Reading 1

What makes Nike’s advertising tick?

Phil Knight, the co-founder and former Chief Executive of Nike, prefers to let his superstar athletes
and advertisements do his talking for him. Named Advertiser of the Year at the 50th Cannes
International Advertising Festival, he is the first person to win the award twice.
Knight has an absolutely clear and committed strategy to use celebrity athlete endorsement. He
describes it is as one part of the ‘three- legged stool’ which lies behind Nike’s phenomenal growth
since the early 1980s, with the other two being product design and advertising.
He has built Nike’s expansion into sport after sport from its athletics roots on the back of
sporting masters: Carl Lewis on the track; tennis’s Jimmy Connors and John McEnroe. Tiger
Woods, who led Nike into golf; Ronaldo and the Brazilian national football team; and the
basketball star, Michael Jordan, who famously rescued the company.
From the beginning Nike has been prepared to take a gamble on sporting bad boys others
would not touch: Andre Agassi springs to mind. It was a strategy that began with Ilie Nastase,
the original tennis bad boy. The Romanian had the quality that has come to represent Nike and
its advertising: attitude.
After extraordinary growth, Nike became number one trainer manufacturer in the US. But
Knight admits the company then lost its way as it failed to cope with its success. It experimented
unsuccessfully with expansion into non-athletic shoes, and lost its number one position to Reebok
in 1986.
Knight bet the future of the company on a new feature: a new air technology inside the trainer. He
launched the product with a David Fincher- directed ad which used the Beatles track Revolution, and
then marketed the Air Jordan brand on the back of Michael Jordan. Sales took off and the rest is
history.
This brings us to the subject of globalisation and the question of how American the brand can be.
Nike uses a mix of global ad campaigns such as ‘good v evil’ and local advertising such as its famous
poster campaigns m the UK.
During a 21-year partnership with the agency Wieden and Kennedy, Nike so has created some of
the world’s most attention- grabbing advertising: for example the Nike ‘good v evil’ campaign and two
advertisements both for World Cups and the ad ‘tag’, last year’s Cannes grand prix winner. Other
famous ads star Pete Sampras and Andre Agassi playing in the streets of Manhattan; Tiger Woods
playing ‘keepy-uppy’ with a golf ball; and Brazil's team playing soccer at the airport terminal.
It is a remarkable body of work, both in its variety, daring and consistent originality. At Nike there
is a streamlined decision-making process that gives marketing directors real power. They do not rely
on market research pre-testing which often reduces the impact of more experimental commercials.
There is also the long relationship with one of the world’s best ad agencies, and what Wieden
describes as ‘an honesty about sport’. Things only happen in Nike ads that sportsmen and women can
really do.
‘My number one advertising principle - if I have one - is to wake up the consumer,’ concludes
Knight, with an absolute conviction that is unique among” modern-day chief executives. ‘We have a
high-risk strategy on advertising. When it works, it is more interesting. There really is no formula.’
(from the Guardian By Stefano Hatfield)
Answer the questions:
1. According to Phil Knight, what are the three factors which have led to the huge success of
Nike?
…………………………………………………………………………..
2. Why did Nike lose market share in the mid 980s?
………………………………………………………………………………
1
 3. Which innovation saved the company?
……………………………………………………………………………….
4. Which celebrity saved the company?
……………………………………………………………………………….
5. What is Phil Knight’s key idea about advertising?
………………………………………………………………………………
6. Do you think using celebrities in advertising is effective?
………………………………………………………………………………
Decide if these statements are true or false, according to the writer?

7. Nike has been Advertiser of the Year three times. ……….

8. Nike uses only worldwide advertising. ………..
9. Nike believes market research pre-testing is very important. ………..
10. A lot of computer tricks are used in Nike ads. …………

Reading 2

Are brand names being pushed off the shelf?

