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MGT 450 MISSION STATEMENT

MGT 450 MISSION STATEMENT

 
Select an organization or department of your choice. Your task is to develop a mission statement. The mission statement describes the purpose of the organization, why the business exists. Develop and submit a one to two page paper (excluding title and reference pages) that establishes a mission statement and its meaning to the department or organization: Here are some things to consider when it comes to developing a mission statement:

Is the mission statement focused on satisfying customer needs rather than being focused on the product? Does the mission statement clearly communicate purpose to customers? Does the mission statement explain how the organization closes the gap between customer needs and the products or services offered? Does the mission statement explain a customer centered philosophy? Does the mission statement match the current market conditions/needs? Does the mission statement reflect the company’s strengths? Is the mission statement motivating? Is the mission statement realistic? Is the mission statement detailed, brief, concentrated and remarkable? Is the mission statement clear and easily understood? You must use at least two references. The paper must be formatted according to the current APA style guide. Examples of Mission Statements Mission Statements | MyStrategicPlan Resources. (n.d.). MyStrategicPlan | Strategy Development and Execution Software. Retrieved March 11, 2012, from https://mystrategicplan.com/resources/mission-statements/#Defining%20Your%20Mission

 

 

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Introduction to Business accounting

Introduction to Business accounting

Question 1
The following is the trial balance of Dave Brown a retailer.

Trial Balance as at 31st December 2011

Dr Cr£
Sales

 
190,200
Purchases
84,300
Trade debtors
28,0
Trade creditors
17,000

Advertising
1,650
Wages and salaries
42,000
Insurance
1,300
Heating and lighting
1,800
General expenses
13,450
Motor vehicles at cost
20,000
Accumulated depreciation – motor vehicles
8,000

Computer equipment at cost
14,000
Accumulated depreciation – computer equipment
7,000

Provision for doubtful debts
700

Drawings
24,000
Bank account
3,000
Capital account
31,600

Inventory as at 1st January, 2011
21,000

254,500
254,500

Additional information

(i) Inventory at 31st December, 2011 is £70,000.

(ii) At 31st December, 2011 rates owing of £2,000 and prepaid insurance of £400.

(iii) Depreciation on Motor vehicles and computer equipment is charged at rate of 25% on cost.

(iv) Bad debts of 10% of trade debtors are to be written off and it is decided to adjust the doubtful debts provision to 5% of trade debtors.

Required:

Prepare Dave Brown’s Income Statement for the year ended 31st December, 2011 and Balance Sheet.

50 marks

Question 2

(a) What are the potential problems and limitations of financial ratio analysis? 20 marks

(b) Explain what information the Income Statement (profit and loss account) provides? 15 marks

(c) Explain what information the Statement of Financial Position (Balance Sheet) provides? 15 marks

 

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Religion and Spirituarity in the workplace

Religion and Spirituarity in the workplace

 

On page 248 of your textbook is an exercise of Religion and Spirituality in the Workplace . Choose two of the four scenarios presented and answer the following questions for each scenario.
•What are the possible explanations for the person’s behavior? •How should management/leadership respond to this situation? •How should the employee respond to this situation? •How should the employee’s co-workers respond to this situation? •After answering the questions for each scenario, discuss a religion that you are familiar with and how that religion could potentially impact the workplace.
Textbook: Canas, K. A., & Sondak, H. (2011). Opportunities and challenges or workplace diversity: theory cases and exercises. Upper Saddle River, NJ: Pearson Education, Inc.

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Common Assessment

Common Assessment
Compose a document that presents the marketing decisions and strategies embraced in marketing. The document is a proposal to be submitted to a client that needs assurance that his investments in marketing his products will be of value. The client has been losing market share to competition in a heavily saturated market. He is unsure about what to do to recover market share and create a strong brand image. Just where should he position his product to get the broadest market share and revenue. His product is thin white uncoated paper plates like you might find at most social events. He recognizes he may not have stayed up with the times and is willing to upgrade his product, but he does like the paper plate industry………..

 

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SEPARATION AND TERMINATION POLICIES

SEPARATION AND TERMINATION POLICIES

 
State on how to Manage Separation and Termination Assignment……………..

TABLE OF CONTENTS

TOPIC PAGE

 

INTRODUCTION………………………………………………………………………………..3

TERMINATION/SEPARATION POLICIES………………………………………………3

IMPLEMENTATION……………………………………………………………………………6

REDUNDANCY PLAN……………………………………………………………………..…..6

TASK 2…………………………………………………………………………………………….…8

PURPOSE AND BENEFIT OF AN EXIT INTERVIEW…………………………..…..9

ANALYSIS OF DATA……………………………………………………………………………9

CONCLUSION…………………………………………………………………………….…….11

REFERENCES……………………………………………………………………………..…….13

INTRODUCTION

Many companies being established today are growing quickly due to the advancement of technology and good management practices. They hire more staff to meet all their operations requirements but a time comes when due to external factors like low sales volumes and high competition they are required to downsize their workforce to meet optimal operational standards. The company will need a comprehensive policy on how to carry out the exercise without compromising the welfare of the employees or violating any existing legislation .This is because such an issue can make the affected staff seek legal redress and this can damage the reputation and business name of the company.

Qwikmail Company will need a concrete document that will act as a guide to its fifty employees and the management will continuously refer to it in making decisions that pertain to separation or termination.

TERMINATION/SEPARATION

This is usually of two kinds;

Voluntary termination

This is where the decision to stop working for the company is made by the employee. The first way is through resignation where an employee is required to give notice to the employer about his/her intention. Salaried employees should give a written notice of four weeks while the ones paid on hourly basis should give a written notice of two weeks (Fitz, 1995). However a member of staff who quits work on medical grounds is not supposed to give notice since this is non-intentional. The medical reports should also be copied to the Manager of the company. Such an employee will be entitled to full benefits. Giving notice is important because the employee will have left work on good standing and such employees are normally available for re-hire.

The other way of voluntary termination isthrough job abandonment where an employee quits work at the company without giving notice (Dave, 2001). An employee who stops working this way puts the company at risk of losing his output and he should pay the company an amount of money equivalent to his wages for either two weeks or four weeks based on the notice he was supposed to give.

Involuntary Termination

This is where the company resolves to terminate the employment contract of a worker or workers. This is usually due to misconduct, layoffs, position elimination, redundancies, discharge for underperformance and non-renewal of contracts. An employee is guilty of misconduct if he commits or is accused of any of the following offences;

Insubordination. This is where an employee refuses to perform a given task assigned to him by his /her supervisor without any reason.
An employee who gave false documents when being recruited by the company and later it is known that he was recruited on the basis of fake documents.
Negligence. This is where an employee makes the company incur losses due to poor performance of tasks, not seeking directions, not paying attention to detail or being arrogant.
Use of drugs when at work or working under the influence of drugs. This can endanger the life of the user and the colleagues in the workplace. The company is allowed to perform health and fitness tests through their medical professionals.
Working under the influence of alcohol and reporting to work when drunk. This will lower the output of the worker and the company may not reach its targets. It also endangers the colleagues in the workplace.
Breaking the country laws which lead to incarceration in a court of law leading to missing five working days consecutively.
Fighting, threat of physical violence or physical violence within the company premises whether during or after working hours.
Being involved in any acts that may defame or malign the company’simage to the general public.
Deserting work without permission from your supervisor.
Any other act which the management will construe to be an act of misconduct.
Lay off of any employee will require the management to give a four weeks written notice and also grant the employee a terminal leave upon whose expiry the layoff will be effected.Layoffs are normally caused by lack of work that the employee can competitively do or lack of enough capacity and resources in the company to continue engaging the person(Reddington,2003). The company should always liaise with the labor office to ensure full compliance with the prevailing laws that change from time to time.

Position Elimination may be due to the company losing funds from regular donors that force it to carry out organizational structural changes that eliminates the position. The company will give the employee a written notice of four weeks.

The employees who are leaving the company will be required to fill an employee separation sheet (Bratton, 2006) which will contain the following details; last day worked, reason for separation and any terminal leave days to be paid. The supervisor will be required to sign plus other managers of the company. The discharged employee can use these documents when he is seeking employment elsewhere.

IMPLEMENTATION OF THE POLICIES

After the preparation of these policies and procedures they will be tabled in a management meeting for further scrutiny and approval. The managers will give their input on areas they feel have not been adequately covered. It will then be upon the management to adopt the regulations and mandate the Human Resources Department to give employees copies of the document so that they can study it and not be victims. The department will also give a copy of these regulations to the respective labor union that covers the employees of this company. A copy of the regulations will also be given to the respective government department that deals with employee relations.

