Role of Management and Leadership Theories to Bring Change in Business

“ROLE OF MANAGEMENT AND LEADERSHIP THEORIES TO BRING CHANGE IN BUSINESS”

Table of Contents

Purpose of Report

INTRODUCTION

Change Management Theories and Leadership Theories

Change Management Theories

Lewin change model

Kotter’s Change Management Theory

Kubler Ross grief cycle

The Prosci ADKAR model

Leadership Theories

Nudge Theory

Trait Theory

Behaviour Theory

Great Man Theory

References

 

The main aim is to justify the role of management theories and leadership theories in a particular business to improve its efficiency or we can say to reduce or minimise the concerns and make sure business runs smoothly. The four theories of management and leadership explained will be used in car customising business namely “HQ ARTS”.The main gist of report is about HQ ARTS NZ which is an Auto Customisation shop based in Manukau, at 149 Great South Road, Manurewa, Auckland, New Zealand. It’s owned and operated by Director Sukhdeep Singh Maan (HQ ARTS NZ, 2018). The company was established in 2015 and is classified as “Motor accessory shop operation”.HQ ARTS NZ provides affordable and high quality auto customisation services for all types of cars. Auto customisation services include Led Lighting, Sound and Security system, Window Tints and car wraps. Moreover the company also deals with home and office tints. HQ ARTS NZ focuses on specifications given by the buyer to built a car or we can say that HQ arts modify cars according to need, wants and demands of the customers. HQ ARTS NZ maintains a loyal customer base through customer oriented focus on business (Bizdb.co.nz, 2018).

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This report aims at analyzing the change management and leadership theories and all the tools and techniques associated with these theories. The change management theories and leadership theories plays a key role in the overall success of the organization as it provides the organization with efficiency in its operations. The HQ ARTS NZ is a New Zealand based firm which provides their customers with an automobile customization services to make it look better. The efficient change management plan provides the firm with a huge efficiency in its operations. And the leadership theories play a significant role in the efficiency of the change management plan.

Change management is the process in which the tools and techniques to manage the people side of change to achieve a required business outcome. When the business is not stable then the higher authorities brings in the change to prolong the efficiency of business.

Leadership means the person in charge of team in an organisation who is able to guide and influence the behaviour and work of others. Leadership is the potential to influence. It is also defined as the capacity to influence a group towards the realization of a goal. Leaders are required to develop future visions, and to motivate the team to achieve the visions.

Leadership theories play a significant role in maintaining efficiency in the organization as it provides the firm with:

Motivation

Providing guidance

Creating confidence

Building moral

Builds work environment

Co-ordination

Initiates action

The successful leader is the person who has all of the above qualities in it. Leadership plays a very critical role for the success of business(MSG, 2018).

This report is about   the change management theories and leadership theories for the success of organisation. The business in which these theories will be implemented is HQ Arts.

The theories of change management and leadership which will be discussed and implemented arelisted below as follows:-

Kurt Lewin Change Theory

Kotter’s Change Management Theory

Kubler Ross grief cycle

The Prosci ADKAR model

 

And some of the Leadership theories are listed below as follows:

Nudge Theory

Trait Theory

Behavior Theory

Great Man Theory

The change management theory of Kurt Lewin is called change theory or three phase model. This theory is based on 3-step process (Unfreeze-Change-Freeze) that provides a high-level of effort to change. It gives a manager of a particular company a framework to implement a change effort, which is always very sensitive and must be as easy as possible (Morrison M. , 2014).  By using this theory the leader or higher authority of certain organisation can do following changes –

Make any change

Reduce  the disruption of the operational structure

Make sure that the change is adopted and implemented permanently

The 3 phases of the Kurt Lewin model give us guidance on how to make people to change: a manager will implement new processes and re-assign tasks, but change will only be effective if the people involved accept it and help putting it into practice it.

Lewin change model

The Lewin change model basically involves three phases which is represented below as follows:

Unfreeze – Change – Freeze

When a formation of particular company is in place for some time, habits and routine have automatically settled in. The company is going in the right direction, but people and processes may have strayed.  The main aim of unfreeze is to get rid of tasks which are not useful anymore. Moreover it helps the employees to change their habit of doing things one way and bring in the new methods and learn new things on daily basis.

 

Change is  “implementation” of plan

When the team member opens up his mind and start doing the similar tasks in new ways it means the change has started.  The change process takes some time to get implemented and be effective. The employees need to take responsibilities and new tasks which help them in learning and developing further but on the other hand first the organisation slows down a bit.

A change process is an investment, both in terms of time and the allocation of resources. After the new organization and processes have been rolled out, a certain chaos might ensue, but that is the price to pay in order to attain enhanced effectiveness within the structure.

 Freeze is also called refreeze and it means “making new change stick”

Change will only beneficial totally if it’s made permanent. Once the organizational changes have been made and the structure has regained its effectiveness, every effort is made to implement and fix them and make sure the new change in organization becomes the standard. Further changes will be made down the line, but once the structure has found a way to improve the way it conducts its operations, “re-freezing” will give the employees the opportunity to thrive in the new organization and take full advantage of the change.

 

When a change is made for upper level group then the survival time is very short and it soon returns back to previous level therefore it indicates that it is not suffice to define the objective of planned change in group performance as the reaching of a different level.  The permanency of new change should be mentioned as primary objective (Morrison M. , 2014).

According to the studies in Journal of Innovation and Knowledge, to have a continuous growth of the organization and to have an efficient performance of the operations of the firm a change is necessary. The three steps process of the Lewin’s change model is discussed in this study and the studies also suggest that Lewing change management theory provides a constructive framework to the organizations in order to have an efficient performance of the firm. This conclusion of efficiency of Lewin’s change management theory has been concluded on the basis of the theoretical and practical implications (Hussain at al., 2016).

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Kotter’s Change Management Theory

Kotter’s change management theory is one of the most popular and is used y many organisations in the world. This theory has made d by John P. Kotter, who is professor at Harvard Business School  and author of several books based on change management. This change management theory by him is divided into eight stages where each one of them focuses on a key principle that is associated with the response of people to change.

Increase urgency –  For achieving company objective the team is motivated by creating sense of instant changes required.

Build the team – This step of Kotter’s change management theory is linked with getting the right people on the team by selecting a mix of skills, knowledge and commitment.

Get the vision correct –  this stage deals with creativity, emotions  and objectives

to create the correct vision among team.

Communicate – Communication with employees regarding need of change is also an important part of the change management theory.

Get things moving – the feedback is very crucial as it helps to identify roadblocks and implementation of new strategies in more solid way.

Focus on short term goals – Focusing on short term goals and dividing the ultimate goal into small and achievable parts is a good way to achieve success with minimum pressure.

Don’t give up – being consistent is the key to success and it is important not to give up while the process of change management is on the go, no matter how hard things look.

Incorporate change – Besides managing change effectively, it is also important to reinforce it and make it a part of the workplace culture.

(CLEVERISM, 2015) 

 There are several benefits of using Kotter’s change management theory in an organisation because it is a step-by-step process that is easy to follow and incorporate. The main idea behind it is to accept the change and prepare for it rather than changing itself. No doubt everything on this planet which has advantages also have disadvantages as well. Same is in case of Kotter’s Change management theory because whether it is a step-by-step process, no step can be skipped to reach the one after that. The entire process given in this model can be very time consuming (Venkateswaran, 2014).

According to the studies in Asian Journal of Research in Business Economics and Management, the change management theories of Kotter could be implemented in Small Medium Enterprises according to the practitioner’s validation criteria. The implementation of the Kotter’s change management theory would allow these firms to have more efficient and productive environment at the workplace which would result in the overall growth of the organization. There are several suggestions provided in order to maintain efficiency in the organization like assessment of the checklist for the change, Goal execution tracking mechanism and rewarding system for the employees in order to have an efficient implementation of the change management plan (R. Rajan, 2017).

Kubler Ross grief cycle

This model of Change management theory was given by the Elisabeth Kubler-Ross. According to Elisabeth Kubler-Ross, change could occur regardless of time and could not be prevented. There are several stages associated with this theory which could be used in order to prevent any negative impact of these changes. It could be used effectively by the organizations in order to develop an effective workforce in their organization’s environment during the coming changes. This model is also known as 5 stages of grief. It is important for the organizations to support their employees while dealing with the external changes of the environment (Anastasia, 2015). The several stages of the Kubler Ross grief model are discussed below as follows:

Denial: This stage of the Kubler Ross grief cycle is basically the very first stage which involves shock or denial. This phase of the theory refers to the time when the organization or a leader realizes about the change and is processing in his/her mind the unexpected changes.

Anger: After the arrival of the unexpected change, the organization or the leader of the organization understands the gravity of the situation and starts blaming other for the situation.

Bargaining: After the Anger stage passes away, the individual start looking for the ways in which the problems could be dealt with or ways in which the changes could be postponed for the certain period of time.

Depression: It is the phase where the organization faces sadness or stress due to the arrival of changes in the environment.

Acceptance: In this stage of the theory, the individual realizes that accepting the changes and performing accordingly could provide the firm with a more positive outcome rather than fighting it.

According to the studies by J. S. Shoolin, the Kubler Ross grief model could be used to examine and analyze the impact of the changes and the strategies and plans could be developed in according to put a positive impact on the growth and development of the firm. According to the Shoolin, if the organization analyzes the impact of change on other organizations, then it could develop plan and strategy in order to put positive impact on the growth and development (Shoolin, 2010).

The Prosci ADKAR model

This model for the change management in the organization was developed by the founder of the Prosci Jeff Hiatt. For the successful management of the changes in the organization, it is important for them to understand the impact of these changes on the small scale. It basically stands for five basic outcomes that the organization needs to achieve in order to have a successful response of these changes. These stages of the ADKAR model are discussed below as follows:

Awareness about the changes which has to be made in order to maintain efficiency in the organization.

Desire to contribute to the change by involving and supporting it.

Knowledge about how the organization could implement or adapt to changes.

The ability of the organizations in order to develop and provide skills and behaviours to their employees in order to maintain efficiency in the organization.

The reinforcement to stabilize during the change and prevent any negative impact on the organization’s revenue.

According to the studies by Bandar Alqahtani, the Prosci ADKAR model allows the firm to develop safe and sustainable practices in the organization by making amendments in the procedures and operations of the firm by the employees in order to put positive impact on the growth and development of the organization. According to the study, the implementation of the Prosci ADKAR model allows the firm to have more productive performance at the workplace (Alqahtani, 2010).

There are several leadership theories which could be used in order to have an efficient implementation of the change management plan and some of theories

Nudge Theory

“Nudge Theory or Nudge is a blend in which science, economics, and political theories are taken into account as useful and it can be applied to change management in organizations and businesses as well. This theory belongs to Cass R. Sunstein and Richard H. Thaler. Nudging employees or encouraging and inspiring them to change is the basic role of this theory (RICHARD H. THALER, 2017). It is not only beneficial in exploring and understanding existing influences but also useful in explaining why to either eliminate them or change them to a limit where positives results begin to become” (CLEVERISM, 2015).

This theory deals with human behaviour to lead them towards change. It works directly at management levels in particular organisations. It is important to note that there are many unhelpful ‘nudges’ around which can either be deliberate or may just be accidental. It focuses on the design of choices which is responsible for dealing with our preferences and influencing the options. According to this theory choices must be designed in such a way that it should be parallel with the way people think and decide.

As compared to other theories, Nudge Theory is more sophisticated in its approach and is totally different from other ways of implementation of planes. It removes the traditional change methods like punishment enforcement and direct instructions. One of the main benefits of this theory is that the difference in feelings, opinions, and knowledge of people is taken in account and also considers the reality of the situation as well as the characteristics of human nature and behaviour (Scouten, 2017).

The employees feel as part of company and choose it as their career. The new ideas are generated which is major benefit to particular company. Moreover when the management listen to it team, the employees feels respected and they try work hard and work together as one team to achieve the goal together.

It increase resistance from employees of a company and is not well applied in several industries. Sometimes when listening to much from team ends up in a argument between team members and they does not like to work together or we can say work on same page.

According to the studies by Mark Kosters and Jereon Van der Heijden, the nudge theory of leadership allows the firm to successfully handle the external changes in the environment like changes in the taxation system or any political factors. The nudge theory allows the firm to have a successful implementation of the change management plan by contributing to the leadership in the organizations. In the studies by Mark and Jereon, several examples have been considered in order to analyze the current situation of the theory and how does it contribute in the efficient performance of the firm (Mark Kosters, 2015).

Trait Theory

It is one of the oldest theories of leadership. People are born with inherited traits. Some traits are particularly suited to leadership. People who make good leaders have the right (or sufficient) combination of traits. The trait theory has two approaches which are the great man approach and the personality trait approach.

Stogdill (1974) identified the following traits and skills as critical to leaders.

Traits

Skills

    Adaptable to situations

    Alert to social environment

    Ambitious and achievement-orientated

    Assertive

    Cooperative

    Decisive

    Dependable

    Dominant (desire to influence others)

    Energetic (high activity level)

    Persistent

    Self-confident

    Tolerant of stress

    Willing to assume responsibility

    Clever (intelligent)

    Conceptually skilled

    Creative

    Diplomatic and tactful

    Fluent in speaking

    Knowledgeable about group task

    Organised (administrative ability)

    Persuasive

    Socially skilled

(Changing Minds) 

McCall and Lombardo (1983) researched both success and failure and identified these four primary traits by which leaders could succeed or fail.

Emotional stability and composure:  when situation is under pressure control pne needs to be Calm, confident and subtle. When the work load is high and you are running out of time it puts stress on mental ability but if the leader is calm and composed he will find the alternative even when resources are less.

Admitting error: Owning up to mistakes, rather than putting energy into covering up. If a employee made mistake there is no fun in pointing out the particular person. One should always let these thing go and work on the plan as per need or the team will feel unmotivated.

Good interpersonal skills: Able to communicate and persuade others without resort to negative  If the leader is able to communicate well then they might the track that everyone in team is on same page.

Intellectual breadth: Able to understand a wide range of areas, rather than having a narrow (and narrow-minded) area of eexpertise

Many researchers feel that “Traits focus on performance rather than on personal characteristics”. It is now recognised that certain traits increase the likelihood that a leader will be effective  but they do not guarantee the effectiveness. Eugene E. Jennings also concluded, “Fifty years of study have failed to produce one personality trait or set of qualities that can be used to discriminate leaders and non-leaders”. There are few weaknesses which trait theory suffers like it is not possible to identify universal or specific traits common to all leaders. We are unsure of how much trait every person should have. Leaders do not possess all traits whereas non-leaders might have all. It is not clear that which trait is most important and which are least important. Trait studies describe but do not analyse behaviour patterns (Preservearticles, 2018).

To make sure that the organisation such as HQ Arts is running smoothly and effectively the management and leadership plays the most important part. The style of leadership could be autocratic or democratic, job centred leadership or employee centred, etc.  Being positive towards the goal makes it a lot easier to achieve. The traits are present in every single individual whether or not they are leader or non-leaders.  The leadership and management at HQ Arts is to be democratic, so that the ideas of car modification can be groomed. The employees should be given equal amount of opportunity as they are the once who get the job done. Moreover they need to focus and keep in mind that customers are always right.

Behaviour Theory

Behaviour theories of the leadership are basically referred to the theories which allow understanding the specific nature or characters of the individuals. This theory is considered as the best theory as it allows the firm to understand the determinant of the success of the leadership in an organization. These behavioural studies allows to understand the importance of the leadership in an organization and would also allow the firm to make amendments in their operations in order to have a successful leadership in the change management procedures of the organization for the efficient performance of the firm (Leadership Central, 2018).

There are basically two kinds of Behavioural studies which could be used in order to have successful implementation of Leadership in the change management procedures. These two Behavioural studies are listed below as follows:

Task Oriented Leaders: There focus would be on following aspects as listed below:

Organizing

Initiating

Clarifying

And Gathering Information.

People Oriented Leaders: There focus would be on following aspects as listed below:

Observing

Encouraging

Listening

Mentoring and Coaching

According to the studies by Scott Derue et al., the leadership style in the organization suffers from the lack of theoretical research and integration which affects the performance of the leaders. The theoretical framework for the leadership in an organization could put a positive impact on the growth and development of the organization. According to this study, the overall growth and development of the organization would put a huge positive impact on the organization and would allow the firm to have an efficient performance of the change management plan in an organization (DERUE et al., 2011).

Great Man Theory

According to the studies, leadership is an inborn quality which provides efficiency in the organizations change management plan. This theory enlightens all the aspects under which the qualities of the leaders are studied.  According to this theory of Great man, the leader should have qualities like persuasiveness, charm, judgment, commanding personality, aggressiveness, courage, and intelligence and action orientation. These qualities make an effective leadership in an organization. According to the further implications of theory there are several aspects which are necessary to be considered and are discussed below as follows:

Leadership is a gift to mankind.

Everyone cannot acquire the qualities of the leaders.

The inborn qualities of an individual are alone necessary to put a positive impact on the organization.

According to the theory, the leadership qualities can be attained by an individual if properly trained for the position (Chand, 2018).

According to the studies in the Journal of Leadership Education, the study of people who were born with the leadership qualities could put a positive impact if imposed on the academic pursuit of an organization. The implementation of the theories in the training sessions could put a positive impact on the growth and development on the organization (Harter, 2003).