According to the Wall Street Journal: "More and more shoppers are by- passing
household names for the cheaper, no-name products one shelf over. This shows that even the
biggest and strongest brands in the world are vulnerable."
It has been clear for some time - principally since recession began to be felt in the major
economies of the world - that the strength of brands has been under fire. During the second
half of the eighties, the Japanese, for example, showed themselves willing to pay a huge
premium to buy goods with a smart label and image to match: they were fashion victims par
excellence, be it in choosing their luggage (Louis Vuitton was much favoured) or in buying
2
their booze, where a 20-year-old version of a good malt whisky could fetch the equivalent of
~60 or more. Over the past year or two, that enthusiasm to spend big money on a classy label
has waned markedly.
But we may be witnessing the death of the brand.
First, every story that now appears about the troubles being experienced by makers of
luxury goods triggers wise nods and told- you-so frowns.
Two days ago, LVMH in France, which owns Moet et Chandon champagne, Louis
Vuitton and the Christian Lacroix fashion house, reported lower earnings for the first half of
1993 than it did a year ago. As David Jarvis, in charge of the European operations of drinks
company Hiram Walker, puts it: "A few years ago, it might have been considered smart to
wear a shirt with a designer's logo embroidered on the pocket; frankly, it now seems a bit haft."
This conclusion fits with one's instincts. In the straitened nineties, with nearly 3 million
out of work and 425,000 people officially classed as homeless in England alone, conspicuous
consumption now seems vulgar rather than chic.
But just because flashy, up-market brands have lost some of their appeal, it does not
follow that all brands have done so. Cadbury's Dairy Milk is just as much a brand as Cartier
watches. Tastes may have shifted downmarket, but that does not mean that they have shifted
from flash-brand to no brand.
The second strand of the brand argument is tied intimately with the effects of recession.
No one yet knows to what extent the apparent lack of some brands' appeal is merely a
temporary phenomenon. It may well be that, deep down, we would still love to own a Louis
Vuitton suitcase rather than one from Woolworth's but while we are out of work or fearing that
our job is at risk, we are not prepared to express that preference by actually spending the cash.
Third, the example of Marlboro is an extreme one. The difference in price between
premium brand cigarettes and budget rivals in the US had become huge during the 1980s: a
packet of Marlboro or Camel might cost 80 percent more than a budget variety. Few brands in
any area of consumer goods could hope to maintain so great a premium indefinitely.
And fourth, in looking at the brands argument globally, it is too easy to become misled
by what is happening in an individual market. In the UK as a whole, about one third of
groceries are under super- markets' own labels. In the USA the proportion is only 20 per cent.
But it does seem that the gradual shift from manufacturer-branded to retailer-branded goods is
worldwide.
As David Jarvis of Hiram Walker says: "We believe that brands will retain their halo,
but people are less inclined to pay for something just because it's a fashion accessory. They
need to be reassured that the product is intrinsically better."
Reports of the death of the brand have been exaggerated. Reports of the death of the
deluxe brand may" be premature, but sound much more plausible.
(from The Guardian)

Fill each gap below with one word.

1. Consumers often prefer to buy (1)………….unbranded products rather than more (2)
……………..branded goods. The reason for this seems to be the worldwide (3)………….in
major economies.
2. In Japan consumers are less likely to buy goods with a fashionable (4)....................
3. In the present economic climate it seems (5)....................to spend money on expensive
designer products.
4. (6)……….brands are less popular, but (7)................... brands are still important.

3
5. Maybe, when the recession is over, designer brands will regain their (8)....................
6. In the 80s, famous-brand cigarettes cost (9)…………..more than cheap brands. This
difference is no longer so..(10)...................
7. In the USA proportionally.(11)...................own-label brands are sold than in Britain.
8. The consumer won't buy branded goods unless they are..(12)...................

Reading 3

The business sections of the media tend to focus on large, traditional companies. By definition,
these are high-profile businesses - the companies that are quoted in the leading share price
indices. However, most economists agree that smaller businesses, particularly new and
developing small businesses, are central to the long-term success of any economy. They argue
that the industries of the future will originate in the small business sector. That is why the
United Nations Economic Commission for Europe describes SMEs (small and medium-sized
enterprises, with less than 250 employees) as 'the engine of economic development'.

