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[Must Read] 18 BUSS4 A2 Business Examples


Below is a list of all the businesses I know that can relate to the BUSS 4 essay for Business Studies A2. You will also see that some businesses can apply to more than one part of business studies making them very valuable examples for when you have the exam. It is also important to know that 80% of mergers and takeovers fail within the first year. Feel free to skip to the parts most relevant to you.


Cisco took over Flip Video for $590 million - Failure

This is an example of Cisco diversifying their portfolio seeing that Cisco designs, manufactures, and sells networking equipments.  However, the takeover was a failure which ended up with Cisco discontinuing the line of Flip camera in early 2011. Cisco didn't anticipate that smartphones were going to take market share from the camera and pocket camera market. Diversifying into an extremely competitive market made this takeover high risk. They underestimated the technological advances of competitors in the same and lateral markets severely.

HMV took over Waterstones - Failure

HMV (Simon Fox) can be considered a problem child considering that people are more price sensitive than ever during this recession. Therefore, the public are more likely to buy ebooks and MP3 files more than books and CDs (albums). They also have the problem of illegal downloading which reduced their profits even more. Instead of investing in a business that possesses future technological advances, they instead took over a business (Waterstones) with technology from the past being books. Ebooks are cheaper alternative stealing market share from Waterstones. What made HMV fail was the fact they though technology from the past would become a USP in a technology-driven price sensitive recession. 

Update 2013 - This failure from HMV may have been a reason for the retailer to go into administration at the start of 2013. As well as music and video becoming more online, this take over did not help HMV at all.

eBay took over Paypal for $1.5 billion - Success

Over 50% of users that use eBay use their method of paying as Paypal. Therefore, it seemed wise for eBay to buy a business that is benefiting from their own business so much. They are taking over a business that is having a benefit from their own business. This takeover will give eBay even more dominance in online auctioning. Another reason why this takeover has succeeded is because eBay are in a market along with Paypal where they have achieved success from the recession. With people looking constantly for cheaper alternatives, eBay has become the number one cheapest alternative as well as becoming a marketplace where people can also make money. Some of the profits and business eBay produce are going from eBay to Paypal. From this, it is clear that the success of a merger or takeover depends on what markets you and your target are in. This may also be an example of vertical integration.


Coca Cola took over Innocent Drinks - Success

Innocent were gaining market share in the soft drinks market and in the eyes of Coca Cola, they were becoming more progressively competitive. Therefore, by taking over them would regain and obtain more market share for Coca Cola. Although the soft drinks market is unaffected by the recession, the price of fruit increased dramatically decreasing profit margins for Innocent. In one way, it can be seen as a success because Coca Cola have successfully taking over a competitor that looked dangerous. In doing so, they have gained extra market share. On the other hand, the recession has hit Innocent hard with fruit prices increasing. Coca Cola have also performed horizontal integration which is riskier if the whole market fails (which is very unlikely). Saying this, the reserved profits Coca Cola have makes it clear that are able to invest in Innocent in the future to give the business a boost be it in the marketing or financial sector.


Coca Cola Recipe Change - Failure

In the 1980s, Pepsi produced a blind taste test advertising campaign which made the public blindly taste Pepsi and Coca Cola. The majority preferred the sweeter taste of Pepsi increasing their market share gradually. In response, Coca Cola thought the problem was with their taste and produced a new and sweeter taste naming it Coca Cola II. People hated it and many riots happened to bring the old taste back. Sure enough, they brought it back and regained the market share they had lost. Coca Cola forgot that people didn't buy Coca Cola just for the taste but the whole brand image too. They had no contingency plan for such a problem which didn't help. As well as this, it makes clear that Coca Cola are in a market which should not have premature change let alone change. Forcing change in a rigid market is sometimes the failure of a business.


Kraft took over Cadbury for £1.96 billion - Success

The main reason this takeover was going to fail was due to culture clashes. Kraft is a business which was more about financial objectives whereas Cadbury had a strong CSR and are a proud and long-term heritage. The reason this takeover succeeded was because Kraft didn't change Cadbury. They were wise enough to see that change would upset stakeholders affecting sales. Therefore, they left Cadbury alone which since the takeover have grown healthily. As well as this, people will now look at cadbury more positively because they have the backing of a market leader in confectionery. The element of risk is removed because unnecessary change (being changes in cultures) has been removed from the takeover. Removing risk gives stakeholders more confidence in the takeover. Therefore, share prices, sales and public brand image won't decrease providing the best support to Cadbury.