REDUNDANCY PLAN

Since the company has resolved to lay off twenty of its employees, it must come up with an elaborate plan on how to carry out the exercise;

The management must first identify the pool or department targeted for redundancy (Frost, 2010). This is the area which has mainly been involved in mail delivery which following loss of business majority of them has been left with no duties to perform.The human resource department will initiate a consultative process where the workers who were mainly involved in mail delivery will be informed that they are at risk of being laid off. The workers will then be continuously updatedthrough meetings on the developments and in these meetings they can be accompanied by their union representatives. The minutes of these meetings should be kept very well as they will form the basis of defense should any aggrieved employee sue the company.

The company should discuss the proposals in detail with the employees and let them know of the redeployment plans in place and the options available to each employee. The company should not talk of any or keep a list of the employees to be laid off. The employees should be informed that it is the job or the role the employee was engaged to do that has become redundant. The company will then go ahead to identify the specific staff to be laid off. They can use the staff appraisal methods that are based on the particular performance of individual employees. Those who have been performing poorly are the ones identified for layoff. After identifying the individuals, they should be given a four week written notice as per the rules of the company.

The company can then start processing their benefits and can also assist them get placements in other companies where their services may be needed.

 

 

TASK 2

The decision by the management to terminate Rachel’s employment must be done in full compliance with the law;

The management should give Rachel a written notice of termination of her services as per the employment contract.
They should then notify the overall Manager of the company of their intention and the reasons behind it.
The management should ensure the termination will not be harsh, unjust or unreasonable and complies with the labor laws that govern settlement of disputes and grievances.
They should also make sure they have exhausted avenues on employee counseling and warnings of disciplinary action. This is as agreed in existing collective bargaining agreements between labor unions and employer.
The company can avoid such occurrences by giving very clear and easy to understand job descriptions(Becker,2006). An employee when being engaged by the company should be given a clear orientation on the specific details of the requirements. The job description will list all the responsibilities of the employee in order of priority. It will also detail the reporting structure and will clearly inform the employee where to seek directions and guidance in case of any problem. This will eliminate cases like the one of Rachel who collides with the boss severally.

 

PURPOSE AND BENEFITS OF AN EXIT INTERVIEW

The interview helps the management hear the grievances of those leaving the company. This makes sure that the disgruntled employees have a chance to be heard and those who may have had vengeful intentions usually make peace with the managers. The interviews also provide an opportunity for the managers to be criticized in their implementation of the company’spolicies. This helps the managers to understand more the work of managing people(Caroline,2007) and this also provides quality feedback which is of importance in the company’s forward planning. They also offer a chance to the management to retain a valuable employee who they could otherwise have lost. This is because instead of relying on a letter to dismiss an employee, this face to face meeting makes the management know the clear and specific reason a person is leaving the company.They also provide the management with important data on the training needs and areas in the organization. These interviews also embolden the company’s image to the public. Not many companies will entertain criticism but through this process an employee leaving feels he has been offered an opportunity to fully express himself and give his personal view of the process.

ANALYSIS OF DATA

The organization should use the Strategic Human Resource Model (Grobler, 2000) to analyse the data and come up with clear objectives. This is because of the ineffectiveness of the adopted policies which can cripple the operations of the organization. The model has six stages:

Environmental Analysis

The organization should know the factors in the surrounding that influence the nature of its business. Why can’t they pay their employees competitive wages commensurate with other companies? Why are many employees not enjoying their job?

The answers will make them know whether it is their production procedures that are outdated(Morley,2005) and maybe they need to acquire new machinery and alter their procedures.

Organization Mission and Goal Analysis

They should redefine their mission and goals and evaluate whether they are in line with their operations. They are not retaining any capacity when majority of the employees serve for only two years and leave. An organization without experience cannot compete optimally in the market.

Analysis of Organization strengths and culture

The management will need to focus on areas where the organization is fully endowed and maximize on that. The organization will need to motivate their staff by offering better wages and also training to ensure quality.

Analysis of the organizations strategies

The company may be required to overhaul its current strategies on human resource management and production to stem the high rates of redundancy after a short period of service. This is due to the low morale in the workplace and a lot of exits. Their production procedures may also need review to stem many redundancies. Also the working conditions will need to be improved to ensure the safety of the workers in their workplaces.

Choice and Implementation of Human Resource Strategies

The methods used to choose these strategies will require deep review by the management. They should be in line with the company’sgoals and objectives (Hattfield, 1998). There should also be a clear follow up on the implementation by the various sections in the organization.

Review and Evaluation of Human Resource Strategies

There should be periodical review of the progress of implementation of the new strategies put in place by the organization. This will involve the various departmental heads reporting on the progresses achieved, obstacles noted and giving input on the way forward.

CONCLUSION

The importance of an organization having good human resource policies and procedures is very important. They determine to a great extent how the company will achieve its goals and objectives both in the short run and in the long run. This calls for companies to strengthen their human resource departments through adequate budgetary allocations, so that they can fully be in a position to formulate clear functions and descriptions of the various offices and levels in the organization. They will also set the targets and goals for each department and be able to measure whether they have been achieved or not. This will help companies remain competitive and not be faced with industrial strikes, staff go slows and acts of sabotage in the workplace. Failure to do this the company will be risking a great deal because the other management functions can collapse. The company will be operating without a department that can gauge their relevance in the industry and advice on the best way forward.

References

Becker,E (2006), Human Resources: The Business Partner, Wicks Publishers Ltd, P.51

Bratton, J (2006), Human Resource Management Theory and Practice, West Group Printers Ltd, P.22

Caroline, H (2007), Introduction to Human Resource Management, Cambridge Press, P.22

Dave, H (2001), The Human Resource Value Proposition, Ridim Press Ltd, P.74

Fitz, J (1995), Measuring Human Resource Management, Grog Educational Publishers, P.16

Frost, P (2010), Management and Organizational Behavior, Edin Publishing House, P.41

Grobler, P (2000), Managing Human Resource Policies, Freidburg Press Ltd, P.9

Hattfield,D (1998) ,People Management Practices , Abert Books, P.34

Morley, M (2005),Employment Termination Procedures, Shavew Printers, P.6

Reddington, M (2003), Transforming Human Resources, Redton Books, P.82

 

 

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Finatial Report

Finatial Report

 

Discuss on Financial Report …………………..

TABLE OF CONTENTS PAGE

1. INTRODUCTION…………………………………………………………………………3
2. COMPANY INTRODUCTION…………………….……………………………………..3
3. FINANCIAL STATUS…………………………………………………………………….4
4. INTERNATIONAL TRADING STRATEGY…………………………………………………….6
5. EXCHANGE RATE RISK MANAGEMENT AND RECCOMENDATION……………..8
6. COUNTRY OR POLITICAL RISK MANAGEMENT AND RECCOMENDATION…..9
7. CONCLUSION……………………………………………………………………………10
8. REFERENCES…………………………………………………………………………..13
INTRODUCTION

The growth and expansion of any company is the best reward and it is mainly one of the main objectives of a firm at inception. However for a company to attain this it must employ good analytical methods of the financial data at the preparation stage and also at the reporting stage. Good data preparation skills and knowledge are essential so as to ensure the inferences drawn from such data is true and can be used by analysts in their forecasts and predictions of future performance. The analysis and conclusions drawn from any set of data from the company will assist the management in formulating policies and procedures that will optimize the operations and production processes in a company. It is therefore imperative for the management of a company to invest in good data collection and analytical techniques in order to arrive at logical conclusions.

COMPANY INTRODUCTION

Berendsenplc is a company in the textile service business and operates in fifteen countries in Europe. It was formed following the acquisition of the SophusBerendsen by The Davis Service Group in 2002 and its headquarters are in London.It is dominant in its markets of operation especially in linen rentals, work wear rentals and laundry services. It had a turnover of 992 million pounds as at December 2011 (Peter, n.d). It is listed in the London stock exchange and had a market capitalisation value of 909 million pounds as at December 2011.Their main brands include berendsen, sunlight, and spring grove which have more than 100 years of experience each. They provide service solutions in sourcing, cleaning and maintaining textiles required by their customers. Their business is divided into three main lines; Workwear, facility and linen (Grens ,n.d).

FINANCIAL STATUS

The company has been stable financially since 2007 as shown by key variables summarised in table1.

YEAR 2007 2008 2009 2010 2011
TOTAL REVENUE 822.1 953.9 970.9 986.1 992.0
NET PROFIT 63.6 42.1 45.8 22.4 57.5
EPS(EARNINGS PER SHARE(pence) 38.4 39.3 39.4 41.7 48.4
DIVIDENDS(pence) 19.4 20.0 20.0 21.2 23.4
NET ASSETS 460.1 496.1 475.8 467.9 458.5
Table1 (All figures are in millions of pounds unless stated)

Total revenue

Quality products and services ensure that a company is able to maintain and increase its customer base and also the market share (Collins, 1993). Its products remain relevant and competitive when compared with those of competitors. However many of the subsidiaries experienced financial shifts mainly due to changes in exchange rates in their markets of operation and this affects the consolidated figures.