In the UK, the Department of Trade and Industry (DTI) reported that the total number
of businesses, including small companies, partnerships and sole traders, rose by 260,000 in
2004 to 4.3 million (source: www.dti.oov.uk).This is UP from the previous year and represents
the best figures ever recorded.
This is success for government policy. Successive UK governments have sought to
encourage small business start-ups. Behind the policy is a belief that small businesses
contribute to a stronger economic base, and that they have the ability to thrive in a competitive
global business environment.
The government also encourages small businesses because they are:
 a source of employment
 flexible and innovative
 responsive to gaps in the market
 able to accommodate people with a passion for a product who might not thrive in a
large corporation.
Business planning
Policy makers recognize that it is not sufficient to simply encourage an enterprise
culture. If new entrepreneurs are to succeed, if new businesses are to thrive, then it is
important that they appreciate the central role of planning. A business plan is the basis of new
business development, and it encourages an entrepreneur to think ahead and plan, as far as
possible, for the business to be successful.
' Writing a business plan will not in itself ensure that a business survives. However, it is
an invaluable exercise, forcing entrepreneurs to go through planning steps to make sure their
business propositions are viable. A business plan draws on concepts, skills and knowledge,
including:
 doing market research to make sure that planned products and services meet customer
needs
 understanding the market by analysing competitors' products, services and prices

4
  setting clear business aims and objectives
 finding sufficient capital to meet the business's short-term and long-term needs
 deciding on the most suitable structure and form of ownership for the business

Question:
1. Why new and developing small businesses are crucial to the success of the UK
economy?
2. If you opened a small business, how would you prepare yourself?

5
Reading 4:
FIRST IMPRESSIONS COUNT

A Traditionally uniforms were — and for some industries still are — manufactured to
protect the worker. When they were first designed, it is also likely that all uniforms made
symbolic sense - those for the military, for example, were originally intended to impress and
even terrify the enemy; other uniforms denoted a hierarchy - chefs wore white because they
worked with flour, but the main chef wore a black hat to show he supervised.
B The last 30 years, however, have seen an increasing emphasis on their role in
projecting the image of an organisation and in uniting the workforce into a homogeneous unit
— particularly in ‘customer facing" industries, and especially in financial services and
retailing. From uniforms and workwear has emerged ‘corporate clothing’. "The people you
employ are your ambassadors," says Peter Griffin, managing director of a major retailer in the
UK. "What they say, how they look, and how they behave is terribly important." The result is a
new way of looking at corporate workwear. From being a simple means of identifying who is a
member of staff, the uniform is emerging as a new channel of marketing communication.
C Truly effective marketing through visual cues such as uniforms is a subtle art,
however. Wittingly or unwittingly, how we look sends all sorts of powerful subliminal
messages to other people. Dark colours give an aura of authority while lighter pastel shades
suggest approachability. Certain dress style creates a sense of conservatism, others a sense of
openness to new ideas. Neatness can suggest efficiency but, if it is overdone, it can spill over
and indicate an obsession with power. "If the company is selling quality, then it must have
quality uniforms. If it is selling style, its uniforms must be stylish. If it wants to appear
innovative, everybody can’t look exactly the same. Subliminally we see all these things," says
Lynn Elvy, a director of image consultants House of Colour.
D But translating corporate philosophies into the right mix of colour, style, degree of
branding and uniformity can be a fraught process. And it is not always successful. According
to Company Clothing magazine, there are 1000 companies supplying the workwear and
corporate clothing market. Of these, 22 account for 85% of total sales - £380 million in 1994.
E A successful uniform needs to balance two key sets of needs. On the one hand, no
uniform will work if staff feel uncomfortable or ugly. Giving the wearers a choice has become
a key element in the way corporate clothing is introduced and managed. On the other, it is
pointless if the look doesn’t express the business’s marketing strategy. The greatest challenge
in this respect is time. When it comes to human perceptions, first impressions count. Customers
will size up the way staff look in just a few seconds, and that few seconds will colour their
attitudes from then on. Those few seconds can be so important that big companies are prepared
to invest years, and millions of pounds, getting them right.
F In addition, some uniform companies also offer rental services. "There will be an
increasing specialisation in the marketplace," predicts Mr Blyth, Customer Services Manager
of a large UK bank. The past two or three years have seen consolidation. Increasingly, the big
suppliers are becoming ‘managing agents’, which means they offer a total service to put
together the whole complex operation of a company’s corporate clothing package - which
includes reliable sourcing, managing the inventory, budget control and distribution to either
central locations or to each staff member individually. Huge investments have been made in
new systems, information technology and amassing quality assurance accreditations.
G Corporate clothing does have potential for further growth. Some banks have yet to
introduce a full corporate look; police forces are researching a complete new look for the 21st
6
century. And many employees now welcome a company wardrobe. A recent survey of staff
found that 90 per cent welcomed having clothing which reflected the corporate identity.

