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Netflix: Self-created growth shows no signs of stopping

MarketLine

In October 2018 Netflix Inc. announced its 2018 Q3 results, showing a continuation of its subscriber volume growth with 5% growth on the previous quarter and 25% growth year-on-year. The company has performed well historically too, with a 500% increase in subscriber volumes expected between 2011 and 2018. Netflix has performed so well for three main reasons. Firstly, the company was one of the first to make a serious commitment to online media streaming. The company has since established itself as the name in on-demand streaming and has no real… Read more

Angling Direct: Attempt to consolidate fishing industry

MarketLine

Angling Direct is the largest specialist fishing tackle and equipment retailer in the UK. The company had humble beginnings, starting as a single tackle shop in the Norfolk Broads. As of 2018, it sells a comprehensive range of over 21,500 fishing tackle products and associated angling paraphernalia, including its successful own brand, ‘Advanta’, launched in March 2016. In July 2017, the company cast off into the Alternative Investment Market (AIM) on the London Stock Exchange, entering the next stage of growth. The initial public offering raised GBP9m ($11.6m) to fund… Read more

BP back in Libya: British oil major is taking risks returning to chaotic country

MarketLine

For BP, a company which has suffered following massive bills incurred from the Deepwater Horizon disaster in the Gulf of Mexico, entering such a market may not immediately appear to be an example of prudent business decision making. Provided BP can drill oil reliably, and the country remains sufficiently stable to enable foreign companies to operate freely, the partnership with Eni to begin exploratory drilling in the early part of 2019 could prove fruitful. Exploring for oil at this stage could prove to be a valuable strategic move when viewed… Read more

New Zealand: New efforts to curb skyrocketing house prices

MarketLine

New Zealand has the world’s most frenetic property market, with prices in Auckland, New Zealand’s largest city, now outstripping London. In 2017, New Zealand house prices were the most unaffordable in the world and prices in Auckland have risen by 75% over the last four years alone. Home ownership is also low with only one quarter of New Zealanders owning a home. The last five years have also witnessed a rise in homelessness. At the same time, New Zealand has recently become known as a get-away for the foreign super-rich… Read more

US becomes world’s leading oil producer: Expanded oil production changes global industry dynamic

MarketLine

For a long time the US has been a leading oil player, but the combined might of OPEC was sufficient to reduce the global influence the country could have. However, thawing relations between Russia and Saudi Arabia reveal a decline in the ability of Gulf oil states to shape the international oil price according to domestic wants. Under such circumstances, expanding US production over much of the last decade has gone up against comparatively steady production from both Russia and Saudi Arabia. The US Energy Information Administration (EIA) predicts the… Read more

Tesco & Carrefour – Strategic partnership protecting wafer thin margins

MarketLine

All the big traditional supermarkets are trying to cut costs and improve profitability, as they adapt to an array of pressures and changes which are reshaping the industry. Grocers in Europe have come under pressure in recent years from the expansion of Lidl and Aldi, the German discounters that offer a narrower range of products bought in huge volumes at deeply discounted prices. Additionally, traditional grocers are under increased pressure from Amazon fearing the potential disruption it could cause in the grocery sector. As efforts by traditional retailers to shore… Read more

Brandless The Procter & Gamble for millennials

MarketLine

Brandless, a startup e-commerce consumer packaged goods company, wants to set a landing point for consumers who seek quality and transparency, and want to avoid brand loyalty and choice overload typical for the majority of grocery stores. By selling its products online in no-frills packaging, Brandless claims to save consumers up to 40% by eliminating hidden costs associated with marketing, branding, and advertising for a national brand. Through the principles of its business model, Brandless is creating a direct relationship with its consumers, which most CPG brands do not actually… Read more

Vegan Pet Food: Movement has the right environmental ideas, but might be bad for animal health