Risks: The Company will need to monitor the commodity price changes of their raw materials because an increase in the price of raw materials will require the company to increase commodity prices so that they can realise set targets on revenue and profits.

Net Profit

The net profit for the period has reduced especially in 2010. This is because from 2007 the company has carried out an ambitious expansion strategy which includes acquisition of Permaclean Group in Germany and also acquisition of UK clinical solutions and decontamination business in 2007, entry into the Baltic States in 2008 and there was also the opening of a processing plant in Czech Republic in 2008. These are projects that involved large capital outlays and many operational expenses which usually eat (Berger, 2008) into the company’s profitability. The company also experienced several transactional risks due to various currency exchanges regimes it had to encounter.

Risks: The Company must operate optimally because any failure to realise net profits will create panic among the shareholders and other stakeholders.

Earnings per share

These have continued to increase over the years. This is because the company has continued to make profits over the years and the confidence of the investors has been high. The continued expansion of the company especially in overseas markets promises a bright future to the investors who have continued to hold on to their shares as they expect higher returns in the future.

Risks: The continued retention of earnings may make the investors dispose their shares and seek other stocks of companies that pay more dividends. This is especially to the short term investors.

Dividends

The company has been paying dividends to the shareholders every year. This is because the company has been making profits in every year. However most of the earnings from the shares have been retained by the company to finance its expansionist strategy. These retained earnings have also been used to hedge against the exchange rate risks that the company has been exposed to during expansion (Howard, 2007).

Risks: The Company’s dividend policy should be enhanced to benefit the short term investors. But this will require the company to reduce their retained earnings which may affect the firm’s expansion strategy.

Net Assets

These represent the assets of the company less the liabilities. They have experienced some decline due to the increase in liabilities. The firm’s expansion has made it incur many liabilities but in the long run the full benefits of the expansion will be realised.

INTERNATIONAL TRADING STRATEGY

The firm’s management has resolved to trade through wholly owned subsidiaries in the foreign markets. Each of these subsidiaries has its own Board of Directors and management team that is answerable to the overall Chairman in the UK. The firm wants to be strategically placed and be a global leader in the textile industry. Through its wholly owned subsidiaries the company will incur low per unit costs of production.The company will do most of its production locally through the use of local suppliers and subcontractors. This will help the company hedge against import tariff shifts (Michael, 2004). The elimination of importation costs, transport and warehouse charges that the company would incur if it was relying on imports will improve the profitability of the company. This is because the company will own the premises and the production process. The company will also able to centralise all its operations and be able to cut on the lead time (Sergio, 2000) required for planning and strategising for production processes to start. There will also be higher sales volumes of its productsandhigh market penetration. Due to low production costs the company will have enough capital to invest in aggressive marketing of its products in the new markets through sales promotions, branding and audio adverts. The company will also have great potential to grow both in market share and profitability in the long run. This is because it will enjoy economies of scale in the production and distribution of its products. The company should also negotiate an investment agreement with the host government. This agreement will help the company to know the policies of the host government on matters concerning payment of remittances like royalties, dividends and also its stand on the company’s bid to export to other markets.According to Fred (2003) the company will also be able to know from such an agreement the taxation methods and rates that will be applicable to its operations and how they are determined. This is important for the forward planning in the company’s business. The firm will also state its corporate social responsibility and its obligation in provision of social amenities like schools, health centres and public toilets.

However the strategy of trading with these wholly owned subsidiaries has its pitfalls of risksand obligations that the company will be required to adhere to. The Company will spend a lot of capital in the acquisition and setting up of the business. These set up costs may take a long time to recover and the subsidiaries could go for long periods without realising profits( Davies,2007). This will mean low returns to the shareholders and this may lead to panic selling in the stock market. This will eventually reduce the market capitalisation of the company and also reduce the capital available for investment activities. This strategy also calls for high level of commitment by the firm’s management in implementing decisions. The management will have to come up with very efficient management models and procedures. The company will also face stiff competition from the established operators in the foreign markets who will guard against their market share. Berendsenplc will therefore have to invest a lot in advertising and marketing activities to be able to penetrate the market.

 

EXCHANGE RATE RISK MANAGEMENT AND RECOMMENDATION

The company will be required to devise good tactics because most of the buyers prefer trading in their local currencies even though most of the raw materials were purchased using hard currency. This calls for efficient market studies to analyze the volatility of the market in order to minimize any potential losses that may stem from use of currency.The company in its pursuit of foreign markets will encounter various exchange rates because the currencies involved in the various jurisdictions are different (Richard, n.d). The company will identify whether the country of operation uses hard or soft currency. Hard currencies like the dollar, pound and euro are widely acknowledged internationally and can be used to perform transactions across boarders. But where the country’s local currency is not recognised internationally, the company will be exposed to transaction risks as any changes in exchange rates will affect receivables, payables and even repatriation of profits (Horcher, 2005). The firm will also be exposed to translation risks that will affect the valuation of subsidiaries and eventually the consolidated balance sheet of the organization. During the end of a trading period consolidation can be done at the prevailing exchange rate at the time or at the average rate for the period. Translation risks of the foreign subsidiaries are measured by the level of exposure of the net assets (assets less liabilities) to any potential exchange rate shifts. In dealing with exports, the company can solve the problem of exchange rates by pricing the export goods using the current exchange rate. The recipients of the goods will be required to pay spot on for the goods and the company will be sure there are no losses that stem from exchange rate shifts. The company can also decide to net all foreign exchange receipts with foreign exchange payments so that if they export to a particular country and also import may be raw materials from the same country, all those transactions can be conducted using one currency.

In countries where the local currency is not recognised internationally, the company will be required to negotiate a Futures contract with local financial institutions in the country of operation (Zhao, 2005). This contract will guarantee the supply of a specific amount of foreign currency at a known exchange rate in the future. The company should factor in the time-value of money when it is assessing the risk of currency exchange fluctuations. It can then consider insuring against losses that may be incurred later when buying the futures. The company can also sign a forward contract with a financial institution which will assure the supply of any amount of foreign currency in the future at a known rate. The company can also hedge against currency fluctuations by opening a local bank account in the country of operation. All the revenues that will be earned in that country should be banked in that account. All the purchases that are made in that country should be paid through that account. If there are any foreign payments, the company can make the transfers through the account and this will minimise the exchange fees to the company. The company can also acquire a loan in the currency which it mostly uses; the interest paid on that loan can cancel out with the returns it will get from not being affected by the daily shifts. This is because it will no longer be required to buy these hard currencies on a daily basis as it will have enough in stock. The company can also negotiate fixed rate exchange contracts and then all the income can be priced at an exchange rate equal to or greater than the fixed rate. The country can also guard against potential exchange risks by providing a line item in its financial reports of maybe 10% of overall expenses. This will always check any shifts that will occur on the financial statements and the shareholders and other interest groups should be notified on this.

