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392 posts categorized "Industries"

October 15, 2009

LOGICAL FRAMEWORK

Project Design and Planning

 

Introduction

 

            As part of the development in the mining industry, technological advances such as jackleg drills, longwall shearers, diesel power, and hydrometallurgy have had major impacts on mining and quarrying practices and the nature of the mine site. The changes and evolution of current technologies, as well as the introduction of new, breakthrough technologies, will continue and perhaps accelerate in the new century. Several industry objectives will drive future technology change, including

•           Lowering production costs.

•           Enhancing the productivity of workers and equipment.

•           Opening up new reserves and extending the life of existing ore bodies.

•           Meeting regulatory and stakeholder requirements in areas such as health and safety, environmental and aesthetic impacts, and land use.

Inline with the advancement of technology and continues innovation in mining and mineral industry, the issues regarding risk-free production arises. The issues concerning cleaner project planning will be considered in this paper. Many technologies have been proposed for use in mines, including mechanical cutting of hard rock, remote-controlled and automated machinery, wireless communications and data networks, and in-situ processing.

Mining and quarrying are capital-intensive activities, and many factors affect the pace of diffusion of new technologies: research and development (R&D) budgets, commodities markets and profit margins, regulatory and community requirements, the ability of firms to acquire and assimilate information, available technology options, the variability in cost structures among firms, and industry attitudes. In recent years, the organization of the mining industry has changed substantially as a result of enterprise restructuring, consolidation, and globalization. Through this, cleaner production project in mining and mineral industry pertaining to the technology used in their processes should be observed.

 

Logical Project Matrix

 

Strategy

Indicators

Assumptions

Indicators of the Assumptions

Overall Goal

Evaluate the technology used in mining and mineral processing.

 

 

 

Development Goal

To determine if the technology used in mining and mineral processing are risk- and hazard-free to environment.

The technology used in mining and mineral processing should be justified as risk- and hazard-free to environment.

 

 

Project Purpose

To determine if the technology in mining and mineral processing passed the cleaner project standards.

The technology used in processing mines and minerals passed the cleaner project standards.

The target mining and mineral industries are assumed to cooperate.

All materials such jackleg drills, longwall shearers, diesel power, and hydrometallurgy, etc were evaluated and passed the risk- and hazard free standards.

Results

The technologies used are risk- and hazard free.

All materials such jackleg drills, longwall shearers, diesel power, and hydrometallurgy, etc should passed the risk- and hazard free standards.

The government and other organization will understand the effect of cleaner production project to business development.

The government and other organization continuously evaluate the different industries pertaining to cleaner production project.

Activities

Assessment of materials and systems used in mining and mineral processing

All tools and used in mining and mineral processing.

 

 

Key Arrangements

 

Basically, cleaner production project has received increasing attention in recent years, both from academics and from practitioners. Actually, the heightened interest in cleaner production project is the result of a number of coincident secular trends. But cleaner production project has also attracted attention as a result of the repeated and well-publicized failures associated with its implementation. Despite the increased academic and professional attention paid to cleaner production project, frequent instances still occur when sophisticated mining or mineral industry experience sudden, unexpected, and devastating losses. In cases such as Barings, Metallgesellschaft, and Long-Term Capital Management, losses have been in the billions of dollars. In such cases the sophistication of the cleaner production project processes in place was clearly inadequate for the level and type of risks assumed.

            In mining and mineral industry, cleaner production project is more narrowly defined as a possible event or circumstance that can have negative influences on a project. Its influence can be on the schedule, the resources, the scope and/or the quality. As part of the development of cleaner production project in mining and mineral industry, risks in technology should be considered. In the pursuit of a mining and mineral business in Australia to improve its capacity to provide the services to the people and in the same time satisfy the needs of their customers, risks management and analysis of government ethical issues are thus the most effective solution. Nonetheless, lack of appropriate management could pose several risks for the industry as a whole. These risks include:

a.)                Non-compliance of the project timeline

b.)                Costly maintenance of infrastructure

c.)                Compatibility of  firms project to government ethics

d.)               Budget deficiency

e.)                Increased workforce expenses

            Apparently, a more extensive study would be desirable in order to more closely validate the results within mining and mineral business. This would include clarifying any items which are subject to multiple interpretations and should take into consideration issues of model structure validity and reliability. Ideally this research would be accompanied by personal or focused group interviews to permit a deepened understanding of the elements that comprise the ethical outlook of micro business operators and of how these are translated into practice.

 

Justification for Project Matrix and Governance Structure

 

            Although good ethics would reinforce good business, because of the lack of competition and the lack of conditions that Adam Smith envisioned, good ethics are not necessarily practiced in today's businesses. Although the decision makers could take an ethical stance in all of their decisions, conditions in their day-to-day activities are such that they may not take such a stance. Because much of the time the decision makers lack ethical values and background, they are driven by their survival instincts, they face many situational variables, and they are oriented to short-term success, good ethics and good business do not coexist regularly (, 1994).

            Many business executives seem to be altering their viewpoint of government roles -- from the traditional perspective of government intervention being inherently undesirable and wrong to recognition of the necessity of a government role in business as a regulator, arbitrator, stimulator, customer, and even partner. This orientation is embodied in the concept of a new, socially conscious capitalistic or business system. And in fact, there seems to be a feeling today among many young people that government and not business is where the action is (, 1996).

            In summary, this paper has discussed the cleaner production project cost of the growth of mining and mineral industry. These include the evaluation of technology used in processing, its effect to environment, contamination of streams and river, the problem of oil spillage, forest destruction and biodiversity loss, the environmental effects of gas flaring, and effluent discharge and disposal. In the course of mine exploration and production, various materials are released into the environment.

 

References:

 

September 22, 2009

PROBLEM BEHIND THE INDUSTRIAL DEVELOPMENTS

 

 

 

 

 

 

Problems with the English Planning System: Why it takes long to start to develop Battersea Power Station

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Abstract

            The investigation looked into problems arising in industrial developments by looking at the operation of the English planning system in the case of the regeneration plan for Battersea Power Station. The objectives included the investigation of the role of the English planning system in industrial development, the comparative strengths and weaknesses of the English planning system relative to the system in other European countries, comparative experiences of the United Kingdom and other European countries in their planning systems, and problems and solutions to issues in the English planning system. Data was obtained from secondary sources and interviews. Results showed that the English planning system plays a significant effect on the problems in the redevelopment of Battersea Power Station because of the reliance on the private sector and adjustments to integration. Although, in theory the English planning system constitutes a better system because of its flexibility relative to the planning systems of other European countries, the English planning system can involve complexities experienced to a lesser degree in the other planning systems. Improvements in the English planning system involves continuous evaluations of the planning system and policies to address problem areas and the determination of role and regulations governing the public-private partnerships to balance control needs and interests.

           

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acknowledgements

 

My gratitude for the completion of this dissertation is extended to my supervisor, Professor (put you supervisor’s name here), who took time to mentor me until the completion of this paper especially in guiding the research process to achieve the objectives for this paper.

The author also expresses gratitude to the participants of the study in taking time to provide primary data to support valid conclusions.

Lastly, I extend my thanks to all the people who contributed to the success of this academic endeavour.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table of Contents

 

Abstract 2

Acknowledgements. 3

Table of Contents. 4

Chapter 1: The Problem and Its Background.. 5

Introduction.. 5

Background of the Study. 5

Battersea Power Station.. 6

Objectives. 7

Statement of the Problem... 7

Methodology. 8

Chapter 2: Review of Related Literature. 9

Overview.. 9

Description of the English Planning System... 10

Basis and Development of the English Planning System... 12

English Planning System and Development Plans in London.. 13

Problems with the English Planning System... 14

Planning agreement between Wandsworth Council and Parkview International 16

Chapter 3: Comparison of European Planning Systems. 18

Chapter 4: Comparable European Cities and their Regeneration.. 20

Germany: The Ruhr. 20

Milan: The Bovisa District 21

Ireland: Spencer Dock. 22

United Kingdom: Battersea Power Station.. 24

Chapter 5: Conclusion.. 26

References. 30

Appendices. 32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chapter 1: The Problem and Its Background

Introduction

            In the history of humanity, industrial development played a significant role in the advancement of societies by changing the physical environment and space available, especially in the urban areas where population growth is highest. As populations grew and industries proliferated, free or open lands and other natural resources decreased as residential and industrial buildings were put up to support the economic needs and activities of the growing population. ( 1997, ) With the recognition of the scarcity of land and other resources, regulation of the use of these resources became imperative. Moreover, industrial redevelopments are large-scale requiring long-term implementation with long-ranging effects ( 1997, ). As such, regulation and planning became necessary to ensure sustainable industrial developments ( &  2004, ). Regulation involves the need for permits from government authorities before commencing a building project and planning involves the consideration of the different aspects of the construction project including environmental implications ( &  2004, ). In the context of the necessity of regulation and planning of industrial redevelopments, the paper attempts to evaluate the problem behind the industrial redevelopments in UK particularly Battersea Power Station in London and give an idea how it will be regenerated in the future. By doing so, the study expects to learn the reasons for the long period it takes to commence this industrial redevelopment project regulated through the English planning system. Moreover, the paper will give an outline of the comparable industrial redevelopment projects in European Cities including The Ruhr in Germany, Bovisa in Milan, and Spencer Dock in Island.   

Background of the Study

            The establishment of the English planning system served the purpose of facilitating industrial developments by providing a regulatory process and policies for parties seeking allocation of land and other natural resources whether this be the government or private entities and a process of determining and settling any conflict of interest ( &  2004, ). Fundamentally, the goal of the English planning system is to ensure sustainable development ( 2001, ) by regulating the allocation of land and other resources in a manner directed towards ensuring resources for the future generations.

           

            In 2004, a reform occurred in the English planning system with the new system replacing the old system ( 2007, ). Justification for the reform is to reassess planning policies ( &  2006, ) and enhance the efficiency of the processing and approval of industrial development projects in order to meet long-term needs ( 2007, ). Criticisms of the old planning system that spurred the reforms included the long process of application and approval resulting to delays in the implementation of projects. This was due to the lack of organisation and integration of the English planning system because of the different planning and control regulations used in the different levels—national, county and district—and the variances in the guidelines used in assessing industrial development applications ( 2007, ). This means that projects at the district level may receive approval but this could receive disapproval by the county or vice versa. Moreover, in practice, collaboration between government offices and the private sector for the sustainable development or redevelopment of land involves a number of problems leading to the long period it takes to plan, commence, and finish the regeneration of lands ( 2000, ).  

           

            As such, the new English planning system was intended to provide top-down planning and control policies to serve as common guides for processing at the district, county and national levels resulting to the ease in having industrial projects approved to speed up the commencement of construction and other development projects as well as facilitate the improved partnership between the public and private sector ( 2007, ).

           

            In light of the developments in the English planning system, the study seeks to look into an industrial development project—Battersea Power Station in London—to determine the regeneration plans, particularly the status of the application process, the role played by the English planning system in these projects, and the issues surrounding these projects. Brief descriptions of the Battersea Power Station follow to provide a background into the case for study. 

Battersea Power Station

 

Before the constructed of the current Power Station, the site had many different functions.  It used to be the site of a country fair and the Southwark was the location for water works. During the early 1920s, aeroplane construction used to take place in the site. In the late 1920s, the London Power Company decided to build a power station on the riverside.  started to design the building, but   took over the completion of the service. He designed the red telephone box, Waterloo Bridge and the Bankside power station which has been redeveloped and it is the new Tate Modern.  The first part of the construction has been built in 1933 with just 2 chimneys with art deco styling and by 1953 after the second World War the 4 chimneys were completed. ( 2002, )

 

Battersea Power Station in London is an obsolete power station that was the first in a series of large coal-fired electrical generating facilities set up in England as part of the National Grid power distribution system then being introduced ( 2007). In 1983 the production of power has ended. In 1984 competition of redesign the site was won by Alton Towers Limited who proposed an indoor theme park, which received planning permission 1986. Work has started and part of the site has been demolished and been left like that, because the company did not have enough funding to finish it. In 1993, Parkview International purchased the site and started the redevelopment, but sold it in 2006, since that the redevelopment has not been started.

Objectives

The purpose of this study is to examine and analyse the problems in industrial redevelopments in the UK by looking at the operations of the English planning system and the specific manner that this affects the approval and commencement of industrial redevelopment and regeneration plans specifically for Battersea Power Station. It aims to understand the impact of the English planning system to provide a context for the reasons that some industrial projects, such as Battersea Power Station redevelopment has not been started yet. Since the approval of industrial redevelopment plans for this site depends upon their land classification, based on the standards applied by the English planning system, the study would also investigate how these sites have been classified, what are problems in land classification, and what are the issues arising in the approval of the plan for this site. As such, the study constitutes an investigation of the problems in industrial redevelopment in the UK by evaluating the English planning system because of its implications in the commencement of planned industrial work across the United Kingdom. Part of the evaluation involves conducting case study on industrial redevelopment site—Battersea Power Station in London whose owners have applied for the redevelopment of these sites but failed to start the redevelopment process. Moreover, the study aims to compare problems in industrial redevelopment in different European countries by looking at the relative strengths and weaknesses of the English planning system with its counterparts in various European countries. The strengths would reflect the extent and pace of industrial redevelopment in different European countries while the weaknesses represent the problem areas requiring improvements. The comparative study would explain the various problems in industrial planning brought about by the respective planning systems of the different countries.

Statement of the Problem

This research finds the necessity for a study that specifically tackles the problems in industrial redevelopment, particularly the manner these problems affect the commencement of industrial redevelopment projects such as those planned for the Battersea Power Station. Results should aid in the determination of ways in improving the English planning system to address industrial redevelopment problems and speed up the implementation of sustainable industrial projects. Moreover, this study will try to answer the following queries:

1.                  What is the English planning system relation to regeneration?

2.                  How do the processes under the English planning system affect formal industrial sites?

3.                  How does the English planning system affect the commencement of the redevelopment project for Battersea Power Station?

4.                  What are the comparative strengths and weaknesses of the English planning system relative to the planning systems of different European Union countries?

5.                  What are the comparative experiences of industrial development problems experienced by different European countries in relation to their respective planning systems and redevelopment of industrial buildings.

6.         How can the English planning system be improved to address problems in industrial redevelopments to facilitate the commencement of redevelopment projects in the UK such as Battersea Power Station?

Methodology

The researcher sees that the most appropriate design for the study is the descriptive approach to research. Descriptive research has as its purpose, the development of a better understanding of a phenomenon in detail ( 2002, ). Descriptive studies usually have as their purpose the first two aims of normal science as described by  (1970, ): “attempts to increase the accuracy and scope with which…facts…are known” or “determination…[of] those facts that…can be compared directly with the predictions from…theory”. The aim of descriptive research is to clarify the nature of a phenomenon in a specified, static context while viewed from a specific, fixed perspective ( 2001, ). Since the study seeks to describe the problems with the English planning system, the descriptive approach works as the guide perspective for deriving detailed information in completing the study.

           

            To obtain background data necessary in completing the study, secondary research or desk research applied by collating existing current data ( 2003, ) on the English planning system and the development plans for Battersea Power Station and Lots Road Power Station as the cases for study. One of the major strengths of desk research is its practicality – data and information are collected quickly and it is easier to conduct than field research. On the minus side, however, the secondary data may not be recent or accurate. Moreover, secondary data sometimes can be hard to find, depending on the subject. Finally, the data derived by others may not be relevant to the context under study. ( &  2003, ) Nevertheless, the researcher did not encounter the aforementioned problems in desk research. For this study, secondary sources of data were gathered from books, articles in journals and magazines, and information from government websites and other reliable websites. These sources provided the researcher a plethora of materials about the topic.

           

            To derive primary data, a semi-structured interview applied through the aid of a questionnaire.  Interviewing is the data-collection process that derives insights from a phenomenon, expands understanding of theories or models, identifies general rules and exceptions, and documents differences in experiences ( &  2005, ). A semi-structured interview applied by using a questionnaire to guide the interview process but allowing the researcher and the respondents, room to expound on important answers. This provided the researcher greater control over the interview process to support the gathering of wide-ranging data. ( 2006, ) Interviews were made with key respondents with first hand knowledge on the historical, present and future plans for Battersea Power Station. Interviews were made with  ( ) and  ()

(1,891) 

Chapter 2: Review of Related Literature

Overview

            The driving force behind the English planning system is sustainability, which the United Kingdom government defined in terms of the four objectives of 1) social progress, which considers everyone’s needs, 2) effective environmental protection, 3) prudential utilisation of natural resources, and 4) maintenance of a continuously stable rate of employment and economic growth ( &  2004, ). On a local level, planning systems for land use has been recognised as a significant contributor in the achievement of sustainability objectives. Through a sustainability based planning system that regulates spatial development, sustainability is achieved through strategic policies to guide planning guidelines so that local authorities were compelled to consider economic, environmental and social factors in the creation of development plans and in approving applications for private-sponsored land development. This means that the local government need to apply assessment measures intended to apply the elements of sustainability in determining the soundness of land use plans. To provide policy guidance, the national government listed a number of key principles that apply in evaluating land use plans. First principle is sustainability as criteria in appraising land use plans. Second principle is integration, which pertains to the application of appraisal throughout the stages of land use development (,  &  2005, ). Third principle is public consultation that includes the taking of public opinion on the appraisal method as much as of the land use plan ( &  2005, ;  2005, ). Fourth principle is iteration so that the land use appraisal requires alignment with defined environmental perspectives (,  &  2005, ). Fifth principle is environmental stock or the collection of detailed data on the environmental implications of land use plans. Sixth principle is scoping or the consideration of the various issues spanning the land use plan. Seventh principle is the consideration of alternative policies as well as plans or proposal. Eighth principle is the monitoring of the land use plans using indicators of long-term benefits. ( &  2004, ) As such, sustainability has become a key part of the planning system in the United Kingdom.

           

            In the case of the development planning for the Battersea Power Station, sustainability appears to be at the core of planning because of the consideration of long-term plans. The period it took to complete a plan and commence the development of the power station could exemplify long-term plans. Nevertheless, the long period before the commencement of the plans could mean the intervention of policy or regulation-based issues that hamper the commencement of these projects. These areas comprise an area for investigation.

Description of the English Planning System

            The English planning system constitutes a land use regulation that applies by requiring entities seeking to build something on land or occupies space to obtain permission before commencing the project ( 2005, ). Depending upon the type and implications of the land use plan, the local authority with jurisdiction of the area usually assess applications but in exceptional circumstances when the land use plan has national implications the processing of applications become the work of the Secretary of State. In conducting the assessment, the applicant is favoured by the planning system but with due consideration of any objections. Upon the receipt of the application for land use together with all additional information necessary in evaluating the impacts of the plan, the planning authorities weigh the differing arguments justifying and decrying the approval of the land use application including protests from other parties. As such, the decision involves the consideration of the economic, environmental and social benefits as against the costs, risks or damage from various sources of information including public consultations, since public participation has become a policy in order to provide better guidance for the local development officer and the committee assessing applications. After considering all these factors, the planning officer writes a report for distribution to the planning committee prior to raising the recommendations of the report for voting. The decision of the committee determines the eventual implementation of scrapping of the land use application. Of course, interested parties, especially the applicants who are not satisfied with the decision can raise appeals to the Secretary of State. ( 2005, )

           

            In the case of Battersea Power Station, the application was filed by Parkview International, the private developer with Wandsworth Council, the local government authority holding regulatory jurisdiction over the redevelopment of Battersea Power Station. After receiving the application, Wandsworth Council assesses the application based on planning policies for Battersea Power Station evaluated as brownfield land relative to the intended plans of the private developer. This even involves negotiations in case the plan needs to consider other factors.

            The process of applying for a permit to commence and accomplish development projects involves a seemingly simple process because the developer files an application containing details of the plan to the local development authorities. A local development officer will be assigned to assess the application and make a recommendation to the committee as basis for the voting process. Any objections by other parties to the plan should also be filed. The development officer looks into the merits of the application and even considers public opinions. The vote determines the decision to approve or permit the development project, with the decision subject to appeal to the Secretary of State. There is a determined assessment process and considerations together with a process for appeal. However, this is not a simple or short process because the period of investigation could take a long time, especially when there are numerous objections that need to be investigated by the local development officer. Apart from the need for investigation, the local development officer also often makes judgment calls and the subjectivity of the process can influence the recommendation to approve or disapprove the application. After the report has reached the deciding committee, the decision process could also take long especially when the members of the committee represent different interests that cannot be easily settled.

           

            The planning permit for the Battersea Power Stationt was obtained in 2002 following agreements between the Wandsworth Council and Parkview International. The plan involves the partnership between public and private sector. The permit was granted after the Wandsworth Council was able to include the provision of services to the community such as parking area, creation of employment for the community, and facilitation of training for students and community members to take part in the development of Battersea Power Station.  

*                    

*                   The English planning process involves two basic processes, which are development planning and development control. Development planning involves the development proposal acceptable in a given area by using policies, such as the principles previously mentioned, as tests for the types and means of development for a particular area. On the national level, development planning for the United Kingdom falls under the responsibility of the Communities and Local Government department while on the local level, the local planning authorities handle development planning for the locality. As such, the development plans on the national and local level constitute blue prints of the intended sustainable development direction of the country in general and the localities in particular. It is in relation to these plans that the approval of applications is determined. Development control refers to the process of determining whether to grant or refuse applications for land use by carefully considering guiding policies and the particulars of the land use application.

*                    

*                   The development plan for the Battersea Power Station, particularly the plans covered by the permit applied for by Parkview International, a Hong Kong based developing firm. Wandsworth Council granted the permit in the exercise of its development planning and development control responsibilities. The permit came with a contractual agreement that covers the public interests for incorporation into the implementation of the plan. Since the plans were made years before its approval, this means that it took time before the permit was obtained. However, it has to be considered that the application and permit came before the reform in the English planning system in 2004.   

*                    

*                   After the reforms, the United Kingdom has a single planning system operating on different levels, such as the national and local level or development planning and development control, which through the introduction of the new planning system were intended to be integrated in order to streamline development plans that guide the processing of applications. Multi-level operations of the planning system could result to problems in the development planning and control from the complexities arising from the extent of streamlining. Although the permit came before this reforms, the  effect of the reforms should reflect in the post-permit and implementation phase.  

Basis and Development of the English Planning System

            Development planning constitutes a multi-tiered system that necessitates relationships of influence so that local development is largely influenced by national development policies while development in the UK is also influenced by EU development policies ( 2005, ). The UK government has incorporated the sustainable development strategies of EU in its Planning Policy Statements (PPS) and Planning Policy Guidance (PPG), which are documents containing the policies and strategies governing development planning and control in the United Kingdom. If these policy guides are clear and practicable as well as widely communicated to the local planning authorities, then this should develop bottom-up alignment with planning policies. As such, the sustainable planning directives coming from the national government play important roles in the planning system of the local level. ( 2005, )

           

            In the case of London, with its local planning authority, the policy directives of the national government found reflection through the development framework brought out for London in 2003. This framework provides an overall plan for the city of London amidst the various factors affecting the development of the city such as population growth, economic shifts, environmental issue, technological innovations, and lifestyle changes. In 2004, the mayor issued the development strategy for London that includes that plan to accommodate the growing population without encroaching on remaining open spaces in order to make the city socially inclusive while at the same time developing the city into a well-designed environment friendly city. As such, the objectives of the development for London included the protection of townscapes through the conservation of historic sites and enhancement of public and open spaces together with the maintenance of heritage sites and parks. Other objectives include the design and positioning of high buildings together with the re-using of existing brown spaces instead of allowing infrastructures to encroach on green spaces. ( 2005, )     

           

            Relative to the development framework for London, the plan of Parkview International covering an area of land included in the geographic scope of the Battersea Power Station involved plans for the reuse and regeneration of brown spaces and the conservation of historic buildings. This means that the plan for Battersea Power Station coincided with the London development framework. Nevertheless, since the commencement of the plan is taking time, the difficulties or problems experienced in the development process involve other areas apart from the ability of the plan to meet permit requirements.

           

            Due to the inter-linkages of the different tiers of development planning policies, effective implementation necessitates alignment and integration of efforts so that national policies that serve as guide to local planning authorities need to be well aligned with the planning directives of the European Union. This parallels the planning policies of London that need to consider the overall development blue print for the entire United Kingdom. Multi-tier linkages could create problems especially in taking general planning directives and applying these in particular contexts, such as the urban situation on London. It can happen that some policies may work well for London or are difficult to apply amidst the development of situations affecting only a particular locale.

English Planning System and Development Plans in London

            Development planning and control in London adheres to various sustainability principles. These principles serve as guide in classifying different locations across London and the suitability of these areas for various activities such as housing or commercial establishments. Assessment of applications occurs according to these determinants. ( &  2005, )

 

            In the case of the development plan for Battersea Power Station, there was no issue in the classification of the power plant resulting to one less problem for the regeneration plan. London development authorities classified Battersea Power Station as brownfield land because it has already been developed as a power plant and this stripped it of its greenfield status. Due to the clear classification of Battersea Power Station as brownfield land, meeting the requirement for a permit depended on the manner of developing brownfield land in line with the sustainability framework for London.                  

           

            For purposes of the study, the policies to be discussed are those that apply to the London urban environment.            First is the conservation policy covering built environment, which involve controls targeting the preservation of built environments. This is based on the goal of sustainable development by seeking to maintain the built heritage of the country for the consumption of future generations. As such, land development was limited only to the re-use of old building and land sites together with the preservation of areas covered under conservation areas. ( 2005, ) Second is the determination of a list of buildings considered as having historic interest or special architectural features. When buildings become part of the list, development becomes limited to the preservation or enhancement of the historic building but this cannot be demolished unless this is with the consent of the land development authorities. (( &  2005, ;  2005, )

 

            In the case of the power plant, the development plan included the retention of the historic building or the plant itself within the regeneration framework. Plans submitted by the Parkview International to the Wadsworth Council included the retention of the original power plant building but regenerated to form part of the overall development plan for the entire area. The Wadsworth Council base its permit granting decisions on the Unitary Development Plan (UDP) adopted by the Council in 2003 that covers the planning policies of protecting and enhancing the socio-economic opportunities for the community and improving quality of life. The plan applies regeneration policies including the conservation policies and historic building maintenance. 

Problems with the English Planning System

            Despite the importance of the English planning system, a number of problems emerge. The phases of changes occurring in the English planning system commenced during the 1960s because of the realisation of the inability of the existing planning system to accommodate the rapidly changing environment. Prior to the 1960s, the English planning system revolved around the preservation of natural or green lands across the UK so that the primary criteria for development planning and control is the environmental soundness of development plans. However, during the 1960s a number of major changes occurred including large-scale development plans with international and national support that greatly pressured the English planning system to accommodate these development plans. As such, evaluations were made to determine the timeliness of the development planning system. Reforms included the balancing of the various economic, political, social and environmental interests of the public instead of solely focusing on environmental preservation or conservation. ( &  2006, )

           

            Although this shift occurred decades ago, the English planning system seems to be in the same place as before with the new planning system seeking to accommodate pressures for changes brought about by economic interests due to the growing competitiveness of the international market, resulting to the interests of business firms in boosting the economic capabilities of the country including the development of tourism and service sectors, which in turn required land use developments. Balancing interests to meet changing contexts constitutes a continuing problem of the English planning system so that current trend in policies has impacts not only to the achievement of the development goals of the country but also the accomplishment of valid development plans. If the English planning system fails to correctly perceive and accommodate important changes, then the planning system could lose its importance or significance in advocating sustainability through effective development planning and control. Development policies should be thoroughly formulated to address current as well as future development processes.

           

            This problem emerged in the negotiation for the development of the Battersea Power Station. A number of developing firms have handled the regeneration of the site. However, no firm has been able to implement significantly the development plan. This could be due to the inability of the Wadsworth Council and the private developing firm to meet. Wadsworth Council needs private participation in the development plan to contribute to fund requirements. Private developing firms need to coordinate with the Wadsworth Council in order to legitimize the project.  

 

             Another problem is the alignment and coordination of multi-tiered policy support from linking the sustainability goal of the EU to the development of national sustainability policies of the UK and then the development of regional development plans advocating sustainability principles that should in turn be consistent with the local development plans. This amounts to the implementation of the broad EU and UK sustainability policies and translating these into specific development plans within the local context ( &  2004, ). This creates problems when the local context carries a different perspective of sustainability when compared to the intention of the national sustainability policies. When differences in opinion occur, there would also be corresponding differences in the manner of planning and controlling land and building development programs. This inconsistency creates confusion on the part of developers seeking approval of their development plans. Due to the differences in perspective, applications could be viewed differently by the local and regional development offices requiring the elevation of the application to the Secretary of State, which involves time and resources.

           

            As such,  (2000, ) and  and  (2007, ) provide for the need to articulate and clarify the meaning of principles and policies. This starts by defining sustainability in the local context followed by the consideration of the developments of space and environments particularly drawing the differences between rural and urban land classifications and the applicable development policies. The processes and systems also need clarification to translate general development policies to practical regulations that effectively apply these policies. Doing so would ease the application of the English planning system that would also speed up the approval of sustainable development plans and the rejection of unsustainable development plans.  

 

            Still another problem is the reliance of the English planning system on the private sector. Public-private partnerships work because of the important role of both sectors in planning but the relationship implies the clarification of the roles of the sectors in order to achieve a complementary relationship, with the private sector filling the weaknesses of government and handling other aspects of public sector responsibilities so that the public sector can concentrate on welfare services ( 2000, ). This means that both play important roles and the public sector cannot shun away from its regulatory role. The approach of considering the private sector as a partner involves the evaluative role of government in determining the extent of achievement of goals and objectives ( 2006, ). As partners, public and private parties need to share risks and benefits and exercise accountability ( 2006, ). Weaknesses in determining the roles of public and private sectors in planning and in the exercise evaluation and accountability lead to problems of the English planning system. The English planning system highly employs public-private partnership in industrial planning resulting to the change from public sector ownership and control to market based planning involving redevelopment projects that gave rise to problems in ensuring the achievement of public interest ( 2007, ).

 

            Regeneration plans for Battersea Power Station experienced this problem when difficulties emerged in ensuring that the private developer would meet public sector objectives while at the same time providing incentives for the private sector, especially Parkview International and Treasury Holdings, to invest in the redevelopment. This led to the long time it took to achieve an agreement and the failure to commence implementation.

Planning agreement between Wandsworth Council and Parkview International  

            Covering the site approximately 38 acres in heart of London the Power Station is the largest and probably the most expensive undeveloped brownfield land in the Europe. The English Heritage made it Grade II listed building after when the first owner demolished part of it, following work being started on a scheme and being left undeveloped because of lack of funding. New developers Parkview International London Plc acquired the site in 1996 with an enormous regeneration project plan. Approval was given in 1997 for the proposal involving a leisure/entertainment complex in the Power Station, while on the adjacent land the development of a business park, film studio, hotels, theatre with 2000 seat, residential development, 3500 parking space, roads, and the railway station. The plan included 2 hectares public spaces alone on the riverside and the proposal for the jetty providing river bus service to the north. (See appendix for the detailed plan and map).The legal agreement between the developer and the Wandsworth Borough of Council covered many aspects of the scheme, particularly transport and parking.  the President of Parkview International wanted to do something special. The government and council thought this project would provide many advantages to the local people by creating new jobs and regenerate East Battersea. ()

 

            The planning permission was granted in 2002.  There have been some further plans to create a pedestrian bridge between the Power Station and Pimlico and Victoria. In 2003, Parkview started the work on a £1.1 billion project to restore the building and to redevelop the 38-acre site in one of the largest privately owned development project in the UK.   

 

            Moreover, it was also in the agreement between Parkview and Wandsworth Council, the developer has to support the creation of a local employment initiative through a section 106 agreement. This agreement includes a Local Employment Agreement which sets out that the Council and Parkview will work together to ensure the local people and local business will have benefit from the development. The developer had to pay £397,000 to provide community purposes. () It was proposed that the team would develop relationships with contractors at the site, advertise their vacancies and facilitate local people in being able to access these opportunities. In July 2005, Job Shop has been opened on the site. The purpose of the Job Shop was to help local residents including young people with skills, confidence to find employment opportunities at the Battersea Power Station Site. It would create 3000 jobs on the site.  When the finished redevelopment opens, approximately 9000 new jobs will be created. There will be a wide range of jobs, including IT, plumbers, carpenters, security, catering, river transport, designers, journalist etc.  ( 2005-2008)

 

            Furthermore, another agreement also involves another opportunity for community members. There is an S28 agreement between the local council and the developer, which gives opportunity for construction training facility on site.  ( 2005-2008)  and  Minister of Education opened the On-Site Construction Training Centre in 2006.  The funding came from the Government but the space for the construction training centre was provided by Parkview International. At the moment, the Lambeth College provides on site training for students learning building skills. After the completion of training, the JobShop will provide jobs for them on the site or help them to find job somewhere else until the development process has not been started. () Furthermore, it aims to help local small businesses to get contracts during and after the development as suppliers for the goods and services needed in the development plan.

 

            It aims to help people to get back into work at the site or somewhere else in London. Victor Hwang said that he was delighted to welcome Gordon Brown to see the new centre. “It shows how the public and private sector can work together in urban regeneration for mutual benefit.” ()

 

            Community forum have been created with about 60 members. All sides of the community were represented including local residents, teachers, police officers and businesspeople. These people contributed by identifying issues and raising concerns regarding the development. Local community used to work together with the developers. There will be another example for this later on in this paper. This is a very important part of any type of development project where local community works together with developers. ()

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                    Chapter 3: Comparison of European Planning Systems

           

            Over the last 30 years, different problems have been occurring in the European counties. These societies become more aware of the growing environmental cost of economic competition and urbanisation and the need for more sustainable forms of developments. Moreover, they had to deal with dereliction left by previous generation.  Urban regeneration is the solution for the existing problems in Europe. The European Commission has made urban regeneration the main focus of the European Planning policy. (,  &  2003, ). Most countries have created new legislations to improve the condition of urban areas. The UK Government created the Urban White Paper, which built on ’s report, Towards an Urban Renaissance. The French Government has produced a New Planning Act 2000. Germany has the Social Cities programme and Netherlands created the Major Cities programme. Furthermore, Italy and Belgium have interest in the regeneration programme. The  planning systems in Europe varies, according to different factors such as the scope, extent of development, disparity between planned objectives and actual results, the concentration of decision-making power as either centralised of decentralised, and the dominant approach as either market led or planning led. The differences stem from the cultural and historical development of the different European countries.

 

            European countries can be classified according to the two factors of uncertainty avoidance, which is the extent of preference for structures and power distance, which pertains to the extent of inequality acceptable to the population as determinant of interest representation. Although most European countries lean towards low power distance indicating the high propensity for the representation of diverse interests, Germany leans more towards a higher uncertainty avoidance indicating its preference for structured planning when compared to the UK that leans more towards low uncertainty avoidance to show that the country applies flexible development policies. ( 2003, ) In a way, this constitutes a comparative strength of the English planning system since this allows room for flexibility to changing situations and development contexts when compared to Germany. These preferences should be supported by the context-based development needs and demands of the country and the flexible planning system suits the UK best. However, this could also lead to the weakness in establishing sufficient structures to support development planning and control that also provides enough room for flexibility.

               

             In the area of spatial planning, Europe can also be classified under the four primary traditions. First tradition is regional economic planning, which utilises spatial planning in order to achieve a wide rang of socio-economic objectives including elimination of poverty, employment and other disparities. As such, this involves the strong role of the national government, such as the case of France, in implementing spatial planning policies. Second tradition is comprehensive integrated planning, which develops plans using formal, systematic and hierarchical plans. Since local authorities apply top-down planning policies, local governance plays an important role in implementation such as the case of Denmark, Germany and Netherlands. Third tradition is land use management, which considers planning as a technical process of controlling land use to ensure the sustainability of growth such as the case of the rural and urban planning in the UK. Fourth tradition is urbanism, which focuses on urban design and architecture by applying regulations on zoning and codifications to manage urban spaces such as those applied in European countries near the Mediterranean Ocean. (,  and , 2005) It appears that only the United Kingdom has integrated sustainability in its planning system as mandated by the EU planning policies. This constitutes strength of the English planning system because of the focus of policies on managing long-term and wide-ranging land use plans. However, the balancing of centralisation and decentralisation or the role of the national, regional and local planning authorities creates problems in aligning planning policies since long-term sustainability can only be achieved through coordinated action of the different tiers of planning policy authorities.

           

            In relation to the operation of planning systems of different European countries, the planning systems can also be classified according to the degree of discretion or flexibility allowed by the planning system and the degree that unauthorised developments are allowed. The United Kingdom applies a discretionary perspective that allows the country to achieve a lesser disparity between actual planning objectives and actual results. The countries Denmark, Finland and Netherlands operate planning systems with moderate levels of flexibility so that the application of these planning systems also achieve a lower degree of disparity between objectives and results. The European countries France and Germany apply planning systems with limited flexibility in line with the corresponding regulations. As long as regulations are applied comprehensively, results also matched the objectives. Other European countries such as Belgium and Spain apply strict planning systems resulting to higher disparity between the intended and actual results. (,  &  2005) When adjustability and flexibility are considered as positive measures for the ability of planning systems to actualise objectives, the United Kingdom carries this strength relative to other European countries. However, flexibility be balanced with structure in order to achieve intended results. Otherwise, problems would arise in implementation.

 

            Based on the consideration of the different planning systems of various European countries, the English planning system carries the strengths of flexibility in operations and sustainability of plans. Even with these strengths, the English planning system becomes open to a number of weaknesses such as the difficulties in translating general policies into practical regulations and the balancing of structure with flexibility.

 

            In 1970`s and 1980`s in the UK and western Europe the traditional industrial structures had rapid changes. Unemployment and urban deprivation became the major political concern. In the UK, but not elsewhere, the role of local authorities became increasingly marginalised as central government sought solution that involved direct action in partnership with private sector investors.

Other countries had different solution, in France the devolution of power to local communities was supported by state expenditure. In Germany wealthy regional and local governments tried to spend their way out of the crisis, at least until reunification changed the priorities for investment. The most successful examples of urban regeneration have been where the land has been in public ownership from the start. (,  &  2003, )

Coach stated that the UK government is doing no more than catching up with this other countries.

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Chapter 4: Comparable European Cities and their Regeneration

Germany: The Ruhr

 

            The Ruhr area has been dominated by coal mining and heavy industry for more than a century, and was left with enormous ecological and social problems after the industrial decline of the 1980s.

