Critical Analysis of The Business Strategies

Offensive and defensive strategies are by products or results of the corporate strategies. A corporate strategy is a comprehensive set of activities developed by top management to aid an organization achieve its corporate objectives. Involving all parts of an organization, these strategies consider both internal and external environments. As the name suggests these strategies are aimed at placing the organization in a ‘attack mode' of sorts. Organizations employing such strategies generally believe in acting before their opponent. Such strategies are usually achieved through internal growth, though some like mergers and acquisition, etc are external. Concentration on a single product or service The firm chooses to specialize in a single product, product line, or service. It plans to do one thing with great effectiveness and efficiency. This specialization allows an organization to do whatever it does extremely well, perhaps even better than other organizations. Used mostly by small organizations, it reduces the amount of resources required and as such is a low risk strategy. However, it ties up all of the firm's resources on a single product, service, or product line. The firm's success and growth is dependent entirely on that particular product with nothing to fall back on were that product to fail. Also, coupled with the facts that this strategy limits an organization's growth and opportunities, it can be considered a high-risk strategy as well. E.g. a company deciding to specialize only in the production and distribution of a particular brand of chocolate will find their chances for growth and profits tied inexorably with the market acceptance of that chocolate. Failure of the product will spell doom for the company. Despite these pitfalls, the concentration strategy has nevertheless borne fruit for organizations like Holiday Inns. Considered one of the largest hotel chains in the world with 1800inns, Holiday Inns have achieved unparalleled success by focusing on the hospitality industry. Put plainly concentric diversification is said to be when a firm originally concentrating on one specific product, service, or product line decides to add related products or services to its already existing retinue. These new products or services are added internally (i.e. it can be a management decision) or may be acquired through acquisitions. A good example is Cadbury. Though initially focusing on biscuits, the company today has an impressive line-up that includes not only biscuits, but also chocolates and ice cream as well. One of the major reasons why companies choose to follow such a strategy is the potential for faster growth, and the lure of establishing a diverse if related product line. This ensures that if one product were to fail, there would still be something to fall back on. Vertical integration occurs when one firm acquires another that is involved either in an earlier stage of the production process (backward integration) or a later stage of the production process (forward integration). The firm that is acquired usually follows the same line of business as that of the parent company. While backward integration will give the firm more control over the quality and quantity of its raw materials, forward integration will ensure that the firm's products will enjoy a good demand. This occurs when a firm decides to branch out and add products or services that are unrelated to its existing products and services. Conglomerate diversification can occur through acquisitions or it may be based on management decisions. The purpose in employing such a strategy is to increase sales and earnings, spread risks, or in the case of acquisitions simply to make an attractive investment. An example is the heavy vehicles and industrial equipment manufacturer Caterpillar, who have branched out into the production of boots and accessories. A merger involves combining the operations of two companies to form a new and unified organization. Acquisitions on the other hand is the taking over of another firm but allowing the acquired firm to function as a independent division or subsidiary of the acquiring firm. The main aim of this strategy is to achieve growth both in sales and earnings, which it does more quickly than any internal strategies. An accurate example would be the recent merger of carmakers Chrysler and Mercedes Benz. An example of acquisition would be BMW's takeover of Rolls Royce. Joint venture is when two or more firms combine resources to accomplish a task that an individual firm could not have done alone, or to do a job more efficiently. Considered as a means to implement a strategy rather than a strategy, joint ventures offer a way for organizations to undertake projects and spread any risks as well as operate more efficiently. General Motor's collaboration with Toyota is an example of a joint venture. Usually adopted by companies, who follow a wait and watch attitude, these strategies nevertheless help an organization achieve a good foothold in the market. Reducing the scope of operations or activities to improve effectiveness and efficiency is retrenchment. Organizations adopting such a strategy generally believe that making the organization more effective and efficient will give it a better chance to return to a higher level of profitability. In some cases a firm may simply cut costs, reduce personnel, etc, but will decide to maintain all its current line of business, whereas, in extreme cases a firm may decide to get rid of certain product lines or services. Divestment is when a firm spins off or sells segments of its operations. The main reasons for such a situation to arise are: a firm may have acquired another firm that either interferes or does not contribute to its current organization mission, a segment may not be functioning satisfactorily enough to justify the resources invested in it, or the segment might be earning a profit but the management decides its resources are better utilized elsewhere. Stopping the decline in a firm's performance and bringing a return to successful performance involves turnaround. It combines a defensive strategy (retrenchment or divestment) with a growth strategy. The turnaround of Chrysler Corporation in early 1980's from a failing enterprise to a successful one is a good example. Usually a last resort strategy, it involves selling or disposing of the organization assets. The entire organization or only part of it may be sold. It occurs when turnaround was a failure or may not have been viable. Undertaken mainly to provide the stockholders a return on their investment, it is one of the most unpleasant strategies. The various offensive and defensive strategies are not separate, and are used in complement with one another. Most firms employ a variation or a mixture of the various strategies. The only important factor is deciding which strategy will better suit the conditions presently being faced by the firm.

