Weekly Commercial Awareness Update

By Ben Triggs

In this week's Commercial Awareness update we discuss Theresa May's announcement on Brexit, Deutsche Bank, oil production and the launch of Google smartphones.

1. Will it be a 'hard' Brexit?

Last week Theresa May announced Britain will trigger Article 50 by the end of May 2017 and formally begin the two-year period of leaving the EU. The Prime Minister also suggested Britain's legal position will be clarified by a 'Great Repeal Bill' which will remove the European Communities Act of 1972 from statute law. Many Conservatives and Leave voters were getting frustrated about the lack of progress but this new revelation adds clarity and means Britain can prepare itself for the complex negotiations with other EU member states.

International Trade Secretary Liam Fox has predicted Britain will be able to keep the benefits of the EU free trade agreement post-Brexit. He suggested introducing tariffs on trade between Britain and other European countries would harm the EU more, as Britain imports a huge amount from those countries. Others believe this wouldn't be the case, with Liberal Democrat MP Nick Clegg claiming Fox was "delusional".

It's been 100 days since Britain voted to leave the EU and the state of the economy is significantly better than many experts believed. Last week the Treasury predicted Brexit "will not dent growth at all in 2016". Gross Domestic Product (GDP) forecasts were immediately downgraded after Brexit, however they have recently seen a 1.8% increase.

Questions to ask yourself… Will Britain be able to negotiate a free trade deal with the EU after Brexit? Which industries have felt the biggest impact of the Leave vote? 

2. Problems for Deutsche Bank

Deutsche Bank's share price plummeted to its lowest level since 1992 after the revelation it faces the prospect of a $14.5 billion fine from US authorities for an alleged misselling scandal before the 2008 mortgage crisis. The bank's share price has fallen by around 50% this year after they announced a €6.8 billion loss in January, but the share price hit a new low of under €10 this week. There has been much speculation of the bank's possible collapse for months and in July the International Monetary Fund (IMF) suggested it was "most important net contributor to systemic risks in the global banking system". 

The German government has shown reluctance to provide Deutsche Bank with a bailout, but this could change if the situation deteriorates. There's a suggestion the government may take a 25% share of the company or facilitate a merger with Commerzbank. Deutsche Bank is getting media attention at the moment but the crisis stems from wider problems in European banking. With almost 0% interest rates, it's very difficult for banks to make money, as margins on yields are almost non-existant. Secondly, banks continue to be hit with misconduct fines and European banks often are the worst effected. The American Department of Justice often threatens banks with with removal of their dollar clearing licences if they don't pay the fines.

There was some better news for Deutsche Bank on Friday afternoon however as rumours emerged they were about to strike a deal with US authorities to cut their fine to $5.4 million. This caused a sudden rise in the share price, but the deal is yet to be confirmed.

Questions to ask yourself… Should the German government bail out Deutsche Bank if there's no other solution? How can investment and commercial banks start making more profits?

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3. FTSE rises after oil production deal

The FTSE 100 rose by 1% on Thursday with oil stocks increasing the most, after the Organisation of the Petroleum Exporting Countries (OPEC) agreed to cut oil supply. Oversupply has led to a declining oil price in recent years, but this new agreement will ensure exporters cut supply, in the hope of driving up prices. OPEC will cut output to between 32.5 million and 33 million barrels per day from about 33.5 million barrels. Despite the markets reacting favourably to the announcement, the cost of oil actually fell as many speculators believed OPEC wasn't doing enough to cut supplies.

Mining has also being doing well recently as investors seek safe assets while there's economic uncertainty. The price of gold has risen by 6% in the last 100 days while silver has increased by 12%. The industry has been volatile in the last 12 months, but an increase in investment and many seeking safe returns has provided stability in the industry.

Questions to ask yourself… Will Theresa May's announcement about Brexit have an impact on the markets this week? What are the potential downsides of cutting oil supplies?

4. Google Phones

Google will launch their first branded smartphones this week, aimed to compete with Amazon and Apple. Google focused on producing software which other companies could use, but with its new hardware division, they are about to launch their own distinct products. Google tried and failed to break into the phone hardware market after acquiring Motorola many years ago - this was a short-lived venture. Globally, around 80% of smartphones use Google's Android platform, but the hardware market has been dominated by Apple and Samsung in recent years.

In the same week, Blackberry has announced they will not be designing any more of their own handsets after 14 years, and will now focus on creating software instead. The launch of Google first smartphone is expected on Tuesday at an event in San Francisco - keep an eye out this week.

Questions to ask yourself… Which markets are key for the success of Google's smartphone? Does Google have the power to compete with Apple?

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5. UK still very competitive

The UK is the seventh most competitive economy according to the World Economic Forum. Efforts to cut red tape has made business activity in the UK much easier and led to a three-place rise in the rankings. The country is at the forefront of digital innovation and money is readily available for new ventures. Switzerland continues to top the list, while Singapore and the USA make up the top three.