 

            Emscher Park International Building Exhibition (IBA) was created in 1989 to provide a framework and to help the administrative districts within the Emscher region. The main role was to encourage and evaluate proposals for regeneration projects in the Park, and to create a new image to the Ruhr with high quality of life and sustainable development.  The IBA Emscher Park project is a unique planning and architectural endeavour because it considers local organizational structures instead of just constructing model buildings. Its five main categories include the remediation of the industrial landscape, cleaning the Emscher river system, housing developments, construction of commercial and educational facilities and re-use of old industrial structures. The regeneration process relies on comprehensive planning, influenced by the international sustainable development agenda, place marketing and the need to change the image of the area to attract inward investment.

 

            The founding for the Emscher Park project come from the state and federal governments and some from the European Union and a very small part from private sector.  That was a 10 year project whish has been finished in 1999. The IBA finished 120 projects within the 10 year period which mainly concentrated on large areas of derelict land. There have been smaller activities such as a creation of new ecosystem and planting of trees. (, ., , . and , . 2003.) Healey stated that the IBA`s regeneration project has relied on comprehensive planning and ecological revitalisation since the IBA sees regional quality in physical, social, environmental and cultural terms as a key factor to improve the area.  , ., , . and , . 2003.).  stated that in Gelsenkirchen on the former site of a steelworks, most of the redundant buildings have been removed, the land has been cleaned up and the largest solar-heated building has been constructed on the site. The new building offers office spaces for environmental technology companies with high rent, which has been occupied mainly by public institutions and a small amount occupied by private companies.  There was a similar project completed in Dortmund Eving a former coal mine where the former mine shaft has been converted into offices. The site has been rented out on a law rate in order to encourage industry to the Park.

 

            In Oberhausen a large area of derelict land has been redeveloped. The new redevelopment called `Centro` including shopping and leisure complex. The development is well designed on a high standard with a good public transport

facility, but on the other side not a sustainable development. Another redevelopment in the same area is the gasometer which has been converted for new uses such as art, culture, recreation, business and offices.  (,  &  2003, )

 

            IBA had a programme of reusing old and derelict industrial buildings for cultural and recreational purposes. The former Meiderich steel works has been redeveloped into a landscape park with new leisure and recreational facilities built in and around the old steel structure. The aim of the project was to attract tourist to the area and provide new opportunities to the population of the Ruhr.

IBA`s key strategy was the place marketing to attract inward investment for Emscher Park. Duiusburg has been regenerating its old inner harbour area with replacing derelict industrial buildings with new industries and housing development with public founding as it has been mentioned earlier. The plan was to refurbish existing buildings and develop new ones to create a mixed use development, create commercial space and leisure facilities.

 

            Furthermore the IBA  scheme has resulted in the successful redevelopment of  a big amount of old industrial site. It provided new flats for people with low-income giving them opportunity for ownership, developed parks, green public spaces, cycle path and there have been environmental improvements in the area too.  (,  &  2003, )

 

Milan: The Bovisa District

 

            Bovisa was an industrial area in Milan with a high quality transport infrastructure. Later on has been constructed with a local railway and tramway system which integrated with the North Milan area and which has been a significant support to the industrial and residential development of the area. It has a very important highway system between Venice and Turin. French company produced gas in the inner area, which was supplying Milan until few years ago. The leftover from this company is a vacant industrial buildings, gasometers and railway tracks.

 

            At the end of the 1990s Milan had about 500-600 hectares of redundant or highly underused industrial plants. In this time the government proposed The Director Document for the Underground Railway Link. The aims of the project were to coordinate the effects of an infrastructural modernisation project with a transformation an abandoned or underused industrial and railway lands. This plan has been followed by the town planning scheme.  After the this project the government has created The Director Documents for Distressed and Underused Areas which propose some strategic targets and general principles for conversion, follows the same principles. . (,  &  2003,  .) The program has not proved to be successful for process implementation or for achieving coordination between public programmes and private investment. However this strategic planning approach is well developed in Milan. There was eight urban regeneration program had been prepared in Milan. This programme agreement was the key element for the implementation of the 1990s urban regeneration programme. This was introduced by the national law and improved by regional Acts. The planning process started in 1995 and by 2000 this programs were completed including Bovisa district and the oil depot area in Quarto Oggiaro District. Development agencies, mixed companies and multi-companies were involved in the redevelopment project. This companies collected different public founds, from the European Community, central and regional government and private funds from banks and industries.  (,  &  2003, )

 

            In the Bovisa District area a new Polytechnic University has been built which is the largest technical university in Italy.  () 

The oil depot are Quarto Oggiaro District has started to be redeveloped by a private company specifically formed for regenerating distressed areas. The area includes residential and commercial developments, example offices, hotels, restaurants, multiplex cinema and a new infrastructural line which being connected to the new road network to the Polytechnic University, link this area with the motorway system. (,  &  2003, ).

Ireland: Spencer Dock

            The last comparable regeneration project is different than the above mentioned, but maybe it is the most important, because the same company is doing the development project as the one who bought Battersea Power Station and will redevelop the derelict land.

            Spencer Dock can be divided into two sections, Spencer Dock and Spencer Dock North. Spencer Dock falls under the jurisdiction of the powers of Section 25. Section 25 also provides that the carrying out of development which is certified by the Authority to be consistent with the Planning Scheme shall be exempted from development for the purposes of the Planning and Development Act. The effect of this provision is to eliminate uncertainty and minimise delay in respect of developments requiring major public and/or private investment, when compared to the normal planning process” ( 2003, )

 

            If Developers want to build in Spencer Dock North must apply to Dublin City Council in order to obtain planning permission. This is a route that, unlike Section 25, is open to third-party appeals.

In June 2003 the developers engaged in negotiations with the local community through an experienced London based group of architects known as John Thompson and partners. The developer’s negotiations with the community were specifically targeted at the area known as Spencer Dock North. The negotiation concentrated on how to develop the site and the surrounding areas. This included the issue of surrounding transportation, social problems and social and affordable housing.  This gave those present, through the use of ‘local’ knowledge, an idea of how the site could be developed. ()

 

            Spencer Dock is the biggest and most ambitious urban regeneration project in Ireland. Spencer Dock, a 51-acre brownfield site located on the north side of Dublin Docklands is an area, which has been earmarked for a major regeneration project by a consortium known as the Spencer Dock Development Company (SDDC), which owns the site. The developers Treasury Holdings, the state owned company CIE and the Docklands entrepreneur Harry Crosbie are the three stakeholders that form the SDDC. The Treasury Holdings Group is one of Ireland’s largest and most successful private property companies. ()Their objective is to create developments that sit in harmony with their environment and enhance the community. They concentrate on the core objectives of excellence, innovation and customer satisfaction and relax. The Convention Centre Dublin is Ireland’s new world class convention facility and is scheduled to open in the second half of 2010. The new development will have a six million square foot of office, residential, service and leisure space.

            There is a National Conference Centre, which will include a 2,000-seat auditorium, two 450-seat multi-media halls, exhibition spaces, conference and meeting facilities. The site is includes a five star hotel and 2.5 acres of parkland.

Ireland’s largest professional services firm, PriceWaterhouseCoopers will be the  first commercial tenant to locate in the area. More than 1,600 PwC employees will work at Spencer Dock.

            The building provides 230,000 square feet of office space, and is fitted out to the high standard that will be typical of all commercial developments in Spencer Dock. Facilities for employees include a fully equipped gym and fitness centre, a food court, café and shop.

            A new train station strengthens the comprehensive public transport links to the area, which includes train links, bus making the area highly accessible for employees across the country. It is expected that up to 6,000 people will work in the area with an additional 5,000 residents. The building has been designed to provide high-quality and flexible meeting space, finished to the highest standards and with the most modern technology available. It offers space for the large number of staff and also the ability to customise the building to work equally well for their employees and visiting clients. ()

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United Kingdom: Battersea Power Station

 

            In 2006 an Irish company Treasury Holdings purchased the side from Parkview International. The reason of this sale was the lack of funding and a huge profit made by . The Chinese businessman still has 40% share of the development.  had a dream and the dream will come true working together with Treasury Holdings.  said they will start the redevelopment together. As mentioned above, the new developer had a similar project in Belfast, so they have experience in redeveloping big and derelict lands employing high standards.  said plans for affordable housing have to be included otherwise they will not be able to get planning permission. The new proposal will be submitted later on this year. ()

 

Future plans of the Power Station

 

            The Power Station redevelopment is one of the largest in UK. The 136,000 square metre building is one of the world’s most talked about leisure and retail destination. It has been mentioned before the Power Station building is Grade II* listed.  Grade II* are particularly important buildings of more than special interest English Heritage looks at individual buildings, hundreds of which are brought to their attention each year by members of the public. Without this public interest, many important buildings might be lost or damaged. English Heritage assesses buildings by type and by area, to bring the lists up-to-date by ensuring that the best buildings of a particular type are listed. .

            After two years investigation and repair Parkview decided to remove the old chimneys and replace them with new identical chimneys, which had never happened.   said; Within the training on the side there is a Health and Safety valuation takes place to investigate the structure of the Power station and the four chimneys again, before the builders can start any work on it again. ()

 

            The plan is to make the new chimneys functioning part of the building. Permission has been granted to make a one table restaurant on top of the North – West chimney with a beautiful view over London on 104 metre high. The one table restaurant will allow diners to choose from one of the top chefs who will prepare the dinner for them. It will be delivered to the One table restaurant.  North-East would act as a flue for the Power Station ecologically friendly heat and power plant. One will be a Theme park stile adrenalin ride and one will form part of heritage tour. () The boiler house will be the heart of the building. It will be filled with three floors of retail, leisure facilities. Parkview could have filled the building with multiple floors, but instead decided to retain the vast central space. The glass ceiling will allow visitors to look from the bottom of the Power Station to the Chimneys and the sky beyond.  The west hall was demolished by the previous owner and it will be replaced with a glass wall. That will be a greenhouse with fruit, vegetables and herbs that will be for use for the Power Station’s restaurants. () Over three levels will be a retail mix that cannot be found anywhere else in London, from the most exclusive designer brands to high street names. The developers want to create a different shopping mall from the others in London. The design will be more natural more like a Tate Modern style. The restaurant and entertainment side will offer 70-80 leisure facilities including restaurants, bars, jazz, night club, comedy clubs with the idea of 24 hour eating and drinking venue. (.) There are plans to build UK`s first all-digital cinema with 10-16 screens divided between international, blockbuster and art house films. There will be entertainment for everyone. 

 

            The residential apartments have been designed to harmonise with and relate geometrically to the scale of the Power Station with more than 700 apartments.  There will be a garden area both ground level and roof top gardens are planned consisting with the London Plan.   ()

 

 

Battersea Park Station

 

            The transport plan for the Power Station is the refurbishment of the rundown Battersea Park Station. The modernisation and upgrade of the railway station is part of its commitment to improve the local environment, create first class transport link and easy accessibility for the Power Station visitors and employees. The existing ticket hall is a listed building too. The plans include two new entrances on the north side of the station facing onto Battersea Park. The viaducts at the back of the existing station will become retail and leisure space leading to the new north side entrance. Also, there is planning permission for landscaping the route between the Battersea Park Station and The Power Station. (.)

 

Jetty of the future

 

             said:” The Power Station`s existing jetty will be renovated and refurbished to provide access from the river walk to boats. That will give a better and easy option to deliver building materials to the site and from the side. Furthermore it will reduce the congestion from the main road caused by lorries under the construction works.” ()

 

            The existing road would be improved with new signs and a second entrance would be built for the visitors. Also a river bus service will be another transport option for the public. They are planning to have up to 12 boats on the river which will run approximately every ten minutes through central London to Battersea Power station Pier.  ()

 

            It is like a city in the city. It will offer regeneration potential for the area.

This redevelopment will be London most exciting destination place. People from round the work will live work, play and stay there and enjoy all kind of benefit of the building and its surrounding area. The question is when it will happen. 

 

Chapter 5: Conclusion

 

The study was able to meet substantially the objectives identified during the start of the research project. A look into the specific case of Battersea Power Station has been able to provide insight into the workings of the English planning system as well as identify problems leading to the failure to commence the implementation of the regeneration plans for the high valued brownfield land in London. Information from secondary sources have been able to provide a background of the development of the English planning system with implications on the development of Battersea Power Station and problems in the application of the English planning system that affected the failure to commence the project. This was so despite the grant of a permit in 1997 under one developer and the grant of another permit in 2002 under another developer, which still controls 40 percent of the project after selling the 60 percent to another private developer because of funding problems even after profiting from the venture. Interviews with two respondents directly involved in the development of the Battersea Power Station were able to provide information on the current and future plans as well as on the public-private collaboration that occurred in the process, from which problems in the English legal system were derived. Results of the desk research and interviews were covered in the succeeding discussions.

 

The English planning system served as the underlying context for regeneration plans, such as for Battersea Power Station, by providing regulatory policies and procedural rules necessary to facilitate the regeneration plans for sites. In relation to its regulatory function, the English planning system affects regeneration plans by providing the need for permits that implies the presentation and approval of a development plan that meets the requirements. The requirements depend on the classification of the land and the allowable development actions and limits based on overall sustainability goals for the area, which in the case of Battersea Power Station is London. As a source of procedural rules, the English planning system provides the processes for compliance by the interested parties including the requirement for a development plan, application for a permit, and other requirements before commencing regeneration plans.   

 

The English planning system affects the development and the manner of developing formal industrial sites by determining whether plans for the industrial site would be implemented, which plans and parties should implement the plan and the process of doing this, and when to commence the development of formal industrial sites and the expected benefits. Since the English planning system is based on the encompassing goal of sustainability, the development of formal industrial sites need to comply with this goal. Actions and the nature or extent of actions for formal industrial sites is governed by the processes under the English planning system.

 

By being classified as a brownfield land under the English planning system, the commencement of the redevelopment project for Battersea Power Station was affected by the operation of this regulatory and procedural system. In application, the English planning system largely depends on public-private sector partnerships for the completion of redevelopment projects. Public-private partnerships offer a number of benefits such as funding and technical skills that could not have been experienced had the city government handled the development plan alone. However, there are also drawbacks to this type of collaboration, especially conflict of interest in the management of the redevelopment project or decision-making. The failure of redevelopment plans for Battersea Power Station can find attribution to the emergence of the drawbacks of public-private partnership. During the application for a development permit, a number of private sector developers received grant for the regeneration of Battersea Power Station. The years it took to obtain a permit was due to the process of negotiation between the public authorities and the private entity over aspects of the development plan, especially community welfare and the sustainability goal, with which private sector developers do not necessarily agree because of their prioritization of profitability. After obtaining the permit, the sharing of control over the implementation of the plan became the next problem since the local authorities exercised regulatory powers over the implementation that limits the actions of private developers. As such, implementation failed to commence because of problems such as lack of funding or hesitation to provide funding because of changes in perceived returns on their investment. To date, the regeneration plan for Battersea Power Station had not commenced. Minor work has been done such as the preservation of some parts of the historic building to prevent irreparable destruction but no major work has been done.

 

In the European context, the English planning system has relative strengths and weaknesses when compared to the other planning systems of other European countries. A strength of the English planning system is the integration of the goal of sustainability in the planning system, which implies that approved regeneration plans are likely to be long-term and do not require substantial changes mid-way through the implementation phase or involve adverse effects to the community. Although an EU directive has encouraged the intervention of sustainability in the planning systems of other European countries, only the United Kingdom has actually accomplished integration. Another strength of the English planning system is the application of the discretionary perspective resulting to the flexibility on the part of policy implementers in considering contingent plans in case unexpected situations emerge. This lessens the disparity between the planned objectives and the outcomes. In the other European countries such as France and Germany, there is a low level of flexibility in the implementation of the respective planning systems so that outcomes do not necessarily match the objectives since outcomes are acceptable as long as these have complied with regulations. As such, there is a higher tendency for outcomes to match objectives in the English planning system.

 

However, the English planning system also has a number of weaknesses. One is the longer period it takes to commence and complete redevelopment plans because of the complexities arising from the integrated system that covers multi-tiered regulation and decision-making from the national to the local level. This is not experienced by other European planning system in the same degree as the United Kingdom because of the lesser degree of integration resulting to independent decision-making on the different levels, albeit creating a different problem. Another weakness is the greater importance placed by the English planning system on public-private partnership when compared to the other European planning systems. Collaboration leads to the problems of control and conflict of interest because local government has different intentions for the redevelopment relative to the private sector developers. In other planning systems, greater responsibility for redevelopment rests on the local government so that control resides with the local government.

 

Due to the differences between the planning systems in Europe and the relative strengths and weaknesses of the planning systems, various European countries had different experiences in industrial development. In the case of the development of The Ruhr in Germany, the strength of the development project is the control and direction that resides in the local government because of the important role played by a government corporation in the consortium created for the development of The Ruhr. The weakness is the achievement of sustainability of the plans that could have prevented resource wastage and ensured long-term benefits. With regard to The Bovisa District in Italy, the project experienced the strength of policy direction from the government because of the role of the government in planning and decision-making but experienced the weaknesses of poor coordination and public-private partnership. These experiences are largely different from the development of industrial lands in the United Kingdom. In terms of the Spencer Dock in Ireland, private developers greatly handled the development much like in the Battersea Power Station in London but a government corporation also played an important role in planning so that public interest was secured by consulting the community regarding specific appropriate plans. In a way, balance between public and private interests was achieved unlike in the Battersea Power Station, where the private sector played a more important role in the development plan. As such, the differences in the planning system of the different countries determined the successes and problems these countries experienced in industrial development. This means that the problems in the industrial development linked to the planning systems can find solution through planning system reforms in the areas of policy and application.

 

Improving the English planning system can be made by focusing on the two problem areas emerging from the application of the system. The first problem is the complexity of a single planning system since local development initiatives have to consider national planning policies that should in turn comply with European Union directives for sustainable development. This means that local regulation and processes need to be in line with national planning policies. However, integration involves phases that commenced only in 2004 with planning reforms. This means that it should take some time before local regulations and processes adjusts to the integration and national planning policies are enhanced to provide sufficient guidelines but provide room for flexibility. The solution to this problem lies with the policymakers to assess the operation of the planning reforms, determine problems by looking at problems in actual industrial developments, and identify solutions to these problems as part of a continuing process that should ease the integration problems in the next years. The second problem is the reliance on the private sector for redevelopment projects. The English planning system allows private sector to play major roles in industrial development at the expense of public interest and control over the development process. Public-private partnerships succeed with the determination of the roles of the parties to determine the extent of control by the local government based on the policy guidelines and the limit of the decision-making power of the private developer because of the consideration of public welfare and sustainability. As such, the solution to this problem involves the enhanced role of the local government in approving the plans of private developers with consideration of implementation issues such as funding and planning timetable and policy issues such as community welfare and sustainability. The redevelopment of Battersea Power Station has changed hands among private developers but the same problems have occurred especially funding problems. Local government should ensure that approved plans and private partners have the capacity to commence and complete the approved redevelopment plan as well as observe policies as part of its regulatory power. 

 

Plans for the redevelopment of Battersea Power Station, with the involvement of Treasury Holdings, a firm with a wide experience in large-scale industrial development, which is expected to support the commencement of the regeneration plan before the end of this year. The development plan of Battersea Power Station requires £400 million, an amount that Parkview International claimed it could not meet. However, with the involvement of another private player, together with the role of Wandsworth Council in approving new players and changes in the plan, the redevelopment of Battersea Power Station should commence as scheduled. Moreover, continuous enhancement of the English planning system should address integration problems.

(1,851)

 

 

References

 

Appendices

 

Detailed planning

permission approval

 

1 Power Station

2. Urban Resort Hotel

3. Conference Hotel

4  Office' Weave'

5, Showcase 'Twist'

6. Jetty

7  Auditorium

8. Residential

9  Riverside  Walk

10. Riverside Path 

11. Northern Piazza

12. Glass Pavilion

13. Galleria

14. Service Entry/Exit

15. Urban Resort Hotel Ballroom

16 Southern Piazza

17. Main Vehicular Entry

18. Main Vehicular Exit

 

2.5 levels of underground Parking

with 3,500 car parking spaces

and 28 coach parking spaces

 

Proposed additional facilities

 

19 Thames Pedestrian Bridge

 

 

 

 

 

 

September 17, 2009

The Security Management Industry

TASK 1

 

Security management is the term used to describe the techniques and expertise of efficient organization, planning, direction, and control of the security operations of an organization. In the theory of security management, organization has two principal aspects. One relates to the establishment of so-called lines of responsibility, drawn usually in the form of an organization chart that designates the executives of the organization, from the president to the foreperson or security department head, and specifies the functions for which they are responsible. The other principal aspect relates to the development of a staff of qualified security management personnel. Planning in security management has three principal aspects. One is the establishment of broad basic security management policies with respect to production; sales; the purchase of equipment, materials, and supplies; and accounting. The second aspect relates to the implementation of these security management policies by departments. The third relates to the establishment of standards of work in all departments. Direction is concerned primarily with supervision and guidance by the security management executive in authority; in this connection a distinction is generally made between top management, which is essentially administrative in nature, and security management, which is concerned with the direct execution of policy. Control involves the use of records and reports to compare performance with the established standards for work.

 

The term security management originates from the Greek language, where the word means the art of a general. The person who makes security management strategies is the strategist who is the leader of an organization. Management of a firm needs security management strategy, to make sure that everything goes well in the company, through the use of security management everything done in the company is well organized and no detail is being left out. The company needs security management to make sure that the company is doing well internally. Security management decisions have multi-functional and multi-business consequences, this kind of decision require broad consideration of the firm's external and internal environments, and it may affect the firm’s chance of prosperity.

The security management paradigm is built on the notion that security management decision making results from intentional actions in the name of individual or collective purpose. The paradigm accords central importance to the cognitive elements of understanding and intention as basic drivers of security management choice. Managerial thought is critical to processes of strategy formulation, for example, which require security managers to envision and prioritize future states that are appropriate and proper. Similarly, security management thought is critical to environmental analysis, which requires managers to forecast and make predictions. These tasks all depend on individual cognitive capabilities and on cognitive processes such as attention, perception, reflection, and understanding. For some, security management is just another commercial technique being foisted on an unwilling sector which is losing its soul. For others, however, security management has provided a useful set of tools and techniques to draw on and adapt to enable them to be more focused, to create a stronger sense of unity and direction, to understand the external environment better and to manage more effectively the development of the organization. The paper will give a background of the organization Symantec and the security management industry of Hong Kong (HK). The paper will discuss the strengths and weakness of the company and will analyze the HK security management industry through porter’s five forces. The paper will also give recommendations towards the industry and the company. The information acquired from such will be used to create a conclusion.

Porter’s five forces

In the security management industry of HK the rules of the competition are governed by five competitive forces. These five forces include potential entrants, competitive rivalry, substitutes, the bargaining power of buyers, the bargaining power of suppliers,  These five forces address the question why are some markets more attractive than others? The overall strength of these five competitive forces validates the capability of companies and organizations in the security management industry of HK to earn, on average, rates of return on investment in excess of the cost of capital.

 Potential Entrants

For potential entrants to the security management industry of HK there are various barriers to overcome. These barriers arise due to economies of scale, product differentiation, capital requirements, and access to distribution channels, switching costs, government policies, experience, brand strength, and retaliation. Companies like McAfee and Symantec has been around for a long time and these companies are not greatly affected by the new entrants. The influence of potential entrants to the security management industry of HK is weak. But to ensure that no other problem arises companies in this industry maintain low cost of unit production, this helps in making sure that the new entrant will not have advantage over them. Another thing that companies do is to innovate new techniques and procedures in serving the clients so that their can be product differentiation and the company has a unique product apart from the product their rivals has. 

Competitive rivalry

The strength and intensity of competition among the firms in the security management industry of HK depends on the number of firms operating in the industry sector. The factors which influence the competition are the number of firms and the key players, seller concentration, the relative size of the firms, market share, profitability, margins earned, added value, excess capacity available, and the strength of the brands. Competition is one of the things that the companies in the security management industry of HK tend to focus its attention. Competitive rivalry highly influences these companies, like McAfee and Symantec. Different things are done by these companies to ensure that they have advantage over their competitors, one is a strategy wherein they give service straight from the heart. This kind of strategy gives the company a better relationship with the clients. Having a good relationship with clients gives them advantage over rivals. Another thing done by these companies is to offer quality prices. By doing so the company lures clients away from competition. Moreover the company uses different promotional materials so that clients get to know them and so that more clients will transact with the company.

Substitutes

Substitutes in the security management industry of HK involve direct and indirect substitutes. The more substitutes there are the less intense the competition will become.  It is the ease with which one product renders another redundant by providing the same utility more effectively or efficiently. The security management industry of HK offers products that increase effectiveness and efficiency, which results to a great competitive advantage to all the companies in the industry.  Substitutes give high influence to the companies in the security management industry of HK since substitutes can make a company lose the clients it has. Companies in the security management industry of HK make sure that the substitutes won’t give them much problem. They do this by proving that the security management service and products they offer are the best quality and are better than substitutes. They also prove that their service is better against others by comparing and contrasting it with substitutes so that clients can know the difference. Companies in the security management industry of HK also try to offer security management products and services superior than substitutes so that they can attract more clients by offering superior products

 

 

Bargaining power of buyers

In bargaining power of buyers the factors that are included in the security management industry of HK are as follows: demands for quality; playing off competitors; buyer concentration; are products a significant element in buyer costs; buyers' price sensitivity; power of suppliers relative to buyers. Buyers in the security management industry of HK have more power in the market according to factors such as the volumes in which they deal the availability of the product they want to buy, the margins to which they work, and the control they have over manufacture of the product. Because buyers are more powerful, competitive pressures increase for producers.  The bargaining power of buyers highly influences the companies in the security management industry of HK. It shows how good these companies are doing in serving the clients. It also helps in determining how known these companies are. These companies make sure that the bargaining power of buyers is high. They do this by making sure that buyers are concentrated and there are few buyers in a significant market share.

Bargaining power of sellers

Similarly to buyers, suppliers in the security management industry of HK exert competitive pressure since they control the market for a resource, hold the balance of power in the supply and demand relationship, and produce the products the buyer does.  The bargaining power of sellers in the security management industry of HK highly influences the companies involved. The companies make sure that their suppliers have high bargaining power through helping them show their importance in the industry.  By demonstrating the value of their suppliers these companies attract other companies to purchase the suppliers products thus their bargaining power increase.

TASK 2

 

Symantec Hong Kong, a leading supplier of security management software programs to corporate and government customers, today is now among the first companies to provide its customers with the next level of industry-standard security management software programs, while many vendors are still struggling to broaden their product lines. Symantec Hong Kong's has the unique ability to take a market strategy position during important technology transitions because of its build-to-order manufacturing process. This build-to-order approach allows the company to maintain low inventory levels and integrate emerging technologies into software programs. Today's customers are reducing their supplier bases, providing the opportunity for the most capable suppliers to seize huge market share gains as Symantec Hong Kong needs to redefine its strategy to make business capabilities within the core of the business model as it requires creating a new strategy and bringing the company's core activities into alignment with its business model in customer operations strategy, core operations capabilities and organization structure. In the first few years of its existence, Symantec Hong Kong was a struggling software producer, the company ordered its components in advance and manufactured to inventory. Then Symantec Hong Kong began to implement a new business model. It converted its operations to a build-to-order process, eliminated its inventories through a just-in-time system, and sold its products directly to consumers putting these new supply chain capabilities at the core of its strategy. Symantec Hong Kong developed a supply chain mastery that went far beyond the simple pursuit of efficiency and asset productivity. However, the company had to make a series of very difficult strategic tradeoffs to bring its functional activities into alignment with its new business model.

a. Brand Image

          The Symantec security management software is the main product of the company and is considered as its most important asset. Symantec belongs to the top-international security management software brand circles in the world, as proven by its average growth of nearly 8% in sales volumes in the last ten years.

The Symantec brand already has a premium status in all its markets. It is practically the main profit provider of the company in the broad markets. Also, because of its market strength, the Symantec brand has already obtained significant profitable segments on its own.

b. Marketing

Symantec is one of the world's leading companies in security management in terms of profit and sales volume. The company has also the widest presence among all international security management companies. This is made possible through a positioning strategy of global networking of companies and distributors.

In terms of volume, Symantec is one of the largest distributors of security management programs in Hong Kong. The company also balances stable and profitable markets in Europe and North America. In recent years, Symantec has initiated efforts to solidify its presence in the Asia Pacific Region through the acquisitions of markets in China and Russia.

The Symantec brand is one of the world's most valuable security management software brands. Symantec uses the name of both the company and its mainstream security management software label, and this strategy has allowed the company to pursue an integrated marketing approach directly related to the company name.

Symantec, as a leader in their industry, has implemented various strategies to fully adapt to the need to go global. However, it is more important for the company to implement a more sober approach to maintain consumer loyalty with their local brands. This is primarily due to the consolidation and globalization that are taking place across most industries, including the security management industry.

c. Operations

Symantec Hong Kong carefully targeted corporate relationship customers that had predictable, budgeted needs and that wanted a predetermined set of product models. The company also selected individual customers who were high-end, repeat purchasers with a preference for early technology adoption. Both account segments had the stable, predictable purchase patterns that Symantec Hong Kong needed to make its joint build-product-to-order/buy-component-to-plan system work. Effective in-customer operations require powerful technical capabilities, crucial customer knowledge, and the ability to fit into the customer's organization and work processes their unique customer knowledge and customer relationships created a set of barriers to entry that others could not overcome. It was this capability at the grassroots level that drove companies' meteoric increase in customer market share as internet becomes a more pervasive and powerful element of company business models, it offers companies the ability to differentiate them based on their in-customer operations. These enhanced capabilities make customer intimacy both more feasible and more efficient. Symantec Hong Kong differentiated itself in the corporate market by developing a set of extremely effective security management software programs. Each program was highly tailored to the customer's individual situation. Symantec Hong Kong worked with each customer to specify a particular set of product configurations that would work best in the customer's network. Tailored offerings were specified and developed for each customer. At the same time, Symantec Hong Kong used its direct links with both corporate and individual customers to get immediate, real-time insights about latent customer needs and to identify new generations of security management products and services.

 

 

d. Human Resources

Symantec Hong Kong knows that its future depends on the company’s ability to attract new personnel and retain existing personnel in key areas including engineering and sales. None of the company’s employees is subject to a collective bargaining agreement. The company considers its relationship to its employees to be good.

e. Product-Service Market

An effective channel strategy which is a necessary element of supply chain mastery, the process of choosing a channel strategy, the supply chain master can create a powerful new channel that reduces its competitors' access to important target accounts and market segments. In the security management industry of HK, a battle looms between producers and distributors and among horizontal competitors over customer ownership through inter-company supply chain relationships. Most successful supply chain-based strategies offer significant advantage that is either explicit and the ability to control pricing through direct customer relations is another key element of channel strategy. As it does with in-customer operations, the Web opens both new channel opportunities and new dimensions of customer service. However, this newly created channel must maintain the fit between a company's account set and its business model. All too many companies lose sight of this critical factor as they indiscriminately pursue incremental revenues. Symantec Hong Kong's direct-to-customer channel strategy certainly is a breakthrough in the security management industry of HK. In the early stages of a technology product's lifecycle, distributors are important for supporting new adopters. Symantec Hong Kong has discerned a lucrative set of high-end customers that were ready for direct distribution with arm's length customer support from help lines.

An innovative direct channel strategy gave Symantec Hong Kong these crucial elements of its powerful business model:

Ø  Real-time customer feedback and market insights

Ø  The ability to "sell what you have"--that is, using day-to-day pricing and sales incentives to shift demand toward products that are currently makable

Ø  Extremely crisp product life cycle transitions

Ø  Elimination of the obsolete and excess dealer stock that plagues the non-direct competitors

Ø  The ability to control pricing on a real-time basis.

The capabilities were rooted in each company's core business processes, many of which focused on supply management. The new supply chain masters consolidated their supplier bases in order to form more effective partnerships. The masterful suppliers that they kept realized large market share gains. Insightful suppliers also can help supply chain managers accelerate their supply chain mastery. Symantec Hong Kong developed a set of new operations capabilities in five crucial areas as it created the flawless make-to-order system that has been widely noted (but in fact is only one part of its business model. Symantec Hong Kong worked at length to build an effective supplier management function in order to shorten component lead times and maintain the absolute quality standards required by the just-in-time operation.

f. Operations Philosophy

Symantec Hong Kong maximizes its flexible-response capabilities by outsourcing component-part manufacturing. Symantec Hong Kong doesn't have substantial resources tied up in physical facilities dedicated to winning the first-to-market battle for each successive generation of technology but the company invests in the information technology infrastructure that supports real time communication among its customers, its own manufacturing facilities, component suppliers, and airfreight carriers. Symantec Hong Kong streamlines its operations and relies on its computer monitor suppliers to ship directly to the customer. As long as a supplier retains its strategic position, Symantec Hong Kong will collaborate with it to achieve mutual success, but if a particular supplier loses its edge, Symantec Hong Kong has the flexibility to respond quickly and customer focused to ensure the company continued competitiveness. In addition, customers are important assets to Symantec Hong Kong as the company introduced the direct model of its competitors were selling computers to end consumers via distributors and detaching themselves from end consumers. Symantec Hong Kong, on the other hand, sells directly to consumers and is continuously communicating with them and benefiting, especially in two areas: seeing sales trends and learning about unmet customer needs. The sales trend data helps Symantec Hong Kong match supply with demand, and information related to unmet customer needs translates into opportunities for innovation of products and services. The company also relies on customers' knowledge of what they want to purchase and when they want to complete the transaction to drive the direct business model.

To build customer intimacy and loyalty, Symantec Hong Kong leverages its customers' knowledge of their own unmet needs. Symantec Hong Kong's brand image was and is shaped by customer feedback. Identifying the linked set of assets enables Symantec Hong Kong to select strategy-focused, asset-based balanced scorecard measures that support the customer intimacy value proposition include:

Ø  Training dollars spent per full-time equivalent by customer segment to ensure that well-educated business segment managers provide state-of-the art advice to customers

Ø  Number of collaborative customer-solution teams that motivate Symantec Hong Kong to collaborate with its customers and jointly create technology solutions that fulfill any unmet customer needs

Ø  Number of emerging technologies evaluated inspires Symantec Hong Kong's leaders to stay abreast of technology threats and opportunities that may alter the competitive landscape in the future.

 

 

Symantec Hong Kong SWOT Analysis

It is not surprising for Symantec Hong Kong to determine where it wants to go in the future, it must assess where it is now as a part of the strategic planning process managers can call on the "SWOT" team for assessing Symantec Hong Kong strengths, weaknesses, opportunities and threats, a critical phase in the general planning process as it helps determine exactly where the organization is and what resources it may or may not have. Strength assessment identifies what the department tends to do well and can include a skilled, professional staff and a modern, well-equipped facility. Weaknesses denote what the company may not do so well or what diminishes its effectiveness. Inadequate financial resources may fit into this category. Opportunities reflect what the organization might seize upon to do better. This area could include increasing community interactions and taking advantage of particular grants. Finally, threats are environmental factors that may hinder performance as it could include a rising demand for service or increased legislative mandates that can impact resources. Managers should consider "SWOT" analysis for issues both external to the organization, such as population growth and increased industrialization and internal to it, such as an aging workforce that might result in competing priorities for resources. "SWOT" analysis constitutes one of the most important aspects in the strategic management process.

 

 

THREAT

Symantec Hong Kong’s threats are technological changes that are expected since security management technology can only get better. Global economy and increased competition in which Symantec Hong Kong’s financial ratios identifies that they are no match for their competitors.

OPPORTUNITY

Symantec Hong Kong has many opportunities such as potential growth in overseas markets, the security management industry is still in a growth phase and the entering to the new product markets.

WEAKNESS

Symantec Hong Kong’s weaknesses are single sourcing, new product market and reliance on corporate clients.

STRENGTHS

Strengths are internal resources and capabilities that have the potential to be core competencies. Symantec Hong Kong’s core competencies are their cost strategy. In consistent to being an integrated cost leader, Symantec Hong Kong also produce high quality security management programs by using their Direct Business Model approach and sells them directly to the customers. With this innovative process, Symantec Hong Kong cuts out the intermediary, excluding the associated cost as the company can understand the customers’ needs better and can provide the most effective computing solutions to meet those needs.

Present Strategy

Symantec Hong Kong’s strategy is collapsing profit margins throughout the security management industry of HK, a dire development for rivals who can’t keep up. Symantec Hong Kong is pricing its security management software programs not so much such as high-tech products but more like airline tickets and low margin commodities. Symantec Hong Kong has tight competency with other big security management software program sellers like McAfee. Social factors also affect the business environment of Symantec Hong Kong. Security management companies have to acknowledge that in the Hong Kong culture, people are still unsure about sales because of the huge expense of computers in Hong Kong. Companies, then have to invest in door-to-door or face-to-face operations to gain consumers’ faith and consumers trust in the company and its product. Symantec Hong Kong also implemented goals where by the goal is to improve internal business environment performance in a continuous improvement processes which are used to share successes throughout the company. Symantec Hong Kong has positioned to extend its brand name beyond mainstream security management software products by leveraging its reputation as an e-commerce leader. In the year 2000, Symantec Hong Kong began to redefine itself as the company that knows how e-business works. It has shared its online sales expertise with a few large customers as they developed their own e-commerce capabilities.

Critical Success Factors

Symantec Hong Kong’s direct-to-customer business model is the key to the company’s dramatic growth and success and has focused on selling directly to customers. This helps eliminate the middleman and offers customers more powerful configured systems than most competitors. The direct model enables Symantec Hong Kong to develop a thorough understanding of customer expectations which strengthens customer relationships and increases customer satisfaction and loyalty. One of the characteristics that distinguish Symantec Hong Kong from its other competitors is that Symantec Hong Kong provides the mode to custom the security management software programs of the customers’ choice and taste and delivers the software programs to the customer as it is the most crucial and critical success factor behind Symantec Hong Kong. Therefore, Symantec Hong Kong must be aware of the benefits they wish to realize, how it will be realized and ensure only investments of appropriate amounts of resources to obtain benefits. Symantec Hong Kong relies on reputation in the HK market of award-winning service and a high-quality product. Customer satisfaction and consumer awareness surveys should be conducted quarterly to ensure the image that Symantec Hong Kong creates for itself within a culture has not existed before there is a positive one. Market timing and speed are critical to many industries, such as technology, pharmaceuticals, and some consumer goods.