COUNTRY OR POLITICAL RISKS MANAGEMENT AND RECCOMMENDATION

These are risks of loss that the company is exposed to when investing in a country due to changes in the political structure or the policies of the country (Beulig, 2006). These include internal conflicts, business setbacks like contract renegotiation or cancellation by host country, terrorism, restrictions on repatriation of profits and politically driven increases in taxation. The company needs to assess carefully the government’s attitude towards foreign investors in the countries they seek to invest. This can be done by carrying out surveys of the foreign investors operating in those jurisdictions. Also before the signing of the investment agreement the management should ensure it has engaged all the relevant government departments so that they can get assurances on the part of government. This is essential so that when there are acts of for example civil disobedience the government can have a responsibility on protecting the premises of the company from damage and vandalism. This is in recognition of the advantages the foreign investor brings to the country such as employment of locals, payment of tax and also the potential of encouraging other foreign investors to come. The company can use integrative techniques to become like one of the indigenous firms. This can be done by cultivating good relations with the host government through corporate social responsibility initiatives like building schools, health centres and other social amenities. The company should also undertake to adhere to the set labour regulations to avoid being blamed for abuse because this will give it a negative publicity which can affect its future engagements with the state especially on license renewals.Also most of the products can be produced locally as much as possible using local suppliers and subcontractors. Also any capital required should be raised through the local financial institutions. The company can also diversify the production of its goods in a number of countries so that if there is political turmoil in one its operations do not become grounded. It will be easy to direct its activities to the other without suffering stock outs. Country and political risks should be managed from the top of the organization (Class notes on slide). The board and management should communicate the firms risk tolerance levels to the other employees and it should also be known which business unit will handle those risks. This is because managing political risks will directly impact on the company’s performance both in the short and long run. Managing political risks can make the company analyse the impact of impending social, regulatory and economic changes (Brenson, n.d). This will especially be of great importance if the company is in a highly regularized business zones. The company can rely on the prevailing political environment to make crucial decisions of expansion and more investment in their production processes. In many business environments political risks usually have a very big impact on the supply chain, their reputation and this can even affect their market share. The evaluation of political risks by the firm’s management will help optimize decision making. High political tensions in a country will put away investors and also reduce productivity. Insurance companies will price their policies very highly due to the high chances of unrest. This eventually makes business undesirable and very expensive. The portfolio view of these risks will assist the management in viewing their risks globally and assess their relationship. This will help them view whether the risks in one geographical region cancel out with those in another. This can help in making decisions that help the company maximise operations in those areas that are seen to be favourable to the business. The analysis of these risks has a very big impact on the continuity of operations in one region as compared to another. Business investment decisions heavily rely on the analysis of how friendly the policies of a country are when compared with the operational procedures of the company. The There should therefore be an established framework in the company for reporting political risks because they will affect future operating and investment decisions of the firm.

CONCLUSION

The procedures adopted by a company to deal with the various risks in its business are very vital in the realisation of its profits and other strategies like expansion into other countries. During establishment, the company must identify all the risks that it will be exposed to and come up with ways of combating them. The risks must be tackled like any other management issue and structures must be put in place to mitigate their occurrence and there should be known methods that the company will adopt in solving them. The company should provide relevant insurance covers for the various risk levels. Such levels include firm specific risks like inconvertibility of the host currency to hard currency and expropriation risks involved in transfer of assets to home countries.

The identity of all these and ensuring the firm is adequately covered will be of utmost importance(Kennedy, 2009). The risks that the company is exposed to should also be prioritized. Those that seem very likely to occur should definitely be given priority. The choice of stake holders that the company will do business with is also very important. The choice of local suppliers and other service providers in the host market should be done competitively to avoid obstacles. The company should enter into clear contracts that have exit clauses to avoid any legal collisions with locals. However risk management is not a one off exercise, there must be continuous review and monitoring of the review management policy the company will adopt. This will ensure the correct identity and assessment of risks to ensure appropriate controls are put in place.Failure to identify the risks face a firm will be very detrimental to the business. The company will face enormous challenges that may even cripple its operations. The formulation of the risk management policy should be done in the initial stages when the company is being set up or when it is setting up the subsidiaries. This will enhance quick response to the challenges that will need immediate address and the company will not suffer much losses. Also the risk management policy will ensure the reports the company gives to its shareholders are accurate and can be relied upon in making future investment decisions.

References

Berger, K (2008) Elements of Financial Reviews. London: Pittman Books Ltd, P.56

Beulig, N (2006) General Economics. Mexico: Welsh Publishers Ltd,P.41

Brenson, H (n.d) “ Risk Management Standards” (Online ). Available from http://www.businessrisks.org/ (Accessed on 20th April 2012)

Collins, D (1993) Financial Reporting and Analysis. California: John Wiley and Sons, P.21

Davies, W (2007) Overview of Financial Risks. Sydney: Patmore Books Ltd, P.9

Fred , A (2003) Mitigating Financial Risks. New York: Keranson Publishers ltd, P.53

Grens, V (n.d) “ Berendsen Product lines” (Online ). Available from http://www.berendsenplc.com/ (Accessed on 20th April 2012)

Horcher, K (2005) Essentials of Financial Risk Management. London: Holmes Ltd, P.5

Howard , S (2007) Fundamentals of Financial Management. Stuttgart: Desarc Printers, P.33

Kennedy, D (2009) Essentials of Risk. London: Cambridge Press, P.77

Michael, K (2004) Managing and Measuring Risks.Warwick: Vantage Books Ltd, P.52

Peter, D (n.d) “Berendsenplc Performance” ( Online). Available from http://www.businesslink.gov.uk/ (Accessed on 20th April 2012)

Richard, N (n.d) “International Trading Strategy” (Online). Available from http://www.businessstrategies.com/ (Accessed on 20th April 2012)

Sergio , S (2000) Business Risks and Management. Edinburgh: Groag Educational Books, P.6

Zhao, X (2005) Credit Risk Management.Leeds: Khan Books Ltd, P.27

Class Notes on the slides

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STATE AN EVALUATION OF OLYMPUS INCENTIVES LTD………….

STATE AN EVALUATION OF OLYMPUS INCENTIVES LTD………….

 

Question 1

The Break Even Point (BEP) is the point at which the Revenue generated or the Total contribution is equal to Expenses incurred in say, Production.

In the case study of Olympus Incentives Ltd, the Turnover necessary to ensure a break even point within the year would be

Solution:

Break Even Point (Units) = Fixed Cost (FC)

(SP – VC)

Where: SP – is the Selling Price

VC – is the Variable Cost

 

Break Even point (In Sales) = Fixed cost (FC)

C/P

Where: C – is the Cost per Unit

P – is the Price per Unit

OR

= BEP (Units) × P (Price per Unit)

Therefore:

P (Selling price per unit) = Turnover ÷ Number of units

= 850,000 ÷ 850

= £ 1,000

VC (Variable Cost per unit) = 450,000 ÷ 850

=£ 529.41

FC (Fixed Cost) =£ 500,000

P/V Ratio = (1000 – 529.41) ÷ 1,000

= 0.47

BEP (Sales/Turnover) = 500,000 ÷ 0.47

= £ 1,064,000

 

Question 2

Variable Cost = 450,000

= 95% × 450,000

= £ 427,500

VC (Variable cost per unit) = 427,500 ÷ 850

= £ 502.94

P/V Ratio = (1,000 – 502.94) ÷ 1,000

= 0.5

BEP (Sales/Turnover) = £ 1,000,000

The 5% reduction in variable cost has an effect on the Break Even Point in Turnover. It reduces the BEP point from the previous £ 1,064,000 to £ 1,000,000

Question 3

Turnover = 850,000 × 1.05

= £ 892,500

Ne Profit= 892,500 – 950,000

= (£ 57,500)

Even with the increase in The Company’s Turnover by 5% as the Variable costs remain the same, the Net profit is still a negative. It however reduces from a negative £ 100,000 to a negative £57,500. This means that the increase in turnover, with all other factors remaining constant, the profits increase proportionately.

Question 4

Fixed Cost = 500,000 × 95%

= £ 475,000

Net Profit = Turnover – Direct Cost – Fixed Cost

= 850,000 – 450,00 – 475,000

= (£ 75,000)

A reduction in fixed costs, with everything else remaining constant, the Profit increases. As indicated above the profit increase from a negative £ 100,000 to a negative £ 75,000. This implies that the change in the fixed costs has a proportional effect on the profit realized by the company.

 

 

Question 5

OLIMOUS INCENTIVES LIMITED

DIRECTORS REPORT ON THE COMPANY’S PERFORMANCE

DIRECTORS:

Mr. Wei Wong
Mrs. Olive Wong
Mr. Thai Pham
Olympus Incentives Ltd is a manufacturing company well placed in its market to serving a specific but wide range of clients, both individual and companies ranging from football clubs, cricket clubs and large athletic companies. The fact that there are a lot of competitions going around all year round makes the company especially placed to serve this specific niche in the market.

The company has had a great deal of successes over the years and from the financial records it has been growing quite tremendously. This growth can be attributed to various factors such as the fact that even with the company’s relatively small size; it specializes in the manufacturing, wholesale and retail of its products. This has ensured that the company does not have to deal with middle men who would have been an expense to the company. This also enables the company to be in touch with its customers and at the same time carry out its marketing on a more personalized level. Personalized marketing is of great importance as it enables the company to, among other things; identify prospects and potential clients, and know their clients and their needs better (Bhasin, 2012).

The fact that the company has already identified its highest times in a year is also a point to be desired. The is because the company can now concentrate on maximizing on these peak seasons or periods within the year by concentrating on not only its current clients but also on potential clients who might be ‘taking their business’ to the competitors.

The success of a business can be greatly attributed to its location and Olympus Incentives Ltd is right on the money when it comes to this key factor. Its location, 25 kilometers of the center of London is a major plus as it ensures that the company is located in close vicinity to various infrastructure such as main roads to various locations and airports linking the company to its international customers. This reduces transport cost and delivery time which by extension improves customer satisfaction (Bowes, P. 2008).

