MarketLine Blog

Posts written in August 2014

Is Quantitative Easing (QE) a good detox for banks?

MarketLine

International financial markets became dysfunctional and credit dried up following the collapse of major banks and insurance companies in the US and UK in 2008. At that time, commercial banks were desperate for cash to cover their asset and liability mismatches. In response to highly negative events, the Bank of England (BoE) launched the Quantitative Easing program, with the aim of re-establishing credit conditions by increasing inter-bank lending and, consequently, supporting the overall level of economic activity. Did it work? Apart from the increase in unemployment rates, the major risk… Read more

International Trade: Where do the ships sent to unsafe breaking yards come from?

MarketLine

The beaches of Alang in India and Gadani in Pakistan are major worldwide centres of the ship breaking industry. Together with Chittagong in Bangladesh, these breaking yards are also notorious for poor working conditions, health and safety issues and environmental concerns. In June 2014 for example, five people were killed and at least ten were injured following an explosion in a chemical tanker that was being salvaged and scrapped in Alang. The explosion was triggered by a suspected gas leak. With the nearest hospital 50km away in Bhavnagar, there are… Read more

Burger King shows franchising is the way to be profitable

MarketLine

The FRANdex is a stock market index that tracks the market cap of a basket of companies which act primarily as business system franchisors. The latest (Q1 2014) report on its performance reveals that it has outperformed the S&P 500 index since 2006. It looks like these companies are doing something right. In fact, learning how to “do something right”, and then passing on the knowledge, is central to the business model of successful franchisors. Take Burger King, for example. Founded in 1954 as a quick service burger restaurant, there… Read more

Nothing fishy about the global aquaculture industry’s performance

MarketLine

Overfishing across the world’s oceans is becoming an increasingly serious problem, causing fish stocks around the globe to become depleted. Furthermore, fishing fleets are estimated to be two to three times larger than is necessary, causing further unsustainability in fish stocks. Fishing rights disputes have also become increasingly common; as a result aquaculture is becoming increasingly important as a solution to sustainability in the fish industry. This is reflected in the global aquaculture industry’s growth of 5.4% in 2013, to reach a value of $121 billion (with almost 60 million… Read more

Motorcycle manufacturing shifting to low-cost production areas

MarketLine

Recent economic difficulties have had an impact on motorcycle manufacturers in some parts of the world, particularly Western Europe and some countries in Asia. However, other areas such as the US and India are an exception to this. India in particular is seeing huge growth in motorcycle manufacturing, perhaps indicative of the inclination of companies to locate their manufacturing facilities in low-cost production areas. The global motorcycle manufacturing industry grew by 3.3% in 2013, to reach a value of $61.5bn representing a compound annual growth rate of 5.8% for the… Read more

Arla’s Lactofree increases its consumer base

MarketLine

With an increase in self diagnosed cases of lactose intolerance; sales of lactose free products are expected to grow at a strong rate between 2012 and 2016, according to findings from Food and Health Innovation Services. Arla’s brand Lactofree specializes in offering complete lactose free products which are not readily available in the market.  The Lactofree brand offering includes milk, butter, cheese, cream, yogurt, ice-cream and many more. According to the UK’s National Health Service (NHS), lactose is a sugar found in milk. It cannot become absorbed by the body… Read more

Starbucks: Expanding beyond coffee

MarketLine

In recent years, Starbucks has embarked on a growth strategy known as the ‘accelerated growth plan’ in an effort to grow the business. A key part of this initiative, as discussed in the case study ‘Starbucks Corporation: Accelerated Growth Plan’ , has been the expansion of in-store offerings beyond coffee. In order to aid this expansion Starbucks made a number of acquisitions, namely of Evolution Fresh, La Boulange, and Teavana. Following the purchase of Evolution Fresh in late 2011, the company set out aggressive growth plans with the plan being… Read more

Global car manufacturing industry continues to motor along

MarketLine

The global car manufacturing industry exhibited strong growth in 2013, although it should be noted that the situation differed greatly from country to country. Some of this country specific growth was encouraged by government schemes to encourage the domestic manufacture and purchase of cars. One such example was the increase of import tax for cars in Brazil, introduced in 2012. The industry stabilized in Western Europe following a sharp contraction in 2012, as countries such as the UK continued to perform well. Globally, the industry grew by 4.3% in terms… Read more

Barclays: Can global restructuring boost bank’s profits?

MarketLine

In February 2013, Barclays CEO Antony Jenkins announced a new group strategy with the central aims of simplifying the bank’s operations and boosting profitability. The plan, termed by Jenkins as a ‘bold simplification of Barclays’, involves the establishment of a ‘non-core’ operation consisting of assets and businesses that Barclays plans to run down or exit, a noticeable reduction in headcount, a scaling back of investment banking operations, increased automation of banking processes, and changes to the bank’s UK branch network. As explored in the MarketLine case study ‘Barclays PLC: Reshaping… Read more