Symantec Hong Kong’s competencies are their cost strategy. In consistent to being an integrated cost leader, Symantec Hong Kong produces high quality security management software programs by using their Direct Business Model approach and sells them directly to the customers. Symantec Hong Kong’s weaknesses are single sourcing, new product and reliance on corporate clients. Symantec Hong Kong has opportunities like the potential growth in overseas markets as the security management industry is still in growth phase and the entering of the new product markets. Henceforth, the threats are technological changes that are expected since technology can only get better. Global economy and increased competition in which Symantec Hong Kong’s financial ratios identifies that the company is no match for their competitors. Symantec Hong Kong ’s most competitive force is the Direct-Model concept which helped them to reach above-average returns and remains in business today. Customers have developed a brand-name loyalty to Symantec Hong Kong because of their low cost differentiation strategy. The huge threat faced by Symantec Hong Kong is the fierce competition in the industry. If Symantec Hong Kong enters into a merge it would not have to spend so much money and time trying to develop a face-to-face communications, if the local business is already well known. According to cost saving benefits, the company will not have to spend any extra money for product development if it is already developed. Furthermore, there will be plenty of joint financial support. If there is synergy between the two companies, their market penetration will be that much easier to achieve. Symantec Hong Kong initiated ways to overcome its weaknesses and use its strengths to gain advantages over its competitors- by careful analyzing of the factors that contribute to the company’s success in business strategies that had implemented created the path for the company’s continued success.

Symantec Hong Kong Key Ratios

Key Ratios

 

Valuation Ratios

P/E

23.23

Price to Cash Flow Ratio

17.05

Price To Sales (TTM)

1.25

Price To Book

2.55

Per Share Ratios

Book Value Per Share

0.00

EPS Fully Diluted

1.29

Revenue Per Share

24.77

Profit Margins

Operating Margin

6.32

Net Profit Margin

5.23

Gross Profit Margin

30.00

Growth (%)

5 Year Annual Growth

7.66

Revenue - 5 Year Growth

3.73

EPS - 5 Year Growth

0.00

Financial Strength

Quick Ratio

1.58

Current Ratio

1.72

LT Debt to Equity

6.02

Total Debt to Equity

6.02

Return on Equity (ROE) Per Share

0.00

Return on Assets (ROA)

8.81

Return on Invested Capital (ROIC)

0.00

Assets

Asset Turnover

1.39

Inventory Turnover

34.85

TASK THREE

In this modern time, corporate worlds such as banks, production companies, and Information Technology companies are greatly dependent on computers and internet programs to assist and expedite their daily operation. However, very beneficial maybe to the current times – speeding up transactions from hours to split-second intervals, and providing comfort and easy-to-use features – computers and internet also pose vulnerable likelihood to be abused by some unscrupulous conmen. Somehow, people being so unfamiliar with data and computer securities are one reason why fraud and security leaks occur.

Take for example huge computer-hacking incidents in the world today. Citibank, SunTrust, credit unions to community and America’s financial institutions are scrambling now to deal with the biggest documented case of debit-card fraud to date. Apparently, a huge hacking occurrence took place a month ago that led to millions of dollars loss to the companies mentioned. These nation’s banks have quietly tried to extinguish the problem by closing hundreds of thousands of debit-card accounts and providing customers new cards, account numbers and PINs (2006) Furthermore, confidential information being passed around because of the lack of tough security measures among government agencies and corporate companies.  Bank of America suffered the same way like the loss of its government worker data and added to it a dash of Choicepoint’s “data leaks” occurring in April. Not to mention the Troj/BankAsh-A virus – a Trojan set up that stole bank account passwords (2005)

And not only that this Information Technology we have is also vulnerable with different computer viruses – intentionally or intentionally made. One of the most astounding computer virus that swept around the globe, across the country and into Hampton Roads was the virus slyly titled ‘ILOVEYOU”. Suspected of originating in the Philippines, the nefarious e-mail message staggered electronic communications, with effects ranging from minor inconvenience to a complete halt of email systems and the destruction of audio and graphic files (2000). The virus had been reported to have had caused America billions of dollars.

And with this, top corporations and agencies nowadays are now so hell-bent on fortifying security counter-measures in order to prevent and combat these dilemmas. Time matters as to finding solutions how to hinder these kinds of anomalous activities.

 

While the Internet has altered and significantly enhanced our lives, this enormous network and its related tools have opened the door to an escalating number of security and privacy coercion from which individuals, families and business must protect themselves. The prominence on Internet Privacy has become more and more essential. The consequences of attacks can range from the placidly tiresome to the fully devastating.

 

Many concerned in online business assume that time alone will liquefy consumer concerns regarding the privacy and security of online shopping, yet people concerned argue that larger Internet experience and more prevalent promotion of the latent risks of online shopping will direct to amplified risk discernments. To date, no recognized research has scrutinized whether advanced levels of Internet practice are connected to higher or lower levels of apparent hazards and concerns about privacy and security of online shopping. In addition, the mounting body of consumer-oriented Internet research that is focusing on privacy- and security-related issues suggests that these issues may play a significant role in the development of online retailing. However, there has been little available research concerning how privacy and security issues relate to purchaser risk awareness and probable acquisition actions.

With the increase in convention of the Internet, certain concerns about security and privacy arise. In 1995 study of Kapowski, pornography, privacy violations, transaction security infringes, unsolicited e-mail and other questionable or illegal actions being conducted through internet have become hotly debated issues. Some see directives as the only answer to guard from unwelcome infringement; but due to the universal nature of the Internet, ruling will be tremendously difficult, if not impossible ().

 

According to a survey conducted by Udo, security concerns are a major reason that users give for not shopping online. Many consumer organizations and government agencies provide tips on how to transact safely on the Internet by providing key information such as its return policy and privacy practices (). In theory, consumers could choose not to patronize sites that fail to provide key information, but in practice, consumers do not search for this information, if at all, until after they have spent considerable time investigating a site's product offerings ().

 

The purpose of Udo’s study was to investigate the privacy and security concerns of internet users in order to establish a consensus among them. The survey data used in this study came from 158 participants. As indicated by the study findings, the majority of the online IT users today have serious concerns about their privacy and security while shopping on the Internet. They are also concerned about the safety and confidentiality of their e-mails. IT users do not only lose confidence in the technology but they also have very little hope that the government is capable of significantly reducing their concerns in the near future.

 

The majority of the internet users who participated in Udo’s study believed that the advancements in such technology as encryption and other security features are not sufficient to reduce their privacy and security concerns. Based on the responses of those who took part in the study, an overwhelming majority of employees prefer the organization to have policies for e-mail and Internet use and to also notify the employees of the policies.

 

Actually, the main security issue relevant to internet privacy is the people who sell private or personal information through the internet. This security issue is brought about by purchases or transactions made online. Individuals who access and sell private information are particularly dangerous as they are not concerned about confidentiality and protecting others’ privacy. According to , while data brokers and hackers are known threats to internet security, people that develop profiles derived from illegally acquired personal data are big threats as well\. Illegal profiling has been occurring even before the internet was introduced. However, at that time, personal records are difficult to obtain. With online access, profiles containing various information, from the user’s activities, interests, location and contacts, can easily be acquired and sold to anyone who needs it for whatever purpose.

 

To a lesser degree, e-mail addresses and messages displayed on online groups are not private or secure and can be searched by anyone easily. The problem on Spam e-mailers is then the result. The main sources of information for spammers are postings on Usenet bulletin boards as well as mailing list servers. In some cases, spammers even extract e-mail addresses from user web browsers. Not only do spammers caused annoyance for users whose e-mail addresses had been extracted, but spam e-mails also cause significant costs to the users brought about by e-mail traffic ().

 

In order to resolve these security issues, companies utilized various means of protection. One of which is through the installation of a firewall. A firewall is a means of securing internet users that is basically made up of a system of a group of systems, which serves as the enforcer of a control policy between two networks. In a way, a firewall works like a membrane of a computer system, wherein it could either block or permit traffic. Some firewalls however, emphasizes more on blocking traffic, while some are developed to stress more on permitting it. The main purpose of putting firewalls on computer systems is to hinder unauthorized internet users from accessing the user’s private networks, particularly the networks of major organizations or companies whose data are highly confidential.

 

Apparently, Schafer has noted that aside from firewalls, encryption is another useful measure in preventing internet security issues. Encryption is actually a process which changes a message into a sequence of coded numbers, which makes the message incomprehensible to users other than the intended recipient. The process of encryption utilizes mathematical algorithms for concealing private or confidential information. This is mainly used for protecting system files as well as e-mail messages (). A number of other possible programs or software applications that could protect users for internet security problems are also used by organizations.

 

            With respect to these discussions, security and privacy risks have been a common problem not only to individual but also to business organizations. Either caused by computer crimes or unethical work practices, security and privacy troubles direct to even greater unenthusiastic brunt such as organization losses, dwindled efficiency and abridged morale. Due to this dispute, organizations had picked to utilize a variety of crime preclusion schemes including encryption procedures, firewall installation and employee examination techniques. Based on discussions of this paper the use of technology to implement these crime preclusion techniques has been highlighted.

 

            Despite the fact that schemes for checking internet privacy and security problems in organizational scenery are vital, appropriate management should be valued as well. Through appropriate or good management, the organization is able to converse efficiently with its internal and external associates concerning the implication of executing different security procedures. This practice also allows employers to hire successfully as well as build up distinct hiring guidelines and systems. Furthermore, appropriate management also allows organizations to monitor their security systems through established measures.

 

            However, based on evaluation, both crime preclusion techniques and appropriate organization management have diverse roles in making security and privacy. Additionally, putting equivalent value on these two phases can direct to better organizational upshots such as sanctioned organizational members, protection of resources, ensured security and better work relations. Hence, rather than placing more assessment on organization management in consideration with the problem of modern security, organizations should give equal assessment to methods and knowledge. In this way, the attempts towards an improved security and privacy system are make the most of.

 

Recommendations

            Security Measures and Counter Measures

Again, the application of information technology (IT) in McAfee Hong Kong is a tremendous success, its maintaining competitive advantage has already been discussed earlier. IT can either be a product or service provided by the company, or a part of the organizational support for a product or service. Companies using IT as a product or service pursued to remain competitive (1992)).

But, as what have been established earlier, the joys of having Information Technology helping in our daily tasks has also been tarnished and endangered with different malicious acts with just as malicious people. Thus the need for security among institutions – public and private – is needed.

We can define security to be the state of being free from danger and not exposed to damage from accidents or attacks, or it can be defined as the process for achieving that desirable state (). It is indeed one of the major concerns in Information Technology nowadays. The lack of security always undermines the integrity of data which has a direct impact on the organization itself. Virtual businesses require that proper and adequate security systems be in place to ensure that threats can be brought down to a minimum.

Moreover, computer security means denying unauthorized persons access to information. A total security policy matches the need-to-know requirements of a user to the sensitivity of the information he or she is allowed to access (1992)).

According to Business Computing book, computer security is broken down to different components namely: Physical and environmental security, personal security, operations security, communications security, and network security.

            Physical and environmental security addresses the issues necessary to protect the physical items, objects or areas of an organization from unauthorized access and/or misuse, damage, and interference to business premises and information.

            Personal security addresses the protection of individual or group of individuals who are authorized to have access in the organization and its operations.

            Operations Security refers and focuses on the protection of a particular operation or series of activities.

            Communications security addresses the protection of an organizations communications media, technology, and content.

            Network security, on the other hand, is the protection of components, connections, contents, systems, and hardware that are used to store, and transmit information.

            Misuse of technology by hackers as well as employees has presented a threat to financial institutions from the earliest days of computers. In his 1989 book The Cuckoo's Egg, Cliff Stoll, formerly an astrophysicist/systems manager at the Lawrence Berkeley Laboratory in California, describes how, in tracking down a 75-cent irregularity in an accounting program, he ended up fighting an international group of spies who were cracking computer systems across the United States. (The group exploited the program s system of rounding dollars to deposit small amounts from numerous accounts into a private account, which over time added up to big money in the account set up to receive the rounded cents.) (2001)).

Different ways and means have been implemented by different organizations to counter measure anomalous activities. Different organizations have made stringent measures in their computer system to prevent hackers entering the organizations’ systems, they have installed different anti-virus computer programs to fortify the “wall” of the system they are using from viruses, and, again, from hackers. 

It is inevitable, as well, that some of McAfee Hong Kong’s personnel need to have high-level access to the network by the nature of their work for they will be the ones who will be operating it. Thus institutions must very well know the firms they hire as well as the backgrounds of the individuals who will handle the job (2001)).

With regards to the accounting systems of McAfee Hong Kong, there will be system of checks and balances to protect from hacking attacks. For instance, the company can use a dual control system similar to the one they use in money handling, teaming up a contractor with an internal employee. The two would work together, but the company employee would be responsible for reviewing and remaining aware of what the contractor was doing.

Password Programs

            Symantec Hong Kong must develop a security software program that will implement stringent measures when it comes to passwords for the vaults, computers, and online records of companies.

            Some of these policies are: sharing passwords is a security risk. In Symantec Hong Kong, the administration must make it a point that sharing passwords will have their accounts disabled. Storing passwords in a file on any computer system (including Palm Pilots or similar devices) without encryption must absolutely be disallowed. The same with the use of the same passwords for AECOM accounts as for other access, or using ‘remember password” feature of applications (e.g. Eudora, Outlook, and Netscape Messenger.

            Furthermore, passwords for the employees must be requested to truncate at eight (8) characters, with an acceptable password of at least seven (7) characters, shorter passwords are easier to guess, longer passwords are harder to guess; with five different characters, repeated characters can make for palindromes and reduce the search space; with an acceptable password that have characters from at least three (3) different character types – upper case, lower case, digits, punctuation, etc., a password that includes a sample from a rich character set is difficult to crack, as the search space is very large.

Also the acceptable password for a company to their employees must have alphabetic sequence any longer than three (3) characters, the intent is to male sure that dictionary words are avoided; a digit sequence any longer than two (2) characters, long digit sequences reduce the search plate; and a few characters that will cause problems if used in a password, for example, the “delete” character is one of the obvious ones. Passwords that should not be are the following: dictionary words (including foreign and technical dictionaries), anyone’s or anything’s name, a place, a proper noun, a phone number, simple pattern of letters on keyboards, any of the above reversed or concatenated,  and any of the above with digits prepended or appended. The possible method for picking a good password is to make up some acronym. For example: gPanth2c, it is hard to choose. As with the rule of the thumb no one should write down a password, someone might discover the password.

            For the access codes inside the company, passwords and access codes must be changed daily, for example when it comes to authorization codes for their employee to gain access to their tasks. Symantec Hong Kong would perhaps use the four seasons of the year and the current day’s date. Like today was the tenth of May: Summer 10.

Moreover, reusable, or static, passwords offer weak security. To address that problem, Symantec Hong Kong is turning to dynamic passwords, which are created by a user token and verified using an algorithm synchronized with a central computer server. The user's token generates a password that can only be used in a one-minute span. If this password were stolen by someone looking over a coworker's shoulder or monitoring the system electronically, the network would not be at risk, because the password's usefulness would expire before it could be used by the thief (2001)).

Internet access policy Software

            And as for the internet access policy, Symantec Hong Kong must use “cookies”. A “cookie” is a small piece of information that a web site stores on your web browser on your PC and can later retrieve. These cookies are used for a number of administrative purposes, including storing the client’s preferences for certain kinds of information. No cookie, however, will be set by the website on the web browser that will contain information that could enable any third party to contact the client via telephone, email, or postal mail.

            According to Symantec Hong Kong’s Private and Security guidelines the methods how to protect online security is strong encryption, securing user name and password (the client preferred user name and password for the client website, and these items must be entered every time the client sign-in to the Priva, automatic “time-out” (when there is no activity 15 minutes, the session will be terminated to help protect against unauthorized access, and Client-Driven Authentication Questions. (with questions about the web-site, the bank must first confirm the client’s identity on the phone before discussing his account information.

            Other methods to combat fraud and malicious attacks against are encryption, authentication, firewalls, and dial-back, among others.

Encryption is used by most banks to ensure the security data during transmission and transactions. It is used for in-house protection as well as for online banking services. Not only financial information but also account information being encrypted while being stored and in transit (S., Jeffrey (2001)). It involves the translations of data into secret code, in such a way that only the computer with the key can decode it. Most computer encryption systems are either symmetric-key encryption or public-key encryption (4/1/2002).

Authentication, on the other hand, is another data security process being used by different agencies to verify that the information comes from a trusted source. This is very important especially in banks so as to know the message come from the authorized sender and no other data is being divulged to a culprit.  It involves adding an extra field to a record, with the contents of this field derived from the remainder of the record by applying an algorithm that has previously been agreed between the senders and recipients of data. Moreover, Encryption and authentication (2002) work hand-in-hand to create a secure environment. Authentication can be done using passwords; pass cards, or digital signatures. The digital signature standard (DSS) is based on a type of public-key encryption method that uses the digital signature algorithm (DSA).

And as for Firewall, it is being used by some big organization to prevent unwelcome intrusions into company systems. A firewall is an instrumental component in helping to formulate secure corporate communications. It can be equipped with parameters to make sure that repeated attacks formed around the same code cannot be successful, so it is a useful damage limitation tool ( 6/1/2000). Or, the company could somehow install Virtual Private Networks. VPN is a private network that's privately owned and used. In other words, it's a network that's not open to the public. Most office networks are private networks. As a company grows, it might expand into several countries. The main drawback, however, with VPN is that it’s public, one that raises question of data security. In order to solve the problem, security measures such as encrypting the data are used to protect the integrity and security of the data transferred from one office to another.

Further on, Dial-back is essential for the organizations to have security that operates by requiring the person wanting access to the network to dial into it and identify themselves first. The system then dials the person back on their authorized number before allowing them access.

As for the problems of spam and virus infection in the computers, so many antivirus programs and hardware have been developed to combat viruses by top corporations. Research for evidence of a virus program (by checking for appearances or behavior that are characteristic of computer viruses), isolate infected files, and remove viruses from a computer's software. Other methods to combat viruses and hackers are Adware/Spyware scanners. Spam e-mail, pop-up ads, viruses and worms make computing irritating enough at times. With "spyware," a problem that isn't new, but gains notoriety and attention as use of free, downloadable software increases. Spyware and "adware" describe software that ends up on your computer, maybe without your knowledge that can track where you go online and report the trends back to a company or advertiser. This way, the user’s routine in his PC is recorded. Other way is to disable unnecessary services. Especially during online, it happens often that the site you visited asked you to install a program so you can go on with your surfing. It might be a virus-infected program, so it is better not to install it. So much connection online services have the wider chance to “catch” different viruses.

Summary

There are always a problem regarding security and more so, in computers. Now that computers play a bigger part in today’s technology, its role in the advancement of humanity is increasing, but just how increasing its role, its vulnerability has always been tested. Attacks like hacking, virus, spamming, and other malicious occurrences intensify too.

It is vigilance among agencies in the knowledge of computer security to be able to combat. Without these, although programs like spyware, firewall, and encryption are there, hackers would always find their way to break into the system to sow destruction, and in a way, rob truckload of cash.

Employees in the banks, financial firms, security agencies, among others, have to be well-trained about security.

Banks must continue to develop new methods for fighting cyber crime as the threat evolves. For example, cooperation between Internet service providers (ISPs) and financial institutions needs to increase. This way, there are ways how to combat hackers. And in this way, they can exchange information about methods. Also, e-commerce products created by financial institutions are not typically thoroughly tested for security hazards within the institution's computer environment, a situation that will change as financial losses, as well as blows to banks' reputations, encourage them to strengthen security systems worldwide.

 

 

 

 

 

 

 

September 09, 2009

Relate to experience, ways in which the firm you work, measures the productivity of a port

 

MODERN PORT MANAGEMENT:

PORT PRODUCTIVITY, PORT MANAGEMENT, AND THE PORT BUSINESS INDUSTRY IN THE 21ST CENTURY


 

TABLE OF CONTENTS

 

I.      Introduction.. 3

II.     Port Improvements in the 21st Century.. 4

A.     External Forces. 4

B.     Private Participation.. 5

C.     Diversified Investors and Operators. 6

III.        Port productivity.. 6

IV.        Importance of Proper Port Management in Increasing Port Productivity   6

V.     Conclusion.. 6

VI.        Recommendations. 7

VII.       References. 9

 


 

 

I.                  Introduction

Changes in the global environment as well as the demands of the current commercial setting have influenced the industries all over the world. Operations of the modern organisation as well as their consequent industries tends to realise the need to satisfy these demands in order to acquire value on their assets and resources and consequently a higher level of competitive advantage over the other players in the industry. This is the same in the context of the port business environment. The changes brought about by the developments in every aspect of business have triggered an impetus for adopting certain modifications to meet these demands. This paper intends to look into these demands and the improvements made in the port business industry. In the same manner, measures of port productivity will be taken into consideration. Moreover, elements that affect the improvements in the context of port productivity will also be discussed. A discussion on the proper means of port management will be discussed in line with these arguments and observations pertaining to the improvement of port productivity. The contents of this paper will primarily be composed of the professional encounters with the company that I work with. With these arguments and observations, a set of recommendations will be provided which is also based in the conclusions formulated in this paper.  

     

 

II.               Port Improvements in the 21st Century

Traditionally, ports have been the primary tool of the state in terms of gaining international power and trading opportunities. This is because at those periods, sea-faring vessels were the primary, if not the sole, means of gaining access to any part of the world. The following discussions will comprise of several improvements that hugely influenced the development and basic operations of port businesses. Specifically, these are based on my personal observations and encounters in my organisation.   

 

A.   External Forces

On this account, elements like competition and the emergence of new technology has become major issues in the modern port business sector. Specifically, the port business industry now possesses the propensity to compete with other national ports. This means that ports are now becoming increasingly receptive to accepting a paradigm shift from being mere state-controlled areas where sea vessels could dock to an aggressive body that intends to establish a name in the global setting. In the same regard, ports which are still under the control of the state is placed in a tight situation given that their ability to be more responsive and even to the more basic act of mobilising their assets are rather limited and constricted. This is based on the apparent reason that they have to go through official channels to get things done.     

 

B.   Private Participation

Recent trends also show signs of the private sector slowly creeping in the port business industry. In the case of my company, private corporations are now being contracted to deal with the infrastructure needs of the port. This shows that the public sector, which initially took charge of all the workings involved in the ports have now realised the potential offered by the services of the private sector. The participation of the private sector has now been heavily considered in my organisation such that their involvement is slowly broadened to consultation and even outsourcing endeavours of the port business industry.

Though this method has been already implemented in other state mandates like public works and highways, this is still rather new in the context of ports. Moreover, there is a small part of the operations of the port that has been under the management of a private institution. This shows that collaboration between private and public entities is possible and could eventually push for a greater advantage to the state. In as much as the context of provision of public service is concerned, the contribution of the private sector has greatly improved the efficiency of this element. In considering this observation, it should be emphasised that the improvements in ports could also be attributed to these private corporations. In a sense, there is great potential in considering the idea of private institutions managing ports in the future.

 

C.   Diversified Investors and Operators

In relation to the discussions above regarding the collaboration with the private sector, I have also observed that the port business industry has slowly been peppered with diverse types of investors and operations that seek profit in the said business. For instance, the company that I work in has chanced upon a proposal from a company seeking to supply the port with labourers, dockers and stevedores to be exact. This company poses as an agency for these employees and appears to have a strong international operation.

Another type of investors that have contributed to the development of ports is seen from the shipping lines, both major and minor ones. Specific consideration by these investors is manifested in their intention to help the port authorities in maintaining the ports and docking stations of these vessels. In the same account, these eventually developed into actual investments on the acquisition of a formal terminal on these ports. In the case of my company, these investments in terminals tend to be on the top sources of capital.

And lastly, there is these investors that tends to seek land near ports that they could use as areas for temporary storage and even warehousing. These are prevalent in importing and exporting companies that operates on a just-in-time scheme on their logistic operations. Seeing these elements added in the operations in the port business industry, there is no surprise why the pursuit of port productivity has become considerably complicated and continuously becoming a complex system everyday.  

 

III.            Port productivity

In the work of (2004, in , 2004) he defined the productivity of the port as the “measure of its ability to move cargo through it within a unit of time under actual conditions.” This definition manifests an assumption that ports merely operate to move cargo. On the whole, our company tends to veer away from this rather restricted view of port productivity. Based on the mission-vision statement of our company, productivity tends to be a measure on the overall performance of the port as a whole.

The measure of our company’s productivity tends to cover not only the movement of cargo but also the movement of vessels, maintenance of terminals as well as the warehouses that the company manages. To some extent, the task appears to be rather ambitious. However, in terms of measuring the actual productivity of the port, the overall performance of the company in financial terms as well as the efficiency in its operations reflects this element.

 

However, in keeping with the definition ofs (2004), the port productivity of our company tends to have improved considerably with our use of information systems that complement our operations. Specifically, our company have improved the operations as it implemented the use of electronic data interchange (EDI).  

In using such technology in our operations, our company has improved our mandate in serving as the key link in the distribution chain in the global perspective. In a sense, it has allowed the company to veer away from any added losses in our resources. In the same manner, our company have similarly made improvements in terms of the provision of services to the public.

A more specific outcome of using such technology is the cutback in the times at which the employees of the port are at rest. This means that the technology has allowed the company to make the most of the capabilities and working time demanded from the employees. In the same manner, the queue in the line of lorries have also been noticed to have significantly lessened. This is similarly true in the processing of documents among the export shipping companies.

In employing an automation scheme and improving the IT capacities our company has been able to keep a strong grasp with its goals by constantly being flexible operations. This has been supported by the study of  (1993, ) claiming that having a stable and competent IT capability, companies like our own will be able to hurdle any challenges and changes that the external environment may offer.          

 

IV.           Conclusion

The issue of port productivity has been the focus of these discussions, however, it must be emphasised that the internal and external elements of the port business environment should also be considered. This is shown in the discussions of the improvements that have been made in the port business (external) and the importance of proper port management (internal). In knowing the actual demands of the port business environment a specific company could adjust its own management processes and specific port actions that could improve their port productivity.

 

Specific actions have been noted above like adding machinery or expanding the range of operations may well contribute to overall port productivity. However, these are mere port actions deal with specific parts of the overall operations of the organisation. Adding up a crane would only add speed on the operations; including an additional port area only improves the number of vessels accommodated. These are mere strokes needed to accomplish a goal far greater than sheer efficiency and increase of clients. In order to sustain this level of port productivity, the organisation must be able to find a balance between the demands of the port industry, particularly the demands of the level of competition, internationalisation, and possible contributions of the private sector. It must recognise these demands such that the management of the ports could shift towards a system that could complement these ever-changing demands. Thus, this study claims that the harmony between the external and internal elements influencing the port industry tends to be a valuable measure in determining port productivity.    

 

V.              Recommendations

The following recommendations are based on the conclusions above as well as the arguments and observations made in the paper.  

 

  • Make an outline of the competitive landscape of the industry

 

As established in the discussions above, the port business has evolved from being the sole area of access and way out of trade in states. It has acquired a commercial status, which also entails that the industry has formed some type of competition among ports all over the globe. In knowing the competitive landscape of the particular port organisation it will have some idea on how and what details of the port management processes it will change to gain a competitive advantage over the rest of the players in the industry. Classic marketing tools like Porter’s Five Forces Model may prove to be rather valuable in determining the external environment and the level of competition and rivalry present in it. It is advisable that port organisations employ such schemes to improve their port productivity and seek other means of self-development.  

 

  • Recognise the port dynamics that may influence the trends of the external environment

 

The company should also be always on its toes on the developments in terms of globalisation trends and change in technologies. To be specific, the company should always be aware of the recent changes on policies, treaties, and directives from trading blocs and international organisations like the World Trade Organisation and the European Union. Changes in tariffs and other barriers to trading could influence the number of clients that could possibly seek the services of the port. In the same account, changes in terms of technology as it becomes one of the tools used by ports to attract possible clients. The company has to start employing IT technologies in the collection of their services offered. In some cases, IT technologies are used to monitor traffic and other real time information that users could consult with regards to detecting cargo and other important documents. In doing so, the company will eventually provide possible clients value for their money.   

 

  • Be aware of the possible challenges and potential opportunities in the industry 

 

A recent trend, as discussed above, seen in port business has bee considered both an opportunity and a challenge in the industry. Specifically, the slow access of the private sector on the port industry has becoming an imminent issue. The company should realise the potential of this. However, it is recommended that the company make the most of what private sector is offering. Nevertheless, this does not mean that the company should place full control to the highest bidder. This paper merely suggests the there are certain operations of port management that could perform well if the command is given to the private sector. Certain activities like towing and maintenance could be contracted to the private sector. In this manner, the company is still in total control of the decision-making and other executive actions that will influence its future in the port business industry.  

 

VI.           References

July 06, 2009

The Import and Export in England and France

This paper will discuss about the import and export conditions that were present in England and France. It will particularly compare and see the quantity of export and import made by these countries and how this event explains the greater industrialization level for England.

            If we are to examine the exportation aspect of the two countries during the industrialization era, we can see that England is clearly surpassing France in terms of the quantity of products that is being sold aboard by the two countries. This condition can be attributed to various characteristics and aspects that are inherent to England but is not present in France. England can be described as a geographically compact nation where major cities, urban centers and manufacturing areas are interconnected by excellent railways, fast ports and quickly accessed canals and inland waterways. These means of transportations ensured that English companies and manufacturers can move and shift their products, raw materials and goods at a faster rate without added charge and delays in shipping (Trebilcock, 1981).

This would in turn minimize production cost and wastages. Farms and industrial plants in England have also used various technological methods that would increase production and faster turn out of goods and merchandise. Crop rotation, use of harvesting machines and the extensive use of chemicals and fertilizers are incorporated by large farmers and plantation owners (Trebilcock, 1981). Sea trade and commerce in terms of imports and exports is also protected by the British navy, then at those times, the greatest naval power of the world. The British therefore can protect and carry their products from England to the intended markets while maintaining their grip to colonies such as India, Australia, Hong Kong, Singapore and Malaysia which are major sources of raw materials and market (Toliono, 1992).

The opposite of these conditions existed in France. Unlike England, France’s geography is full of natural boundaries that hinder the effective transportation of goods. Bureaucracy and red tape were the hindrances that hindered the growth of this country. To clearly illustrate this point, it is better to examine the situation that was prevailing in the province of Provence, France. One of the most important aspects of an agricultural society present in France at this time is the easy and available access to a water supply. This water supply can irrigate hectares and hectares of land making the farmers enjoy big and prosperous harvests with their crops. Because of these clear advantages, entrepreneurs and nobles attempted to build canals that would transport water for the Durance River to peasant farms.

In the course of these plans, certain factors and issue inherent inside the social and political aspect of the French society prevented this effort. Technology at building canals and waterways during the year 1700 to 1860 was the same technique that was used in French farms during the 13th century (Rosenthal, 1990). Canals and dams built on 13th century technology was inferior when applied to the 18 and middle 19th centuries, floods and drought affected the supply of water thus affecting the quantity of harvest. If new technologies to build canals were used in certain situations, the higher cost of building and maintaining these structures made it prohibitive to be available to poor and small farmers (Rosenthal, 1990).

Aside from technological backwardness, the division of authority over rights of eminent domain was also a big obstacle in building canals and irrigation systems. This system of eminent domain was present in the case of a canal builder by the name of Adam de Crappone. Crappone wanted to build a canal that would link an agricultural area to a rivers source. He secured all grants and permits but unfortunately, a piece of land that the canal must pass through is not under the jurisdiction and power of the local authorities and the state. In the end, the canal passed through the disputed land with the agreement that they can also use the water from the canal free of charge (Rosenthal, 1990). Because of this arrangement, Crappone went bankrupt and other investors were frightened in the prospect of investing. This issue with regards to the proper authority in eminent domain remained a hurdle that was not successfully leaped by the French agricultural sector. Provencal communities and other communities in France were sometimes not under the influence and authority of the state. In many instances, canals cannot go very far from the water sources because the farther it goes, the more problems regarding eminent domain would hinder and ultimately stop the construction

 

 

 

June 11, 2009

Business Plan

In preparing a Business Plan, it is a must to know the condition and situation of the country to which your business is situated.  In such a way that the demand of the public in a certain State is best suited and the capital investment is not put into risk.  In this case, a focus to a certain country matter.  One good example is the condition of the Politics and Economy of France.

 

France’s Government and Economy

The country where the most famous Eiffel Tower is situated is no other than France.  Its country’s capital is Paris.  The third largest independent European nation and the center of a large overseas administration found in Western Europe.   France has started playing its major role in world events since 17th century.   It has experienced numerous crises, including the devastation of two world wars, political and social upheavals.  It has, however, survived and emerged from the ruins of World War II to become an important world supplier of agricultural and industrial products and a major partner in the European Community (EC, or Common Market).  At present, France is at the forefront of European states seeking to exploit the momentum of monetary union to advance the creation of a more unified and capable European defense and security apparatus. ()

From the general description above, a country France seemed to be good for business setting.  The stability of the government, politics and business arena has been tested from the past centuries.  From downfall, it rises back to life.  This is a sign of a strong republic. 

 

A glimpse to France’s Economy

In the midst of France Transitory period, from a well-to-do modern economy that has featured extensive government ownership and intervention to one that relies more on market mechanisms. The Socialist-led government partially or fully privatized many large companies, banks, and insurers, but the government retains controlling stakes in several leading firms. The leaders remained committed to capitalism in which they maintain social equity by means of laws, tax policies, and social spending that reduce income disparity and the impact of free markets on public health and welfare. Though the current government has lowered income taxes and introduced measures to boost employment, business investment remains listless because of low rates of capital utilization, sluggish demand, high debt, and the steep cost of capital.

As to its Gross Domestic Product (GDP): Purchasing power parity is One trillion six hundred billion and sixty-one million Dollars ($1.661 trillion).  However, the Public Debt amounted to 68.8% of the GDP.  This includes that the GDP per capita reaches up to Twenty Seven Thousand Six Hundred ($27,600 purchasing power parity), while the GDP real growth rate is 0.5%.  Furthermore, GDP by composition sector as estimated in the year 2003 are as follows: agriculture got the lowest percentage of 2.7 %; this is followed by the industry which is 24.4%; and the services got the highest percentage of 72.9%.  All facts mentioned above were estimated as of the year 2003. ()

This GDP represents the nation’s total economic output.  The percentages enumerated above would give a guide for the economists or businessmen on what businesses France is suited for.  From its statistics, it is best for giving services. 

With regard to its industry status, France will suffice if given more support and enough effort. Machinery, chemicals, automobiles, metallurgy, aircraft, electronics, textiles, food processing, tourism are the industries most commonly found in that certain country. 

 

Employment Rate

For more than sixty million population rate in France, the unemployment rate reaches up to 9.7%, while the labor force is 27.39 million as of 2003. ()

This means that employment rate is much higher.  This is one of the proofs of the country’s richness.  The unemployment rate of France shows that most the French Nationals are working.  This is one factor that reads the economic status of the country.  This is a sign that French government is really working for the welfare of its citizens. 

 

Currency

France currency is called Euro (EUR).  It should be noted that on 1 January 1999, the European Monetary Union introduced the euro as a common currency to be used by financial institutions of member countries; on 1 January 2002, the euro became the sole currency for everyday transactions within the member countries.   One Euro (1 EUR) is equivalent to 0.8886 U.S. dollar as of 2003. ()  It means, that there currency rate is high and so far, they did not suffer deflation.

 

Inflation

Inflation rate in France is 2.1%. The current account balance as of the year 2003 is 13.8 billion. ()

According to  (Director of the Vossiche Zeitung ): "If we had an active balance of payments it would be a matter of indifferenct whether the accounts of the State showed a deficit or not, as it would also be a matter of indifference whether this deficit were covered by loans or by an increase in the floating debt or by any other means."   ().

 

Engineering Industry in France and China

The engineering industry is diverse and complex. It covers a wide range of activities, including mechanical engineering, metal goods, electrical engineering, electronics, instruments, motor vehicles, aerospace, and other transport equipment, covering a multiplicity of products and processes (1986). Some of these activities are more closely linked to industries outside engineering than they are to other activities within engineering itself. Some sectors have been in rapid decline in recent years, while others have grown, such that an aggregate overview may disguise differing trends in the various parts of the engineering industry.

The France engineering industry is at a particular turning point in a prolonged crisis. The competitive environment for engineering firms is not just that of market downturn during a recession (1990). It is one in which a number of major changes coincide and interact: the global diffusion of new technological and organizational norms; the impact of European inte- gration; gration; the end of the Cold War and defense procurement restructuring; and the pursual of neo-liberal government policies in the France. This is therefore a period of strategic change, in which the impacts of such major structural changes in the competitive environment tend to overwhelm the on-going processes of technological change, organizational evolution, and product change.

            While in China, the engineering industry gives the advancement of technology and equipment to the different sectors of the national economy. It also determines the phase of China’s industrialization (2006). There were 100,000 construction companies employing 12 million workers and a production value of 120 million RMB or 25% of total industrial output value. These companies yield different types of equipment, from agricultural machines to precision instruments, bringing in 80% of China’s fundamental industries. The main mistakes in the engineering industry in China are its low rank of specialization and technical skill, as well as glut idleness in production, yielding to a waste of raw materials and resources. Engineering enterprises were focused mostly in Liaoning and Shanghai, however, expansion was swift in Inner Mongolia, Shaanxi, Gansu, Ningxia, Qinghai, Xinjiang, Anhui, Zhejiang, Fujian, Jiangxi, Henan, Guangxi, Yunnan, and Guizhou. With the exemption of Tibet, every province had, to some extent, a capability for engineering.  

 

In France, company responses to change of course vary greatly, especially in such a complex and diffuse industry as engineering (1991). Virtually all companies are aiming to enhance their competitiveness, cut unnecessary costs, and increase their profits. Strategies adopted to meet these aims vary, and a clear distinction is discernible between those companies merely reacting to change in order to survive, and those who are employing proactive changes in an attempt to meet desired objectives

Within the engineering industry of France the interaction between product and process technology may have important consequences. For instance, the shift from electrical to electronic components, and from metal to plastic products, are resulting in major process changes (1983). These include a reduction in the significance of manufacturing itself within the overall production process. These same developments have important implications for skills development and training. Many of the skills for which employers reported 'shortages' and/or 'recruitment difficulties' were those related to new technologies or new ways of using existing technologies.

In functional terms there is evidence for 'the galvanisation of employment' as traditional occupational divisions and demarcations become increasingly redundant in the engineering industry of France. However, despite the increase in emphasis on 'intermediate' skills or 'technician' occupations, in many instances the strategy adopted to achieve functional flexibility involves the 'training up' of operatives to perform specific tasks previously undertaken by a skilled craftsman, rather than the provision of a more general training which might equip the individual with the full range of skills normally associated with the traditional engineering craftsman (1986). Such a wide-ranging training may not be necessary in order to meet the narrower objective of enabling workers to undertake a variety of tasks, and to therefore achieve faster production response times. In turn, in numerical terms there is evidence for the increasing use of fixed-term contracts, casual and temporary working, with many companies developing registers of workers to be called upon in accordance with production needs. Hence, for many of those working in the engineering industry, 'flexibility' means deterioration in the quality of employment.

