Category Archives: Business

cutting prices fend off

Wesfarmers boss Richard Goyder has promised to keep cutting prices at Coles to guard against resurgent rival Woolworths.

Mr Goyder said Coles had built a price gap, which it planned to safeguard through being “fleet footed” and “as aggressive as ever” but he said the supermarket business remained committed to its long-term every-day-low-prices strategy

Wesfarmers did not provide any insight on the supermarket’s sales performance in the first few weeks of the second quarter but retail insiders suggest it’s on a similar track to the first quarter and determined not to follow competitors into irrational promotions.

If comparable sales growth slips back in this period, it will make four quarters of weakening sales growth at the supermarket chain and suggest the Woolworths turnaround is accelerating at the expense of its biggest rival.

“What we’re not going to do is deal with short-term market concerns by compromising on what we want to do long term,” Mr Goyder said.

“We want positive comps [comparable store growth] and positive sales momentum … it’s pretty hard to stay at those highs of 3 or 4 per cent … I think investors absolutely understand that.”

Pumpkin Patch appoints administrators

Children’s clothing retailer Pumpkin Patch has been tipped into receivership by its lenders and has appointed voluntary administrators after failing to reinvent itself in the face of shrinking sales and too much debt.

Auckland-based Pumpkin Patch’s board appointed McGrathNicol’s Andrew Grenfell and Conor McElhinney as administrators and said it understood KordaMentha’s Neale Jackson and Brendon Gibson had been named receivers.

Last week the retailer said there was virtually no value left in its equity after talks with its lender ANZ Bank New Zealand fell through.

“Despite considerable efforts by the board and its management team, it has become evident that no solution is available to the company, at this time, to address the current over-leveraged and significantly capital constrained position,” chairman Peter Schuyt and managing director Luke Bunt said in a statement.

“With no likely solution available, the board believes that the constraints currently experienced by the business are too great and the only appropriate action to best protect the interests of stakeholders is to appoint administrators.”

In its full-year results published last month, Pumpkin Patch told investors its directors had given an undertaking to the bank that it would put forward proposals by October 20, which was later pushed out to October 31. The capital constraints were highlighted in the accounts as a “material risk” to the ongoing viability of the business.

Dreamworld in the future

Ardent Leisure shares have again been sold down as analysts predict a 75 per cent profit plunge after this week’s Dreamworld tragedy and speculate about future implications for the embattled theme park operator.

As investigations continue into the cause of this week’s accident at the Thunder River Rapids ride, which claimed the lives of four people, investors are trying to assess the future structure of the company. Ardent had signalled before the tragedy it was moving its focus to its more lucrative event business in the United States. Preparing for this step, shareholders approved a name change from Ardent Leisure to Main Event Entertainment at the company’s emotional shareholder meeting on Thursday.

One option that the company hasn’t ruled out after the tragedy could see Ardent sell the theme park division – which includes Dreamworld and adjacent WhiteWater World on the Gold Coast – off to a private operator and exit the business.

Facing shareholders and the media at the group’s annual general meeting, outgoing chairman Neil Balnaves said that while there was no intention to sell the theme parks, it could be an option in the future.

Charge as insurance woes hit profit

AMP shares have tumbled by more than 10 per cent after it wrote down the vale of its life insurance business by $668 million and warned conditions in the industry had worsened further.

Investors sent AMP shares to $4.61 on Friday afternoon, a drop of 10.5 per cent, in response to a series of changes to shore up its troubled life insurance business.

The sell-off, which weighed on the sharemarket, took the wealth manager’s share price to its lowest level since early 2014.

It came after AMP said the challenges faced in wealth insurance over the past three years – higher-than- expected payouts and policies lapsing – had been “accentuated” in 2016.

After a detailed review, AMP formed the view that its problems were “structural,” or deep-seated, and it would write down the goodwill in its Australian life insurance business by $668 million this financial year.

“We’ve seen consistent deterioration in the insurance sector over the course of 2016,” AMP Chief Executive Officer Craig Meller said in the statement. “Today’s actions are designed to re-set the wealth protection business.”

The company also announced a reinsurance deal with one of the world’s largest reinsurers, Munich Re, to cover 50 per cent of $750 million of annual premium income as it seeks to “reduce the magnitude of earnings volatility” and release an estimated $500 million in capital.

The deal is expected to cut the unit’s annual profits by $25 million from fiscal 2017, AMP said in a statement Friday.

AMP is among insurers struggling in an industry facing rising claims, policy lapses and low investment returns. Insurers’ revenue fell 36 per cent to $28 billion in the year to June 30 from a year earlier, acording data from the Australian Prudential Regulation Authority.