Kayem Foods, Inc

Executive Summary Problem/Issues Matt Monkiewicz, director of marketing for Kayem Foods, Inc. , is challenged with a decision pertaining to a small but fast growing product, Al Fresco chicken sausage. The product has become a brand leader in its market niche, and means on how to promote the product is in question. A â€Å"buzz† marketing campaign was recently used, and while the company did increase in sales, there is no way to directly calculate the effect the campaign had on the product. Mr. Monkiewicz would like to continue to use the â€Å"buzz† marketing approach, but supermarket executives and food distributers are unwilling to increase buying and support for the brand. They do not believe that this small marketing campaign is solid enough to increase buyer recognition and increase sales. Customers have remarked that the product is hard to find in stores, and some cannot find it entirely and have to visit other locations. Analysis The sausage market, while growing, has several competitors who dominate the market. Al Fresco chicken sausage has become the number one brand in its market niche, but buyer power is high due to the low price and similarity of the product. Kayem Foods Inc has primarily sold through supermarkets and other retail food stores in the Northeast. In the last two years, it had made a concerted effort to obtain distribution in the Midwest and the Southeast. Kayem has two different communication needs. First, they need to convince retailers that their product has a stable top of the market demand, and that current pricing creates a large profit potential. This objective can be achieved by devoting money to print advertisements in food magazines, and by allocating money to trade advertisements which depict the success the company has currently seen with the Al Fresco product Monkiewicz used Al Fresco’s high recent sales increases to secure an $185,000 advertising budget for FY 2006. His perceived marketing options include spending $75-72,000 on another Buzz campaign, which supermarket executives do not believe is an adequate marketing campaign for the product. Another possibility is running trade advertisements to entice more retailers to sell Fresco’s chicken sausage (minimum cost of $80,000). The company has evaluated the possibility running no less than 2 or 3 print ads in specialty food magazines; this would be a cheap way to get circulation to the target market. A final alternative would distribute consumer price-off coupons at a minimum cost of $90,000. On top of the advertising venues chosen, an informative website that provided, product history, flavors, recipes, and product locations would be beneficial Recommendations Kayem Foods, Inc. should use the budgeted $185,000 promotional dollars to run a series of â€Å"trade advertisements† that would cost $80,000. They should also run two ads in both Food and Wine and Cooking Light food specialty magazines which would cost $39,765 and $57,840 and would be seen by 5. 4 million people. They should also launch an informational website that would help build product awareness. Use of these three advertising avenues helps resolve the problems the Al Fresco brand currently faces; a new, largely unknown brand to consumers, supermarket managers have been reluctant to offer the brand considerable, if any shelf space due to doubts of stable demand. Problems/Issues Matt Monkiewicz, director of marketing for Kayem Foods, Inc. , is challenged with a decision pertaining to a small but fast growing product, Al Fresco chicken sausage. This product, though small, has become the number-one brand in its niche market. The company had recently implemented a â€Å"buzz† marketing campaign for the product. This is a unique technique for using a word-of-mouth advertising venue. Monkiewicz did not initially have a substantial marketing budget adequate enough to make a substantial impact using traditional media. â€Å"Buzz† marketing, gave him means to promote the rand on a small budget but still have an impact on his target market. According to ACNielsen, Al Fresco had become the number one-selling branded chicken sausage in the United States by late July 2004. However, it was not clear whether this was due to the buzz campaign or to other marketing activities implemented by the firm. Prior to the campaign, the brand had developed substantial m omentum with a minimum of advertising support. Also, during the campaign period the sales force had made a special effort and offered special discounts and allowances to obtain new distribution. The sales increase by the brand was very impressive, but it was not clear how much more growth Kayem could expect from this rather unusual marketing tactic. Monkiewicz explained that it would be a challenge to sustain the growth and increase market share with such a limited marketing budget. Even with substantial growth of the product, the company has continued problems with supermarket executives and food distributers still unwilling to increase buying and support for the brand. They do not believe that this small marketing campaign is solid enough to increase buyer recognition and increase sales. This placed a major dilemma for Kayem Foods, and Al Fresco. They would like to continue to use the â€Å"buzz† marketing approach, but there is no way to justify and link the increase in sales with the campaign. The big issue now is getting supermarket executives and distributers to be confident with the product to increase shelf space and brand recognition. This is very important because seventy-two percent of the BzzAgents reported that they had had difficulty finding the product in the supermarket. This meant that they had to either ask the store manager for the product or go to a different store. Twenty-three percent were never able to find the product. Monkiewicz has two weeks to decide how to implement an upcoming market strategy for the product. He would like to implement another â€Å"buzz† marketing campaign in 2005, but since this strategy is not wielded well by supermarket executives, he has to look at other venues. Some alternatives he could look to with the advertising budget include; limited magazine advertising, consumer coupons, or more point-of-purchase material. Monkiewicz has also considered an advertising campaign in supermarket trade magazines aimed at retail food buyers and merchandising executives. Situation Analysis 5 Forces Upon reviewing the five forces model for Al Fresco, it is noted that competition is pretty high in the industry. Total category sales for the chicken sausage segment were about $75 million per year. The market is growing at about 12 percent a year. This is a growing market, with a few large brands, and rivalry is high. Al Fresco possesses a small 5. 3 percent of the market in the New England area. Because the chicken sausage category is small, it is difficult to obtain many specifics about competition. Buyer power is moderate to high, due to the fact of low switching cost and ease of access to the product. Buyers can be brand loyal, which is a benefit to some companies in the industry. Tying in with the high buyer power is a high power of substitutes. Consumers on average spend $16. 95 annually per year in the target market, when compared to the food industry is not very much. The sausage market can be seasonal, with price promotions and coupon discounts during these periods can be very high. This can lead to shelf space being a big factor, because if a consumer cannot find their desired product, they can easily purchase a similar product for a similar price. Barrier to entry is low in the market due to the fact of establishing a high quality product at a reasonable price with good shelf space and advertising. Supplier power is also low due to the fact that the low priced products in the industry are located in all major grocery stores. S. W. O. T. Strengths In 1999 Kayem introduced the Al Fresco brand. The firm believed if they could have a well-recognized â€Å"demand brand,† it could potentially obtain higher prices and better margins and open doors in new markets. By late July 2004, Al Fresco had become the number one-selling branded chicken sausage in the United States. The product was offered with high quality, healthy attributes, freshness, and distinctive flavors. Al Fresco chicken sausage has 75 percent less fat than traditional pork sausage and is available in seven flavors. Sales have increased significantly for Al Fresco chicken sausage. In September of 2003 they posted sales of $197,000 and in October of 2004 that number rose to $575,000. Weaknesses Though Al Fresco has been prosperous in recent years, Kayem’s profit margins have been eroding. Gross margin for the company had been declining for several years due to supermarkets gaining â€Å"power† through consolidation and demands for greater discounts and promotional allowances from suppliers. With this, Al Fresco has been asked for more price- oriented promotions. This could be a possible benefit for the company, but would cost about $90,000 to be effective. The target market for Al Fresco chicken sausage is the 25- to 54-year-old woman who was health conscious. This is a good niche market, but it makes Al Fresco cater to this niche instead of advertising to an entire population. Opportunities Kayem Foods Inc has primarily sold through supermarkets and other retail food stores in the Northeast. In the last two years, it had made a concerted effort to obtain distribution in the Midwest and the Southeast. This market expansion could lead to vast growth for the company if it takes hold of market share in these regions. The chicken sausage segment is small, with category sales about $75 million per year, but the market is growing at about 12 percent a year. With the new prospective advertising campaign, Al Fresco has potential to capture additional market share. Since sales of Al Fresco had been increasing significantly, the advertising budget was increased to $185,000 for fiscal year 2006 (March 1, 2005-February 28, 2006). This allows Monkiewicz with new possibilities for advertising and reaching a broader customer base. The company should use this to increase demand from supermarket executives, to provide better shelf space for the product. Monkiewicz would like to continue to use the â€Å"buzz† marketing campaign. Rob Walker wrote an article in the New York Times, explaining how effective this campaign was. Appendix) One agent related. †I told everyone that they were low in fat and so much better than pork sausages. †Ã‚  The article relates how effective â€Å"word of mouth† advertising can be. Threats Al Fresco has faced a few problems along the way. During their â€Å"buzz† marketing campaign, seventy-two percent of the agents reported that they had had difficulty finding the product, while twenty-three percent were never able to find the product. This is unacceptable in the marketplace and Al Fresco must convince the supermarkets to carry the product, and give it adequate shelf space. Though Monkiewicz liked the â€Å"buzz† campaign, it was hard to track and justify just how effective an advertising campaign it was. This is threatening, because supermarket executives are timid to demand the product if this is the only kind of advertising the company partakes in. Sausage Market Consumers of sausage products spanned all national regions and income levels. Accordingly, the sausage products where used for both main entree’s and complements to other center-plate dishes for all three main meals of a day. Retail sales of all sausages tallied $2. billion in 2003. This total includes Al Fresco’s product segment, specialty sausage, which had a 20%, or $4. 