Although in France,  most engineering companies predicted no change in employment levels over the short and medium term, or predicted a continuation of job losses, there was a general recognition of the importance of continuing investment in training in order to maintain and enhance competitiveness. Training is most prevalent among large employers, so the demise of large engineering firms has significant implications for the numbers of individuals receiving training, and for the training infrastructure (1990). The combination of a number of the trends discussed above is tending to produce a marked change in the firm structure of the engineering industry, as both big firms, and weaker small firms, have experienced serious problems. Processes of decentralization are taking place both within big firms and from big firms to suppliers, in order to offload or spread risk, while the weaker small firms are going to the wall (Dunning, 1983).

While medium-sized firms are themselves not exempt from the pressures of a more competitive environment, there is a discernible tendency for the characteristic unit of production to become the medium-sized enterprise or the autonomous division of a bigger firm ( 1990). This has interesting implications for the future of the engineering industry, because it entails a weakening of the hegemonic role previously played by a relatively small number of very large firms. Strategic decision making in the industry may be becoming more diffused among wider and weaker policy networks.

            On the other hand in China, small engineering enterprises are also distributed in communities and teams throughout the country (  2006). These companies main job was the produce and repair of machine tools, helping mostly rural industry and agriculture. The production of these industries was 522,000 pieces of farm machinery, 142,000 machine-drawn farm tools, 719.14 million fittings, and 374.15 million other farm tools. Moreover, 34,000 metal-cutting machine tools and automobile fittings valued at RMB 800 million were produced ( 2006). These small companies provide development of the tactically significant rear areas of the country. China’s engineering industry is currently facing its biggest problem such as lack of large, precision, numerically controlled, highly efficient machine tools. The industry concentrate on main machinery, so secondary machinery and appropriateness remain in short supply. For the most part, the engineering industry has serviced the heavy industry. 

 

The Gist of this Report in Connection with the Proposed Business Plan

Every country around the world has its distinct characteristics.  One country may be said to be deprived from the richness on earth and opportunities in the global competition.  Despite such fact, there is always a room for improvement.  In the business world, where competition is inevitable, good if not cunning strategy is needed.  Proper management and efficiency are needed wherever country you planned to establish your business.

In establishing business in France, Services has a high demand.  Putting up Industries may also suffice by due perseverance.   Since labor force in France gets a high percentage, proper dealings with wages and salaries to the laborers maybe one of the factors that could give a booming industry.  The compensable salaries will give them motivating force to do well in their assigned task.  Say for example, in the engineering industry, where payment by results takes the form, not of formal price lists, but of mutuality, account must be taken of the facts, first that the proportion of piece-workers to time-workers may alter over a period of years, and secondly that the ratio of average piece-work earnings to the corresponding time-rates may alter, either because the employers deliberately adopt a new standard ratio, or because the workers' rate of output changes. ( 1998).

PESTEL Analysis

To be specific, political issues that concerns the business includes: the objective to limit access on information; the campaign of certain countries to eliminate those in business to operate, are these  engineering companies both in France and China are being operated under the law and policies of their government? How these companies operate according to the policies of each region especially in China?

            The economic issue that concerns the business on the other hand is the production of the engineering industry particularly in China and France because more and more people are dealing within this industry. Moreover, the stiff competition of the business on other countries has forced some to close down. The downturn of the business in the economic scene is evident for many.

            In the societal issue on the other hand, from the perspectives of engineers, social issues are complicated as political issues and it is quite a mess in the industry. The engineering industry has a great deal to offer in serving the public, may they be government employees or consultants of the government. This issue should be addressed especially by the engineering industry in China, because Chinese society is much more traditional than France.

 

            Technological issue basically concerns about the upgrade and maintenance and development of the engineering industry of France and China. The owner of these companies should be updated with the latest technologies or else their companies will be left behind by others who constantly upgrade their system. Furthermore, the owner should figure out the fastest technological advancement available as possible. (2004).

            The environmental issue that can be linked with the engineering industry is its position or its initiative to promote clean environment to their prospective regions that they are operating. In developing countries, some people are not disciplined enough to put their trash in the right place. This can harm the environment where the engineering company is operating. Thus, it is their responsibility to promote cleanliness to their countries.

            Basically, concerning legal issues, engineering business is known to have operators lacking business licenses for instance in China. Moreover, certain legal issues are the laxity of the engineering industry in China in preserving the environment.

SWOT Analysis

The strength of the industry lies in the needs of France and China in development of their economy. The engineering industry is one of the most lucrative businesses in these countries. It yields almost 50% of the economic profits of both countries. Moreover, one indicator of a country’s economic development is a good quality and high end infrastructure.

            The weakness of the industry is its confusing legal rules in constructing and the use of technology. Furthermore, other weakness of the industry is the stiff competition. Because of this “neck to neck” competition, most business has been shut down. Also, the industry attracts too much attention to certain governments because it provides access to information around the globe.

            In regards to opportunities, the engineering industry in first world country like France and developing country like China yields more prospective profits because of both country’s objectives of more economic development projects such as infrastructure, manufacturing and equipments and technological advancement.

 

            Threat in the business includes competitors from other industries such as the engineering industry which is often a subordinate of the government. Furthermore, other threat on the business includes the legal issues that have long been imposed on the business, as it could affect its normal operation.

Strategic Planning

Pricing

           

            Pricing is an incredible marketing tool. Knowing the exact price these engineering companies should charge would means the difference between financial losses, mediocre sales, or huge increases in revenues. The reason why so many products fail or produce is because business owners, corporations and marketers do not know the exact right price to charge before a launch, after a launch, or what to change the price to when there are many new competitors, not to mention the stiff competition being faced by business nowadays.

            One of the elements in marketing mix is price (2004). This is important strategic issue because it is associated to product positioning. Additionally it influences other marketing mix elements such as channel decisions, product features and promotion. While there is no single guidelines and methods to establish and resolve pricing, the following is a all-purpose procedure of steps that might be followed for developing the pricing of a new product: First is develop marketing strategy. This means that one has to perform marketing analysis, segmentation, targeting and positioning. Second, make a marketing mix decision which involves defining the product, distribution and promotional tactics. Third, is estimating the demand curve. This means to understand how quantity demanded varies with price. Fourth, calculate cost which includes fixed and variable costs associated with the product. Fifth, understands environmental factors and evaluate likely competitor actions, understand legal constraints, etc. Sixth, set pricing objectives like profit maximization, revenue maximization or price stabilization (status quo). Lastly but not the least, determine pricing using information collected in the above steps, select a pricing method, develop pricing structure and define discounts.

Product Policy

            Organizations operating in multiple locations across the globe have to give attention to their product planning policies. The fine distinction of customer behavior and customer likes and dislikes diverge across cultures. Furthermore, different cultures support different kinds of lifestyles. This is also important in order to determine whether the product is safer to the environment and to the consumers using it. Creating products need careful consideration and has to inform the consumers about the strategy being adapted to the product and how it is implemented. Product policy includes information’s and guidelines in using the products.

Place

            Distribution is also vital in the marketing world. This is all about getting the product and services to the right people at the right time with special consideration for profit and effectiveness (2005). Successful marketing does not end when a business has created a product or service and has found its suitable target audience with a view to selling it at the right price. The next concern that needs to be faced is how they are going to distribute and market this product or service to the customers. When a product or service is acquired and bought by a consumer, it may have been purchased directly from the business or it may have been through a number of intermediaries which includes wholesaler, retailer etc. which are also known and called as the channels of distribution. Businesses, big and small alike need to concede the various types of distribution channels to exploit sales potential. Moreover, distribution channels are induced for the most part by the type and size of the business and so some of the channels explained may not be viable and possible for a finicky and fastidious business. As a result, these channels could be espoused in the future to accommodate for any changes and to help business grow and develop in the incoming future. Intermediaries and selling methods includes direct on-site which is very common for small business, products and services (Marketing and sales). This can be sold directly to the consumer directly from shop, office or home by consumers physically coming into the area to make a purchase. Another intermediaries or selling method is direct mail, which is also known as a mail shot. This type of marketing can produce sales on local, national or even global, scale. Its methods involve send out flyers, leaflets, brochures or catalogues and often target to particular consumers to selling the product or service. Another type is the telemarketing which is done through the phone and e-commerce with the aid of the internet.

 

Promotion

            Catching the attention and keeping lucrative and cost-effective customer relationship is by no means easy. Today, however, shielding, defending and increasing the economic value of the customer franchise seem even arduous and grueling. Novel industry dynamics, altering customer demographics and minimized or insufficient or derisory marketing resources present executives with more intricacies, more ambiguity and more threats. Basically customer relationship management is an information industry term for methodologies and internet capabilities that help an enterprise manage customer relationships in an organized and efficient manner (WhatIs, 2005). Customer relationship management includes aiding an enterprise to enable its marketing departments to distinguish and make out and at the same time target their best customers, manage marketing campaigns with clear goals and objectives, and generate quality leads for the sales team. It also involves assisting the organization to improve telesales, account and sales management by optimizing information shared by multiple employees and streamlining existing processes. Then, allowing the information of individualized relationship with customers, with the aim of improving customer satisfaction and maximizing profits, identifying the most profitable customers and providing them the highest level of service. Lastly, customer relationship management involves providing employees with the information and processes necessary to know their customers, understand their needs, and effectively build relationship between the company, its customer base and distribution partners.

Conclusion

Therefore, the efficient skills in running the business, the enough capital investment, proper management and the favorable state’s situation in politics, security and economy are the factors to be considered of to have a successful and profitable business.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

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June 10, 2009

Climate Change in Wine Industry

Meltdown or the implications of climate change for the wine industry

 

Introduction

            The greatest threat facing our planet today is climate change or global warming. Climate change is a global issue whose causes and consequences require action at local, national and global levels. As the atmosphere and oceans warm, climate change will bring uncertainty and threats to the agriculture sector, to the economy and almost every activity of the human kind. Just as nuclear Armageddon would have resulted from human failures, global warming is the product of the activities and decisions of humankind.

            According to the Intergovernmental Panel on Climate Change (2001), scientists have ascertained that global warming is under way, and they believe that climate change is very likely happening now. It causes increased frequency of severe weather events like floods and droughts, the spread of pathogens to new areas, adverse changes in agricultural yields, increased human mortality from heat and cold, coastal erosion and damage from the rise in sea level, melting glaciers, and a host of other troubles (IPCC, 2001). These problems will harm the poorest countries and peoples the most due to their vulnerable locations and limited resources, which make it difficult or impossible for them to adapt (IPCC, 2001).

 

 

 

Climate Change Research and Projection

            Climate change refers to the variation in the Earth’s climate or in regional climates overtime (). It describes changes in the variability or average state of the atmosphere or average weather over time scales ranging from decades to millions of years. These changes may come from processes internal to earth, be driven by external forces or be caused by human activities.  In the context of environmental policy, climate change is define as the ongoing changes in modern climate, including the rise in the average surface temperature known as global warming.

             (1995) concluded that human activities are changing the atmospheric concentrations and distribution of greenhouse gases and aerosols. These changes can produce a radiative forcing, that is, a change in the energy available to the climate system by changing either the reflection or absorption of solar radiation, or the emission and absorption of terrestrial radiation. He addressed climate change as any change in climate over time whether due to natural variability or as a result of human activity.

            In addition,  (1986) concluded that the addition of carbon dioxide in the atmosphere is not the only influence of mankind in the climate but also that there are other infrared-absorbing trace gases that can cause a greenhouse effect, such as the chlorofluoromethanes, nitrous oxide, and methane.

            Climate change generally is caused by the increased of carbon dioxide and other polluting gases in the atmosphere. Figure 1 shows the process by which gases trap heat by forming a blanket around the Earth like the glass of a greenhouse. Once released the greenhouse gases stay in the atmosphere for many years. As they build up, the planet's temperature rises. Greenhouse gases are released by burning fossil fuels such as coal, oil and gas and by cutting down forests.

            A string of recent research findings points to a high probability of serious consequences of climate change if we remain complacent.

            For example, NASA and other scientists have observed rapid recession of Arctic sea ice and several research groups have also documented rapid melting of permafrost in the northern hemisphere (2006). These reduce the albedo, or reflectivity of the surface, as bright snow is replaced by darker vegetation and soil, and this, in turn, leads to more global warming, an early positive feedback that makes things progressively worse.

            Among the most affected regions of climate change are those at the high latitudes (2001). The extreme forecast is that fundamental ecosystems will be modified as the continuous and discontinuous permafrost boundaries move northwards by several hundred kilometers, along with attendant shifts in the tree-line. Moisture loss, resulting from the melting of the currently impermeable permafrost layer underlying northern wetlands, would be exacerbated by increased evaporation resulting in the rapid loss of wetlands, the foundation of complex ecological systems. Sea-ice cover will shrink, substantially affecting the habitat of marine species such as ringed and bearded seals, sea-lions and walruses which require ice for breeding. It has been estimated that fresh-water fish will migrate pole ward by 150km for every 1°C increase in temperature, possibly displacing current resident species ( 2001).

            In addition, according to  (2006), observations now indicate that the world's forests, long regarded as important sinks for carbon dioxide could be transformed into treacherous sources of greenhouse gases as global warming proceeds, a disturbing turnaround and, again, one that means global warming will feed itself.

             (2005) states that a number of scientists have recently observed vegetation and soils acting as sources rather than sinks and this could mean an earlier-than-expected positive, that is undesirable, feedback in the terrestrial carbon cycle.

            Heat waves and other extreme events are predicted to become more frequent with climate change. News at Nature reported that a team of European scientists had found that the stifling 2003 heat wave in Europe caused the continent's grasslands and forests to release massive amounts of carbon dioxide into the atmosphere. The carbon dioxide released as a result of the heat wave was equivalent to the amount of carbon stored in plants over the previous four years of normal growth.

            In addition, global warming is expected to lead to a more vigorous hydrological cycle, including more total rainfall and more frequent high intensity rainfall events (IPCC, 1995). These rainfall changes, along with expected changes in temperature, solar radiation, and atmospheric carbon dioxide concentrations, will have significant impacts on soil erosion rates. The processes involved in the impact of climate change on soil erosion by water are complex, involving changes in rainfall amounts and intensities, number of days of precipitation, ratio of rain to snow, plant biomass production, plant residue decomposition rates, soil microbial activity, evapotranspiration rates, and shifts in land use necessary to accommodate a new climatic regime. Soil erosion rates may be expected to change in response to changes in climate for a variety of reasons, the most direct of which is the change in the erosive power of rainfall ( 2001;  2002). A second dominant pathway of influence by climate change on erosion rates is through changes in plant biomass. The mechanisms by which climate changes affect biomass, and by which biomass changes impact runoff and erosion, are complex (2002).

            Climate change also affects the sea water level. One of the more-certain predictions associated with global climate warming and the melting of polar ice caps is a rise in sea level ( 1989). Sea level rise for the last century is estimated at 4-6 inches, in part due to thermal expansion of water. Most estimates project a rise of about three feet over the next one hundred years, corresponding to 10-15 inches for each one-degree rise in temperature. Such a rise in sea level can be expected to have serious consequences, especially if at least some preventive measures are not implemented. The major impacts are permanent inundation, beach erosion, increased flooding and saltwater intrusion. Continual development along coastal regions will not only increase the probability and extent of flood damage, but will result in the destruction of some of the natural barriers that help to mitigate these effects.

            The globally averaged surface temperature is projected to increase by 1.4 to 5.8°C over the period 1990 to 2100 (IPCC, 2001). In addition, global average water vapor concentration and precipitation are projected to increase during the 21st century. By the second half of the 21st century, it is likely that precipitation will have increased over northern mid- to high-latitudes and Antarctica in winter. At low latitudes there are both regional increases and decreases over land areas. Larger year to year variations in precipitation are very likely over most areas where an increase in mean precipitation is projected.

            Moreover, Northern Hemisphere snow cover and sea-ice extent are projected to decrease further. Glaciers and icecaps are projected to continue their widespread retreat during the 21st century. The Antarctic ice sheet is likely to gain mass because of greater precipitation, while the Greenland ice sheet is likely to lose mass because the increase in runoff will exceed the precipitation increase. Further, global mean sea level is projected to rise by 0.09 to 0.88 metres between 1990 and 2100.

            Emissions of long-lived greenhouse gases have a lasting effect on atmospheric composition, radiative forcing and climate. After greenhouse gas concentrations have stabilized, global average surface temperatures would rise at a rate of only a few tenths of a degree per century rather than several degrees per century as projected for the 21st century without stabilization.

Impact on the wine industry

            The hotter days and warmer nights that global warming may bring could compel most premium wine grape growers to lower their quality. Premium wine grapes are usually defined as such because they are used to make wine. Lower-quality grapes end up in jug or fortified wine, as table grapes and as raisins. Growing premium wine grapes requires the right climate: hot during the day and cool at night. Temperature extremes can ruin otherwise good wine grapes.

            However, some level of climate change is nothing new to wine-growing regions, according to Greg climate scientist at Southern Oregon University and another study author ( 2006). According to  winemaker at Bogle Vineyards in Clarksburg, lengthening the growing season is a good thing for wine grapes, because the best spend a long time slowly maturing on the vine and this gives the grapes enough time to develop the correct balance of flavor and sugar ( 2006). However, according to , of Shenandoah Vineyards in Amador County, when temperatures get too high, about 95 to 100 degrees, the grapes pretty much shut down. If you get to about 100 degrees, the vine shuts down, and if you get to 100 day after day, the leaves start burning ( 2006).

                According to  (2004), growing season temperatures have increased for most of the world's high quality wine regions over the last 50 years by an average of 2°C. In tandem with this rise in temperatures, the quality of vintages has also improved. There is a significant relationship between the vintage ratings and monthly average growing season temperatures in most regions. Jones accepts that there is a chance that the rise in vintage quality might not just be because of the temperature increases, but points out that his data show that between 10% and 62% of vintage quality can be explained by growing season temperature variability, with the greatest effects seen in cool climate regions such as the Mosel.

            In the prediction of wine regions can expect an average growing season temperature increase of 2.04°C by 2049, on top of the 2°C rise of the last 50 years. The largest predicted change was for southern Portugal which is 2.85°C and the lowest was for South Africa which is 0.88°C (2004).

            According to it would appear that the currently cool climate regions would benefit the most (2004). If the climate warms as the models predict, then these regions will be better able to ripen the fruit, and may even be able to consider other varieties that could not ripen there today.

            However, global warming is detrimental to some of the warmest wine regions, including most of the vineyard areas in California. For, according to many of the warm-to-hot regions the negative impacts are already being felt. In hot regions, grapes ripen to a 'sugar ripe' condition, but lack flavors that can take time to develop (2004). Other regions, somewhat in between cool and hot growing climates, will likely have to consider other varieties that will produce better in a new climate regime. For example, in California's Napa and Sonoma valleys, the climate has become so warm that ripening fruit is not an issue but retaining acidity and developing flavor have become increasingly difficult in the warmer conditions (2004). This issue could become very critical in already warm areas like Chianti, Barolo, Rioja, southern France, the Hunter Valley, parts of Chile and the Central Valley of California.

            In addition, negative effects of increased temperatures could include harvest periods being brought forward into the warmest parts of the year, reduced water availability and increased pest and disease burden.

            Moreover, one of the common predictions of climate models also has implications for wine with rising temperatures come an increased frequency of extreme weather events and a rising unpredictability of climates. Winegrowers don't want unusual weather; understandably, they like things to be predictable and stable, because large fluctuations will almost always be detrimental for vintage quality. Even if growing season temperatures are very good, a vintage can be easily ruined by extended rain during harvesting, or hailstorms, or a late snap of frost in May.

Response of the wine industry

            In response to climate change, there will be a local adaptation by each environment, a possibility for planting new varieties in regions not previously suitable. Varieties only grown 500km south of a region may be possibly planted further north.

            According to (2004), the observed warming of the past 50 years appears to have mostly benefited the quality of wine grown worldwide. However, the average predicted warming in the next 50 years has numerous potential impacts on the wine industry including changes in grapevine phenological timing, disruption of balanced composition in grapes and wine, alterations in varieties grown and regional wine styles, and spatial changes in viable grape-growing regions.

            Potentially even more important is that climate change, through its direct impact on grape and wine production, has the ability to indirectly bring about cultural change by altering long-held regional identities.

            The wine industry likely can adapt to the possible changes in climate, but not without help. Today many of the Old World wine regions in Europe have stringent standards by which varieties, yields, growing and winemaking techniques, and wine styles are regulated to assure quality and maintain identities (2004).

            For example, the summer heat wave of 2003 in Europe produced very early harvests and some challenging growing conditions that without irrigation resulted in lower yields and out-of-balance flavors (2005). Although New World wine regions have fewer governmental constraints, growers and winemakers worldwide will need the freedom to adapt to the potential changes in climate in both the short and long term.

 

Conclusion

            Climate change affects almost every aspect of living of the human kind. It affects the agriculture industry with the unpredictable change in the weather. It also affects the temperature of the globe which causes the permafrost to melt down increasing the sea water level and loss of inhabitants of some animals. Global warming is threatening to the future of the humankind. With the wine industry it is particularly important to be able to predict the climate because wine grape are particularly affected with changing weather. Extreme weather conditions affect the quality of the grapes. Vintage quality of grapes is easily ruined even with extended rainfall, or when temperature reached 95°F the grapevine will shut down.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX

 

Figure 1. Heat from the Sun (a) is trapped by the gases in our atmosphere (b)

 

 

Global warming caused by greenhouse gases

 

Source: Friends of the Earth ()

 

 

Table 1. Predicted temperature rises for selected wine regions over the next 50 years 
 
                      PREDICTED TEMPERATURE RISE 
WINE REGION           FOR THE PERIOD 2000-2049 ([degrees]C) 
 
Central Washington                       2.27 
Eastern Washington                       2.81 
Northern Oregon                          1.56 
Southern Oregon                          2.35 
Northern California                        2.16 
Mid-California                               1.85 
Southern California                       1.38 
Northern Portugal                         2.42 
Southern Portugal                         2.85 
Rioja                                          2.52 
Barolo                                        2.41 
Chianti                                        2.30 
Rhine Valley                                 1.51 
Mosel Valley                                 1.51 
Northern Rhone                            2.26 
Southern Rhone                            2.26 
Loire Valley                                  2.14 
Alsace                                        1.65 
Champagne                                 1.51 
Burgundy--Beaune                        2.26 
Burgundy--Cote d'Or                     2.09 
Bordeaux                                    2.33 
Hunter Valley                               1.78 
Margaret Valley                            2.04 
Barossa Valley                             2.01 
South Africa                                0.88 
Chile                                           1.84 
 

Source: data

 

June 09, 2009

MANAGEMENT

" Management"

 

     Launched in August 1957, SMG or the Scottish Media Group is a national and regional broadcasting network providing information and entertainment services across the United Kingdom (UK).  They operate in commercial television, radio, outdoor and cinema advertising.  SMG Television incorporates Scottish TV, Grampian TV, SMG TV Productions, Ginger Television and SMG Broadcast and Event Solutions. Now, it is the 6th largest program producer in the UK.  They also include Virgin Radio for radio, Pearl and Dean for cinemas, and Primesight for out door advertising. ()

     Scottish TV, in Central Scotland currently serves 3.5m viewers. This Independent Television (ITV) license holder is the most popular channel in Scotland in peaktime and is the leading commercial broadcaster in the UK. And its award-winning output reflects Scotland's different political, legal, educational, cultural and sporting and religious agendas, and most importantly the interest and aspirations of its viewers and advertisers. Quality, creativity, innovation and the provision of new opportunities for the next generation of program and film-makers is its core values.

     While Grampian TV in Northern Scotland and has the largest transmission area in the ITV network serving 1.1m viewers. Grampian TV provides viewers with high quality program that are distinctive and innovative.  Their production have a high level of ambition, socially purposive, has educational value and reflect the varied and exciting cultural, artistic, sporting and spiritual life of the region.

 

      SMG TV Productions a major player in UK and in international television production industry, constantly endeavoring to nurture and develop the talent essential for the health of the TV industry outside the south east. SMG TV Productions, together with its sister company, Ginger Television Productions, has produced a wide range of programs for a variety of networks including top quality ITV1 drama like Taggart and Goodbye Mr. Chips and high profile factual programming for ITV1 and ITV2 including Club Reps, Don't Drop The Coffin and Medics of the Glen. SMG TV Productions also produces peaktime programming for BBC1, Channel 4, Sky1, and Five. Its track record in children's programming includes How2, Squeak! and the CITV dramas, Butterfingers and Harry and the Wrinklies. And other well known programs in the international market, over its 100 territories.

     SMG Broadcast and Event Solutions, the production resources division of SMG, is the home of some of the UK broadcasting industry’s best talent and leading edge facilities. 

     It contains three business areas: SMG Broadcast Solutions; SMG Commercial Solutions; and SMG Event solutions.

     SMG Broadcast and Event Solutions provides a diverse range of expert staff and state of the art facilities to support program making and transmission requirements for clients like Setanta Sports, Lion TV Scotland, Channel 4, BskyB, Scottish TV, Grampian TV and SMG TV Productions.  They shoot on a range variety of formats and equipment, including 35mm film or High Definition.

     They provide "one stop shop" needs for OB (Outside Broadcast) events to corporate videos.  From producing, developing, and delivery.  They cater Sports, LE, Dramas, Topical, Factual programming, Music Awards, product launches and presentations for both Corporate and TV clients. ()

     Pearl & Dean has been screening advertisements since 1953.   Pearl & Dean provides on and off-screen media opportunities across some of the biggest and best cinemas in the UK. These now include: Vue; UGC; and Apollo circuits as well as many successful independents.   Pearl & Dean now represent over 1200 screens across the UK and Eire.

     Primesight provides advertising solutions for both audience targeting and coverage requirements.  Primesight markets an expansive outdoor media product across the UK.  Products include small and large format displays on major roads; displays at locations such as leading cinemas and health clubs; retail outlets and the Glasgow underground network

     SMG Radio has three divisions: Virgin Radio; Virgin Radio Classic Rock; and Virgin Radio Groove.  Virgin Radio started in 1993, and is the nation's only commercial pop and rock music station.

     Virgin Radio Broadcasts on 105.8FM in London, 1215AM nationwide, on Sky Digital and the cable networks, on any DAB (Digital Audio Broadcasting) Digital Radio and via internet through www.virginradio.co.uk.  Virgin Radio Classic Rock and Virgin Radio Groove also broadcasts on DAB radio and on the internet across London. ()    

 

 

 

 

 

 

 

PESTLE Analysis

     PESTLE analysis is very important in an organization since one should consider its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. 

  PESTLE (Political, Economic, Socio-cultural, Technological, Ecological or Environmental, and Legal) is an analytical tool used to assess the company or business organization’s environment.  The marketing environment is made up of: The internal environment (e.g. staff, office technology, wages and finance, and so on.); the micro-environment (e.g. customers, agents and distributors, suppliers, our competitors, and so on); and the macro-environment (e.g. Political, Economic, Socio-cultural, Technological, Ecological or Environmental, and Legal)

     Let us delimit the scope of our PESTLE analysis.  Let’s concentrate on the organization’s external macro-environment. Namely, the political, the economic, the socio-cultural, the technological, the legal, and the ecological or environmental forces that affects the organization. 

     The political forces are the political and fiscal stability of the government, tax legislation, social legislation such as marketing ethics, legislation against pollution, religion and beliefs, and so on, and the government’s relationship with the industries, such as trading agreement, deregulation, and so on.

    

     The economic forces pertains to the income, employment and other related factors of the market (in order for the market to support the product, there should be the ability and willingness to buy), and also including the current economic status of the country and its past crises.

    Meanwhile, the socio-cultural forces differ from place to place. It refers to lifestyles, values and beliefs of the inhabitants. consumer behavior (e.g. consumers attitudes to foreign products and services), and social issues (e.g. changing gender roles: increasing number of two-income households, a growing number of “house husbands”, women’s attitudes towards careers, shopping and products continue to evolve)

      Technology is vital for competitive advantage, and is a major driver of globalization.   It has a tremendous impact on people’s lifestyles, consumption patterns, and economic well being.  It enables Individuals to access information shop and communicate globally increasing access to different goods, giving wider choice of products and services and thus Increasing Competition.

     Technology has the power to create new and destroy existing industry. Like computer hardware and software, and robotics replacing typewriters and some manual labors.

     The legal forces are mostly related with the political environment.  These are local, national, or global legislations that may have an effect on the organization.

     The environmental or ecological forces are usually environmental issues may it be local or global.  And it is mostly backed up by legislation.  So, in a way it too, is related to the political environment.  The most common issues related to this is wastes management and energy conservation.

PESTEL ANALYSIS ON SMG

     Political/Legal Factors:

     SMG is an Independent Television.  It was originally part of the commercial British television broadcasters, set up on a regional basis in 1955 to provide competition to the BBC. Since the only television service in Britain in the early 1950’s was operated as a monopoly by the British Broadcasting Corporation (BBC), and financed by the annual television license fee payable by each household which contained one or more television sets. 

      Almost all of these companies have now merged into a single business. Its flagship analogue channel is ITV1. ()

     In the European Union, member states have enforcing authorities to ensure that the basic legal requirements relating to occupational safety and health are met. In many EU countries, there is strong cooperation between employer and worker organizations (e.g. Unions) to ensure good Occupational Safety and Health (OSH) performance as it is recognized this has benefits for both worker (maintenance of health) and enterprise (improved productivity and quality).

     An example of these is The Health and Safety Executive (HSE), which reports to the Health and Safety Commission, is a British government body responsible for the regulation of risks to health and safety in the UK. It was created as a result of the Health and Safety at Work Act 1974.

     As compliance to this SMG made occupational health service available to all their employees provided by British United Provident Association (BUPA). BUPA is international health and care company, its base in the UK gives health insurance both for individuals and corporations that want to look after the health of their employees. ()

     Economic Factors:

     The United Kingdom, is a leading trading power and financial centre, it has an essentially capitalist economy, the fourth largest in the world in terms of market exchange rates and the sixth largest by Purchasing Power Parity (PPP) exchange rates. Over the past decades, the government has greatly reduced public ownership by means of privatization programs, and has contained the growth s three states.

     Agriculture is intensive, highly mechanized, and efficient by European standards, producing about 60% of food needs with only 1% of the labor force. The UK has large coal, natural gas, and oil reserves; primary energy production accounts for 10% of GDP, one of the highest shares of any industrial state.

     In terms of services, particularly in banking, insurance and business services, the UK account for by far the largest proportion of GDP. Though the industry continues to decline in importance, but still, the UK is Europe's largest manufacturer of armaments, petroleum products, personal computers, televisions, and mobile telephones. In terms of tourism, the UK has over 24 million tourists a year, ranking as the sixth major tourist destination in the world.

     Socio-cultural

     Historically most people in the United Kingdom lived either in conjugal extended families or nuclear families. This reflected an economic landscape where the general populace tended to have less spending power, meaning that it was more practical to stick together rather than go their individual ways. This pattern also reflected gender roles. Men were expected to go out to work and women were expected to stay at home and look after the families.

     But in the 20th century, the greater freedoms enjoyed by both men and women in the years greatly influenced easier divorce.  This changed gender roles and living arrangements significantly. The general trend is for single people to live alone, reducing in prominence on the traditional nuclear family.

  

 

 

      But some research indicates that in the 21st century young people are tending to continue to live in the parental home for much longer than their predecessors. The high cost of living, combined with rising cost of accommodation, further education and higher education means that many young people cannot afford to live independent lives from their families.

     Environmental/Ecological:

     The Montreal Protocol on Substances That Deplete the Ozone Layer is an international treaty designed to protect the ozone layer by phasing out the production of a number of substances believed to be responsible for ozone depletion.

     In compliance to this, SMG made policies that conduct responsible ways in minimizing the adverse effects of the business on the environment.  This includes policies on energy efficiency and waste management.  Examples of these are: Using renewable energy sources to power sites in Glasgow, Waterhouse Square (London) and Aberdeen; controlling and minimizing the use of energy, such as gas, electricity, and water; the use of Greenline products of cleaning contractors; and introduction of recycling in all sites.

 

 

 

 

 

SWOT Analysis

     SWOT (Strengths, Weaknesses, Opportunities, and Threats) is also an analytical tool which focuses on the organization’s environment.  They are divided into two groups, the external (Strengths, and Weaknesses), and internal (Opportunities, and Threats).

     SWOT analysis provides the organization vital information in matching its resources and capabilities to the competitive environment it lives in. (cited in http://www.quickmba.com)

     Strengths are resources and capabilities of the organization that can be used as basis for competitive advantage.  Resources are tangible visible assets, such as skills, financial, physical and technological, in order to meet organisational needs.  On the other hand, capabilities are Intangible & invisible assets such as knowledge and relationships

     Examples of organizational strengths are: Marketing expertise; a new, innovative product or service; the location of business; and quality processes and procedures.

     Meanwhile, weakness is the absence of strengths: Lack of marketing expertise; bad location; poor quality goods or services; and bad reputation.

     Like strengths and weaknesses, opportunities and threats are also like the different sides of a same coin.  Changes in technology and markets on both a global, national and local scale, changes in government policy related to the organization’s field, changes in social patterns, population profiles, lifestyle changes, and local events can viewed both as opportunities and threats, depending on the organization’s strengths and weaknesses.

SWOT ANALYSIS ON SMG

STRENGHTS:

-Strong market position.

-Introduction of live daytime programming.

-New business initiatives.  (Broadcast & event solutions expansion, new digital radio stations, new outdoor panels and cinema contracts)

WEAKNESSES:

-Low RAJAR (Radio Joint Audience Research Limited) sampling.

-Loss of the UGC (Union Générale Cinématographique) contract.

OPPORTUNITIES:

-Changing broadcasting environment due to new technologies and multi-channel television.

-Lower license fees and reduced public service broadcasting commitment.

-Release of high profile movies. (Harry Potter, Narnia, and War of the Worlds).

 

THREATS:

-Changing broadcasting environment due to new technologies and multi-channel television.

-Short term and erratic advertising markets.

-Low consumer spending.

     Since the advertising market is not stable due to seasonal changes, SMG should ought to make their products and services more flexible to ride the sudden shifts of the market.

CHANGE MANAGEMENT

     Change management is the process of developing a planned approach to change in an organization. Typically, the objective is to maximize the collective efforts of all people involved in the change and minimize the risk of failure of implementing the change.  ()

     Change management can be either 'reactive', in which case management is responding to changes in the macroenvironment, which makes the source of the change external, or proactive, in which case management is initiating the change in order to achieve a desired goal, which makes the source of the change internal.  

 

     Change management can be conducted on a continuous basis, on a regular schedule such as an annual review, or when deemed necessary on a program-by-program basis.

     Change management can be approached from a number of angles and applied to numerous organizational processes. Its most common uses are in information technology management, strategic management, and process management.

     To be effective, change management should be multi-disciplinary, touching all aspects of the organization. However, at its core, implementing new procedures, technologies, and overcoming resistance to change are fundamentally human resource management issues.  ()

      and  formulated a formula for change, which is sometimes called Gleicher's Formula. This formula provides a model to assess the relative strengths affecting the likely success or otherwise of organisational change programs.  ()

D x V x F > R

      The three factors that must be present for meaningful organisational change to take place are: D = Dissatisfaction with how things are now; V = Vision of what is possible; F = Initial, concrete steps that can be taken towards the vision.

If the product of these three factors is greater than R = Resistance, then change is possible.

     Because of the multiplication of D, V and F, if any one is absent or low, then the product will be low and therefore not capable of overcoming the resistance.

     To ensure a successful change it is necessary to use influence and strategic thinking in order to create vision and identify those crucial, early steps towards it. In addition to this, the organisation must recognise and accept the dissatisfaction that exists by communicating industry trends, leadership ideas, best practice and competitive analysis to identify the necessity for change.  ()

     Management's first responsibility is to detect trends in the macroenvironment so as to be able to identify changes and initiate programs. It is also important to estimate what impact a change will likely have on employee behaviour patterns, work processes, technological requirements, and motivation.

      Management must also assess what employees reactions will be and craft a change program that will provide support as workers go through the process of accepting change. The program must then be implemented, disseminated throughout the organization, monitored for effectiveness, and adjusted where necessary.

 

 

     In general, a change program should:

     1) Describe the change process to all people involved and explain the reasons why the changes are occurring. The information should be complete, unbiased, reliable, transparent, and timely.

     2) Be designed to effectively implement the change while being aligned with organizational objectives, macroenvironmental trends, and employee perceptions and feelings.

     3)Provide support to employees as they deal with the change, and wherever possible involve the employees directly in the change process itself.

 

CHANGE MANAGEMENT IN SMG

Dissatisfaction

     In this scenario, dissatiafaction comes from the managers.  It is beacause of the intense competition from its rivals.  And since the advertising market was short lived and erratic, the Group would need new ideas to keep up with competition and the constanly changing market.

 

 Vission   

     Even though the advertising market was unpredictable, the Group insisted to strengthen this part of their field.  They continued investments in outdoor panel build and cinema minimum rental guarantees.  They believe that this erratic behavior of the advertising market will soon come to pass.

 

Initial steps towards vision

     To strengthen advertising, The Group increased advertising sales in important sectors, such as health clubs, garage forecourts and convenience store.  The SMG also expanded their Backlight business and made agreements with Cal Brown. 

     The SMG also decided to establish digital brands, such as Virgin Radio Classic Rock and Virgin Radio Group.

 

Resistance

     In this scenario, there is not much resistance from the employees of the SMG.  Maybe except for those who will be layed-out due to the restructuring  of the company which was not mentioned in their annual reports.

 

BALANCED SCORECARD

     The balanced scorecard is a management system and not just a measurement system, which enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise. ()

     The balanced scorecard suggests viewing the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:

 The Learning and Growth Perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement. In a knowledge-worker organization, people are the only repository of knowledge and are the main source. In the current climate of rapid technological change, it is becoming necessary for workers to be in a continuous learning mode. This can also be an indicator of 'brain drain'. Metrics can be put into place to guide managers in focusing training funds where they can help the most. In any case, learning and growth constitute the essential foundation for success of any knowledge-worker organization.

     The Business Process Perspective refers to internal business processes. It tells managers how well the business is running, and whether its products and services conform to customer requirements. These metrics have to be carefully designed by those who know these processes most intimately; not something that can be developed by outside consultants.

