Sakae Sushi Business Plan

BU2005 Entrepreneurship Sakae Sushi Business Plan By: Lu Mi (12668064) Zhou Ke Jun (12618536) Aditya Nandal (1266) Mayank Bhardwaj(12669440) mayank. [email  protected] jcu. edu. au Executive Summary This report provides an analysis and evaluation of the current and prospective marketing, sales strategy, target customers, production cost, expenses and capital requirements of Sakae Sushi. It is an in depth report that discusses about the rise of Sakae Sushi as one of Singapore’s major restaurant chains.This report talks about the methods implemented by Sakae Sushi to attract customers during the time of the Asian financial crisis. This report contains financial statements of Sakae Sushi; it also contains information related to the costs involved in running the business, i. e. expenses, salaries and cost of raw materials, etc. It also contains information about the management team of Sakae Sushi and it provides insights of the industry and the company on the whole. Also discuss ed here are the various products and services offered at Sakae Sushi and the methods implemented by them to promote and advertise their brand to the masses.At the end there are a few questions addressed to the Chief Executive Officer of Sakae Sushi, Mr. Douglas Foo Peow Yong, which will help us to gain first hand knowledge about Mr. Foo and also about Sakae Sushi. It will also help young and budding entrepreneurs to understand how to analyze the market and make right decisions from time to time. Table of contents 1. Introduction 2. Overview of the Industry 3. Insights on the Company 4. Market/Product Positioning 5. Products and Services offered 6. Marketing (4 P’s) 7. Sales 8. Business Development Status 9. Production Process 0. Suppliers 11. Staff training and requirements 12. Expenses and Capital Requirements 13. Balance Sheet 14. Income Statement 15. Cash Flow Statement 16. Balance sheet & cash flow statement of Sakae Holdings 17. Financial Highlights 18. Management Profil e 19. Board of Directors 20. Funding Request and Exit Strategy 21. Risks and Contingency Planning 22. Recommendations Introduction Sushi is a Japanese specialty that consists of boiled vinegar rice wrapped around by a sheet of seaweed usually dry seaweed. Sushi is the most famous Japanese food found outside Japan.In Japan sushi is portrayed as a traditional food, the Japanese people enjoy various types of sushi during several occasions. For example oshi-zushi, which is made by pressing fish onto the sushi rice in a wooden box, inari-zushi is a very simple and most inexpensive type of sushi in which the rice is filled into deep fried tofu, chirashi-zushi is another variety of sushi in which seafood, mushrooms and vegetables are added over the sushi rice (Japan-guide. com, 2008). The main ingredients involved in preparing sushi are Shari that consists of short white-grained Japanese rice mixed with a dressing consisting of rice-vinegar, sugar and salt. Next ingredient is Nori, which is basically black seaweed wrappers; it is a type of algae very common in the harbors of Japan. It mostly involves the use of fish tuna, being the most common and also the chef’s specialty. Other seafood’s like shrimp, octopus, squid and crabs are used in preparing sushi. There can be more ingredients added to sushi by just adding them to the rice before it is rolled with the seaweed. One can use the bamboo mat for making the sushi roll (Japan-guide. com, 2008). Sakae Sushi was first introduced during the Asian financial crisis when almost all of the major Asian economies were going through a phase of turmoil.Mr. Douglas Foo Peow Yong, the Chief executive officer of Sakae Sushi opened the first branch of his now famous chain of restaurants in 1997 at Raffles Place, Singapore. At that point in time many would have thought of it as a very risky business and a great risk, but the company did exceptionally well to maintain its image in the mar ket and they established themselves as a tough competitor among other food chains. They managed all this by providing excellent quality customer service and serving one of the most delicious sushi dishes in the city.Sakae sushi took the heart of many Singaporeans and there innovative idea of serving sushi on the conveyor belt attracted more and more customers, not only the Japanese people living in Singapore but also tourists from all over the world visiting Singapore being a tourist hotspot. Many foreigners visiting Singapore were in search of great ambience and good quality fine dining cuisine, which was served at Sakae Sushi and the hospitality of the staff at Sakae sushi made their customers visit them more often and also recommend them to their fellow colleagues and friends. Overview of the IndustryMr. Douglas Foo would never have imagined that taking a gamble of launching his business during tough times would have paid of so much and help him reach such heights, as during the times of recession it is always very hard to enter a new market and sustain in the market, but his hard work along with the compassion and commitment of his colleagues and their dream of becoming the best in the business not only allowed the business to flourish during hard times but in due course it also became one of the most famous and trusted restaurant in qSingapore and also in different parts of Asia. Mr.Douglas Foo implemented his business idea with full dedication and attention and he also operated his business at low profit margins, which helped him attract more customers including the budding middle class and also students to enjoy great tasting authentic Japanese cuisine sitting at home in Singapore. He saw that his business was doing well in Asia and this made him think of expanding outside