8 million in sales, and was currently the fastest growing segment. Increased sales were linked with a shift in consumer preference for differentiated products that added a variety to their menus, or were lower in fat content. Concurrently, Al Fresco’s chicken sausage was part of a market segment of low-fat/lean sausages which made up 19% of all sausage sales. Communication strategy Kayem has two different communication needs. First, they need to convince etailers that their product has a stable top of the market demand, and that current pricing creates a large profit potential. This objective can be achieved by devoting money to print advertisements in food magazines, and by allocating money to trade advertisements which depict the success the company has currently seen with the Al Fresco product. Ads in food magazines will also help achieve the second communication goal, stimulating primary demand in consumers, by introducing them to not only a new product segment, but the most popular product in that market. Supermarket executives have recommended that Kayem advertise in specialty food magazines. Through this type of method consumers should be encouraged to deepen brand loyalty. Due to the niche market of chicken sausage, consumers may not need a sales promotion as often as in larger, saturated market segments. Running advertisements in specialty magazines allows a company to easily target desired geographic and demographic segments. Magazine ads are thought to have both high credibility and prestige. Plus, this method of marketing has a longer life span than many other mediums (TV, radio, telephone). In essence, though Kayem would be out the entire expense of running advertisements in the current fiscal year, sales spurred by these investments may be realized in months or even years to come. Out of the possible types of advertising goals, the persuasive approach is most in line with both Kayem’s marketing goals and the potential customers reading cuisine magazines. The company can create liking, preference, and conviction for readers to buy their sausage by highlighting its flavor, freshness, and more importantly healthy composition in comparison to other sausage alternatives. They currently have very low brand awareness which could be alleviated with vast advertising campaigns. This method also works best when consumers are processing the advertisement in a detailed, analytical mode. This description fully fits the reader of a food magazine who is seeking new recipes and/or foods. Point-of-purchase (P-O-P) communication is not the most effective use of Kayem’s promotional money at this time. The company’s current dilemma involves convincing more retailers to buy/stock their item on shelves. This problem should be tackled before the same retailers are asked about in-store promotions. Analysis of Alternatives Monkiewicz used Al Fresco’s high recent sales increases to secure an $185,000 advertising budget for FY 2006. His perceived marketing options include spending $75-72,000 on another Buzz campaign, running trade advertisements to entice more retailers to sell Fresco’s chicken sausage (minimum cost of $80,000), running no less than 2 or 3 print ads in specialty food magazines, and distributing consumer price-off coupons at a minimum cost of $90,000. Monkiewicz must decide if BzzAgent’s previous campaign generated enough sales to warrant spending an additional $75,000 on a second campaign in FY 2006. Due to other promotional activities that occurred simultaneously with the first campaign he is unable to determine how many incremental sales the program created. Kayem’s own sales representatives claimed that they were unable to get additional placements or expanded shelf space due to the buzz campaign alone. The cost per â€Å"buzz† (conversation/ activity involving Al Fresco) was calculated to be almost $4. 24. The new campaign would have a unit breakeven of 62,500 packages. While this advertising approach does disseminate relevant literature there remains no clear way to track generated sales. Growing negative market sentiments of BzzAgent’s techniques may also hurt the image of the company if consumers become aware that they use this form of advertising. Another drawback is the fact that Kayem must rely on unpaid employees of another firm to handle their promotions. A second option costing at least $80,000, involves Kayem running a series of â€Å"trade advertisements† directed at convincing retailers that their chicken sausage is in high demand and can be sold with high profit margins. This alternative has a unit breakeven of 66,667 units. Although past efforts have lacked the intended success, Kayem must address the limited availability of their product. Producing the leading brand of a product in a market segment which has quickly expanded gives them better financial support when approaching retailers than before. The option of distributing consumer price-off coupons was mentioned by both Al Fresco’s sales force and certain supermarket managers. The supermarket managers would still receive full retail selling price, but the Kayem would be cutting their profit margin on each package bought with a coupon. The unit breakeven of this promotion would be 75,000 packages. The product is competitively priced with other chicken sausage products according to a survey of the Boston-area supermarkets. Another draw-back to offering price reductions is in conflicts with Kayem’s desire to keep margins high to off-set their lower profit lines. A final promotional route Kayem could choose involves running advertisements in specialty food magazines. This approach covers a large geographic area, connects to the targeted demographic profile, and has a longer life than most of media avenues. Various costs for ads covering a full, half, or quarter of a page for three different magazines is accompanied by number of circulations in the appendix. Kayem’s managers believe that no fewer than 2 or 3 ads would be needed to have any positive effect on sales. There are many new opportunities opening in the advertising venue for Al Fresco due to the increased budget. Two big issues the company faces are product awareness, and knowledge of where the product is available for purchase. With the Internet becoming more and more common place, a simple website would be a possible alternative for Al Fresco. The site would offer history of the product, types of product, recipes to go with the sausage, and locations were the sausage may be purchased. Any advertising that is done; the name of the website could be placed on the advertisement. It is assumed that a start up fee cost for a simple informative website would be $4,000 and yearly upkeep would be an additional $3,000. Recommendations/Implementation Kayem Foods, Inc. should use the budgeted 185,000 promotional dollars to run a series of â€Å"trade advertisements†, 2 ads in both Food and Wine and Cooking Light food specialty magazines, and launch an informative website. Use of these three advertising avenues helps resolve the problems the Al Fresco brand currently faces; a new, largely unknown brand to consumers, supermarket managers have been reluctant to offer the brand considerable, if any shelf space due to doubts of stable demand. Due to budget constraints, the placement of two 1/4 four-color advertisements in both food specialty magazines is the cheapest way to increase broad brand awareness in the target market. An estimated 5. 2 million ads will be circulated at an estimated cost of $18. 7 per 1,000 viewers. This is by far a cheaper avenue to reach potential customers than another â€Å"buzz† campaign (appendix). The ads should highlight the freshness and natural, healthy composition of Al Fresco’s chicken sausage, and should include the statements, â€Å"#1 Selling, Healthy, All-Natural Choice† and â€Å"Ask for It at Your Local Supermarket†. Thes e advertisements will not only increase selective demand, an approach that attempts to highlight a specific brand’s competitive advantage in the face of many substitutions, but will also spur a deepening in brand loyalty. By using a persuasive advertising approach these placements will lead to higher preference, liking, and conviction of Al Fresco’s chicken sausage flavors by consumers because they will be processing the ads in a detailed, analytical mode. Placing these ads in food magazines gives Kayem the opportunity to place their product in the minds of consumers actively searching for new products/ recipes, thus initiating new sales from experimenting, health conscience, or even allergenic consumers. Secondly, supermarket executives have said such an advertisement campaign is needed to create the stable demand required to prompt initial purchases and shelving of Al Fresco’s chicken sausage. Increasing the pressure on retailers to adopt and sell Al Fresco’s products can be supplemented by running a series of â€Å"trade advertisements†. These ads will highlight the specialty and low-fat sausage market segment’s growing sales numbers, and Al Fresco’s personal commitment to faithfully market their products. High profit margins and placement at the top of the segment market are also key points that must be received by retailing executives. As mentioned by Monkiewicz, $80,000 will be needed to successfully implement this advertising campaign. The remaining budget dollars will be used to launch and maintain an informational website specifically aimed at providing product awareness to customers. In today’s day and age, the internet is becoming more resourceful. With Al Fresco’s increased advertising over the next year, they can add they website URL to the ads for free publicity to the website. The website would be simple, offering product history, flavors and recipes, and locations were the product is available. APPENDIX |BREAKEVENS | | | | | | | | | | | |$1. 0 contribution margin per pound, typical package (unit) size= . 75 pounds, SO, $1. 20 contribution margin/package | | | | | | | |OPTIONS | | | | | |1. Bzz campaign @ cost $75-72,000 | | | | |75,000/1. 2 = 62,500 Breakeven in units | | | | | | | | | | |2. Series of â€Å"Trade Advertisements† @ cost $80,000 | | | |80,000/1. 2 = 66,667 Breakeven in units | | | | | | | | | | |3. Consumer Price-off Coupons @ cost 90,000 | | | |90,000/1. 2 = 75,000 Breakeven in units | | | | | | | | | | |4. Ads in specialty magazines | | | | |MEDIA COST AND CIRCULATION FOR MAGAZINES | | | | | | | | | | |Circulation |Cost of Full Page |1/2 Page |1/4 Page | |Better Homes and Gardens |7,600,000 | $ 359,000 | $ 215,400. 0 | $ 107,700 | |Food and Wine |900,000 | $ 66,275 | $ 39,765. 0 | $ 19,883 | |Cooking Light |1,700,000 | $ 96,400 | $ 57,840. | $ 28,920 | | | | | | | | | | | | | |$185,000 Proposed Budget | | | | |Circulation |Price | | | | |1. 8 million |$39,765 |(2) 1/4 Page ads in Food & Wine | |3. million |$57,840 |(2) 1/4 Page ads in Cooking Light | |5. 2 million |$97,605 |Total | | | |   |$80,000 |Cost of Trade Advertising | | | |$177,605 | | | | | |$7,000 |Launch and Maintenance of Website | |$184,605 |Total Advertising Budget | | | | | | | | |*Cost of magazine ads $97,605 with an estimated 5. 2 million circulation = $18. 77 per estimated 1,000 viewers | |*While Cooking Light has a lower cost-per-thousand | |the difference is not significant enough to offset the potential | |increased reach of running advertisements in Food and Wine simultaneously. | Buzz Mkt | | | | | | |2000 agents | | |Conversation Locations | | | |3 coupons for free package | | |Place |Percent | | |10 $1 off coupons when purchasing 2 packages | | |Home |41% | 5,807| | | | |Social Location |16% | 2,266| |goal each agent talks to 10 people = 20,000 people | |Work |15% | 2,125| | | | |Grocery Store |10% | 1,416| |758 agents filed reports | | |Other |18% | 2,550| |1,647 BzzReports completed, 8,470 buzz hits | | | | | | |1 report = 8. 6 conversations or activities about Al Fresco | | | | | |8. 6 x 1647 = 14,164 buzz hits (revised) | | |14,164 | | | | | | | | | | |Reedeming coupons 6000 free package coupons | | | | | |at 4. 9 = $26,940 | | | | | | | | | | | | | |20000 $1 off coupons = $20,000 | | | | | | | | | | | | | |Total cost of full redemption = $36,940 | | | | | | |$47,000 + 46,940 = $93,940 Potential Total Cost of Bzz campaign | | | | |Estimate | | | | | | |Total cost $ 60,000/ 14,164 = 4. 361 | | | | | | |An estimated $4. 24 spent for each conversation/activity | | | | | |stemming from Bzz regarding Al Fresco | | | | | | |CHICKEN SAUSAGE MARKET | | | | | | |FY 2006 |FY 2007 | |$75,000,000 |$84,000,000 |$94,080,000 | Sources

