MarketLine Blog

Posts written in September 2014

Boeing and SpaceX to launch astronauts: Bad news for Virgin Galactic?

MarketLine

The ISS was originally designed and tested to provide an operational lifetime of 15 years; this period passed in November 2013. In January 2014, NASA announced its intention to extend ISS operations until 2024, giving a new 26-year life span to the station. However, at the same time, NASA’s budget has been falling in real terms and the agency has had to develop new relationships with private enterprises, such as SpaceX, Orbital Sciences and Sierra Nevada, in an attempt to allow competitive forces to drive down the cost of rocket… Read more

Is there a recipe to boost manufacturing sector growth in the Eurozone?

MarketLine

In 2010, the US Federal Reserve (Fed) launched its Quantitative Easing (QE) program with the aim of re-establishing credit conditions by accelerating inter-bank lending and, consequently, supporting business and consumers to have access to relatively cheap loans. The policy was designed to support the overall level of economic activity in the United States, raise inflation and employment to levels consistent with the Fed’s maximum employment and price stability mandate. The announcement that it would artificially create money by increasing its liabilities was seen as an unorthodox monetary policy by mainstream… Read more

Tesco: Fallout from profit overstating continues

MarketLine

Yesterday (September 22), the UK’s largest retailer Tesco had to make the embarrassing and damaging admission that its first half profits had been overstated by some £250m (approximately $390m). Consequently, profits for the period are now expected to be around £850m (approximately $1,328.8m) rather than the originally-reported £1.1bn (approximately $1.7bn); quite a difference. The fallout has been catastrophic and has prompted some serious questions that have led to staff suspensions, a delay in publishing its first half results, and the intervention of legal and accounting firms. Following the shock announcement,… Read more

Did Phones 4U fail to pick up the signals?

MarketLine

On 15 September 2014, Phones 4u went into administration. The United Kingdom-based mobile phone retailer had more than 700 high street outlets and a workforce of nearly 5,600. However, when network operator EE announced that it was not going to extend a supply contract with the company, its business model became unworkable. Phones 4u started life as a wholesaler of cellphone handsets called Midland Mobile Phones, founded by entrpreneur John Caudwell in 1987. The Caudwell Group entered the cellphone retail market in 1996 under the Phones 4u banner. Phones 4u… Read more

Is time running out for Sony?

MarketLine

  “We must be like the Russians defending Moscow against Napoleon, ready to scorch the earth to stay ahead of the invaders. We must be Sony United and fight like the Sony warriors we are.” Exactly nine years ago to the month, Sir Howard Stringer then Sony’s first foreign CEO roused his comrades with these words, as he aimed to revive the fortunes of the Japanese electronics giant. Nine years on and with the General now departed to pastures new, Sony fights on like a war weary battalion trying desperately… Read more

Alibaba says open sesame to western markets

MarketLine

  Chinese e-commerce giant Alibaba has increased the price range of its eagerly anticipated IPO to $66-$68 per share, adding further value to the offering, which is already expected to be the largest technology IPO in history (surpassing the $16bn raised by Facebook in 2012). The value could even eclipse the largest ever US IPO – that of Agricultural Bank of China in 2010 – if underwriters exercise options to purchase additional shares. The jump in price means that the IPO could now net over $25bn, valuing the company at… Read more

Mapping Global Innovation

MarketLine

Technological innovation, often regarded as ‘the great growling engine of change’, has long been synonymous with powering economic development. Equally, through necessity, industrial growth helps to drive innovation and the creation of new technologies. Thus in theory at least, both economic and technological growth feed off each other to sustain and accelerate development. Yet in recent years the opposite has been the case; the global economy has gone through the pains of a financial crisis at a time when patent applications, which are a reasonably good measure of the level… Read more

Russian e-commerce market presents significant business opportunities for those able to overcome its challenges

MarketLine

With 84.4 million internet users and 27 million online shoppers Russia is already the largest online community in Europe and growing rapidly. With a skyrocketing number of Internet users, but a still underdeveloped commercial environment, the opportunity to build a successful online selling business in Russia is huge. The biggest growth areas are mostly in the remote regions, where growth is 50% higher than in central cities. Even amid a slowing economy, the country’s online shopping kept increasing at a double digit rate in 2013, making it the fastest expanding… Read more

Apple Watch – Leapfrogging competitors?

MarketLine

Yesterday, Apple took to the stage to reveal two new iPhone models – the iPhone 6 and iPhone 6 Plus – and its own smart watch – dubbed the Apple Watch. Both new iPhone models represent an attempt to take on competitor devices with larger screens, referred to as “phablets” – such as Samsung’s Galaxy Note range – which are gaining traction in the smartphone market. The Apple watch, meanwhile, represents a movement into the burgeoning wearable technology industry, in typical Apple style. The Apple Watch shares much in common… Read more

Goodbye, (Alastair) Darling? What happens if Scotland says “Aye” to Independence?

MarketLine

As the referendum date draws closer (Thursday 18th September 2014), a shock narrowing in the polls has led to the establishment contemplating what was once considered unpalatable- the dissolution of the United Kingdom as Scotland seeks political independence. As the “Better Together” campaigns’ lead has gradually eroded, with a tight margin in favour of independence now, the economic ramifications of independence could be huge for both the remainder of the UK and Scotland. Both camps have published analyses of what would happen, with both attracting criticism. As the Better Together… Read more

Economic downturn provides opportunities for private label sector

MarketLine

During a time of financial crisis and low disposable income, consumers are less likely to buy expensive, branded food products.  According to the Office for National Statistics, disposable income available to households fell 1.7% between the end of 2012 and the first three months of 2013; the biggest decline since early 1987. As discussed in the MarketLine case study, Supermarket private labels: growth following economic downturn, this has in turn led to consumers seeking out cheaper private label products that they can afford when carrying out their weekly food shopping…. Read more

Wii U-turn: is Nintendo preparing to sell on iOS following console failure and smartphone boom?

MarketLine

Nintendo has completed a volte-face by announcing it is developing games for iOS, paving the way for a relaxation of its exclusivity policy. Elsewhere, there has been a renewed interest in Nintendo’s core market, and cause a scissor polarity in Nintendo’s consumers. Pokémon Trading Card Online is now being developed by the company to be played on iPad. This represents a major departure for Nintendo, which has previously focused all of its game production efforts on Nintendo hardware, although it has released iOS apps before. A policy of hardware exclusivity… Read more

Whole Foods: A victim of its own success?

MarketLine

Whole Foods, the US-based organic food retailer, is not now nor will it ever be a cheap shopping experience. Despite its high prices, the company has seen its revenues rise in recent years, as demand for healthy, natural foods has constantly increased. However, despite a whole paycheck being needed to shop at this organic food giant, recently only a fraction of one has been needed to buy the company’s stock. The company has seen its shares fall almost 35% in 2014. The main reason for the stock’s poor performance is… Read more