Asia. He started of with the United States of America but due to the world financial crisis in 2008 his dreams of doing well in the States were shattered and it was hard to sustain th e business in New York.Mr. Foo being a great Entrepreneur spotted the difficulties early on during the financial crisis and he finally decided to shut down operations at the Chrysler building in New York. Insights on the Company Mr. Douglas Foo introduced the first branch of Sakae Sushi at Raffles place in Singapore in the year 1997, knowing it’s going to be a tough fight Mr. Foo never backed out. He worked really hard along with his team to penetrate into the market and establish Sakae Sushi in the country.To attract customers they kept the prices low in comparison to other competitors, which attracted more customers and soon went on to open new outlets one by one and finally today they own more than 30 outlets in Singapore but he did not stop here, his plans of becoming world renowned motivated him to open new outlets in Malaysia, Thailand, Indonesia, Philippines and the People’s Republic of China, with intentions of entering North Korea and also looking to operate i n the United States of America in the near future (Apex-Pal International, 2009).They opened many branches in the suburban areas of Singapore, which gives a clear idea of them trying to reach out to the masses; this is another reason for their success. To grow along with the fast growing new generation, Mr. Foo introduced several other chains apart from sushi, he opened chains like Sakae Teppanyaki, Sakae Izakaya, The Pasta shop by Sakae, Hibiki and also for private sector parties he introduced Nouvelle Events and they soon became one of the best caterers in the whole of Singapore.The innovative idea of using conveyor belt to serve food met with a huge success and attracted customers who were looking for a great ambience to enjoy delicious food. He also introduced Sakae Delivery that enabled people to even order sushi at their home by calling Sakae Sushi directly. Their good quality food, safe environment and customer friendly service allowed them to achieve high customer satisfacti on, thus making them one of the best restaurant chains not only in Singapore but in many different parts of Asia (Apex-Pal, 2003). Mr.Foo does not just want to stop here; he has plans enter other Asian markets like North Korea that has strong monopoly power and also he still hopes for achieving success in the United States of America. Market/Product Positioning Sakae sushi not only serves sushi but it also has a variety of products that were introduced by Mr. Foo to maintain domination in the market. He knew very well that Singapore being a tourist nation attracts many foreigners who have different taste buds, so he introduced various other signature dishes that suit the taste buds of the customers.To keep up with the demand they keep on innovating and introducing new offers and new themes every month for example they started with Soba theme for the month of April which involved several Soba food specialties like soba soup, soba salad and soba cheese rolls, and the best part is that all of these items are affordable even for the middle class. At some stores they even serve free meals on every first Sunday of the month for the young children.Its important to attract the young generation and today’s generation loves to have fast food so they introduced variety of burgers like Teriyaki Chicken, Unagi and Salmon Mango, the school going children and college students also cherish such delicacies provided to them at reasonable prices. Sakae sushi also runs several sushi buffets for each meal of the day like lunch buffet, teatime buffet and dinner buffet for every member of the family from children to youth to adult they cover all the generations. Their customers love the availability of different desserts with several fruity flavors and they are even healthy.The vast varity of desserts offered like sesame with red bean, vanilla with chestnut, mango and strawberry, etc. are cherished by one and all, thus the people enjoy coming to Sakae Sushi again and again (A pex-Pal International, n. d. ). Marketing Marketing is an art and science of mixing up of elements such as appealing products, competitive prices, convenient places/locations, and promotions to comprise the basic building blocks of the firm’s offer to the market (Noel Capon, 2009, p. 11). Marketing basically involves 3 types of orientation, i. e. Consumer, goal and system orientation.All three orientations need to go hand in hand so as to achieve golden success for any firm and this is exactly the case of Sakae Sushi. Mr. Douglas Foo and other members of the management team were able to address all three orientations very well and were able to create such a brand in Singapore that now has operations in some of the major economies of Asia. The marketing mix of services marketing included 4 P’s that are essential to effectively market a product to the prospective target market, the 4 P’s are namely; Product, Place, Promotion and Pricing.For any firm to excel in it s marketing efforts it needs to focus on these 4 P’s so as to effectively market their product and create a well-established brand image. (Please refer to appendix 1. 