MarketLine

There are big trends in motion in the global pet food market. Customers looking for foods that are healthier for their pets, less damaging to the environment or more premium have been purchasing increasing amounts of products such as raw and vegan pet food stuffs. The issue however is complicated. Much of the science on what foods are truly safe to feed your pets is ambiguous and new trends like vegan pet food are largely unproven in their long-term effects. A considerable problem for both the industry and society at… Read more

Australia Banking sector under misconduct investigation

MarketLine

Finance is Australia’s biggest industry, and its banks are some of the most profitable in the world. Australia’s “Big Four” – Commonwealth Bank (CBA), ANZ, National Australia Bank (NAB) and Westpac – collectively hold about 80% of the country’s banking market. Despite its strong position, Australia’s banking and financial services sector has been rocked by a series of scandals over the last decade, with all “Big Four” largest banks being accused of serious misconduct. As a result, a royal commission, Australia’s highest form of public inquiry, has been called to… Read more

Microsoft’s acquisition of GitHub: A crucial step for the company’s new strategy

MarketLine

Microsoft’s interest in the open-source community reveals its importance; given the company’s strategic change is some years now towards the embracing of open-source software development. Accordingly, the acquisition of GitHub does not sound surprising, at least not as much as the $7.5bn paid for that acquisition. However, the acquisition of Microsoft is of pure strategic value; the extraordinary $7.5bn paid that equals 3000% of GitHub’s estimated annual turnover means that the financial value of the company itself is not the reason for making such an acquisition. Indeed, Microsoft paid that… Read more

China Three Gorges takeover of EDP: Deal would leave Portugal dangerously exposed to China

MarketLine

The $10.9bn bid from China Three Gorges, the largest clean energy company in China, was rejected by EDP but the takeover remains very much the most likely outcome – only at present the shareholders would prefer to extract a larger sum of money for a prized asset. Current trading conditions are ideal for China Three Gorges. A relatively poor government (although now at least managing a growing economy and rising employment) in need of foreign investment makes EDP ripe for a takeover bid. Yet to secure this the government will… Read more

Air France – KLM: Unclear market position the source of many problems

MarketLine

Air France’s ongoing dispute with labor unions has caused more financial woe for the company and its stock price has plummeted. Specifically, the air carrier’s stock price has already fallen by 47% from the start of the year as its financial indicators regarding costs have been disappointing, while its total debt has soared to EUR 12,444m – equal to almost half of its revenues. However, problems at the company go deeper. Its lack of a clear market positioning is a structural problem which is the source of reduced competition and… Read more

New Zealand: Halt to offshore drilling

MarketLine

New Zealand pumped an average of just 31,000 barrels of crude oil a day in 2017, according to data from the US Energy Information Agency (EIA), a fraction of the 913,000 barrels produced daily in the North Sea. The country’s annual oil production makes up just 1.4% of the country’s economy. The industry is already in decline after a downturn in the global market from 2014 took a heavy toll on its earnings. Crude oil production declined in 2016 to the lowest level in a decade, and spending on production… Read more

Vincent Bolloré charged in France

MarketLine

The arrest of French billionaire Vincent Bolloré, head of one of the largest companies operating in Africa, Bolloré Logistics, is unlikely to hurt the operations of the company recently valued at EUR12.9bn ($15.4bn). Insufficient logistical infrastructure has long held back economic growth for many countries situated on the world’s poorest continent. The French company has been important to developing critical infrastructure that has been driving growth of late. Odds are investigations in France will not significantly damage the company in Africa. Vincent Bolloré has already gained vocal support from Guinean… Read more

Sears seeks to sell assets to ESL Investments: Strategic call of CEO Eddie Lampert is sign of failure

MarketLine

Under CEO Eddie Lampert, Sears has always found enough money to struggle onwards. Now the much criticized hedge fund billionaire is seeking to buy the Kenmore appliance brand from his own company via his own hedge fund, ESL Investments. Lampert himself claims the sale “will provide an important source of liquidity” for Sears and help “to complete its transformation to respond to the challenging retail environment.” Few expect that sort of turnaround. Conventional wisdom dictates a troubled retailer needs to maintain the most lucrative assets under its control, not sell… Read more