Bizdb.co.nz. (2018, january 03). Hq Arts Nz Limited. Retrieved from bizdb: www.bizdb.co.nz/company/9429042001553/

Changing Minds. (n.d.). Retrieved novemeber 2018, from www.changingminds.com: http://changingminds.org/disciplines/leadership/theories/trait_theory.htm

CLEVERISM. (2015, JUNE 18). Retrieved NOVEMBER 2018, from www.cleverism.com: https://www.cleverism.com/major-approaches-models-of-change-management/

HQ ARTS NZ. (2018). Retrieved from www.hqarts.com: www.hqarts.co.nz/contact.html

Hussain at al. (2016). Kurt Lewin’s process model for organizational change: The role of leadership and employee involvement: A critical review. Journal of Innovation & Knowledge, 124-127. Retrieved from https://www.researchgate.net/publication/309182963_Kurt_Lewin’s_process_model_for_organizational_change_The_role_of_leadership_and_employee_involvement_A_critical_review

Mark Kosters, J. V. (2015). From mechanism to virtue: Evaluating Nudge theory. Evaluation, pp. 276-291. Retrieved from https://journals.sagepub.com/doi/abs/10.1177/1356389015590218

Morrison, M. (2014, July). Kurt Lewin change theory three step model – unfreeze, change, freeze. Retrieved from https://rapidbi.com: https://rapidbi.com/kurt-lewin-three-step-change-theory/

Morrison, M. (2014, JULY 07). RAPIDBI. Retrieved NOVEMBER 2018, from www.rapidbi.com: https://rapidbi.com/kurt-lewin-three-step-change-theory/

MSG. (2018). Retrieved november 12, 2018, from www.managementstudyguide.com: https://www.managementstudyguide.com/importance_of_leadership.htm

Preservearticles. (2018). 5 weakness and failures of the trait theory. Retrieved from http://www.preservearticles.com: http://www.preservearticles.com/2012051932573/5-weakness-and-failures-of-the-trait-theory.html

R. Rajan, R. G. (2017). A Critical Analysis of John P. Kotter‟s Change Management Framework. Asian Journal of Research in Business Economics and Management , 181-203. Retrieved from https://www.researchgate.net/publication/318481875_A_critical_analysis_of_John_P_Kotter’s_change_management_framework

RICHARD H. THALER, C. R. (2017). ABOUT NUDGE. Retrieved from https://www.penguinrandomhouse.com: https://www.penguinrandomhouse.com/books/304634/nudge-by-richard-h-thaler-and-cass-r-sunstein/9780143115267/

Scouten, G. (2017). Using Nudge Theory to Drive Student Leadership. Retrieved from https://www.gclileadership.org: https://www.gclileadership.org/using-nudge-theory-drive-student-leadership/

Venkateswaran, D. (2014, may 19). A CRITIQUE OF KOTTER’S 8 STEP MODEL FOR LEADING CHANGE. Retrieved from https://dineshvenk.wordpress.com: https://dineshvenk.wordpress.com/2014/05/19/kotter-critique-part-1/

Impact of Increased Business and Trade on Morocco

 This report shows a nation that is having an increase of business and trade activities in the past decade and had been achieving high rating in relation to the rest of African countries. Three criteria have been used to identify the capacity of the nation at the moment and its s viability to hos the World Expo. The nation has a rich population of 35 million people and almost half of them are adults that can work in the sectors of the economy. The leading sector is mining followed by tourism in terms of the total GDP of the country as they provide a third of the total amount received in trade. The population is young and has a life expectancy of 76 years which shows the quality health care and the good standards of life that are maintained in Morocco.

Table of Contents

Abstract

Introduction

Weighting category

Morocco

Economic vulnerability index

Human asset index

Income index

Conclusion

Recommendations

References

Africa is becoming the hub of business in the recent past and most of what has been happening has been due to the increased exposure to the outside world and the increased literacy levels. Such kind of development in the African continent has satisfied the need for rapid adjustments in the economies and the creation of sustainable programs for the countries in Africa. Most of the nations in Africa today face the problem of inadequate funds for their projects irrespective of the fact that Africa itself is a very rich continent in terms of natural resources.

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This report seeks to identify Morocco as a viable contestant to host the World Expo, and three stage criteria will be used to identify the strengths and the weaknesses of the country, and why it is suited best for the task of hosting the World expo. From the research the determination of the various ratings of the country based on the criteria will help the ranking of the country in the selection process and will likely give Morocco a chance of hosting the event. Morocco has been rated as a low-income country though the development to a middle-class nation has been acknowledged in the previous rating (Klok et al. 2017, p.28) This rating will mean that the nation is still facing a challenge in the various sectors of economy that classify it as a low-income country.

From the insights in the research of Morocco, the following weights on the three criteria will be used

Important – 36-50 points

Moderately important – 16-35 points

Not necessary – 0-15 points

Economic vulnerability index

The incomes of the people in the nation arise from sectors such as tourism, which provides 20% of the GDP for the nation. The mining industry is the leading business for the nation, which generates 25% of total the GDP (Bouoiyour and Miftah, 2016. The service sector accounts for over half of the total GDP and most of the people are employed in this sector. The nation uses Dirham, which is readily converted to other accounts at any point enhancing the business and trade in the nation further (Willer and Lernoud 2016).

Agriculture accounts for about 14% of the GDP and offers 45% of the people their livelihood (Corrado, Castro, and Perrotta 2017). The textile industry accounts for 34% of all the exports for the country with 40% of the industrial workforce working in it (Schausteck et al. 2014, p.268). And estimation in profits are at $1.29 billion and the country wishes to increase it to $3.987 billion in the next decade (Lybbert et al. 2014, p.179).

The weight assigned to this is important which 45 points is;

Human Asset Index

The life expectancy for the average morocco resident is 76.1 years.

The expected years of schooling for an average student is 12.4 years, which is not enough considering that the full school years are approximately 16 years to 20 years.

Inequality rates at about 64% considering that the cultural influence in the nation causes most of the inequalities to happen generally.

44.4% of adults are employed in the sectors of the economy which still leaves a larger unemployed people in the country.

58.3% of the total population can access the internet and communication services which is unlike the countries target of having 75% of the population accessing communication services by the end of 2017/2019 period.

Due to heavy industrialization 1.7 tons of carbon dioxide emission are released contributing significantly to the global warming.

The total population of the country is at 35.7 million people by the end of 2017 and out of this 20.3% is the workforce that affect the socio-economic sustainability of Morocco.

The weight assigned to this is important, thus 44 points are awarded to the criteria in the nation.

Income Index

The nation has trade and financial flows resulting from exports and imports of 85% of the whole economy. Morocco is an African nation that is the fifth in economic capacity in Africa and has more of its population depended on trade than on any other source of income. Estimated 45% of the people in morocco are involved in business in various sectors in the economy (International Monetary Fund 2015). Morocco is a liberalized economy where the forces of supply and demand affect the markets significantly and the manner of trade that the people practice in the region.

It is ranked fourth in the quality of life index in Africa and that is behind Egypt and South Africa (Shafik 2016). 8.2% of the population work poor under a pay of $3.10 as the maximum wage that they earn (Epstein and Shapiro 2018) The income per the GNI is $7760 for a citizen in morocco, which accounts to the average income of a person in Morocco is $60,000 per year (Bouzahzah and Menyari 2013).

Recommendations

Hosting of the World Expo in Morocco will be beneficial to the economy and to the various nations and individuals that will be involved. It will open up the channels for investments and partnership as well as market the nation to the rest of the world. It will allow Morocco to showcase its culture, pride, and its economic advances too.

From this information, it is certain that the Morocco offers a great opportunity to the world to invest in a market that is growing and stable from all the political and economic activities. The nation, therefore, needs more investors as there is availability of resources and the working relations and the cost of operation is relatively cheap due to cheap energy. The country has the ability to grow the sectors, such as agriculture, tourism, mining and communications, and media sectors significantly, which will allow the nation to develop at a rate that will be beneficial to the whole community in Morocco.

The points for each of criteria was important for the economy is basically measured by these structures thus the nation will scoop 43 of the points of the importance list which is 86% important to the nation to use such a criterion.

References

Bouoiyour, J. and Miftah, A., 2016. The impact of remittances on children’s human capital accumulation: Evidence from Morocco. Journal of International Development, 28(2), pp.266-280.

Bouzahzah, M. and El Menyari, Y., 2013. International tourism and economic growth: the case of Morocco and Tunisia. The Journal of North African Studies, 18(4), pp.592-607.

Corrado, A., Castro, C. D., & Perrotta, D. (2017). Migration and agriculture: mobility and change in the Mediterranean Area https://www.dawsonera.com/guard/protected/dawson.jsp?name=https://idp.soas.ac.uk/entity&dest=http://www.dawsonera.com/depp/reader/protected/exter

Epstein, B. and Finkelstein Shapiro, A., 2018. Financial Development, Unemployment Volatility, and Sectoral Dynamics.

Lybbert, T.J., Galarza, F.B., McPeak, J., Barrett, C.B., Boucher, S.R., Carter, M.R., Chantarat, S., Fadlaoui, A. and Mude, A., 2010. Dynamic field experiments in development economics: Risk valuation in Morocco, Kenya, and Peru. Agricultural and Resource Economics Review, 39(2), pp.176-192.

International Monetary Fund. (2015). Morocco: 2014 article IV consultation: staff report: press release: and statement by the Executive Director for Morocco. Washington, D.C., International Monetary Fund http://public.eblib.com/choice/publicfullrecord.aspx?p=1996988.

Klok, J., Tilburg, T.G.V., Suanet, B. and Fokkema, T., 2017. Transnational aging among older Turkish and Moroccan migrants in the Netherlands: Determinants of transnational behavior and transnational belonging. Transnational Social Review, 7(1), pp.25-40.

Schausteck de Almeida, B., Bolsmann, C., Marchi Junior, W. and de Souza, J., 2015. Rationales, rhetoric and realities: FIFA’s World Cup in South Africa 2010 and Brazil 2014. International Review for the Sociology of Sport, 50(3), pp.265-282.

Shafik, N. ed., 2016. Economic Challenges Facing Middle Eastern and North African Countries. Springer

Willer, H. and Lernoud, J., 2016. The world of organic agriculture. Statistics and emerging trends 2016 (pp. 1-336). Research Institute of Organic Agriculture FiBL and IFOAM Organics International.

 

Analyzing Hyper-competitiveness in Contemporary Business Development Environments

ANALYZING HYPER-COMPETITIVENESS IN CONTEMPORARY BUSINESS DEVELOPMENT ENVIRONMENTS: DOES HYPER-COMPETITIVENESS RENDER DETERMINING SYSTEMATIC STRATEGIC DIRECTION FOR ENTERPRISES IMPOSSIBLE?

 

1.0 Introduction

Presently, contemporary business development environments are gradually experiencing an increased level of competitiveness and dynamism. Majority of the technology-based enterprises are undergoing rapid changes hence making it a requirement for such entities to create new concepts as a way of coming up with the changes.[1] On previous occasions, business enterprises would maximize their levels of competitive advantage to gain market control something that proved to be sustainable for a given period. Nonetheless, this is no longer the case due to the reality of hyper-competition, which can be described as a new era of competition in the business world. Various business experts define hyper-competition as tactics used by organizations to upset the competitive advantage held by direct rivals.[2] In the technology-based industry, businesses try to gain competitive advantage through price adjustments complemented by the mastery of financial independence, the decline of boundaries, customer changes and integration of technology and innovations.

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In the article Revealing Your Hand: Caveats in Implementing Digital Business Strategy by Grover and Kohli (2013), it was concluded that hyper-competition renders the determination of systematic strategic direction in enterprises impossible.[3] Due to the availability of hyper-competitiveness, business tends to focus on understanding how normal operations are affected by the rapid changes in the modern business environment. These circumstances force business executives in the technology-based industry to come up with measures that are tailored to withstand such environmental changes. Hyper-competition affects the performance of businesses as well as the process of decision-making considering it has turned the world into one level field. This phenomenon is termed as globalization. The technology-based enterprises are experiencing significant changes regarding the cultural, social and economic business environments thus making it impossible to determine the systematic strategic direction of a business. Hyper-competition depends on technology and innovations considering they are essential elements in the disruption of competitive advantage held by market leaders.

The introduction of more efficient products in the technology-based industry has played a significant role in creating disruptions to the operations of market leaders. This form of innovation can be linked to the changes that were experienced in the beverage industry due to the introduction of energy drinks. This form of innovation on the long haul proved to be a success as it resulted in competitors coming up with new concepts and lines of energy drinks. Therefore, these kinds of changes brought about by the reality of hyper-competition make it had for business executives to determine the systematic strategic direction of an enterprise. Besides, hyper-competitiveness results in business experiencing customer changes, something that business executives cannot predict and occurs sporadically.[4] Customer changes possess the consumers to determine dramatic effects on market leaders in the technology-based industry considering the success of a market.

The purchases made by consumers determine the success of an organization that specializes in the production of technology-based products.[5] For example, consumers may purchase wireless charging systems for one year and then decide to acquire wire-based charging systems for the following year. This situation underlines the vulnerability of an organization to the changes in the hyper-competitive markets. Due to hyper-competition, business executives in the technology-based enterprises are forced to assume that they operate in a business environment that is not confined to any given boundaries.[6] This situation has resulted in the elimination of boundary to entry; thus, presently it is quite easy for an outside business to invest in specific markets. The existence of hyper-competition has complicated business operations because for an enterprise to dominate a given industry, and then it is required to attain financial independence. The elimination of boundaries to entry jeopardizes the chances of a business controlling a particular industry. This research proposal will focus on the investigation of how hyper-competitiveness renders the determination of systematic strategic direction in enterprises impossible.

2.0 Statement of the Problem

The technology-based enterprises have been affected by hyper-competitiveness drastically. It is evident that competition has its place in the modern day business environment where it influences activities and day-to-day operations.[7] Competition is the pinnacle of what defines the business world. For that reason, these circumstances bring about the question of how businesses are affected by the reality of hyper-competition. Today, business executives are facing multiple struggles that are arising from the existence of competition within the global business arena. This level of competition has negatively affected the maintenance of strategic development within technology-based enterprises. An investigation conducted by Blodgett concluded that hyper-competition significantly harms business enterprises through various price factors, production and labor costs.[8] Price factors ensure that business remains operational; therefore, it is upon the management of business enterprises to determine how important pricing is to the achievement of success.

On a global stage, the technology-based enterprises have gradually experienced a rapid increase in competition; as a result, they have been exposed to poor market performance and decision-making. Hyper-competition has resulted in businesses experiencing price fluctuation something that has drastically affected the costs of operation.[9] Small businesses that have access to limited resources have not been able to keep up with the changes brought about by the reality of hyper-competitiveness. Hyper-competition threatens the profit maximization of the majority of the businesses in the technology-based industry; hence, to remain operational business executives have been forced to come up with new concepts and measures. For example, due to high competition levels to attain the state of market dominance as industry leaders businesses have been forced to a merger. Through merging, companies get to pull their resources together in the bid to gain significant market dominance through coming up with active pricing strategy development.

Small technology-based businesses are usually the most significant casualties of hyper-competition due to the existence of global competition and economy. On the worldwide stage, enterprises gain access to different options of selling, purchasing and hiring as such the level of competition has escalated. This situation has complicated the ability of small businesses to attain profitability within their service or trade. Hyper-competition has created a platform where enterprises are expected to face more firms and markets while trying to come up with strategies that can result in the attainment of market leadership and dominance. There are parts that small businesses find they are impossible to deal with most especially the outsourcing of employees. However, large enterprises face little challenges when trying to outsource employees because due to their vast resources they can hire employees from other countries or via online platforms.[10] This is an advantage that small businesses do not get to enjoy as they are forced to regulate themselves to a specific location that is within their scope or range of employment.

It is evident that the existence of high competition threatens the ability of businesses to exist and remain operational on a global stage. Hyper-competition affects the performance of companies as well as the process of decision-making considering it has turned the world into one level field. Hyper-competitiveness is associated with elevated levels of unpredictability hence these circumstances complicate how businesses can maintain strategic development. Hyper-competition has significantly disrupted the operations of businesses operations on either local or global fronts or both.[11] These are the kind of changes that make technology-based enterprises worry about their survival rate regarding their ability to ensure that they turn losses into profits. Hyper-competition has damaging effects on the profit maximization of technology-based enterprises. This research proposal will be focusing on determining how hyper-competition has affected the ability of technology-based enterprises to determine systematic strategic direction.

3.0 Research Questions

a)     In what manner does financial independence influence the maintenance of strategic development in a business?

b)     What are the effects of the decline of boundaries on the determination of systematic strategic direction in a business?

c)     In what ways do customer changes influence the determination of systematic strategic direction in a business?

d)     What are the impacts of the integration of technology and innovations on the determination of systematic strategic direction in a business?

4.0 Research Hypotheses
HO1:
Financial independence does not influence the systematic strategic development in business.
HO2:
The decline of boundaries bears no impact on the determination of systematic strategic direction in business.
HO3:
Customer changes does not influence the determination of systematic strategic direction in business.
HO4: 
The integration of technology and innovations does not determine the systematic strategic direction in business.

5.0 Importance of the Study

5.1 Business

Every technology-based enterprise will benefit from the findings of this study. This is because every business is maintained based on a plan that includes information regarding the analysis of how hyper-competitiveness levels render the maintenance of systematic strategic direction impossible. Besides, this study will solve the problem associated with the failure of business executives understanding how hyper-competition affects the level of maintaining strategic business development. The analysis of the impacts of hyper-competition helps businesses in the process of decision hence controlling the performance levels of a firm.[12] The findings of this study provide technology-based businesses with an opportunity to focus on the market and their competition. This situation offers the business executives with the perfect platform where they get to learn what their direct rivals are doing and why. Through the analysis of financial independence, a decline of boundaries, customer changes and integration of technology and innovations, business executives will update their systematic strategic plans based on the changes in the general market.

5.2 Government

Various researchers have concluded that it is evident that hyper-competitiveness affects contemporary development in the modern business.[13] This is a situation that is of interest to the government of the United States because it affects the determination of the systematic strategic direction for enterprises impossible. The findings of this study will ensure that the government gains an insight into how hyper-competition is changing the development and profit maximization function of technology-based enterprises. For that reason, the government will try to come up with new concepts that will provide businesses with the perfect tools to help in coping with the changes in the competitive markets.

Market hyper-competition in the technology-based industry can be connected to war because the objective of market leaders is to gain complete dominance. Most of the market leaders want to control the entire market.[14] This situation is further complicated by the desire of direct rivals also to gain control of the market. Thus, the findings of this study will help the government to understand the effects of hyper-competition thereby coming up with some rules of engagement. Although the United States market is free, the government still has the responsibility of establishing the lines that businesses cannot ignore. The reality of hyper-competition has violated some of the laws against false advertising and fraud as well as those against consumer rights violation. Through understanding the downside of hyper-competition, the government will ensure that businesses do not unfairly disadvantage other companies by copying their trademarks, copyrights, and patents.[15]

5.3 Scholars

This research proposal will be of significance to academic and practice-based scholars because it will help them to gain unprecedented knowledge into the effects of hyper-competitiveness on the decision making regarding strategic development in organizations. The area of hyper-competition has proven to be examinable; thus, any findings provide scholars with information that can be explored and used to explain a specific phenomenon. The research findings of this study will give the scholars significant insight into how to deal with the issues regarding hyper-competitiveness in a contemporary business environment. The research proposal will also highlight the different gaps and areas that have not been explored by other researcher, creating a basis for future research work. The underlying reason behind the conduction of research work is for the researchers to accumulate meaningful solutions that can be regarded as a commendable achievement[16]. This research proposal will provide scholars with information concerning the different limitations that often face researchers in conducting a study in the contemporary business environment.