Questions 1-6

The passage First Impressions Count has seven paragraphs A—G.

Which paragraphs discuss the following points?
1. different types of purchasing agreement
2. the original purposes of uniforms
3. the popularity rating of staff uniforms
4. involving employees in the selection of a uniform
5. the changing significance of company uniforms
6. perceptions of different types of dress

Questions 7-13
Say Yes, No or Not Given?

7. Uniforms were more carefully made in the past than they are today.
8. Uniforms make employees feel part of a team.
9. Using uniforms as a marketing tool requires great care.
10. Being too smart could have a negative impact on customers.
11.Most businesses that supply company clothing are successful.
12.Uniforms are best selected by marketing consultants.
13.Clothing companies are planning to offer financial services in the future.

Reading 5

MANAGING PRODUCTION

Processes and issues

To be successful, management must plan and control a company’s production. While

production and operations are very large subject areas, which cover many techniques and
theories, there are certain aspects which involve management directly. There are decisions to
be made, such as what to produce, where, how and how much. More specifically, planning and
control are central concerns, and four particularly important aspects are process engineering,
management by objectives, project management, and quality management.

Process engineering (or re-engineering) is a concept crucial to the management perspective.

It is often referred to as BPR, or business process re-engineering. According to Hammer and
Champy (1993), this is the ‘fundamental rethinking and radical redesign of business processes
to achieve dramatic improvements in…cost, quality, service and speed’. The approach assumes
that processes, such as putting together a machine or inventory management, are what business

7
is built on, and it aims to make them much simpler and more logical. Organizational structures
become flatter as workers are empowered and it is sometimes said: ‘work for their customers
rather their employers’. Re-engineering business may include downsizing (losing workers to
lower costs), delayering (removing a level of management), creating more flexible labour
(workers being open to change and prepared to work in different ways) and agile
manufacturing (being able to change according to customer needs). Although these methods do
result in efficiencies in some cases, they often also lead to a ruthless and uncaring attitude
towards staff.

There is one approach to organizing business processes which is particularly orientated

towards results. It is called management by objectives (MBO). With MBO, managers set
business objectives and targets that contribute to the mission statement of the company
(Drucker, 1955, in Drucker, 2001), Then, work is divided up into jobs, set within the formal
organizational structures, with the measurable performance of each one made clear. All plans
and lower-level objectives contribute to the higher objectives. This complex system has
obvious effects: more motivated workers with easy-to-understand objectives, and clearer
management coordination and control. However, this approach is, unfortunately, much slower
to respond to change. What is more, it does not account for workers’ differing personal
priorities and concerns.

Of course, not all managers are at a senior level, and another important area is the study of
managing smaller units in business. Often, production is broken down into cells where similar
jobs are grouped together. This is called cellular manufacturing, or CM, and helps make
production cleaner. Similarly, production is often made up of a number of projects. A project
can be defined as a single job with a clear starting point, objectives and outcomes, and is
normally made up of a group of related tasks. Project managers use a range of useful tools to
help them complete projects effectively and efficiently. For example, they could find the most
efficient way through the project using critical path analysis, or they might use Gantt charts for
planning, scheduling and ordering tasks.

Whatever the size of the company, or the management level involved, the key element to
control in the production process is quality. We can define quality as how much a product or
service is fit for its purpose of satisfying customer needs or wants. This type of activity used to
be called quality control, meaning inspectors randomly look for faults. An excellent
progression from quality control is the movement towards quality assurance (QA), a more
advanced and preventative approach based on total quality management (TQM). The goal is to
achieve zero defects during production. TQM is company-wide. Every person is fully
accountable, and sees others in the company as internal customers. With TQM, processes are
continually improved. Teamwork is favoured, and one type of team is the quality circle, which
meets to solve problems and suggest improvements. One consequence of quality management
is best-practice benchmarking. This is the level of quality that the best company in the industry
has, and that other companies will try to reach. There are various institutions that promote
quality and offer standards that companies can qualify for if they prove to meet the
8
requirements. A good example is the ISO 9000 for the International Organization for
Standardization.