1) Product The term product refers to the tangible physical products as well as services that include decisions to be made regarding the brand name, styling, packaging and design, etc. of a product. The way Sakae Sushi has brought about a change to this concept is something for which the management at Sakae Sushi deserves a great round of applause.Introducing an already known product to the customers in a totally new way and effectively marketing it to the masses by introducing a totally new concept of conveyor belt is something to learn from. It not only requires creativity but also innovation at its best, so that whatever hard work is put in is reflected by the craving the customers have for their sushi (Lovelock, 2007). Price The level of competition in today’s world is very high and everything costs a great amount of money as compared to the past.So to effectively market out a product to the customers out of the 4 P’s, price is a very important aspect that needs to be taken into consideration as it affects the demand of a commodity inversely. If the price is more then the demand for a good falls and vice-versa, so to increase the sales pricing should be competitive, and Sakae Sushi has done exactly the same by introducing the Sakae Buffet at competitive prices for different days of the week so that every sushi liver gets to eat all what they crave for. PlacePlace or distribution strategies are concerned with making products available to the customers where and when they want them (Charles W. Lamb et al. 2008,pg. 46). Sakae Sushi outlets in Singapore are located at strategically important and accessible places, so that their customers need not walk miles in search for good food. Being located at many of Singapore’s prime locations and almost all outlets accessible b y M. R. T, it makes Sakae Sushi the preferred choice for the working class of Singapore in areas such as City Hall, Dhoby Ghaut and Orchard during peak office hours.Sakae Sushi targets those areas to operate their stores where they find a potential target market also keeping in mind other areas in close vicinity. Promotion Promotion represents the methods of communication that a marketer may use to provide information to different parties about his product. Promotion comprises of elements such as:  advertising,  public relations,  personal selling  and  sales promotion. To gain most out of the target market and potential customers, various sought of promotions need to be given out form time to time so as to keep the interest of the customers alive.Sakae Sushi has done enough advertising campaigns and has offered its customers with new themes every month so that their customers never get bored of the same old dishes. By introducing â€Å"Sakae Signatures†, â€Å"Sak ae Buffet† and â€Å"Sakae Lunch Mix â€Å"N† Match†, etc. they try to offer more and more to their customers so that the customers can indulge in eating more delicacies without having to worry about their pockets. This has revolutionized the service industry. They also offer burgers and pastas so that they can expand their target market customers and let more people crave for mouth-watering delicacies (Lovelock, 2007).SWOT Analysis Strengths Well-established brand in terms of customer satisfaction and also they provide quality service. Market leaders and trendsetters in terms of addressing the needs of the customers by bringing new and apt themes and promotions every now and then that is according to the demands of their customers. Managing high sales revenue without charging hefty prices to their customers. Dedicated and honest staff that always looks to serve the customers with a smile. Weaknesses The business structure is highly complex in terms of operations and the cost of maintenance is also high.Providing on the job training to their employees also costs a lot of money. Opportunities Can look to capitalize on the advantage they have over their competitors as a well-established brand. They also have good tie-ups in foreign countries including major Asian economies like China. Their company is a well-recognized company listed on Singapore Stock Exchange. Threats Competitors can copy their business idea and try to monopolize on it. The competitors can offer jobs to their employees at their own restaurant. It is also difficult to keep up with the ever-changing demands of the customers.Sales Effectively marketing a product is only one side of the coin, the other side of the coin is the sales strategy that is implemented by a company so as to boost revenues by increasing sales. All the marketing efforts can go down the drain if a company fails to capitalize on the efforts put in by the marketing team. Main motive of any company is to earn profits and this can only be achieved by boosting sales, and to boost sales it is very important to come up with fancy promotions and schemes so that the customers are lured into indulging themselves with the products offered by the company.By introducing Sakae Sushi membership and giving Sakae Card to the customers for S$38 and still managing to give the customers value worth S$55 is a good step taken by the management. The card not only gives bonus value, but it also can be used to avail discounts and other promotions from Sakae Sushi outlets, this keeps the customers craving for more and more new delicacies and keeping a look at new offerings.Various schemes and promotions like â€Å"The Sakae buffet, Min â€Å"N† Match, Drive-Thru menu and Self Collect and Save† help Sakae Sushi to maintain high standards of customer satisfaction and this in turn motivates them to bring up new themes for each month of the year. For example the theme for the month of April is the à ¢â‚¬Å"Soba† theme. New promotions, new monthly themes and discounts help boost sales and as the past records show Sakae Sushi has done well enough to maintain the stream of profits and also innovate to perfection (Dalrymple, 2000). Business Development StatusSakae Sushi was stared in the year 1997, since then it has grown tremendously and expanded and reached out to other countries like Indonesia, Thailand, Philippines, Malaysia, Vietnam and China etc. Douglas Foo’s ambition is to turn Sakae into a major food franchise and to be considered as â€Å"the McDonalds of sushi† worldwide. After starting its first branch in Raffles place (business district of Singapore), it has now opened more than 15 branches in Singapore alone. In 2001, Sakae opened its first overseas outlet in Thailand, a joint venture with a Thai food company and other local partners.By 2002, Sakae was in Indonesia as well and was grossing annual revenue of around $23 million SGD. For the financial year ended 31 December 2009, the Group reported revenue of SGD88. 