Uk Taxation System

1. 1 Introduction of the UK tax system There is a very long time before British tax becomes what it is now, which can be traced back to Ancient times when UK was a part of the Roman Empire. The uniform land tax in 1692 is the basis to the current British tax system; at that time, the land tax is a kind of direct tax and is the main source of government revenue. Before the end of 18th century in British, William Pitt announced income tax to cover the expenses on weapons in the preparation for the Napoleonic Wars. Initially, the tax rate was around 1/120 of the income above ? 60 and the rate increased to 1/10 of income above ? 200.In the 20th century, income tax is the main resource for UK government; in the mean time, indirect taxes also became more important through the century. In 1965, the corporation tax and the capital gains tax were introduced, and in 1984 the capital transfer tax was replaced by inheritance tax. Currently, the taxation system in the UK can be mainly categorized as personal tax, including income tax, inheritance tax and council tax, sales taxes and duties, including value added tax, excise duties, stamp duty and motoring taxation, business and personal taxes, including national insurance contributions and capital gains tax and business taxes.As a constitutional monarchy, the power of legislation is highly concentrated. All tax laws are from proposals from the Treasury Department and after approved by parliament and the royal, these proposals can come into effect and become laws. In the UK, nearly 90% of tax income is collected by central government. The HM Revenue & Customs takes charges of tax administration related affairs, including value added tax, sales revenue and tariff. 1. 2 Discussion of the UK taxation bases In computing the tax, we have to consider two parts: tax base and tax rate.Tax base is the economic basis of a certain tax and it is the base amount to compute the tax liabilities. Tax base is different from tax object, for e xample, the total income is the object of income tax, while only the taxable income can be regarded tax base. On the whole, tax base has two categories: economical tax base and non-economical tax base. Economical tax base means the objects of tax that are related to economical actions, such as revenue, capital and sales; non-economical tax base has nothing to do with people’s economical actions, such as the poll tax that is taxed on every individual person without their actions.In the UK, there are three kinds of tax bases: income base, capital base and consumption base. The income base is mainly used in individual income tax and corporate income tax. In most countries, revenue from income tax is the main source of government, so income tax base certainly has many advantages. Firstly, income tax base is much larger than other tax bases, because people with income above taxable allowance are the subjects to income tax. Furthermore, for most people, tax based on income is easy to calculate and manage for governmental officers. On the other hand, income tax base also has several disadvantages.Firstly, income tax base is only available for cash income; for income as goods, income tax base would not work. Obviously, it is unfair to not tax on goods income. Secondly, income has many sources; some are easy to track, such as wages and bonus, while some are not easy to detect, such as illegal sales commissions. At last, different people have different ability to pay the tax and income is not a good indictor to measure their tax abilities. So it is very hard to make a rule or rate to keep fair among every taxpayer. Capital can be used to make income and can reflect individuals’ paying ability, so it seems to be a good base for tax.However, the amount of capital would not generate the same amount of income, so it is not very accurate to use capital as a tax base. Furthermore, there are many kinds of capitals, which are hard to calculate and manage, and taxp ayers’ economic conditions are not the same, for example a house with mortgages and without mortgage should not be regarded same, so capital tax base also has some drawbacks. At last, consumption is also a measurement of ability to pay tax; more consumption means more ability to pay tax and less consumption means less ability to pay tax.According to Nicholas Kaldor’s theory, revenue should be the base of tax, not income. But here comes a confusing question: what if a person saves most of his/her income in the bank, rather than for consumption? Moreover, revenue tax base would affect the money supply on the capital market, because most people would tend to shorten their consumption and save money in banks. In a nut shell, all of these three tax bases have advantages and disadvantages, and there is no perfect tax base that can very fairly measure all taxpayers’ ability. So when considering the tax system, we should keep a balance between these three tax bases. . 3 Evaluation of a good taxation system What are the qualities of a good taxation system? Of course, nobody likes paying tax; however, tax is the main source for government revenue, which is used for providing public services. So we can also say taxpayers pay for the services they received, such as high ways and public schools. A good tax system should be both simple and equitable and simple. Equity has two directions: one is horizontal and the other is vertical. Horizontal equity means taxpayers with similar income should the same level of tax; vertical equity means taxpayers with higher income should pay a high level tax.Even though companies have to pay corporate tax, all taxes are ultimately paid by individual taxpayers. So it is extremely important to keep tax system to be equitable. Besides, simple is also an important quality to a good tax system. The rules and laws should be easy to understand; the tax liability should be easy to calculate and the tax system should be easy to administer. If the cost to administer the tax is more than tax revenue received, this kind of tax system is inefficient to both taxpayers and government.Complicated tax laws are costly to both taxpayers and the government; such laws are hard to administer and inefficient to collect. In addition, a good tax system should also be certainty, which means that the tax policy should keep being stable year to year, because this can make taxpayers to know the difficulty to evade tax payable and make a reasonable tax plan on the long run. On the whole, equity and efficient principles are two main principles to measure a tax system. A pie cannot be made both bigger and divided fairly. The same situation happens here.We cannot expect a tax system to be both equity and efficient, for example, when cut down the marginal income tax rate for those high income taxpayers, their productivity would increase accordingly, while the tax equity would decrease. However, there is always a comparably good po int between them, which we often call tradeoff. 1. 4 Evaluation of the UK taxation system In the UK tax system, income tax, national insurance, value added tax and corporation tax are the four main source of governmental revenue; the percentages are respectively 29%, 19%, 15% and 9%. On the whole, the UK tax system is quite stable.According to Huijun Yang (2012), from mid 90s 20th century, the ratio of total tax on GDP is between 36% and 39%, so it would be easy for taxpayers to make a tax plan. In addition, the UK tax system is quite equity for its income tax rate ranges from 10% to 50% and low income taxpayers can deduct allowances too. In 2012, the income tax personal allowance increases from 7,475 to 9,000 and the highest income tax rate decreases from 50% to 45%. This new rule will benefit 23,000,000 basic income tax rate taxpayers. The UK tax system also operates efficiently and the cost to administer tax is comparatively low.So overall, the UK tax system is well designed and works both efficiently and equity. However, there are still some drawbacks of the UK tax system. Firstly, the highest tax rate will be 45% in 2013, so the income gap between the rich and the poor will get bigger and bigger. Secondly, the tax takes less than 40% of the GDP, while, on average, government expenditure is 45% of the GDP, which means that the government need to increase their deficit to keep going on. Too much deficit will increase the governments’ financial pressure, because the borrowing must be paid by future years’ tax revenue.If the deficit always keeps on a high level, the governments’ authority among public would be weaken, and government function cannot be operated well. Thirdly, individual tax is prepared and paid by individuals; these tax preparation costs, including service fee of accountants and time cost, are also hidden costs for taxpayers. At last, the British government provides comprehensive social welfare to all citizens; among them, most taxpayers pay for the services, but some lower income taxpayers or unemployed people enjoy the services free of charge.So it is those high income taxpayers pay money for the low income taxpayers, and this would decrease those high income taxpayers’ work efficiency because some of their work are not rewarded. According to Holdford and Lovelace-Elmore (2001, p. 8), Vroom asserts, â€Å"Intensity of work effort depends on the perception that an individual’s effort will result in a desired outcome†. 1. 5 suggestions for the UK taxation system The following suggestions may be work to solve those drawbacks: * Creating more jobs for the poor and unemployed people * Increasing the highest rate of income tax Optimize the tax structure * Simplifying complex tax law clause * Decreasing the corporate tax rate for starting companies 2. 1 proposals for the UK taxation system In the UK, the main taxes are: income tax, inheritance tax, council tax, value added tax, motori ng taxation, corporate tax and capital gain tax. Even though all taxes have different tax bases, the ultimate taxpayers are every individual. As we know, a pie cannot both be big and evenly sliced. So for the UK government, it should find out a good point that can make the tax system be both efficient and equity.According to the 2012 Budget statement by the Chancellor of the Exchequer, the Rt Hon George Osborne MP (2012), the main target for the UK government is to keep the economy in a stable increase trend. As mentioned in Osborne’s report, the UK’s economy is in a depressed time and the government has to both cut down expenditures and expand tax revenue. Therefore, we proposed three proposals on the tax system to improve the development of economy. Firstly, divide more the income tax rate levels between the higher rate and additional rate.According to the current UK income tax system, taxpayers with band between ? 34,371 and ? 150,000 are applicable to the higher ra te that is 40%, and taxpayers with band over ? 150,000 are applicable to 50% additional income tax rate. Apparently, the range from ? 34,371 and ? 150,000 are too wide that some mid-class families have to pay too much income tax for the high marginal tax rate. Taxpayers with income of ? 34,371 and ? 150,000 are totally different in tax payment ability, so it is not fair to let all of them pay tax on the same rate. From my point of view, taxpayers with band between ? 4,371 and ? 70,000 are applicable to tax rate of 25% because most mid-class taxpayers’ incomes are in this range and by doing so, there financial pressure will be reduced a lot; taxpayers with income ranges from ? 70,000 to ? 100,000 are subjects to 35% income tax rate and taxpayers with band from ? 100,000 to ? 150,000 pay income tax on 45% income tax rate. This proposal will greatly reduce the most mid-class taxpayers’ financial pressure and as the marginal tax rate increases for high income taxpayers, th e total tax revenue for government will not decrease.Secondly, impose property tax on people who own luxury houses or own more than three houses. In many countries, the property tax is imposed on individual house owners because real perporty is a remark of wealth. The property tax can help to reduce the gap between the rich and the poor. Moreover, as the tax is imposed on multiple house holders, the economic bubble in real estate investment or speculation will be greatly eliminated. Currently, the property tax is imposed on gains from capital, such as house rental not on capital itself. Even though taxpayers pay tax on their capital gain, the income gap still increases.At last, decrease the rate of stamp duty for bond or stock transactions. Currently, the stamp duty rate is 0. 5%. As mentioned in the UK’s budget statement, the main target in 2012 is to keep the economy to be stable not do slow down. The decrease of stamp duty is really a good method to stimulate the economy d evelopment. On the one hand, the decrease of stamp duty is a good remark for the stock market, which would encourage more stock transactions. On the other hand, even though the rate of stamp duty decreases, as more transactions there will be, the total revenue from stamp duty will still increase.As we know, UK is the center of worldwide stock market center. Stock market is the main capital source for public companies, so the boom of capital market will greatly promote the development of entity economy. In conclusion, the UK’s tax system is well organized and designed except for some drawbacks. I believe my proposals can effectively improve both equity and efficiency of the UK tax system and stimulate the economy development. Reference list Budget statement by the Chancellor of the Exchequer, the Rt Hon George Osborne MP, 2010. HM TREASURY. online] Available at: < http://www. hm-treasury. gov. uk/junebudget_speech. htm> Finance Act 1965 (c. 25), from UK Statute Law Databaseâ⠂¬ . UK Statutory Publications Office,  Ministry of Justice. Retrieved 2007-05-09. â€Å"HM Revenue and Customs receipts†. hmrc. gov. uk. Retrieved 2011-11-11. Kay, Richard. â€Å"Palace fear over Queen's tax bill†. Daily Mail  (London). Peter Victor (30 July 1995). â€Å"A brief history of VAT†. The Independent(London). Retrieved 13 January 2011. Principles of a good tax system,2010, tutor2u, [online] Available at:

The Reforms of Peter the Great Essay Example | Topics and Well Written Essays - 1000 words

