Welcome to Sanctuary Graduates’ first post in a new weekly series designed to help students and graduates improve and prepare for the dreaded commercial awareness question in your interviews. The posts will summarise the week’s headlines and updates in the commercial sphere. We hope it’s helpful in improving your commercial awareness in an easy to read, digestible format! This week our post covers: coronavirus’ economic impact; Credit Suisse espionage; Jaguar Land Rover’s drop in sales; as well as Bong Joon Ho’s Oscar win with Parasite; and HS2 plans.
Bong Joon Ho’s Oscar win with his dark comedy on class warfare has made history as the first non-English language film to win best picture at the Academy Awards.
This reflects South Korea’s rapidly growing presence in cultural influence, and the global economy. With the Korean
Film Council allocating £65 million for film development, one sees a 32% increase compared to last year. One observes clear benefits to this with Oscars serving as currency in the film industry.
With Parasite alone, one sees a global revenue of $165 million globally thus far, and the Korean film industry having an estimated export value of $41.6 million. An early investor hedge fund in Korea owns around $2.6 million in assets due to an initial $500, 000 investment. Seoul-based Barunson Entertainment & Arts also saw their stocks surge by 90% since the Academy Awards.
China’s economy is both larger, and less stable than at the time of its last health risk outbreak of SARS 17 years ago. As such, ripple effects are being felt globally as a result of the recent coronavirus outbreak and resulting frenzy.
Given China contributes a sixth of the global economy, industries across the board are feeling the impact. For example, cancelled flights to and from China, exports ceasing globally breaking supply chains, and the Chinese market being restricted from global spending. Even crude oil hit its lowest level in over a year with a 15% drop “reflecting declining demand from China”.
Tentative predictions come from Oxford Economics that the Chinese economy will grow by 4% in 2020’s first quarter compared to the pre-virus forecast of 6%. Predictions of the global economy growth also dropped 0.2 points compared to pre-virus forecasting.
Following spying scandals regarding former employees of Credit Suisse, including Mr. Iqbal Khan – the former Head of Wealth Management at the bank – Mr. Tidjane Thiam has resigned in order to protect the bank’s reputation.
Despite assurances to the contrary, rumours have circulated following the Board’s unanimous acceptance of Thiam’s resignation that relations between the soon to be former Chief Executive and the Chairman have become increasingly strained following the scandal. Mr. Thiam is due to be replaced by Credit Suisse’s head of Swiss business, Thomas Gottstein.
Carmakers globally have cut production due to a shortage of parts shipped from China owing to the recent coronavirus outbreak. Among these are JLR, applying a “production balancing” strategy, halting or halving lines at its Solihull and Castle Bromwich factories.
Although no job cuts have been announced at the factories, this comes after 500 job cuts in the companies Halewood plant last year. This was also inclusive of 4, 500 positions cut globally in the last year. Such strategies come with the aim of saving £2.5bn following decrease in demand.
Disney’s recent launch of Disney+ has seen resounding success, attracting 29 million paying subscribers in less than three months. Industry experts note however, a fall of 23pc in profits to $2.13 billion following launch costs.
This loss comes from operating costs of $693 million due to a variety of factors. These include: the launch and maintenance of Disney+; as well as park closures in Hong Kong and Shanghai due to the coronavirus outbreak, with a predicted hit of $300 million. Disney, however, predicted losses of $800 million with the launch, and a further $900 million loss predicted during the current quarter. As such, one sees why the company has been overwhelmingly pleased with the launch.
Although the political ramifications of Trump’s impeachment trial could have been vast, the economic consequences could be just as profound. Uncertainty in politics inevitably breeds uncertainty in investments, and major investors may think twice before offering their backing to US companies. And if investment wanes, growth can slow and unemployment would surely rise.
That said, the US economy has largely thrived irrespective of allegations of abuse of power at the summit. Unemployment remains low and economic growth is by no means struggling. Moreover, Trump’s favour amongst the electorate doesn’t appear to have diminished much in spite of the impeachment saga. As a result, few experts are forecasting any significant market volatility as the next presidential election looms. Whether Trump has come out of this sufficiently unscathed to be reelected remains to be seen, but if he is displaced by the end of the year, the state of the economy won’t be to blame.
Following Mulberry’s near £10 million profit loss in the 6-month run up to September 2019, the Newcastle United owner Mike Ashley stepped in to acquire a 12.5% stake in the company – making him the company’s 3rd largest investor.
Having a history of swooping in when stocks are cheap and building the business back up to its feet, Mulberry is the latest addition to the Frasers Group’s prolific investment portfolio. Previous additions to their portfolio include Jack Wills, sofa.com and French Connection, to name but a few.
The retail guru’s investment comes in support of Frasers Group’s ‘elevation strategy’: “building stronger relationships with premium 3rd party brands” in an attempt to provide his consumer base with more upmarket products.
For now, the seeds of his labour have yet to be planted; but when they do, the brand will no doubt grow exponentially.
Cutting the London-Birmingham commute from 1h20m to just 20m, the HS2 will elevate British travel to a different sphere. HS2 is a huge point of investment, meaning its influence is felt in all walks of British life. From creating thousands of jobs spanning 2 decades, to reducing the national carbon footprint, and rebalancing the UK economy, the HS2 has entered the process entirely self-assured.
Closely following in the footsteps of the Chinese Maglev Train in terms of speed, the HS2 will be at the forefront of modern public transport – but what’s the catch?
First and foremost – it is incredibly expensive. Being budgeted at £56bn in 2015, recent estimates have placed the proposed cost to actually be closer to £106bn. The rearranging of rivers and bisecting of Towns may be proving to be a much bigger ask than originally intended.
Are we as a nation willing to carry on as we are: overpopulation, overcrowded trains and collapsing economy? Or do we try and reroute the way in which we view travel, investing our efforts in securing our future? The HS2 certainly is not the answer to all our problems, but it may be a start.
Did this post help you gain a better understanding of what commercial awareness topics are relevant? Will you be tuning in next week for the week’s relevant commercial awareness topics, summarised by our outstanding team? Let us know in the comments, and keep an eye on our blog for more commercial awareness pieces, as well as pieces on how to excel in your graduate role processes!