6.0 Overview of Methodology

The research methodology in this research proposal will provide the outline for the designs and procedures that will be used in furthering the aims of the study. This section will give the readers the essential explanations of different methods, for instance, sampling techniques, sample size, target population and instruments of research complemented by other specifications. An overview of the research methodology in this proposal will provide elaboration on the methods of analysis and data collection as a way of answering the research questions. Additionally, under this section, different sources will provide support for theoretical elements as vital first-hand information.

6.1 Research Design

A qualitative research design will be used in providing answers to the topical research questions. Qualitative research can mainly be described an explanatory research.[17] For that reason, researchers use a qualitative research design as a way of attaining an understanding of the fundamental motivations, opinions, and intentions. The use of qualitative research design will provide significant insights into the effects of hyper-competition on the maintenance of strategic business development in technology-based enterprises. By using this type of research design, the study will go ahead and expose events in opinions and thoughts, and further focus on investigating the local phenomenon. The research study will use different qualitative data collection methods, especially the semi-structured and unstructured techniques that will involve the use of observations and individual interviews. A qualitative research design is fit for this study because it focuses on and highlights the process of data collection; therefore, acting as an essential element in providing answers to the research questions.

6.2 Justification for the Qualitative Research Design

The necessary information acquired for this study indicates that a qualitative research design will prove to be the perfect fit. The research topic in this study is sensitive; therefore, it provides the need for the investigation to apply the use of a qualitative research design.[18] It is anticipated that due to confidentiality reasons most of the technology-based enterprises will be cautious towards providing important details concerning how their business operations have been affected by hyper-competition. These circumstances give the reasons why the use of qualitative research design will be suitable for this research study because it will result in the acquisition of useful data. As opposed to quantitative research design, the qualitative one does not rely on sample size because it is possible to come up with valuable data even from a small sample group.

The topic phenomenon of this research proposal is complex thus requiring the use of hypotheses; this situation makes the use of qualitative techniques imperative. The method of qualitative research design will provide the researcher with a platform that will be used in acquiring data and more insights into the effects of hyper-competitiveness on strategic business development efforts in an organization. Having a restricted sample size also underlines the importance of utilizing qualitative techniques in trying to answer the research questions. The use of a qualitative research design provides detailed insights by “painting the real picture” of a research phenomenon, an important element that might not be revealed using quantitative techniques.[19]

6.3 Population and Sample Size

This study focuses on the technology-based enterprises that have been affected by the increasing growth and growing popularity of hyper-competition in the United States. This situation will provide the researcher with the right platform to examine the how hyper-competitiveness renders the determination of systematic strategic direction for enterprises impossible. To reduce the effects of biases the information that will be collected to answer the research questions will be collected from individuals who will be the right representation of the target population.[20] The complexity of the local phenomenon will potentially make it difficult for the researcher to gain access to bigger sample size. Therefore, this situation supports the importance of the research proposal utilizing the techniques of a qualitative research design that can acquire useful data even from a smaller sample size.

6.4 Type of Data

In the book Creative research methods in practice by Kara (2015), it was concluded that secondary data refers to the pre-existing information that was collected to serve a particular primary need but still can be used subsequently by other researchers to serve a secondary need.[21] The technology-based industry is fast-paced due to increased levels of competition hence it can be described as highly dynamic. As a result, in the bid to answer the topical questions the researcher will be required to borrow from the previous findings and conclusions of other researchers regarding the same research topic. The assessment of the changes in the technology-based industry in the United States provides a significant basis for this study. The analysis of the effects of hyper-competitiveness will help in the identification of the research gaps, therefore, offering questions that will need to be addressed in the future. The secondary data that will be used in this study will be retrieved from the following journals: Business & Professional Ethics Journal, MIS Quarterly, MIR: Management International Review, Information Systems Research, Strategic Management Journal, Journal of Information Technology, and Journal of International Business Studies.

6.5 Research Instruments

Various important instruments of research will be used in this research proposal; they will include academic journals and primary data collected from the respondent. The instruments of research inform the process that will be used in collecting data.[22] The instruments of research that will be used will play an integral role in providing the right information concerning the effects of hyper-competition on the strategic development of the technology-based enterprises. The collected data will ensure that the researcher gains access to the following factors; financial independence, a decline of boundaries, customer changes and integration of technology and innovations influence systematic strategic development.

6.6 Sampling Techniques

Through the identification of the right target population, this study will gain the usage of a valid process of data collection. These circumstances stress how crucial it is for the researcher to select the right sample to be used in this study as a representation of the population size. To sample the population size, this research will use the random sampling technique to identify the particular sample that will be used to answer the research questions. The use of random sampling maintains the trustworthiness of the process used in collecting data as it eliminates the instances of bias.[23] Random sampling will ensure that the study provides an approach that is well thought when trying to answer the research questions.

6.7 Data Analysis

This study will attain the right patterns that will be used in analyzing the collected data through the provision of detailed descriptions. To analyze the collected data in this study the researcher will use qualitative statistical software, such as SPSS and NVivo 12. The use of qualitative statistical software will make it easier for the researcher to gain access to a more simplified way that can be used to organize vast amounts of data.[24] This process is achieved by utilizing the statistical software to interpret the collected data. The methods of sampling, data collection and analysis do co-exist thus it is imperative that the researcher revises the process of analysis while interpreting the collected data.

6.8 Data Processing and Presentation

Graphs and tables will be used to organize and present the collected data. Various researchers have argued that by using tables to present that analyzed data, the researchers of a particular study made use of elaborate tables.[25] The use of tabular forms provides researchers with the right avenues through which they can analyze the facts and relationships underlined by the collected data. This situation is illustrated by the various factors that ensure hyper-competitiveness affects the level of maintaining strategic development. Through the visual presentation of the analyzed data, the researcher will ensure that data is also presented in a cartographic form that will include the utilization of graphs and diagrams. The graphical presentation is also another form that can be used in presenting collected and analyzed data.[26] To analyze the casuals and correlation hypotheses, the researcher will also conduct different statistical tests as a way of boosting the reliability of the research conclusions.

6.9 Research Limitations

The availability of limited academic resources on the issues regarding the effects hyper-competition will include one of the most significant factors that will hamper the success of this research study. In addition, investigations into determining how high competition has influenced the profit maximization function and the performance of firms in the technology-based industry are still in the novel stages. This situation guarantees the lack of adequate empirical materials that can be used to support the research findings.

7.0 Definition of Key Terms and Concepts

Hyper-competition: The strategies that are applied by different firms focused on disrupting the competitive advantage held by direct rivals who enjoy the role of being market leaders.[27] This is a phenomenon that occurs rapidly hence it is unpredictable.

Technology-based enterprises: These are businesses that majorly use technology to run operations that involve the provision of products and services that are based on new technology.

Strategic development: These are strategies that play an integral role in the creation and maintenance of business operations. These strategies provide specific goals and objectives that can be changed and tailored to respond to the changes in the market environment.[28]

Qualitative research design: These are oldest scientific techniques used in research and have proven to be useful in the study of motivations, opinions and the behavior of human beings by researchers and scientists.

Contemporary business: These are the settings and concepts that characterize the modern-day improvements in the business environment.

Bibliography

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Aral, Sinan, Chrysanthos Dellarocas, and David Godes. “Introduction to the Special Issue: Social Media and Business Transformation: A Framework for Research.” Information Systems Research 24, no. 1 (2013): 3-13.

Blodgett, Mark. “Substantive Ethics: Integrating Law and Ethics in Corporate Ethics Programs.” Journal of Business Ethics 99 (2011): 39-48. http://www.jstor.org/stable/41476167.

Celo, Sokol, and Aya Chacar. “International Coherence and MNE Performance.” Journal of International Business Studies 46, no. 5 (2015): 620-28. http://www.jstor.org/stable/43653870.

Chen, Hsinchun, Roger H. L. Chiang, and Veda C. Storey. “Business Intelligence and Analytics: From Big Data to Big Impact.” MIS Quarterly 36, no. 4 (2012): 1165-188. http://www.jstor.org/stable/41703503.

Foroughi, Amir, Nor Aishah Buang, Zizah Che Senik, Reihaneh Sadat Hajmirsadeghi, and Mahdi Mohammad Bagheri. “The Role of Open Service Innovation in Enhancing Business Performance: The Moderating Effects of Competitive Intensity.”Current Science 109, no. 4 (2015): 691-98. http://www.jstor.org/stable/24905729.

Groenewold, George and Lessard-Phillip Laurence. “Research Methodology.” In The European Second Generation Compared: Does the Integration Context Matter?, edited by Maurice Crul, Jens Schneider, and Frans Lelie, 39-56. Amsterdam: Amsterdam University Press, 2012.

Grover, Varun and Rajiv Kohli. “Revealing Your Hand: Caveats in Implementing Digital Business Strategy.” MIS Quarterly 37, 2 (2013): 655-62. http://www.jstor.org/stable/43825931.

Kara, Helen. “Creative Research Methods in Practice.” Creative Research Methods in the Social Sciences: A Practical Guide. Bristol: Policy Press at the University of Bristol, 2015.

Mithas, Sunil, Ali Tafti, and Will Mitchell. “How a Firm’s Competitive Environment and Digital Strategic Posture Influence Digital Business Strategy.” MIS Quarterly 37, no. 2 (2013): 511-36. http://www.jstor.org/stable/43825921.

Mudrack, Peter, James Bloodgood, and William Turnley. “Some Ethical Implications of Individual Competitiveness.” Journal of Business Ethics 108, no. 3 (2012): 347-59. http://www.jstor.org/stable/41476299.

Roome, Nigel. “A Retrospective on Globalization and Sustainable Development: The Business Challenge of Systems Organization and Systems Integration.” Business & Professional Ethics Journal 30, no. 3/4 (2011): 195-230. http://www.jstor.org/stable/41340856.

Tallman, Stephen and Mitchell Koza. “Keeping the Global in Mind: The Evolution of the Headquarters’ Role in Global Multi-business Firms.” MIR: Management International Review 50, no. 4 (2010): 433-48. http://www.jstor.org/stable/40985346.

Toporowski, Waldemar and Rainer Lademann. “The Importance of Assortment, Pricing, and Retail Site Location for Competition in Food Retailing – Results from Marketing Research.” Marketing: ZFP – Journal of Research and Management 36, no. 2 (2014): 131-40. http://www.jstor.org/stable/26426721.

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Pricing Strategy For Retail Leather Business

1. Executive Summary
Pricing strategy is play very important role in any business and pricing is always based on the consumers perception .This research is based on the Pricing strategy of Leather Retail Business in Singapore this is my first step for having retail leather shop in Singapore.
In this research the important to know what price range will make customer to buy leather products and to see gap or space in existing leather market.
This paper investigates about the consumer preferred pricing for leather products- Handbags, Wallets, Jackets, Computer Bags, Mobile case , Shoes and belts and what price range they found product is Expensive and At what price range consumer think that product is cheap? These factors are very important to know about consumer pricing acceptance. Finally we have got consumer preferred price, expensive and cheap price also