The Reforms of Peter the Great - Essay Example According to Thomas Riha, he was one of the few leaders in the empire who had â€Å"†¦ the imagination and ability to offer outstanding personal leadership† (498). He instituted radical reforms in the country’s education military, local government and church by reorganizing his army in line with western standards, creating a navy secularizing the education sector as well and exercising greater control of the reactionary Orthodox Church compared to any of his predecessors. In summary, his foreign policy was aggressive considering that he, â€Å"...acquired territory in Estonia, Latvia and Finland and through several wars with Turkey in the south† (â€Å"Peter the Great biography†). This paper is an examination of the reforms made by Peter the great, their effects, and the significance they had on Russia. In an attempt to weaken the powers of the provincial government which he considered a threat, Peter allowed the towns to elect their own officials who would be charged with collection of revenue and simulation of trade, the real power behind the local government was Ratusha based in Moscow. In 1702, an elective board that replaced the old system of elected sheriffs governed towns, moreover, in 1724; he changed the system so that local governments could have a quasi-aristocracy of sorts where towns could be self-governed under guilds of elected well off citizens. Nonetheless, these reforms were considerably difficult to implement, practice since local property owners and the provincial governor had immense influence, and their hold on local affairs was extremely difficult to break. Provincial government was divided into eight Guberniia, which were headed by a Gubnator who had absolute power from within the guberniia that were divided into districts known as Uzeda, which by 1718 the increased by twelve in number. Peter considering the forty Provintsiia, in order to consolidate his power he ensured the Gubnators despite their local autonomy were directly answerable to him. In this case, there were forty departments to carry out his orders, however, since not all of them had predefined functions their duties would sometimes overspill into each other creating inefficiency and an allowance for corruption. Peter’s centralized government policy was evident in that â€Å"†¦each of the provinces was ruled by an appointed governor† (Riasanovsky and Steinberg 259). This meant that the governors exercised power at his pleasure, hence were fully loyal to him. Peter’s belief in absolutism ensured that the church would no longer retain its semiautonomous status, as he was interested in its control since it was a very wealth institution among other reasons. In addition, he wanted access to these funds, and although he had tried to modernize it, but it had refused to be changed and remained steadfast in its traditional ways. Furthermore, the church had substantial amounts of land, many serfs and oth er â€Å"properties†; consequently, Peter was uncomfortable because it appeared in a way the church was rivaling him. In order to control the church, Peter refused to appoint a leader of the church after Partricah Aldrich died and gradually took over the church integrating it into the state. In the year 1701, it was placed under a government department known as Monastyrskii Prikaz, and they paid the monks

Companies Go Global Article Example | Topics and Well Written Essays - 500 words

Companies Go Global - Article Example s, the Europeans always criticize the Americans for their lack of knowledge in relation to the culture of the Europeans and this has over the years lead to a build up of animosity between these groups of people. The two groups of business people are faced by a number of disparities in relation to their attitudes to one another plus the differences in the etiquettes of running of the companies in each of the continents plus the relative management approaches of the relative countries. Complications in the management of different traditions and values for the achievement of goals and targets occur when people from differing cultures either from the European or America find themselves running businesses in the opposite continent. Problems are always inherent in the host countries and managers find themselves with problems of internalizing issues making management to be full of complications requiring expatriate knowledge. Due to the disparities in cultures and values of the various societies, the business has to develop and implement advanced and customized tactics which suit the specific countries needs and characteristics. Despite all this management problems and related challenges, the companies need to go global due to the increased competition and advancements in communication. Companies have become multinationals hence the need for globalization that’s related to the characteristics of nations ensuring that they no longer remain in just in one country. Initially companies used to go multinational due to their attempts to diversify, seeking raw materials, increasing their markets, improving of the production efficiency and in some instance attempts to avoid or move away from issues like the political instabilities. However the companies always try and achieve their attempts to act global but unfortunately they find themselves unable to act local and understand the roots of what the local communities like and practice like and hence they are faced with

CHA performance monitoring critical ssessment Essay

CHA performance monitoring critical ssessment - Essay Example Estate Management of CHA aims to provide the tenants with high quality services and facilities subject to consultations with the stakeholders, and in compliance with the Decent Homes Standards, the neighbourhood, and local authorities. It aims to satisfy different parties involved in the maintenance, development, and improvement of housing requirements. To be able to achieve satisfaction, a Market Analysis was done and CHA has been working in partnership with tenants, providers, and local authorities so that the desirable results can be realized to the satisfaction of all the parties involved. In the Market Analysis, high quality design has to be blended with costs, given the situation wherein only 12 % of residents are employed while 18 % lost their employment; 73 % of households receive housing benefits; 43 % receive income support. And the economy might not have affordable mortgage lending available for many. CHA therefore applies for, receives, and utilizes grants from the NHAP ( National Housing Affordable Programme). To the Self-Assessment Questionnaire provided for Estate Management by SHR, the answers to all the questions (appended) will be yes. However, Equality for a diverse set of tenants is one of the standards for Estate Management. In relation to the Equality and Diversity elements of Objective # 4 which states that CHA should â€Å" enhance the (CHA) association through a commitment to equality and diversity and value for money† ... Even on the overall, tenant satisfaction fell below the desired KPI in two consecutive quarters. KPI of 73 % was attained while the desired KPI was 86 %. Even after considering the views of the landlords, performance was only 60 % which was below the desired 79 %. One of the Self-Assessment Questions by the SHR was, â€Å"Have we published documents that clearly and specifically set out our commitment and approach to equalities issues?† The answer is not yet. CHA still has to inform residents about the way the association allocates and prioritizes expenditures for the services intended to meet national standards. CHA still has to communicate how the organization has added value for money and what benefits the residents can expect. The CHA Corporate Plan and Business Strategy disclosed that the organization has yet to â€Å"complete and maintain a 100 % tenant profile of the diversity needs of all residents†. In short, even the profiling should conform with the prescribe d performance standards by having some information about tenants. According to the KPI, CHA had already reached 80% to over 81% of the project to complete tenant profiling. Perhaps the survey to determine the extent of compliance with the SHR should tap the 81 % available tenant profiling so that there can be some identification of weaknesses and strengths in the matter of satisfying different tenants with diverse situations. This will allow CHA to arrange questionnaires by classification of respondents so that they can be tabulated accordingly. As it is, there was no such tabulation for the diverse groups. Shared owners were surveyed as a whole without categories as to employment, race, religious belief,

EMPLOYEE RIGHTS, MANAGED CARE AND PATIENT SAFETY Essay - 3

EMPLOYEE RIGHTS, MANAGED CARE AND PATIENT SAFETY - Essay Example Managed care organizations, commonly referred as MCOs (Pozgar 2012) have been a key feature in this sector. According to the (Altenstettter &Bjorkman 2000) it has been seen that integration of both the insurer and provider functions been in the increase. Health Maintenance Organizations not only finances, but also ensure delivery of health services, which are comprehensive, to all the bonafide beneficiaries. The charges, under this model, are made on the employer for each subscriber. The fixed premium charge goes a long in giving the beneficiary rights of both being insured and provided medical care in case of ailments (Pozgar 2012). Subscriber should though note that, once in this system they can only get service from HMO contracted physicians. The HMO model has several forms which include staff and Independent practice association model. Under staff-model, an arrangement is made for the physician to proved services to the subscribers on full-time basis. The IPA- model has arrangeme nts made between the independent physicians and HMO to offer services on contract to the beneficiaries. Health care services can be bought from a group of providers who are carefully selected. Care in selection is emphasized so that the beneficiaries get the best treatment. This is accomplished through preferred provider organizations which are characterized by a well utilization management plan. Under this model, negotiation of payment rates and speeded payment terms are facilitated. In addition, the beneficiaries have freedom to choose services from other providers though at their own cost (Pozgar 2012). The major essence of this model is the negotiation of charges between the payer and panel providers whom the terms are on contract basis. The payer also selects a panel of providers whom are consulted by the enrollees in case of ailments or other medical necessities. This model has

Procurement assignment Case Study Example | Topics and Well Written Essays - 2500 words

Procurement assignment - Case Study Example When it comes to getting goods, raw materials and other kinds of specialized services, these organizations tends to rely on the process of procurement, in order to get the best suppliers for the intended services and goods needed for the success of their business goals and objectives (Amaratunga & Baldry 2002, p. 45). The procurement process, as used in such organizations refers to the act of acquiring services, goods and different kinds of works from external sources different from the business. In the process of procurement, it is very important that those particular goods and services as well as other kinds of works be very appropriate, being procured from the best and favorable costs that are according to the needs of the business organisation with respect to their quality and quantity standards. A procurement process that is professionally done enhances success in business functions, something that later becomes a competitive strategy for the particular businesses (Sekaran 2003, p. 23). Public and corporate bodies often define procurement as the processes aimed at promoting open and fair competition for their particular businesses while minimizing exposures to instances of fraud and collisions. This paper examines the process of procurement as done by an engineering firm that was seeking the services of oil explorers in Kazakhstan. Kazakhstan is one of largest countries in Europe, being estimated to have a size that is almost equivalent to that of Western Europe. The country comprises of a highly varied landscape that stretches all the way from the mountainous sections found to the east, going all the way to the vast lowlands that are energy rich to the west. Additionally, it includes the largely industrialized northern lands with their cold climates that go all the way to the steppes of the semi-desert of the central belt, all the way to the very fertile grasslands found to the south. Kazakhstan is a

Criminal Law Degree Case Study Example | Topics and Well Written Essays - 1000 words