The company keeps a small stock of its manufactured items and mostly produces on demand. This is of advantage to the company as it ensures that resources are not wasted by producing items that have not been ordered since more clients prefer customized products. Hiring local and foreign casual workers when need be, has also saved the company the expense of paying the workers during the period when business is on a low.

The decision by Mr. Wei to ‘sweat the assets’ which means to putting the assets to a more efficient use (Workman, 2009), was a good business decision. This could ensure that the assets generate an income for the company even during the low business season. By hiring out some of the machinery or the company vehicles, the company could earn some money off them which can be used to pay off some of the loans and interest amounts attributed to the same assets.

Despite all the things that the company has going for itself, there are various shortcoming that it needs to change or at least keep a keen eye one. These are various issues that could very well spell doom for the company. The fluctuation of activity within a year is normal to any company, but when this means the total halt of business activity for the whole organization during certain months, it becomes a cause for concern. The effects of this are quite evident in the turnover and production level in various months as is evident in the months of March, August, October and November.

Graph One: Monthly Fluctuations in Sales

 

In this day and age, the use of automated systems to carry out activities such as record keeping, making orders, making quotations and generation of various other necessary sale and purchase documents, is key. The fact that Olympus Incentives is still relying on hand written records is terrifying if not down right terrible. The problem seems to stem from the fact that the person tasked with this duty, Mr. Berlusconi, has rejected the use of computer based accounting and comes to work when he feels up to it. This is why the company seems not to be up to date in its record keeping and is slacking off during the peak season. The lack of proper record keeping in itself has given rise to various problems within the company, and with regard to various other stakeholders. Some clients have even refused to settle their bills due to the fact that they have received mismatching bills and quotation amounts.

Corruption within the company due to the lack of proper record keeping has crept into the company. The employees seem to have free will in the pricing of various products since there are no checks within the organization or departments charged with handling various activities. This has in turn lead to the clients themselves having a free reign on when the payment dates for goods delivered should be. This has had a negative effect on the company’s cash flow since payments are not received when they fall due. The company is therefore at risk of bankruptcy as a result of this poor credit management system, and in turn poor credit rating by the various financial institutions. The lack of sufficient funds resulting to bouncing cheques is also a result of this poor or rather non-existent credit management practice in the company.

The constant disagreement between Mr. Wei and Mr. Scrooge, the bank manager, are also retrogressive to the company. The effect of this is that, besides being in the company’s ‘black book’ future requests for assistance from the bank with regard to financing, extension of loan repayment period or even request for an overdraft facility with the bank, could be denied.

The company has rented a considerable piece of property for its operations. It is however only using half of it and letting the other half go to waste. This is a waste of space and money considering that it still has to pay for the property in full which according to the records, is a considerable amount of money. This in turn has a negative effect on the profit generated by the company.

The negative publicity that the company has also been receiving due to the law suit and Mr. Wei’s attitude towards the matter could also be retrogressive. The saying that all publicity is good publicity could be true in some quarters, but it could also lead to the company’s downfall, especially where there are competitors involved. The suit is attributable to poor workmanship on the medal that ended up hurting one of OIL’s clients.

Lastly, the company being a limited liability company should not have its liabilities guaranteed by one of the directors. The fact that the loans and company’s overdraft facility is guaranteed by a charge on Mr. Thai Pham’s house and other assets, is bad business practice according to international business standards and laws. The company is a separate business entity from its members and as such its liabilities are its own and separate from the members (Companies Act 2006). However the Directors can be held liable for the debts of the company if they allow the company to carry out business while insolvent without any foreseeable future in the company’s activities.

The company therefore has a lot to improve on so as to at least maintain the growth it has been experiencing over the past periods and improve its financial footing. There is a great demand for growth opportunities among organizations and this has encouraged companies to pursue diversification even though its effectiveness is mixed. One could find success in diversifying while another could fail to compensate for the loss incurred even after diversifying his or her business activities (Gassenheimer and Keep, 2012). Since the company is already making medals, trophies, plaques and cups, it could also look into manufacturing household items such as mugs with customized engraving, decorative wares for houses such as chandeliers and vases, or any products that could be made out of the type of materials they already use. Venturing into such diverse production could ensure that the time spent ticking over could be put to better use and ensure that the company is earning revenue from these items.

Depending on how well this diversification goes, the company could also start keeping stock of the products being sold quickly of the market and which require minimal or no customization. This would ensure that more time is spent thinking up ways of diversifying production and go a long way in catering for the months when business activity forth company is low. During these months, more of these other products could be produced and kept in stock with the production volume determined by market studies into their demand in the market.

Diversification should also involve targeted marketing to specific clients which would ensure that a great deal of the company’s business assured of du to its clientele and is not dependent on in a large part, on an unsure general market. This means that the company should make a deliberate effort in establishing relationships with other players in their target markets as it has done with the firm of sports management agents and the English County Cricket Board. This creates a wider pool of clients for the company that it can bank on and budget for in its monthly or yearly projections (eHow, 2012)

Proper record keeping is vital to the success of any business. As the business seeks to maximize on its returns, good record keeping should be among the key ingredients to realizing this objective. In light of this, it is clear that it would be necessary for the good of the company to re-evaluate Mr. Berlusconi’s services towards the company. This does not necessarily mean termination of his services completely, but at least the company should look into getting someone else who is more conversant with a relevant accounting system that can carry out all the necessary requirements and replace the current hand-written books of accounts (Horne and Wachowicz, 2004).

The company does not also seem to carry out any budgeting system. As such, a cash budget should be considered among its most important things to introduce (Rachulin, 2000). A cash budget would ensure that the company is prepared for the seasonal cash flow fluctuations and unexpected discounts from its suppliers. It also helps the company know its cash position so as to determine how creditors will be settled, whether or not their bank will approve a loan request as well as influencing the company’s profitability. Variances between the actual and budgeted amounts can also be determined and relevant adjustments made (Bond, 2005).

The cash budget would also ensure help in indicating areas that need improvement on. From the records, the company clearly needs to work on its Accounts Receivable collection. The issue of clients paying when they want should be nonexistent. If need be, the company set up a credit control department to ensure that debts to the company are collected in time by being in constant communication with such clients, and ensuring that these clients are dully reminded of such obligation.

The company should also consider leasing a smaller property or sub-letting the part of the property it does not make use of. This would ensure that the company’s expenses are reduced in the case of leasing out a smaller place, or the money generated from the sub-letting goes into settling the hefty rent bill imposed on the company.

Question 6

Olympus Incentives Ltd. Cash Budget
For the Year Ending 31st December 2011
£ 000
Beginning Cash Balance 15
Expected Cash Receipts
Cash Sales 408
Collection of Accounts Receivable 82
Other Income 52
Total Cash 557
Expected Cash Expense
Raw Materials 30
Payroll 3
Direct Expenses 96
Sales and Marketing Expense 22
Administration Expenses 40
Equipment Expenditures 10
Total Cash Expenses 201
Ending Cash Balance 356

The Cash Budget is as a result of various estimations made in relation to various recommendations made above such as: The introduction of an automated accounting system, diversification of product line, introduction of a cash budgeting system, introduction of a credit control department or person, enhanced target marketing, keeping of stock of goods produced, and leasing a smaller business premise or sub-letting the existing one.

The estimates made were:

A 20% increase in the Turnover of the company.
40% of the sales in the year will be cash sales with only 10% of the sales being receivables. 80% of the receivables are estimated to be collected within the year.
The raw materials are estimated to increase by 50% while the sales and Marketing expense estimated to rise by 10% since this activity was already ongoing.
While the administration expense is estimated to remain the same, equipment expense attributed to repairs and maintenance could amount to £10,000.
The result of the estimated Cash budget is a positive balance of £356,000. This should however be compared with actual results to be realized at the end of the year. The necessary adjustments will then be made. The company should also consider making a more frequent Cash budget, say monthly, which would enable it streamline some of the issues such as pricing of its products and determine its cash position (Laidre, A. 2012)

From the Cash budget, a resulting Income statement and Statement of Financial position can be generated.

Olympus Incentives Ltd.

Income Statement for Year ended 31 December 2011
£000 £000

Turnover 1,020

Direct Labor 350
Direct Materials 20
Direct expenses 96 466

Contribution 554

Fixed Costs-
Rent 94
Rates 40
Bank interest and charges 100
Administration 40
Sales and marketing expenses 22
Insurance 6
Vehicle expenses 24
Sundry expenses 20
Depreciation 40 386

Net Profit (Loss) 168
The resulting Balance sheet would be as follows:

Olympus Incentives Ltd.