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Research paper also investigates all the factors which are influencing consumer buying decision they are – Price, Quantity, Brand and Country of Origin. We got that price is top most important factor for consumer in buying decision and Competitors Price offerings analysis shows that Store type Biz from home and Retail Leather store is much similar but store type Shopping Mall store is having high end products with high price.
For this research, SPSS, Perceptual and excel is used to know about the difference between Consumer preferred price. Perceptual is used to know preferred leather product according to the consumer age and gender. SPSS for knowing the cluster of leather product so that can be used for offering packages on demand.
Overall, Price is very important factor and there is gap between consumer preferred price and competitors offerings and there new store can enter in market for selling leather products in consumer preferred price.
1. Introduction
An entrepreneurial venture I am going to practice is to step in, in the leather retail business. This dissertation is based on the Pricing strategy of Leather Retail Business in Singapore this start will help me to stand up on my own feet. Singapore is small place but It is known as shopping paradise for Singaporean and tourists also.
All leather products are fashion symbol for teenager and youth generation in the world Singapore youths are also fond of leather products.
In 2008-2009, each and every business was facing decline due to the global crisis and in that period Singapore recession started because of that people started buying only necessary things for them and they were less concerned about the fashion and style but From first Q1 of 2010 the shadow of global crisis started fading off and base on this I think Its right time to start Leather retail business .Leather products could never die although it might face difficulties, which is the part of business.
Leather products will be purchased from wholesale leather industries, Dharavi, Mumbai. Dharavi is famous for selling all genuine leather products at cheap price.
In order to move ahead with my plan, I have to make certain assumptions and get a fair idea of the market. For this, the group will be conducted a primary research on the local people on their desire to buy leather and their expectation from the leather product
The details of overseas buyers/delegates who visited India during the three Indian International Leather Fairs in the last three years is given below: In which Singapore has entered in 2006-2008 It is taken from – http://www.leatherindia.org/annexure
Year
Country
Number of overseas Buyers
2005-06
Spain, Portugal, UK, Singapore, Oman & Italy
14
2006-07
Italy, Romania, Turkey, Argentina, Mexico, UK, USA, Portugal, Philippines, Bangladesh, France, Germany, Vietnam, Mexico, Sri Lanka and South Africa 
69
2007-08
Spain, Belgium, USA, Brazil, Brunei, Spain, Czech Rep, Netherlands, Ethiopia, Hong Kong, Israel, Kenya, Mexico, Nigeria, Namibia, UK, Romania, Poland, Finland, Colombia, Canada, South Africa, Turkey, Belgium, Portugal, Italy, Philippines, Singapore, Sri Lanka, Taiwan, Uzbekistan & Turkmenistan
116
In Singapore seems to be a considerable potential for the entry or expansion of specialized retail chains for leather retail business. Singapore is very small country and here market of any service or product gets saturated very rapidly but during my initial research shows that total – 98 retail leather shops are available in the market but in 98 retail leather shops. 25 to 30 retail shops sell Branded leather like Gucci, Bulgary.
1.2 Singapore retail leather Market
In Singapore seems to be a considerable potential for the entry or expansion of specialized retail chains for leather retail business. Singapore is very small country and here market of any service or product gets saturated very rapidly but during my initial research shows that total – 98 retail leather shops are available in the market but in 98 retail leather shops. 40 retail shops sells Branded leather like Gucci, The Indian durable goods sector has seen the entry of a large number of foreign companies during the post liberalization period. A greater variety of consumer electronic items and household appliances became available to the Indian customer. Intense competition among companies to sell their brands provided a strong impetus to the growth for retailers doing business in this sector. Increasing household incomes due to better economic opportunities have encouraged consumer expenditure on leisure and personal goods in the country. B2B meetings between India exporters and overseas buyers. Changes in consumer needs, attitudes and behavior: The growth of modern leather retail is linked to consumer needs, attitudes and behavior. Rising income levels, education and global exposure have contributed to the evolution of the Singaporean middle class. As a result, purchasing and shopping habits have been inculcated and are increasing day by day. Historically, Singaporeans have been the ones to splurge on luxury items. Today, people are willing to try new things and look different, which has increased spending on fashion and beauty products apart from apparels, food and grocery items.
1.3 Competitors of Retail leather stores
In Singapore many competitors are available but leather market is not saturated. Pls see below the list of Company Name who runs retails leather business in Singapore – http://www.singaporebusinessguide.com/category/Leather_Goods.htm
Here almost all retail leather shops are concentrating Leather wallets, Hand bags, key case, leather jackets and card holders and in the list few of company are selling all these above products but rest of them concentrating few product items and some of them concentrating on one product like only men belts and some only hand bags. I have visited retail store of Artisan where they sell all leather products. Pls see the below Pricing for some demanding products. In in leather industry Pricing is good factor in retail business and importantly if you are selling the product which you got in low price where Product has a high value so seller willingly sale product in good profit margin. Business strategy of selling product in low price which can be adopted , if you have enter in existing market where competitors are already gaining good profit margin so there differentiation can be made by selling product with low profit margin and make profit from selling large quantity.
1.4 Target Customer
People who stays in Singapore – Locals, PR or EP holders anyone who stays in Singapore and like to buy product with good quality in reasonable price. After recession hit in 2008 -people who were keen to buy branded products from showroom and malls are moving into this customer segment
Customers are segregated according to their Monthly family Income and their buying behavior. Other factors will be their preference for any particular leather product and availability of the product
1.5 Literature Review (Pricing Strategy)
1.5.1 How Competitive Forces change strategy
Price is big factor for buyers and sellers both in retail business. Typically in Singapore It is very much observed that People are more likely buy products where they get products in low price. And there is opportunity in retail leather market to have leather retail business with low business strategy.
Michael E Porter Business strategy professor from Harvard Business School has written in his article How Competitive Forces change strategy – The buyers are likely to shop for a favorable price and purchase their products
1.5.2 Empirical Analysis of Determinants of Retailer Pricing Strategy
Author Venkatesh Shanker and Ruth N Boltan has given their point of view for An Empirical Analysis of Determinants of Retailer Pricing Strategy where they investigated the other determinants of pricing strategy for retail business and how price coordination and relative price and chain factors in retailer pricing . And these outputs are derived from a simultaneous equation model and how it is underlying dimensions of retailers pricing strategies and that are influenced by some pricing dimensions and following are the These four pricing dimensions are statistically related First Competitors price and deal frequency), Second Storability and necessity ,Third Chain positioning and size , Fourth Store size and assortment ,Fifth Brand preference and advertising and Sixth Price and deal elasticity These findings are very useful to retailers profiling alternative pricing strategies.
Author Scott Alen has put some light on the point that How much should product and service be charged? How product positioning should be placed and is pricing going to be key part of that positioning? The product positioning has to be consistent with positioning because people really want to get in return same or above what they pay for. Pricing is also aferct demand because of that you have to do basic research so need to make simple questionnaire and asking them At what price they would like to buy that product and service ? even this sole practitioner will give basic curve that says that at X price, Y percentage people will buy.
Author Deloitte has emphasized main challenge of retail business is setting up an accurate base price for a product. Price is important to draw the customer and generate the sale margin
Market basket analysis should be done and we can identify an optimal base price using measurement tool like Price elasticity. This can be done by doing compare a series of price points and determining a price which generates the good gross sales margin. The past data of the product should be assessed to come up with the best base price for the market.
Retailers will be prevented stock shortages and minimized unplanned clearance markdowns by selecting the optimal price This method or strategy will ensure price image remains fix and consistent to the customer and it will enable retailers to increase sales and inventory turns.
Existing leather
1.6 Area of concern: It is necessary to set Price of Product while entering existing market. First step will be decide the price and look into the availability of leather products in different mediums. According to my analysis of counting Leather shops from different categories. Currently 26 retail local leather shops which is different from Branded leather shops, 63 branded shops and approximately local online shops are 15.
Singapore is very small country so market of any product gets saturated and there are direct competitors who are selling all types of leather products It will be challenge for new entrant to enter in existing market, stay in the market and plan for growth of the business.
1.8 Research Problem:
This market research is the function which connects the consumer and customer in the public. Market research result is used to get an idea of identity and information is used to identify and decide opportunities and problems in the market for evaluating and refining marketing situation also observing market behavior and performance. This will improve the understanding of the marketing in and out
Market Research emphasis the data collection process and analyze the results and after that collected findings should be used for their implications. It is related with problem solving methods and the technique for getting idea to how to solve the problems. To understand the unpredictable consumer buying behavior and analyze this problem and make attempt to offset this. People sometimes have perception high quality means high price. Require to segregate the pricing strategy to avoid the product price perception. Product selection is required according to the demand of Singaporeans like Mens Accessories, Women Accessories, Shoes and Leather Jackets etc and according to the demand of Singapore people.
To understand the Competitors Pricing strategy analysis for their products and then different products with different price range. This research should be niche to find the competitors pricing strategy
1.7 Objective of the Study: Price of any product or service is always play very important role and this need to explore the opportunities for entering new retail store in existing leather market of Singapore by applying pricing strategy. Research of the competitors products price and how pricing impact on Consumer buying decision.
To determine demographic segment of the existing leather products consumers and how each segment behave differently
Verify the preferred pricing for all leather products according to consumer point of view
Identifying the price of leather products where consumer think that products are expensive and cheap
Verify competitors price offerings
2. Methodology
2.1 Data Collection: The primary data has been collected from the 81 people who have contributed in Survey questionnaire form created for doing analysis on my research topic. Data collection is done with gender wise and according to the monthly income range and age to get a better idea from different view of consumer by knowing their demographic angle.
Competitor’s data collection based on the price offering of competitors to the consumer and the type of stores like, Shopping Mall, Retail shop or business from home .
Sample size was 81 for survey questionnaire of consumer and Competitors data collection sample size is 24
2.2 Data Analysis: Perceptual Analysis is used to see leather product Handbags, Wallets, Jackets, Computer bag, Mobile case, shoes and belts preference according to the gender wise. Female preference for leather products and Male preference for leather products.
SPSS tool has been used for performing for cluster analysis to know the combination of leather products and frequency analysis to get details of frequency of using leather products.
Excel is also used for getting difference between expensive price compare to preferred price and getting the details of variation of Expensive, preferred and cheap price.
2.2.1 Demographic analysis
Demographic analysis has been used to segregate data with different available basic parameters of consumers. Age, Gender, Monthly Income, Nationality, Using leather products and frequency of purchasing leather products
2.2.2 Perceptual Analysis
Perceptual analysis has been used to see the different variables position. There are 7 types of leather products – Handbags, Wallets, Jackets, Computer bag, Mobile case, Shoes and belts. Analysis is based on according to different age group and gender.
2.2.3 Frequency Analysis
Frequency analysis has been used to see frequency of preferred variable and differentiate variables preference. This analysis has helped to find out buying influenced factors – Price, Quality, Brand and country of origin.
2.2.4 Cluster Analysis
Cluster Analysis has been used to see possible cluster from available all leather products. Available products for this analysis – Handbags, Wallets, Jackets, Computer bags , Mobile case, shoes and belts.
2.2.5 Price Segmentation analysis
Price Segmentation analysis has been used to see variance among acceptance category given in primary data by consumer. There are 3 categories available Expensive, Preferred and Cheap. After this check the difference between Expensive to preferred to see which price will be suitable for consumer
3. Results and Interpretation
3.1. Demographic Analysis Result
3.1.1 Age
Result Finding and Interpretation:
There are 5 categories of age range Sample size is 81, 55% from 81 response is from age range 25-35 and second highest is from age range 35-45
3.1.2 Nationality
Result findings and Interpretation
First analysis of Nationality of all 81 responses shows that there are 4 categories in which first highest one is Indian having 51.9% and second one is Singaporean 35.8% , 8.6% Malay and 3.7% of others. This research according to this findings is more based on Indian and Singaporean.
1.3 Gender
Result findings and Interpretation
This demographic analysis is showing that in 81 responses Male are having 61.7 % and female are having 38.3% that means preference of leather products of male is more prominent research compare to female
3.1.4 Income Range- Singapore Dollar
Result findings and Interpretation
This demographic analysis is very important to know the monthly income range of taken 81 responses for this research as it is based on pricing. 27% is 10001 to 12500 and second one is 12501 to 15000 and 3.1.5 At present Using in Leather Products
Result findings and interpretations
This analysis is showing that 88.9% is already using leather products means they are already associated with their choice of leather goods and their price so following analysis is useful to get impact of their products choice of purchased leather product and what exactly they are looking for it. 11.1% are not using leather product and the following analysis will tell us about their preference which makes them to buy leather product
3.1.6 Leather Product Purchasing Frequency
Result findings
One time in a year is captured first place 22.22% from 81 responses and second place there are two categories one is 2 times in year and another is 1 time in a year . I interpret that Yearly frequency has captured more % then monthly because leather product are not essential product.
Interpretations
3.1.7 Preferred Store type for Leather products shopping
Result findings
This analysis is saying that 51.9% from 81 responses prefer to buy from Retail local shop in compare to Mall or online. I interpret that people like to buy from retail shop compare to Mall – Branded shop or online shopping.
3.2 Clustering of leather products
Result findings. There are 7 clusters for leather products shoes, belts, wallets, Computer bags, Mobile case, Handbags and Jackets. Belts and shoes is one good cluster and another one is computer bag and Mobile case.
Interpretations: Belts and shoes are having very good relation in buyers point of view if anyone likes shoes so in same manner he will like belts also . Seller can sell them as a package and same for the Computer bags and Mobile case
3.3 Perceptual Analysis
3.3.1 .Male Preference of Products with different Age Range
Result findings
This analysis is based on leather products preference according to their age group – Male only. There are 6 categories Teen : 45yrs and 1- handbags, 2- wallets, 3- Jackets, 4- Computer bags, 5- Mobile Case, 6- Shoes and 7- Belts
Interpretations: Male Adults and Male Teen they both like 4 Computer bags more and Male Young Adult prefer more shoes then other products and Aged like Wallets and Mid Aged male like Jackets and mobile case
3.3.2 Female Preference of Products with different Age Range
Result findings
This analysis is based on leather products preference according to their age group – Male only. There are 6 categories Teen : 45yrs and 1- handbags, 2- wallets, 3- Jackets, 4- Computer bags, 5- Mobile Case, 6- Shoes and 7- Belts
Interpretations
Female teens like no 2 – Wallets, female young Adults like belts compare to other leather products and female aged like Jackets, mid aged adult and adult like Handbags and shoes but Female mid aged adult like more Handbags and shoes compare to Adult female
3.4 Leather products preferred price
3.4.1 Handbags preferred/expensive/cheap
Difference between Expensive and preferred price range
Result findings and interpretaion
In the above 2 charts X axis is Number of response and Y axis is the mean of selected Price range. This analysis is done to check the variation of 81 people responses regarding their preferred price for Handbags, expensive price according to people and cheap price and difference between the people preferred and expensive pricing. People preferred price range are bit low or sometime as same as expensive price and from this we can interpretate that people will like to buy handbags if it is bit expensive
3.4.2 Wallets preferred/expensive/cheap
Difference Between Expensive and Prefered
Result findings and interpretation
In the above 2 charts X axis is Number of response and Y axis is the mean of selected Price range. This analysis is done to check the variation of 81 people responses regarding their preferred price for Wallets, expensive price according to people and cheap price and difference between the people preferred and expensive pricing.
According to this analysis output People preferred price range are low from expensive price so we can interpret that people will like to buy Wallets in their preferred price and do not like to pay more
3.4.3 Jacket preferred/expensive/cheap
Difference
Result findings and interpretations
In the above 2 charts X axis is Number of response and Y axis is the mean of selected Price range. This analysis is done to check the variation of 81 people responses regarding their preferred price for Jackets, expensive price according to people and cheap price and difference between the people preferred and expensive pricing.
According to this analysis output People preferred price range are low from expensive price so we can interpret that people will like to buy Jackets in their preferred price and do not like to pay more
3.4.4 Computer Bag preferred/expensive/cheap
Difference
Result findings and interpretation
In the above 2 charts X axis is Number of response and Y axis is the mean of selected Price range. This analysis is done to check the variation of 81 people responses regarding their preferred price for Computer bags , expensive price according to people and cheap price and difference between the people preferred and expensive pricing. People preferred price range are bit low or sometime as same as expensive price and from this we can interpret that people will like to buy Computer bags if it is bit expensive but still they are very few in compare to all 81 responses.
3.4.5 Mobile Case preferred/expensive/cheap
Difference
Result findings and interpretation
In the above 2 charts X axis is Number of response and Y axis is the mean of selected Price range. This analysis is done to check the variation of 81 people responses regarding their preferred price for Mobile case, expensive price according to people and cheap price and difference between the people preferred and expensive pricing. People preferred price range are visibly low compare to expensive price and from this we can interpret that people will like to buy Mobile case if it is provided in their preferred price range
3.4.6 Shoes preferred/expensive/cheap
Difference
Result findings and interpretation
In the above 2 charts X axis is Number of response and Y axis is the mean of selected Price range. This analysis is done to check the variation of 81 people responses regarding their preferred price for Shoes, expensive price according to people and cheap price and difference between the people preferred and expensive pricing.
According to this analysis output People preferred price range are low from expensive price so we can interpret that people will like to buy Shoes in their preferred price and do not like to pay more
3.4.7 Belts preferred/expensive/cheap
Difference
Result findings and interpretation
In the above 2 charts X axis is Number of response and Y axis is the mean of selected Price range. This analysis is done to check the variation of 81 people responses regarding their preferred price for Belts, expensive price according to people and cheap price and difference between the people preferred and expensive pricing. People preferred price range are bit low or sometime as same as expensive price and from this we can interpret that people will like to buy Belts if it is given in their preferred price range
3.5 Influence factors of Buying
3.5.1 Price-Buying Influence Factor
Result findings
Result findings are 55.6% responses is said that Price is Most important factor for them for buying leather product and 21% is said that price is very important factor and for 9.9% it is less important, 6.2% it is very less important and 7.4 it not at all important factor for buying and leather products
Interpretations
More than 50% of responses are saying that Price is Most important factor for them to buy any leather product and 21% are saying Price is very important factor so cumulative 72% out of 100% is saying Price is important factor
3.5.2 Quality-Buying Influence Factor
Result findings
Result findings are 44.4% responses is said that Quality is Most important factor for them for buying leather product and 25.9 % is said that Quality is very important factor and for 3.7% it is less important, 11.1% it is very less important and 14.4% it not at all important factor for buying and leather products
Interpretations
More than 44.4% of responses are saying that Quality is Most important factor for them to buy any leather product and 25.9% are saying Quality is very important factor so cumulative 70% out of 100% is saying Quality is important factor
3.5.3 Brand-Buying Influence Factor
Result findings
Result findings are 3.7% responses is said that Brand is Most important factor for them for buying leather product and 29.6% is said that Brand is very important factor and for 48.1% it is less important, 11.1% it is very less important and 7.4 it not at all important factor for buying and leather products
Interpretations
More than 48.1 % of responses are saying that Brand is less important factor for them to buy any leather product, 11.1% are saying Brand is very less important factor and 7.4% is saying it is not at all important so cumulative 67% out of 100% is saying Brand is not much important factor for them for buying leather products
5.4 Country Origin-Buying Influence Factor
Result findings
Result findings are 11.1% responses is said that Country of origin is Most important factor for them for buying leather product and 18.52% is said that Country of origin is very important factor and for 18.52% it is less important, 25.93% it is very less important and 25.93% it not at all important factor for buying and leather products
Interpretations
More than 18.52 % of responses are saying that Country of origin is less important factor for them to buy any leather product, 25.93% are saying Country of origin is very less important factor and 25.93% is saying it is not at all important so cumulative 70% out of 100% is saying Country of origin is not much important factor for them for buying leather products
6.Competitive Analysis
6.1 Types of Stores
Research Findings and Interpretations
Sample size is 24 stores and 45.8% from 24 is Retail shop and 37.5 from shopping mall and 16.7% Biz from home . Analysis is for all these 3 store types is to know about the pricing offering for leather products
6.2 Handbags Price Range
Handbags- Biz from Home Handbags- Shopping Mall Handbags- Retail Store
Result findings and Interpretation
Store Type – Biz from home 27% selling handbags at $1 to $150 price range and 73% at $151 to $300 and Store type – Shopping Mall 70% selling handbags at $151 to $300 and 30% $301 to $450 and Store Type – Retail 45% selling handbags at $1 to $150 price range and 55% at $151 to $300. According to these findings I interpret that retail store are selling balance price range products and Shopping mall starting range is bit high compare to retail store and biz from home
6.3 Wallets Price Range
Wallets-Biz from Home Wallets- Shopping Mall Wallets- Retail Store
Result findings and Interpretation
Store Type – Biz from home 75% selling Wallets at $1 to $100 price range and 25% at $101 to $200 and Store type – Shopping Mall 70% selling wallets at $201 to $300 and 30% $301 and above and Store Type – Retail 35% selling wallets at $1 to $100 price range and 65% at $101 to $200. According to these findings I interpret that retail store biz from home are selling at low price range products and Shopping mall starting range is bit high compare to retail store and biz from home
6.3 Jackets Price Range
Jackets-Biz from Home Jackets- Shopping Mall Jackets- Retail Store
Result findings and Interpretation
Store Type – Biz from home 50% selling Jackets at $1 to $150 price range and 50% at $151 to $300 and Store type – Shopping Mall 55% selling Jackets at $151 to $300 and 45% $301 to $450 and Store Type – Retail 20% selling Jackets at $1 to $150 price range and 80% at $151 to $300. According to these findings I interpret that Biz from home store type are selling balance price range products
6.4 Computer bags Price Range
Computer Bag-Biz from Home Computer bags- Shopping Mall Compbags- Retail Store
Result findings and Interpretation
Store Type – Biz from home 75% selling Computer bags at $1 to $200 price range and 25% at $201 to $400 and Store type – Shopping Mall 30% selling Computer bags at $201 to $400 and 70% $401 to $600 and Store Type – Retail 25% selling Computer bags at $1 to $200 price range and 75% at $201 to $400. According to these findings I interpret that retail store are selling balance price range products and Shopping mall starting range is bit high compare to
 

The Causes and Effects of the Great Depression on the American People and Business

The Great Depression, which lasted from 1929 to 1939, was a very destructive event that tore down the American Economics system. It was not caused by just one event, many things combined helped to bring it about and the damage it caused seemed irreparable. The Great Depression wreaked havoc upon the economy and in the progress, destroyed the lives and businesses of the American people. There was no way to get away from the hurt of this tragic event. The Great Depression’s causes like the stock market crash, farming practices, bank failures, and The Smoot-Hawley Tariff effected the industries and businesses by people no longer buying products, unemployment being raised, and businesses closing; and it effected the everyday American people due to families losing their savings, their homes, and everyday needs not being met.