AMP expects to book around $500 million in capital losses and one-off items and the wealth protection business’s embedded value will fall by $1 billion in the year to December 31, according to the statement. The division’s profit margins are expected to decline by about $65 million in the 2017 financial year, it said.

The impairment charges won’t impact AMP’s fiscal 2016 underlying profit, according to the statement. The company’s dividend policy of paying out 70 per cent to 90 per cent of underlying profits remains unchanged.

AMP’s tie-up with Munich Re “de-risks the company to some extent,” although the insurer’s future earnings remain a “black box” amid ongoing claims issues across the life industry, said David Walker, who helps oversee $600 million at Clime Asset Management in Sydney. “AMP’s share price has done nothing for nearly seven years,” said Walker, who doesn’t own the stock. “But the company’s still not cheap enough for us to invest in.”

The expectations in first quarter

Same-store sales, excluding new stores, grew 0.7 per cent in the 14 weeks to October 2. This was higher than analyst expectations and Woolworths’ first rise in same-store sales since 2015.

Chief executive Brad Banducci said:  “We’ve been seeing gradual, consistent improvement in our business since May. There’s no one thing we can look at, we’re just a little bit better every week.”

Woolworths has cut prices by about $1 billion in recent quarters, driving increased store traffic and transaction numbers. But Mr Banducci said Woolworths was shifting its focus from price to fresh products and product range, as recommended by former Aldi executive Paul Foley.

Mr Banducci said it was “hard to get clean read” on Australia’s $90 billion grocery market, which is becoming more competitive as Woolies and No. 2 chain Coles cut prices, and foreign chains Aldi and Costco expand.

“There is some indication of the two-speed economy, it’s very hard for us to be precise given our price investment,” he said.

“In terms of Aldi’s entry into South Australia and Western Australia … they’re having an impact in those economies. We’ve been impacted but we’ve not been impacted to the extent we had expected or budgeted.”

Rival Wesfarmers was dumped by investors this week after lower-than-expected growth for its Coles supermarkets.

Deutsche Bank analyst Michael Simotas told clients Woolworths’ sales update was “positive … particularly in the context of the Wesfarmers’ release earlier in the week” and contained “no major surprises except for [discount department store] Big W, which was worse than expected”.

“Interestingly, items per basket are still falling with improvement driven by transaction growth,” he said. “Items per basket is probably an easier problem to fix than lack of customers, but a drag nonetheless.”

The last time Woolworths reported, in August, it posted its first loss as a listed company, driven by its disastrous foray into home improvement, Masters, plus troubles in supermarkets and Big W.

Friday’s results also highlighted continued bleeding from Big W, and Woolworths has forecast operating earnings will not rise from last year’s. Same-store sales were down 5.7 per cent year-on-year, due to lower-than-expected clothing sales.

Former fund manager Peter Morgan, who owns some Woolworths stock, cautioned the company’s turnaround would take time. Woolworths has said it will take three to five years.

“You can’t turn big ships around quickly,” Mr Morgan said. “Woolworths has only been down and out for six to 12 months, really.

“It’s still got a competitive environment. I don’t think [rival] Coles is going to lay down. And the bigger issue, longer term, is what happens online in the marketplace.”

whats the people say about Aachievement

Achievement is what you have done of significance at work which has benefited your company or organisation. Think about your work achievements. Or even your life achievements – these are the successes that you have had so far. Perhaps you have just passed your driving test, or maybe after many years of trying, you have learnt to swim. This is an achievement as it is something you have worked hard for, and in the end the results have been successful.

Why is this important?

In our lives it is important to have objectives so when you have reached them you can say you have some achievements. Think about when you were younger, and your ambitions. Maybe you wanted to become a doctor, so you studied hard, and you finally became a doctor. Perhaps you wanted to have a house with a big garden. Can you remember the day you fulfilled this dream? These are personal achievements and they give you the feeling of self-satisfaction, confidence, and happiness. Let us now take a look at your work achievements. When you have achievement at work it means that you are working towards goals normally set by others, but they can be set by yourself, too. Perhaps you have to reach a sales target, or you need to complete a project within a deadline, or perhaps you need to see clients or customers and help them in some way. If you succeed in helping them, or you reach your sales target, or you complete your project by the deadline, you have examples of achievements. Striving for achievements shows determination and tenacity.

How can you show you have this competency?