Criminal Law Degree - Case Study Example Martin6 which concerned the defence of necessity to driving while disqualified and the defendant was allowed to use the defence in his appeal (c) This was intentional homicide amounting to murder and necessity is not a defence to murder. See Queen v Dudley and Stephens7However see also the decision taken in the case of Re A (Children) (Conjoined Twins: Surgical Separation)8 where the parents of six week old Siamese twins, Mary and Jody,(M and J) appealed against a court order granting the NHS the authority to perform an optional surgical separation .9 where murder/intentional killing of the Siamese twin was justified to save one life. (e) This is a case of Duress which is a general defence to a many crimes but not to Murder. However it can be argued that he did not know the reason he was being asked to park the van outside the Mission. The question will be forseeability then i.e. whether he saw through or could reasonable have seen through their designs in parking the van outside. The relevant authorities here are Kray 11,Lynch v DPP for NI 12 and Howe13. This is a case of assault/battery and the thin Skull rule under the famous case of R v. Blaue. Fred cannot plead he did not know about Amrit's pre-existing condition and thus will be guilty of manslaughter NOT murder as it is not possible to show intentional killing here. This was something in the nature of unlawful act manslaughter.(See Andrews v DPP (1973) AC 576 at 581 and Fenton (1830) 1 Lew CC 179). The theft of 5000 pounds from Amrit's pockets is an offence under the Theft Act 1968 as he is well aware that the money is the stolen proceeds of illicit drug dealing. When Fred persuades an elderly to write a the facts are insufficient to judge whether there has actually been some sort of deception here but see below for a case under the Fraud Act 2006. Fred has remained silent about obtaining more than his due salary.In this regard see offences under the Theft Act 1968 and 1978 like Obtaining property by deception (Theft Act 1968, section 15), or in the case of the extra salary obtaining a money transfer by deception (Theft Act 1968, section 15A) or obtaining pecuniary advantage by deception (Theft Act 1968, section 16) which are now covered by the Fraud Act 2006 and would primarily fit under the Fraud Act 2006. Possible liability for Fred in both scenarios under the Fraud Act 2006. Section 2 Fraud by false representation" is as a case where a person makes "any representation as to fact or law ... express or implied" which they know to be untrue or misleading. Fraud by failing to disclose information" under Section 3 of the Act in the case of the extra salary. "Fraud by abuse of position" under Section 4 of the Act in case of the abuse of the elderly man's money in his position of his caretaker. Week

My Paper on Interprenual School of Thought Essay Example for Free

My Paper on Interprenual School of Thought Essay Entrepreneurship is a concept which is defined in many ways. The word entrepreneur means a person who undertakes from the French term called eneteprendre. In terms of business, the term entrepreneur means starting a business. An entrepreneur is a person who manages, organizes, and takes over all the enterprise or business risks. Other definitions include a person who has high ambition and aptitude to initiate change is known as an entrepreneur. The entrepreneurial school of thought is based on vision: a mental representation of strategy created or at least expressed in the head of the leader as perspective, specifically a sense of long term direction of organizations future and a sound vision and visionary CEO can help organization in turbulent times or in very difficult years for the organization also it have shortfalls that hanging on the health and whim of single person, the death or health problem of that person result in crisis of organization. nd one of present day successful entrepreneur and its strategic moves in the direction of the school of thought is discussed. Historical background of the school Throughout the theoretical history of entrepreneurship, scholars from multiple disciplines in the social sciences have grappled with a diverse set of interpretations and definitions to conceptualize this abstract idea. Over time, some writers have identified entrepreneurship with the function of uncertainty-bearing, others with the coordination of productive resources, others with the introduction of innovation, and still others with the provision of capital (Hoselitz, 1952). Even though certain themes continually resurface throughout the history of entrepreneurship theory, presently there is no single definition of entrepreneurship that is accepted by all economists or that is applicable in every economy. Although there is only limited consensus about the defining characteristics of entrepreneurship, the concept is almost as old as the formal discipline of economics itself. The term entrepreneur was first introduced by the early 18th century French economist Richard Cantillon. In his writings, he formally defines the entrepreneur as the agent who buys means of production at certain prices in order to combine them into a new product (Schumpeter, 1951). Shortly thereafter, the French economist J. B. Say added to Cantillons definition by including the idea that entrepreneurs had to be leaders. Say claims that an entrepreneur is one who brings other people together in order to build a single productive organism (Schumpeter, 1951). Over the next century, British economists such as Adam Smith, David Ricardo, and John Stuart Mill briefly touched on the concept of entrepreneurship, though they referred to it under the broad English term of business management. Whereas the writings of Smith and Ricardo suggest that they likely undervalued the importance of entrepreneurship, Mill goes out of his way to stress the significance of entrepreneurship for economic growth. In his writings, Mill claims that entrepreneurship requires no ordinary skill, and he laments the fact that there is no good English equivalent word to encompass the specific meaning of the French term entrepreneur (Schumpeter, 1951). The necessity of entrepreneurship for production was first formally recognized by Alfred Marshall in 1890. In his famous treatise Principles of Economics, Marshall asserts that there are four factors of production: land, labor, capital, and organization. Organization is the coordinating factor, which brings the other factors together, and Marshall believed that entrepreneurship is the driving element behind organization. By creatively organizing, entrepreneurs create new commodities or improve the plan of producing an old commodity (Marshall, 1994). In order to do this, Marshall believed that entrepreneurs must have a thorough understanding about their industries, and they must be natural leaders. Additionally, Marshalls entrepreneurs must have the ability to foresee changes in supply and demand and be willing to act on such risky forecasts in the absence of complete information (Marshall, 1994). Like Mill, Marshall suggests that the skills associated with entrepreneurship are rare and limited in supply. He claims that the abilities of the entrepreneur are so great and so numerous that very few people can exhibit them all in a very high degree (1994). Marshall, however, implies that people can be taught to acquire the abilities that are necessary to be an entrepreneur. Unfortunately, the opportunities for entrepreneurs are often limited by the economic environment which surrounds them. Additionally, although entrepreneurs share some common abilities, all entrepreneurs are different, and their successes depend on the economic situations in which they attempt their endeavors (Marshall, 1994). Since the time of Marshall, the concept of entrepreneurship has continued to undergo theoretical evolution. For example, whereas Marshall believed entrepreneurship was simply the driving force behind organization, many economists today, but certainly not all, believe that entrepreneurship is by itself the fourth factor of production that coordinates the other three (Arnold, 1996). Unfortunately, although many economists agree that entrepreneurship is necessary for economic growth, they continue to debate over the actual role that entrepreneurs play in generating economic growth. One school of thought on entrepreneurship suggests that the role of the entrepreneur is that of a risk-bearer in the face of uncertainty and imperfect information. Knight claims that an entrepreneur will be willing to bear the risk of a new venture if he believes that there is a significant chance for profit (Swoboda, 1983). Although many current theories on entrepreneurship agree that there is an inherent component of risk, the risk-bearer theory alone cannot explain why some individuals become entrepreneurs while others do not. For example, following from Knight, Mises claims any person who bears the risk of losses or any type of uncertainty could be called an entrepreneur under this narrow-definition of the entrepreneur as the risk-bearer (Swoboda, 1983). Thus, in order to build a development model of entrepreneurship it is necessary to look at some of the other characteristics that help explain why some people are entrepreneurs; risk may be a factor, but it is not the only one. Another modern school of thought claims that the role of the entrepreneur is that of an innovator; however, the definition of innovation is still widely debatable. Kirzner suggests that the process of innovation is actually that of spontaneous undeliberate learning (Kirzner, 1985, 10). Thus, the necessary characteristic of the entrepreneur is alertness, and no intrinsic skills-other than that of recognizing opportunities-are necessary. Other economists in the innovation school side more with Mill and Marshall than