     There are two kinds of business processes can be identified: a) mission-oriented processes, and b) support processes. Mission-oriented processes are the special functions of government offices, and many unique problems are encountered in these processes. The support processes are more repetitive in nature and hence easier to measure and benchmark using generic metrics.

 The Customer Perspective concentrates in developing metrics for customer satisfaction.  Customers should be analyzed in terms of kinds of customers and the kinds of processes for which we are providing a product or service to those customer groups.

    The Financial Perspective refers to timely and accurate funding data will always be a priority, and managers will do whatever necessary to provide it.

BALANCE SCORECARD ON SMG

The Learning and Growth:

     SMG Television are encouraged to identify development objectives that are personal to their continuing professional development.  SMG has recently incorporated competencies into the performance management system, which focuses upon the behaviors and skills that people employ to do their job.

 

     Last March 2003, SMG launched a Training Forum.  Members of staff are able to improve their knowledge, skills and performance. The Training Forum provides a full complement of training which is open to all members. The training course includes: Widescreen TV; Digital camera technology; Media legislation; Small Camera Technology; Compliance; Copyright & Intellectual Property; Airtime Trading; Insight into TV Studio; Desk top editing; TV audience Profiles; Scots Law in Journalism; The developments surrounding the Communications Bill; Data Protection; A variety of PC skills courses; Shareholder value; Understanding Business Finance; and Disciplinary and Absence Management.

The Business Process:

     The first half of 2005 has been a period of profitable growth for SMG, aided by a strong first quarter for advertising and excellent regulatory settlements which resulted in lower licence fees and reduced public service broadcasting commitments. Turnover was up 7% to £94.9m (2004: £88.5m) resulting in a 68% increase in underlying pre-tax profits to £6.7m (2004: £4.0m).

     The operating margin of 17% on television was three percentage points up on the corresponding period in 2004. Although the advertising revenues were on a par with the first half of 2004, still SMG Television Division outperformed ITV1 as a whole, growing their NAR share to 6.7% (2004: 6.4%). This was achieved despite regional advertising revenues being 10% lower, primarily due to a significant cut in Scottish Executive spending.

     Virgin Radio has gained considerable momentum in 2005 through its national positioning, strength of brand, singular focus and the rapidly evolving marketplace for digital radio services.

     Meanwhile, the Out of Home Division grew sales by 9% aided outdoor panel growth and cinema contract.  Primesight grew revenues by 15%, outperforming the overall outdoor market, and SMG Out of Home Division now hold market-leading positions for the 6 sheet format in a number of important sectors, including: health clubs; garage forecourts and convenience stores. And the expansion of their Backlight business continued with an additional 12 panels being constructed across the UK.  Making them the leading Backlight contractor in London to date.

     Pearl & Dean grew cinema advertising sales by 5% over the period, again outperforming the market. ()

The Customer:

     SMG Television is number one in peak time.  Gathering 33% of audience share as of June 30 2005.  ITV1 ranked in second with 29% audience share, BBC1 in third with 23%, C4 in fourth with 10%, BBC2 and FIVE both in fifth, with 8%.  While other cable and satellite channels have 22%. ()    

 

 

The Financial:

     The SMG’s financial highlights are as follows:

2005

2004

Turnover

£94.9m

Turnover

£88.5m

Operating Profit

£13.7m

Operating Profit

£11.3m

Profit Before Tax (Underlying)

£6.7m

Profit Before Tax (Underlying)

£4.0m

Profit Before Tax (Statutory)

£6.7m

Profit Before Tax (Underlying)

£8.6m

Basic Earning per Share (Underlying)

1.7p

Profit Before Tax (Underlying)

1.1p

Basic Earning per Share (Statutory)

1.7p

Basic Earning per Share (Statutory)

2.8p

Interim Dividend

1.2p

Interim Dividend

1.0p

 

    

 

 

Real Estate Article

OBJECTIVES

As a person with knowledge of the Chinese real estate markets, the author has always brought up to his superiors the viability of strategy formation regarding the analysis of this topic and at times fail to understand the reasons or logic behind certain strategic implementations imposed on it.

By delving into this project paper, the author intends to have better insights into how the Chinese real estate markets are thought up, formulated and then imparted down. The author hopes to have an in-depth understanding as to how the real estate markets enable China to compete effectively and profitably in this era of internationalization where competition is extremely intense.

In order to reinforce the learning objectives, two key focal issues were focused upon i.e. innovation and diversity. Innovation was discussed with regard to the Chinese real estate markets where it was renowned for its developmental capabilities to constantly innovate. Diversity came under strategic thinking and formation as the author considered the diverse culture, political climate, economic surroundings, social environment, technological settings, government policies and legal systems in order to better understand the issues being discussed.

 

 

 

The Restriction of Chinese Real Estate Markets

China has experienced electoral and political transitions and crises in the last 12 months following the restriction of its own real estate markets.  There have been at least four political trends that have emanated from these events. These are: (a) the cry for democracy and reforms in the real estate industry; (b) increased popular and local-level assertiveness; (c) greater public accountability; (d) re-definition of the concepts of power and politics. Also, the forms of political economies have slowly shifted from a bipolar (big government-big business) to a tri-polar structure (authorities - private sector – civil society).

 

            The implementation of the Free Trade Area, or FTA, which laid out a comprehensive program of regional tariff reduction in the Chinese real estate market, will be continuously implemented in phases through the year 2008 ( 2003). Over the course of the next several years, the programs in tariff reductions were made broader. Efforts to eliminate non-tariff barriers and develop common real estate market standards were initiated. In addition, China also was able to formulate framework agreements for the intra-regional liberalization of trade in real estate markets. Industrial complementation schemes meant to encourage intra-regional investment were also approved.

 

 

 

 

Long-term Trends

Despite the adverse economic trends in the first half of the year because of certain restrictions in the real estate industry of China, the country as a whole still experienced a relatively robust economic growth. It is estimated that China, taken together, posted a better-than-expected GDP growth of 4.5% last year, slightly higher than the 4.1% growth that they achieved in 2002 (2004).

It is a common knowledge that the real estate industry of China is still a relatively new industry and is still in its early stages of development. However, it has shown signs of rapid growth and it is being estimated that there will be more entrepreneurs that will invest in the industry within the year. And it is further being expected that within the next years the tremendous growth and technological advancements will continue in the real estate industry of China. E-commerce and multimedia terminals are just some of the technological advancements already being expected. Therefore, the continued growth and development will also make it imperative for localization to occur in the real estate industry of China industry in the years to come.

Short-term Trends

With the rise in the middle to upper-middle class households in China, there exists a strategy mismatch for not considering the potential for consumer market.

There have also been social and cultural trends that have been evident over the last 12 months after the restrictions in the real estate market of China. These include: (a) the irreversible rise of civil society against the restrictions; (b) the rise of civil society blends perfectly with a tri-polar structure of political economy; (c) the increase in the roles of intellectuals; and (d) the beginning of a period of introspection (2004).

The creation of restrictive policies, commercialization, and protection has been a significant source of comparative advantage of real estate enterprises and economies and a major driver of their competitive strategies. Indeed, China is fully aware of the pressing need for a long-term policy commitment to collectively transform its real estate industry into one which is largely based on knowledge, driven by innovation and sustained by the active participation of all major sectors.

China has pledged to work together to help accelerate the pace and scope of policy formulation, commercialization and protection; to improve the regional framework of policies and institutions relating to its real estate industry, including the development and harmonization of enabling monitoring and evaluation systems; to promote cooperation and dialogues within China as well with the country’s real estate organizations; to strengthen real- estate related human and institutional capabilities in the country, including fostering greater public awareness of issues and implications relating to the real estate industry.

 

June 08, 2009

Events and Conference Essay

INTRODUCTION

 It can be said that the UK's tourism is a victorious account and that its importance can no longer be undervalued and be able to position the sector at the forefront of thinking by both the Government and the business community. thus, conferences, exhibitions, incentive markets, events and business process having better shares of UK’s tourism industry within its national economy. Aside, during the year 2001, British Tourist Authority projects that in the coming years, expenditure in UK could represent as much as 45 percent of its total tourism spend as there contributes to developing trade through the showcasing of the UK's products and services in terms of its supply and demand level also, facilitating exports and inward investment, gathering information, furthering knowledge and enabling productive market process as well as networking. So, it is true that UK has its unique advantages being respected business tourism destination although it face such challenges that could undermine its position as one of the leading countries in the competitive, international marketplace. Thus, UK's business tourism industry must continue to provide a good balance of conferences and exhibitions providing enough facilities and services which are successfully marketed its national and international audiences leading the way to sustainable, high quality growth for the country’s trade and tourism respectively. (Hirst, 2003) 

DISCUSSION

The conference and exhibition industry is continually endeavouring to increase the ‘internationality’ of its shows in order to enhance the opportunity for exhibitors to increase their export markets and took up crucial steps forward to meet the supply and demand for the country’s sustainability as a way of adopting new techniques to improve its economic status. The British Tourist Authority actively promotes the UK as an incentive travel destination in terms of haul destinations, as long as the UK can provide top quality tourism facilities such conferences, exhibitions and incentive markets, the country will continue to play a significant role in its tourism industry. It is a fact that United Kingdom’s tourism industry encompasses such conferences and meetings (British Conference Market Trends Survey 2001), also exhibitions and trade fairs as it is estimated to be worth £2.04 billion annually and that exhibitions are the 5th largest marketing medium attracting 11 percent of media expenditure in the UK and also, important events of inbound tourism earnings for the UK, as said by the International Passenger Survey. (Hirst, 2003)

 Moreover, business tourism kindles future investment as business people see the attractions of a destination while on business and or attending a conference, exhibition or incentive markets and return to establish business operations there. They can also become unpaid ‘ambassadors’ for a destination by communicating to colleagues and others their positive impressions and favourable experiences (National Exhibition Centre).  Furthermore, conference and incentive visitors are together so that it is possible to inform and educate them about the local community in which their event is being held in order to maximise the enjoyment of their stay but also to minimise any disruption and possible inconvenience to the local resident population. It is very much harder to manage, in the same way, the impact of individual leisure travellers on a destination. The individual segments of UK’s business tourism such as conferences and meetings, exhibitions and trade fairs, incentive market travel and various events, are crucial segments which are the prime focus of marketing activities by venues and destinations, because decisions about where the events take place are open to influence. The organisers of the event may have greater flexibility in deciding where it is held, and are able to use their own judgement as corporate meetings segment is recognized as one of the most valuable segments of the conference market.(British Conference Market Trends Survey 2001)   

Henceforth, expectations of venues are high in terms of their ability to keep up with advances in presentation technology. Corporate conference organisers have high expectations for all aspects of their meeting experience, demanding high quality meeting facilities and service, as justification for use of their valuable time in holding meetings as the recruiting and training staff to meet these service requirements is a continuing challenge for those providing facilities and services for conferences. (Hirst, 2003) The demands made upon conference venues catering for national association conferences will continue to grow, both in the provision of electronic communications technology but also in requirements for space like for instance, increasing use of syndicate/breakout rooms, greater need for exhibition space and for higher levels of security More destination marketing organisations are establishing ‘ambassador programmes’ designed specifically to target the national and international association conference segments. Such programmes identify and recruit key individuals within local communities to act as ambassadors for the destination in promoting its benefits and in bidding to bring the major conference of the organisation of which they are a member to their own destination. (Hirst, 2003)

 The international association congress market brings together members with common professional, scientific or social interests. The associations vary in size and membership, can be regional or international in scope and use meetings as one of the most important communication methods amongst members. The associations also use their meetings as a key revenue generator to support the headquarters and fund outreach activities such as specialised research and public campaigns as well as programmes in developing countries. Individuals attend congresses because they provide an opportunity to share ideas and information about their industry or field, impart/gain intelligence and research and network with industry colleagues. (Hirst, 2003) There is also a requirement in some, particularly medical, professions to attend congresses as a part of a continuing education programme. There were methods of researching these congresses with a view to hosting their events in the UK: this is either done through the UK member contact of an international association or by approaching the headquarters, usually located overseas, directly. (Hirst, 2003)

 Furthermore, delegates attending these conferences are more likely to bring families/accompanying people with them and add on a holiday before or after the congress. Thus, with a growing number of world-class facilities being built around the UK, there are opportunities to promote good regional spread of events around the country. It is important that the destination is both financially viable in terms of the usual conference budget and cost-effective to allow low-enough registration fees which will encourage high delegate attendance. As the supply of convention facilities increases around the world, competition becomes more intense. As some of the larger conferences grow in size and complexity, organisers are opting for a smaller number of tried and tested venues to work with. (Hirst, 2003) The growth of new technologies is making congresses, particularly in the scientific field, more innovative in their presentation technologies and on-line registrations. The conference venues industry is one of the first in Europe to adopt the regular use of Broadband and wireless technology with Local Area Networks for networked electronic presentations. (Bowerman, 2004)

 Increasingly, as congresses become larger and more important economically, particularly to the host city, the association convention is being used as a bargaining chip to engage more support or increase membership in areas of the world where it may be minimal. Such emerging destinations invariably do not have the desired infrastructure to host a convention but they represent important new markets and new income for associations and well-established congress destinations such as the UK are increasingly finding themselves competing against such locations. The UK is considered to be an expensive destination with a fragmented convention industry but future business lies in the UK’s key strengths which include: (Hirst, 2003 p. 34)

Ø      Ease of access

Ø      Quality and variety of venues

Ø      High standards of service amongst UK conference organisers

Ø      Strength of British science and medicine - British academics regularly hold key positions within the decision-making Boards of the associations

Ø      Ease and speed of VAT reclaim

Ø      English language which is now the language of choice for international meetings

Ø      The UK is one of the most attractive destinations culturally for international delegates, ensuring that congresses held in the UK are better attended and more profitable than those held elsewhere.

  

The fact that the UK has not adopted the European single currency is a setback in that organising events in the UK can become more expensive with currency transaction bank charges. There is a school of thought that the UK is perceived to be not part of Europe. The Business Tourism Partnership is working to encourage a more collaborative and cohesive approach to winning more international association conferences, particularly through the involvement of British embassies and consulates, British Council offices overseas, British Tourist Authority staff and key Government departments in the UK in the research and bidding processes. (Bowerman, 2004) Trade exhibitions are those exhibitions aimed primarily at those working within a particular trade sector. Visitors are usually required to establish their bona fides exhibitions are a combination of trade and public exhibitions, which are organised to attract both types of visitors. The exhibition sector consists of three main groups: organisers of the exhibitions, the venues where the exhibitions are held, and those businesses contracted by the organisers and/or exhibitors to supply services for/at the exhibition. The UK hosts a significant number of these events. (Bowerman, 2004) Aside, UK’s exhibition industry is regarded for its design, presentation and entrepreneurial skills. The direct and indirect spend by exhibition organisers, exhibitors and visitors to exhibitions results in useful economic profits for the society and its people.

 

CONCLUSION

 In conclusion therefore, it can be said that a UK exhibition that attracts just 1,500 international business visitors would contribute over £1.2 million in direct spend to the economy solely through its international business visitor component. As certain figures from the British Tourist Authority (BTA) show that in 2001 the UK exhibition industry attracted 207,000 overseas visitors. In addition, exhibitions play a vital role in the UK economy in generating exports. Many exhibitions held in the UK have established themselves as a strong base for international trade. Exhibitions then build product branding, strengthen existing customer relationships, produce high quality leads, educate, have applications for market research, generate media coverage and are often used to launch new products and has a vital role in the marketing mix offering a wide range of benefits. Exhibitions provide a cost-effective competitive platform for Small and Medium-Sized Enterprises (SMEs) to promote and sell their products and services, enabling many SMEs to establish themselves in the marketplace and, through international visitor attendance at exhibitions, often providing SMEs with their first openings to export markets. (Advertising Association’s Advertising Statistics Yearbook)

 

June 01, 2009

RETAIL AND BREWING INDUSTRY

Retail and Brewing Industry

 

            The essay is all about the critical issues on the supply chains of the retail and brewing industry. As an introduction, retail and brewing industry are defined together with its unique characteristics that differentiate them from each other. The issues, together with significant facts, followed the introduction. A conclusion finalizes the said topic at the end of the essay.

The Retail Industry 

The retail industry involves the sale of new or used goods to final consumers for personal or household consumption. It also includes the repair of household equipment or motor vehicles.

Most retailers employ fewer than twenty staff and are largely in the furniture/house wares/appliances stores sector, the recreational goods stores sector and specialized food (including take-away foods) sector. Larger retailers, employing two hundred people or more, operate in the clothing and soft goods sector, supermarket/grocery stores sector and department stores sector. About forty four thousand of the people employed in the industry are working proprietors and partners.

A Look at the Brewing Industry

A brewery, on the other hand, means any establishment made for the manufacture of malt liquors, such as beer and ale. Typically a brewery is divided into distinct sections, with each section reserved for one part of the brewing process. Breweries can take up multiple city blocks, or be a collection of equipment in a home brewer’s kitchen. The diversity of size in breweries is matched by the diversity of processes, degrees of automation, and kinds of beer produced in breweries. Brewing industry, therefore, is any industry involved in the brewing activity. Brewing is the production of alcoholic beverages and alcohol fuel through fermentation. This is the method used in beer production, although the term can be used for other drinks such as sake, mead and wine. The term is also sometimes used to refer to any chemical mixing process.

Key Retail Industry Issues

Retailers focused on supply chain efficiency in order to stay competitive, according to research by the NRF Foundation and Bearing Point, Inc. unveiled at the NRF Annual Convention and EXPO in New York. The study, ":  for 2004,  for 2005," revealed that the majority of retailers cite supply chain optimization as a priority initiative for getting closer to the customer.

In today's competitive environment, retailers understand the importance of leveraging their customer information. Shopping data collected from the store level can be leveraged as valuable real time data and shared throughout a retailer's supply chain network of suppliers, factories and distribution centers to meet anticipated product demand.

Other key findings of the study include the fact that almost twenty five percent of retailers plan for half of their merchandise assortments to be private label. In the next twelve months, more than half of retailers (57%) plan to replace or upgrade their point-of-sale systems. While thirty eight percent of retailers will focus on domestic expansion, seventeen percent will focus on international expansion. This year, thirty three percent of retailers will focus on redesign and relocation of stores. More than one in five retailers (21%) list outsourcing as a priority for 2005.

Retailers realize that in order to improve their businesses, it is important for them to reinvest in new technologies and programs. This was according to the NRF President and CEO . Consumers are rewarding retailers who utilize resources to feature new merchandise, new technology, and new ideas.

The study also includes suggestions of several approaches for retailers’ use to provide competitive advantage and generate robust prospects for profitability. First is to create true supply chain visibility with a synchronized demand network that eases inventory pain by providing trading partners with optimal flow through of product and near-real time sharing of forecasts and demand signal. Second, link disparate systems for common connectivity to aid in retailers' streamlining of operations. Targeting and segregating of high-value customers from low-and no-value customers and providing the right combination of product and services to earn loyalty is also of great help.

Brewing Industry Issues

            Brewing is almost certainly the most ancient manufacturing art known to men, and is probably as old as agriculture. Today the global beer market is worth USD 266.1 billion and is said to reach a value of USD 290 billion in 2008, which indicates that this age-old product is far from being out of fashion today and still registers growth. The value chain of the brewing industry today however is under a lot of pressure. Regulatory compliance, global competition, emerging new markets in Eastern Europe and Asia versus traditional and mature markets in Europe and the US, and finally shifting consumer patterns are heavily influencing this traditional industry.

Needless to say that these factors play an important role in the brewing business and that they are forcing manufacturers to consider various investments that enables them to face these challenges. Choices on brand strategies, mergers and acquisitions, costs reductions and investments/divestments are reshaping the traditional value chain were the focus always was on the brewing process and the primary quality of the beer. As such we see the value chain slowly shifting towards a focus on supply chain and filling & packaging, implicating that flexibility, time to market and managing costs are the keys.

The key issues in the brewing industry are on market dynamics, global or distributed manufacturing, regulatory requirements, and on marketing & RFID Technology.

With regards to market dynamics, it says that growth, through consolidation, gives brewers greater efficiencies and economies of scale. It also increases utilization of industry capacity. Globalization gives brewers the opportunity to expand into markets with more growth potential than their own backyards. Shifts are seen from mature markets towards China, India or Latin America where the increasing standard of living and increasing population will lead to greater alcoholic beverage consumption. In the mature local markets, changing consumption patterns require brand management and manufacturing optimization as prices are under pressure. Introductions of low-carb beers, mix beers and innovative packaging addressed consumers "value of life" and increases sales of premium brands. As a result, beer manufacturers are challenged to adapt to new markets and consumer behaviors while dealing with pressure on prices and risk of declining brand awareness.

On the global or distributed manufacturing issue, the current market situation demands a good manufacturing strategy. Producing in several locations using economies of scale, low cost operations are keys to secure market share. Furthermore, supply chain and marketing are putting demands on manufacturing facilities that require more flexibility and transparency into the plant. After many mergers & acquisitions and as a result of the autonomy of the local plants, many enterprises that now are focusing on consolidation, visibility and efficiency of their production capacity are confronted however with many applications and systems in the different manufacturing locations. As a result, beer manufacturers are challenged to standardize systems and procedures in order to obtain plant visibility, which enables focusing on low costs operations and economies of scale.

Today's brewers operate in a complex public policy environment. Legislative, regulatory, and social challenges can directly affect brewers' day-to-day business activities and their outlook for the future. Kyoto treaty and local energy reduction programs require breweries to optimize processes and procedures. European Union’s Packaging and waste directive specifies high amounts of recycling to be achieved. Traceability in perspective of the EU Food Law and US Bio-Terrorism Act require big investments in automation and IT projects.

Corporate marketing strategies are driven by global branding and increasing product diversification. Smart RFID labels become cheaper and have big potential in addressing customer service, cost reductions, counterfeiting, asset management, etc.

Conclusion

            Retail trade sector comprises establishments primarily engaged in retailing merchandise, generally without transformation, and rendering services incidental to the sale of merchandise. The retailing process is the final step in the distribution of merchandise. Retailers are therefore organized to sell merchandise in small quantities to the general public. It is opposite to the case of the brewing industry. In here, it is the initial step in the process of making a product, example is the beer. That is why a deeper understanding of their unique characteristics and differentiation from each other makes it easier to determine solutions to the issues involving the two industries.

 

 

 

References

May 28, 2009

MARKET STRUCTURES OF CHINA

Major Factor and Cause of Existence

Perfect Competition (Agricultural Sector)

            Implicitly divulged by Xinhua News Agency (2002), China government is the actor that primarily ignites the existence of an independent and active agricultural industry.  Specifically explained, the move released regionalization of agricultural output and ended the historical separation of value chain activities which prohibited farmers selling their products or creating their own raw materials.  At present, integration is pushed to most part of the country.  The method also includes the existence of agribusiness firms, mostly in coastal areas, initially numbered at 3,000.  They are responsible of providing needed information to all farmers that has yet to enjoy the promise of economies of scale when producing in an informed manner.  In this support, agricultural workers were transformed to a farmer-entrepreneur.  No more problems on where to source out expensive farm inputs because the state-owned firms provided them most of the supply.  In addition, the agribusiness firms bought any output, similar to contract growing, so that the farmer has no worries on where to market its products.  Lastly, technology transfer for quality output was made available including training to upgrade skills and knowledge on the usage of new developed technologies.

            The state’s role is aimed to create an environment that would make the agricultural sector competitive.  The incentives of farmer-entrepreneur under the scheme served as motivation to produce at highest quality.  Otherwise, their output would not be purchased by the state-firms or will be priced in an inferior manner.  The hidden agenda is to make them competitive and take whatever pricing the state firms deemed necessary.  Obviously, pricing within state standards would result to a uniform pricing strategy.  Perfect competition is needed to bring out the best from the farmer-participants that will make long-term success to China through foreign investment and export. 

A 1995 book written by Lester Brown asked, “Who will feed China?” The question is rather a challenge to their government.  With a population that topped most of the food consumption statistics, China needs to produce quality products in order to gain international acceptance of their exports.  With this, the agribusiness firms are situated in such a way that it will prove to the foreigners that their food is worth buying, producing and consuming.              

 

Monopoly (Shanghai’s Dairy Giant)

The Shanghai Dairy Group Company (SDG) has a number of factors that made it a monopoly in the dairy market of Shanghai.  Cited by Helsell (1997), it owns the crucial and important factors of production.  It sourced out 60-70 percent of its inputs from its wholly owned subsidiary farms.  Although the remaining 30-40 percent is produced through sub-contracting, the provision of technology and training to the contractors established harmonious relationship that built the backbone of loyalty between the company and the small producers.  With these two examples, inputs are generally incorruptible from the hands of the dairy giant. 

The facts stated in the report had grabbed advantages for the firm. Economies of scope stemmed at the nationwide sales network of the company created the incentive to produce lower cost of additional output unlike other small firms.  Also, the ownership of a milk and milk powder production bases added the uniqueness of the integration supremacy of the firm.  In China, milk is not popular historically.  This fact made disincentives for other firms to construct milk factories.  However, Shanghai Dairy Group thought beyond short-term profitability which the later converted into market power.  Lastly, to finalize the large integration network of the firm, it also owns storage companies, distribution companies and retail stores saturating the market at all levels (Helsell 1997). 

This power inherent to the company made it formidable in competition.  Seemingly, it could wipe out any competition that would dare its market leadership especially in Shanghai area.  The experience in the sector, knowledge of Shanghai market preferences, integration strategies, relationship with contractors and 5,000 level of labor force, it could be hard for new entrants to share the pie with the firm.  To note, although substitutes are present in the market, it accounted to a minimal 5% which probably settled through highly differentiated dairy products or those produced for a specific market segment like high-end consumers, certain manufacturing company and export requirement (Helsell 1997).

 

Monopolistic Competition (Foreign Fast Food Firms)

Although China is gifted with wide agricultural land and enormous labor force, it needs the penetration of the Western investors for western plate experience among others like fried chicken, pizza and other fast food offerings.  These areas were not yet tapped by the country that was presently limited in the traditional noodle and tea restaurants and expensive five star dining (Hatfield 1997).  This made several foreign investors successful.  Most of them produced variety of foods to offer at reasonable prices.  As mentioned in Business Wire (2001), Kentucky Fried Chicken is named as the “as powerful and growing brand in China” and also considered as the most popular international brand.  Its prominence, however, is limited to fried chicken because pizza belongs to Pizza Hut and Papa John (Business Wire 2005).  Although the two are known players in the fast food industry, KFC dilemma is also their major constraint to saturate all line of products in a fast food chain. 

According to Sloman and Sutcliffe (2001), monopolistic competition is comparable to perfect competition aside from the heterogeneous product offerings within the industry that somehow gives firms the capability to increase the price of its products and services.  The fierce competitor of KFC in China is McDonalds (Hatfield 1997).  The latter has variety of prominent products that appealed greatly to the Chinese community like French fries which was accounted to increase the demand of potatoes from United States for years to come. Also the report explained, Mos Burger from Japan targeted the hamburger consumption allowing it to gather most of its sales through hamburgers.  In the pizza services area, Pizza hut and Papa John are considered close competitions (Business Wire 2005).  The former offers relatively expensive menus because of the extra-ingredient added like the stuff crust (Mallas 2005) while the other based on quality and strategic locations of its branches within cities (Business Wire 2005).  Similarly other fast food firms, mostly foreign investors, are increasing in number in the country like Ronghua Chicken, California Fried Chicken, Care de Coral, Tieban Steak, Chalon and Hartz (Hatfield 1997).  Their entrance to the market is characterized by perfect competition but rather their products are several.  From this, they select the line of product(s) where they could gain competitive advantage from others.     

The increase in competition to exploit the expensive and limited traditional cuisines of most Chinese restaurants is largely caused by the loose intervention of the government against free-trade.  Consequently, monopolistic competition was the resulting product because foreign firms wanted to concentrate on one area of food service to prevent direct competition to a more established firms like KFC which penetrated the borders as early as 1987 (Business Wire 2001).  With such tactic, its product offerings gained added premium that somehow granted its control over price.  Added to the fast food business incentive is the concentration to a specific product, not totally withdrawing the line of homogenous offerings the same as industry competitors like beverages and desserts, by which marketing expenses are minimized in favor of the dearest product or service offering.     

 Oligopoly (Former State-Owned Communications Giant)

According to China Telecom (2001), the entry of China Railcom in the communications industry had toppled the prices of local and international calls including installation charges to low levels.  The decrease of its prices affected the pricing of contemporary few players like China Unicom, Ji-Tong Communications, China Netcom, and China Telecom.  Since the intent of the new entrant is to cut the national average with ten percent decrease in local calls and twenty percent in overseas calls, it signaled the need for other players to bring down prices.  It is no wonder that China Railcom had the liquidity and infrastructure capability because it was a former division of Ministry of Railways (M2 Presswire).  From the sole responsibility to provide communication services to the rail transportation industry, the company was grated authorization to serve the general public on 2001.

The eminent competitive advantages of China Railcom are derived from the heavy investment of the government during its inception.  Because of this, the characteristic of an oligopoly market to bar a potential entrant (Sloman & Sutcliffe 2001) did not affect the established infrastructures of China Railcom to penetrate the market.  It was also exempted to pursue heavy marketing to be known in the market.  The desirable qualities and requirements were inherited since its creation by the state.  Added to its intrinsic capabilities, it also offers a wide variety of communications services like fax, telegraph, network resource lease, public data transmission, Internet access, and wireless paging (M2 Presswire 2003).  The internet provision of the firm was strengthened by its venture with Riverstone that made possible the upgrade of virtual services for several cities for audio to video offerings.

Just like other market structure, oligopoly in China is manipulated by the government.  The move to privatize Railcom created a tacit collusion in which rivals in the industry were forced to react to the price leader other than other factors that could ignite competition like quality issues (Sloman & Sutcliffe 2001).  Formerly, the market of the firm is limited to the rail transport hindering its market power by the countervailing power innate to a single consumer.  But as it went public, the government investments poured to establish its railway connections that made it one of the largest telecommunication’s networks in China paid off.  Although threatening to the profitability of other oligopoly players, the entrance of Railcom produced positive gains for the public for low cost communication service.  Probably, this is one of the major reasons the government decided to privatize the formerly state-owned firm.                 

 Economic Efficiency, Equity Outcomes and the Role of the Government

            Using Economics for Business 2nd Edition of Sloman and Sutcliffe 2001 as reference, the following findings and conclusions are attained with the aid of the above examples.

            From all the market structures, oligopoly is the most consumer-friendly.  Unlike in competition structures, there are several numbers of firms which the consumer would try to select the most significant value-adding products/ services.  The broader the market players, the greater the consumers’ effort to pin point the low cost or quality leader which could be limited and not attained because of transaction costs.  The position of China Railcom as former state-owned communications provider not only instituted its brand name in the minds of the population but also created its low-cost capabilities and prosperous infrastructures.  To maximize the important role of oligopoly, the government should try to multiply several examples of Railcom for the benefit of the local people on basic necessities and utilities.  In return, this strategy should guard private firms within the industry that would eventually resist the diminishing profits due to low prices and thus withdraw its investments.

            On the other hand, perfect competition has biggest impact for a firm to become efficient at levels of value chain.  Unlike oligopoly and monopoly, perfect competition assures the existence of invisible hand in the free-market.  This means that no one could control the prices of commodities that signal the basic cause of competitive advantage, at least in price, which is producing at the lowest possible cost.  The idea posts maximization of factors of production.  As a result, the macroeconomic status of a country would reach its maximum potential.  Since natural or synthetic inputs are properly used, there is high occurrence of local surplus that could penetrate foreign markets.  However, the government must guard exploitation of natural resources especially the bodies of land and water.  To note, several explorations of mining industry had caused soil erosions.  These abusive acts could result not only of several positive returns but also negative externalities that could hurt the industry in the long run.

            Third, monopolistic competition could be considered the catalyst of innovation in the market.  The desire of the firm to take advantage of a discovered technology or other business improvements could make the industry survive in the long run with different line of products and services to offer.  For a consumer, every breakthrough is undoubtedly crucial to their everyday life.  In addition, the emergence of information technology firms supplied the requirement of every industry to attain efficiency at work.  The importance of innovation is countless and has no boundaries.  Fast food chains tend to be creative and more customer-oriented through this kind of market structure.  In this case, the government should be strict on patents to avoid disincentive for innovative ventures like research and development endeavors of firms.

            Lastly, monopoly is considered the least beneficial market structure in a macroeconomic view.  It brings down efficiency and innovation because it is unguarded and free from the competition.  Because of this, consumer-friendliness is unlikely to result because the control in prices could result to selfish acts to recoup investments or gain more.  Consequently, the government should guard if not make this market structure an oligopoly. .               

 

May 22, 2009

The Forming of Job Insecurity in Taiwan

Abstract

Keywords:  job insecurity, financial system, financial destabilization, tendency of globalization, job satisfaction.

            In recent years, situation in Taiwan draws a study from the idea of job insecurity with the focus of research on financial industry circumstances.  This research documented certain analysis of the existing financial system in Taiwan.  Furthermore, a more useful and reliable interviews were conducted to the people concern. 

            The what-is-called “revolution of the bowls” is an apparent concept relevant to this issue.  The said revolution caused a historic strike on banking employees since it triggers economic and financial destabilization. 

In explaining its perception on the present condition of Taiwan’s financial employment, job insecurity is directly linked to region’s tendency of globalization.  However, this study also pushed an item that proved that globalization has nothing to do with job insecurity.  Instead, this has something to do with the capitalistic competition logic that required all banking and financial workers to abide by the preset rules. 

The study also blamed on the undesirable employment practices in the domestic area.  Although reforms after reforms have been developed to promote job satisfaction and security, the weak employment benefits for financial workers is found to be also responsible.   

Introduction

Overview of the Financial System in Taiwan

            Taiwan has a varied financial system encompassed of many types of financial markets and institutions.  The financial system apportions insufficient financial resources between the suppliers and users of capital or money through a complex web of financial markets and institutions. 

The most important financial markets in Taiwan include the banking and insurance markets, the money market, the capital market, and the foreign-exchange market. These markets essentially enable savers to lend or invest their excess funds and users to borrow or issue 'securities' to acquire these funds. The banking market enables banks as financial depository intermediaries to collect deposits from lenders, which are, in turn, re-lent to borrowers. The insurance market enables insurance companies as non-depository intermediaries to collect funds from lenders who through insurance premiums seek protection against untoward and specifically unpredictable financial losses and through annuities and different types of insurance premiums accumulate savings; these funds are lent to borrowers through loans and investments in their bonds and equities. The money market is a market where securities with maturities with one year or less, such as treasury bills, bankers' acceptances, negotiable certificates of deposit and commercial paper, are issued by the CBC, banks, and corporations, and purchased by investors, such as corporations and financial institutions, all on the primary market, and traded by these investors and issuers on the secondary market. The capital market is a market where securities with maturities of more than one year, such as corporate equities and corporate and government bonds, are issued on the primary market by corporations and governments to investors, and on the secondary market traded by these investors and issuers. The foreign-exchange market is a market where foreign currencies and the $NT are traded, as its participants adjust their holdings of foreign currencies and the $NT for capital and trade transactions (Semkov 1994).

Taiwan has a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by government authorities. In keeping with this trend, some large government-owned banks and industrial firms are being privatized (www.cia.gov).

Purpose of the Study

            This paper aims at understanding the causes of the formation of job insecurity taking into account the tendency of Taiwan in the globalization campaign.  This also raises some findings on the effects of globalization to employment which directly concerns Taiwan recently and suggests measures for counteracting the issue.  Specifically, this article focuses on the Financial Industry sector. 

Banking and Finance

            As of 2004, Taiwan had 45 domestic banks, five medium-size business banks, 36 foreign banks, 35 credit cooperatives, 253 farmers' credit unions, and 25 fishermen's credit unions. "Since the mid-1980s," reports the U.S. Department of Commerce, "the financial sector as a whole has been steadily opening to private investment. Nevertheless, the market share held by foreign banks remains relatively small (below three percent). The establishment of new securities firms, banks, insurance companies, and holding companies, has underscored this liberalization trend and enhanced competition. Four large state-owned banks were privatized in early 1998, and another four sold to the private sector in 1999. The only reinsurance company was privatized in 2002. Privatization efforts have reduced the number of public banks to five and cut the share of assets controlled by public banks from 61 percent to 21 percent of total assets of all domestic and foreign banks." Based on evidence that, despite progress in privatization, the government still has a substantial role in the banking sector, Taiwan's banking and finance score is 1 point worse this year (www.heritage.org).

            Taiwan’s financial situation in 2001 was a turning point. The domestic economy experienced its first recession ever since the central government’s move to Taiwan in 1949 due to deteriorating external factors and worsening problems in the domestic financial structure. A sluggish global economy and weak demand in the IT sector led to substantial declines in foreign trade as both domestic demand and production suffered. At the same time, the domestic economy’s financial sector also deteriorated due to worsening non-performing loan problems caused by declining stock market performance and rising unemployment (www.gio.gov.tw).

Taiwan banks moving to China

            With the approval of a finance ministry of China, Taiwan banks are allowed to conduct businesses with their counterparts in China.  This goes along with the growing unemployment in Taiwan.  The main purpose of such revision is to help Offshore Banking Units develop a capital management center for overseas Taiwanese businesses.  Additionally, the revision also encouraged Taiwanese businesses to remit proceeds from their China investments back to Taiwan.  In the course of mounting calls for liberalization by local industries eager to penetrate the vast China market, Taiwan had planned to relax the policy.  Consequently, the economic downturn and high unemployment has put the brakes on plans to quickly liberalize trade and investments with China. 

            Many companies in Taiwan have been moved to Mainland China for the simple reason that the Mainland China has greatly promoted its economy.  Companies in Taiwan have been closed or downsized that resulted in a job insecurity to a tremendous number of employees recently.  Taiwan’s economy loses ground more drastically with an increasing rate of unemployment.  Many government–managed companies have been handed over to the private enterprise.  This has been what is being implied as the “revolution of the bowl” being now at a state of its worst case – the “broken bowl”.  It greatly affected and threatened employees under organization change context that breeds job insecurity. 

Job Insecurity and Globalization

            The process of globalization has produced concern among the public in terms of its possible effects on job security even though evidence differs.  But how does globalization affect or creates employment insecurity?  An initial answer to this is that global processes apparently do have the potential to shift production and work making employment more insecure.  The globalization of production means that more employment becomes dependent on the contingencies of a more mobile and easily restructured capital base, generating a new source of insecurity in employment beyond national business and policy cycles.  Secondly, global processes are perceived to generate job insecurity because of their distance from their consequences.  Giddens define globalization as the intensification of world wide social relations…in such a way that local happenings are determined by events occurring many miles away (Giddens, 1990, p. 64). 