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There were many causes that brought about the Great Depression. One huge cause of the Great Depression was the stock market crash of 1929. The stock market is an environment where investors of businesses can come together to buy and sell investments. They are often stocks, which means a portion of ownership in a particular company. Often stocks are purchased at a low price and held onto until they have become worth a lot more money, then they are sold at a much higher price making a profit for the original buyer of that stock.  Many people became wealthy doing this and as word got around more and more people became interested in investing in the stock market. The stock market became so popular that it was taking over the economy.  “The majority of available capital in the United States was put into the stock market, to the scary point that during the Bull Months of 1928 and 1929 the market was the actual economy.” (Watkins 38) Over time the stock market became known as the easy and quick way to become rich. Due to this fact, many newcomers came in to invest. These newcomers, wanting to make an easy buck, were inexperienced about the stock market and would often be taken advantage of. These inexperienced newcomers would invest lots of money on a stock only to have that stock worth plummet. These newcomers would then end up losing everything in the end. A great example of this is shown with Michael J. Meeghan. “Stock pool genius Michael J. Meeghan during one week in March 1928, drove the price of the Radio Corporation up from $90.00 to $109.00. This caused the share to completely sell out, which in turn made his his investors a total of 5 Million with himself being paid a handlers fee and the rest of the buyers making a loss as RCA’s stock dribbled back down to $7.00 before those not on the inside understood what was happening.” (Watkins 39) It was easy for these stock market professionals, that were obviously wealthy from this venture, to coax newcomers into investing all they had.  It appears the truth was simply, that the stock market was there for those who were knowledgeable to take advantage of those who were not. It did not help that these lies of quick, easy, and rich money made through the stock market were also being spread in newspapers. “In August 1929 J. Raskels, who was known for being a Wall Street mogul, wrote an article for the Ladies Home Journal, “Everybody Ought to be Rich,” saying that anyone could be $80,000 richer in ten years if he or she invested only $15.00 a week in the stock market. Of course, he knew this was not really the case and had been selling his own stocks as quietly and quickly as possible. Unfortunately, This fact did not stop him from lying to the public so that people would continue to invest which helped keep prices high enough so that he could continue profit-making sales.” (Watkins 40) From the outside looking in it seemed like the money would be everlasting and everyone wanted a piece of it. It is understandable since easy money is naturally enticing to someone. This caused the Stock Market to explode in popularity, which of course raised the prices of all stock. “The Great Bull Market grew like wildfire in 1928 and 1929. 577 million shares had been traded on the stock exchange in 1927, and in 1928 this number had grown to 920 million. By 1929 transactions had reached 1.1 billion shares by the end of the year. Stock selling at $220, $300, $400 a share had multiplied tremendously. For this time such figures were extraordinary, magical, and intoxicating, more importantly any number could play and as many as a million did. The Majority of these players were inexperienced and very easily led by the insiders to invest all of their money. Most of the stock bought buy these inexperienced players were bought on margin, 10 percent down. By September 1929 the total amount loaned by brokers had leaped from 3.2 billion to 8.5 billion.” (Watkins 38). These inexperienced players would find themselves at the mercy of the brokers when the stock market would crash. Unfortunately, the rising prices would not go on forever and the inevitable crash is exactly what happened. “By the end of September 1929 prices began lowering, and by the end of the month the New York Stock Exchange had lost 2.8 million. By Thursday October 24, the New York Stock Exchange would receive so many sell orders that everything started dropping between ten and thirty points. 12.9 million shares would be traded for a loss of 14 billion and by the end of the month there was a total loss of 150 billion.” (Watkins 40). These losses caused great concern for the welfare of United States financially. There was so much concern over these losses that warnings were sent out. “Even the President of the United States, Herbert Hoover, issued a warning against stock speculation while having his own broker sell many of his own stocks because he knew possible hard times were coming” (Watkins 39). Of course, the president was correct because the stock market crash played a huge factor in starting the Great Depression and times could not get much harder than those of the Great Depression.  “After the Stock Market Crash Americans would see and feel the hurtful effects of the Great Depression.” (Watkins 40). A second cause of the Great Depression could be found in the farming practices used in the United States. Farmers used the need for their products during the war time to take advantage. “The war years brought about a much larger need for farming products and American farmers enjoyed this boom and increase in money being made. Wheat production had the largest surge in value in farming products. In 1910 with prices at an average of 91 cents a bushel, 625 million bushels of wheat had been produced on 45.8 million acres. In 1915, a shade over 9 billion bushels had been produced, the largest yield in history, on 60.3 million acres. The Wartime Food Control Act also helped with this large prosperity in Wheat production. This act placed a minimum price of $2.00 per bushel, which was double what farmers were getting in 1910.” (Watkins 44). With farmers knowing they could make so much more per bushel it started a massive overproduction of wheat. Of course, the more something is available the less it is worth so over time this would only lower the value of the wheat. “Another agitator to the economic problem was that Europe had the ability to buy American Agricultural products, so when the food administrator set the price of wheat at an all-time high of $2.20 a bushel, farmers continued to  grow more wheat acreage by 40%. This in turn meant chronic overproduction in the 1920’s.” (McElvaine 11) This Chronic over production in agriculture led to a further dislocation in the economic structure of the United States. Farmers also had to find a way to afford such a large growth of products. In order to do this, they financed everything they owned. “Farmers financed all this extra growth in products by mortgaging and remortgaging their land, home, vehicles and anything else they owned. The amount of debt rose from 3.2 billion in 1910 to 8.4 billion in 1920. Annual interest payments increased from 203 million to 574 million.” (Watkins 44) This put the farmers in a very weakened economic state with loans against everything they owned. They would have to make sales in order to maintain ownership, however with so much overproduction in products it was impossible to maintain the high sales that were needed. “The American Farmers weaknesses was made even worse by their large amount of debt load. The expansion of the war years had helped to double farm mortgages from 3.3 billion to 6.7 billion between 1910 to 1920. When this heavy amount of debt was added to the overproduction and the seasonal farmers, like bad weather, this alone was bad enough to threaten the American economy worse than it was before the overproduction.(McElvaine 36) Another thing to also consider is that overproduction is only a good thing if the producers have someone to sell to. This was not the case, because wages had increased too slowly during the decade and even the workers could not afford to buy what they grew. As if that was not bad enough, wheat prices began to drop. “Unfortunately, the price per bushel did not hold. From 2.19 per bushel in 1919, wheat prices dropped to less than $1.00 in 1922 and finished in 1929 at only $1.05.” (Watkins 44). There was no way for farmers to make back the money they had mortgaged with prices being so low. Also, with everyone hurting from the depression there was not extra money to be spent on agricultural goods causing the need for goods to drop significantly. Naturally, this played an important part in bringing about the Great Depression especially with the number farmers losing everything due to not selling there overproduced farming produce. A third cause of The Great Depression was bank failures.  Banking had become a common idea with many people depositing all their earnings into checking and savings accounts. It was also the common place to go for loans whether for buying cars, homes, or businesses. “Between the years 1900 and 1920 national banks had grown from 14,054 to 30,909 and out of all of these banks only 1,789 had failed. This number continued to rise, until the end of 1929 which totaled 691 that year.” (Watkins 47) This, of course, would have been great if the banks followed better banking practices. Unfortunately, majority of banks were poorly run and managed.  “The Great Depression breakdown worsened when a group of bank failures that started in 1930 took the money supply away.” (McElvaine 27) Sadly, there was poor management in running these banks. Not only was there poor management  but also loans would be given without any check into how they would be repaid, money would also be loaned to risky companies that would soon go out of business, Remember also that the farmers were given loans to increase production. “A perfect example of shady practices in banks can be seen in 1925 when the Louisiana Banking Commissioner looked at failures in his state and it showed that that the entire system should have been shut down. ‘Gross and evil management,’ he said, ‘poor management, promotion of speculative enterprises, loans without security, too large of banks, loans to companies in which officers were interested’. These were all the major causes of bank failures” (Watkins 47). Of course, with these bank failures came complete money loss because none of it was insured. Everyone who deposited their money into savings and checking accounts simply lost everything.  “The 1,352 banks that failed in 1930 represented more than 853 million in deposits. In 1931, 2,294 banks went under with deposits of nearly 1.7 Billion Dollars” (Watkins 55). Regretfully, this would not be the end of failed banks. “All told more than 9,000 banks failed across the country, nearly one-third of all banks were in the United States. In some areas the percentages were even higher. In Chicago more than 80% of all banks were wiped out during the Great Depression” (Favreau 19). Not only had all these banks failed, but everyone was scared to deposit what little money they had, if they had any, into the banks that were still standing. People were too fearful that what banks were left standing could be next in line to close. All of these reasons are what brought about the bank closures. A final cause of the Great Depression was The Smoot Hawley Tariff Act of 1930. “This act was brought in to prevent foreign goods from charging less than American goods on the market.” (Watkins 41) There was a lot promised to the people with this act. “Those who enacted the Smoot Hawley tariff were promised economic success and wealth, but what followed instead was plunging exports and a decline in profits” (Irwin 8). There were too many problems that prevented this tariff from working. “One huge problem with using tariffs to assist agriculture was that it simply did not help the large number of farmers who produced goods for export” (Irwin 9). As you can see, the tariff had no effect on prices the farmers received. “The United States was an exporter of certain crops such as cotton and tobacco that was produced in the South, and grains such as wheat, produced in the Midwest: the nation sold one-half of its cotton, one-third of its tobacco, and one-fifth of its wheat and flour to foreign markets. The price at which these items sold was decided by the world market. Imposing higher duties on the trivial amount of imports of these goods could not provide farmers with any relief because it had no effect on the prices that farmers were paid for their crops” (Irwin 19). Instead of helping it did the complete opposite especially with foreign traders. “A month after the Smoot-Hawley tariff was imposed, a pro-American Liberal government in Canada lost a general election to the pro-British Conservatives, who erected trade barriers designed to shift Canada’s imports from the United States to Britain. Other countries discriminated against the Unites States exports as well, and the nation’s share of world trade fell sharply. The higher sugar duties even helped spark a revolution in Cuba that overthrew a regime that had been friendly to the United States” (Irwin 8). These were all business opportunities with foreign countries that the United States lost thanks to the Smoot Hawley Tariff Act. This act caused America to lose more, greatly needed, income causing the United States to fall into an even deeper depression. “Harvard economist Richard Cooper has stated the growth in United States tariffs, the lack of concern from the U.S. authorities to the results of their acts towards the foreigners and the foreign response that ensued, helped transition a normal decrease in economic power into the depression it became” (Iwin 4). Each one of these events happening back to back brought about the Great Depression.

 The Great Depression wreaked havoc on both industries and businesses. One way in which businesses were affected could be seen because people no longer had the money to shop freely. “During the Depression a vicious circle closed in on itself as fewer people working meant less money spent on the things that factories made, causing factories to close altogether, leading to more layoffs, month after month” (Favreau 2). People stopped making purchases and buying products in order to save money. “During the depression even those who kept their jobs reduced their spending out of fears that they were next in line to be laid off” (McElvaine 73). Which leads me to another way industries and businesses were affected by how unemployment raised. The more companies that went out of business, the more jobs that were lost, and the more jobs loss, the less people had to spend it really was a vicious cycle. “Thirteen to fourteen million able- Americans were out of work by March 1933” (Watkins 115). Growth of unemployment continued growing. “Five months after the Stock Market Crash, it grew from roughly 1.5 million to about 3.2 million.” (Watkins 51). With so many companies closing left and right no one could keep a job. “After the crash General Motors, one of the largest companies in the United States had laid off more than 100,000 workers. Ford Motor company closed its River Rough Plant in Detroit throwing 60,000 people out of work. By 1932 roughly one quarter of all-American Workers had lost their jobs” (Favreau 2). It would be impossible for these staggering numbers not to effect industries and businesses. A final way in which industries and businesses were affected could be seen in how many businesses closed and went under. It is important to understand that for every person that lost a job it was due to a company closing. “26,355 businesses fell through in 1930. This equaled to about 122 failures per 10,000 and was the largest amount ever recorded at that point in time.” (Watkins 55). Unfortunately, with people no longer spending money, unemployment raising, and businesses closing it was clear that no one could escape the Great Depression’s wrath.

Although businesses and industries suffered largely, it in no way compared to how the Great Depression effected the everyday American people. A huge effect to the everyday American people was that Americans had lost all their money when the banks collapsed. “26, 355 banks had failed in the first months of 1933” (Watkins 115). Once these banks shut down the money was simply gone. None of it was insured or covered by the government like it is today. People just simply came to the bank and the doors would be closed with their money gone. This would not be simple checking accounts, but total life savings lost.  “Raymond Tarver of Dublin GA worked at the First National Bank, one of the largest businesses in town, Tarver had earned enough from this bank to afford his home, a Model T car, and to put extra earnings in a savings account at First National Bank. One morning he received a phone call from employees at the bank. The First National Bank had locked its doors. This bank was not only a pillar of Dublin Community, but was one of the last banks standing in town after a series of bank closes earlier that year. Everybody thought their money was safe, however they thought wrong and as far as Turner it was a double blow, both his savings and job were gone” (Favreau 17). A second effect the Great Depression had on Americans was with no more money, savings, or jobs families lost their homes. “The Francos from the wholesale fish market now lived in a world of uncertainty and fear, bills piled up and income shrank. James Franco came home one day to find a sign posted on his front yard. The note on the sign stated the Franco Family were going to be evicted and thrown in the streets. At the time the Francos were able to cobble together enough money to hold onto their house, but others weren’t so lucky” (Favreau 5). These Signs of eviction were popping up in yards everywhere across America. “By 1930 John Sparenga, a mills and factory worker had lost his job. 3 years later the banks foreclosed on his property and moved to evict John and his family. On July 28th, 1933 sheriff’s deputies showed up at the Sparenga’s door to carry their furniture and belongings out onto the street. Neighbors heard what was happening and felt fear and anger knowing this same thing could happen to them. A crowd formed to stop the deputies from carrying out the eviction, 5,000 angry people surrounded the house battling more than 150 police officers. In the end the police pushed the protestors back. The Sparenga’s family lost their home and there is no record of where they ended up” (Favreau 9). Events like these all over America left many people out in the cold without a home. “Transient armies moved from one place to another begging for money and food and even stealing from others when absolutely necessary. The homeless would cook up something called mulligan stews which contained anything slightly considered edible. The people who ere homeless that did not drift would sleep in lice and rat-infested cheap and rundown hotels. Of course, this was only when they could afford the fifteen cents it cost for a nasty urine stained mattress on the floor. When they could not afford that, they slept outside in parks, underneath bridges, in concrete pipes, stream tunnels, construction sites, and broken-down vehicles. They would use anything they could find to shield themselves from the sun, rain, and wind like cardboard and old wood. These were thrown together on the outskirts of cities and they were called Hooverville in honor of President Hoover.” (Watkins 61). The amount of people that were homeless was clearly an effect of the Great Depression, too many Americans lost everything during this time. A final way in which The Great Depression effected the American People was seen by the fact that food and everyday needs were no longer being met. The average American had lost everything, so how were they supposed to afford to meet their everyday needs, it was simply impossible. “Louis V Armstrong wrote in We, Too Are the People, ‘We saw the city at its worst, one vivid gruesome moment of these dark days we shall never forget. We saw a crowd of some fifty men fighting over a barrel of garbage which had been set outside the back door of a restaurant. American Citizens fighting for scraps of food like animals” (Watkins 56). Desperation seemed to follow the hungry, homeless, and sickly and it could be seen and felt around the United States. People would beg for food or eat things that would not normally be considered food, like rotten meat or trash. If that is not bad enough President Hoover would not even acknowledge how bad times were. “He was quoted saying ‘Nobodies actually starving.’ However, he was very wrong, hunger was spread across America. People took desperate measures to feed themselves. In some places people turned to eating weeds out of hunger. In the city men could be seen digging through the trash hunting food. It was even recorded that a Chicago woman would remove her glasses before eating so she could not see the maggots moving in her meat that was rotten with stench.” (McElvaine 80). It was not just adults starving and going without, but children as well. Naturally if the parents did not have enough to eat there was not enough for the children either. “This was seen at a school when a sick little girl went to the nurse for being sick. This little girl was student of an Appalachian School who was told by a teacher to go home and eat something, because she looked too sick, only to have the girl tell her she could not eat that night because it was her sisters turn  to eat.” (Watkins 57). It was not just food that people were doing without either. People did not have the proper clothing for weather, or their shoes were falling apart with holes in them. Some families didn’t even have blankets to cover themselves at night from the cold.   “The desperation from doing without grew worse. ‘My children have not got no shoes and clothing to go to school with,’ A West Virginia man complained in 1935 ‘and we haven’t got enough bed clothes to keep worn. They are cold and hungry but to do something desperate now they would never live down the disgrace. What is a man to do?’” (McElvaine 174) I am sure all these Americans felt as though there was nothing they could do. No matter how hard anyone tried there were no jobs, no money, no security, and it even felt as if there was no help out of this sunken hole called the Great Depression.  It would take the government stepping in and a lot of hard work to undo all the damage the Great Depression caused.

 The stock market crash, farming practices, bank failures, and The Smoot-Hawley Tariff causing the Great Depression had a great effect on the industries and businesses by people no longer buying products, unemployment being raised, and businesses closing; and it also effected the everyday American people due to families losing their savings, their homes, and everyday needs not being met. The stock market crashing caused huge losses for the people who had invested their money which helped to begin the great depression. Farming practices were also a cause for the Great Depression with over-production, farmers mortgaging everything, and having no one to purchase the excess produce. Bank failure was another major cause in the Great Depression due to so many Americans not only losing all their money, but also jobs at the banks. Finally, The Smoot Hawley Tariff caused the Great Depression by raising high tariffs on products causing America to lose business with foreigners and failing to help the American farmers as it had promised. The Great Depression effected industries and businesses when people no longer had money to purchase items and they lost business, unemployment was raised, and the businesses started to close. The Great Depression effected the American people by families losing all their money and lifetime savings when banks collapsed, families also losing their homes due to no longer being able to pay their mortgages, and lastly Americans no longer being able to meet every day needs like food, clothing, and health needs. The Great Depression would have lasting effects on Businesses and the American people that would never be forgotten.

Works Cited

Favreau, Mark. Crash: The Great Depression and the fall and rise of America.  New York New York, Little Brown and Company, April 2018.

McElvaine, Robert. The Great Depression. New York New York, Times Books, 1984.

Watkins, TH. The Great Depression America in the 1930’s. New York New York, Back Bay Books, October 29, 2009.

Irwin, Douglass. Peddling Protectionism Smoot Hawley and The Great Depression. Princeton New Jersey, Princeton University Press, June 2011.

 

 
 

Effect of Market and Business Plan on Company

Milestone 1: Draft of Business Problem and Literature Review

Introduction

All over the world there are many organizations that have been facing business problems related to numerous aspects such as financial management, human resources, and product management.  As time and organizations have developed these challenges have made it harder for organizations to maximize their production and profits. Maruti Suzuki India (MSIL) is an example of a company that has been facing different obstacles which has led them to having a disadvantage in their current segment of business. The research provided will pinpoint the business problem that MSIL is facing and how it is effecting its operations. The research will also interpret the data provided for the organization and explain the differences within the market.

Business Problem

Research Problem

  Overtime Maruti Suzuki dominated the Indian market for a segment cars until it started to fail in the product management department in 2013. After reading the case, MSIL did not make it a priority to focus on its product management like its competitor such as Hyundai and Tata in the A segment. Hyundai and Tata both introduced products that were accepted by the Indian culture which caused major problems to Maruti Suzuki. This caused MSIL market share to drop as well as sales.  There were many aspects of the product management that brought negative results to the company. The first being there was poor research and development by MSIL.  The research and development group did not broaden its scope because they did most of their work in India. They were only looking in the geographical perception not an overall perception. They built products that were meant for customers who were looking in the a- segment, not people who are looking for cars in general. Its competitors Hyundai took the approach of appealing to a wide range of customers and produced a global image which MSIL did not do. Tata also developed a global image which kept customers engaged in its products. MSIL missed this which caused the organizations to fall behind its competitors. Another is that MSIL did not did not keep up with market trends of the customers whose needs were growing and evolving when it comes to the products they would like to have and that affected MSIL tremendously. Although the lace of research was MSIL down fall they have made strides to correcting the problem such as engaging and design product features that they have found was critical to their consumers, by adding this effort it has helped them in their market share.

