HBOS: Breaking the bank

This BBC article describes a growth strategy chosen by one of the biggest UK banks. Read the article, and answer the following questions:

Level 1 - Knowledge
1a) Complete the following gap fill - This article describes a planned __________ _______ between Lloyds and HBOS : (horizontal/vertical/backward/forward) (merger/takeover)
1b) Use the information in the article to define the term ‘credit crunch”

Level 2 - Application
2a) Use the information in the article to construct a timeline of the factors that have resulted in the HBOS takeover by Lloyds

Summer 2008 <-------------------------------------------->Oct 2008

2b) Explain briefly how banks like HBOS make money, and my Lehnam brothers collapse caused problems for banks like HBOS
2c) Explain with a suitable diagram what impact this quote “believes big shareholders were getting out fast. “ would have on HBOS share price.

Level 3 - Analysis

3) Analyse the political, social, environmental and technical factors in this article.

Level 4 - Evaluation
4) Discuss the decision of the UK Prime Minister (Gordon Brown) who in being consulted on this situation “personally reassured Lloyds chairman, Victor Blank that competition rules could be bypassed in the national interest”

Note: Level 1 – Level 4 are questions based on IB standards where

• Level 1: Knowledge
• Level 2: Application
• Level 3: Analysis
• Level 4: Evaluation

Words in bold (define, explain…) have a specific meaning in the IB Diploma Program (DP). The meanings are in Glossary of Command Terms Section of the IBO DP Business and Management Guide available at the OCC and from my website

Inside a frozen pizza factory

Watch this BBC video and answer the following questions:
1) Define the terms:
a) Labour intensive Business
b) Capital Intensive Business

2) How many pizzas are made by this business each week?

3) What kind of production process is used in this video?

4) Watch carefully, and write down a title for EACH stage of the production process (I counted 10 stages!!)

Boom for online fashion firm ASOS

This article from the BBC ties in nicely with the ASOS case study you are doing...did anyone read it I wonder??

Glassmakers fined record €1.4bn for price-fixing

This article from the Guardian covers the record fines given to a cartel of 4 European businesses involved.

Read it and answer the following questions

Level 1- Knowledge
1a) Define the word ‘cartel’
1b) Outline how the cartel acted in an ‘unethical and wholly illegal’ way

Level 2 - Application
2a) Explain why EU competition commissioner has “imposed an €896m penalty on French group Saint-Gobain’
2b) Saint-Gobain has stated that the fine it has received is "excessive and disproportionate"

Level 3 - Analysis
3) Analyse the impact of market forces on the behaviour of cartel members.

Level 4- Evaluation
4) To what extent do you agree with the following statement?
Instead of fining Saint-Gobain a record amount, its senior managers should have been sent to prison

Note Level 1 – Level 4 are questions based on IB standards where

• Level 1: Knowledge
• Level 2: Application
• Level 3: Analysis
• Level 4: Evaluation

Words in bold (define, explain…) have a specific meaning in the IB Diploma Program (DP). The meanings are in Glossary of Command Terms Section of the IBO DP Business and Management Guide available at the OCC and from my website

Oct 2008 - Is the UK in recession?

This is a nice short article from bized.co.uk on the threat of recession in the UK. People use the term loosely, but based on the generally accepted economist’s definition of recession, the UK right now (Oct 2008) is NOT in recession. However, the article states that the UK is almost certainly going to be in recession in very soon.

Read the article and answer the following questions

Q1) By how much did GDP increase or decrease by
a) In the 2nd quarter 2008
b) In the 3rd quarter 2008

Q2) What is expected to happen to UK GDP in the 4th quarter 2008

Q3) What is the generally accepted definition of the word ‘recession’

Q4) What does a ‘negative period of economic growth’ actually mean for an economy?

Q5) What does the article tell us about economic activity in the primary, secondary, and tertiary sectors?

Q6) What does the information in the article about GDP have to do with this statement in the article?
The news had a bad effect on share prices and on the value of the pound, which fell to $1.53 having been at around $2 in the summer.
(Hint – it will be best to answer by describing a) the effect on share prices and b) the effect on the value of the pound separately using suitable diagrams