Question to ask yourself… What are the key factors in making a country's economy competitive? What gives Switzerland the edge compared to other countries? 

Welcome

Welcome to all new and returning members of the Commercial Awareness Society. We would like to introduce the new committee and provide some information about what we have to offer you this coming year.

New committee:
We are very excited to announce the committee that will be representing the Society for 2016/17. Each member was elected by members at the AGM held earlier in summer and their role, year group and degree subject are listed below.

President: Mbarak Shakuwe (2nd year Law)
Vice President: Becky Morris (3rd year Economics)
Treasurer: Callum Stukins (2nd year Law)
Secretary: Ellie Dobbyne (PGT Law)
Health and Safety Officer: Louisa Ng (3rd year Law)
Union Council Representative: Louisa Ng (3rd year Law)

We are a diverse group that is passionate about this society and we are committed to ensuring that our members get the most from our society.

What to expect:
We are planning big things for our members this year, including a Commercial Awareness Competition. We have secured KPMG sponsorship to help achieve our goals and are constantly working on maintaining contacts in order to help our members. We will update you on new events and opportunities through email and social media accounts, so keep an eye out!

Blog:
This blog will be used as a platform for you to share and discuss commercial matters. If there is anything that you are interested in, then please do write about it and submit it to us. Writing for the blog is completely flexible - you can be a regular poster or write a one-off piece - and any topic can be relevant; last year, we had topics ranging from fashion to football. Contributing to the blog is a great way for you to start thinking commercially and can be a great addition to your CV.
To submit a post, simply email your piece to uea.casociety.submit@blogger.com

That's all for now! We hope you have a brilliant year and that we can help you become commercially aware.

James Ford - Life Lessons from Earlham Hall to Singapore

On Monday 7th December, UEA graduate James Ford returned to Earlham Hall after 27 years. James is currently Senior Vice President and General Counsel for GlaxoSmithKline, the sixth largest pharmaceutical company in world, and his career has allowed him to work all over the world. He came back to UEA to give current students some advice on how to succeed in an international company.

Be authentic. 
One sentence that stuck out from James' talk was 'Be smart enough. Do not be the smartest.' While academic strengths are important, they are not the be-all and end-all. When working for such a large company, employees have to show that they can communicate and have chemistry with anyone that they meet. By being authentic, you can be more relatable and accessible to those you work with, and this is vital for any company to succeed.

Learn the basics. 
This seems pretty obvious. It is important to remember, especially in large companies, that there are masses of people who are above you when you are new to the industry. As James put it, you will be the 'snake's belly' for a while. Instead of being bogged down by making coffee and photocopying, take the opportunity to observe and learn how the company fits together and what your role in it could and will be.

Experiment early. 

When James was a trainee lawyer, he took the opportunity to go on secondment in Hong Kong. This was an unforgettable and invaluable experience. This willingness to adapt and throw himself into opportunities is how James started his career at what was SmithKline Beecham. After qualifying, James accepted a job in a private practice firm, with an appealing salary, but soon realised that it wasn't the firm for him. This experience pushed him to question whether he would be better suited in an in-house position and he ended up taking a job at SKB (now GSK).

Take calculated risks. 

Very similar to the above, risk-taking has been a key aspect throughout James' career. Starting out in London, he has gone on to accept positions across the globe, including America, Saudi Arabia and Australia. While James admitted that each time he and his family moved it was a struggle to adjust, he believed it was worth it, and that it made his job more interesting and rewarding. 

Believe in yourself. 

While in New York, James spent a difficult and stressful 5 months completing the New York Bar. American lawyers and British lawyers are trained to think differently, and James realised his potential to 'think both'. Fewer than 2% of the lawyers at GSK have dual qualifications, and this distinction led to James being offered a role in Singapore. This, for him, has been the most dynamic and diverse place to live, and has challenged him as he works in 120 markets and 36 departments. 

Finally, a piece of advice James himself was given: The harder you work, the luckier you will be. 

- Ellie Dobbyne

BT Commercial Awareness Tips

Katie Bradley and Julia Mansi, two trainees from BT's in-house legal team, visited UEA on Wednesday 11th November 2015. They came to discuss the value of commercial awareness to working in-house and to run a workshop enabling students to develop their commercial understanding.

BT has one of the largest in-house legal departments, with over 200 lawyers across the globe. Their training scheme is extremely generous, with a £31,500 starting salary, fully-funded LPC, BT Sport for just £1, support to help you with your studies, and much more. Only 3 applicants a year are given a place, and so it is fundamental that you prove you are more than just academically talented.

When applying for a training contract anywhere, not just at BT, it is fundamental that you demonstrate you are commercially aware. This is because you will be working for a company, and part of your role will be to support the business in its commercial goals, as well as providing legal and regulatory advice. It is therefore crucial that you have a clear vision of those goals and understand all the relevant factors that help or hinder the realisation of those objectives (e.g. political and economic climate, business structure, competitors etc). This vision and understanding is essentially commercial awareness.