Statement of Financial Position as at 31 December 2010
£000 £000

Non-current Assets 230

Current Assets
Inventories 5
Trade Receivables 102
Cash and Bank 326 433

663

Bank overdraft 120

Bank Loans 100

REFERENCES

Bhasin, H. (2012) One on One Marketing.

Bond, E. (2005) How to Prepare a Cash Budget: Amegy Bank Business Resource Center.

Bowes, P. (2008) Transforming Location into Success. Available from: http://www.pbinsight.com/files/resource-library/resource-files/Transforming_Location_into_Success__11-08.pdf (Accessed 23rd April 2012).

eHow Money. Market Diversification vs. Product Diversification (2012). Available from: http://www.ehow.com/info_7746062_market-diversification-vs-product-diversification.html (Accessed 23 April 2012).

Gassenheimer, B. and Keep, W. (2012) The Effect of Diversification on Manufacturers, Wholesalers, and Retailers.

Horne, C. and Wachowicz (2001) Fundamentals of Financial Management: Prentice Hall.

Laidre, A. (2012) How to Evaluate Your Company’s Financial Position. Available from: http://www.inc.com/guides/2010/08/how-to-evaludate-your-financial-position.html (Accessed: 22nd April 2012).

Queensland Government (2008) The Importance of Record Keeping. Available from: http://www.ajml.com.au/downloads/resource-centre/references/operational-management/The%20importance%20of%20record%20keeping.pdf (Accessed: 22nd April 2012).

Rachulin, R. (2000) Hand Book of Budgeting. 4.

The Companies Act (2006). Available from: http://www.legislation.gov.uk/ukpga/2006/46/contents (Accessed 22nd April 2012).

Workman, B. (2009) EDUCAUSE REVIEW. 44(5), 44-55.

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American Interest group and Australian Interest group

American Interest group and Australian Interest group
Why are some interes groups more effective than others?

Contents Page

3.1.0 Introduction

4. 2.0 American interest groups

5. 3.0 Australian interest groups

6.4.0 Effectiveness of interest groups

7. 5.0 Conclusions

9. 6.0 References

1.0 Introduction

This essay looks at the role of interest groups and why some are more effective in their missions than others. There are different types of interest groups categorized on the basis of membership and their missions. These groups are formed for various reasons such as to pursue a political or social agenda, to celebrate a common heritage among others, (Binderkrantz, 2008). However, the formation may also elicit counter groups which may be formed in response to a given interest groups who will champion a completely different view from that of the initial group. It also analyses the role of interest groups in the business and politics ofAmericaandAustralia.

2.0 American interest groups and their roles in politics and business

The most influential business groups in theUSare the chamber of commerce representing over 200, 000 companies in theUS. The group lobbies for the laws and regulations aimed at promoting economic growth and commercial activities in the country. Another prominent and powerful interest group is the national association of manufactures, (NAM) which lobbies for the laws and regulations that create manufacturing jobs.

Others are labor unions, an examples being American federation of labor and congress of industrial organization consisting over thirteen million members and contributes greatly towards political campaigns in the country, through finances and grassroots support with most of its support and financial contributions going to democratic incumbents and challengers. They include American medical association, (AMA) screen actor association, (SAA) and American bar associations, (ABA) being the most powerful professional associations in theUS. American medical association made a record contribution towards political campaigns in the year 2000. The screen actors associations are known to use the star power of their members to influence political campaigns in the country.

The oldest among these is the American libertiesUnion, dating back to the First World War. It fought for rights of people in matters of civil liberties and bill of rights. Public citizen is the modern form of public interest group formed by Ralph Nader, it fought for the legislations supporting voting rights among the youths. National abortion rights action advocating for the legalization of abortion and the right to life committee fighting for the delegalization of abortion.

The role of interest groups in 2012 US elections have been intensified with massive financial contribution expected to rise due to the proliferation of outside interest groups and supreme court’s decision allowing corporations to spend unlimited funds to elections, with independent groups having spent over $270 millions to date towards the 2012 campaigns.

So far super PAC has spent over $3 million in support of Democrats this year. Obama is likely to call on unions and other traditional Democratic groups in raising to supplement his campaign funds. American crossroads and cross GPS have reported spending over $40 million on 2012 political campaigns. American chamber of commerce(ACC) has so far spent $32 million in favor of republicans, an indication of how interest groups are shaping the politics of theUS.

2.0 Australian interest groups: political and business role

Interest groups in Australiahold certain political values just like political parties and they greatly influence government decisions. Get up action is an independent Australian political movement consisting of five hundred plus members. Its main objective is to build a progressiveAustralia and promote peoples’ participation in democracy. Its apolitical movement involved in human rights advocacy and an end to mandatory detention, having campaigned for the abolition of detention debt and radical changes in the Australian refugee policy. It’s on record for fighting against political huge political donations and economic fairness especially among the marginalized and unemployed people.

Australian new right (ANR) is a radical neo-liberal social movement inAustralia. It played a big role of demonizing and opponents of neo-liberalism in the dying days of labor federal government from 1983 to 1996 and was very influential in changing political debates and a key player in policy battle within the liberal party, (Cahill, 2004). It received massive support from different sections of capital making it a strong political force inAustralia and led to formation of government much more sympathetic to neo-liberal radical agendas since 1996.

Political activism inAustraliahas gained momentum in 2012 with more people rebelling against the government and ruling class, (political activism, n. d). The year is experiencing a push from all sectors of Australian community and interest groups against federal and state governments. The country has recently seen protests organized by various groups citing fundamental problems withAustralia’s democracy, (political activism, n. d).

 

4.0 Effectiveness of interest groups

Interest groups give members an opportunity to express their opinions and actively engage in political participation. According to Dalton et al. (2003), effectiveness of interest groups highly depends on its internal democracy which helps in building loyalty and allegiance. Members therefore provide maximum support to the group in return and this makes the group to be more effective in championing its goals as it will have the required support from its members.

According Bosso (2003); Jordan & Maloney (1998) the mode of communication highly determines the effectiveness of interest group. Communication in public interest groups is not very official (mostly done via mails, internet, newspapers and magazines) which limits their level of participation in decision making process hence reducing the effectiveness of this type of interest groups.

The relationship between members and the officials of the group also determines the effectiveness of a given interest group. Trade movements and professional associations exhibit direct correspondences with their members unlike most public interest groups. This means that the influence of members on the group is more pronounced in economic and single issue interest groups than in public interest groups, (Dunleavy 1991; Halpin 2006).This explains why most trade unions and professional associations are more effective than public interest groups.

The exit from a given group is another reason why some groups are more stable and solid than others. Exit in public interest group is much easier unlike in economic interest groups such as trade unions. A member can easily terminate his membership in the case of public interest group because it pursues broader objective which may not be of much interest and also because there is availability of an alternative group to join in, (Hirschman 1970), a scenario unlikely to be found in economic and sectional groups, where members do not have substitute groups to turn to when dissatisfied and might not also be able to exit fully from enjoying the

Why some interest Groups are more effective than others

We find that some groups are more effective because they have full support of its members than others; examples are trade unions and professional associations like AMA,ACC,NAM, ANR and political activism groups inAustralia. Public interest groups such as transparency international represent broader public views hence they do not have the full support of its members like trade unions and professional associations.

Political connections have played a huge role to the effectiveness of these groups. Groups engaged in political activism seem to be more effective because many people have interest in politics hence motivating the group. InAustraliaandAmerica, trade unions and professional association have been successful in their missions due to their connection to political leaders.

Internal democracy within interest groups have made some groups more effective than others. In professional associations and trade unions, democracy is heightened and every member contributes towards the group’s actions. This creates a sense of ownership by members towards the moves and decisions of the group and they provide enough support in return which has made them more successful than groups with no or little internal democracy.

Leadership style adopted by interest groups determines why some are more effective. Some groups have aggressive leaders who take on their opponents and governments head on unlike others. This has helped them a great deal in making them more effective than other groups who adopt soft and diplomatic approach in carrying out their mandates. Examples are trade movements and human rights activist who engage in strikes and public demonstrations.

The size and financial positions of interest groups influences the groups’ performances. Groups with huge followers are known to succeed in their missions because they have the numbers to push for their agendas unlike small groups.

5.0 Conclusions

The paper analyzes the effectiveness of interest groups and their contributions to business and politics ofAustraliaand theUS. Several reasons explaining why some groups are effective than others have been discussed. Democratic space within the group itself highly impacts on the group performance. This allows members to actively participate in decision making process of the group creating a sense of ownership for the achievements that are realized.

The mode of relationships and communication between the officials and members also determine the effectiveness of the group. The exit rate has been found to be high in public interest group compared to sectional and economic groups like trade unions and professional associations. The exit rate from a particular group is also determined by the availability of other forms of groups to which the members can move to whenever they feel dissatisfied with a particular interest group. These were found to be common in public interest groups.