If you have a job interview and you want to demonstrate your achievements you need to think about different situations you have been in, the actions you have taken, and the results of these actions. Perhaps you have had a difficult customer, how have you dealt with that person? Did your action benefit your organisation? In what way? If your results were successful, state this either in your job application, or in your interview.
Think about the skills which you have which make you attractive and valuable as an employee. Remember the more achievement you can give as examples, the more you can sell and market yourself for the job.

How to improve this skill

If there is a goal which seems difficult to achieve, don’t give up easily. If you can understand your goal and work towards it this will show that you have the potential to achieve. You need to be able to face obstacles and be determined enough to meet targets. Think about a time where you have had to take “no” for an answer, did you just accept it? Don’t just accept it, find out why the answer is “no”.
Also ask for feedback as this can give you an indication of how you are doing. You could compare this to learning a language, for example, if you find some grammar difficult you can always ask your teacher for feedback on your exercises. You can apply this rule to the workplace as well and if you are not sure of how you are progressing, ask!

Case study for business

download-57Set up in the 1920s by James Carston, a Manchester tailor, the company has remained in the family and is now run by James’s grandson, Paul Carston.  Employing fewer than 50 people, the company has a reputation for producing high-quality men’s shirts, which it sells by mail order, and has a loyal customer base.  As Paul Carston says, ‘Once someone has tried our shirts, they tend to come back for more.  Our customers appreciate the attention to detail and the high-quality fabric we use.’  And it’s the fabric they now use that makes the company almost unique in the world of men’s shirt manufacturers.

When Paul Carston took over running the company in 1999, he inherited a business that prided itself on using local well-paid machinists rather than sweatshop labour, and looked upon its employees as members of an extended family.  Paul, a committed environmentalist, felt that the company fitted in well with his values.  The shirts were made from 100 per cent cotton, and as Paul says, ‘It’s a completely natural fibre, so you would think it was environmentally sound’.  Then Paul read a magazine article about Fair Trade and cotton producers.  He was devastated to read that the cotton industry is a major source of pollution, and that the synthetic fertilisers used to produce cotton are finding their way into the food chain.

Paul takes up the story.  ‘I investigated our suppliers, and sure enough found that they were producing cotton on an industrial scale using massive amounts of chemicals.  Then I looked into organic cotton suppliers, and found an organisation of Indian farmers who worked together to produce organic cotton on a Fair Trade basis.  Organic cotton is considerably more expensive than conventionally produced cotton, so I did the sums. I discovered that if we were prepared to take a cut in profits, we would only need to add a couple of pounds to the price of each shirt to cover the extra costs.  The big risk, of course, was whether our customers would pay extra for organic cotton.’

Paul did some research into the ethical clothing market and discovered that although there were several companies producing casual clothing such as T-shirts in organic cotton, there was a gap in the market for smart men’s shirts.  He decided to take the plunge and switch entirely to organic cotton.  He wrote to all his customers explaining the reasons for the change, and at the same time the company set up a website so they could sell the shirts on the internet.  The response was encouraging.  Although they lost some of their regular customers, they gained a whole customer base looking for formal shirts made from organic cotton, and the company is going from strength to strength.

Tips when you choose for change your management

download-56When you first read the text, don’t worry about the numbers in brackets.  You will fill in the gaps in Exercise 1.

A change for the better?

In the world of business, change is inevitable.  Nobody would seriously argue with that, especially at a time when IT developments are sweeping through all areas of work and changing how things are done and who does them.  But when change does come, not everybody agrees on what it means.  How you view change depends on  in the organisation, and managers and employees usually have very different perspectives.

If you’re , your focus is on results, and you’ll see the change as the best way to realise them.  They are more aware of the business’ overall goals, the financial state of the company and its position with regard to competitors and market share.

When  consider introducing change, they ask questions such as, ‘How quickly can it be implemented?’, ‘How will it benefit the company?’, ‘What investment is required?’, ‘How cost effective is the change?’ and ‘How will it affect our customers?’  Since they are usually the advocates of change, managers tend to be more enthusiastic about it.

If you’re , however, your focus is more on the immediate task of getting the job done.  They seldom have time to consider how their work fits into the overall scheme of things; they don’t share the broader perspective of the company directors.  Because they are often skilled and experienced in their work, or because they are placed on the frontline dealing with customers on a daily basis, they look at change from a personal perspective.

The questions  ask are, ‘How will this effect the quality of my work?’, ‘How much time will it take for me to adapt?’, ‘What’s wrong with the way we’ve always done things?’ and, ultimately, ‘What’s in it for me?’  Since employees are the ones who have to put the change into action, they are usually less enthusiastic about it.

