The Proof of my Book Arrived

Here is the cover of my book ... proof copy. Found one error :(. Small mistake and so easy to correct.

Buy it from amazon.co.uk in Kindle and Print versions.

Duncan Williamson

My new book is available NOW!

I have published a new book: Business Cases for mSMEs.

So far it is available from the Kindle book store: just go to there to find it.

It costs just £5.99 and is available for instant download.

This book is for budding entrepreneurs looking for ideas, for teachers who teach entrepreneurship. There are cases on ecommerce, franchising and advertising as well as entrepreneurship.

The cases are short, easy to read and understand and every cases comes with questions to help you to review the case whether for the classroom or to help you with your own business ideas and business plans.

Available from the Kindle book store NOW!

Duncan Williamson

My New Book and Youth Unemployment

It is a sad fact that there are far too many young people unemployed in the UK. For a long time now I have felt that there are several reasons why young people are not getting jobs

• welfare state
• unrealistic ambitions
• poor education

Many young people who live at home are receiving unemployment and other benefits and they may well be satisfying: there is no drive for them to need work.

I talk to young people whose first ambition is to become a manager ... this is before they have any experience and, indeed, education, training and experience. Parents, teachers and others who discuss these matters with their young people need to convince them that starting at the bottom is the reality and not something that was fine in the old days ...

There is no doubt that young people are leaving school in the UK undereducated relative to a generation ago. The people who say, for example, that if someone can communicate, it doesn't matter whether they can spell and so on: complete tosh. This is a recipe for people to be trapped at the lower levels. After all, the average middle and senior manager in the UK needs good communication skills as they have to give speeches, write reports and so on. Mathematical abilities are nowhere near what they were: I have met 18 year olds who wanted to use a calculator to find the answer to the question, "What is 10 as a percentage of 100?"

New Case Study Book: a recipe for success

I believe there are, however, a lot of young people who should be encouraged to take hold of their lives and look after themselves. The book I am writing at the moment is a case study book: lots of examples of MSME businesses that even school and university leavers can take a look at and start. Many of the examples you can read about might even need no capital, or very little capital. One of the fascinating aspects of the cases is that most of them come from the Far East: the Philippines, Singapore, Vietnam, Thailand, Indonesia ... If you would like to see specimen examples from the book before it is published, just write to me at duncan_at_duncanwil_dot_co_dot_uk with Specimen Cases Please as the subject and I will send you three examples from the book free of charge.

DW

Target Costing: new page on my web site

I have written a page on Target Costing. I was inspired to write this page when I found a perfect example of target costing being discussed, accidentally, in a self building PC forum on the internet. The page includes this example and others, including the Mercedes M Class.

Go to this page on my web site and click on the target costing item in the menu under Cost Accounting.

Duncan Williamson

Using Monte Carlo Simulations with CVP/Break Even Analysis

Take a look at this video ... demonstrating the use of Monte Carlo Simulation for CVP/Break Even Analysis. The video is relatively low quality and I am working on uploading the full quality video.

Your feedback is eagerly awaited!

If you would like the spreadsheet that is featured in this video, please send me an email to duncan@duncanwil.co.uk and PLEASE spell out exactly what you want! Sorry but I have received BLANK messages before and messages that say send me the file ... so please be specific and you can have it!


DW

Graphs/Charts ... do it right!

On my web site you will find a lot of examples I put together a few years ago of drawing graphs and charts properly. Anyone who has read those guides will be interested in this page on the Economist web site ... I hope the page is not behind a paywall as it is a good set of examples:

http://www.economist.com/blogs/graphicdetail/2012/06/mis-charting-economic-history%20?fsrc=nlw|newe|6-21-2012|2278741|36353618|UK

DW

RyanAir ... gimme, gimme, gimme!

Take a look at this page from the Financial Times in which you will read about that odious little man at RyanAir who wants to grab money that he has no real right to grab at: it will come to him or not. The other company involved has essentially told him to eff off!

http://www.ft.com/cms/s/0/df47055e-95de-11e1-a163-00144feab49a.html#axzz1vcpWcg8d

Duncan Williamson

2.5 Days or Billion Days?

In my training sessions I often tell my delegates the following story:

20+ years ago someone went round the big car makers and asked them, if you had to make one of every car and combination of features of every car you make, how long would it take you?

