FlixBus & MeinFernbus Are Offering Spotify

Week Beginning: 18.01.2016

The companies „Mein Fernbus“ and „FlixBus“, which recently have merged to form a partner-company have now Spotify on board. All around Europe, especially in Germany, these two bus companies have become a replacement for the train. On one hand, because they are much cheaper, but also because they offer free-wifi in their busses. With their newest marketing strategy, the company is trying to attract more customers.
Wifi was always offered during the bus rides, but it used to block Spotify, in order for everyone to have the same amount of data volume and therefore the same access to the internet. These times are now over since the company offers the access to Spotify now for their customers. Furthermore Spotify and FlixBus are offering a playlist for their customers too.

With this strategy the company hopes to attract more customers and maybe one day even become the market leader for transportation in Germany, since they are already the market leader in the bus transportation market. Since the company has a high number of younger people, often university students, as their customers, it makes them their target audience with their marketing strategy. Especially because Spotify is very popular within this specific age group.
This the links to Strategy of the CUEGIS, since the company has developed this certain marketing strategy to attract more customers. As mentioned above, they are trying to attract this special age group and are hoping to create brand loyalty within this age group. Furthermore it could create brand recognition, since more people would be thinking about using FlixBus instead of Deutsche Bahn. Furthermore it links to Change and Innovation of the CUEGIS, since it is a change for the company, since they never offered something linke that before. It might also link to Innovation, since no other transportation company/method offers a service like that, which makes it something entirely new in the market.

Microsoft is Opening Windows Store to Businesses

Week Beginning: 16.11.2015

Since early October, however, Microsoft has opened up about its plans a bit more. One of the big changes coming in Windows 10 is that the firm will allow businesses to customize Windows Store and manage the delivery of apps to their users.

This is a big deal for the company. When you consider how consumer-focused the Store was in the initial Windows 8 release two years ago, it becomes obvious that this change is in many ways an even bigger deal.

That is, in Windows 8 Microsoft introduced a safe, reliable and consistent apps platform. But it limited the reach of that platform by forcing those apps to only run in full-screen, by limiting the interaction these apps could have with desktop apps, and by pushing a touch-first user experience that isolated over a billion users on traditional PCs.

Microsoft started to break down the wall between these new apps, and the desktop. In Windows 8.1, it added a title bar with standard controls to these apps, making them easier to use with a mouse or other traditional pointing device. And in the initial Windows 10 pre-release builds, we've seen the next step, where these apps can run in windows on top of the desktop and alongside your other apps.

But the back-end changes are even more important. In Windows 8.1, for example, users can browse through the Windows Store and find a fairly middling collection of mostly consumer-oriented apps, and while Microsoft does let some desktop applications be advertised in the store, you have to download them and install them from the web, and those apps do not come with the liberal licensing found in Windows Store. Furthermore, you need to use a Microsoft account to even download an app from Windows Store.

Here's what's changing in Windows 10.

First, Microsoft is allowing business customers to use their domain accounts as connected accounts that work just like Microsoft accounts from the perspective of app acquisition and licensing. This means that highly managed businesses that wish to retain control over which apps their users install on work PCs and devices can now do so, and they no longer need to worry about users with their own Microsoft accounts on those machines.

Second, Microsoft is letting businesses modify Windows Store on their users' PCs so that they see a custom version of the store than highlights work apps and, if desired, those publicly-available apps that the business approves of. There will be a web-based portal for IT administrators that let them assign apps to users and user groups in Microsoft Azure Active Directory, Microsoft says.

Third, Microsoft is adding Windows Store management capabilities to System Center and in tune, and opening up these capabilities to third-party Mobile Device Management (MDM) solutions. This will allow businesses to manage the installing and uninstalling of apps, app updates, app licensing, the addition of apps to Windows install images, the deploying of provisioning packages, and the ability to automatically install apps from an on-premises-based server.

This article links Strategy of the CUEGIS, since this is a marketing strategy of Microsoft to aim the new update of Windows directly to Businesses. The company tries to find a new market for its product by advertising their product directly to this market. In this case it also links to Market Development of the Ansoff’s Matrix, since the company is introducing an existing product into a new market. However since it is an update of the existing product with new features directly addressed to the new market, it is more Diversification of the Ansoff’s Matrix, since it is a new product in a new market. Therefore it is also very risky for Microsoft to do this step, since they are the market leader for computer softwares, but not for their App Store. Furthermore it also links to Change and Innovation of the CUEGIS. Since Microsoft has never advertised their software directly to businesses it is a change for the company. Adding to that, it links to innovation since there is not really a product (software) which is directly customized for a business use. Most softwares like (Microsoft), iOS or linux are customized for an average person, in order to attract a large customer base. Since Microsoft is the market leader in their market, they will have the possibility to attract a large customer base. They are also benefitting from their brand image and brand loyalty of their customers.

