Govern-mental

Monday, 4 April 2011

Westminster

For the past two weeks (and next ten) I have been working in a central government department on a short term contract to manage a project that will improve integration between the department and stakeholders.

I have joined the department with my eyes wide-open. I know what the department does, who heads it and how they have come into power. I made the decision to apply for the job because I thought it would be interesting, I could do it and make a difference whilst doing it. I made the conscious decision before undertaking the role that I would not let my political views and persuasions have any governance over my performance at work. I thought it necessary for me to draw the line between my work –something I do to the best of my abilities in return for money. And my political views, which are something I hold dear and are something I choose to invest a lot of my time and effort into formulating.

If anyone reading this are anti-coalition/cuts/conservatives/lib dems and could not imagine working for this Government, I can empathise however cannot entirely agree. The job I am doing is to help senior civil servants engage with industry and public sector organisations. Whatever your political persuasion you cannot disagree that this is a good thing for the economy and the department itself. The department, as with all public sector departments is under-going a process of cuts. These cuts are taking place in every area possible. From my perspective; a temporary employee working under contract I can say that the cuts are coming into action a little too quickly and very drastically. The department will play a crucial role in the future success or failure of the country and if you cut it too deeply you will stifle potential growth that it can create. In my personal view this department should be given the same budget as previous years if not a bigger one. This is because central government departments’ role in the UK is an integral one and an extra £200 million invested here may result in an extra £700 million being produced in the private sector. At the moment the department are waiting to hear who is to be made redundant, approximately a quarter of the staff will go. The department are expected to do the same job – if not more than before but will be drastically understaffed. This will result in disgruntled staff over stretched, stressed and unable to give projects the attention and effort they deserve. I foresee that projects which come under this departments remit will suffer a.) because of the lack of support the department will be able to give because of the lack of staff and b.) the lack of investment the department will be able to make.

I believe that the government are under pressure to make these huge internal cuts for their public image rather than any strategic savings reasons. As the money they will save from cutting the size of departments won’t scratch the surface of the immense deficit. I believe that a little more investment or sustaining previous amounts will, in the long run be better for the economy and therefore the country as a whole. Especially in the departments that are actively involved in the economy, business and creating growth. However, if the Government do not cut its spending in all departments there will be public outcry not least from members of the general population but from the government departments that have been cut. So I think the governments hands are tied in terms of selecting who and what to cut. As local authorities really start to feel the pinch from the cuts they will be watching central governments budgets very closely. Both local and central government play imperative roles, however it is generally considered that local authorities provide more of a front line service whereas central departments do a lot of work ‘behind the scenes’ for the economy as a whole. Therefore, the voting public will be much more aware of cuts to local government rather than central as they will be affecting the front line service they are exposed to on a daily basis. However, central government departments are looked at with a lack of understanding as to what it is they actually do. Many view it as ‘Whitehall Boys Club’ where favours are exchanged between those who went to the same outrageously expensive Boarding Schools, an elitist club if you like. I am yet to make up my mind about this. Yes the top positions in the department are filled with aristocrat-like public servants all speaking identical versions of the Kings. However, there is a good mixture of people within the department with varying local accents many of whom fill the lower paid roles. So is there a glass ceiling in central government to keep the peasants where they should be? I have yet to experience this, however I strongly expect there is.

I conclude that certain reductions in spending, people power and investment will lead to a reduced growth rate in the future. Furthermore, it will lead to a reduction of the top level staff in the public sector as many will migrate to the private as working conditions become worse. This will leave the department with a skills gap not able to perform at the level it should be at and once was.

*The views expressed in this blog are my own and in no way reflect the views of my employers or any government department.*

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Stella Artois ... Cidre?

Wednesday, 9 February 2011

Stella Artois are to launch a brand extension, Stella Cidre. This is due to be released in the UK around Easter and will add to the growing range of alcoholic drinks Stella have in their stable.

Stella have struggled with their brand over the past ten years as not too long ago they were fighting a battle with the type of people who were drinking their lager. Stella became a firm favourite of the ‘Chav’ due to its high alcohol content, wide availability and relatively low price when purchased in bulk in shops. It earned it self the title ‘Wife beater’. This is something I have looked into some years back in detail and I was fascinated as to how a brand had to distance itself from a core customer group without completely quashing their sales in a key market. At the same time Burberry were struggling with their brand as their widely used iconic beige tartan pattern was being widely imitated and reproduced for the masses. They successfully shed the image but it cost them the use of the pattern on many of their products. Stella combatted their negative brand association by introducing a brand variation Stella 4%. This made existing Stella drinkers view the brand differently. It was no longer a drink only bought by thugs and drunks. It won its more sophisticated, premier and high quality image back. The Stella 4% was branded and advertised very wisely and communicated directly to those Stella wanted to be buying their products not to those who previously were.