Toyota answered 2.5 days
GM answered 2.5 billion years

I have to admit that I have lost and forgotten the source of my story although I try to find it from time to time. I think in general my story is correct. So, what now? Well, take a look here at the comparison between Android driven phones and Apple driven phones ... the key idea is complexity.

Complexity almost killed GM and I believe it should have. Apple is keeping things simple: is this a pointer to the future?

Android phones:
http://fortunebrainstormtech.files.wordpress.com/2012/05/screen-shot-2012-05-17-at-10-09-20-am.png

Apple Phones: essentially it has 3 platforms: iPhone, iPad, iPod Touch

In terms of resolution, scroll down this page and see how Android phones ooze complexity and choice compared with Apples supreme simplicity:

http://opensignalmaps.com/reports/fragmentation.php?

I find this very interesting!

DW

Continuous Improvement

This is a good read BUT you MUST read all of the comments as well as they include some very valuable and additional insights:

http://blogs.hbr.org/ashkenas/2012/05/its-time-to-rethink-continuous.html?cm_mmc=email-_-newsletter-_-strategy-_-strategy051512&referral=00210&utm_source=newsletter_strategy&utm_medium=email&utm_campaign=strategy051512

Duncan Williamson

It's as if I knew!

Everyone knows I am hardly a fan of Microsoft. So it came as a massive boost to me to read that MS is partnering its search engine Bing with Facebook and Twitter ... about a month after I had unregistered with both of them.

Phew! That was close.

Duncan Williamson

Emirates Flies Ever Upwards!

There are two reasons to go and take a look at the Emirates Group's web site, the home page of the Emirates Airlines Group:

• to see the financial and non financial results of a 24th successful year in a row for the group
• to see some lovely photos in their 2011 - 2012 Annual Report

Start here and follow your nose and eyes! www.theemiratesgroup.com/annualresults

Duncan Williamson

Facebook IPO

I have been reading about the Facebook Initial Public Offering (IPO) and here are just a couple of things that I have found  in the Prospectus document from which these extracts have come:


Facebook's Mission

We don’t build services to make money; we make money to build better services.

Culture The Hacker Way

As part of building a strong company, we work hard at making Facebook the best place for great people to have a big impact on the world and learn from other great people. We have cultivated a unique culture and management approach that we call the Hacker Way.

… The Hacker Way is an approach to building that involves continuous improvement and iteration. Hackers believe that something can always be better and that nothing is ever complete. They just have to go fix it: often in the face of people who say it’s impossible or are content with the status quo.

Hackers try to build the best services over the long term by quickly releasing and learning from smaller iterations rather than trying to get everything right all at once. To support this, we have built a testing framework that at any given time can try out thousands of versions of Facebook. We have the words “Done is better than perfect” painted on our walls to remind ourselves to always keep shipping.

(There's more to the Hacker Way in the Prospectus document from which these extracts have come ...)

Five core values for how we run Facebook

1 Focus on Impact

2 Move Fast

3 Be Bold

4 Be Open

5 Build Social Value

(There's more to these value in the Prospectus document from which these extracts have come ...)

From a financial point of view, the implied P/E ratio for Facebook when the shares are finally sold are as follows:

P/E Ratios based on an issue prices below and the EPS above	Based on results as at 31/12/11	As at 31/3/12
$28	57.14
29	59.18	72.50
30	61.22	75.00
31	63.27	77.50
32	65.31	80.00
33	67.35	82.50
34	69.39	85.00
35	71.43	87.50

Those P/E ratios are high, I think and are indicative of the hype surrounding this IPO. Take a look at the risk assessments in the Prospectus to see some of the things that Facebook is worried about. One such worry is that Facebook might not be here in 1 year's time or 5 years or 10 years ... They admit in the risk assessment section that significant parts of their business are already on mobile platforms and are moving to mobile platforms more and more and yet they have no real strategy for turning such connections into revenue and therefore profit: I find that scary!


If I were thinking of investing in a company I wouldn't pay such a vast amount for a share in this dot com company UNLESS I was merely going to try to make a major short term windfall profit.


Duncan Williamson

How Much is a Footballer Worth?

Most of us will agree that Premiership footballers' wages are too high. Far too high. Far, far too high! 

However, how should we decide what such a wage should be?

We hear that Wayne Rooney is paid £250,000 a week. Others are paid similar obscene amounts ... all the way down to marginal clubs whose players might earn as little as £20,000 a week.