Pressure groups have greatly influenced the politics ofAustraliaand the Us governments. They play a key role in political campaigns through financial support to parties they share with common stand and interest.

6.0 References

Binderkrantz, A. (2008): Different Groups, Different Strategies: How Interest Groups Pursue Their Political Ambitions. Scandinavian Political Studies, Jun2008, Vol. 31 Issue 2, p173-200, 28p

Binderkrantz, A. S. (2009): Membership Recruitment and Internal Democracy in Interest Groups: Do Group-Membership Relations Vary Between Group Types? West European Politics, May 2009, Vol. 32 Issue 3, p657-678, 22p,

Bosso, C. J. (2003). ‘Rethinking the Concept of Membership in Nature Advocacy organizations’, The Policy Studies Journal, 31:3, 397–411.

Dalton. R. J., Scarrow. E, S., and Cain. B. C (2003). ‘New Forms of

Democracy? Reform and Transformation of Democratic Institutions’, in Bruce E. Cain,

Damien C. (2004): The radical neo-liberal movement and its impact upon Australian politics. Australasian political studies association conference

UniversityofAdelaide. 29 September – 1 October 2004

Dunleavy, P (1988). ‘Group Identities and Individual Influence: Reconstructing the theory of Interest Groups’, British Journal of Political Science, 18:1, 21–49.

Halpin, D. (2006). ‘The Participatory and Democratic Potential and Practice of Interest groups: Between Solidarity and Representation’, Public Administration, 84:4, 919–40.

Hirschman, A. O. (1970). Exit, Voice and Loyalty. Responses to Decline in Firms, organizations and States.Cambridge,MA:HarvardUniversityPress.

Interest groups. (online) retrieved from http://www.netplaces.com (Accessed on 21st April, 2012).

Jordan, G, and Maloney. W, (1998). ‘Manipulating Membership: Supply-Side Influences on Group Size’, British Journal of Political Science, 28, 389–409.

Political activism. (online). Retrieved from http://www.theglobalistreport.com (Accessed on 21st April, 2012).

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Prepare a Portfolio of task………………..

Prepare a Portfolio of task………………..

TABLE OF CONTENTS

INTRODUCTION
1.1 DIGITAL NATIVES AND DIGITAL IMMIGRANTS…………………………3

AREAS TO BENEFIT FROM PROCESS OF IMPROVEMENT………………………,3
2.1 SALES………………………………………………………………………..3

2.2 ACCOUNT DEPARTMENT…………………………………………………3

2.3 STOCK CONTROL………………………………………………………….4

2.4 PURCHASES…………………………………………………………………4

2.5 PRESENTATION…………………………………………………………….4

3. JOB CHARACTERISTICS……………………………………………………………………5

3.1 SALES JOB………………………………………………………………………….5

4. WEB- ENABLED ORGANIZATION……………………………………………………….6.

4.1 ADVERTISING…………………………………………………………………….6

4.2 TABLE OF CONTENTS…………………………………………………………….6

5. DIGITAL DIVIDE……………………………………………………………………………7

5.1 IMPACT OF DIGITAL DIVIDE……………………………………………………7

6. REFERENCES………………………………………………………………………………..8

 

INTRODUCTION

DIGITAL NATIVES AND DIGITAL IMMIGRANTS

Digital natives are people born or brought up during the age of digital technology and are so familiar with computers and internet from the earlier age, while digital immigrants are people born or brought up before the widespread use of technology (Oxford University press, 2012). The two categories of technology users above, digital native and digital immigrants are a reality. The students of today are considered as digital natives because they are born and brought up in the information technology era. They use computers in their studies and can access internet. They have spent their entire lives surrounded by and using computers, video games, digital music players, video cams, cell phones and all other toys and tools of the digital age. As a result of this environment and their interaction with it today’s student think and process information fundamentally different from their predecessors.

The areas within the Snakehead organization which could benefit from the process of improvement brought about through the utilization of information technology include the following;

Sales; All the sales of Snakehead Company are channeled to the sales office. Through the use of information technology, different departments will be able to share their sales information promptly as they are executed. This will give sales manager easier time in gathering sales information from the different departments hence save time and cost.

Account department; All the sales and purchases details will from all the business units within Snakehead organization are require by the head of accounts for book entries purpose and hence through employment of web based system, information from various business units within the Snakehead organization regarding every business transaction will be made available to the central accounts office promptly (Ballou and Pazzer, 1995).

Stock Control; The use of web based as a means of information technology will ensure that stock within different business units are maintained efficiently using a formal stock control system. All information concerning orders will also be shared within the business units.

Purchases; Through the use of web based information technology, all the purchase of the Snakehead organization will be shared with various concerned departments. This will enhance efficiency within the organization.

Presentation

All around us information technology is moving from paper to digital (Edinburgh University Press, 2008). Information technology refers to the use of system for storing, receiving and sending information. Use of information technology has become a popular tool in the management of businesses across the world. Information technology is an important aspect in business of today. In the Snakehead organization use of information technology will be very essential to the different business units. Updating of the information system in Snakehead organization will increase the speed of information processing and hence service delivery within the organization. The company will therefore be able to provide immediate assistance to clients and thus improve their customer service. All orders received from different units within the Snakehead organization will be shared promptly by the various departments and action taken immediately to avoid any delay in the execution of an order. This will help customer satisfaction and help in winning of the customer’s loyalty. Efficiency within the Snakehead Company will be enhanced due to the increase in speed. Information technology will improve response time and this will enable Snakehead company get raid of unnecessary delays and the cost associated with it. Different departments within the Snakehead organization are interrelated hence the flow of information will increase when a web based information technology is adopted by the company.

Use of information technology will provide room for multi-tasking of some duties. Computers are able to perform multiple tasks simultaneously. This will help reduce the cost associated with employment of various employees toper form the tasks. This will eventually ensure the profitability of the company. Cost of operation within the organization will also be reduced. Computers have become more affordable, they can also replace other means of document storage and it can also enable certain jobs to be eliminated. For example the account department can only have one staff to do the entries and accounts since all the information will flow from all the business units thin the organization. This will eventually lower the cost of Snakehead Organization.

Sales job; Sale is a job which is important and vital in any organization. It can be regarded as the cornerstone of any business organization (Orvel, 1994). It is through sales that company receives revenues that enable to carry out their day to day business activity. Any business organization without a strong sales policy is likely to fail. In order for a sales person to be successful he or she must have the following characteristics. Sales people must invest heavily in technology, in people, and in themselves. They must constantly expand their horizon, training and constantly look out for anything that will give them a slight advantage. Sales people must be consistent in their work. Consistency of sales people will help in winning of customers thereby boosting sales of their respective organizations. Sales people must be confident in their work. They should believe in their products, their services and their people. Sales people should be patient in their work, they should always be in the look out for the next need cycle and strive tube there when need arises. Sales people should have a sense of a assortment, they should offer a wide variety of services and products and adapt their offering, their terms, and their delivery schedules to meet customers demand. They should look for the new, unusual, and unique and add to their offering. Sales people should be convenient; they should be enthusiastic and optimistic in their work. They should have good word for everyone and never complain about weather, economy or the people they work for. Sales people should be committed in their work; they should have no time for excuses and apologies and never argue with the result, they should treat every customer as if survivals of their business depend on them.

Web based organization in finding that they need to continually improve their web presence and maturity are doing the following; Advertisement, several of web based organization such as Google and Face book are doing vigorous advertisement through their website inured to increase client database and increase their productivity, this will enhance their productivity.

Table of contents showing advertising revenues from Google Inc. (Google Inc. 2012)
Year Ended December 31,
2009 2010 2011
Advertising revenues:
Google websites $ 15,723 $ 19,444 $ 26,145
Google Network Members’ websites 7,166 8,792 10,386
Total advertising revenues 22,889 28,236 36,531
Other revenues 762 1,085 1,374

Revenues $ 23,651 $ 29,321 $ 37,905

The above table clearly shows that advertisement contributes to significant revenue for the Google Inc. The advertisement is being done in their website. The reason for carrying out advertisement is to enhance sales and increase revenues of the company. The increased revenue will eventually increase the firm’s profitability. The advertisement carried out is obtained from different companies who use the website either to increase their popularity or to popularize their products. By doing this they pay Google Inc. the fee for carrying out the advertisement and this will generate revenue for the Google Inc.

The impact of digital divide on the web-enabled organization of today; Digital divide describe the fact that the world can be divided into people who do and people who don’t have access to and capability to use modern technology such as the telephone, television or internet (Ohms, 1999).

