012 PayPal covered more than 164 million accounts (123 million active) and allowed transactions in 19 currencies in 190 markets and territories around the world. Providing access to the global online market, PayPal also supports popular payment methods in local markets. Setting up PayPal account takes only a few minutes and it provides instant, safe and convenient money transfer service with plenty of the additional features. This article focuses on… Read more

The Lego Group: Iconic bricks find the better model

MarketLine

In the year 2000, 68 years after the iconic brick company inception, The Lego Group made a net loss of DKK831m ($155m), its first major loss in all its history the company having never posted a negative result until the late nineties, and a result referred to in the annual report that year as unsatisfactory. It would take the group nearly ten years to remedy that evaluation, and to turn that loss into the substantial return it made in 2011, where, exceeding expectations, the group recorded a net return of… Read more

Pfizer re-entring to the OTC healthcare market

MarketLine

Pfizer Inc., the world’s largest pharmaceutical company, exited the over-the-counter (OTC) healthcare market in 2006 with the sale of its Consumer Healthcare division to Johnson & Johnson. Just 3 years later, in 2009, Pfizer re-entered the market with its acquisition of Wyeth. This article will examine the rise of Pfizer into a diversified healthcare company, the circumstances that led to the disposal of the Consumer Healthcare division, and the subsequent re-entry to the OTC market in 2009. Pfizer, Inc. was originally founded as fine chemicals business. Following a series of… Read more

Mohammed Morsi and the Muslim Brotherhood removed from power in Egypt

MarketLine

Egypt has once again been in uproar as Tahrir square became the epicentre for a new wave of protests a year on from the last regime change. After days of speculation and promises from military leaders, there has been a momentous night of change in Egypt. The generals and military leaders have been true to their word and acted comprehensively in ousting both the president and loosening the grip of the Muslim Brotherhood on state institutions and organizations. Mohammed Morsi (the Egyptian President) and Mohammed Badie (the supreme leader of… Read more

Inditex: Global fashion powerhouse

MarketLine

Industria de Diseno Textil SA (Inditex) has become one of the world’s largest fashion retailers. It is headquartered in A Coruna, Spain and primarily operates in Europe. The company is engaged in activities relating to textiles design, production and distribution. The group is structured into more than 100 different companies, all of which operate in the fashion industry. Each of these 100 companies performs a specialized activity. This article analyzes the strategies Inditex has adopted to become one of the world’s leading fashion retailers. Inditex was founded in 1963 by… Read more

Is monetary expansion fuelled by Quantitative Easing boosting the construction sector in the United Kingdom?

MarketLine

The Bank of England has flooded commercial banks with money in the aftermath of the financial crisis. The aim of its policy has been to inject money into the economic system and consequently increase investment and consumer spending. How does monetary expansion work? Since March 2009, the bank has bought government debt from pension funds, commercial banks, insurance companies and non-financial firms. Commercial banks selling their government debt to the central bank in exchange for cash should be depositing more money into their own reserves. This extra capital should then… Read more

Oligopoly in a credit rating systemic market

MarketLine

By agency, S&P Ratings, Moody’s, and Fitch (held by Fimalac) represent the largest credit rating companies in the world: as of 2011, S&P had 1,416 credit analysts; Moody’s, 1,252; and Fitch, 1,096. The next credit rating firm ranked by agency was A.M. Best with 123 analysts. By revenue, the same group of three companies tops the table: as of 2011, Moody’s brought in $2,281 million; S&P, $1,767 million; and Fitch, $757 million. DBRS, the next largest agency by revenue to publish financials, and with a similar number of analysts (118)… Read more

Croatia becomes 28th member of the European Union

MarketLine

Croatia today became the 28th member of the European Union (EU) less than 20 years after the end of its bloody war for independence. The country’s accession to the union was celebrated in the country’s capital, Zagreb, where thousands flocked to the city’s central square to party with music and fireworks.  “Welcome to the European Union!”  European Commission President Jose Manuel Barroso exclaimed, rather impressively, in Croatian and President Ivo Josipovic described it as “a great and joyful day for our homeland”. Croatia is the first new EU member since… Read more