Efficient production is clearly a complex and difficult goal for management to achieve.
However, managers have a wide range of approaches to help them in this area.

Answer these questions:

1. What is the definition of production management?
2. How does BPR improve production efficiency?
3. How does MBO work?
4. How is cellular manufacturing different from normal manufacturing?

Reading 6
MARRIOTT HOTELS INTERNATIONAL

Hospitality and lodging

Annual sales £550m
Staff numbers 11,157
Male/female ratio 48:52
Average age 31
Staff turnover 36%
Earning £35,000+ 4%
Typical job food and beverage associate
Marriott checks in ten places higher up our list this year thanks to its five-star treatment of
staff. Employees award the family-run hospitality business the highest positive score in our
survey – 76% – for loving their work here.

It may not be the biggest payer (three-quarters of workers get a basic salary of £11,500
or less), but staff have fun (83%), think the job is good for their personal growth (77%) and are
happy with the balance between work and home life (66%).

Employees also feel they can make a difference in the organization (73%), make a
valuable contribution to its success (76%) and are excited about where the company is going
(69%).

The worldwide group, which employs more than 11,000 staff, ranks second out of all 20
organisations on questions about what staff think of the company and their colleagues and third
for their positive views of managers.
9
 There is a culture of respect and recognition, and there is training specifically on
teamwork, a quality prized by the company. Marriott even uses psychosometric testing to
assess how well managers align to its nine core organisational competencies. Staff say that
senior managers truly live the values of the organisation (71%), help them fulfil their potential
and motivate them to give their best every day (71% and 70%, both top scores). They say the
managers are excellent role models and regularly show appreciation, winning positive scores
of 69% and 75% respectively, results bettered in both cases by only one other firm.

The company, where the average length of service for general managers is 17 years,
likes to promote from within. Its performance review process creates a development plan for
every member of staff and identifies their training needs. On-the-job training is a key feature of
development, and there are NVQ programmes for accredited qualifications, with staff saying
this training is of great benefit to them (72%).

Rewards for outstanding contribution and long service, plus an annual staff appreciation
week and quarterly social activities, reinforce the value Marriott places on its people. In the
year to August 2008, the firm spent £355,000 on fun events for employees, who go out of their
way to help each other (76%).

Staff have free use of the hotel leisure clubs and access to a confidential helpline if they
have any personal worries. All this helps promote a strong sense of wellbeing. Stress isn’t a
problem (76%); workers say they are not under so much pressure they can’t concentrate (72%)
or that they can’t perform well (70%, the second-highest score).

Benefits include between 20 and 25 days’ basic holiday, two weeks’ paternity leave on
90% of pay, childcare vouchers, dental insurance, critical illness cover, life assurance and a
contributory pension. Employees say Marriott is run on strong principles (75%) by an
inspirational boss (71%), and that they are proud to work for it (79%).

(from The Sunday Times, copyright The Times, 2009, www.nisyndication.com)

Question: Would you prefer to work for Marriott Hotels International? Why or why
not?

