Welcome to professors’ picks, offering a curated selection of FT articles by and for business school faculty to connect classrooms to current events and to develop students’ critical thinking.
Read all submissions at www.ft.com/bschoolpicks. Save this link in myFT to receive emails alerting you to each new edition. Search the tags for relevant topics to illustrate teaching points.
Comments or contributions? Get in touch at bschool@ft.com.
Business and Societal Good, Finance, Strategy
GSK launches £2bn buyback on strong HIV and cancer drugs sales
Tags: Share buyback, pharmaceuticals, life sciences, women in business, competition
Summary: GSK announced a rare £2bn share buyback and raised its growth targets after strong sales of speciality medicines, boosting shares by 6 per cent. Shareholders will see higher dividends, and the company increased its long-term sales forecast. Total sales grew, driven by strong performance in oncology, while vaccine sales declined. Core earnings rose, but total earnings fell due to a costly legal settlement over Zantac. CEO Emma Walmsley highlighted the company’s strong momentum and called for greater UK government support to stay competitive in the global pharmaceutical industry.
Classroom Application: This article provides a platform for faculty and students to consider the implications of share buybacks from multiple perspectives.
Questions:
What are the pros and cons of share buybacks for various firm stakeholders including its board of directors, executive team, employees, shareholders, customers, and the country/society in which it operates?
To what extent is there (or is there not) an agency conflict in the case of this specific share buyback?
What might this share buyback telegraph in terms of GSK’s internal pipeline of projects and R&D?
How might the prospects for cancer drugs, HIV drugs, and vaccines be viewed positively and/or negatively relative to this share buyback? By which stakeholders?
What is meant by “co-opetition” and what common goals of British pharma companies are alluded to in the article?
Tom Davis, Clinical Assistant Professor, Joseph M Katz Graduate School of Business, University of Pittsburgh
Tariffs
Donald Trump hits Canada, Mexico and China with steep tariffs
Tags:
Trade Wars, Tariffs, Supply Chain Disruptions, Global Economy, US-China Relations, Retaliatory Measures
Summary: The escalation of tariffs under Donald Trump’s second term as US President has ushered in a new era of trade wars, with significant implications for global supply chains and international trade. By leveraging economic pressure to influence border security and drug policy, the US has triggered a series of retaliatory measures from key trading partners including Canada, Mexico and China. These actions are expected to lead to supply chain disruptions, rising consumer costs and heightened diplomatic tensions. The resulting trade uncertainties could have long-term economic consequences, including potential recessions and widespread job losses. This article provides a platform for analysing the intersection of trade policy, supply chain management and global economic stability.
Classroom Application: This article offers an opportunity for students to explore the complex interplay between trade policies, supply chain dynamics, and global economic stability. It encourages critical thinking about how trade wars impact international supply chains, the role of tariffs in shaping trade relationships and the broader economic and political repercussions of trade disputes. The discussion can also delve into strategies for managing supply chain disruptions in an era of heightened trade uncertainty.
See also: Trump tracker: the latest data on US trade, tariffs and economy and updates at https://www.ft.com/trump-tariffs
Questions
1. Trade Policy and Supply Chain Disruptions:
How do tariffs and trade wars impact global supply chains, particularly in industries reliant on cross-border trade?
What are the short-term and long-term effects of supply chain disruptions caused by trade tensions?
2. Economic and Political Repercussions:
What are the potential economic consequences of escalating trade wars, both for the US and its trading partners?
How might retaliatory measures from countries like China, Canada and Mexico further strain diplomatic relations and global trade stability?
3. Risk Management in Supply Chains:
What strategies can companies adopt to mitigate the risks associated with trade wars and supply chain disruptions?
How can businesses balance the need for cost efficiency with the need for supply chain resilience in an uncertain trade environment?
4. Global Trade Dynamics:
5. Ethical and Social Responsibility Considerations:
What ethical considerations should businesses take into account when navigating trade wars and their impact on global supply chains?
How can companies ensure that their supply chain practices remain socially responsible in the face of economic pressures?
Fahd Jamil, UC Irvine
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