Stella now believe their brand is so strong and so synonymous with high quality they are extending it into the cider market. Their new brand Stella Cidre will be selling alongside some very established cider brands such as Magners / Bulmers, Westons, Aspalls and even Strongbow. However, Stella say their closest rivals will be the Westons and Aspalls because they are known for their premium quality and this is where they are positioning themselves.

I do not foresee Stella posing a credible threat to any of the existing cider brands in the UK market.

Stella are trying to do what Coca-Cola has successfully done before, diversify into different product ranges in their core sector. Coca-Cola has done this very successfully selling us bottled water, Orange Juice and sports drinks. However, Coke had the foresight to rebrand their different drinks in their respective markets. This was crucial to Coca-Colas success as every market requires very different things from their products and a complete rebrand is certainly necessary. Using the Coca-Cola brand to sell Orange Juice simply wouldn’t work because of the connotations that Coca-Cola has with sugary unhealthy drinks. This would not only severely damage the Orange Juice brand but weaken Coca-Colas position. Professor John Quelch, a branding professor from Harvard Business School, made the point that while brand extensions occasionally succeed, they usually fail. And in the worst-case scenario they not only fail, but also weaken the brand in its original category.

Stella are positioning themselves as a premium cider brand, however they have no heritage in this area. I do not believe that serious cider drinkers will switch to a cider that’s heritage is solely in producing lager. Stella is synonymous with lager/beer and I believe it will struggle to distant itself from this to become a credible cider producer.

However I can see why Stella are so tempted to enter the cider market. For one, Mintel expects to see the cider market grow by 45% over five years. So the potential growth for Stella in the cider market is undeniable and they would be foolish to not try and take advantage of it. I just believe they are going the wrong way about it. I believe they should have created a separate brand, distanced themselves from the lager producing heritage and concentrated on the cider itself. Stella have a “double digit” million pound marketing budget for the promotion of the new drink and they also have the distribution network in place to make the drink widely available. I expect sales to be relatively high whilst the drink is being heavily promoted and people try it for the first time. However when the promotions fade I expect the sales to fade with it.

I believe brands should stick to their original core markets and if diversification is necessary then rebranding should be applied to ensure the new brand is able to stand alone and not depend on the original brand. Let’s be honest we don’t want a Sminoff lager or a Forester’s vodka do we?

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UNIONS: Unite or Divide and Fall?

Tuesday, 26 October 2010

This post assesses the power of the modern day union and with public cuts and people being forced out of jobs how likely is it that we will see the mass demonstrations and strikes that are common place across Europe.

However, unite effectively handed power to Ed Miliband the leader of the Labour party. Most of the big unions are in support of him due to his support of the worker and his belief that drastic cuts in public expenditure will increase our time in the red, rather than decrease it.

With the Conservatives in power we are seeing the biggest cuts in living memory, spending on public services is likely to be decreased by £60 billion and around 700 000 public sector jobs lost, not to mention the private sector jobs lost as a result of the lack of spending and services. The unions see this as a personal attack on their working class members, taking a problem that was caused by the rich (financial industry) and dumping it on the poor to suffer for. The unions see this as their biggest battle since Thatcher and in some respects it’s a bigger battle as the Governments actions has the ability to affect all people living in the country, rich or poor, young or old.

As hardliner Lee McLusky is set to become the most powerful union baron in Britain, yesterday (24^th Oct 2010) threatened a new wave of militancy saying there is, ‘no such thing as an irresponsible strike.’ This is worrying as it comes from the likely General Secretary of the UK and Ireland’s biggest union. Are we going to see a battle between the unions and the government? I’m not sure, but I do know that many are preparing for such an event. People are starting to come together because they are feeling as though they are under attack, their pensions, wages, taxes, public services etc. The only voice they have is that of the unions. Bob Crowe (RMT), probably the best known General Secretary of all the unions is calling for an organised fight back, including strikes and demonstrations. Mr Crowe is not one to make empty threats as he was behind the tube strikes on Sept 7^th. Is Bob Crowe the class warrior he likes to think of himself or is he a relic with out-dated fascist political views? He is a former Communist who insists that Capitalism has failed mankind. He has quite a confrontational and boisterous nature.

Do the unions have the same power they had in the 70’s? The simple answer is no, membership has dropped from over half the population to a quarter only seven million members of the workforce are now unionised. However most of these members are in the public sector in roles that if not present can do real damage to services. For example, look at the RMT Unions strikes at the London underground, only for one day but the chaos it caused for the six million or so passengers that use TfL was immense. There are also laws put in place now that discourage the long drawn out strikes that took place decades ago, but as the RMT has shown short one day strikes can have a real effect.