 Is Rooney worth £250,000 a week and how do we know? Because of Rooney, Manchester United might be more

• successful than if he didn't play for them 
• exciting to watch 
• consistent from game to game 
• and so on

Can we quantify these effects? Yes, for example, if we can say how many more people watch United because of Rooney together with the money they pay over. We can quantify the number of Rooney shirts and boots that are sold by or on behalf of United. And so on; but this is all very pedestrian and it might be that Rooney has no marginal value.

After all, United has been very successful for decades so has Rooney made their position any better?

Let's look at JiSong Park now: Manchester United's South Korean player. I have found an estimate of his wage of £65,000 a week: much less than Rooney. Can we evaluate Park's worth? Well, I think we can evaluate Park's worth much better than we can evaluate Rooney's worth.

Take a look at this article: http://www.dailymail.co.uk/sport/football/article-2038633/Park-Ji-sung-Manchester-Unioteds-Korean-cash-machine.html That article sets out the reality that because Park is a United player AND is seen to be an all round good egg, he is adored in South Korea. A MILLION pounds worth of United shirts adorn a South Korean back, over a MILLION South Koreans carry a Manchester United credit card with Park's face on it, television audiences are massive because of Park. When Park was not played in the first team by United, South Koreans got a bit itchy about it!

 These Park related matters can be very easily quantified I think. The possibility is that the money rolling into United's coffers from South Korea could easily be just a tenth of what they are now ... that's a blind guess.

Let's see what happens when Park retires from United. Will there be a replacement South Korean at Old Trafford? If there is no replacement for Park will merchandise and credit card income from South Korea dry up?

 Fascinating, if you ask me!

 Duncan Williamson

Another airline tax? Get lost!

This is a simulcast with duncan's diurnal diatribe Read this article and then my comments below http://www.ft.com/cms/s/0/8d2ca858-92f2-11e1-b6e2-00144feab49a.html#axzz1tFw6P9cn --oo0oo-- This is a joke, yes? Cameron agrees so that's it? The reality is that politicians these days are so undereducated in the ways of the practicalities of running a country that all they can think about is to increase taxes and hope that a problem will then be solved. The reality is that this is a matter of planning, forecasting and management. Is it a surprise, for example, that today, an Emirates A380 will arrive from Dubai at Heathrow (and Manchester for that matter) and another one will arrive from Singapore? Is it also a surprise that there may be more than 500 people on each plane? Is it also a surprise that this happens every day of the year? The point is quite clear, airlines have their timetables and their slots at our airports. We all know all of this. Now, just take another step or two from here: on average, how many Brits are on these planes?; how many are from the EU and so on?; how many are from the rest of the world ... la la la. Passenger arrival statistics are a matter of fact and have almost certainly been analysed ... haven't they? Finally, we get the the nub of the matter: the Border Agency knows all of the above much better than I do but in the end it's a matter of staffing and management since the plans and forecasts have largely been taken care of. Like other people on this thread, I travel a lot and would resent most strongly if ever more taxes were loaded onto passengers. For example, a recent flight: cost of ticket £42, cost of taxes and other charges on that ticket £121. Easy target or what? Duncan Williamson

Just Eat

Here's a peculiar thing. I came across an article in the FT yesterday on a company called Just Eat. The essence of the story is that "Just-Eat, an online takeaway site, has raised $64m from private equity group Vitruvian Partners and other investors to help it gobble up smaller rivals, in Europe’s largest ecommerce fundraising yet this year." What's so good about that? I had never heard of the company! So I did a search for them and found that they are here in Halifax too. Well, they are everywhere: an online booking service. Not just a link to the local pizza shed but a restaurant's entire menu is online, you choose from it then Just Eat sends a message to the restaurant which then fulfills your order. Good idea and I am not being paid to write this: I am just surprised that I had never heard of it before! I am not sure if you need a subscription to the FT to read it but see the article Just-Eat raises $64m for acquisitions By Tim Bradshaw, Digital Media Correspondent at http://www.ft.com/cms/s/0/6c805dd2-9097-11e1-8adc-00144feab49a.html#axzz1tFw6P9cn Duncan Williamson