Glencore faces its balance sheet

Week Beginning: 05.10.2015

Glencore plc is an Anglo–Swiss multinational commodity trading and mining company headquartered in Baar, Switzerland, with its registered office in Saint Helier, Jersey. 

Back in September the companies CEO Ivan Glasenberg touted a new plan to rescue his flailing company.

 He said “We have pitched our balance sheet for Armageddon.” 

At that time Glencore was trading at £1.31 which declined to to £0.70 a 46% decline in a few days. In 2011 the companys shares were worth more than £5.00. 

Two reasons for the Glencore Apocalypse are Copper and their debts.

The mining and commodities trading company faces a huge issue. It is not profitable, it is highly indebted and holds little cash.  Their fortunes are heavily dependent on the price of copper, which is going down.

 Looking at Glencores finances, the business has on paper roughly $US100 billion in liabilities on its balance sheet and only $US3 billion in cash. It has to be added that the key phrase for businesses in this case is “on paper.” But traditional accounting principles make its numbers look worse than they are. In reality this looks different. Glencore owns more than some mines, it also trades commodities in its marketing division. These trades are also hedged with other trades, so that the company isn’t exposed to unexpected moves in prices.

Although Glencore believes it has the kind of scale and assets that will allow it to thrive in the long term, the stock market predicts differently. Its financial statements at the end of the first half of 2015 were.

Revenues: $US85.7 billion                                                                                               

Cost of goods sold: $US83.6 billion

Gross Profit: $US2.1 billion

This shows that the company’s gross profit is only 2% of its revenues. This is a very small safety of margin for the company. The company is basically spending $US84 billion to make $US86 billion, every six months.

Their competitor (Anglo American) had a gross profit margin of 16% of revenues in 2014. Glencore has to expand their safety of margin if the price of copper goes up again.

 Right now, copper trades at around $US5,000 per metric tonne. Back in 2011 it was twice the price.

Unsurprisingly, once you account for Glencore’s other costs, it loses money:

• Expenses (highlights):
• Admin/sales: $US636 million
• Interest expenses: $US786 million
• Net income: -$US817 million

The company had hardly any cash on its balance sheet, just $US3 billion at the end of June 2015. 

The problem is that Glencore is heavily indebted and spends a huge amount of money servicing its debts and loans. Their liabilities for 2014.2015 include the following:

If you add current and non-current liabilities the company owes $US100 billion, even though it only has $US3 billion in cash on hand. Not all liabilities are the same. If investors look at the company, Glencore shows then their “net debt”. 

Net debt is defined as the debt left over if the company were to sell all its “readily marketable inventories,” which are assets it believes can be liquidated so quickly they essentially function like cash.

 This includes the following:

 All in all Glencore makes $US4.6 billion in profits, holds $US3 billion in cash, and only has $US30 billion in debt. This looks more manageable.

This article links to several concepts of the CUEGIS. First of all it links to strategy, since the balance sheet and the income statement are both startegies to get an overview of the money flowing into and out a business and where it is exactly spent. These strategies help the company in situations like this to have an overview of their finances. Therefore makes it easier to solve this problem. It also links to strategy in a way that many companies have startegies to make their balance sheets to look nicer, than it actually is, Window dressing. 

In this case it could also link to ethics to some extent, since the company is trying to put their finances as best looking together for possible investors. This might be profitable for the company, but not for investors or banks, since they do not know the truth about the actual financial problems about the company. 

Furthermore it links to Change of the CUEGIS, since it is a change for the company Glencore. The company is experiencing a decline stage for their profit. Since in 2011, the copper price was higher and the company made much more profit than now, Glencore has experienced better stages for their revenue. 

This article then also links to several topics in the syllabus. It sums up the principle of final accounts, such as the balance sheet and the income statement, perfectly. It also covers the area of the break even analysis, since the company is having such a decline in profit that their safety margin is constantly decreasing, which makes them closer to their break-even point. The article also links to Marketing, with the product life circle. Although the article is not exactly about a product, but the principle of the product life circle can be applied in this case too, such that Glencore is in its decline stage of sales/profit. 

All in all the company has to consider all factors above, in order pay off their debt and make profit again.