Key Stakeholders

Maruti Suzuki company has different quite a few different stakeholders, the company is considered a joint venture due to its collaboration with Indian government. As time went on MSIL involved other stakeholders in the financial and public institution. After reading the case one of the main stakeholders are the people who are working for MSIL, as the market share starts to decline the company gets low returns which means the business receives low dividends at the end of the fiscal year. With this effect the management of the company who act as representatives of the shareholders of the organizations. Another stakeholder that is affected are the customers due to the lack of proper product management they will not be able satisfy product needs. According to the case, it shows that Maruti Suzuki motor has suffered with this problem and it is resulted to low sales and stiff competitors in the market.

Research Objective

The research objective in this case is product management had major effect on the growth and profitability of Maruti Suzuki in India. One of the benefits of knowing the research objective is being able to understand where the company started to down fall in the a- segment vehicles. Knowing this information, it helps also mold how the company can rise above the adversity that it currently is facing with its competitors.  Also, the objective is to better understand the aspects of product management that failed and the aspects that contributed to a huge lose in market share to its competitors.  One major factor that goes into this is the hiring and development in the product research department. If MSIL would have allocated more resources to this area they could have possibly avoided poor product management and they could have had proper product management and the stakeholders would have not had as many issues. 

Research Question

For MSIL, how has product management effected its market and business plan.?

Ethical Issues

Any potential ethical issue for this study would reside from the people or society that data is collected from. One ethical consideration, is that making sure that the data that is collected does not violate the rights of the people. Two ways of collecting data in a manner that can assist with this is through questionnaires or interviews from people who are randomly selected. If this method is chosen, they must consent and agree to be a part of the research that would be used to promote the product. Data that is collected should be recorded and collected in a data base that is secure and not tampered with. Also, protecting human rights will be effective and significant that advocates the well-being of the people who have participated. The human subjects will only be required to provide information that is relevant to the case study. Another major aspect is confidentially of the participants and will be maintained in an efficient manner to ensure privacy regulations laws. Respect to privacy will be highly prioritized in the study.

Literature Review

The following review will analyze theories that adhere to the organizational problem in Maruti Suzuki               and the bias and limitations that are present, it will touch upon research studies that have similar issues and an organization with similar issues.

Theories

The problems that are affecting Maruti Suzuki India is poor product management. Overall management is the main problem affecting the organization. There are many theories that can be applied to ground the problem that MSIL is facing. According to Anderson, Rungtusanatham, & Schroeder (1994), they outline that Maruti Suzuki company failed at applying the scientific management theory in its overall operations. The main responsibility of the management team was to make sure there was improvement in the process and that it grows from a regional to a global stand point when it comes to production. Scientific theory of management indicates that when ensuring growth fails, it causes negative problems to the business (Locke, 1982).  This theory grounds the problem affecting MSIL ensuring that productivity and poor product management is the reason why Hyundai and Tata took over the market. Another theory that grounds the problem is the product management theory.  For instance, the product management theory involves brining in the best product. The product can be new or old to the market but market research shows that business must identify changing needs of the consumers, research on improving product is best when facing the competitors (Nambsian, 2002). Another element is that product management covers marketing as well.  In the case study, it highlights how MSIL failed to ensure proper product management and how the product management theory grounds the issue that it is currently facing. One example of this is that product management theory asks for market research to figure out the needs of consumers as well as constantly improving with the need and standards and MSIL failed to do so causing them to suffer in market share.

Bias and Limitations

After reading the case study there are many biases and limitations. In the case, it states that Maruti Suzuki has a had a huge loss of market share overtime.  The data presented shows the percentages and the trends of different players in the segment over the years. Although the stock given shows positive bias (Anderson, Rungtusanatham, & Schroeder, 1994). There is a huge drop as a result of lower production that is supported by the data. One major element that is missing in the case is that it shows how the market changed by how the data was collected causing reason to question the validity of the data used in the case. Another limitation is the data collected cannot be verified so it’s not clear if the data is biased or not. These biases and limitations can affect an organization negatively if it relies on informed judgment to resolve the issue.

Other Research Study

According to Becker Ritterspach (2005) research it illustrates a similar problem of biases and limitations of studies specially to Maruti Suzuki India. According to the research it highlights that there is bias and limitations present in the case. The case study didn’t give any evidence of the source of the information provided and data was collected based on people’s review similar to MSIL. It manufactured products and the information given was not reliable.

Other Organizations

One other organization that had similar issues was Blackberry. Blackberry used to be one of the top runners in telecommunication industry. They were competing with apple but the lack of product management brought down their stocks. Blackberry chose to be very limited with its operating system. The other companies such as Apple were always evolving and improving their operating system. Android and Apple interface changed the world of mobile applications, by the time blackberry noticed this it was too late which resulted in Blackberry now not being a top cellphone company. This case is prime example of poor product management. Blackberry has now joined the android platform but it’s too late and blackberry has lost market share that they may never get back.

References

Anderson, J. C., Rungtusanatham, M., & Schroeder, R. G. (1994). A theory of quality management underlying the Deming management method. Academy of management Review, 19(3), 472-509.

Becker-Ritterspach, F. A. (2005). Transfer, intercultural friction and hybridization: empirical evidence from a German automobile subsidiary in India. Asian Business & Management, 4(4), 365-387.

Blackberry, Where it All Went Wrong. Retrieved from; http://bgr.com/2013/09/30/blackberry-downfall-analysis-iphone/

Locke, E. A. (1982). The ideas of Frederick W. Taylor: an evaluation. Academy of Management Review, 7(1), 14-24.

Nambisan, S. (2002). Designing virtual customer environments for new product development: Toward a theory. Academy of Management Review, 27(3), 392-413.

Mukherjee, J., Mathur, G., & Dhar, N. R. (2015). Maruti Suzuki India: Defending Market Leadership in the A-Segment. Sales and Marketing Case Study. Canada: Ivey Publishing.

Walmart Business Analysis

Contents (Jump to)
Walmart’s Current Strategy
Organizational structure, culture, and control systems
SWOT Analysis for Walmart
Porter’s Five Analysis of Walmart
Key Strategic Issues at Walmart
Personal SWOT Analysis
Financial Analysis of Walmart
Recommendations

Walmart store Inc. is not only the retail giant, but also is the largest grocery chain in the world. Walmart store Inc. was founded in 1962. Samuel Walton and his brother J.L. Walton open their first Walmart Discount City in Rogers, Arkansas (Walmart History, 2010). For Walmart store Inc., their common mission is: “Save people money so they can live better” (Walmart corporate, 2010). Compared with their main competitors such as Target and K mart, Walmart’s 2009 sales were almost 50% more. “Because of its giant size and buying power, Walmart can buy its products at very low prices, exchanging high purchase volumes for low cost then passing the savings onto its customers” (Wikinvest Walmart, 2010).