Subaru: Company is growing well in the US but declining heavily in Europe

MarketLine

Some strange things are happening at Subaru Corp. The company famous for its boxer engines and all wheel drive vehicles is making excellent progress in the US market, but is declining in Europe, revealing the big differences between the two automotive markets and their expectations of vehicles. For Subaru though it appears to have damaged the company’s confidence in the European market and now it’s range is reduced and cautious for fear of wasting time trying to convince an audience that is not receptive to its products anymore. But really… Read more

Saudi Arabia – Wind of change in the desert kingdom will create new business opportunities

MarketLine

Saudi Arabia has for decades been one of the world’s most culturally austere and restrictive countries, not allowing gender mixing, concerts, and cinemas, amongst others. However, the government’s Vision 2030 reform program is set to return the country to a more moderate Islam, diversify the economy and reduce the country’s dependence on oil by growing sectors like entertainment, arts, tourism and culture. This liberalizing reform drive has already opened the door to concerts, comedy shows and women drivers over the past year. From June 2018 women will be allowed to… Read more

UK holidaymakers abroad: Independent holidays are taking on package holidays

MarketLine

The number of UK travelers abroad has been growing strongly in recent years, above 3% year-on-year since 2014. The steadily growing number of tourists abroad in the last two years seems even more remarkable given the fact that the value of the British Pound, which is a determinant of the cost of a holiday abroad, has fallen dramatically in that period. However, there is a new trend hidden behind this paradox; package holidays are not the main option for UK tourists abroad who now seek greater value on the tailored… Read more

Trillion dollar companies: Apple, Amazon, Facebook and Alphabet all in contention to be the first

MarketLine

For many years analysts have been considering which companies might actually reach the staggering level of a trillion-dollar market capitalization company. Over the last decade the leaderboards have seen change with the big oil companies dropping out of contention for the top spots and instead the big tech giants working their way up to the top along with the entrance of new Chinese companies and global banks. These companies have new freedoms, such as being able to avoid having to post profit in favor of extreme growth. Of the top… Read more

Australian bookmakers under pressure as new legislation hits hard

MarketLine

Online gambling is incredibly popular in Australia with around 80% of Australians gambling at least once a year. Adults in Australia gamble more per capita than any other nation in the world, an average of $976.50 per adult. That is 40% higher than Singapore, the runner-up, and around double the average in other Western countries. The existing loopholes in the gambling law created a gray area allowing almost every form of online gambling. This has attracted many of the world’s top online gambling sites, as well as illegal operators to… Read more

Twitch & YouTube: Amazon and Google fight over gamers, but the former has the better business model

MarketLine

The battle for the increasingly lucrative media format of gaming livestreaming is warming up. Enormously popular with millennials and generation Z, gaming livestreams have gone from a niche genre to the mainstream with the industry’s biggest stars taking millions of dollar a year and featuring in mainstream media. The king of this domain has for some time been Twitch, a gaming specific livestream platform that can host clips and videos but whose primary focus is nurturing its community of content creators and viewer base. YouTube has stepped into this arena… Read more

Consumer credit is unsustainable – Tough times lie ahead for retail and services in the UK

MarketLine

There has been a boom in consumer credit in recent years, which has supported consumption as wages have been subdued and inflation has been rising. Although it may seem paradoxical, households in the UK have being increasing their consumption as their real income has been shrinking. Consumer credit has recorded the highest (double-digit) growth rates since the financial crisis of 2008, amid high consumer confidence and a low interest rate environment. Under these terms, the retail and services sector that have grown based on this credit spree are vulnerable in… Read more

Chinese regulator takes over Anbang: Massive insurer made example of in wider effort to keep money at home