            Since Taiwan is on its way to Globalization Tendency, the region is not an exemption to the impact of globalization to job insecurity.  Apart from the above-mentioned statements on globalization, there are still authors, like Taylor (2002), that defended global trade and asserted that technology and not globalization is responsible for job losses and insecurity.   

 

THE ECONOMY AND UNEMPLOYMENT:

Global or National Problems?

                        Problems in the Economy                            Unemployment

            National          Global             both                National          Global             Both

Phil      36                    38                    25                    54                    28                    17

S. Korea 50               12                    34                    66                    8                      22

Japan 26                   8                      52                    55                    4                      30

China    42                  11                    47                    74                    5                      20

Taiwan 40                 13                    44                    58                    8                      32

(Responses are in “percent” in an interview involving 9,000 Asians.)

Source: Asia and Europe Study (ASES)

 2. Domestic Causes

Taiwan’s pension schemes

·          Relatively lower benefits for employees: lump-sum benefit + DC pension scheme

·          No mandatory pension program for non-employees: National Pension plan

·          Weak dependent-related benefits: no dependent supplement benefit + low survivor benefit (lump-sum)

·          Comprehensive coverage of individual-based allowance schemes: covering over 70% (2003) of aged 65 + population

Recent Pension Development and Reforms

            Taiwan reorganizes and expanded its allowance schemes during 1999 and 2005 reforms. 

Retrenchment in Taiwan Banking Industry

            The retrenchment was caused by the economic slump of Taiwan.  United World Chinese Commercial Bank recently introduced incentives to encourage employees to leave with high severance pay.  Taiwan banking industry has tightened its belt due to the economic slowdown.  Reduction of expenditure of staff and savings will assist in keeping running costs low in response to the economic crash.  Despite the fact that large-scale banks were conducting retrenchment exercises, some medium and small-sized banks began to instigate various projects to lay off its employees.  Taipei Bank is dismissing 200 employees with more than 10-year working experiences that would cut off 200 billion in manpower costs. 

 New expansion and opportunities

            Looking for the right and proper way of counteracting the slump, some banks were exploring new expansion and diversification opportunities.  Such bank as Bank of Overseas Chinese recently introduced a non-financial service.  With its new approach, people who go to Bank of Overseas Chinese for financial business can enjoy the wide-band internet service offered by China Telecom of Taiwan.  The non-financial services aimed at restructuring bank’s services for consumers so as to meet the new challenges after the Taiwan’s entry into the World Trade Organization, noted General Manager Li Wenlong of BOC. 

Prospects for Taiwan's Banking Industry

The Taiwan Institute of Economic Research's banking industry survey of economic prospects for 2002 shows that 64% of the island's bankers are optimistic about the economy while 36% are holding to a conservative attitude.

Favorable Economic Factors

·         The sweeping out of malpractice in the financial industry will maintain financial order.

·         The Financial Institutions Merger Law, Financial Holding Company Law, and Trust Business Law will expand operating space and strengthen competitiveness.

·         The asset management mechanism will improve the overdue-loan situation, and the implementation of securitization will increase the liquidity of capital.

·         If the Legislative Yuan passes the Business Tax Law revision, the business tax for financial institutions will be cut from the current 2% to 0% and the extra profit that banks derive from this reduction will help them to write off bad loans.

·         The increased interest rate on deposit reserves will boost bank profits by an estimated NT$4.8 billion per year.

Unfavorable Economic Factors

·         With the economy in a slump and the stock market weak, domestic demand and the real estate market will deteriorate and overdue loans will increase.

·         With Taiwan's entry into the WTO, foreign banks will come into the domestic market with their advantages of capital and financial innovation, and it will be difficult for domestic banks to compete with them.

·         The rising popularity of direct financing gives companies a short cut to the raising of funds and compresses the space for bank loans.

·         Financial relief measures, the lengthening of repayment terms, and preferential home loans increase operating risk for banks and reduce their interest-rate spread (Ruoqian, 2001).

Financial Reforms Triggers First Banking Strike

            The first time in history of Taiwan’s finance industry that employees called for a strike.  The problem was generated by the failure of the government to reach an agreement that resulted in the withdrawal of offer by the prospective buyer of the Taiwan Business Bank – E. Sun Financial Holdings.  Notwithstanding the government’s policy towards the privatization of state-owned banks and the promotion of banking industry mergers and acquisitions, there still persist a great deal of uncertainty in its second round of financial reforms. 

            Included in the second round financial reform is the cutting of the number of state-owned financial institutions from 12 to 6 by the end of 2005 and the number of financial holding companies be reduced from 14 to seven by the end of next year.  According to Vice Premier Wu Rong-I, the objective of the second round of financial reforms is to encourage Taiwan’s banking industry to consolidate into three to five banks that together will account for at least 80% of the local market.  Wu says that is the only way Taiwan’s banks will be able to joi the ranks of the world’s top 100 banks and acquire enough capital to play on the global stage. 

            From the point of view of bank workers, the Taiwan Business Bank strike is only the first move.  If the union strike is successful in blocking the bank’s privatization, employees at the next consolidation target are likely to follow suit.  In fact, the National Federation of Bank Employees Unions has already put together plans for 16 bank unions to call a "united strike" to demand that the government delay the second round of reforms. It is still difficult to anticipate what will come of the second round of reforms, but further hurdles are certain. Fostering communication and negotiation between managers and workers, keeping the process on the right track, and preventing oligo-polistic market will all be crucial to the reforms' success (Taiwan Panorama).

Conclusion

            Despite the fact that the scale of an organization in Taiwan has been huge and runs for ages, it is not purely the bureaucracy that has to be considered in trying to understand the economic slump but to properly adjust the main structure of the organization that is unfavorable to boost up the competitiveness.

            Placing Taiwan’s financial system on a more solid and strong foundation, necessitates pressing ahead with financial reforms.  These reforms may raise social justice issues which are astoundingly resisted by bank employees.  These matters should be addressed conscientiously. 

 

May 05, 2009

Strategic Management

Introduction

Management of a firm needs strategy, to make sure that everything goes well in the company, through the use of strategic management everything done in the company is well organized and no detail is being left out. The company needs strategic management to make sure that the company is doing well internally. The term strategic management originates from the Greek language, where the word means the art of a general. The person who makes strategies is the strategist who is the leader of an army ( 1991).Strategic management decisions have multi-functional and multi-business consequences, this kind of decision require broad consideration of the firm's external and internal environments, and it may affect the firm’s chance of prosperity. The strategic management paradigm is built on the notion that strategic decision making results from intentional actions in the name of individual or collective purpose.

 

The paradigm accords central importance to the cognitive elements of understanding and intention as basic drivers of strategic choice. Managerial thought is critical to processes of strategy formulation, for example, which require managers to envision and prioritize future states that are appropriate and proper. Similarly, managerial thought is critical to environmental analysis, which requires managers to forecast and make predictions. These tasks all depend on individual cognitive capabilities and on cognitive processes such as attention, perception, reflection, and understanding (1992).  It is important to know what strategy is about, what can it do help the company prosper, what will happen if not used properly, what are the advantages and disadvantages of having a strategy. Strategy is a plan that assimilates the company’s major target; policies and rules; decisions and sequences of action into organized whole. It can apply at all levels of organization and pertain to any of the functional areas of management ( 2000).

 

Strategy is plagued by a stigma of unsystematic reasoning (1988). It is also used in incomplete searches for strategic alternatives, and bounded rationality (1960) influenced this perception. Strategy is a combination of the company’s objectives, policies and decisions to be done in unison or contingent upon each other. Marketing strategy thus refers to how a company’s products or services its trade is presented to consumers in an effective manner as to gain loyal costumers. Strategy can be used in different ways, one of which is through marketing. Using strategy in marketing makes it more convincing and effective. Strategy makes sure that nothing wrong happens in the marketing process in the company.

 

Manufacturing is the process of producing goods that are necessary for modern life from raw materials. The word manufacture comes from the Latin manus which means hand and facere which means to make. Originally manufacturing was accomplished by hand, but most of today's modern manufacturing operations are highly mechanized and automated. There are three main processes involved in virtually all manufacturing: assembly, extraction, and alteration. Assembly is the combination of parts to make a product. For example, an airplane is assembled when the manufacturer puts together the engines, wings, and fuselage. Extraction is the process of removing one or more components from raw materials, such as obtaining gasoline from crude oil. Alteration is modifying or molding raw materials into a final product for example, sawing trees into lumber. Science and engineering are required to develop new products and to create new manufacturing methods, but there are other factors involved in the manufacturing process. Legal matters, such as obtaining operating permits and meeting industrial safety standards, must be adhered to. Economic considerations, such as competition, worldwide markets, and tariffs, control to some degree what prices are set for manufactured goods and what inventories are needed ( 1993).

 

Manufacturing systems today are designed to recycle many of their components. For example, in the automotive industry, excess steel and aluminum can become scrap stock for new metal, rubber tires can be chopped and mixed with asphalt for new roadways, and engine starters can be remanufactured and sold again. Recycling for newer materials, such as composites or combinations of materials designed with superior physical and mechanical properties, has yet to be developed, however. Emission control will be a critical issue for future manufacturers. Smoke scrubbers must remove dangerous gases and particulates from industrial plant discharges, and manufacturing facilities that dump chemicals into rivers must develop methods of eliminating or reusing these waste products (2004). The economically advantageous automated factory has become the norm. Most automobile engines are manufactured using robotic tools and handling systems that deliver the engine to various machining sites. Computers with sophisticated inventory tracking programs make it possible for items to be assembled and delivered at the manufacturing facility only as they are needed. In demand-activated manufacturing, when an item is sold a computer schedules the manufacture of an item to replace the unit sent to the customer. Engineers use computers to help them design new products efficiently. The Boeing 777 jet, for example, was developed in record time by having its entire design and manufacturing systems created on a computer database rather than using traditional blueprints ( 2004). The paper will give a background of Royal Dutch/Shell Group. The paper will also identify problems on operations management or areas of potential improvement associated with the manufacturing process. The paper will also analyze all the relevant aspects of the process that have bearing on the potential improvement or problem. The information gathered will then be used to create a conclusion.

 

Petroleum and the Petroleum Industry           

            Petroleum, or crude oil, naturally occurring oily, bituminous liquid composed of various organic chemicals. It is found in large quantities below the surface of Earth and is used as a fuel and as a raw material in the chemical industry. Modern industrial societies use it primarily to achieve a degree of mobile both on land, at sea, and in the air that was barely imaginable less than 100 years ago. In addition, petroleum and its derivatives are used in the manufacture of medicines and fertilizers, foodstuffs, plastics, building materials, paints, and cloth and to generate electricity. The United States petroleum industry is composed of tens of thousands of separate businesses, covering an enormous range in size, influence, and breadth of operations ( 1959).

 

Its behavior is governed not merely by the profit-seeking activities of these private parties, but also in vital ways by a network of governmental controls, direct and indirect, state and national agencies that regulate output, providing differential tax treatment in the way of special exemptions and levies, fixing prices, limiting international commerce, as well as merely persuading, threatening, or cajoling managers into one course of action or another. This aggregation of separate business entities, thus organized and controlled, is expected to safeguard the national defense, conserve scarce resources, reduce prices, improve quality, expand capacity, and protect the competitive status of thousands of private parties whose interests are often flatly opposed. The diversity of these influences on industry behavior and the complexity of these tests of good and bad performance preclude a simple verdict in assessing the charges and counterclaims of waste and monopoly, conservation and competition that have plagued the industry during the entire course of its history ( 1959).

Modern industrial civilization depends on petroleum and its products; the physical structure and way of life of the suburban communities that surround the great cities are the result of an ample and inexpensive supply of petroleum. In addition, the goals of developing countries to exploit their natural resources and to supply foodstuffs for the mushrooming populations are based on the assumption of petroleum availability. In recent years, however, the worldwide availability of petroleum has steadily declined and its relative cost has increased. Many experts forecast that petroleum will no longer be a common commercial material by the mid-21st century. Petroleum is formed under Earth’s surface by the decomposition of marine organisms. The remains of tiny organisms that live in the sea and, to a lesser extent, those of land organisms that are carried down to the sea in rivers and of plants that grow on the ocean bottoms, this are enmeshed with the fine sands and silts that settle to the bottom in quiet sea basins. Such deposits, which are rich in organic materials, become the source rocks for the generation of crude oil. Once the petroleum forms, it flows upward in Earth’s crust because it has a lower density than the brines that saturate the interstices of the shells, sands, and carbonate rocks that constitute the crust of Earth ( 1959).

 

The crude oil and natural gas rise into the microscopic pores of the coarser sediments lying above. Frequently, the rising material encounters an impermeable shale or dense layer of rock that prevents further migration; the oil has become trapped, and a reservoir of petroleum is formed. A significant amount of the upward-migrating oil, however, does not encounter impermeable rock but instead flows out at the surface of Earth or onto the ocean floor. Surface deposits also include bituminous lakes and escaping natural gas. In order to find crude oil underground, geologists must search for a sedimentary basin in which shales rich in organic material have been buried for a sufficiently long time for petroleum to have formed. The petroleum must also have had an opportunity to migrate into porous traps that are capable of holding large amounts of fluid. The occurrence of crude oil in Earth’s crust is limited both by these conditions, which must be met simultaneously, and by the time span of tens of millions to a hundred million years required for the oil’s formation (1959).

 

Petrochemicals are manufactured from naturally occurring crude oils and gases. Once removed from the earth, the crude oil is refined into gasoline, heating oil, kerosene, plastics, textile fibers, coatings, adhesives, drugs, pesticides, and fertilizers. Crude oil contains thousands of natural organic chemicals. These are separated by distilling, or boiling off, the compounds at different temperatures. Gases such as methane, ethane, and propane are also released. Methane, when combined with nitrogen and pressurized and heated, yields ammonia, an important ingredient in fertilizers. Simple plastic materials, such as polyethylene and polypropylene, are manufactured by first heating ethane and propane gases and then rapidly cooling them to alter their chemical structure ( 1991). One company that explores and makes use of petrochemical as raw material is Royal Dutch/Shell Group.

Royal Dutch/Shell

Royal Dutch/Shell Group is the international producer of petroleum, gas, and chemicals. The Royal Dutch/Shell Group comprises a loose federation of more than 1,700 associated companies controlled by two parent companies: the Shell Transport and Trading Company based in London, England, and the Royal Dutch Petroleum Company, based in The Hague, Netherlands. The Royal Dutch/Shell Group ranks as the world’s second largest oil company, behind Exxon Mobil Corporation, and are the world’s largest petrochemicals company. The company is known for its service stations, its exploration and production of oil and gas both at land and sea, but what is not popularly known is the other things the company do. Shell transports and trade oil, markets natural gas, produces and sells fuel for ships and planes, generates electricity and provide energy efficiency advice. Its logo or emblem the Pecten is 100 years old, it identified Shell’s brand and promoted the company’s corporate reputation. This logo have stood not only for the quality of the company’s products and services but a visible representation of  Shell’s professionalism, and values in all of the company’s business activities and all the stakeholders around the world. 

 

History

The Royal Dutch/Shell Group was formed in 1907 by the merger of the Royal Dutch Petroleum Company with Shell Transport and Trading. Shell Transport began in the 1830s in London as an importer of seashells from East Asia. British importer Marcus Samuel inherited the company in 1870 and developed it into one of the leading shipping and trading enterprises in Asia. He began trading in oil from Russia in the late 19th century and incorporated the company as Shell Transport and Trading in 1898 ( 2000).Royal Dutch Petroleum Company was established by Dutch industrialist  in 1890 in The Hague and began drilling for oil on Sumatra in the Dutch East Indies. Dutch accountant   became chief executive of Royal Dutch in 1901. D strategy of forming alliances led to the creation, with Shell Transport, of the Asiatic Petroleum Company in 1903 and the merger of Royal Dutch and Shell Transport four years later. The Royal Dutch/Shell Group, 60 percent owned by Royal Dutch and 40 percent by Shell Transport, expanded rapidly, developing oil fields in different parts of the world. ( 2000).

 

Number of employees and offices

 As of 2004 the company has 112,000 employees all around the world. They operate in over 140 countries. These countries include Argentina, Bolivia, Brazil, Denmark, France, Germany, Greece, Japan, Kenya, and Kuwait, to name a few.

 

Financial Performance and Major Competitors

The company’s net income in 2004 is $ 18.2 billion. They have asset sales of $7.6 billion. It has invested 10 billion on upstream businesses.  Its financial performance as shown below has improved from 2002 to 2004.

Earnings

 

 

$ Million

 

2004

2003

2002

Income from Continuing Operations

16,623

12,033

9469

Income from Discontinued Operations

1560

25

187

Cumulative effect of a change in accounting principle

 

255

 

Net Income

18,183

12,313

9,656

 

The company’s major competitors include Beyond Petroleum (BP), Exxon Mobil, and Total. Beyond Petroleum is an international petroleum, gas, and chemical company, based in London, England. Formerly known as The British Petroleum Company, the company merged with Amoco Corporation in 1998 and adopted its current name. BP Amoco is one of the world’s largest oil companies. Exxon Mobil is one of the largest oil companies. It was formed in 1999 with the merger of industry giants Exxon Corporation and Mobil Corporation. Exxon Mobil explores for and refines petroleum and natural gas; manufactures petroleum products; sells oil, gas, and petroleum; and operates service stations worldwide.

 

The company is also involved in the chemicals and minerals industries. Its headquarters is in Irving, Texas. Total is one of the largest oil companies in the world, it explores, develops, and produces and crude oil and natural gas. Total also refines and markets oil. Lastly Total transports both crude and finished oil. The company tries to give the best it can to contradict its competitors. The company tries to compete with the above mentioned competitors for leadership in the industry.

Problems on Operation Management

Operations management is the design, operation and improvement of the systems that create and deliver the firm’s primary product and service combinations. Operations management has its origins in the study of production or manufacturing management. These terms still very much apply to manufacturing organizations that will have distinct operational activities that convert say, beans and rich tomato sauce into cans of baked beans to be sold by a retailer. Thus, people can initially think of operations management as being part of a distinct function producing a product and service combination, just like   having marketing and accounting functions in many organizations (2002).Every organization that offers goods or services has an operations activity. As far as the organization structure is concerned, some firms will have a discrete operations function. This might be called a manufacturing department, an operations system, or have no identifiable name at all. However, like marketing and accounting, it is a fundamental function of the firm with professionally trained operations or production managers responsible for conversion of resources into the required product and service combinations. In some organizations such managers will have different titles, a store manager for a retailer, administrative managers within a hospital or distribution managers in a logistics company (2002).

 

Operations management is all about transforming raw inputs in the form of labor, material, and capital into useful goods and services. While output of enterprises is normally depicted as goods and services, there is also waste. Waste adds to costs and detracts from a company's competitive advantage. Waste can be reduced greater efficiency in the production process and by improving quality. If a process has a 10 percent defect rate, then 900 units of output require 1,000 units of input. If the defect rate is reduced to 1 percent, then the output increases 10 percent to 990 units with no change to input Transforming waste into something useful is another way to enhance a company's competitive position. In the United States, heavy users of hot water may install cogeneration plants to produce electricity rather than purchase electricity from electric utilities. Excess electricity production can be sold to public utilities at their average cost. Generally speaking, the rate of return on the investment in selling electricity does not justify a company's dedicating scarce capital resources for a cogeneration plant. The primary advantage of a cogeneration plant to industry is in capturing waste heat in the form of hot water. The savings in not having to purchase energy to heat water swing the economic calculation in favor of cogeneration plants ( 2000).

 

The company gets its raw materials from different sources that have been previously mentioned. The company locates these sources and extracts the raw materials from it. After which the next thing done is for the company to process the said materials in different plants it has so that it can be used by consumers.  In operations management different problems and concerns can come out. These problems include. Safety of materials transported, security of the plants, safety measures while production, problems among personnel, and financial problems. In operation management one problem is safety of the materials transported. When materials are transported it might encounter accidents or man made calamities. The company tries to make sure that none would happen but there are instances where such problems still occur. Another problem for operations management is security of plants. In these times security threats can be common for businesses, people due to different reasons can cause business operations to fail through destroying plants and other business facilities. The company has a tight security guarding plants and other facilities but sometimes people who want to commit harm to the company eludes such security thus causing problems.

 

Moreover a problem for operations management is safety measures while in the production stage. Just like in transporting products problems might be encountered during production wherein personnel can encounter accidents and health problems. A problem for operations management is personnel concerns. During business operations one problem that can come out is concerning personnel. Some personnel may want more salary or other benefits from the company. Other personnel may be the ones who are not doing their job well thus causing other problems. Lastly a problem for operations management is finances. There comes a time when doing business operations the company’s budget may be a problem. The company’s budget may take some time before it can reach them.

Aspect in the process that can lead to Improvement

The goal behind improving development's links with business is to obtain improvement for the employing organization, for the business world in general, and for the society that is impacted by business and upon which business depends. Achieving these goals requires strategies beyond those that focus on developing the individual in isolation.  Self-development methods are now sometimes perceived as all very well for personal growth, but as less functional for moving forward the organization. The same point can be found embedded in the useful distinction between manager development and management development. The former can include all manner of educational and training experiences which enhance the individual. The latter more directly impacts on the functional capability of the managerial stock as a whole, and improves the collective management performance in a manner relevant to business needs. Weaknesses in the popular model have long been understood. Individually oriented strategies of change, such as training, are not effective in bringing about organizational change (2004).

 

This is due to at least three basic problems. The first relates to the age-old issue in training transfer of learning. The simple fact that most training occurs in a location other than the individual's work space produces the problem of recreating the training milieu and learning back on the job. Critical mass is a second problem. How many people must one train to obtain the desired impact on the organization? A third problem relates to the social psychological principle that individual behavior in group context is considerably shaped and regulated by social norms. Individual training often requires individual deviance from accepted norms. Trainers do not understand that groups are easier to change than individuals. Training should facilitate change, not attempt to provide it. Attempts to change organizations by changing individuals have a long history of theoretical inadequacy and practical failure. Both stem from a disregard of the systemic properties of organizations and from the confusion of individual changes with modification in organizational variables (2004). In the process of creating the product one aspect that can have bearing on the improvement or solving the problem is using the best personnel and most behaved personnel to accomplish such task. These personnel can create changes and improvements that can last for a long time.  The personnel are the ones who make results in the process and hiring the best ones tend to make solutions to problems. Another aspect that can that can have bearing on the improvement or solving the problem is adding more rules that can guide the personnel on how to do certain things and how to work safely.

 

Conclusion

Manufacturing is the process of producing goods that are necessary for modern life from raw materials. Petrochemicals are manufactured from naturally occurring crude oils and gases. Royal Dutch/Shell Group is the international producer of petroleum, gas, and chemicals. People can initially think of operations management as being part of a distinct function producing a product and service combination, just like   having marketing and accounting functions in many organizations. In operations management different problems and concerns can come out. These problems include. Safety of materials transported, security of the plants, safety measures while production, problems among personnel, and financial problems. The goal behind improving development's links with business is to obtain improvement for the employing organization, for the business world in general, and for the society that is impacted by business and upon which business depends. Improvement can be done by focusing on certain aspects of the process that can be changed.

 

April 23, 2009

INFRASTRUCTURE AND DEVELOPMENT: MACROECONOMIC IMPACT OF INFRASTRUCTURE ON DEVELOPMENT IN DEVELOPING COUNTRIES

INFRASTRUCTURE AND DEVELOPMENT: MACROECONOMIC IMPACT OF INFRASTRUCTURE ON DEVELOPMENT IN DEVELOPING COUNTRIES

 

 

PROBLEM STATEMENT

 

          Infrastructures are defined as the framework of interdependent networks and systems comprising identifiable industries, institutions (including people and procedures), and distribution capabilities that provide a reliable flow of products and services (2003). To put in simple words, they are the basic facilities, services, and installations needed for the functioning of a community or society, such as transportation and communications systems, water and power lines, and public institutions including schools, post offices, and prisons. Infrastructures are important for every citizen because they define the standards of living and the quality of life that citizens experience. For instance, without adequate energy infrastructures, there would be poor supply of electricity. The same goes with inadequate water provisions, transport, communication, and basic infrastructure systems such as hospitals, schools, city halls, banks, libraries, etc. Without those infrastructures, progress will be slow and the quality of life degraded. Their importance can be reflected by mere common sense as without them, progress will be difficult to achieve. Can you imagine a society without any transportation infrastructures? Such a situation will be quite a hassle to motorists since there will be no roads to move their vehicles into. A society without water and electricity provisions can also be a difficult situation since water and electricity are two necessities that are important factors for a progressive society. Without schools, only few will be able to get education and the standard of such would be greatly degraded. Infrastructures do not only provide the buildings where a specific or many functions can take place but they also create the opportunity to develop and implement systems to which the functions can be implemented more effectively.

The importance of infrastructures in development has been exemplified in various developed countries. The United States, United Kingdom, Japan and a few others lead the way globally in terms of quality of life and standard of living because of their basic and advanced infrastructures. Infrastructures are symbols of development, and with it, many new innovations and systems can be created. Both public and private infrastructures contribute to the economic and social processes of a nation. For instance, the macroeconomic impact of transportation infrastructure investments is promising as it can creates jobs while boosting industry competitiveness and productivity, enhances household wellbeing, strengthens local, regional, and state economies, boost state tax revenues, facilitates business and leisure travel, reduce economic losses associated with crashes, and reduce economic losses associated with congestion ( 2003). The importance of an urban rail system was also proven by previous studies ( 1990; 1992; 1994; 1994; 1996) as such infrastructure system can attain a high patronage, or at least match the forecast patronage on the system, can be cost-effective in terms of building and operating the system, can increase public transport usage, can prevent or solve the problems of traffic congestion and environmental pollution, and can improve the land-use and urban growth patterns.

On the other hand, the construction of infrastructures for a water system is also important since water and sewer services require extensive underground pipe systems to deliver (2000). Furthermore, infrastructures help greatly in water management ( 2000). The importance of proper management of water is greatly emphasized by the fact that it is a conduit for diseases, and sewage, if not properly removed and disposed of, becomes a public nuisance and can contaminate ground water and other supply sources, leading to outbreaks and epidemics ( 2000). Waterworks is also important for the sewage system as it tends to contaminate the local sources of water supply. Contamination cannot be removed except by means of a public system of water works (2000).

Similarly, electricity provisions are as important as water provisions to the community.  (2002) conducted a study that aims to measure the impact of community electrification in Dhaka, Bangladesh since 1978 and found positive results. The electrification of the community for over two decades resulted in series of growth including higher family income that is 65 % higher than for non-electrified villages. The study also found that an exact 16 % of annual income of electrified households is attributed to electricity. In terms of employment,  (2002) also found that electrified local industries employ 11 times as many workers as non-electrified industries. Furthermore, literacy rate was 71 % for electrified villages compared to 56 % for villages without electricity. Also, human health was improved as exemplified by the infant mortality reported in the study: there was 43/1000 for electrified households compared to 58/1000 for households without electricity. Immunization was 61 % compared to 37 % for non-electrified villages. Finally, electricity also contributed to empowerment of women, and it significantly improved agricultural and industrial productivity and stimulated commercial activities (2002).

This paper argues that infrastructure is an important factor for development in both developed and developing countries. Developed countries are actual examples of its importance while developing countries emphasize its importance through their different experiences. Different types of infrastructures can bring different macroeconomic impact to the community. For instance, the study cited above on electricity shows that its provision is greatly linked with the social and economic progress of a community. The study shows its importance to a Third World country such as Bangladesh. However, it alone does not provide the whole picture of the importance of infrastructure to community development. There are many types of infrastructures and there are many developing countries to investigate. Thus, this current study will try to look in a broader perspective and will try to provide an overview of the macroeconomic impact of infrastructures on the development of developing countries. The study will focus on important infrastructures such as roads, rails, and water and electricity provisions. It will investigate two developing countries, namely Nigeria and the Philippines. Only two countries were chosen to be investigated because of time constraint, financial limitations and limited availability of resources. However, it is expected that by investigating these two countries, new and useful insights about the macroeconomic impact of development in developing countries can be unraveled and learned.

 

OBJECTIVES OF THE STUDY

 

            The aim of the study is to determine the macroeconomic impact of key infrastructures (i.e. roads, rails, energy and transportation) on the development of developing countries, specifically Nigeria and the Philippines. The plan is to choose two provinces for each country: one which has recently been provided with basic infrastructures such as those mentioned above; and one that have none of those infrastructures. Several key points will be determined such as: Quality of life; and Economic growth. Quality of life includes the increase of use of technologies that require the basic infrastructures mentioned above, but also improves the way of living of citizens within the community. The quality of life variables that will be measured in the study include: the use of sufficient land transportation system; the citizens have access to pollutant-free drinking water; the use of innovative tools in fetching or storing water; decrease of disease; increase of immunization; the use of electricity-required technologies such as televisions, radios, light bulbs, etc.; and the quickness of traveling from one place to another within the community. On the other hand, the economic growth will be measured in variables similar to what (2002) measured, which are: the increase of family income; the increase of annual income of electrified households; improvement of agricultural and industrial productivity and commercial activities; and increase of employment; increase of literacy rate; and the increase of education.

            In sum, this study will conduct the following:

Ø      Review the economy the provinces from the 1980 up to the present.

Ø      Interview and survey present citizens about their different experiences related to the infrastructures featured in this study.

Ø      Pinpoint specific quality of life and economic improvements of the community since 1980.

Ø      Analyze and conclude if infrastructures such as roads, rails, and water and electricity provisions have positive macroeconomic impact on the communities.

The following are the specific objectives of the study:

Ø      To compare the quality of life and economic growth of a community with infrastructures such as roads, rails, water and electricity provisions to a community without any or lack of one or more of those infrastructures mentioned above.

Ø      To help emphasize the importance of infrastructure investments in developing countries.

Ø      To learn the specific macroeconomic effects of infrastructures in developing countries.

Ø      To descriptively provide information about the impact of infrastructure to help in the development of theories and practices related to the topic.

It is hoped that through this study, the quality of life and economy of a developing country’s community existing with specific infrastructures will be accurately compared with one without any existing infrastructure systems.

 

SIGNIFICANCE OF THE STUDY

 

            The study is significant to OEDC and other developing countries because it may emphasize to them the importance of investing in key infrastructures such as rails, roads, water systems, and electricity systems. The results may show a good comparison of communities with infrastructures to those without, which may be a key point in influencing local government officials in developing countries to build strategies on how such infrastructure community demands can be met.

            The study is also significant to citizens of the developing countries that will be covered because as it may influence the development of infrastructures in their community, their quality of life may be improved.

            Overall, the study will be important as it will provide an overview of how infrastructures can aid a Third World country socially and economically. It is hoped that through this study, many local governments and national governments from different developing countries will realize the importance of investing to infrastructures and will realize how much it can contribute to the development and progress of their country.

 

LITERATURE REVIEW

According to  (2002), a humanitarian association in UK, the word “Third World” is a Cold War term that means the division of humanity into haves and have-nots. Third World is basically synonymous with developing country.

Nigeria is one example of a developing country and is one of the countries in Africa that experiences mass poverty because of problems in its government policies and economic strategies. With more than 250 ethnic groups in its population, the country experienced dictatorship in the seventies, and today, it seems that corruption in the government stands out as Nigeria’s most daunting and deliberating problem (2004). Nigeria is not a poor country, so to speak, as it has many supplies of oil. However, despite of this wealth which gained it the title of being the 6th oil producing nation of the world, the poor constitute about 70% of the Nigerian population (2001). The Economic Commission for Africa (2002) stated that social division and mismanagement have paralyzed the opportunity of Nigeria to alleviate its people from poverty. Basically, this poor condition creates many negative repercussions in different industries and institutions.

 (2001) reported that water and power infrastructures are two of the main lacks of Nigeria. According to him, majority of the citizens of this Nigeria have not had water flowing from their pipes (2001). Furthermore, it was emphasized that: “Most individual have had to embark on various boreholes and well sinking projects.  Industries especially have had to undertake the sinking of boreholes in their factories in an effort to ensure that this very basic of needs is adequately catered for” (2001). Aside from poor water infrastructures, Nigeria also suffers from chronic power outages over the past years (2001). There is also a large area of unpaved roads in the country. Only 60,068 km are paved, while134,326 km unpaved (2006).

Similarly, the Philippines are also a developing country that suffers from lack of basic infrastructures that would accommodate most of its rural citizen’s needs. According to  (2006b), some of the environmental concerns in the country include: uncontrolled deforestation especially in watershed areas; soil erosion; air and water pollution in major urban centers; coral reef degradation; increasing pollution of coastal mangrove swamps that are important fish breeding grounds. Most of those concerns reflect the country’s need to have a better water system. However, the  (2006b) emphasized that several fiscal constraints limit Manila's ability to finance infrastructure and social spending. For instance, the Philippines' consistently large budget deficit has produced a high debt level, and this situation has forced Manila to spend a large portion of the national government budget on debt service. Also, it still keeps the operation of unprofitable large public enterprises, which are mostly in the energy sector. The report also shows that the country suffers from lack of adequate roads; only 19,804 km are paved, while
180,233 km is unpaved by 2003 (CIA World Fact Book, 2006b). The country also has limited waterways, with only 3,219 km covered ( 2006).

According to  (2003), low income countries, tend to focus more on roads than electricity. They found that roads tend to dominate, accounting for about 50% of infrastructure stocks, whereas in middle income countries, this share falls to 28% while electricity accounts for close to 50%. On the other hand, electricity and roads amount to about 40% to 45% each of overall infrastructure stocks in high-income countries ( 2003). There is also a decrease of investment on rails and increase of investment in electricity ( 2003).

            The  (2004) reported that efficient transport, reliable energy, safe drinking water, and modern telecommunication systems are important for every developing country because they are critical to attracting foreign direct investment, expanding international trade, and achieving long-term investment and growth. However, developing countries often fail to create depth, maturity, sophistication and size because of several factors such as the impact of recent macroeconomic shocks, ongoing transformations in the global, electricity and telecommunications industries, the weakness of local capital markets in most developing countries, and unfinished reforms needed in many developing countries to place their infrastructure industries on a commercial footing.

            Previous studies have emphasized the importance of infrastructures in development. For instance,  (1997) found that infrastructure development in poorer regions reduces production and transaction costs. Furthermore,  (2000) also found that improvements in communication and road services imply capital gains for these poor farmers. Also, infrastructure helps poorer individuals and underdeveloped areas to get connected to core economic activities, thus allowing them to access additional productive opportunities ( 2003).

METHODOLOGIES

The research strategy that will used for this study is the descriptive research. A descriptive research intends to present facts concerning the nature and status of a situation, as it exists at the time of the study (1994). It is also concerned with relationships and practices that exist, beliefs and processes that are ongoing, effects that are being felt, or trends that are developing. (1970) In addition, such approach tries to describe present conditions, events or systems based on the impressions or reactions of the respondents of the research (1994).

Basically, a descriptive research utilizes observations and surveys. It is for this particular reason that this approach was chosen by the researcher, whose intention is to gather data from the citizens of two communities each from Nigeria and the Philippines. Moreover, this will allow for a flexible approach that when important new issues and questions arise at the duration of the study, a further investigation can be conducted. Also, with this type of approach, the researcher will be allowed to drop unproductive areas of research from the original plan of the study. Another advantage is that with this approach, the research will be fast and somehow cost-effective.

The study is also exploratory in nature as it will investigate past economic performances of the communities and compared it to the present. In this case, previous documents from each local government offices will be needed.

Data Collection

 

            Data will be conducted in two ways: literature and data review; and interviews with current citizens of the communities. Literature and data from previous documents will be researched on local libraries in the Philippines and Nigeria, as well as on available online libraries that provide related resources. Previous documents will also be searched on the local government offices of the communities to be investigated. These should include the annual income of residents since 1980, the total family income, reports of infrastructure improvements, the increase or decrease of economic activities, etc.

            On the other hand, interviews will be conducted on current citizens of the communities. In the semi-structured interviews the will be conducted to selected citizens, the researcher will have a list of themes and questions to be covered, although these may vary from interview to interview, meaning, some questions may be omitted in particular interviews, given the specific organizational context that is encouraged in relation to the research topic, and the order of questions, as well, may also be varied depending on the flow of conversation. (Saunders et al, 2003) Meanwhile, additional questions may be required to explore the research questions and objectives, given the nature of events within particular communities, and the nature of the questions and the ensuing discussion mean that the data will be recorded, perhaps by note-taking or by tape-recording the conversation. (2003)

            Accordingly, semi-structured interviews provide the researcher the opportunity to ‘probe’ answers, which can be done in instances where there is a need or want for the interviewees to explain further or build on their responses, and this is important if one is adopting a phenomenological approach, where the researcher is concerned to understand the meanings that respondents attribute to various phenomena, as interviewees may use words or ideas in a particular way, and the opportunity to probe these meanings will add significance and depth to the data obtained and may also lead the discussion into areas that had not been previously considered but which are significant for understanding and may help in addressing research questions and objectives. (2003) In addition, semi-structured interviews give interviewees the chance to hear themselves “thinking aloud” about things they might not have previously thought about, which in turn, may lead a to collect rich and detailed set of data. ( 2003).

 

Data Analysis

The following statistical formula will be used to analyze the interview data: Percentage – to determine the magnitude of the responses to the questionnaire.

                        n

% = -------- x 100        ;           n – number of responses

                        N                                 N – total number of respondents

1.      Weighted Mean

                        f1x1 + f2x2  + f3x3 + f4x4  + f5x5

x = ---------------------------------------------  ;

                                    xt

where:             f – weight given to each response

                        x – number of responses

                        xt – total number of responses

On the other hand, to assess the strength of relationship between variables, it is important to get the correlation coefficient, which can take on any value between -1 and +1 (Figure 3.2), since this will tell the strength of the relationship between two ranked or quantifiable variables (2003). Accordingly, a value of +1 represents a perfect positive correlation, which means that the two variables are exactly related, where, as the values of one variable increase, values of the other variable will increase. Conversely, a value of -1 shows a perfect negative correlation, which also means that the two variables are exactly related, only this time, as the values of one variable increase, that of the other decreases. Finally, correlation coefficients between +1 and -1 stand for weaker positive and negative correlations, and a value of 0 means that the variables are completely independent from each other. This will be applied as well in comparing the previous and current social and financial performances of the communities.

Figure 3.2: Values of the correlation coefficient

To assist the researcher in the statistical analysis of the gathered data, the Statistical Package for the Social Sciences (SPSS) was used. SPSS is one of the most widely available and powerful statistical software packages that covers a broad range of statistical procedures, which allows a researcher to summarize data (e.g., compute means and standard deviations), determine whether there are significant differences between groups (e.g., t-tests, analysis of variance), examine relationships among variables (e.g., correlation, multiple regression), and graph results (e.g., bar charts, line graphs) (2000).