Impact of digital divide can impact negatively or positively on the web-based organization of today (Gary & Vernon, 2012). On positive note it will enable the organization goals reach a majority of people. This is because, those who have access to technology, will be to access information freely from the organization site. On a negative note it will hinder access of information from the organization websites. Lack of access to information technology will render web- based organization unprofitable since the overall sales will be reduced. People will not be able to relevant information regarding a particular product or service in the market. Hence access to information technology is very essential for the business operations.

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Oreos cookies marketing strategy

Oreos cookies marketing strategy

 

 

Discuss strategic management(sustainability, porter five forces) of the product “Oreo Cookies” from Kraft foods…………

Introduction

This paper evaluates marketing strategic management of Oreo products. The history of product has been highlighted as well as an overview of product positioning and marketing strategies. Reasons for its sustainability in global markets and marketing strategies used in penetrating the Japanese markets have also been discussed.

History of Oreos Cookies

Oreo product was born on 6th march 1912 and has significantly developed its brand name to become the top selling cookie in the world today. Enjoyed in more 100 countries, Oreo is milk cookie biscuit which have been innovated into local flavors of to different regions and markets they are consumed in, (Company Overview, n. d).

Oreo was first sold in Hoboken, New Jersey, where the product was packaged in bulk tins and sold in weight. The original Oreo was made at Nabisco library and has a street named after it, Oreo way in the in New York. It is the most favorite and best selling cookie brand in the world, generating global annual revenue of over 1.5 billion dollars for the Kraft foods company as at 2010 statistics.

In 1913, Oreo cookie was registered as a Nabisco trademark and changed its name from ‘Oreo Biscuit ‘to Oreo sandwich in 1921 and later to ‘Oreo crème sandwich‘ in 1937. Two years later, the product was first advertised on Trolley cars and was first exported to Spanish speaking nations of central and Latin America. Global moments campaigns for the product were launched in 1998 and a variety of its brands were introduced into different countries.

Kraft Company is the custodian of Oreo products which are found in more 100 countries worldwide. Its biggest markets are in the US, China, Venezuela, Canada, Indonesia, Mexico, Spain, UK, Central America, Argentina and the Caribbean. Oreos are made in 21 bakeries of Kraft foods spread across the world. The product has over 23 million facebook lovers representing more than 200 plus countries of different languages and is ranked among the top five facebook pages in the world today.

Porter’s competitive strategy analysis in Oreo brands

Threat of entry: the threat of new entrants into food industry is generally high and this extends to the snacks, biscuits and other similar brands. This is because of low initial capital required to establish a food processing factory. The increasing demand for food items due to the swelling world population has made the industry attractive to potential investors. However, established brand names of Oreo have scared away new entrants into markets where Oreo brands are highly recognized like China, Canada, US, Indonesia, Japan and Mexico among other locations.

Power of suppliers: The suppliers of raw materials and labor are diversified; this has drastically reduced their power. Raw materials can be easily obtained, an example is milk and sugar whose supply is not only high but also readily available and can be obtained from various sources. Inputs are highly differentiated especially in the production of Oreo chocolates and biscuits, and supplier size is relatively big which gives the company more independency to choose the best supplier hence reducing their powers. The switching cost from one supplier to another is almost zero and there exists a variety of substitute inputs for the production of Oreo products.

Power of Buyers: The power of buyers is very high because of very low switching costs in the food industry. Consumers of food products are generally sensitive to price changes which make buyers to influence prices of products. They can easily switch to competitor products hence the need to develop brand name and build consumer loyalty. However, large size of buyers of Oreo brands and market segmentation has helped in reducing the power of buyers.

Substitutes: Oreo products have a variety of cheap substitutes, ranging from milk powder, snacks and biscuits. This is complemented by low switching cost to substitute products. Building Oreo brand name and consumer loyalty is necessary to maintain high performance of the products

Competitive rivalry is relatively high, main competitors being Keeler, which is the second largest in the US, whose sales have been increasing significantly and is also engaged in massive product innovations and diversification. Competitive rivalry is high in this industry which is attributed to easiness of entry by investors. However, brand recognition and product differentiation has sustained the performance of Oreo brands in the global market. Low installation costs, growing demands for food products and low exit rate from the industry have increased competition in the industry.

Overview of Oreo strategy

Kraft Company employs various strategies to survive in the global competitive markets. This includes both marketing mix and marketing analysis strategies.

Market target strategies involve expanding into fast growing demographics and economic segments. Oreo products have been extended in Asian markets which have experienced economic growths, Canada and America. The growing population in target markets offered a wide market for the Oreo branded products, (Company Overview, n. d).

Market segmentation strategies: The products have been segmented geographically and demographically. Deemographic targets were basically children for biscuit and crème filled products. Another target group is women who seem to be more health conscious, and company introduced fat free Oreo products for this market segment. The company offers different Oreo products for different regions. This is aimed at meeting different regional needs for goods and services especially in terms of tastes and packaging.

Another strategy is developing consumer loyalty among the customers to prevent them from switching to other similar products. This has been achieved through building brand name and offering discounts to different market segments such as children.

Marketing promotion strategies involve the use of media and online advertisements to reach the targeted consumers. Advertisements in magazines and television stations have been used to market Oreo brands. These have been supplemented with consumer campaigns through direct and personal selling.

Positioning

Product positioning has been achieved through:

Product development and innovation strategies. Oreo products have been developed to suit the health requirements of its customers, such low calorie and fat content. Focusing on high demand product sectors such snacks, crèmes and biscuits have helped to increase company sales in Oreo brands. Product diversification has also been employed, currently; there are different brands of Oreo products spread across the world.

Branding and product recognition has been intensified through different forms of marketing promotion which has contributed to the growth of company brands including Oreo cookies. This has been achieved through focusing on sectors that have demands such snacks and convenient meals. The company has got a well established and faster growing distribution channels, hence product are easily accessed in most food retailing shops in its market of operation.

Packaging and product differentiation: product packaging has been differentiated to suit different categories of customers. This has also been adopted in product promotion and advertisement. An example is more colorful and eye appealing packages for products targeting children. The original Oreo products were blue in color; however, fat free products were packaged in red and blue colors, with red representing the health aspect which the product is addressing and blue color representing the Oreo brand.

Sustainability of Oreo products

Product sustainability has been enhanced through innovative nature of the marketing team. This has helped to maintain and increase sales of the Oreo products. An example is recent introduction of low calorie and fat free Oreo products which have revived declining sales of the Oreo brands. Products have been diversified to spread risks associated with non performing lines which have been covered by other brands.

Sustainability has also been achieved through expansive strategies into new locations of Asia, Europe and America. This has added to its growing customer base hence increased sales of the product and revenue. Expanding into emerging economies has helped reduce products risks in non performing locations due to poor global economic performance.

Company’s image and reputation, coupled with brand recognition of Oreo products has sustained Oreo brand despite stiff competition and poor performance in global economy. Marketing promotion and building customer loyalty has improved brand recognition. Effective marketing communication was employed to reach targeted markets of Oreo products, press release and media kits was used to communicate company products to the public and food retailers.

For public relation, Oreo Brand Company sponsored sporting activities in Japan and donated to charitable organization to build recognition in the new market. Company established a reliable distribution chain which ensured that products get to customers without delay and in good condition. It partnered with major food retailers and distributors which helped in getting goods to consumers.
Oreo marketing strategies in Japan

Oreo products in Japan involved the use of promotion strategies through the media, internet and use marketing and social media campaigns were also used to reach Japanese market. Consumer promotions were used to reach the target segment of customers in the Japanese market. The company used magazines, television, internet and social media network to reach its target customers. For instance, the use of social media was intended to reach youths within Japanese population.

Consumer promotional activities were conducted at major food stores across the country which allowed feedbacks from respective customers and coupons were also offered at sampling stations and company websites. Packaging of products was designed to suit Japanese standards, marketing demands and culture.

Products were innovated and diversified to make them as appealing as possible to Japanese taste and culture, (Company Overview, n. d). The company developed a variety of Oreo products which are sold to Japanese population such Green Oreo tea among other Oreo products. Promotion strategies involved the use of Japanese culture and legends to create a sense of Japanese ownership in the Oreo products.

Conclusions

This paper analyzed different strategies employed by Kraft Company to reach and maintain Oreo products in the global market. Expansive strategies and product innovations have been used to position and maintain product performances in the global markets. Company and brand recognition has been identified as reasons behind the excellent performances of Oreo products in the global market.

Analysis of Porter’s competitive strategy was undertaken to evaluate food industry and how Oreo products have responded to industry demands. Strategies employed by Oreo team to enter into Japanese market were discussed in this paper.

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