L'Oreal took over The Body Shop for £652 million - Success and Failure

Immediately, there were culture clashes in this takeover. Having bought out The Body Shop at 300p a share (32p more than market value), The Body Shop has a strong ethical USP for their products because they don't use animal testing. On the other hand, L'Oreal use animal testing on a mass scale. This will reduce the image of Body Shop  because although they are ethical, they are ultimately not because the mother business that owns them is not ethical. Seeing that most stakeholders will notice this clash in CSR, they will feel resentful like The Body Shop has become a hypocritical business. They have put money before ethical issues: if no animal testing was so important to what they believe, they would have rejected the extremely tempting offer from L'Oreal. The fact they didn't makes clear they only had an ethical USP to gain more sales and not because they believe in the ethical issue themselves. Saying this, The Body Shop in 2010 had an operating profit of £36.2 million and has increased their infrastructure of stores by 143. Either consumers don't see the irony in this takeover or they don't care: as long as the products by The Body Shop are ethical, that is all that matters.


Tim Cook Replacing Steve Jobs - Success

Since the tragic loss of Steve Jobs, the replacement leader for Apple has been Tim Cook who was recruited internally. Straight away, this is a safe option seeing that he understands the unique innovative culture Apple drives on to make high end products. It could be argued that it is extremely difficult to make a market leading business a failure within the first year or so. However, with the 25th billionth app downloaded and record sales, it is clear that Tim Cook is not holding back. He's letting Apple feed off the personality and culture Steve Jobs first brought to Apple that made them so successful. Instead of being the sole leader of Apple, he has delegated the role of CEO to different sections of the business to identify that Apple is not just a one man business but a team of highly skilled staff. It takes more than one person to make a business successful and Cooks wants to show this. Cooks is a good leader because he hasn't changed anything at Apple. If he does change anything, he may change the success rate of Apple. Change always happens in a business. Forcing premature change in a business is sometimes what causes failure. A good leader will know if change should happen or is premature just like Cook does.


Steve Jobs at Apple - Success

Since Steve Jobs entering Apple at 1999, Jobs has achieved long term success with Apple no matter what way you look at the company. They have created high end laptops, phones, MP3 players and tablets which are all market leaders in their own markets. As well as this, the profit Apple generate each year has been increasing alongside their price of this shares. Steve Jobs has created a brand awareness that makes Apple products unique and special. The differentiation has led to the success of Apple. From this, it is clear the leader can be quite solely down to the success of a business. With the right leadership, personality and PR, a business can go far in achieving success just like Steve Jobs with Apple. He produced a innovative culture that went alongside his personality. A man that was on a chosen salary of £1/year makes clear he loves his job helping brand image.


Virgin and Richard Branson - Success

Virgin have become one of the most known brand names for the number of markets it has diversified into. This has helped the company spread risk if failure happens in one of the markets. Virgin are a company that grow from organic growth and taking over failing businesses too. An example of this is with Virgin Galatic which Virgin diversified through organically. On the other hand, they bought out a failing bank, Northern Rock (for £747 million), turning it into Virgin Money making clear they diversify organically and through takeovers.


Marks and Spencer - Success

Marks and Spencer have produced a CSR plan to help them differentiate from competitors called 'Plan A'. This involves seven pillars which are based around reducing waste, reducing carbon emissions produced and improving the lives of everyone associated with M&S. This strategy has become successful in creating a vivid 'eco-friendly' brand awareness for M&S. Many businesses feel the need to adopt CSR to make consumers happier which results in an increase in sales. No matter if M&S actually want to be eco-friendly or not, the CSR plan has helped to label them as a company that cares. This will give customers the stereotype when shopping at M&S that the money they will have given to M&S will be used in a beneficial way to the environment and world. As well as increased positive brand awareness, the plan will also help reduce the running operational costs of the business too. This highlights the fact that social reporting is not always can help to make your products cheaper if you decide to past down the cost savings to customers. Social reporting is for businesses that like to show off how well they are doing just like M&S. They want to give you every possible reason to shop at their stores and not of competitors.