 

 

 

 

 

 

April 15, 2009

Main differences between UK and Italian fashion retail sector

Comparison Fashion Retail Sector: UK and Italy

 

Introduction

Fashion retailing all over the world has commonness and differences.   (2003) stated that fashion is an aesthetic expression that aims to communicate notions, subtleties, and therefore, as soon as an aesthetic order comes to be generally perceived as a code, then works of art tend to move beyond this code while exploring its possible mutations and extensions. Furthermore, fashion is believed to be a cyclical reflection of social, cultural, and environmental characteristics that are unique to a certain point of time in a particular geographical setting, in addition to playing a crucial role in complementing one’s self-image.

In terms of fashion retailing,  (3) stated that its market has gained criticism for a lack of differentiation, possibly due to greater degrees of market concentration and the standardization of the fashion retail offer across stores and regions. With the addition of new technological developments, fashion retailers face both a differentiation dilemma and a challenge in maintaining any long-term advantage over their competitors. Competitive advantage is needed, and being unique and persuasive are important in order to attract the attention of customers and create positive consumer behavior that would benefit the company.  Primarily, the main goal of this study is to discuss the differences between UK fashion retailing Italian Fashion Retailing.

 

UK And Italian Fashion Retailing

The United Kingdom’s retailing industry is a main element of the service sector economy making a meaningful contribution to Gross Domestic Product. However it is a sector characterized by market segmentation, specialization and domination with multiple organizations frequently holding substantial property portfolios (1989;  1988).

Within property research, the significance of retailing lies in the fact that it serves a major use category, usually occupying the busiest city center locations where there are a lot of consumer prospects, although decentralization and changes in the structure of retailing linked to wider socio-economic trends have been to the fore over the past decade (1993;  1986). Nevertheless the most important determinant of retail success remains the location of the store premises and its impact upon customer drawing power ( 1992; 1990).

UK’s appearance on retail fashion has been strikingly changed in the last decade, and it’s because of the increased foreign participation and reformation of image and buying strategies by established fashion retailers. Own-brand fashion has become very popular on major fashion retain companies. Major UK fashion Retail Company seeks to identify the mechanisms by which own-brands are created and maintained. Some of UK’s big company’s recognizes a cluster of important retailer benefits attributable to own branding. They also believe that own-branding is likely to remain a key aspect of the UK fashion market, and questions the future for manufacturer fashion brands. Fashion own brand penetration is estimated to be in excess of 53 per cent and is the highest in Europe. However, despite the significance of own branding to the UK fashion market, research interest appears to have focused extensively upon the UK grocery sector.

As multiple retailers in UK have become more efficient in the management of their businesses, they have continually sought to take full advantage of their market strength and have recognized the value of own-brands as a means of exploiting that strength, as well as reinforcing their market positioning. Small business is a relatively new economic category, which became politically necessary as economic activity flowed from owner-managed enterprises to managerial corporations. The future trajectory of small business in the UK is by no means certain ( 2003).

On the other hand, there are three exciting things about Italian fashion today: the first is in the fact that Italy is capable of producing a kind of clothes which suit the market exactly–and producing them in a manner unequalled by any other European country. Namely, clothes for outdoors, for resorts, for travel, for skiing; separates, fads, looks, airs, tricks–all the gay things, all the boutique articles and accessories. The second is the fabrics–anything and everything pertaining to Italian fabrics is newsworthy.

The the–irk is the evening dresses, marvelously made in marvelous silks at a relatively low cost. The Italian fashion retail industry has been ranked as the second largest market in Western Europe having a 20% share.  The Italian customers are big spenders on clothing which made the retailer company earn big. Italian fashion retail companies, demonstrates how understanding of industry and practice are central to issues of identity in dress and shows that the ‘look’ of Italian clothes cannot be separated from Italy's industrial capabilities.

Backed by the Italian textile producers, designers in Milan produced high quality ready-to-wear – clothes that combined the casual qualities of American sportswear with European luxury and status. “The Italians were the first to make refined sportswear,” recalled   of Women's Wear Daily. Significantly, the international clientele for Italian style included both men and women. Moreover, they increasingly wore clothing that was not only “made in Italy”, but that also expressed some version of “the Italian Look”.

Aside from this strategy, different retail industries also use advertising as part of the retail strategy. The importance of creating in the fashion retailing is obvious, but more than anywhere else it must be exercised with a view to consistency since the objective is that the product should be immediately recognizable and associated with an absolute, possibly unique, identity. In my experience, the most successful advertising campaigns are those resulting from a very close collaboration between designers, photographers, and those such as stylists who, from an external perspective can add to this a story, an element of conceived reality. The Italian fashion industry is currently one of the leading players on the international fashion stage, and ranks parallel with Paris and New York (1995).

Italian retail industry also imposed the concept of boutique, known to be high-fashion ready-to-wear. Boutique fashions were produced in Italy (by both couturiers and specialized boutique designers) and sold abroad in the late 1940s, but it was not until the Florentine shows from 1951 that collections of boutique began to be presented to an international audience of buyers and press. They are well remembered by witnesses. Accordingly, boutique fashion was described as ‘different, novel and fantastic, though not extreme. It was also comfortable, simple and more wearable than the couture. Fabric and colors were important. Proponents also make the important point that ‘it was much easier for the press to state that the boutique style of retailing was innovative.

Boutique style represented a niche which Italy could carve out in the international market, without standing in direct competition to Paris, or copying it.  who was a fashion PR in this period, echoes these ideas, writing that even in the 1950s ‘Italians stood out for their greater simplicity, their sophisticated use of color and their attention to decorative details … features like wearability, practicality, and simple cut were even more pronounced in the boutique collections which accompanied the high fashion showings. They were also more in tune with the “modern woman”, especially the American woman who was understood to be active and working.’ He continues, ‘It is these collections that represent a truly new understanding of how women dress. They were also forums for freer experimentation, in material, production and cut.

            The retail industry in Italy has been undergone to different changes and stages until it reach a more competitive strategy which retailers enjoyed.  The retailers see to it that they provide quality fashion designs to their customers and clients.

 

Conclusion

            Although both UK and Italian fashion retailing industry are competitive it can be concluded that each has their own style of retailing.  UK sees to it that their brand would be unique and innovative compared to other brands or fashion rivals. On the other hand, Italian fashion industry ensures that the needs of the customers for ready-to-wear clothing and apparel are highly standardized.

            All in all, the retailing capabilities of both countries can be seen as the most important aspects why these countries are known to be a competitive region when it comes to fashion designing and retailing. It is recommended that the retailers of both countries must be able to adjust in the stiff competition of the marketplace not only in the local arena but also at the international market.

 

 

April 07, 2009

Article analysis

Introduction

 

The market research industry in the United Kingdom has appeared to be flourishing in the past years. This has been the observation of  (2001) in his study. The success of the UK market research industry has been established by Boddy in the initial part of the article stating the existence of several hundreds of organizations in the field of market research. This presents that there is indeed an actual thriving industry for such field. Even though the author has established that there is indeed a considerable success in the said field, he goes further by analyzing the reasons for its success of the industry, particularly in the UK setting. Particularly, the objectives of his study revolve around the “perceived” reason why the said industry is flourishing. This means that the basic source of his findings would come primarily on a set of respondents stating responses to particular issues relating to the market research industry.    

 

Literature Review

 

The principle of conducting a literature review for a researcher is to establish solutions on the subject of what is recognized on a theme. Similarly, researchers evaluate previous research to build up more intelligent and highly noteworthy issues about a theme  1994).  In addition, (1994) has recommended previous literature may also be accounted for as a channel for establishing the case and unit of examination.  It is similarly declared that most academics like better to measure it up to their findings with preceding research, 1994). This part of the paper is going to discuss the use of literature on the article of Boddy. Specifically, the structure, theme, and theoretical framework is going to be presented and analyzed in this part.

 

Structure

 

In the case of the article of Boddy, the structure of the review of literature has been predominantly employed to create a great defense of the employment of such methodology. Specifically, the use of the qualitative form was the main aspect of the citation of past literature on the said article. The author's attempt to justify the use of such method in a research that intends to measure the responses of the respondents from the research market industry reveals the author's intention to "maintain an objective approach to the study.”

 

Theme

 

The work of Boddy rested on the assumption that the market research industry of the United Kingdom is indeed at a successful stage. Although there are a meager number of sources that indicated of such success, the discussions of the said author depended on this idea. He merely cited the 2000 Research Buyers Guide to claim that there is indeed success in the said field. He noted that there are several hundreds of research companies that existed in the UK market research industry. However, he failed to realize that the number of companies that exists in an industry in not the sole determinant of success in the said field. In this aspect, Boddy's central theme of success in the market research area is seen as weak considering the lacking of any other proof from past and present literature regarding such claim of success. 

 

Theoretical Framework

 

In the article, the author tried to establish that the "perceived" reasons for the success of the research market industry is basically homogenous in every respondent company. He made use of the social constructionist approach as a framework for his discussions regarding the said reasons for success.  

 

In doing so, he assumed that the groups generate and uphold their accounts of reality through symbolic contact. That is to say that mutually consented and corroborated symbols describe reality and truth for their validating communities, in this context the market research community. Information is, consequently, anchored and entrenched within socially consequent symbolic structures. The use of such rhetoric as symbolic advocacy is a basic component in the social construction of reality which is evident in the discussions of Boddy. Even a scientific community's account of reality anchors on rhetoric. By pointing out to a scientific community which is akin to the market research community, even those communities that perceive their work to be most directly connected  with that which is "objective," communicatively create their social setting. This goes to show, based on the articles, that a social constructionist approach does not automatically discharge the subsistence of an objective reality. To a certain extent the said approach which is employed by Boddy distinguishes the impracticality of purely and wholly characterizing an objective reality.

 

Conclusion

 

The article of Boddy emphasized more on the use of literature to justify the methodology he employed in the study. In doing so, there is a lack of justification that presents a clearly successful market research industry. He should have used a literature review in order to provide an introductory discussion of the actual relevance of his intent to present the "perceived" reasons for the success of the said industry.

 

April 06, 2009

CAR INDUSTRY

INTRODUCTION

 

 

            This paper explores and evaluates the global car industry, specifically its structure and the latest issues that concern it. The aim of this paper is to be able to determine the strengths and weaknesses of the industry, particularly barriers to entry and exits, and the different companies that dominate the industry, the differences between the European, Japanese and American car industry, and many more. The aim of this paper is to have an overview of the industry, to be able to determine the political, economic, social and technological factors that affect it, and to give a sound conclusion that would create an overall picture of the industry’s structure.

 

 

The Complexity of the Car Industry

 

            According to Fine et al (1996), “The automobile is one of the most complex consumer products in existence. The automotive manufacturing process serves as the “moment of truth” for the entire design, development, supply chain, and manufacturing process”. Compared to other industries, developers and workers in the car industry have to be extra meticulous in the development process of every project. Fine et al (1996) stated that if the parts do not fit when the manufacturer attempts to put them together, the system has a defect that must be tracked down and eliminated. Thus, auto companies focus a great deal of attention on understanding and improving the manufacturing process.

 

            The industry is also divided into three broad types of manufacturers, namely: high volume, full-ranged producers; specialist producers; and niche producers (Nieuwenhuis and Wells, 2003). The first type is typified by Ford, VW, Fiat, Toyota, Nissan and GM. These companies are in the centre of the market, producing at the highest volumes and lowest prices with a range of general purpose cars of various sizes and capabilities to appeal to the broad mass of consumers (Nieuwenhuis and Wells, 2003).  These compete on the basis of cost reduction. On the other hand, the second one is typified by Mercedes, Volvo, Audi, BMW and Lancia. These companies occupy the upper market reaches, with larger or higher performance cars that demand higher prices. They compete on the basis of differentiation and cost recovery, offering a compromise between exclusivity, quality and utility. Finally, the niche types are typified by Lotus, Alpine, TVR and Ferrari. Such companies offer exclusivity and extremes of performance, particularly in sports cars, but often at the cost of uneven quality, limited practicality and considerable financial burden (Nieuwenhuis and Wells, 2003). 

 

            The industry is also being shaped by two of the biggest byproducts of globalization – that is, mergers and acquisitions; and direct investment in non-domestic locations (so-called Foreign Direct Investment or FDI). Furthermore, supplies can also be complicated. Without an adequate supply chain plan, a car company might crumple and lose a huge amount of money (Nieuwenhuis and Wells, 2003). Vehicles are comprised of many individual components (such as aluminium radiator cooling fins), aggregated up into sub-systems (such as radiator assemblies) or systems (such as the cooling system including pipes, controls, sensors, etc.). Thus, the competitiveness of a car company in terms of supplies is shaped by: vehicle manufacturers' sourcing strategies; cost, weight and size reduction pressures; globalisation: following the vehicle manufacturers wherever they may go; localisation: putting satellite plants alongside vehicle assembly plants; and modularisation: putting together complex sub-assemblies.

 

The European Auto Industry

 

 

            Of the triad markets in the car manufacturing industry (Japan, Europe, and US), the European is the largest and most competitive, but within Europe there are variations. For instance, in the north-western area, new car demand is virtually static and replacement demand predominates. In Southern and Mediterranean Europe, where car density per head of population is much lower, growth prospects are considered more floating as incomes rise (Donnelly, Mellahi and Morris, 2002). On the other hand, former communist areas of Europe, or the Eastern part, have been perceived as a potentially medium-to long-term growth market (Financial Times, 1994).

 

Market demand in Europe runs at between 16 and 17 million vehicles a year (The Economist, 1994, from Donnelly et al, 2002). However, between them are surplus capacity of approximately 2 to 3 million vehicles a year which exerts upwards pressure on costs and affects their competitiveness with the Americans and Japanese in world markets (The Economist, 1994 from Donnelly et al, 2002).

 

On the other hand, the EU automotive industry had a trade surplus of over 30 billion Euros with about 40 percent of exports in 1999, mainly vehicles, going to the USA. Imports from the USA are mainly parts and accessories (Graham, 2004). A number of the New Member States in Eastern Europe, notably Hungary, the Czech Republic and Poland have emerged in recent years as significant producers (Graham, 2004). However, Germany and France are the two most dominating producers in EU, and Germany is world’s third largest producer after the USA and Japan, producing over 5 million vehicles a year (Graham, 2004). As the home of DaimlerChrysler, the German car industry employs about three quarters of a million people. Next is France, employing about 7 percent of the workforce, making 3 million vehicles per year (Graham, 2004).

 

The car market in Europe has entered restructuring in the early 1990s. Hancke (1998) stated that European car markets are slowly reaching a level of saturation in the nineties comparable to what the US car markets have known since the mid-1970s. But despite the structural weakness of demand, car manufacturers have continued to increase their production capacity and the result is currently an estimated excess capacity in Europe of the order of 25-30% (Hancke, 1998).

 

            The car market in Europe is essentially divided between private buyers (consumers) and the fleet buyers (customers), which specialize in providing a range of company and general hire cars for their clients. Private buyers will buy their cars from franchised dealers who exclusively sell one brand of car and therefore the manufacturer exercises great control over dealers since he can remove franchise should it not perform to the manufacturer’s expectations. In return for the franchise, a dealer must offer a good aftercare service, to honor the warranties (typically 3 years) that are guaranteed be the manufacturer (Key Note, 2002).

 

           Due to the increasing competitiveness in the fleet market and the demands for price reductions from fleet buyers this segment has become less lucrative for car manufacturers despite the high volume they absorb. Therefore the private car market gained in importance (Key Note, 2002).

 

           Car manufacturers make extensive use of advertising to constantly project the image of their brand and models. ‘In general, customer loyalty to a particular brand is fickle, so buyers can be influenced by image as well as price and specification (Key Note, 2002). Advertising has increased by 6.5% in Europe since 2000.

 

AdLINK Europe (2002) stated that more than 15 million vehicles are sold in Western Europe every year, making automotive the most important industry in Europe. All carmakers are struggling for market shares in this important region. The competition in the continent is fierce, with Volkswagen leading the manufacturing share in 2002 and DaimlerChrysler in the eighth place but nonetheless still dominating BMW, Korea and others (see Figure 1).

 

Currently, the Car Manufacturing Industry is being seen as one of the most important industries in Europe. It is a major contributor to value-added as it account for about 3% of the European Union's GDP and for about 7% of the Union's total manufacturing output, which makes the automotive industry a major wealth generator in Europe (European Commission, 2005). The total value added produced of the motor vehicle industry in the EU-15 was about €114 billion in 2002. Aside from that, the industry provides work for more than 2 million Europeans and supports an additional 10 million indirect jobs in both large companies and SMEs (7% of total European manufacturing employment) (EU, 2005). It is also a leading investor in R&D, leading contributor to trade, and an important source of fiscal revenues (EU, 2005).

The United States Auto Industry

 

The background of the US auto industry is much exposed than that of the European as they rank second next to Japan in terms of manufacturing. Foreign and domestic auto makers sold nearly 17 million new cars and light trucks in the U.S. in 1999, which were up from 15.54 million units in 1998. It generated estimated retail sales of more than $400 billion - a record year for the industry (Everett, 2000). Furthermore, passenger vehicle sales in the U.S. had averaged 14.3 million units per year, from 1990 to 1998 (see Table 1).

 

            There are six companies that led the manufacture of passenger vehicles in the U.S. – DaimlerChrysler, General Motors and Ford. Together, they are also known as the ‘The Big Three’ (Everett, 2000). The other three are Japanese based, which are Toyota, Honda, and Nissan. The three produced a large portion of the cars sold in the U.S. in North American assembly plants (Everett, 2000). This shows the weakness of the European car market in the US. The mentioned six basically accounted for 87% of all new vehicles sold (see Table 2). The remaining was basically from non-US firms and they are not necessarily European but could be new auto manufacturing companies from Korea and Malaysia.

 

As can be observed from the data presented above, General Motors is dominating the sales of car and light trucks from 1995 to 1999. It is followed by Ford and Chrysler. Clearly, the Big Three in the United States dominate their own turf as the Japanese and the European manufacturers rank paces behind them.

 

            Like in Europe, the Big Three in America is major source of income and employment. The Car industry also contributes to trade and promoted R&D (Fine et al, 1996).

 

The Japanese Car Industry

 

 

            Japan is one of the countries that have the largest exports of automobiles throughout the world. A leader in car manufacturing in terms of volume, the Japanese car companies have experienced stagnation within the level of 4.5 million units since 1997, but has slowly recovered in 2004. Real GDP could well show a growth rate of 4% for that year as a whole, mainly driven by exports (Gottschling and Heymann, 2004). In 2003, exports increased by 1.7% from their high level of 4 million passenger cars in 2002. Due to strong economic growth in Asia, Japan’s exports have flourished since 2001. Also, consumers in Western Europe have developed a strong appetite for Japanese cars recently, as new models have attracted more attention than ever (Gottschling and Heymann, 2004).

PESTEL Analysis

 

 

Political Analysis

 

 

            The manufacturing industry is different today than that of the pre-informational technology and globalization age. Communication is faster today and collaboration of different industries is easy. The government is one of the many that benefits in this evolving information age. The State itself is an agent of globalization, furthering certain processes of this emerging new economic order through, for example, policies intended to attract and retain investment. For instance in Europe, the European Commission is concerned with the performances of European car manufacturers. It can be remembered that in 1992, the European Commission reached an agreement with the Japanese government about the gradual lifting of import restrictions on Japanese cars until the year 2000 (Dankbaar, 1996). Thus, the European Commission has ordered an investigation into the training needs of the European automotive industry, which also involved an analysis of training projects supported by the European Commission under the FORCE programme on continuous training (Dankbaar, 1996).

 

            In America, the government is also collaborating with industries to improve competitiveness. Fine and Lefrance (1996) stated that the Big 3 automakers were working with the federal government in a cooperative, precompetitive research effort called the Partnership for a New Generation of Vehicles (PNGV). The public/private partnership aims to strengthen U.S. global competitiveness, preserve American jobs, reduce our country’s dependence on foreign oil, and improve the environment.

 

Currently, one of the politically involved governmental bodies in the global automotive industry is the United Nations. The UN currently regulates the manufacturing industry with the Global Compact (DaimlerChrysler, 2000). It is basically a move in-tune with the changes brought by globalization, and is based on nine key principles drawn from the Universal Declaration of Human Rights, the International Labor Organization’s fundamental principles on rights at work, and the Rio Principles on environment and development. The nine principles are human rights, labor and environment oriented.

 

            Basically, politics are involved in regulating the operations of the auto industry. For instance, in the United States and Europe, there is a growing concern regarding the relationship of mobility with economic development, safety and environmental concerns (Fine and Lafrance, 1996). One example of this is in the UK where there are government incentives aimed at reducing the usage of cars, e.g. tax increases and fuel prices increases. With this is the presence of congestion charges. Congestion charge is £5 daily to help get London moving (Anonymous, 2004). On the other hand, the U.S. auto regulations tend to focus on new cars to achieve social objectives. They believe that old cars or ‘clunkers’ increase urban air pollution. It is estimated that less than 10 percent of the vehicles are producing 75 percent of the pollution (Fine and Lafrance, 1996).

 

Economic Analysis

 

 

            The economic condition of the auto industry during the time of merger of Daimler-Benz and Chrysler varies, depending on the country. Fine and Lefrance (1996) stated that average time to market or “lead time” of U.S. automakers has fallen from about 61 months to about 52 months - below the Japanese average during that time, which actually increased from 45 to 55 months from the late 1980s to the early 1990s. As a result, U.S. companies can now compete with the Japanese in product development. Lead time may already be significantly faster at Chrysler than at many of the Japanese companies. But then, American manufacturers’ competitive disadvantage in model mix complexity creates a barrier to their ability to compete in product diversity (Fine and Lefrance, 1996).

 

            Another issue is the continuous rise of car price. The continuous rise in price of new cars is an ominous trend for all automakers (Fine and Lefrance, 1996). Fine and Lefrance (1996) cited from the National Automobile Dealers Association, that the average new-vehicle transaction price has soared from $8,850 to $19,200 since 1981. Furthermore, there has been also a change in consumer preference. For instance, consumers now prefer safety (e.g., airbags, antilock brake systems) with amenities (e.g., air conditioners, powerful engines, power steering, and compact disc players) over vehicles whose primary appeal is size and interior space (Fine and Lefrance, 1996). They stressed that factors influencing customer choices are performance, suitability to personal needs, and family lifestyle, safety, comfort, and appearance (Fine and Lefrance, 1996).

 

Social Analysis

 

 

            Society during the mid-nineties was pretty much in the early days of IT and globalization. Different issues are being discussed easily through the use of the internet which has led to the development of diverse changes in the behavior of the citizens. As mentioned, people start to change their preferences towards vehicles due perhaps to the issues that underlined them. In Europe for example, specifically in UK, it has been reported that more than 400,000 Londoners have abandoned their cars in favour of traveling each day by public transport (Clark, 2004). Although it has been known that people in the UK like using cars, certain policies can affect the behavior of the consumers as it can break the British’ love affair with their cars (Clark, 2004). Moreover, according to Clark, car travel in London has fallen by 4% or 400,000 trips daily since 1999 (Clark, 2004).

 

Technological Analysis

 

            There was also a stiff competition in technology during the nineties. There was an increase in the use of electronic components. Virtually every aspect of driving a modern high-end automobile is controlled by electronics - acceleration, braking, seating, security, entertainment, navigation, driver information, crash protection, steering, etc. Furthermore, the automotive infrastructure - traffic control and guides, law enforcement, toll assessment, and the like, rely increasingly on electronic controls (Fine and Lefrance, 1996). In addition, there was also the increasing demand of competing in business with the use of Information Technologies.

 

Environmental Analysis

 

            Environmental issues in the car manufacturing company have always been related with pollution. The Environmental Defense (2005) stated that cars and light trucks, which include sport utility vehicles, pickups and most minivans, emit more than 300 million tons of carbon into the atmosphere each year in the United States. There were demands to produce zero-emission and weight reduced vehicles to resolve environmental problems (Fine and Lefrance, 1996). There was also an increase in vehicle recycling to prevent old vehicles from polluting visually the community (Fine and Lefrance, 1996).

 

Legal Analysis

 

 

            Basically, the legal issues in the car manufacturing industry are mostly related with the environmental issues. Car manufacturing must basically meet the safety, environment and business standard demands of international and domestic regulations. The merger, and later, the acquisition of Daimler-Benz on Chrysler even undergone legal procedures. Some legal accounts, on the other hand, have been made to regulate for economic purposes such as anti-competitive state laws in the US (Consumer Federation of America, 2001).

 

Conclusion

 

 

            The global car industry is a complex one and is both horizontally and vertically diverse. It is basically dominated by three groups of manufacturing giants – European manufacturers, Japanese manufacturers, and American manufacturers. Although there has been a recent emergence of manufacturing from Korea, China, and Latin Countries, the three countries mentioned above still dominate the competition. Further, it is being divided by three different manufacturing types. Basically, there are those who produce mass volumes, there are those who focus on specializations, and there are those who target niche markets. Supplies can also be complex since the industry affects many niche markets related to it, such as automobile parts, fuels and many more. Production can be another issue since it takes a year or more to produce a new model. Added to this difficulty are the changing regulations of car production, such as in issues of safety and reliability. There are also technological, political and environmental concerns that companies have to consider, all of which has added to the complexity of the whole process of car manufacturing.

 

March 23, 2009

USAGE OF I.T. IN THE HOTEL INDUSTRY

1.0 Background of the Study

At this very moment, the world is in the midst of a technological revolution, which is resulting in changes in the mechanisms of economic and social development. Revolutionary advances in information technology have resulted in a new kind of economy in which information is the critical resource and the basis for competition. Digital media has revolutionized the information economy. More and more people now have access to the internet through personal computers, and mobile phones as well as to a host of new communication services. In addition, the hotel industry is fast adopting the latest technologies in a big way, thanks to increasing competition; it has been observed that technology acts as a key differentiator to retain international clientele in the industry (Louvieris, 2003).

In long gone days, it was said that in order to succeed, all a hotel needed was a scenic location and good cuisine. However, in today’s competitive environment, a mistake as trivial as not taking down a customer’s order can be devastating. As the hospitality industry started looking for ways to improve efficiencies, efforts and investments in the field of information technology intensified. One of the first deployments of IT began at the front desk when receptionists began checking the name of the customer and then allotted a room to him. Big hotels also started putting in place accounting systems and back office software to improve processes (Louvieris, 2003).  Wireless communications and mobile computing technologies are changing the way hotels manage information and which is conducive to the execution of exceptional service.

2.0 Statement of the Problem

What are the issues facing the hotel industry in terms of being in the realm of the information technology? What the industry people are doing in the further flourishing of the industry is critical. Sustainable online reservation system and hotel management would be the key in combating the threats to the unforeseen decline of a particular hotel business. What are the different technical and behavioral aspects of information technology? What are the practices used in the handling of the routine operational problems that crop up while running a hotel? The hotel industry has been criticized as reluctant to make full use of information technology. And the full usage of the revolutionary advances of IT can provide a smooth flow in the overall operation in the hotel industry.

3.0 Objectives of the Study

The main purpose of this study is to analyze the several activities or events that jeopardize effective communication and deliverance of great hotel service if information technology is not fully used. This research, specifically, purports to determine how these activities affect the running of the hotel and to distinguish the role of the people within the industry. This research takes into account the practices that affect efficient hotel management, recognizing the economic, social, and environmental obligation of the people. This paper will describe and analyze the findings of a recent survey on IT applications. This study will contribute to help raise the awareness of IT involvement at all levels of hotel business processes, and facilitate hoteliers to proactively incorporate IT into their efforts to remain competitive in the industry.

4.0 Research Methodology

This study will use the descriptive type of research. A descriptive research intends to present facts concerning the nature and status of a situation, as it exists at the time of the study and to describe present conditions, events or systems based on the impressions or reactions of the respondents of the research (Creswell, 1994). It is also concerned with relationships and practices that exist, beliefs and processes that are ongoing, effects that are being felt, or trends that are developing (Best, 1970).

Through personal interviews with managers of hotel and asking them what the electronic data processing/management information systems did to their hotel will be examined. In addition, the study will use primary and secondary research. The reason for this is to be able to provide adequate discussion for the readers that will help them understand more about the issue and the different variables that involve with it. The primary data for the study will be represented by the survey results that will be acquired from the respondents. On the other hand, the literature reviews to be presented in the second chapter of the study will represent the secondary data of the study.

The research will be presented in written form with the addition of data charts, which will present the project’s results. Pie charts and network charts will be needed to illustrate some of the analyzed data. This cannot be confirmed, however, until the research data have been analyzed.

 

March 19, 2009

THE UNITED STATES AIRLINES INDUSTRY

The airline industry is a unique and interesting industry (Chan, 2000). The reason for this is because it captures the interest of a wide audience because of its glamour, reach and impact on the large and growing numbers of consumers/travelers worldwide (Chan, 2000). The importance of the industry is unquestionable. The industry is worth over US$1,000 billion (directly, indirectly and “induced''), employs 22 million people, and transports and services over 1.25 billion passengers a year. A quarter of the world's manufactured exports by value reach their markets by air. The industry also plays an important role in travel and tourism, the world's largest industry, employing one in nine workers (Chan, 2000).

 

            However, like any other industries, the airline industry also have regulations that it should follow, or in other words, the simple ‘dos’ and don’ts’ that it should comply with. In the case of the United States airline industry, most of the regulations are provided by the industry itself, but the government also plays a great role on how the industry should act.  The U.S. airline industry has been deregulated since 1978 and continuously does so but with a few additional acts prior to the September 11 attacks incidents, which heavily involved airlines hi-jacking. This paper will review the history of key regulations in the United States airline industry and will assess how these regulations affect the industry as a whole.

FROM REGULATION TO DEREGULATION

 

The Airmail Acts

 

The airline industry has been around ever since the early years of the 20th Century. In the United States, airline history was shaped early in its life by the US Postal Service's airmail contract system that started in 1918 (Ward, 2000). Ever since then, the industry continued to grow. The first holiday airlines started in 1926 with Aeromaritime Airways. It began its history flying people from Miami to Havana and to Nassau, often so that the passengers could avoid the Prohibition for a while. However, the airline industry didn’t actually begin with them. It only began after the Airmail Act of 1925 or the “Kelly Act” was passed (Ward, 2000). This act was the first act given for aviation, which specifically gave the air mail service over to private airmail operators for four-year periods under a bidding scheme (Ward, 2000). It authorized the awarding of government mail contracts to private carries, established the rates for transporting mail and it set the airmail rates. Contracts were awarded through the United States Postal Service, and contracts were awarded through a bidding process. The effect of this act was dramatic as it dramatically increased the number of companies that offer airmail services within the United States. The first airliners include Ford Motor Company, Western Air Express, Colonel Air Transport, Florida Airways, and the Boeing Air Transport. It has grown bigger and bigger with the following years, particularly in the mid-to-late 1920’s, when the “big four” domestic airlines of America were born. This includes American Airlines. The complete list include: TWA, United Air Lines, Eastern Airlines and American Airlines (Ward, 2000).

 

            The Airmail Act of 1925 was implemented because mainly of the political pressure to increase the performance of aircraft carriers by turning them over to private owners that could have the ability to expand the industry. Politically, it can be seen that the aim of the US was to create a possible industry that could boom anytime soon. The whole country would benefit from it as it will make transaction faster. However, the Kelly Act, despite giving way to the growth of an industry, was not sufficient to encourage airlines to provide air passenger carriage as the carriage of mail was much more profitable and aircraft were limited in gross weight, roughly around 3,500 pounds. The solution was to create the Airmail Act of 1930. This act encouraged airline carriers to purchase larger aircraft, increasing the likelihood of being awarded airmail contracts. It also stimulated the carriers to fill space on the aircraft with passengers. The only problem with this act was that it was highly political in nature as it is an issue of management control on the booming industry. Basically, it gave the nation's postmaster general the authority to manage the industry (Thomson Gale, 2006). The Postmaster General arranged a meeting wherein the airlines negotiated territories among themselves. This resulted in the establishment of three primary routes—north, middle, and south—across the United States, with United, American, and TWA controlling one route each (Thomson Gale, 2006). Finally, the Roosevelt presidency enabled the Airmail Act of 1930 to be replaced with the Air Mail Act of 1934. In this act, the postmaster general's power over the industry was diluted, and measures to ensure truly competitive bidding were established. New airlines as well as established ones made low bids in an effort to snare market share, and as a result of the fierce competition, no carrier was able to make a profit (Thomson Gale, 2006).

 

Air Commerce Act of 1926

 

Another important regulation in the US airline industry is the Air Commerce Act of 1926. This act had much political color in its sleeves because it was the first act that defines the airline industry as a commercial sector. Developed under the Coolidge presidency, this act along with the Civil Aeronautics Act of 1926 underwent research before being implemented, in the form of the Morrow report. The Part I of the Morrow Report posed and answered six essential questions concerning aviation. This include: the relation between civilian and military aviation; promoting the civil use of aviation; the country’s military air policy; the danger of air attack from menacing enemies; and the establishment of a Department of National Defense; and if there should be a separate Department of Air equivalent with the Departments of War and the Navy. Regarding the first question, the board of the report urged that civilian and military aviations should remain separate and that there is no need for civilian aircraft to be armed with armaments since it begets its kind. In second question, the board emphasized that people must recognize the non-military value of aviation, of which the airmail service of the Post Office was a good example. They recommended the creation of a Bureau of Air Navigation in the Department of Commerce to address the issue. For the third question, the board noted that the Navy was adequate to keep an aerial menace away, and that the military establishment should determine the level needed for an economical defensive force. For the fourth question, the board believed that the United States was not in danger with any menacing aerial attacks if ever if would commercialize airlines within its country because only Canada and Mexico are near its boarders. In the fifth question, the board emphasized that a separate department for the defense of commercial and military aviation would be disadvantageous because of the fact that it would just increase unwanted bureaucracy. For the last question, the researchers concluded ‘no’ because they argued that both the Army and Navy needed integral air arms in order to fulfill their missions, and the air force had yet to demonstrate its value as an independent instrument of war.

 

            The report received more praises than criticisms because it did not only present a coherent conclusion, but also provides some recommendations based on its findings such as: the standardization of aircraft types; regularly scheduled replacement of aircraft types; continuity of equipment orders; orders of reasonable size given to companies with active design staffs; proprietary rights given to companies for their designs; orders for experimental, competitive designs; the rationalization of government procurement laws and regulations, and the continuation; and encouragement of government and private research and innovation. The report supported the view of former president Coolidge because it also looked at aviation as a moral issue. Shortly after, members of the Morrow Board quickly introduced bills into Congress designed to turn its recommendations into legislation. It was passed into the Senate and then later into Congress, and finally promptly signed by President Coolidge. The Air Commerce Act became Public Law 254 in May 20, 1926 (Downs, 2001).

 

            The effects of this act was first, it separated military aviation from commercial aviation. This was a necessary step to create a booming industry, free from military restraints. Second, the effect of this act is that it regularizes practice and procedures finally making aviation as a commercial industry. Because of the act, it became a concentration of commerce and is expected to contribute to US’s GNP. This pattern was also followed by other countries as well (Downs, 2001).

 

The Civil Aeronautics Act of 1938

 

 

The next important act that should be noted in the US airlines industry is the Civil Aeronautics Act of 1938. The Civil Aeronautics Act of 1938 led to the establishment of the Civil Aeronautics Board. This act was created because of the need to regulate passenger fares and airmail routes, monitored acquisitions and mergers, and distributed routes to airlines. These tasks were of course performed by the CAB.

 

Other tasks the CAB performs include: airways, navigational facilities, control towers and ensuring compliance of aviation regulations. The CAB helped the industry become more civil in a sense that many of its aspects are ensured not to exceed the limit that may be harmful to the future of the industry. It also contributes slightly to safety procedures and risk management within the industry.

 

After 20 years, the Federal Aviation Act of 1958 was created and was assigned with the task to control air traffic. The FAA was renamed Federal Aviation Administration (FAA) in 1967 and was put under the control of the U.S. Department of Transportation (DOT), which was also created that year.

 

These laws basically helped US airline companies both in the past and present to improve their standard of service. These also help them formulate fair pricing as well as obliging with several key safety and security measures. They did not only contribute to the marketing of the airline services but contribute to the ethical side of the business as well.

 

The Airline Deregulation Act of 1978

 

 

            Chan (2000) stated that 1978 was a watershed year for the airline industry. The reason for his statement is because it was the year airline deregulation was first introduced in the USA (Williams, 1994). From the outset, airline deregulation had attracted much attention because of its mass impact on the large numbers of consumers/travelers.

 

            The advantage of the act is that it lifted government-imposed barriers that had prevented airlines from entering new markets. New areas of competition within the industry were explored because of this act. For instance, airlines with low costs compete with price, while "local service carriers," which had provided largely regional service under regulation, competed on the basis of service (The Congress of the United States Congressional Budget Office, 1988).

 

            Deregulation might have been a good idea but no real growth yet has been seen for the airline industry ever since its implementation. However, this allowed the firms to recreate the industry and contribute for its development as a structure and as a process. The marketing condition was affected because of it (Driver, 1999). He explained that as airlines have had to become more competitive, they have striven to reduce costs, primarily through the reduction of staff and the outsourcing of non-core activities (Driver, 1999). Their prime competitive advantage is the network and scheduled flights, and consideration of these is the key criterion of consumer choice (Driver, 1999). Network rationalisation and expansion have been a dominant strategy and this has widened the basis of competition as airlines, dominant in some areas, seek to penetrate or expand in new ones (Driver, 1999). Driver (1999) added that to aid this marketing competition has been concentrated on corporate branding both to attract customers and to ascertain strong distribution. Branding has become important in being competitive in the industry because it has tended to permeate marketing oriented airlines and has served as a focus for staffing initiatives as services ancillary to the core product of transportation act as discriminators between airlines.

 

            This act also enabled the development of the Frequent Flyer Program to promote brand loyalty to consumers. In other words, the deregulation act has given the industry the marketing revolution it needed. It also allowed the competition within the industry grows positively.

 

            The political scope of this act is that it was made not only for the industry but also for the consumers paying high fares within a regulated airline industry. As a solution, the deregulation was thought of, and was based on the contestable market theory (Baumol et al., 1982) which suggested that governments should seek to promote contests for markets, even those where large firm size and limited competitors existed. Regulation was believed to encourage competition based on service quality rather than price, limit operational flexibility, and create no incentives for improving efficiency and productivity. However, this has been argued that deregulation has shifted competition from service to price (Rhoades et al, 1998).