with Kirzner; they claim that entrepreneurs have special skills that enable them to participate in the process of innovation. Along this line, Leibenstein claims that the dominant, necessary characteristic of entrepreneurs is that they are gap-fillers: they have the ability to perceive where the market fails and to develop new goods or processes that the market demands but which are not currently being supplied. Thus, Leibenstein posits that entrepreneurs have the special ability to connect different markets and make up for market failures and deficiencies. Additionally, drawing from the early theories of Say and Cantillon, Leibenstein suggests that entrepreneurs have the ability to combine various inputs into new innovations in order to satisfy unfulfilled market demand (Leibenstein, 1995). Although many economists accept the idea that entrepreneurs are innovators, it can be difficult to apply this theory of entrepreneurship to less developed countries (LDCs). Often in LDCs, entrepreneurs are not truly innovators in the traditional sense of the word. For example, entrepreneurs in LDCs rarely produce brand new products; rather, they imitate the products and production processes that have been invented elsewhere in the world (typically in developed countries). This process, which occurs in developed countries as well, is called creative imitation (Drucker, 1985) The term appears initially paradoxical; however, it is quite descriptive of the process of innovation that actually occurs in LDCs. Creative imitation takes place when the imitators better understand how an innovation can be applied, used, or sold in their particular market niche (namely their own countries) than do the people who actually created or discovered the original innovation. Thus, the innovation process in LDCs is often that of imitating and adapting, instead of the traditional notion of new product or process discovery and development. As the above discussion demonstrates, throughout the evolution of entrepreneurship theory, different scholars have posited different characteristics that they believe are common among most entrepreneurs. By combining the above disparate theories, a generalized set of entrepreneurship qualities can be developed. In general, entrepreneurs are risk-bearers, coordinators and organizers, gap-fillers, leaders, and innovators or creative imitators. Although this list of characteristics is by no means fully comprehensive, it can help explain why some people become entrepreneurs while others do not. Thus, by encouraging these qualities and abilities, governments can theoretically alter their countrys supply of domestic entrepreneurship. (David Burnett, thechnoprenurial. com September 2000) Main content of the school The most central concept of this school is vision: a mental representation of strategy created or at least expressed in the head of the leader as perspective, specifically a sense of long term direction of organizations future. That vision serves as both an inspiration and a sense of what needs to be done a guiding idea, if you like. True to its label, vision often tends to be a kind of image more than a fully articulated plan (in words and numbers). That leaves it flexible, so that the leader can adapt it to his or her intuition and experiences. The strategic vision is malleable this suggests that entrepreneurial strategy is both deliberate and emergent: deliberate in its broad lines and sense of direction, emergent in its details so that these can be adapted en route. The school of thought focuses on creating new ideas at the right time to suit the market niche. This leads to the success of the entrepreneurial activity. The tendency of the strategy to take the form of niche allows it to protect market position from the forces of outright competition (Blue ocean strategy). Market awareness and creativity are the most essential aspects according to this school of thought. In strategy making it’s dominated by active search of new opportunities in dramatic leaps forward in the face of uncertainty and growth is the the dominant goal of the organization. The process of strategy formation is semiconscious at best, rooted in the experience and intuition of the leader, whether he or she actually conceives the strategy or adopts it from others and then internalizes it in his or her own behavior the power is centralized in the hands of Chief executives. Contribution discussion A sound vision and visionary CEO can help organization to sail cohesively through muddy waters especially in early or very difficult years for the organization. Deliberate in broad line but flexible and emergent in the details. The malleable and emergent nature of vision and cognition of a manager can enable to explore the opportunities that exist focusing on the actions that lead to creation of value in the present day shifting landscape of business environment. Limitation discussion It presents strategy formation as all wrapped up in the behavior of single individual. It didn’t say about the process. Cruising in predefined image or vision can blind someone for potential unexpected danger or developments. Vague vision; strategies are designed manly based on the leaders intuition. How and when to find the right charismatic visionary leader with the qualities is hard and could be subjective. It requires full knowledge of all the processes and operation. It’s risky that hanging on the health and whim of single person, the escape or death of that person result in crisis of organization. Back ground of Liu Yongxing (East Hope Group) After resigned their jobs and sold their bicycles and watches to raise money, Chairman Chen Yuxin and his three brothers Liu Yongyan, Liu Yongxing, and Liu Yonghao returned to their hometown county of Xinjin in Sichuan province end of 1982. With the initial ? 1000 raised collectively, they established their own business, the Yuxin Fine Breed Farm, to raise quails and chickens. The company had great profit and had established their strong footing in the industry of breading farm. They also have helped to transform the county of Xinjin to the largest quail farm in the world In 1987, Liu Yongxing and his brother Chen Yuxin developed new high-end pig feeds in order to compete with then dominating foreign high-end big feeds products and at the same time with substantial cost advantages. The Liu brothers therefore soon expanded their company into the animal feeds industry and had achieved their second biggest milestone in the making of the company history. By 1995, the Hope Group had won awards of No. 1 of China 100 Feeds Companies and No. of China 500 Private Enterprises. The Hope Group had grown so rapidly that the four brothers decided to split it into four entities: Continental Hope, East Hope, West Hope, and New Hope led respectively by Liu Yongyan, Liu Yongxing, Chen Yuxin, and Liu Yonghao. After separating with other brothers he established the head quarter of east hope group in Chengdu High -Tech Development zone which was moved to shanghai Pudong in April 1999. The east hope group still focuses on feed production, mainly on expanding to the upstream and the downstream along the feed industry chain. Apart from the two feed companies in Vietnam the East hope Group led by him had 68 subsidiary companies in 16 province, cities and autonomous region in china whose main business area was feed production, together with some other related industries such as flour, food, bio engineering , fertilizer ,electrolytic aluminum and investment. During the 20 year development in feed and investment areas, the group had been made rolling development by relying on its own capital its investors include Mingsheng bank , Guang Ming diary industry, Sino Korea BBQ Western Fast food, Beijing Nanshan skiing field ,etc. n order to build world competitive industry chain incorporating aluminum and electricity the group had been engaging in series of projects: electrolytic aluminum plant with the annual yield of 160,000 tons and a power generator set with an annual yield of 310,000 kilowatts in Liaocheng; two phases of construction of 500,000-ton electrolytic aluminum plant and auxiliary generator set and bio-engineering project in Baotou of Inner Mongolia; alumina project in sanmenxia , Henan province. East Hope Group had over 70 subsidiary companies across 16 Provinces, Cities and autonomous regions in China with a total asset of Billions of yuan, and nearly 10,000 employees. The board chairman Liu yongxing had thus won a Variety of Social Honors. The honorsare ? In 2001, Liu Yongxing and his brothers were rated as the top of China’s Most Successful Businessmen byâ€Å"Forbes†, awell-known U. S. financial magazine. ? In 2002, Liu Yongxing was rated as one of â€Å"2001CCTV Top 10 China’s Economic Leaders† and â€Å"Sohu 2001 Top10 Financial Leaders† ? And after that strategically the brothers owned Entereprnual Company diversified in to four different entities. Mr. Liu Yongxing as East hope group keep on focusing the feeding industry and and strategically by rolling development by relying on its own capital it included other companies to build world competitive industry incorporating aluminum and electricity and bio engineering projects and in present day one of Chinas largest privately held industrial materials manufacturers. The company is investing more than $1 billion in an aluminum and power complex and also putting money into commercial real estate in Sichuans capital, Chengdu. Starting with 250 ? on proportion and Sound Vision, Excellence and Charisma Today with 5. 8 Billon $ Mr. Liu Yongxing is 5th and173rd richest person in china and world respectively. throughout his progress he is avisionary person creating new ideas at the right time to suit the market with the pusue of growth semiconsciously that enabled him to be one of influential and great Business manager in the World.