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Walmart has 8,900 stores around the world in three different business segments of retail stores that including: Walmart stores, Sam’s Club and Walmart international. All of them offer different kinds of merchandises including electronic appliances, groceries, furniture, apparel and health & beauty stuffs etc. For their business segment, they have over 54% of the company’s stores are located in the United States, and the others international stores are mainly located in central and south America and China. The company mainly focuses on offering the lowest prices to attract its consumers. Walmart totally earned $408 billion revenue in 2010, increase 1% compare to 2009 (Wikinvest Walmart, 2010).
In 2009, Walmart earned $255.7 billion in the domestic segment of the company’s revenue. For Walmart stores segment are further categories into three different formats including: Supercenters, Discount stores and Neighborhood Stores. For the Sam’s club, it is the second largest membership-only retailer club ( Costco is the first largest membership-only retailer) in United States belong to Walmart Inc., their main customers mostly are offices, convenience stores, motels, restaurants and schools etc. (Wikinvest Walmart, 2010).
For now, Walmart has total 3,121 international stores all over the world including in Mexico, Japan, Canada, China and countries in central and South America. However, recently Walmart begins to slow down their growth rate in the United State and turn their main focus onto its international stores to develop growth. For international stores locations altogether earned total $98.6 billion revenue in 2009, compared to the sales of 2008, is increased 9.1% (Wikinvest Walmart, 2010).
Strategic History of the Industry
The whole retail industry in the United States has over $4 trillion annual revenue. The main retail companies are including Walmart, Home Depot, Kroger, Costco, and Target. Some of the large companies dominate some retail sectors such as mass merchandisers and grocery stores, other sectors like auto dealers and convenience stores are fragmented. However, retail industry still has many small and specialty retailers are single-store operations (Hoover, 2011).
The economy deeply affects the retail demand. In other words, retail demand depends on the economy. Many different kinds of economic factors such as job growth, recession, personal income, consumer confidence and interest rates can strongly affect consumer spending behavior. When during recessionary periods, the bad economy can affect the retail sales growth rate slow drastically or even sales revenue decline. While the retail spending grows rapidly when in the period of strong economy growth, for example consumers will spend more on grocery when they have more income. However, the rising interest rates will affect consumer purchase behavior and consumer ability to finance large amount of purchase such as purchasing cars (Hoover, 2011).
Strategic History of Walmart Store Inc.
In the early stage of strategic history for Walmart, they always unchanged their vision “always low price” for their customers. Until 1990s, Walmart announced that they planned to go global. They wanted to look for international markets for the reasons as following: First of all, Walmart has facing very strong competition in United States such as Target and K mart. These two firms had aggressive expanding their business and had started sharing Walmart’s market share. Secondly, the market in the United States is already saturated; it was becoming difficult for the company to continue its growth rate. Thirdly, the US population is accounted for only 4% of the world’s population and if they want to expand their global market, China had the potential massive growth due to their huge population of over 1.3 billion people. The last reason is, globalization opened up new markets in China and created opportunities for discount stores such as Walmart (Walmart’s Cost Leadership Strategy, 2004).
On the other hand, Walmart is using the strategy that cooperates with local suppliers to purchase their products, even though the organizational culture is standardized with the home country. This strategy is not only use to the products purchasing, but also adapted to the local cultures and stores decoration and designed are also changed to meet local taste all around the world (Walmart’s Cost Leadership Strategy, 2004).
Organizational mission statement
As we know, the mission statement for Walmart is “every day low price.” In order to insist their mission, Walmart implemented three approaches in the market. First, it increased the local purchasing in order to reduce the purchasing costs and also suit consumers’ needs in different places. Secondly, it maintained a good relationship with their suppliers, satisfied them by paying within 3-7 days during its initial years. Thirdly, it established distribution centers (DC) and computerized its management system to improve efficiency and reduce costs (ICFAI, 2005).
Business Level Strategy
For these several years, Walmart has been trying hard on expand its stores outside the United States. It through two different to expand their international business market: new store construction and acquisition. Acquisition strategy of supermarket chains had been a part of Walmart’s entry and store expansion strategy in Canada, Mexico, Brazil, Japan, China and Great Britain (The Walmart Puzzle, 2008).
Over all, the Walmart strategies were including: multiple store segments, lower daily prices, lots of name-brand merchandise, reduce operating costs, emphasized customers satisfied service, wide selection products, disciplined expansion into new geographic markets, and using acquisition to enter foreign market (Walmart Store Inc., 2010). However, no matter Walmart are in which foreign country, their company vision “always low prices” is never changed.
The company’s low distribution costs and cost-efficient supply chain management are the big reasons why Walmart is so success and at the same time reduce the products’ prices. Walmart has get into distribution efficiency compare with their competitors because of its rural store locations.
Current strategy for the major operations/functions of the company
Current strategies for Walmart are including low costs, high volume, increase customer satisfaction and expansion strategy. Walmart creates name recognition and customer satisfaction, and combined the retailer with the reputation of offering the best prices. They also expand their new business segments to different sectors such as pharmacies, automotive repair, and grocery sales to increase their sales revenue.
Expansion strategy:
The company realized that building a new store will allow for increase market share value. After their success in the rural areas, Walmart moved to urban areas and then moved to surrounding areas. The expansion strategy made Walmart the number one retail store in the United States. As Walmart continue its expansion domestically, the firm decided to go international. Furthermore, Walmart realized that acquiring an existing retail firm is necessary for expand domestic and international markets. Therefore, Walmart by acquire retail store which enable to expand locally and internationally.
“Always low prices make customers live better” strategy is believed the strongest strategy used by Walmart. The firm developed the idea of dealing directly with the manufacturer and with the power control by Walmart will enable it to get the best deal from the manufacturers and suppliers.
Organizational structure, culture, and control systems
“Saving people money to help them live better” was the mission for Walmart. Hence, Walmart negotiates different suppliers and understanding their cost structure in order to reduce the price. Walmart has to be certain that the manufacturers were doing their best to cut down costs. Also, Walmart believed in establishing a long-term relationship with their suppliers.
Walmart had 129 distribution centers located at different locations all over the US. Over 80,000 items were stocked in these centers. Walmart’s own warehouses directly supplied 85 percent of the inventory, as compared to 50-65 % for competitors. Shipping costs for Walmart is about 3 % which is lower than its competitors, 5%. The distribution centers ensured a steady and consistent flow of products to support the supply function (Walmart’s Cost Leadership Strategy, 2004).
Walmart’s logistics infrastructure was its fast and successful transportation system. The distribution centers were serviced by more than 3,500 company owned trucks. To make its distribution process more efficient, Walmart also uses a logistics technique called cross-docking. In this system, the finished goods were directly picked up from the manufacturing plant from suppliers, and then directly supplied to the customers. The system reduced the handling and storage of finished goods, eliminating the role of the distribution centers and stores (Walmart’s Cost Leadership Strategy, 2004).
SWOT Analysis for Walmart Store Inc.
(S)trengths
Reputation Brand Name: Walmart is a powerful brand and pioneer in the retail industry with the wide spread network of stores. It has a reputation for low price, convenience and a wide range of products all in one store for customers. Walmart has captured about 10% of the retail market in the U.S. and continues to expand. Walmart stores continue to open all over the country making Walmart a household name. Walmart has also been widely acknowledged for its social responsibility actions. The company has donated to a variety of charitable organizations and has been accredited for bringing jobs and wealth to less developed communities.
Offer Low Prices: Walmart uses its enormous size and buying power to pressure its suppliers into extremely low prices, offering orders of high volumes of merchandise in exchange for low prices. The good thing about Walmart is that its shifts the low cost advantage to customers and available the products at lower prices. It has loyal customer base because it meets the expectation of customer by always delivering the goods at lower prices at compare to its competitors.
Expand Global Market: Walmart has aggressively expands its international market over the past few years and has experienced global expansion. For example its purchase of the United Kingdom based retailer ASDA.
Technology: Technology is strength to Walmart with its inventory control system that was recognized as the most sophisticated in retailing. The technology linked all the stores to the headquarters and the company’s distribution centers. It also enables the warehouse of which the goods are ordered, and direct the flow of goods to the store and proper shelves.
Supply chain and logistics management: Supply chain and logistics management are one of the strengths of Walmart. This allows Walmart to utilize the Just- in-time inventory concept and avoid the pilling up inventory to save the extra cost for maintaining inventories in the warehouses.
Human Resource: Walmart always keen to provide training to their employees to improve the customer service level. The firm hire locally, provides training programs for its employees. Walmart also gets its employees involve and encourage them to make use of words like: we, us, and ours. It also provides stock ownership and profit sharing with great contribution from the H. R of the firm. Walmart was named one of the best 100 firms to work for.
Cross-docking inventory system: Using the cross-dock technique, Walmart was able to effectively leverage their logistical volume into a core strategic competency. Walmart operates an extensive satellite network of distribution centers serviced by company owned trucks. Its satellite network sends point of sale (POS) data directly to 4,000 vendors. Each register is directly connected to a satellite system sending sales information to Walmart’s headquarters and distribution centers.
(W)eaknesses
Employee turnover: Walmart has high employee turnover which costs more money and time for company to train the new employee.
Bad publicity: Walmart is currently facing a gender discrimination lawsuit. Their female employees accuses that they were discriminated against in matters regarding pay and promotions. And also, Their female managers were accounted for the minority group in the company.
Lock of flexibility: Walmart sell very wide range kinds of products for example like clothes, food, pharmacy or stationary which lack of flexibility compare with other more focused competitors. Other competitors may have the ability to make changes and improve on a certain product lines when the needs of their customers change. Walmart, however, may have too much merchandise and not be able to focus in on sectors that need to be improved.
Some products have poor quality: Although Walmart provides low price of products, however, customers sometimes complain about the poor quality of few products.
Facing difficulty in International market: It is hard for Walmart to expand their business out of US to totally different countries all around the world. Moreover, Walmart has to facing different culture and customer behavior in different countries, for example Walmart facing difficulty to expand the market in China.
(O)pportunities
Customers: Because Walmart provides low price to their customers, so they are able to attract more customers. Furthermore, customers basically are able to purchasing everything in one store that satisfied their needs. Walmart 24 hour’s stores also satisfied their customers.
Diversified store types: Walmart’s different store types and new locations provide more opportunities to exploit new market. Stores diversified from local, small-based sites to large super centers.
International Expansion: No doubt that continued expand the international market is a huge opportunity for Walmart. Walmart’s oversea stores have experienced significant growth. There are actually tremendous opportunities for future growth in developing countries and Asian markets than in the United States such as China and India. Creating strategic alliances and licensing agreements with other global retailers are ways to move into different countries.
(T)hreats
Competition: Walmart faces different strong competitions locally and internationally. Walmart main competitors are including Kmart, Target, Carrefour and Costco wholesale. In 2010, the Net Profit Margin for Walmart is 3.59%, Target 4.22%, Costco wholesale 1.69%, Carrefour 0.38%, respectively (Hoovers, 2010). Target is Walmart’s direct competitor in the US, offering a range of general merchandise in a similar store format (Wikinvest, 2010).
Economy Recession: The revenue for Walmart is affected by economy recession. Good economy is an opportunity for great business, because customers will have more money to spend. If the economy is great, there will be more jobs and people will shop more. However, if the economy is bad, there will be fewer jobs and people will shop less. Also, with the high price of gasoline and its effect on the economy, Walmart will certainly be affected the most.
Strategy imitation: Walmart strengthens its competitive advantage on low-cost products. Other competitors may imitate their low-cost strategy to take over their market shares.
Low Brand Loyalty: In the retail industry, customers would like to choose the product with the lowest price. In other words, customers do not care about the brand or which retail stores, if Costco has the exactly same chips that sell cheaper than in the Walmart, then customers will choose to buy the chips in the Costco not Walmart.
TOWS MATRIX
STRENGTHS
WEAKNESSES
Reputation Brand Name
Bad publicity
Offer Low Prices
Lock of flexibility
Expand Global Market
Some products have poor quality
Technology
Facing difficulty in International market
Supply chain and logistics management
Employee turnover
Human Resource
Cross-docking inventory system
OPPORTUNITIES
OPPORTUNITIES-STRENGTHS
OPPORTUNITIES-WEAKNESSES
Customers
Build on its already efficient distribution system to further expand in the U.S and globally.
Walmart should be awareness and strict to control of the quality of the product in order to keep their customers basis.
Diversified Store Types
Expand diversified store types to International market in order to increase profit in International market.
Set higher employment standards through enhanced training to keep their employees have best performance.
International Expansion
Duplicated the successful delivery logistic management and the distribution centers into International market.
Continue to build on cost efficient pricing and production due to expansion.
Go into new markets and buy out their local retailers to gain market share.
THREATS
THREATS-STRENGTHS
THREATS-WEAKNESSES
Competition
Buy raw materials or products from local suppliers to hold a better political status within the local community further to compete with their competitors.
Human resource department should set a benefits long-term promotion program or standard and training program for their employees in order to decrease the employee turnover.
Economy Recession
Create their own brand of products and increase the quality of products in order to establish customers’ loyalty.
Establish joint venture partnerships or long-term relationship with local retail companies to get the advantages in the International segment.
Strategy imitation
Develop strong R&D and technology to enhance the competitive advantage and avoid imitation from other competitors.
Low Brand Loyalty
Five Forces Analysis for Walmart Store Inc.
Threat of entrances – Low
The threat of new entrance in the grocery and discount retailer industry is very low. New entrants have to face with the strong low-price competition among exist giant retail companies like Walmart, Costco and Target. New entrants need to invest large amount of capitals to establish their brand recognition, service, and variety of product offerings that Walmart, Target, and others competitors continue to improve on each day. In addition, existing companies can drop prices lower in order to force a new competitor out of the market. Therefore, the threat of entrances is low.
Power of buyer-High
Customers have many choosing opportunities and consider about products very details. They want the product now and they want it with the best service, best quality and reasonable price. Customers also enjoy increasing choice of products and choose one product that has the best quality and better price. For example, if customers find out Target sells an exactly product that has better quality and price than Walmart, and then they will choose to buy it in Target instead of Walmart.
Power of Suppliers – Low
The bargaining power of suppliers is very low. Walmart is very famous on giving pressure to their suppliers to cut their price lower and lower in order to offer the lowest price to their customers. On the other hand, become the supplier of Walmart is a very fierce competition. In 2004, about 10,000 new suppliers applied to become Walmart vendors. However, only about 200, or 2%, were ultimately accepted by Walmart (Gwendolyn Bounds, The Wall Street Journal). Therefore, the bargaining power of suppliers is low.
Rivalry – High
The competition in the US grocery and discount retailer industry is very high. The main competitors for Walmart in the local market are Kmart and Target. These companies also have to face competition from wholesalers such as BJ’s, Costco and even the international market such as Carrefour. Walmart has adopted a cost leadership generic strategy. In the past, most companies have not been able to match Walmart’s strategy “everyday low prices.” However, Walmart’s barrier to entry (economies of scale) and strength (supply-chain management) can be easily imitated with sufficient resources. Therefore, retailers are in a fierce competition that see who can offer their customers the lowest price.
Threat of substitute – Low
The threat of substitutes in this industry is low because only few companies have ability to offer such a variety of products available instantly and also low prices. One possible substitute is online shopping; however, customers usually do the online shopping for clothes or other stuffs but not for food or grocery shopping. Therefore, the threat of substitute is low.
Key Strategic Issues
Issue #1: Open too many new stores close to existing stores lead to new stores taking over the market shares from existing stores.
Status Quo
Wal- Mart depends on opens many new stores and expands into new market to increase the long-term sales and income growth. However, because of Walmart’s large size of expansion, new stores are effects the sales on existing stores. For example, Walmart builds a store relatively close to an already existing store, the new store might take away customers from the old store thus decrease the sales in existing stores (Walmart, 2010).
Evolutionary Change (Incremental Improvement)
In order to solve this problem, Walmart expands their business segment into international market instead of domestic market. For example, Walmart opened 5 times number of stores in the international market in 2010 compared to domestic stores; most of stores are in Mexico, China, and Central America (Walmart, 2010).
Revolutionary Change (Huge/Drastic Change)
Walmart is also aggressively to open business segments in India if the country opens up the sector to foreign direct investment. India has retail market more than 1 billion; no doubt India is a huge opportunity for Walmart. However, retailers that carry multiple brands (like Walmart) are restricted to wholesale outlets in India. After India’s policy change, Walmart is allowed to expand superstores and generate revenue in India (Walmart, 2010).
Specific tactics to implement the strategy
Walmart needs to establish long-term relationship or joint venture with local retail company to get into the market in India. Although in 2006, Walmart announced that it had tied up with Bharti Enterprises Ltd. (Bharti) to get into the Indian retail sector. Bharti was a diversified company, and one of the biggest mobile telephone service providers in India (Walmart and the Indian Retail Sector, 2007). However, because of the government policy, the small retailers’ groups and the Left parties against allowing the company into India are all the barriers that Walmart has to face it.
Issue #2: International competitors
Status Quo
In order to expand and improve the sales revenue for the economy recession especially in the domestic market, Walmart has been aggressively expand its business segment into international market. However, the local big retailers or small retailer’s groups are against Walmart to get into their market to take over the market shares because of its low price strategy (Walmart, 2010).
Evolutionary Change (Incremental Improvement)
Improve its supply chain, logistic and technology segment to lower its delivery and operation costs in order to compete with local big retailers such as Britain’s Tesco, France’s Carrefour, and Germany’s Metro (Walmart, 2010). On the other hand, retail business segment is hard to create products differentiation, because commodity products are all the same for customers. The only way that gains the market shares for retail stores is not only low price but also quality of products. Therefore, Walmart should awareness of its quality of products to attract more customers even in the international market.
Revolutionary Change (Huge/Drastic Change)
Walmart should acquire and purchase the local retail companies in order to get into the international market. On the other hand, establish long-term relationship with local suppliers to have the win-win situation for their cooperation.
Specific tactics to implement the strategy
In the beginning of year 1, 2 and 3, Walmart should first focus on improving its supply chain, logistic and technology improvement in order to compete with local big retailers on its lower operation, delivery costs and high quality of products. For the long-term tactics, Walmart should deeply penetrate into the local market, understand different cultures and customers behaviors and then cooperate with local suppliers to establish long-term partnership.
Personal assessment
SWOT Analysis of myself in relation to the organization (What can I offer to the organization?).
(S)trengths:
International expansion (China): Walmart is extremely aggressively penetrated into the market in China. Also, no doubt that China has 1.3 billion populations which accounted for the most majority population in the world, creates a huge business opportunity for Walmart. Therefore, Walmart needs a manager who can speak fluently Mandarin and English, and really understand about Chinese culture and Chinese customers’ behavior. Hence, I can offer Walmart my knowledge to develop more opportunity in China’s market in order to maximize the profits.
(W)eaknesses:
Lack of working experience: Even though I can speak fluently Mandarin and understand the Chinese culture and customers’ behavior; however, I still lack of working experiences. I do have some part time working experience such as working in starbucks, but do not have full time working experiences.
(O)pportunities:
Because of my professional knowledge (bachelor and master degree are both business management) are expertise on this field which can offer Walmart a professional employees or manager. Moreover, my family also has business in China, Hangchow, which makes me has understanding and interested about China. I can provide Walmart establish partnership with local suppliers and establish long-term relationship with them to compete with local retails’ competitors.
(T)hreats:
Many applicants around the world: There is still having many talented applicants around the world apply to get into this company. Some of the applicants have high education degree and business knowledge and also have ability to speak many different kinds of languages. Therefore, I am in extremely fierce competition.
Not every business segment in Walmart is my expertise: I have weakened and lower advantages compared to local American because of the speaking and cultural differences. Furthermore, the company does business in many different retail formats, including supercenters, food and drugs, general merchandise stores, cash and carry stores, membership warehouse clubs, apparel stores, soft discount stores and restaurants. However, not every business segment in Walmart is in my field of expertise.
Financial Analysis
2010 Annual Sales (Figure2-1)
(Source: Hoovers, 2011, http://0subscriber.hoovers.com.leopac.ulv.edu/H/company360/competitiveLandscape.html?companyId=11600000000000)
As you can see in Figure 2-1, this is 2010 annual sales for 4 main retail stores in the United States. They are including Walmart, Target, Costco Wholesale and Carrefour. Walmart has almost $400 billion sales in 2010. Compared to other competitors, annual sales for Walmart was much higher than other companies. Carrefour annual sale in 2010 was around $100 billion. Annual sales for Target and Costco were just around $50 billion in 2010.
2010 Net Profit Margin (Figure2-2)
(Source: Hoovers, 2011, http://0subscriber.hoovers.com.leopac.ulv.edu/H/company360/competitiveLandscape.html?companyId=11600000000000)
In Figure 2-2, net profit margin in 2010 for Walmart was 2.98%. Target was higher than Walmart which had 3.69% net profit margin in 2010. Other two competitors, Costco and Carrefour were both under 1.84% in net profit margin in 2010.
Figure 2-3
(Source: Hoovers, 2011, http://0subscriber.hoovers.com.leopac.ulv.edu/H/company360/competitiveLandscape.html?companyId=11600000000000)
The Return on Asset ratio is useful in measuring how efficiently a company uses its assets to generate profit. By definition, ROA is calculated by dividing the Net Income by the total asset of a company. Refer to Figure 2-3, ROA for Walmart from 2006 to 2010 are much higher than its competitors. Walmart’s ROA were around 9% to 10% each year, compared to its competitors which were all much lower than Walmart. This basically means that Walmart utilizes its assets well enough to generate profit in comparison with their competitors. However, ROA in 2007 for Target is higher than Walmart, Target 9.29%, Walmart 9.05%. Target’s major competitive advantage over Walmart lies in its customer base: the average household income for Target customers is about $50,000 a year, whereas the average yearly income for a Walmart customer is only $35,000
Figure 2-4
(Source: Hoovers, 2011, http://0subscriber.hoovers.com.leopac.ulv.edu/H/company360/competitiveLandscape.html?companyId=11600000000000)
The return on Stockholders’ Equity (ROE) ratio measures the percentage of profit earned on stockholders’ investment in the company. In other words, return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested.   In Figure 2-4, ROE for Walmart were around 20% from year 2006 to 2010, compared to other competitors which are higher than others.
Figure 2-5
(Source: Hoovers, 2011, http://0subscriber.hoovers.com.leopac.ulv.edu/H/company360/competitiveLandscape.html?companyId=11600000000000)
“Net profit Margin is an indication of how effective a company at cost control
 

Anheuser-Busch Business Plan

Milestone 2 Implementation

 

Abstract

Recently, Anheuser-Busch acquired multiple breweries across the United States to assist in the entry to the craft beer market. This process of acquiring breweries is expensive, but the goal is of any beverage maker is to sell their product at the highest price possible. If Anheuser-Busch was able to develop and sell their own craft beer, it would sell at a higher price than their existing beer lineup but be at a lower cost than purchasing an established business. The new beer to develop would be an American style India Pale Ale or American IPA. It could be marketed towards millennials and women. “Millennials are people, who are between the ages of 18-34, and women only account for 25% of the craft beer population (Herz, 2016).” Anheuser-Busch can use their existing market presence to help penetrate the new market with this new beer. After all the recent acquisitions, Anheuser-Busch has the ability, buying power and knowledge to push this endeavor forward. “According to Andy Goeler, CEO of craft for Anheuser-Busch, craft beer right now, it’s playing a very important role in the industry, and while around 80 percent of consumers still enjoy and drink domestic large lagers, the craft piece of the business is really growing (Rotunno, 2015).” If Anheuser-Busch is to survive in this niche market, the newest acquisitions and the new product in development needs to help sell more beer at a higher rate than their normal domestic beer.

Business Implementation

 There are several elements needed in putting a business plan together. A few items to highlight are the implementation of technological advancements to integrate, an implementation plan, a project review process, and the inclusion of intrapreneurship and entrepreneurship thinking.

Physical and Technological Resources

In researching the needs for Anheuser-Busch’s business plan a decision needs to be made where the beer will be brewed. The benefit of all the Anheuser-Busch breweries is they are scattered all over the United States and they have their own distribution system. This will allow for the beer to be stocked on shelves quicker, fresher and allow to be more profitable. Anheuser-Busch has 13 breweries from New Hampshire to California which helps accomplishes the quick distribution of the new beer to the local shops.

The equipment for the locations is being evaluated on a buy versus rent analysis to determine the most cost-effective use of funding. Because there are 13 locations, the new equipment should be pleased with service agreements which will help provide replacements and reduce downtime.

Implementation Schedule

The implementation schedule for Anheuser-Busch has based their recent actions of purchasing multiple craft breweries over the last 10 years. The strategy has been for Anheuser-Busch to increase their market share in the craft beer demographic. The initial process was expensive because of all the purchases; however, the development and implementation of a new craft beer product will help lessen the costs and have the same outcome in sales as their acquisitions.

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The work breakdown structure (WBS) details work needed to produce various product or deliverables. The WBS is designed for the scope of the project to make sure it is feasible. It also provides the ability to assign the work, establish a baseline, and measure accomplishments. It defines, collects and reports information to all the stakeholders, as well as defines the relationship between work, organization and costs associated. It can take a good amount of time to develop a WBS because of the uncertainties associated with the project and its scale.

Below is an example of the WBS to be used by Anheuser-Busch to create a new craft beer. The work breakdown structure (WBS) defines the work necessary to produce the product or deliverables. The WBS is designed to enable the definition of the scope of the project, provides the ability to assign the work, establish a baseline, and measure accomplishments objectively. It defines, collects and reports information to all the stakeholders, as well as defines the relationship between work, organization and costs associated. It can take a good amount of time to develop a WBS because there may be many uncertainties associated with the project and its scale.

Below is an example of the WBS to be used by Anheuser-Busch to create a new craft beer.

FIGURE 1

Anheuser-Busch’s new beer has a similar brew process as their flagship beers Budweiser and Bud Light, however, a project plan with milestones and required tasks was developed to keep the project on course. The project plan is continually monitored and evaluated if timelines need to be adjusted as any issues that may arise. The project will take approximately 18 months to complete with a vast amount of the time spent on material and equipment sourcing. This area is the most important because most of the raw materials are readily available as needed but hops are going to the most challenging because of the recipe.

Below is a table of the major key milestones to ensure the new beer will be available on time

TABLE 1:

Project Review Process

 Creating and observe the milestones will provide the correct guide to the project towards success. The first identification of the target market of the millennial age group has already been achieved. The market analysis performed using data from the website Beer Advocate and Brewers Association. “Targeting a specific group of customers reduces the capital needed for marketing and leads to a higher return on investment (Kaleikini, 2009).”

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 The next key milestone is coming up with the prototype for the beer. “Prototyping helps evaluate and test. Sometimes drafts of a design can be unrealistic in real-world applications, having a tangible prototype can help identify design areas that are worthwhile and those that need to be reevaluated (Upton, 2010).” Once a prototype has been designed, it will give Anheuser-Busch an outline of the financial implications to try run of the new beer.

The last milestone is the profitability of the beer. It is critical for Anheuser-Busch analysts to track theses milestones and KPIs. The first KPI to continually monitor is the break-even analysis of sales. The faster the beer hits the marker the likelier the beer will be a success. After the first run of beer sales, the analysts can verify where the beer sold the best and how to reallocate inventory to those markets for faster sales. However, if baseline sales are poor then marketing and a reevaluation need to occur because the first run of beer has been ineffective. Operating at loss is not ideal but if it is short term it is sustainable because profits will hopefully come back but if the loss is long-term, then Anheuser-Busch needs to modify their strategic plan for the marketing of the new beer to help drive sales.

Table 2 Break-Even Analysis

Intrapreneurship

 To make this new beer a success, Anheuser-Busch needs to take advantage of on their intrapreneurial opportunities from the previous brewery acquisitions. Anheuser-Busch will need to continue to learn and focus on the knowledge of the people. Intrapreneurship takes many to be involved in the implementation plan where all members involved offer ideas about how to market or participate in tasks that are directly ordered by the entrepreneur. The entrepreneur, as well as intrapreneurial, are both give goals to complete to ensure financial concerns and performance factors are met and on schedule. (Gustafson, 2016).

References:

Gustafson, F. R. (2016). The Importance of Business Implementation. Retrieved December 3, 2017, from http://smallbusiness.chron.com/importance-business-implementation-34571.html

Herz, J. (2016, August 16). TODAY’S CRAFT BEER LOVERS: MILLENNIALS, WOMEN, AND HISPANICS. Retrieved from Brewers Association:      https://www.brewersassociation.org/communicating-craft/understanding-todays-craft-beer-lovers-millennials-women-hispanics/

Kaleikini, M. (2009, November 30). Why is it important to define a target market for your business? Retrieved June 2, 2018, from                                                                                     https://www.entrepreneur.com/answer/222022

Rotunno, T. (2015, July 26). Inside Anheuser-Busch’s craft beer deals. Retrieved from CNBC: http://www.cnbc.com/2015/07/24/inside-anheuser-buschs-craft-beer-deals.html

Upton, S. (2010, December 02). Four Key Uses of Prototyping. Retrieved June 2, 2018, from https://www.moldmakingtechnology.com/articles/why-is-prototyping-important

Importance of Accounting Information in Business Development

Describe how accounting information helps shareholders and lenders to make decisions concerning the operations and performance of the entity.
Accounting information can be used by shareholders and lenders to look at an entity’s financial position and whether it is viable to invest or lend to the entity. If the performance of a company has been poor and there is no indication of this improving, a potential shareholder will not invest in the company as there is nothing to gain from the investment and a lender will not loan money to the company due to the risk of not seeing that money again. If however, the company is turning a profit, indicates that it will continue to do so in the future and has a great many assets, both shareholders and lenders will consider investing in the company in line with their personal interests.
List five/six stakeholders of accounting information. Describe the information requirements for each one; for example, lenders would need information regarding the business’s ability to repay debt and service a loan.