 

CONCLUSION

 

            We can observe that the development of the US airline industry was made possible by the different interactions that took place between the government and the business owners, as well as the concern for the consumers. Discussions about changes and reforms have been always made through diplomatic legal means that involves the congress and the different bodies that control the airline industry. Research plays an important part in the interaction and agreements were developed through in-depth discussions. In terms of policies, the government influences business decisions little because of the deregulation policies. However, the latest rules implemented by government prior to the September 11 attacks can be seen as a great influence on how US airlines operate today. Although those latest acts were not discussed in the body of this paper, the well-documented and publicized issue shows that most airline companies complains because of the high costs and hassles of complying with those regulations for both the consumers and the employees of the airlines. However, those were just on safety issues. The rest, they can still formulate their own regulations at their will.

 

            At this time of our society, businesses try to influence the decisions of the government by presenting arguments and press releases that criticize a particular act that former issued. Of course, there are other means like presenting research results as discussed earlier. Pleas of airline companies can also be submitted to the government. However, in the overall view, it is still the government who controls all the main areas of airlines business. For instance, they can impose new security standards at the height of red alert level. They can also decide on whether or not to take or reject a particular reform or request that some airline companies want – like a bailout from bankruptcy. The issue of merger and acquisition is also one important area to look at. Because it the aim of the government to balance the air fare services, they will not allow any merger or acquisition that may affect that balance.

 

February 12, 2009

Operation and Technology Management

Introduction

            Due to the improvement of technology in every industry and field in the global market, it had helped to improve as well as speed up the different processes and tasks in the production aspects of any company. There have been many advances in terms of technology that had affected the fluid milk processing industry for over 25 years including the processes of separation, standardization, pasteurization, homogenization as well as the process of packaging and marketing. Most of the advancements are directly beneficial for the production capacity, automation as well as the hygienic operation (Goff & Griffiths 2006).

            One of this is the method of high heat treatment that can also be partner with the microfiltration or the process of centrifugation that can help to extend the shelf-life of the milks. Aside from that there are also different nonthermal methods that are being investigated to be used for the future. There have been many important innovations that helped to improve the quality of the products such as the improved knowledge of different functional properties of ingredients as well as their effects on the overall structures and textures of the milk. However, there are still many incidents of foodborne disease that are associated with the different milk and dairy products that serves as a drive for the industry to continue to study the different processes and techniques that will help to control the pathogen transmission of diseases. There have been many techniques that are being studies and used in order to detect different types of microorganisms that can be developed and improved (Goff & Griffiths 2006).

The Product

            Milk can be considered as one of the least consumer products in the industry of beverages. This is due to the fact that there are more and more children who don’t want to drink milk. That is why more and more fluid milk companies are expanding their line of products by introducing greater diversity of fluid milk products for the consumer.

            Flavored milk beverages have increased in popularity, especially those milk beverages that are packed in single-services and closable plastic containers (Goff & Griffiths 2006).

            Flavored has the total of 3% of the total sales of milk during 2002. It can be considered as one of the smallest portion of milk sales. However, flavored milk represents greater than one-fourth of the milk sales growth during 2001, and it can be seen as one of the key in order to improve the increasing sales of the industry (Food Service Director 2003).

            Chocolate is considered as the leading flavor, having the total of 85% of the total flavored milk sales. According to a survey, children drinks more milk if it is flavored chocolate (Wilson & Temple 2003, p. 216). Second, for the close fight is strawberry, and the third is vanilla (Food Service Director 2003). That is the reason why, those three flavors will be important part of the new products to be developed. The product is considered as more attractive for its consumer, more specifically those children.

 

 

Fluid Milk Processing

            There are different processes and activities that must be done in order to produce fluid milk and flavored milk beverages. The process of production of the fluid milk includes the different unit of operations such as clarification, separation, pasteurization as well as homogenization (University of Guelph n.d.). Figure 1 shows the overall processes that are needed in order to create fluid milk and flavored milk.

            The global industry of fluid milk has a standard for flavored milk. It must contain 93% of milk, 6.3% of sugar, 0.65% of the flavor such as cocoa, strawberry, etc, and 0.05% of carrageenan. Furthermore, the final product must contain from 1% up to 2% of fat or it has 2.15% or 1.1% fat in the milk before the process of adding the other ingredients in the product. The sugar and other flavored ingredients are all added dryly to the cold milk in forceful shakeup, and will later on be pasteurized (University of Guelph n.d.)

 

Figure 1 Fluid Milk Processing

 

 

 

 

 

 

 


 

Adapted from (University of Guelph)

Raw Side

            The process or the production of flavored milk drinks begin with the raw side or the part where in the raw milk will be gathered or received from the suppliers of fresh raw milk. Upon receiving the raw milk, the raw milk will be graded, weighed as well as sampled. This will determine the price to be paid to the farmers or the suppliers.

            The quantity of the milk that had been received will be stored in a specialized container in order to prevent spoilage.

Processing

            There are different processes and activities that must be done in order to create or produce safe fluid and flavored milk. This is with accordance to the global standard of the milk industry.

            The processing of flavored milk drink belongs to the mass processing. The production of different standardized goods for the mass market was introduced during the 20th Century in the United States. It was first used by Henry Ford that is the primary reason why the said system is also called as Fordism. It can be describe as the mass production of different goods via the use of dedicated machines as well as moving assembly lines, together with the techniques of hiring unskilled as well as semi-skilled labor forces in split jobs and tasks, with the tight labor discipline (LearningCurve.uk n.d.).

 

 

Milk Clarification, Separation and Standardization

            Milk clarification is the process of removing the different impurities from the milk. It will help to efficiently reduce and remove the amount of leucocytes and bacteria (Tetra Pack Canada Inc. 2001). In addition, it also helps to remove the blood cells from the milk that can be sold as a whole milk like milk that contains all of the butterfat. On the other hand, the process of separation pertains to the process of removing all of the butterfat as well as other impurities from milk. The Skim milk will then be produced when all of the butterfat has been removed from the raw milk (Hub Pages n.d.)

            This is being done by the use of specialized centrifuge that has a high hydraulic capacity (Tetra Pack Canada Inc, 2001).

Figure 2 Processes of Milk Clarification and Separation

 

 

 

 

 

 

 

 

 

 

 

 


 

           

           

 

 

Figure 2 shows the process of milk clarification and milk separation which are considered as two of the most important as well as preliminary process in production of fluid milk and flavored milk. The process starts with the use of the raw milk, the raw milk will be transfer from its storage room, to the place where in the specialized centrifuges or machines that handles the said processes. The employees or staff of the factory will have to transport the raw milk and put it in the machine or on the centrifuge.

            The output for the said processes will be the skim milk. Afterwards, all of the skim milk that has been produced will undergo series of tests for butterfat and other solid contains in order to make sure that the skim milk will be released for the process of pasteurization. The said test is called as the standardization. The said process is being done inside a separate department or center of the company that will handles the testing procedures.

Pasteurization, Homogenization, Vitamin Fortification and Flavorings

            The process of pasteurization is considered as the most important tasks that must be done for milk. It is the process that helps to remove different spoilage organism to the milk. It is being done by heating each and every particle of the milk or any milk product to a specific temperature for a given period of time and not allowing recontamination of milk during the process of heat treatment (University of Guelph n.d.). This can be done with the help of continuous method via the machines or the high temperature short time or HTST pasteurizer.

            The next process is the homogenization or a mechanical treatment of the different fat globules in milk brought about by passing under high pressure through a tiny orifice. The result of the process will be decrease in the average diameter as well as increase in the number and surface areas of the flat globules (University of Guelph n.d.).

            Vitamin fortification is the process that will help to strengthen the different good nutrients and vitamins of milk products. The process of creating the flavor will also be the last process to be done.

            Adding the flavor of the milk will be done by the process of mixing the flavors such as chocolate, vanilla etc. This is being done by a machine that handles the process of proper mixing the ingredients.

            The finished product will then be stored in a container and will be ready for the process of packing.

Figure 1 Flavored Milk Processes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Packaging

 

            There are studies that show that bottle can improve and increase the shelf life of the flavored milk. That is why it will be important to use bottle than using carton and other types of container.

            In the process of packaging, the aseptic packaging system will be used in order to sterilize different packaging materials in order to kill microorganisms that can be found in the packages that occur during the process of forming and transport to the machine before the process of filling (Ansari & Datta n.d.).

 

February 10, 2009

Indicator Programs at Redefining Progress

Introduction

Almost everything in this world needs an indicator which will allow us to know and recognize how every performance varies. With such instruments, we can be able to determine on what part needs improvement. But before we depend too much with these indicators, it is important to know how reliable it is so that errors would be avoided as time pass by. By that, the real progress of the activity will be viewed correctly and further improvement will be made.

Although the GDP use to measure the economic growth of a country, it was cited that something is wrong in its manner of measuring progress. This error probably creates such imbalances that affect the economy and the society.

 The global upswing continues to be accompanied by major economic imbalances as of now. Unfortunately, did most of us understand this very serious situation regarding our economy? Although many economist have been trying so hard so figured out what would probably be the real solution to this. Still, there are a large number of people who are incapable of understanding such dilemmas that are continuously occurring. Are they just not really aware of it? Or they just take things for granted to hide the truth about it? In every society the government plays a very important role but what if they are the one who can’t be responsible enough? Having a problem that deals with the economy is a very complicated and broad topic because it almost comprises everything. In the case of the GDP’s (Gross Domestic Product), it was being criticized by its poor manner of measuring economic growth. How will these condemns affects the economy? And does the government have something to with it? And if they do would they acknowledge their fault or blame it to the people? Are these accusations supports valid truths? As the famous philosopher Voltaire says, “It is dangerous to be right when the government is wrong”. Nonetheless, all these upbringings had a corresponding solution.

 

Defining GDP

 

            The Gross Domestic Product is usually define as the gauge indicator that economist uses to measure the economic stability of a certain country. It focuses on the region in which an income is generated or where the output is produced rather than who produces it or either how it is being produced. Some economist says that if the GDP is higher, the growth of the economy is rapidly exceeding. But there are concealed imperfections behind these measurements conducted. That’s why a lot of criticisms are being thrown with these concepts of GDP mainly because there are a lot of things to be considered to come up with a right conclusion on how it really implements the correct measurements of the economic growth.

            What are the concerns comprising the Gross Domestic Product? As stated, it tends to be an indicator of economic boom. The major advantages of using GDP per capita as an indicator of standard of living are that it is measured frequently, widely and consistently. However, it disadvantage is that it is not a measure of standard living. It is only intended to be a measure of a particular economic activity within a certain country. In this case, the negative aspects of it merge unintentionally. The GDP fails to delineate the “health” of the economy because it only views limited scope of the subject matter. In what way? There are a lot of misconceptions resulting to deficient knowledge and carelessness of such economists. By that, criticisms tend to arrive and they targeted the wrong concept of GDPs way of measuring economic progress. In fact GDP measures almost everything except the things that makes life worthwhile. However, GDP was not created to play such role. It’s just that it doesn’t make enough clear distinction between those transactions that adds to the well – being and those that diminished it. Instead, it provides the tally of all these activities without separating the productive to the destructive ones. It records every monetary action positive so as a result, it worsen the social structure and natural habitat in the economy.

            With this breakdown happening. Should the government start to make some move about it? Or they would just sit back and relax because most of these activities boost the value of GDP and therefore, the economy is heading on the right track.

 

The Shortcomings

 

            The GDP was face with a lot of pros and cons. The negative and the positive effects that it can bring to our society might lead to something devastated in the near future. But what is really wrong with the GDP?

Income is use as the basis for poverty evaluation. Part of the central concern of the economic theory and economic policy is the income distribution. Such classical economist like David Ricardo, Adam Smith and Thomas Malthus were mainly concerned with the income distribution between land, labor, capital and production as the main factors. However, in the modern period, the economist was mainly concerned with the distribution of income across the individuals and households. In this case, GDP fails to consider this factor because apparently it ignores the differences of the income between the rich and the poor although there is a wide gap between the two. It takes no account to the inequality of income, wealth and the spending power as well. It had been a long topic of argumentation regarding this. The poor becomes poorer and the rich becomes richer.

That’s why economist has come up with various strategies that might overcome this problem. The income inequality metrics was use by the economist to measure the proper allocation of income and economic equality among participants in an economy. It measures the inequalities and not the probable cause of inequality. For an accurate measurement of it, they should take in consideration the available source of income and proper implementations of taxes.

             More often, GDPs concern only lies with the amount it measures as a whole. But it doesn’t give importance to the welfare of its community. Just like for instance, there are a great number of consumer on a new product. And it will be probable that it can cause a higher value for GNP. But unfortunately these products quality are not taken into consideration other wise, the value of GNP here are merely a result of inefficiency and waste. Compare to if consumers will buy high durable goods. Although it will only provide a lesser value in terms GDP. Nonetheless, it will give the consumers a great satisfaction with the product they were using.

Another example is when a calamity hits a country and leaves tremendous damages. The rate of GNP will tend to rise because of there will be a lot of constructions made for the infrastructures but do they know the negative outcome of it? The lives and properties destroyed are such things that are too much too handle especially if the country is not that progressive. So this is the question that bothers most economists. How can you say that a country is on top of its growth in terms of GDP if they were suffering from such disaster?  There are a lot of undesirable situation that can cause the rise of GNP. But do we need all this misfortunes to happen just to be able to achieve a progress? Even the use of health care that was implemented by the government is another example of it. It can also raise GNP but who will be delighted seeing most the people in his country is suffering from diseases. It was such a very unfavorable scenario to look at.

            Externality is also a part of GDPs criticism. This is an impact on any party not involved in a given economic transaction. Either the causes were good or bad. There are two types of externalities, the positive externality and the negative externality. In the case of the positive externality, a good example of is having a good invention. This invention will soon benefit not only the inventor itself but as well as the people who might need it. In both ways it provides positive outcome. In terms of the negative side, mostly the externalities occur is the damage in the environment. The best representation of it is the climate change due to the green house gas emissions from coal, oil and gas. This case so far is the number one externality of all economic activity. Unfortunately, GDP also ignores these following consequences. These are some reasons why even ecological environmentalists are not in favor of the GDP because for them it exploits the natural resources and ignores the value of renewable and non-renewable resources to the economy.

            Another part of the GDPs criticism is that it doesn’t measure the sustainability of growth and fails to take into account of the black market. The sustainability of growth was simply defined as to meet the needs of the present time without endangering the ability of the next generations to meet their own needs.  In contrary with this, some countries are fond of exploiting their natural resources right now without even considering the fact that the next generations are still in need of that. Although they can achieve high GDP, they didn’t thought that it would only be temporary especially if they start to loose their resources at an early point of time.

            On the other hand, the black market or the underground economy is just another fact that makes GDP an inaccurate way of indicating the growth an economy. The underground economy includes most of the illegal sources of income which obviously are not registered. This includes activities and services such as transportation providers, illegal drugs, prostitution, weaponry, alcohol and tobacco and the most popular now a days, the copyrighted media. All these illegal services tend to make the figures of GDP abnormal. Despite of its unlawfulness, all these services are greatly patronized by a large number of consumers.

 

The alternatives

 

            Because of the irregularities that GDP have been compromising. The economists come up with an option to replace it. In 1995, Mathis Wackernagel, the director of Indicator Programs at Redefining Progress based in San Franciso  developed one of the very first alternative to GDP. It is the Genuine Progress Indicator or the GPI. It was rendered out of the theories of the green economics as the barometer of economic health. The main objective of it is to cut off the inadequate and misleading way of measuring the economic growth. GDP is often justified by the lack of a concrete alternative, and the belief that there is no valid way to approximate the value of social and economic factors in economic terms. That’s why GPI was developed to demonstrate that both of these obstacles can be overcome.

According to Senator Byron Dorgan (1995), the GPI reveals that much of what we now call growth or GDP is really just one of three things in disguise: fixing blunders and social decay from the past, borrowing resources from the future, or shifting functions from the traditional realm of household and community to the realm of the monetized economy.

 As part of changed that they want to implement in the economy. They take the GPI as their first step to improve and broaden the accounting framework that guides public policy.

But that time, at the Fordham University in New York. They also came up with another gauge of well – being. It is the Index of the Social Health. In here their main focus was to the nation’s health. Like the GPI, they reinforce the need for new definition of growth and progress by measuring the health of the community and not the success of the particular policy or program. More and more community project indicator projects have emerged following the same concept incorporated with the latter. They have this goal of protecting the environment and preserve the well – being that has been the number one bearer of all the negativities the GDP produce.

 

Adjustment with Genuine Progress Indicator

           

It would be quite impossible to obtain such progression on the economy without making any sacrifices. Not all things would be beneficial for both parties. So how can it be possible to create a symbiotic relationship between the nature and the economy? After coming up with the GPI, promoting it became their next agenda. According to the speech of Robert F. Kennedy, we seem to have surrendered community excellence and community values in the mere accumulation of material things. We contributed nothing beneficial to our environment.  

To minimize the continuous errors that GDP has been input to our system. GPI creates several adjustments. It subtracts the cost of long-term environmental degradation, air pollution, water pollution, ozone depletion, air pollution, noise pollution, loss of farmland, loss of forests, loss of wetlands, it adjusts for net capital formation and net foreign borrowing, it minimizes the cost of crime, auto accidents and cost of consumer durables. At the same time it adds the value of the service from the household infrastructures, highways and streets and the value of volunteer work. In short, the GPI handles not only the monetary factors but as well as the social, environmental and economic phenomena that GDP fails to consider. We’ve been so busy counting everything on which we spend money, and yet we assign no value to several vital activities that really contribute to our well – being.

 

Conclusion

 

With respect to Simon Kuznets, the GDPs principal architect. It is very unintentional that GDP was created with this objective of constructing an illusion in economic progress. Having too much of everything might not be better. At this point, everyone should acknowledge the fact that there is an irregularity unfolding the GDPs way of measuring economic progress. The growth of the economy should not be based only on the numerical value it provides to the statistics studies. But as well on how it was accomplished.

Everything might appear successful right now. But try to consider the things that are involve in every aspects of the situation given. If you have a car accident, ongoing treatment for cancer, or filing for divorce, the following misfortunes in your life helped “boost” the said economic growth. Quite annoying but that was the fact beyond GDPs way of calculating progress. Aside from that even the things that affects our natural resources helps to climb up GDP into a higher value.  It just like that the more harmful things it can be the better to our economy. Sad but true, that crimes, gambling, pollution and other degrading activities contributed a lot in our economy.  And by this point in time we assign no values to our natural wealth. People can sell all the fish they can caught, cut all the trees they can make for furniture, kill all the animals in the wild for clothing and for food.  Obviously it can provide many earnings to them. They can harvest as many as they want right now but do they ever think of the next generation? They only reduced the flow of goods and services in the future.  Lack of natural capital may lead to a more serious problem.

As Paul Hawken stated, the limits to increased fish harvests are not boats, but productive fisheries; the limits to irrigation are not pumps or electricity, but viable aquifers; the limits to pulp and lumber production are not sawmills, but plentiful forests. Nonetheless, our natural resources play a very important role in our economy. At this point the government should justify these things. It is not enough to earn more profit right now. They should make a move on how they can come up with necessary activities that would also be beneficial to the environment. Enough exploitation to our natural resources by this time. The obsession with growth as well as its confusion with the genuine development and the quality of life have caused misleading signals to the leaders and public alike, distorted policy priorities, blunted effective remedial action for environmental and social problems and led us down to a  dangerous and self – destructive path. Maybe it’s the reason why growth isn’t always a good thing. So, the next time you will encounter a headline which states that GDP is growing up it isn’t a good news at all.  In fact, it is more alarming than and quite just as same as reading a headline pertaining to various heinous crimes.

With these great numbers of criticisms that GDP is confronting right now, there is no excuse that the following are such critical judgments. The negative aspects of GDP should become an eye opener to everyone of us. It is quite threatening to know all these factors affecting the growth of our economy involves a lot of undesirable circumstances in our lives.  However now that these things have caught our attention, then it would be better to work on it step by step to come up with such accomplishments that will benefit all of us.

However, GPI doesn’t claim itself to be perfect. And there is no such thing however. What it tries to express is that its construction is based on the recognition that we do not live in an economy but in a society and that society itself is embedded in a natural environment.  It only corrects the errors inherited in the system of GDP.  Being equipped with a lot of alternatives will just make a better future for all of us. Remember that growth is not merely about jobs or profits. Do not wait for the time wherein you almost forgot the meaning of having a “good life” because you’ve been too much busy contributing to activities which are no longer sensible.  

Try promoting the concept of well – being. That happiness is one thing that money cannot buy. There is a need to shift gears in able to surpass all of this. Having trapped with this kind of situation for so long tends to create an illusion that it is all the material things in our life that completes us. What is needed are measures of well – being, prosperity and progress that gives more values to the non – material things in our life that basically makes the true basis of wealth. And in order to achieve it, there should be a restrain from using GDP in measuring our well – being and economic growth statistics. Since it only measures the quantity of the market activity without taking into consideration the social and ecological cost involve. That’s why it became an inadequate and deceptive measure of true prosperity.

It was never too late to renew our beliefs. As the world becomes more and more advance, it would be better to value our natural capital more for it has a serious effect in our economy. Let us give the next generation the legacy of valuing the real strength that we have in abundance right now. Let us bind together all the knowledge that we have at this point in order to attain a better future for them. Whatever type of indicator might be develop someday in the near future just to express the growth of economic progress still it would be better if it is always base on what we really need as human beings living in a society embedded in a natural environment.

Strategic Decision Making

Question 1

Many firms compete in industries where no one firm has a significant market share and is able to impose a strong influence over the industry. Small and medium-sized firms are often to be found in such industries. The essential feature of such industries is the absence of a market leader having the power to shape the industry. Fragmented industries occur across a broad section of different types of business. Industries are fragmented for a wide variety of reasons some of which involve underlying economic causes (Proctor 2000). In Fragmented Industries no small firm has a considerable amount of market share and no small firm can control the industry outcome.

 

Question 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Question 3

The general trend towards concentration among suppliers suggests that the revival of the small-firm sector will come to a halt and that medium-sized firms will experience an expansion. The slight decline of the large-firm sector in employment terms should not be taken as an indication of its general weakening and may, in any case, not continue during the next decade. Within the small-firm sector, there will occur a growing trend towards polarization, brought about by the new stringent demands on small-firm organizational and technological capabilities. Only small firms with high skill resources, suitable for innovative problem-solving and high standards of quality and reliability, will flourish or even survive (Warner 2001). There are different reasons for the revival of small firms. People have seen the effect small firms have on the economy and how it contributed to a better economy that is why people wanted to have more small firms but for suppliers this may not be the case. Markets which are fragmented are made up of many firms, each with small market shares, and little influence on industry-wide outcomes. The full characterization of a fragmented industry is complex. It is also non-unique, in the sense that not all of the full set of potential characteristics need be present for a market to be regarded as fragmented (Reid 1995).

 

As industries mature, they also tend to consolidate, progressing from fragmentation to concentration. It is generally recognized that there is a relationship between industry concentration and profitability. In very fragmented industries, several suppliers may be differentiated and, thereby, offer customers unique features that permit premium prices to be charged. However, with increasing competition, rival firms' margins tend to narrow as economic rents are competed away (Roney 2004).  The information and communication technology (ICT) industry is considered as one of the improving industries in Western Australia. The ICT industry in Western Australia is a broad ranging group of businesses wherein many of this businesses identify their business more in terms of the clients they provide service than their engagement with ICT.  The ICT industry in Western Australia is a fragmented industry because it has limited competition and anything that happens to that industry cannot affect the general situation in the region.

Question 4

Information systems

Information systems have proliferated in business and educational settings during the last 40 years. The utility of these systems critically depends on the adequacy of the question facilities. An individual cannot handle all of the information that is available in the system, so the individual asks specific questions that access a very small subset of the database. The information that gets retrieved hopefully is accurate, complete, and relevant. Individuals become frustrated when they receive irrelevant information and fail to receive important information. Modern information systems have sophisticated and intelligent processing mechanisms, such as intelligent tutoring systems, expert systems, and decision support systems. The processing mechanisms are so complex that it is beyond the capacity of humans to keep track of the exact procedures that underlie decision making, reasoning, planning, and information retrieval (Graesser, Lauer & Peacock 1992).Technological advances have provided a broad base for developing a wide variety of information systems. Such systems currently range from relatively simple and straightforward information reporting systems to complex, high-level advisory structures, such as expert systems, decision support systems, hypertext documents, and interactive tutorials (Graesser, Lauer & Peacock 1992).

 

The common factor among all such systems is that they are structured around large, complex databases that provide support for the performance of human cognitive activities. When designers develop any of these complex information systems, they must identify the information content of the system, the representational format of the information within the system, and the means by which the user will access the information (Graesser, Lauer & Peacock 1992).It should be noted that there are a number of information systems that are related directly to business intelligence systems. For the most part, these systems are helpful in making comparisons, analyzing trends and patterns in business, and presenting historical and current information to decision makers. Essentially, these systems assist decision makers in making better informed decisions that affect all aspects of a company’s operations. In contrast, business intelligence systems go a step further by providing decision makers with a thorough understanding of their operations today and tomorrow (Thierauf 2001). 

 

Because most information systems have been and still are, to a large degree, built on accounting data, they tend to be inwardly focused. If led by these systems, decision makers are consumed with what they already know a lot about particularly costs. In contrast, decision makers need to focus on what they find more difficult: the creation of value and wealth (Thierauf 2001).   Information systems are used by business to process different records, data and information used by the company in making decisions and strategies. Information systems evolved into technologies that made business grow faster. Information systems relate to different business processes. One process related to information system is knowledge management.

Knowledge management

There has been a gap between two concepts: knowledge management and learning management. Knowledge management is focused on providing employees with the information and tools they need to perform their jobs in the most effective manner. This could include the text of e-mail messages, instant messaging, chat sessions, remote conferences, white boarding, traditional documents, and other pieces of knowledge created by employees. Ideally this information is captured, classified, and stored in the background by the system, not directly by the employee (Alderman Jr.  & Barritt 2004). Then all of this information becomes available to other employees as part of a performance-support system or as assets that can be used in future reusable learning objects strategy (RLOs). In fact employees could simply think of the RLOs stored in a learning management system as one part of the global knowledge management of an organization (Alderman Jr.  & Barritt 2004).

 

 From an industry point of view, tools for managing learning and knowledge seem to be moving closer together. As vendors consolidate their offerings and organizations there should a unified system to support all these needs. For example, today an employee would go into a learning management system and register for a course. If a course contains fifty RLOs in a hierarchy, then the learning management system would have to treat each as a separate offering that is still managed as part of a course (Alderman Jr.  & Barritt 2004). Essentially, a knowledge management system (KMS) is capable of making comparisons, analyzing trends, and presenting historical and current knowledge. But more importantly, such a system enables decision makers to analyze and understand the patterns quickly and identify the most significant trends. As such, it is an accurate predictive method for decision makers. In addition, a knowledge management system can track and evaluate key critical success factors for decision makers, which are valuable in assessing whether or not the organization is meeting its corporate objectives and goals (Thierauf 1999).

 

Overall, a knowledge management system can assist decision makers in making better informed decisions that affect all aspects of a company’s operations. By increasing the capabilities of decision makers, a KMS environment improves the chances that an organization will achieve its goals of increased sales, higher profits, and so forth by placing knowledge and related information in the hands of decision makers at the proper time and place and by providing flexibility in their choice and sequence of analysis and in the final presentation of results. From this enlarged perspective, knowledge management systems provide essential knowledge and related information to decision makers so that they can better cope with changing times (Thierauf 1999). Knowledge management makes use of different practices to identify create, represent and distribute knowledge for reuse, awareness and learning. Knowledge management intends to introduce to a firm shared intelligence. It also intends to improve performance, build competitive advantage and create higher levels of innovation.

ICT and its industry

The advent of ICTs and cyberspace has not been achieved independently; rather, it is bound within the histories of telecommunication technologies, computing and wider social and political-economic histories. ICTs and cyberspace are transformative technologies, changing society in a number of ways. They are presently facilitating a process of restructuring, radically altering social, cultural, political, institutional and economic life. There is little doubt among analysts that the processes of globalization, and employment and organizational restructuring, in part caused by ICTs, are instrumental in the current restructuring of urban-regional fabric (Dodge & Kitchin 2001).  Cities were designed as places to overcome time with space, making communication easier. However, the growth of telecommunications to a certain extent nullifies this function by making communication easier through the overcoming of space with time. As such, there is a juxtaposition between urban places and their electronic counterparts which has led several commentators to speculate that these new, electronic spaces and flows will displace or substitute physical travel and physical urban functions, and lead to the dematerialization of the city (Dodge & Kitchin 2001).

 

 At present, however, there is little evidence of a process of dematerialization and dissolution of city life. To the contrary, evidence suggests that ICTs reinforce city life and urban hierarchies through processes of restructuring. As such, it is apparent that rather than the processes which underlie city development being destroyed, electronic spaces are merely altering patterns of urban development, and changing a city's relationship with its surrounding region and other cities (Dodge & Kitchin 2001).   This restructuring is taking place at different levels as urban fixity and electronic mobility exchange trade-offs. ICTs are actually reinforcing, and in some cases increasing, the role of major business center. In fact, the world is only a smaller place for those cities that have attracted a disproportionate share of ICT. The Internet itself is spatially concentrated in certain key cities, as evidenced by analysis of infrastructure of wires and domain names (Dodge & Kitchin 2001).

 

 As a recursive relationship has developed between the ICT industry and those reliant on information: the ICT industry is attracted to the information-rich industries as a source of business, leading to greater density and a range of services; in turn, the information-rich industries are attracted by the availability of cheap, efficient ICTs. Moreover, centralization is reinforced because many companies are reluctant to give up the close proximity of employees that fosters social and business connections, supplying tacit information considered vital in some industries, notably in the finance sector (Dodge & Kitchin 2001). The need for better information and knowledge systems led to the development of information and communication technologies.  With more people and industries needing ICT, more companies were established until it developed into an industry of it s own that continues to grow and devise strategies to achieve its various goals.

Western Australia and ICT industry

Western Australia was characterized by a feeling of certainty about what Australia stood for and wanted to achieve in the world. Australia was a nation composed of honest, decent people seeking to create a better way of life for themselves. There was an Australian way of life which embodied the desires of the Australian people. Contemporary Australia is characterized by the breakdown of these old certainties about nation, race, empire and the Australian way of life (Melleuish 1998).The earlier drive towards homogeneity and unity has slackened considerably. Quite simply the old Australian ideal of a just society founded on a homogeneous people sharing a single culture has lost much of its plausibility. For many Australians living in an increasingly internationalized world it has become more of an embarrassment than a source of pride. It might be true to say that the homogeneous and egalitarian strands in Modern Australia tended to become stronger over time and led to an increasingly conformist social order (Melleuish1998).

 

Australia in the first third of the twentieth century introduced pervasive regulation of economic activity and isolated its markets from the international economy. It did this in pursuit of equity in income distribution and national development. It maintained this system but operated it more moderately through the second third of the century. Australia's economic performance was abysmal relative to other countries that are now rich in the period of strongest commitment to regulatory isolation (Dawkins & Kelly2003). Most Australians live in communities that value the expansion of amenities and opportunities associated with increasing population. It seems that only a comprehensive failure of leadership and management affecting provision of services in the great city of Sydney would cause a retreat from support for national population growth at least at something like the current level of about one and a quarter per cent per annum. This rate is lower than the average for the twentieth century, but would be still the highest of the developed countries (Dawkins & Kelly2003).

 

The economy of Australia continues to improve as the years develop after some stagnancy over the past few years. The country made economic adjustments for the economy to develop. The economic improvement was brought about by various factors one of which is the improvement in technology. The technology in Australia is vastly improving and it initiated the growth of the various businesses in the region. The ideas that were once complex can now be easily transmitted to visible results and products that people can use.  The advancements in technology led to the development of ICTs and industries that offered such service. Western Australia’s ICT industry has acquired its own identity in the region and it helped various companies be successful.  The ICT industry in Western Australia created various opportunities not only for citizens but the members of the industry. The ICT industry in Western Australia play a role in reducing production costs and it provides management needed information on strategic concepts. The ICT industry in Western Australia provides support in increasing businesses’ logistical capabilities.

 

Impact of Core Competence and Sustainability in Business

 

Abstract

This research study draws on the core competence and value of sustainability in automotive as well as power generation industries in United Kingdom and Nigeria as supported by such comparative case analysis as the main research method being utilized of those industries focused within the dissertation study particularly Honda as part of the automobile industry and Siemens as part of power generation industry. Thus, there can be integration of such competence and sustainability framework that are essential for the industries involved as supported by such questionnaire responses through Likert scaling method as gathered in lieu of determining ideal outcomes of competence and sustainability within automotive and power generation industry in UK and Nigeria. Then, there begins to recognize and adopt positive competence and sustainability factors in giving right amount of understanding as well as application of competence and sustainability theories and concepts as reflected into the background as well as in the literature review section. Thus, explaining certain industry values and principles which are believed to underlie sustainable development that can employ a strong impact on business operations and performance wherein full coverage of industry competence are determined and assessed from within the ideal knowledge centering on business process implication that may reveal such strengths and weaknesses on certain noticeable outcomes of the study.

Comparative model involving such theory assumption can be useful analytical tool, as well as being of considerable intrinsic interest to the researchers in the field of investigative study within the academic field. Indeed, the comparative method is not a new method to reach better grounds for study analysis and awareness thus, by looking at different kinds of automotive and power generation organizations within UK and Nigeria is well and good but can be contrasting among other countries as there adds theoretically sophisticated resource dimension. The method in focus amicably pertains to the industry behaviour as well as the interaction within global industries operating in the United Kingdom and Nigeria respectively and that such impact of competence and sustainability will set forth better business operations and effective marketing options in order for these industries to fully take part in changing the business world into a more advanced transition that may have such substantial reference on the industry’s culture and responsibility.

 

 

 

 

 

 

 

Table of Content

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overview

 

This research considers such business paradigm of Honda and Siemens company in terms of realizing ample development in competence and sustainability by means of a system framework thus; looking into methods modified within the preferred model for achieving reasonable process of how such competence and sustainability affects the business in general. Many systems and frameworks that recognize competence skills and continuous sustainable development is truly visible within the industries being served by those companies mentioned that can be within wide range of industry sectors in UK and Nigeria. However, most of the industries carried upon in the study do concentrate on the external side wherein employees can be limited and are being managed in the proper context. This research will then be in form of chapters that will be concerning such availability of resources that may have direct access to related academic studies that may give enough weight on what is being focused on such research findings and application measures however, for the sustainability framework as adopted, current and future drivers of industry change must be known and considered within the competitive markets in auto and power generation industry.

 

 

 

Thus, managing sustainable industry in direct value then, will require a system that provides appropriate access to competence skills acquisition and ongoing development through substantial process denoting such impact on the business as involved that must bring tangible benefits to the management and its team according to industry be engaged in competence and sustainable growth. Then, by means of discussion and consultation with the industries executives such as the stakeholders, there can be possible example of competence framework wherein sustainable setting can incur positive features that could be appropriate for business functionality and effectiveness by such UK and Nigeria affiliated industry sectors.  Feedback from these industries particularly at Siemens UK and stakeholders indicated that no one model in its entirety would fit with their requirements, but selected features and benefits could form a model for consideration. It was noted that the framework should therefore be based upon industry defined standards of competence (National Occupational Standards) that demonstrate whether a worker is ‘work ready’. Recognition of competence against this status and quality assurance could be achieved through a number of ways for new entrants and those already in the workforce. Then, the competence model would provide a mechanism for staff appraisal, assist in the creation of employment contracts and act as a recruitment tool as some industries felt that there is a need for harder pay-off, such as reduction in insurance premiums as well as tax payments.

Moreover, at Honda business there maybe a required demonstration of technical competencies into the work status, such as specialist operation of equipment or veterinary knowledge, these must be defined by industry operations and, together with better job competence’ and so, mechanism that allows for continuous sustainable recognition and development at Honda is welcomed. Thus, better management systems could be developed or links to existing quality standards established as the research is aware of complete analysis associated with the competency framework, as both in terms of the business and individual costs and gains, plus the wider government social and economic targets. The physical resources required initiating and sustaining a framework, including the procedures for recognition of prior achievement and quality assurance are considered. However, what is clear is that it is the overall benefits to industry and the workforce that is paramount. The unique aspect of this research study is that it involves research into the extent to which core competencies gives organizations in the automotive and power generation sectors in UK and Africa specifically in Nigeria, strong sustainable environment advantage. It also intends to researching the occurrence of similar or dissimilar core competencies development (and/or deployment) patterns within the two industries It is an intention to deduce the core ideas and processes involved in the development and deployment of these core competencies in order to evaluate how these can be transformed into relevant, specific ideas/processes for other companies.

 

Aims of dissertation

 

The project aim is to assess the extent to which core competencies impact on sustained business success.  The major reasons for the project is that it is hoped that the knowledge gained from the project will be deployable across different industries and also possibly provide a framework for future work on how to further improve organizational performance through core competencies in most industries.

 

These major reasons for carrying out the project are further elucidated in the following points.

  • To provide a means of improving an organization’s competitive positioning through the application of the knowledge from the thesis
  • To provide a means of improving an organization’s overall performance.

 

Objectives

 

·        To understand the concept of core competences and how they fit into the operational structure of an organization.

 

·        To research the business development of the automotive and turbine sectors in general, and in the UK and Nigeria in particular and to understand the reasons for development.

 

·        To identify the differing core competencies within each industry and to compare and contrast the change of these overtime.

 

·        To research the impact that core competences can have, in theory, on business success.

 

·        To relate this theory to practice to determine the extent to which core competences have impacted on, and are impacting, sustained business success.

 

·        To identify barriers to adoption of core competence best practices within both industries, and to make recommendations for the future.

 

 

 

 

 

 

Chapter 1: Introduction

 

The issue of core competencies is an essential one for businesses today. Its importance not just to the engineering environment, but also beyond it, cannot be overstated. Organizations are increasingly observing that it is no longer enough to be better than their competitors; they must also be able to learn faster than them and develop greater abilities to meet existing and expected customer satisfaction requirements. Historically, companies have sought to find market niches, to develop particular areas in which their competence can be developed, deployed and exploited. The current state of high as well as changing customer satisfaction requirements necessitates that companies evolve their strategy such that they can develop competencies to match the trends of customer requirements.

 

However, being able to develop core competencies that will create enabling environments for sustainable success requires that organizations be able to:

 

·      Learn from other organizations that have been able to adapt and/or evolve their core competencies.

·