I really don't like this

The other day I asked a friend of mine a simple question: where does he buy his bow ties? Many years ago I went through a phase of wearing a bow tie until one day someone came up to me and said, "And my next trick is ..." I thought that was a fatuous thing to say but shortly afterwards I stopped wearing them. Then I had a conversation with someone a few works ago and she sent me to a web site where there was a very nice bow tie waiting to be bought. I bought that bow tie and have started to wear it ... Following advice from my friend I went to three web sites this week to look for other bow ties. Some really nice ties on offer too. Five minutes ago I clicked on a link in an email message and when I got to the page I wanted to read, there, top left hand corner of the page, was an advertisement for one of the three bow tie web sites I went to the other day. I don't like that. I know about cookies and so on. I know that google monitors my messages for advertising purposes and so on. These days, though, we are being monitored in a google like way outside our email as far as I can see. For similar reasons I stopped using Facebook and twitter recently: apart from the waste of time these sites encourage, they are far too intrusive now. Everywhere we go and everything we do has a facebook and twitter link. Now we are being hounded even beyond that. What can we do about this? Refuse to accept cookies? Can't do that unless you want to input some things over and over again ... In the end then, be aware of what is happening and watch out for the insidious. Someone, somewhere has made 5 pence out of my innocent click through, haven't they? Which takes me to another point: knowing the way google works, I NEVER click through any of their sponsored ads. NEVER. If I see a site that interests me I will copy and type the address of that site rather than click through it. Do I begrudge google their money? Not at all but it's another way in which the modern world is paying another tax without realising (I am sure that is true, by the way) it and without being able to control it. Duncan Williamson

Death wish

Anyone know why this worm might have been attracted to my hall only to get there and die?

Several worms of this type have done this over the last two years or so.

DW

New HR book from Tony Miller

There are at least two reasons for buying this newly published book: firstly, it's very practical and it's been written by a true master of his craft, DrTony Miller.

The second reason to buy is that the tables, charts and numerical analysis were driven by yours truly via Microsoft Excel.

Here's the link to Tony's site where you can buy the book.
http://www.tony-miller.com/the-new-hr.php

Duncan Williamson

Budgeting: Practical Problem

In the Gulf Times newspaper last week there was an article relating to the State budget for Qatar for 2011. What they said was that the budget for that year had been based on an average crude oil price of $55 per barrel. Over the year the average price of crude oil on the commodities markets was $112.83 per barrel. Imagine the implications for a company, let alone a country, of one's selling prices being around 105% greater than one had previously budgeted. I understand from a conversation today that Saudi Arabia's State budget was based on a crude oil price of $74 for 2011 ... the same applies to them as to Qatar except that the difference between actual and budget is not so high. Just goes to show that the Beyond Budgeting Round Table people have made some fair points in their time! Duncan Williamson

Value Chain Analysis: beyond Porter

For a few years now I have been required to discuss Value Chain Analysis. Like most people I start with Michael Porter's view of the value chain. However, what's wrong with Porter's analysis is that it concentrates only on the organisation.

There is a further analysis to add to Porter coming from John Shank and Vijay Govindarajan.

I have prepared a detailed review of Porter and Shank & Govindarajans' analyses and they can be yours free of charge. Just write to me at duncan@duncanwil.co.uk and put value chain in the subject and I will send you a PDF file that begins as follows:

--oo0oo--

Value Chain Analysis

Duncan Williamson

This article is concerned with value chain analysis and you should find it useful for you as you consider ways of enhancing the services that you provide to your clients. An understanding both of value added and analysis and value chain analysis will put you ahead of many accountants for whom these skills are elusive!

Having defined the term value chain, we will take a look at a series of examples that will illustrate the need for such analysis. Value chain analysis is best used when analysing a company’s competitive advantage, or lack of it. Michael E Porter suggests using the value chain to separate the company's activities in the value chain into detailed discrete activities. When broken down to a sufficient level of detail, the relative performance of a company can be determined. (Have et al)

Shank and Govindarajan provide fascinating insights into value chain analysis that take Porter’s seminal ideas a stage further. This article explores some aspects of value chain analysis using data taken from the annual reports and accounts of British Airways and easyJet.

The article starts, however, by distinguishing value chain analysis from value added analysis.

The following are the section headings I have used in the rest of the paper:

• Value Added v Value Chain Analysis
• Identifying Value Activities
• The Value Chain
• Value Chain Framework
• Strategic Implications
• Supplier Linkages
• Beneficial Linkages
• How Value Chain Analysis Works
• Value Chain Case Study: airlines
• easyJet
• British Airways
• Conclusions
• References

Duncan Williamson