BAT - Success

As well as being the world's largest tobacco company, the product they sell is addictive to the consumer making it extremely easy to get repetitive sales. This begs the question whether they need CSR. They don't need to attract consumers to their products because the tobacco does that itself. Saying this, many smokers know that nothing good happens from smoking. Therefore, they will feel the need to reduce the guilt by supporting a tobacco company adopting strong CSR like BAT.


Google took over Motorola for £7.8 billion - Success

This is an example of vertical integration because they are buying out one of the manufactures they have been providing an operating system (Android) for. They have performed this merger to help develop the Android operating system for mobile phones and tablets. However, the merger has created tension amonst other manufactures that use the Android OS because they know Google will now give Motorola priority over Android. The merger means that Google now has access to all of Motorola's patents, who have around 17,000 approved patents. The merger has been quite recent happening in 2011. However, there was a delay in the merger for legal reasons involving the patents (by the EU regulators). With Apple and Microsoft having excess of 20,000 and 40,000 patents each, it is clear that Google who held less that 1,000 patents needed to improve this number to gain sustainability within the market and mobile operating system market. Motorola's 17,000 patents and 7,500 pending patents will help make this possible.


Google - Success

Technology is one of the markets where there should be an innovative culture of which Google have. These include where employees choose their working hours, have many different facilities on campus and is a general culture where the employees' well being is taking first over anything. This innovation has led to improvements within their search engine, web browser (Google Chrome), technological device's OS (Android) and YouTube. Before the YouTube takeover, Google had a version of video sharing on the internet which wasn't very popular or successful called Google Videos. However, their innovative culture helped them to take over YouTube while it was still young giving them lots of potential to explore within the world of online video. From this, they have improved upon something that was not making them much success. 


Toyota - Success

Toyota are a business which anticipated change in the car market with their hybrid car being the Prius. With changes to policies which introduces CO2 emission costs where the more CO2 your car emits, the more expensive the tax is on it, Toyota predicted this and was therefore one of the first car manufacturers to make a worldwide available hybrid engine for consumers that wanted to pay less tax and be more eco friendly. From Toyota anticipating a change in demand, they entered a niche market in the car sector earlier than all their competitors which quickly made their care a market leader among hybrids.


Glaxo Smithkline - Failing

GSK are finding it more difficult to make consistent profits due to their inventive culture. Ten years ago, they would be able to create 10 new drugs. However, invention in drugs is becoming harder to do over the years resulting in GSK performing innovation. This goes to prove that it is very difficult to maintain an inventive culture. The best businesses invent at the start (such as Apple with the iPad) and innovate off that invention year by year creating an extension strategy to the product preventing it going into the mature stage of the product life cycle.


Tesco - Success

As well as having a good leader being Sir Terry Leahy, Tesco has diversified their business not through taking over other businesses but by organically. Examples of this include Tesco Mobile, Tesco Bank and Tesco Insurance which were all funded by reserved earnings.


Nokia - Failure

Nokia is one of a few smartphone produces that played it too safe during the recession. While Apple and other leading smartphone makers where inventing with the iPad and extensively innovating their current products taking advantage of new technology, Nokia has put less money into their R&D which resulted in their products to be not as good. Of course by putting less money into a business means the risk of what you lose is less, it also means the rewards that you gain will also be less. From standing back has caused Nokia to lose market share and sales. Now, it seems like they are too late to catch up to the likes of Apple and HTC. This is why they have formed a partnership with Microsoft. With the backing of such a large company, Nokia hopes their new Windows 8 operating system will bring back some of the market share they lost when they were stationary in a developing technological market.

About Will Green

A student in England studying Automotive Engineering with Motorsport, Will created Ask Will Online back in 2010 to help students revise and bloggers make money. You can follow AskWillOnline via @AskWillOnline.

9 comments so far:

  1. Thanks Nookie Bro!!!

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  3. brilliant thanks will help me

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  4. these are dreadful

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