Stakeholder

Information Requirements

Banks

Whether the company in it’s capacity can repay a loan should it decide to take one out.

Employees

Whether the company can support an employee’s lifestyle and longevity in the company. The employee may also seek opportunities in the company such as promotion

Governments

The about of tax the company should be paying and whether the company will pay any more tax in the future.

Community

Whether the company is an asset to the community, providing jobs and resources to other organisations within the community such as sponsorship.

Consumers

Whether the company is providing quality products or services and not cutting corners on the quality of the products. They may also like to see whether their favourite product will continue to be available.

Suppliers

Whether the company can fulfil the financial obligation of purchasing products from the supplier so the supplier itself can make a profit.

Darby Davis is considering purchasing a sushi bar in the inner Brisbane suburb of Paddington. Outline the importance of a business plan for Darby and the type of accounting information she will require to assist her in making the decision.
Business plans are important for new businesses as they provide the background and the purpose of the forthcoming business. In reference to the textbook, “All business plans, whatever their structure, should cover the key issues of marketing, operations and finance”[i]. Specifically, a business plan should include strategy including a background profile, marketing strategy, timeline of business implementation, financial backing and any other issues the business may have.

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How can the professional accounting bodies assist in standard setting?
Accounting firms can assist companies in many ways with their accounting methodology. This can include identifying technical issues, educating members, students and accountants of the company. By doing this, the accounting firms can ensure that the rules enforced by the AASB (Australian Accounting Standards Board), IFRS (International Financial Reporting Standards) and the GAAP (Generally Accepted Accounting Principles) are being met with compliance.
What is meant by business sustainability?
Business sustainability is the act of preserving aspects of the business for the present and future. This can include social, environmental and financial aspects of the business.
Outline the benefits for organisations in considering business sustainability.
By complying with business sustainability, the business is not only benefiting themselves by making plans to preserve their company but also having an impact externally. This can include within the local community, where the business is providing jobs to people. Environmentally, where the business is applying green strategy to benefit the future of the planet. And as one last example, to the shareholders who have invested in the company. By accepting sustainable practices, the business will be able to pay dividends to those shareholders and those shareholders will continue to invest in the company.
What are the three pillars of sustainability?
The three pillars of sustainability are: Social (People), Environmental (Planet) and Economic (Profit).
Outline the possible consequences for an entity that breaches its ‘social contract’.
When a business breaches it’s social contract, the company risks being rejected or boycotted on a social level. Society has an impact on how the business conducts itself within the public, and when a company breaches that expectation they may see negative effects from members of the wider community consequently.
Identify some social performance aspects on which entities report.
Businesses may report on several social performance aspects. These can include:

Ethical and Integral Performance
Environmental Performance
Community Participation and Sponsorship
Community Employment
Improvement of Stakeholder relations

Illustrate with an example how sole traders and partners are taxed in Australia. What are the advantages or disadvantages compared to paying company tax?
Sole traders and partnerships both have their tax assessed as their personal income, this is treated as tax out of their salaries. This means that they do not have to submit to formal reporting standards about their tax, but many use MYOB or Quicken to keep track of their accounts. A disadvantage of this is that the tax rate can be higher than that of a company. Currently the tax rate of a company is 30% and the personal rate can vary on how much they make annually.

[i] Birt, Jacqueline, Keryn Chalmers, Suzanne Maloney, Albie Brooks, Judy Oliver. Accounting: Business Reporting for Decision Making, 6th Edition. John Wiley & Sons Australia,, 08/2016. VitalBook file.

Comparison of Business Model and Development

The growth and development in the field of information communication technology has more or less changed the buying preferences of consumers. Currently Tesco not only sells products through its physical stores but also through online store. Tesco was the first “explorer” of the new market which began online sales in 1994 (Ocado, 2011). Tesco is the UK’s largest retailer and one of the world’s re-known leading international retailers operating in fourteen countries” (Tesco, 2013). During the next 10 years a number of internet retailers emerged in the United Kingdom not only to saturate the online market but also to fight the traditional brick-and-mortar stores. Among them were the Amazon established business in the UK in 1998 (Brown, 2008) and the British start-up Ocado an online grocery shop launched in 2001(Ocado, 2011). Like wises Sainsbury also a third largest retailers in the UK initiated online selling in the year 1995. Although these four businesses are not in direct competition at a first glance, they definitely explore and shape the future of e-retailing and retail industry in general for the coming decades. The aim of this work is to compare the four companies, their business models, logistics set ups and challenges they face. It is important to highlight that unfortunately almost no information is available in open sources about Tesco Direct and Amazon’s performance and development indicators as they are incorporated in the annual reports of the American mother company. In order to achieve the aim required I assumed that more or less of these four companies have similar business model but dealing with the daily logistics in the supply chain network is different from each other and in terms of KPIs. There was also some limitation in finding out resourceful data.

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Amazon’s business model and development over the last 5 years
Amazon appeared on the internet in October 1998 as a rebranded website bookpages.co.uk purchased by amazon.com (Brown, 2008). From the very beginning it was a bookstore offering a range of books wider than any traditional book retailer. Nowadays in addition to books Amazon sells a wide range of product lines: books, music, films, games, electronics, computers, home & garden, toys, children’s accessories, apparel, sports goods, DIY and (so far) limited grocery range.
Tesco Direct- business model and development over the last 5 years
Tesco started selling non grocery products online since 2006 by expanding its products range and integrate home / office electronic, furniture, DIY products and other entertainment related products such as DVD, CD’s, Blue ray, Games etc. Tesco non-food business in the UK is also growing rapidly and in-fact it is over 13% a year (Tesco, 2013a). Tesco manages its own supply chain through its distribution centre located in Hertfordshire, which is responsible to supply goods to south eastern part of England. Moreover, Tesco is generating sales by promoting everyday low price concept not only through stores but also through online. The Tesco non-food online business was also expanded by the acquisition of blinkbox in 2011 (online movie service), We7 (free music) and Mobcast in the year 2012. The transitional period of success in selling general merchandise is sighted over past four years and also expected to grow more in this particular area because the demand is increasing.
Ocado’s business model and development over the last 5 years
Ocado was born out of strategy. Three ex-bankers spotted a market opportunity in the rapidly developing e-commerce and set up in 2001 the first fully dedicated online grocery retailer in the UK (Ocado, 2011). The market spotted was online sales and home deliveries of upmarket food and grocery initially were sourced from Waitrose (Ocado, 2011). As of 2012 Ocado sells 100% of goods via its web store, company’s only sales channel (Ocado, 2011). The company is responsible for order processing, picking and shipping to the customer. It also bears full responsibility for the customer service, technology and inventory availability. Ocado uses a fleet of own dedicated vehicles to ensure deliveries to the customers. Ocado sells own-brand goods from Waitrose and Carrefour, wide range of branded goods from a number of producers, and small but expanding range 1of private label goods (Ocado, 2011). The total number of SKUs is over 22,000; approximately 4,300 SKUs out of that are Waitrose-branded products (Ocado, 2011).
Sainsbury- business model and development over the last 5 years
Sainsbury one of the UK’s top five top grocery retailers founded in 1986. Offering thirty thousand diversified daily use food products and currently operating over 1000 supermarkets and convenience store employs around 150000 colleagues. Sainsbury starts selling products such as electronic & entertainment as well as sports equipment through online in the year 2010. According to the financial performance till 2012 the underlying profit before tax is £712m with the market share of 16.6% (Kantar). It can be seen that since the year 2008 the sales (including VAT & fuel) grew from £19,287m to £24,511m (Sainsbury, 2013 a). Working mainly through four (CFC) strategic fulfilment centres and four Primary consolidation centres (PCC). Many of the stores are also offering non food products. The non- food products sales started back in 2010. In the year 2008, total sales for fourth quarter up 6.7% excluding (5.1% fuel), like for like (LFL) was 6.0% excluding (4.0% fuel). Comparing it with the financial performance of up to the 3rd quarter of the year 2013 the total sales remains 3.9% excluding (3.3% fuel). It shows that in the third quarter of the year 2013 the sales remain lower than it used to be in same quarter in 2011.
Role of logistics and supply chain of Amazon UK
Amazon can be called a pioneer of innovative SCM solutions of the online retail industry. Although a significant progress has been made so far there are a lot of challenges still facing the business including supply chain infrastructure development, inventory optimisation, sourcing optimisation, order fulfilment, last mile solutions etc.
Amazon runs a number of fulfilment centres in the UK – four in England (forth opened in Hemel Hempstead in Hertfordshire 2012), two in Scotland and one in Wales (Amazon, 2011).
These centres are responsible for keeping the minimal stock of goods and fulfilling customer orders.
Amazon operates system of hubs (also called injection points) to reduce transport cost. The idea is to transport goods ready for delivery in full truck loads to the area of their delivery and after that hand them over to Royal Mail, DHL and others for the last mile delivery.
Inventory optimisation has been a key issue for Amazon from its creation. As a response to it Amazon created a multi tear inventory network to optimise own costs and improve performance.
The web store manages and owns relationship with the customer with the immediate access to the Tier I level of the supply chain – Amazon’s fulfilment centre. If for some reason the product is out of stock within own facilities the IT system checks availability with the Tier II level – partner DCs and wholesale DCs. If the product is missing there as well, the IT system turns to the Tier III – suppliers, publishers and third party providers. As a result of this architecture Amazon keeps information flows under control and manages inventory through all three levels to its own benefit (Amazon, 2011). Distribution process is the customer facing supply chain part. Although Amazon outsourced the last mile solution its IT keeps the process under control to ensure transparency for the customer and feedback collection.
Role of logistics and supply chain of Tesco Direct
Tesco Direct established in 2006 providing a large range of home, furniture, appliances, computers and much more. The overall financial performance of Tesco Direct sales were impressive, up by more than 16%, with Click & Collect once again proving a particularly attractive option for customers ahead of Christmas. Many customers chose to collect their orders from one of over 600 Express stores now offering Click & Collect, providing an even greater level of convenience. Due to the growth in the online business Tesco is reopening its Fenny Lock distribution centre (DC) to handle its online growing business. It is also planned to open two (DCs) in Reading and Deganham which will improve its customer services and less impact on environment (Tesco, 2013). Some of the major business also transferred to rail transport in Daventry (DC) which will remove 40000 lorries from the road and save 10000 CO2 emissions (IGD, 2013). Tesco using automated ordering system that keeps updating operations at CFC and warehouses. The operating profit margin relatively remain same 5.9% in 2008 -09, where as little growth was seen around 6.4% in 2011 which came back to 6.1% in 2012 (Tesco, 2013). Related to the Amazon UK the business is different comparing to Tesco Direct. Amazon has expertise in this area more than Tesco Direct which has start selling non-food products just few years ago. But since 2010 non-food products business show positive financial returns which has led Tesco to grow in this particular area of business within the UK and international. Tesco is focusing more to operate internationally because they believe UK market is mature now.
Role of logistics and supply chain of Ocado
Supply chain model implemented by Ocado is far more straightforward comparing to Sainsbury due to only one sales channel and the nature of products delivered to the customer (grocery, substantial part of which can be perishable).
Ocado runs a system of hub and spoke network with so far the only warehouse (the customer fulfilment centre or “CFC”) in Hatfield and seven hubs across England. As a result Ocado covers up to 70% of British households (Ocado, 2013a). The 2nd “CFC” expected to be openned in the 1st quarter of 2013 at Dordon in central England, which would also increase the order fulfilment capacity from 120,000 units per week to 180,000 units per week (Ocado, 2013b). Sales growth also is seen after improving the operation at Hatfield fulfilment centre which is also expected to be rise more than 13 % in the following months of 2013. The gross sales increases jumped over from £ 551m to £ 716m since 2008 to 2012 (Ocado, 2013c).
All online orders, which consumers place, are fulfilled in Hatfield CFC. Now all picking process of product goes through highly automated machineries: plastic totes containing up to three bags move around the warehouse through the conveyer belt. Along the journey the totes are stopped opposite the aisles where members of staff pick ordered good from the shelves and put it into the relevant bags. Then packed orders are allocated depending on the delivery area and loaded onto delivery truck to bring goods to a hub or a delivery van for home deliveries. Ocado owns a fleet of branded lorries for hub deliveries and a fleet of refrigerated Mercedes-Benz brightly coloured vans for the last mile solution.
Ocado benefits from a number of advantages as a result of running such a centralised set up including ease of inbound deliveries, demand forecasting, operations and control over the supply chain in general. Accurate demand forecasting allows Ocado not only to optimise inventory but also to minimise waste of unsold goods which is crucial for a grocery retailer. Ocado’s supply chain is using its own IT customise software in its business. Current service delivery is improved 151 DPV and CFC efficiency improved by 120 UPH.
Role of logistics and supply chain of Sainsbury online grocery deliveries
Currently Sainsbury is working mainly through four (CFC) strategic fulfilment centres and four Primary consolidation centres (PCC) offering. Many of the stores are also offering non food products. The non-food products sales started back in 2010. Over the past five years development has been seen the growth in the overall sales. The Sainsbury is using Manhattan’s Extended Enterprise Management (EEM) solutions in the newly built with fulfilment centres. Sainsbury is an experience retailer of supermarkets serving customers with both food and non food products. Reducing delays in logistics operations & supply management by covering an area on 600000 sq. ft, runs over 2.5 km of conveyer belt with 10 automatic ambient storage and retrieval cranes. Sainsbury operations are spread all over the UK with a larger capacity to store and higher in efficiency output than Ocado so that is why not the right to compare logistics / supply management to each other.
Changes effecting logistic performance of the companies
I selected three major changes that could influence performance of the four companies Tesco Direct, Amazon-UK, Ocado & Sainsbury.
Increasing fuel costs would have mixed effect on all four companies. On one side it would increase their costs and undercut profits. On the other side consumers would be more reluctant to drive for shopping and would be more eager to shop online. In the profit margins would be squeezed but the sales volumes would most probably increase making the market space far more competitive.
Environmental regulations: Environmental problems to be consider seriously by using alternate bio fuels in the road transport network to lower carbon emission. Increase the use 3R’s (Reduce, Reuse & Recycle) in logistics and supply chain management both at national and international levels would generally have positive effect on all companies. At the moment all four companies are working closely to reduce waste and more recycling.
Source locally: Almost all of the four retailers are not fully sourcing their products locally but also dependent on international sourcing. But Amazon UK could be effected in future if the Government announces any new taxes on business, whereas Tesco, Ocado and Sainsbury are as a local retailer would suffer less.
Suggested actions to improve financial performance
Ocado as it is still in its developing phase of business with a lot of opportunities to explore within the UK. Ocado’s still needs to focus more toward to south- east part of the England specially by covering London area, once the market demand of Ocado products increases then to move towards geographic expansion in the UK. The newly built 2nd CFC in north of England would definitely increase the coverage area allowing the company to serve the north of England and Wales. Location play important role in business success hence, Ocado needs to concentrate on those strategic areas which are nearer to the suppliers and market. Once the market is covered a next step the company should consider starting operations in Scotland. The current financial performance is not very good to suggest Ocado to operate outside the UK. Another option would be to increase product range well beyond recent 21,000 SKUs and enter the non-grocery market if they want to compete Sainsbury. Sainsbury has an upper hand by offering products around 30,000. Having appropriate coverage and customer service in place this would be a very sound option for development.
In-house structured trainings should be given to all working in the area of logistics & supply chain management. Weekly trainings should be given to the drivers who face the customers mostly and plays key part in the future development. Company reputation should be kept on priority by meeting the KPI’s. Customer services level needs to be maintained all the time. The last mile problem should be dealt seriously. Lower the customers services are, higher the possibilities in financial growth.
Providing high quality products range in competitive prices would certainly attract the customers through proper marketing. Making sure the product availability all the time in store based or online based, growing the product range would benefit the business. Given the size and expertise of the company it should not be a big issue.
Price always was a key matter for the Amazon’s success. I believe tracking and adopting prices in line with the market fluctuations may be not enough in the future. It would be interesting for Amazon to explore promotion campaigns widely used by traditional retailers.
Summary
This studies is based on four top retailers of the UK companies studied are advanced players in the market of online retail. There business operations are facing more or less similar challenges are similar in-spite of the fact that they are technically serving different markets. Amazon is a well know global market leader still hungry for growth and success in the UK industry and expanding more. Sainsbury is also expanding but inside the UK, Ocado just passed a set up stage and actively growing in the UK and building plans for global expansion. Tesco is performing well in it food grocery and non-food grocery which is performing well and giving hard time rivals also planning to expand in India. I do believe that they work in the exiting online market during the exiting times when everything is still possible and the most innovative and brave will win the marketplace.
References:

Amazon.com Inc, 2011 annual report. [online] Available from: [Accessed 09/03/2013]
IGD (2013), Tesco in major network shake up, [online] Available from: [Accessed 09/03/2013].
Ocado (2011, b), Groundbreaking ceremony for new Ocado ‘CFC, [online] Available from: [Assessed: 08/03/2013].
Ocado (2011, c), [online] Available from: [Assessed: 12/03/2013].
Tesco (2013), , [Assessed: 11/03/2013].
Tesco (2013), Five year financial summary, [online] Available from: [Assessed: 11/03/2013].
Tesco (2013 a), [online] Available from: [Assessed: 11/03/2013].
Sainsbury (2013), [online] Available from: [Assessed: 07/03/2013].
Sainsbury (2013 a), Five year summary, [online] Available from: http://www.j-sainsbury.co.uk/about-us/financial-performance/5-year-summary/#tabbed_section [Assessed: 07/03/2013].
Sainsbury (2013 b), Sainsbury trading statement, [online] Available from: [Assessed: 08/03/2013].