MarketLine

President Xi Jinping has plenty of motivation to take action on Anbang Insurance Group. Not only had the company come to symbolize debt-ridden conglomerates through a series of lavish overseas purchases, but the speed at which the company had expanded raised concerns as to the wider impact failure could have. So far it would appear policy revisions have been successful in halting the flow of money out of the country. The messages many businesses in China will have deduced very swiftly is the President, now rated among the most powerful… Read more

Jaguar I-Pace: Finally an electric vehicle that can truly compete with Tesla

MarketLine

In early 2017 Jaguar Land Rover made the announcement that from 2020 it would only be building hybrid and electric drivetrains for its vehicles. A number of other significant companies have followed suit and made similar commitments and a race to market has begun. Whilst budget EVs and Hybrids have been around for some time, the real prize for the premium vehicle manufacturers was finding a way to catch up with Tesla, matching the sort of staggering performance, unrivalled range and attractive design with a similar or better product. So… Read more

The world’s first plastic-free aisle: A key moment in the war against plastic pollution

MarketLine

The stark reality of the damaging nature of plastic packaging has become increasingly evident in recent years, which has placed pressure on the global community to take action. Supermarkets in particular are guilty of using layer upon layer of plastic to package perishable food items, which over time has caused irreversible damage to the environment. The introduction of Ekoplaza’s plastic-free aisle is a landmark moment in a fight against plastic pollution, showcasing to the world that the concept is possible, scalable and well received. The move to launch the world’s… Read more

Vero: 3 reasons why it won’t replace Instagram

MarketLine

In recent years Instagram users have become increasingly irritated with a number of features of the application. The huge amount of advertisements and changes to the algorithm that Instagram uses to order content, has meant that posts are not featured in chronological order, which has proved to be unpopular amongst the majority of users. Social app Vero appears to answer the demands of users and has been described as ‘the new Instagram’, however in reality it is likely that this is not the case and Instagram will remain a staple… Read more

UK sugar tax – Attempts to curb rising levels of obesity

MarketLine

The UK is the most obese country in Western Europe, and the sixth most obese country in the world. Around 26.9% of the British population has a body mass index of 30 and above, according to the OECD report and the cost of treating ill health caused by obesity and related issues is rising fast, threatening the NHS budget. The government, long criticized for taking no action to tackle this issue, decided to introduce a Soft Drinks Industry Levy, in the hope that the increased cost will stop people from… Read more

Saudi Arabia and Russia oil alliance: Desert kingdom requires Russian co-operation to solve economic problems

MarketLine

Petrostates have historically been wasteful in regard to spending the wealth generated by large-scale fossil fuel extraction. The desert kingdom of Saudi Arabia is no different, spending vast sums on subsidizing fuel and extensive social programs; most of the workforce is employed by the state, funded by oil. Now the country is undergoing significant reform to correct economic imbalances and diversify the economy. The Aramco IPO is driving Saudi Arabian policy, which in turn is likely to be directing the nature of OPEC policy. Oil futures for March 2019 are… Read more

Tablet market decline continues: Strong demand for substitutes and low innovation resulting in falling sales

MarketLine

The tablet market has undergone consecutive years of decline in recent years, and the market is expected to continue declining in the coming years as well. This has put intense pressure on players operating in this market, and many such as Dell and HTC have decided to pull out. Overall the market is dominated by Apple, Samsung and Amazon. Several reasons have been given to explain why the tablets market after such a promising start has succumbed to this pattern of decline. An important reason is the way in which… Read more

Nissan $9.5bn China investment: Scale of spending required to stay relevant in world’s largest car market

MarketLine

Whilst Nissan is not regarded as being a member of the top-tier car manufacturers – the likes of Volkswagen Group and Mercedes Benz are much larger – that has not stopped the company from pumping $9.5bn into car manufacturing in China. Such investments are now essential, particularly for the less popular global brands. The move represents significant ambition from the Japanese car maker: Toyota, recently the second largest player in the Chinese market, is declining in China and an opportunity exists for Nissan to climb up the hierarchy. Large investments… Read more