If effective strikes are to take place there needs to be cooperation between large sections of the population and I believe for this to take place there has to be a unifying force. This could come in the form of people personally being affected by the cuts the Conservatives are making. I feel people will need a very good reason to mobilise, strike, boycott and hold demonstrations to change the Governments actions. I feel we differ from our European cousins in this way.

Looking into unions in a bit more detail it is hard to tell if they are there to protect and serve their members or for their own financial gain. General Secretaries earn six figure salaries and are given countless perks, it’s a far cry from the people they are representing and who they are supposedly in-touch with. There are also allegations of corruption at the highest levels of some of the biggest UK unions. None of which has been proven in court, however the evidence is there for all to see. There are also thousands of allegations of sexism against union officials as it seems the unions have not lost their mind-set from the 70’s and 80’s when representing coal miners and other traditionally male jobs. Union bosses are all male and high in rhetoric and very brutish in nature. The allegations of sexism stem from the fact that typically male jobs (90%) such as refuse collection, gardening and road workers would almost double their basic pay with the bonuses secured for them by the unions. For example road workers would get a bonus for digging up each tree stump in a certain area. Councils later found out that a lot of works were said to have been carried out but were not, resulting in fraudulent bonuses being paid. This is in comparison to jobs predominantly carried out by women such as carers, cleaners and caterers with less than 10% of them receiving bonuses for targets met. The councils and unions argued it was justified as the male workers needed the monetary incentives for motivation and it was necessary to pay them more money as they were commonly the main bread winner in the family. It is interesting to note that these bonuses were all negotiated for by Unison and other unions and they worked with the councils to head off the legal action from the women. I find it unbelievable that women are still fighting equal pay battles in 2010.

In conclusion I believe the need to strike has to come from within individuals and should only be a last resort when all other avenues have been exhausted. However, I do believe we will see an increase in strike action particularly in the next six months. The country is in a mess and it is too easy to blame the faceless international banks that undoubtedly got us into this mess. The point is we are in a situation and have elected a Government to get us out of it and they have decided to take a very hard lined approach to cut the deficit by as much as possible as quickly as possible. It will now be very interesting to see what Britain does in the future, will they come together and take a stand or swallow the inevitably bitter pill. I believe this decision will be based on how well the economy does in the next six months. Will the Conservatives be hailed as heroes or detested for being wrong?

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The Fall and Fall of BP

Friday, 11 June 2010

BP, once a proud British firm has undergone somewhat of a transformation recently. This alteration in BP’s image has left it limp, de-generated, rather embarrassed and in danger of a hostile takeover.
This is partly due to its own short comings as an engineering heavy weight. However, it is also due to the various imprudent remarks made by President Barak Obama.
Said remarks have grown in their intensity as Mr. Obama’s popularity has decreased in the US opinion polls. Coincidence?
No, Barak has been systematically shifting the blame from himself onto BP and Britain as a nation. His repeated referrals to BP as British Petroleum were far from a mistake. He is moving the limelight onto the British and as far away from his administration as possible. This is a typical PR reaction to the anti-Barak feeling along the Gulf coast.
So is Barak blameless?

No, his relentless demonizing of BP is causing the companies share price to plummet. Its share value has decreased by 47% (10th June 2010) and the sharpest decreases were occurring during Baraks most damming comments about BP.
Bp’s response
Tony Haywood has been doing what is expected. Releasing youtube videos in an attempt to conversate directly with those affected. Has it worked? No, the people of the Gulf region do not want to hear the promises of an emotionless politician-esque chairman of a multi-billion dollar company.
What these people want is real progress on the engineering front in capping the well and cleaning up the oil.
Mr. Haywood is doing all that is expected of him and more, by paying for the whole clean up operation, refunding lost earnings and staying there until the whole area is rejuvenated to a better standard than it was before the leak.
Is this more than what is expected?
Yes, as the oil rig was actually owned and operated by an American firm Transocean. One that has stayed largely silent throughout the commotion. It is paying out a One Billion Dollar dividend to its shareholders shortly and Barak has not commented on this. Unlike BP, as Barak has berated them so much on the issue of paying dividends, BP are planning to defer the payment of them and maybe even cut the amount by half.
What does this mean for Britain?
Well BP is the mainstay of almost every UK pension fund and its dividend of almost £7 billion per year or almost £1 in every £6 paid out in British dividends to pension funds. BP's downfall will therefore can have a detrimental effect on the elderly in Britain.
Back to BP's handling of the disaster. It is thought they arending tens of thousands of pounds everyday on google alone to ensure BP are top of the search engine when Gulf oil disaster (or related topic) is entered. They are trying to take control of the situation and force people to look upon the disaster from BP's perspective. Which is: An accident happened, which ruined the livelihoods of many Gulf Sea inhabitants, however BP are doing everything in their power to rectify the situation.
I believe it is worth noting that BP have, quite admirably not tried to push the blame on to Transocean, or engaged in a petty war of words with Barak Obama.

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