Demonstrating your commercial awareness is fairly simple, and Katie and Julia gave us some top tips for your applications, interviews and assessment days:

• Research the company, its values and culture. 
• This can easily be done in a number of ways; looking at their website, attending open days, vacation schemes or internships, asking employees about their experiences. 
• Read the annual reports of the company. 
• This will help you understand more about the finance and structure of the business. 
• Reflect on previous work experience. 
• Be aware that you should never just list what you did, you should explain what you learned and how that development will allow you to be an asset to the company. 
• Reflect on other experiences. 
• You don't just learn skills from working, anything can be used to show that you can think critically. Popular examples include travelling, where you can show you have had to manage finances or organise the most efficient route, or being a committee member, where you can demonstrate that you have organised events based on the needs and wants of your members. 

For more information about the BT graduate scheme, visit: www.btgraduates.com.

- Ellie Dobbyne

The Critical Importance of a Commercial Perspective

Football and business – two great passions of mine, and surprisingly to some, two sides of the same coin. Neither can exist without the other, but why is that the case?
It seems that for students looking to enhance their commercial capabilities, we can look no further than to the beautiful game for inspiration. At every level of the chain of command, individuals demonstrate time and time again their tremendous knack of making lots of money for themselves, or for the organisations they represent.

CEO’s are the standard bearer for commercial awareness, simply because it is their job. For example, Ed Woodward, of Manchester United, who in 2014 agreed a world record $559m shirt sponsorship deal with Chevrolet, which originated from an innocuous meeting with the global marketing manager at a roadshow event at Kuala Lumpur. Managers are commercial too, typified by Alex Ferguson’s £40m NET profit on player transfers during his two decade tenure. But these feats are eclipsed by the guile and cunning displayed by footballers themselves.

I am particularly appreciative of the subterfuge displayed by Sergio Ramos of Real Madrid in the most recent transfer window. With a year left to run on his contract, he expressed a desire to join another team, which accordingly prompted them to make a bid, which was rejected by his current club, and resulted in him earning a bumper new contract – this was always his intention. One can also admire Papy Djilobodji, Bebé and Iago Aspas’ technique of compiling videos of their best bits, and sending them to scouts who naively think they have found the next Messi, when in reality they are no better than the Norwich and Norfolk Sunday League. I am aware these names are very obscure, but they are all millionaires in their own right because of their understanding of how the system works, and how they can gain from it.

I think the point I am getting at is, the people who accomplish their commercial objectives, have a clear understanding of how to leverage their own capabilities in particular industries. It is, in a sense, taking your skills and strengths, and making these as valuable as possible.

So when you are next applying for a job, or heading to an interview, have a clear focus on creating value – think about what makes you valuable, what are they looking for and how that will translate into added value for that company.

- Conor Bell

Commercial Awareness Meet and Greet Event with Colin Dobbyne

On the 20th of October, The Commercial Awareness Society at UEA were proud to hold their first event, comprising of lots of pizza, drinks, the opportunity for members to sign up to the blog and our guest speaker Colin Dobbyne from Karl Storz.
Colin has worked in business consultancy for just over 10 years. Within this time he has owned his own company, predominantly dealing in the medical sector, sold this company and now works for Karl Storz as a consultant.
The talk was started off with a particularly influential quote from Oscar Wilde ‘I am not young enough to know everything’. This was a familiar trend throughout the session, where we were made to realise in the business world you will constantly be learning things and the importance of adapting to changes to remain successful. The session then went on to break down the particulars of commercial awareness, and how to break the concept down depending on what firm you are focusing on. As we are all aware, the term changes invariably depending on the circumstances. These main particulars were; what makes the business a success, who are the customers, where the business is in the market place, how it makes money.
From this, Colin stressed the dangers of how individuals can have amazing ideas, but without putting these factors into consideration they will be left pennyless. Colin spoke of his personal experience, whereby he lost a lot of money through the team advising him failing to be ‘commercially aware’, in that he would simply be ‘outspent’ by the other side. This was then tied in with the importance of communicating effectively with clients and customers. The latter part of the talk focused on figures and terminology, where Colin spoke about how to make an impressive mark. This included general factors such as the health of the business, where it is in the market, its profits and costs. Other values to focus on are what it says in the mission statement.
A particularly helpful example was given of a Bakery, whereby Colin demonstrated the importance of having an knowledge of environmental forecasts. The reason being, the success of the harvest season is predominantly determined by the weather, thus the availability of ingredients and the prices etc. 

With Kodak being used as an example of a company failing to recognise and adapt to threats, leading to failure in the market, Colin rounded up the session by advising members to have a clear idea of where you are, the obstacles in front of you and how you are going to get to where you want to be.

- Ava Bazley