10
Reading 7

Setting up in business

(A) Anyone planning to start a business must be realistic about what can be achieved, and in
what time frame. Entrepreneurs often work extremely long hours, not just during 'trading'
hours, but also after hours doing all the associated paperwork. If entrepreneurs overwork, they
will find it difficult to make good decisions and will lack the energy to analyse and evaluate
marketing and finance data. If an entrepreneur becomes over tired and over anxious, they can
undermine their businesses by giving the impression that things are bad and the business is just
about to close down.
(B) Many organizations provide support networks for entrepreneurs running small
businesses. These networks provide training and access to experienced business mentors for
little or no charge. The Business Link network, funded by Department of Trade and Industry,
is one source of this kind of support. If entrepreneurs are under 30 years of age, the Prince's
Trust also provides training and mentoring for business start-ups. There are various other
privately run business networking groups which can be both fun and mutually supportive.
(C) Owners need to consider four key issues: training, leadership and team development,
delegation and management systems.
(D) Investment in training is necessary to ensure that staff have the skills to do their jobs
efficiently and they can meet the requirements of current legislation such as health and safety.
Staff may also need training to develop skills to meet internationally recognized quality
standards for products and service delivery. Research shows that small and medium-sized
firms often find it very difficult to organize effective training.
(E) Ideally, workplace teams should be happy, creative working groups of individuals who
support each other, work to each other's strengths and work towards the business's goals. This
might require the owners to undertake self-assessment and target-setting reviews to ensure that
the business is staying focused on its objectives. Team development can be fostered by
organizing events such as team lunches and days out walking together.
(F) Owners should delegate and employ appropriate people to do the tasks that they cannot
do or do not have time to do. By freeing themselves from some of the easier day-to-day tasks
of the business, owners can spend their time monitoring the overall business and thinking
about where the business should be going. Certainly if the owners are passionate about the
business, they need time to step back and focus on the long-term goals and vision of the
organization. They also need time to network, to build up sales leads and to explore further
investment opportunities for the business.
(G) At this stage in their development, without outside help and guidance, many businesses
simply reach their 'natural' capacity and they do not develop or grow any further.
Entrepreneurs need to decide whether they want to keep their business small - so that they
retain control of all decisions - or whether they want to go on growing their business and
therefore accept that this will necessarily change their role in the business.

Which paragraph does each statement 1-8 refer to?

1 physical and mental problems that a business owner can face................

11
2 leadership and team improvement ideas...................................
3 the advantage of not expanding in business..............................
4 individuals and larger groups that are available to help people who are new to business.
5 the reasons why the more basic jobs in a small company should not be not be carried
out by employers...........................
6 external reasons why companies should try to keep their employees' knowledge and
expertise up-to-date …………………………..
7 The importance of work arrangement and devising the orientation of the
organization…………….
8 The necessity of planning a business and foresee the key issues that an entrepreneur may
deal with ………………….

READING 8

FRONTIERS OF WORK

Branson's new route to more jobs

(Celia Weston)

For many young people lucky enough to get a job after leaving school or college, the
biggest shock of the transition to work is how few holidays they get.

Having spent their academic years working an eight or nine-month year, it can be
depressing to realize that for the rest of their working lives they will be able to take only four
weeks off a year.

Many would jump at the chance to take three months off - and that's exactly what
happened at Virgin Atlantic, the airline run by Richard Branson. He believes the new initiative
could help to reduce unemployment.

Faced last autumn with the recession and with its failure to acquire more flight slots out
of Heathrow airport, the company had to consider redundancies. Mr Branson wrote to staff
saying that cutting back on jobs was "something I have never wanted to do". Instead he invited
employees to take up to six months unpaid leave and to participate in a job sharing scheme.

The immediate crisis passed but the idea of a shorter working year took off. When the
company later asked for 300 volunteers to take three months unpaid leave, 450 put their names
forward. Mr Branson said: "To be fair and share it around, in some cases we said that people
could only take six weeks."

Most of the volunteers were cabin crew but other staff, including secretaries and pilots,
took advantage of the offer as well. "And when they came back from their break ... they
definitely seemed to enjoy work more," he said.

12
 The company tends to recruit and train its own staff from scratch. As Mr Branson said:
"If you've been at college or on the dole, working for only nine months still makes you a lot
better off financially than you were before." He believes there is a broader social benefit to be
achieved. "If you are only taking on people for nine months, that will enable others who would
otherwise have no work or be living on the dole to have a chance too."

And he goes further. "I think this should be the basis of a pattern across the whole European
Community for the first few years of working life."

Nor was a shorter working year only applicable to young people. "If older women and
men with children can afford it because one partner's working 12 months and the other nine, I
think a lot of people would like to earn slightly less and be able to spend more time with their
children," Mr Branson said.

This year the scheme is on offer again, although not over the busy summer period. "All
the people who took time off last year would like to do so again," Mr Branson said. But its
realization depended on whether the company could recruit enough people to allow 400-500
existing staff to take three months off.

The company was considering whether the arrangement should become a permanent
feature, Mr Branson said. "For new people being taken on in most departments, we're thinking
about making nine-month working a standard contract."

Question:

1. Why is the scheme attractive to new recruits? Is the scheme going to become
permanent?
2. What are your views on Richard Branson's scheme? Would you like to participate in
such a scheme?

13