Critical Evaluation Of The Operations Management

Critical Evaluation Of The Operations Management The essay is about to critical evaluate the operations management strategy of Hard Rock Cafà © as described in the case materials, and discuss the operations management challenges as well as the opportunities when Hard Rock Cafà © considering expand their business in Hanoi-Vietnam. In the essay, textbook, internet, academic researches will be mentioned to support the critical evaluates operations management, challenges and opportunities issues. According to Heizer el at., (2011), Operations management is defined as any activities that relate to the creation of goods and services through the transformation of inputs and outputs, while operation managers play an important role in the management process. The management process contains planning, organizing, staffing, leading, and controlling. (Heizer el at., 2011). In the case materials provided, we will evaluate 10 critical decisions of Operations managements which are goods and service design, managing quality, process and capacity design, location strategy, layout strategy, HR and job design, supply-chain management, inventory, scheduling and last decision is maintenance to see whether how well Hard Rock cafà © applied these decisions in their operation management (Heizer el at., 2011). We will evaluate few decisions amongst those 10 decisions to let people have a broad view of how Hard Rock Cafà © applies these decisions to operate their business. For goods and service design, what services/products should Cafà © give to customers? That is very important issue to Hard Rock Management. As weve known, Hard Rock is in hospitality industry. If they provide products/services wrongly, it would lead the company to bankrupt. Follow the Hard Rock case study, due to the global economic changes, differences in business law, a lot of risk factors that make Hard Rock Cafà © changes from global Strategy into multi-domestic strategy. Multi-domestic strategy is a strategy that companies in each market makes their operating decisions independently of others oversea markets (http://tutor2u.net). In here, company decided to franchise a large number of their cafes by joining with opened cafà © such as in Manchester and Birmingham, which try to attract local residents involve in their business due to this place is not a common place for tourist, where people in here are quite conservative. This decision would make them to redesign their goods and services to meet with the local taste. Differences country would have different cultural, languages, business practices. For example: Hard Rock cafà © in Kuwait would need to change their menus because they cant eat pork. All products are related to pork are prohibited as well as alcohol while in US where people can eat pork, drink alcohol with no restriction due to difference religions and law as well ( Muslim in Kuwait and mainly Catholic, Protestant, Buddhism in US). (http://www.hardrock.com) Another issue is managing quality. Base on Rose el at., (2005), management quality is looked at 4 issues: quality planning, quality control, quality assurance and quality improvement. Hard Rock Cafà © has been focused on quality control and improvement by survey. It has been done regularly with rate from 1 to 7. If the score is not reached score 7 that mean the foods and services will be reviewed. The company has changed their menus to match with local taste as well as upgrade their menu. They are not only focus on their traditional food such as hamburgers and beefs but also look for high class of food like fishes, lobsters. Although customers go to Hard Rock Cafà © because they love music, atmosphere, environment, that is the main reason but high quality of food which show in menus would be value-added to Hard Rock Cafà © reputation and make customers come again. Cianfrani el at., (2009) told that: Quality management could change some of the management principles. This can help t op level management to increase the companys performance as well as satisfy the customers need. This issue is very important for the company which they are strongly focused on customer because most of the Hard Rock Cafà © customers are tourists while a minority is a local resident (Heizer el at., 2011). When the company changes their services/products, they also need to think of their existing supply chain management. Mentzer et al., (2001) stated that: Supply chain management is seen as a mechanism to maintain competition in domestic markets, in light of increasing global competition. The company chooses to upgrade their menu that would restructure their supply chain management because they will need new suppliers as well as maybe eliminate some old suppliers. Hard Rock Cafà © does not want too much on beefs and hamburgers; they want to add more expensive stuff such as fishes and lobsters which would attract a wider range of customers as well as lift the level of Hard Rock Cafà © one step higher. Top level managements also need to consider on the distribution network of new suppliers. Where are their warehouses, distribution centers, number of networking, who are their customers? What are payment terms? Can they deliver goods then we play later or we need to play upfront before they delivery goods? All those things need to consider very careful because it will affect to the cost of the meal later on. If the warehouse of new supplier is too far, it would create a big problem when we run out of food to prepare meal for customers. Moreover, if the company has to make full payment before they deliver goods, it would be an issue to management level to consider because if we can pay them later in a certain day after we receive goods, that is so much better, we can use that money to do something else to make more money and pay the supplier later. Location for Hard Rock Cafà © would a big issue to consider when select the location. A lot of things would affect such as political risk, currency risk, social norms, brand fit, and business practices (Heizer el at., 2011). Political risk is defined as Probability of loss due to political instability in the buyers country that may result in cancellation of a license or otherwise affect the buyers ability to make payments. Political risks are insurable risks, and overlap with the political component of force majeure risks (http://www.businessdictionary.com). It is the main concern when choosing location. Thailand will be a good example. Recently, Thailand has a lot of strikes which would make investors worry. It will also affect tourist industry due to a lot of cancellation tour to Thailand during strike (http://www.thaipro.com). While business practice is another issue Hard Rock Cafà © need to concern. The regulatory framework in Thailand is quite good but whether it is put into p ractice is a different issue (http://www.reuters.com). The business environment in Thailand recently is going down. Corruption is increasing badly. If company wants to expand business in Thailand, this issue would be considering carefully while most of the businesses try to avoid bribing, they want to do clean business especially some companies come from developed countries such as United State, Australia. Maintenance would get involve as the strategy of Hard Rock Cafà © has changed to franchise with opened restaurant or cafà ©. This mean they need to redesign the current cafà ©/restaurant so that will fit local cultural but it will not lose the Hard Rocks visual appearance. Securency Company is an example for bribing. Securency is a joint company between Reserve Bank Australia and British company call Innovia Films. Several former and serving Securency executives engaged in bribery to win deals in Vietnam, Nigeria, Malaysia and Indonesia. Securency Company has been investigated and bribery for some middle-men in order to win the deals oversea has been probed. If Hard Rock Cafà © gets involve in this kind of bribery, this will destroy all the reputation that Hard Rock Cafà © has tried to build up decades ago as well as it will lead to closing down a lot of business if the bribery is proved. Human resource management is also an important matter for company. Armstrong (2006) stated that: Human resource management is the strategic and coherent approach to the management of an organizations most valued assets: the people working there who individually and collectively contribute to the achievement of the objectives. Nowadays, most of the company is really pay attention about human resource. It can help the company win over their competitors. For restaurant industry, products are important but services could be an extra point to attract customer come back. How Hard Rock could do it? The company needs to provide the better services, cheaper price and faster response to compete with their competitors (Blackwell et al., 2001). Staff turnover is another issue especially in restaurant industry due to very high turnover of employees, around 80% to 100% per year (Heizer el at., 2011). Hard Rock Cafà © is successfully in keep very low percentage of staff turnover by let employees fill in each day schedule what day/shift they would like to work base on their level and how important they are at each shift. The purpose is to balance work and normal life of staff as well as will not let over-employee between two shifts. This method works very well as Hard Rock staffs love that method and it helps to reduce the staff turnover which is percentage of staff turnover in restaurant industry is very high. Although staffs at Hard Rock Cafà © are music lover, happy with the working environment but for normal living life, they cannot live without money. So company should have reasonable salary system in order to help their staffs afford to normal living cost. There is an accusing of an anonymous waiter staff in of the Hard Rock Cafà © in United Kingdom that he/she was getting paid under the national minimum wages which is 2.06 pound per hour while national minimum wages is around 5.73 pound per hour (http://news.bbc.co.uk). Employees in Hard Rock Cafà © in London are relying on tips of customer to push their wages to national minimum wages. These tips could come from cash, credit card tips but we do not know all those tip will be distributed fairly to staffs or the company will keep them and give part of it staffs only. This matter is very important. Salary would a tool to stimulus the performance of employees which could make them work harder, dynamic and enthusiasm. If this matter i s proven, the company will be fined and leads to competitors get gain more market share which is belong to company. In order to expand business in Ha Noi, Vietnam, Hard Rock needs to look at challenges and opportunities before make final decision. These challenges and opportunities are mention below: Based on General Statistics Office of Vietnam, Ha noi is about 3345 km2 with more than 6.5 millions of people which is around 1935 person/km2 (http://www.gso.gov.vn). We can see in here, will small area with a lot of people live in, so it is very hard to find location to open a new business in here. Location is a main concern of company which is easy to access; locate around Central Business District where a lot of traveler and people can see their logo. Moreover, real estate price in Ha Noi is very high compare to other cities so that company would need to consider lease or buy it out (http://vietbao.vn). That would be added to the cost of meal which would be an issue in competitive with other competitors. Another challenge is cultural differences. Cultural differences could cause a lot of problem which Hard Rock needs to find out when planning to do business in Vietnam. Eye contact is an important to tell whether we respect opposite person or not. For Western cultural, when people are talking, it is impolite if we do not look at each others eyes. But in many Asian countries such as Japan and Vietnam, they cannot look at their superiors eyes otherwise it means you have no respect for them. If you do that so, that mean you show your respect to them (Moran el at., 2007). Posture/Gesture can make misunderstanding as well if two business men from difference countries with difference cultural. In Vietnam, it would be friendly if two people stand close, remain little gap between two people but in western way, it should be a gap (at least one meter) when they are talking to each other, it is consider polite. On the other hand, handshake would differences between Asian cultural and Western cultural. Western people prefer firm handshake, that show their respect to business partner as well as trustworthy while in Asia, especially in Vietnam, firm handshake should be avoided while people think it is rude, un-educated, not being friendly to guess. Those things are very important because if they do not understand Vietnamese cultural, it might create problems between level management of Hard Rock towards their employees. This is not good for business as it will create the gap between level management and employees, poor performances, people might want to quit du e to disappointed, do not like working environment. Currency risk is another risk factor. At the moment, the exchange rate between US dollar and Vietnamese dong is very high which is 1 US dollar can change to 19500 VND (www.eximbank.com). If Hard Rock would like to bring their goods over from US to keep original taste, it would make the price of each meal increase due to value of VND is decrease plus no shipping cost from US to Hanoi if they buy those products in Vietnam. The rise and fall of exchange rate could make company have more competitive advantage to competitor but it would be a disaster later on so that advantage would turn to disadvantage as Hard Rock Cafà © strategy wants local residents get involve along with tourists. In Vietnam legal framework is quite good but it is not applied. Intellectual property right is an example. It is not protected even Vietnam has signed a lot agreement which promised to protect the copyright but it does not put it in practice (http://www.vietnam-ustrade.org). The percentage of copyright infringement is still high at 85%, same at year 2007, 2008 (http://phapluattp.vn). Hard Rock Cafà © can be set up today but next few weeks, another Cafà © might be open and all the meals, layout, styles, music would be similar or slightly differences. It will affect the brand name of Hard Rock if customers come in, still though that is Hard Rock Cafà © and they have bad serves or food poisoning. Disregard those challenges above, Ha Noi is still a potential place for investor to consider when open business in here. Firstly, Hanoi is capital of Vietnam with labor force 1.6 million of people while 43% of them are under age of 35; it means 400.000 people enter the market every day (http://industrialzone.vn). Moreover, GDP per capital of Vietnam is around $1156 USD/year which is very low compares to US. It means, company has more option in selecting staffs but pay less money than in US market (http://www.dfat.gov.au). That would save a lot money for company while in US huge money has been paid off for HR and singers. This is an advantage when open business in Hanoi. Secondly, supply chain management would not be a problem because people can come to Hanoi by three main ways: railway, roadway and airway. Hanoi is also a starting point of a lot national highway such as Number 1A national highway, Number 3, 5 national road and NoiBai airport is around 40km away only as well as close to 5 big industry zones which they can supply most of the needs for Hard Rock (http://industrialzone.vn). It is easy to deliver goods for company regularly and on time so company will not be run out of stock even in peak period. Thirdly, since 1990, economics of Vietnam is growing very fast. GDP of Vietnam is around 7% growing continuously while GDP per capital is at $725 USD in 2006 goes up to $1156 USD in 2010 which is nearly double in 4 years time. We can see bright economy, growing very fast which is a potential market with around 90 millions of people (http://www.dfat.gov.au). That could open for Hard Rock a lot of chances while invest in Vietnam as a lot of US companies did it long time ago such as IBM, Intel and many more US companies. Intel is good example in investment. They just announced to decided to make the $1 billion investment in a relative newcomer to the high-tech game Vietnam (http://www.usatoday.com). This decision is good news for Vietnam which could create a hundred thousand jobs in Hanoi and Ho Chi Minh City as well as could bring back huge profits for Intel in the future as labor cost in Vietnam is quite cheap but highly educated. In conclusion, ten operation management decisions play an important role in doing business of company. Those decisions mentioned above are not all of ten decisions but it would show out how important ten operation management decisions in managing quality, improve performance of employees, create new goods/services in order to adapt to the fast changing of global economic. If Hard Rock Cafà © can continue to perform as they are doing right now, it would be the strength and a competitive edge toward their competitors.