With such different  about change within the organisation, it’s not surprising that innovation often fails.  Planned changes need to be carefully thought out and managed.  If not, morale will suffer as people feel that they are being forced to change against their will.   There will surely be resistance, and some highly valued members of staff may even decide it’s time to leave.

All of this can eventually have a negative affect on productivity and efficiency.  Management will have to admit defeat and drop the change, or risk losing  to the competition…and then another great idea bites the dust.

Handle complain for customer

The different ways of complaining are:

  • Face to face
  • By phone
  • By email
  • By letter

Let’s first take a look at the advantages and disadvantages of each before concluding which is the most effective.

Picture this scenario: you have bought a faulty item from a shop and you take it back to complain. You go directly to the shop assistant and tell them your problem. They say they cannot help you, which makes you angrier, to the point perhaps where you start insulting the poor shop assistant. RESULT: This will do you no favours, like getting any compensation, or even a refund. If you go directly to the first person you see within the organisation you are complaining about, you may be wasting your time as they may be powerless to take any action or provide you with a solution. So the important lesson to be learnt is to make sure firstly that you are speaking to the relevant person, the one who has the authority to make decisions.

Perhaps you don’t have time to actually go and see the relevant authority in person so you decide to make a phone call. The problem with complaining by phone is that you may be passed around from department to department, making you more and more angry until you finally give up. Either that or the phone is hung up on you, which leaves you fuming even more. Furthermore, any contact can be denied.

The same applies to emails too, which can additionally be deleted, or even manipulated.

This leaves us with the traditional letter. When we first make a complaint the usual response is a request to write a letter:  “Can you put that down in writing please?”

The advantages of writing a letter of complaint are that:

  • Written records are still very important, e.g. in legal matters as opposed to a fax or email.
  • You have complete control over what is being said, and you can present evidence.
  • You can be prepared, and plan your letter carefully.
  • You are able to keep copies of anything sent in writing.
  • You have time to reflect and/or consult as opposed to complaining on the spot.

So here are some useful points to consider when writing your letter:

  • State what went wrong exactly. You need to provide concrete evidence, with documentation, for example a receipt, where possible. Make sure you keep copies of all correspondence, including relevant documentation. You also need to state where, when, who was involved, what was said or done. Photographic or video evidence boosts your case.
  • What do you expect from your complaint?  If you are complaining about a situation at work, focus on taking action to improve situations rather than spending your time complaining.
  • State a time limit for when you expect a reply.
  • Be assertive, and stay calm.
  • Make sure you address the complaint to the relevant person.

This will be more likely to ensure that you will achieve a satisfactory outcome from your complaint. Good luck!

What is the benefit of blogger

Only a few years ago, a “web log” was a little-known way of keeping an online diary.  At that time, it seemed like “blogs” (as they quickly became known) were only for serious computer geeks or obsessives.

This didn’t last long, though, and within a very short period of time, blogs exploded – blogs were everywhere, and it seemed that almost everyone read blogs, or was a blogger.

The blogging craze of a couple of years ago (when it was estimated that ten new blogs were started somewhere in the world every minute) now seems to have died down a bit – yet thousands of blogs (probably the better ones) remain.  Blogs are no now longer seen as the exclusive possession of geeks and obsessives, and are now seen as important and influential sources of news and opinion.  So many people read blogs now, that it has even been suggested that some blogs may have been powerful enough to influence the result of the recent US election.

Blogs are very easy to set up – all you need is a computer, an internet connection and the desire to write something.  The difference between a blog and a traditional internet site is that a blog is one page consisting mostly of text (with perhaps a few pictures), and – importantly – space for people to respond to what you write.  The best blogs are similar to online discussions, where people write in responses to what the blogger has written.  Blogs are regularly updated – busy blogs are updated every day, or even every few hours.

Not all blogs are about politics, however.  There are blogs about music, film, sport, books – any subject you can imagine has its enthusiasts typing away and giving their opinions to fellow enthusiasts or anyone else who cares to read their opinions.

So many people read blogs now that the world of blog writers and blog readers has its own name – the “blogosphere”.

But how influential, or important, is this blogosphere really?  One problem with blogs is that many people who read and write them seem only to communicate with each other.  When people talk about the influence of the blogosphere, they do not take into account the millions of people around the world who are not bloggers, never read blogs, and don’t even have access to a computer, let alone a good internet connection.

Sometimes, it seems that the blogosphere exists only to influence itself, or that its influence is limited to what is actually quite a small community.  Blogs seem to promise a virtual democracy – in which anyone can say anything they like, and have their opinions heard – but who is actually listening to these opinions?  There is still little hard evidence that blogs have influenced people in the way that traditional mass media (television and newspapers) have the ability to do.