8 million and net profit of SGD3. 3 million (Theresianto, 2008). In 2001 Sakae Sushi opened its first Drive through restaurant in Trade Hub 21 in Jurong east MRT station. Sakae Sushi tends to open their branches near MRT stations so as to attract the crowd and the frequent travellers. In 2006 Sakae sushi decided to expand its business to north Korea, Mr.Foo made his first visit to North Korea in 2001 as part of a Singapore Manufacturers' Federation delegation and has maintained the contacts he made then. He believes it will be â€Å"business as usual†, and he might step up talks with his North Korean business partners on plans to take his sushi outlets there and bring North Korean cuisine to Singapore. In 2003, Sakae’s parent company Apex-Pal was listed on the Singapore Stock Exchange. Apex-Pal’s food businesses, of which Sakae is the flagship brand, represented over 95% of the company’s re venues.In August, Apex-Pal’s Initial Public Offering (IPO) set out 16. 5 million shares, of which 836,000 were for public investors and the rest for institutional investors, clients and company employees (Business Times, 2004). Production Process The rice used for the sushi served in our Sakae Sushi restaurants, unlike most conventional sushi restaurants, is enriched with Vitamin E. Their experienced chefs are able to produce a consistent level of quality for all dishes served in Sakae Sushi, thus raising the level of confidence their customers have in their restaurants.To maintain high level of quality and freshness, raw food is not rotated on the kaiten (conveyor belt) for more than an hour, and cooked food for more than two hours. This standard of freshness is maintained through a color-coding system. For the regular dishes, the staff can immediately identify plates, which have been on the Kaiten (conveyor belt) for too long using our color-coded system. In relation to the premium red plate dishes, as the quantity of such premium dishes is much smaller compared to the regular dishes, our chefs personally monitor these dishes using our color-coded system.Their aim is to provide their customers with unique, hassle-free dining experience at Sakae Sushi restaurants. The dual-directional conveyor belt upon which the sushi dishes are displayed was designed to both maximize the seating space available and to provide customers with efficient service. Self-service hot water dispensers are located at each table and at each station of the kaiten (conveyor belt) for customers to fill their complimentary cups of green tea.Also installed is the interactive menu system at most of the restaurants from which customers can surf the menu containing both illustrations and descriptions of the dishes before placing their orders directly with the kitchen through the ordering system on the interactive menu. Where logistical difficulties affect the installing the interactive menu system at any booth portable, the intercom ordering system is installed instead, thus maintaining the high level of efficiency in service. Sakae Sushi adopts a simple two-tier pricing structure in relation to their kaiten sushi.Sakae’s simple price structure proved to be very popular. The majority of sushi dishes were priced at S$1. 90 and premium dishes at S$6. 50, which made Sakae more affordable than other Japanese restaurants. Suppliers The decrease in purchases from them in FY 2001 and FY 2002 is due to Sakae Sushi’s ability to secure alternative sources of those products at lower costs. To reduce their reliance on All Big Trading Co. and to diversify our supplier base for seafood, they began to purchase seafood from Surapon Foods Public Company Limited and LianHup Fish Merchant Co. n FY 2001 and FY 2002 respectively. These purchases helped them increase the turnover, which was also due to the increase in the number of Sakae Sushi restaurants. In addition to Marukawa Trading, they also purchased frozen food products from Tomo-Ya Japanese Food Trading, Shimaya Trading Pte Ltd and Moon Marine Singapore Pte Ltd who supply Sakae Sushi with frozen food products. The amount of purchases made by the Company from each of these three suppliers was relatively constant for the last three financial years (Apex-Pal International, 2009).The following are the suppliers for Sakae Sushi: All Big Trading Co. (All Big Frozen Food Pte Ltd) – Seafood Marukawa Trading – Dried / frozen food products Tomo-Ya Japanese Food Trading- Frozen food products Shimaya Trading Pte Ltd – Frozen food products Moon Marine Singapore Pte Ltd – Frozen food products Surapon Foods Public Company Limited – Seafood LianHup Fish Merchant Co. – Seafood Staff training and requirements Sakae Sushi provides all new employees with a complete orientation and training which is specific to their positions.New full-time operations staff, for their F;B outlets and, those of the franchises is sent to ITE-certified On-The-Job Training (â€Å"OJT†) schools to be trained by Sakae Sushi’s special OJT trainers. The OJT schools have been certified by ITE to be able to conduct OJT for our staff working in their F;B outlets. Such training involves the training and coaching of new employees by supervisors and managers through hands-on learning at the OJT schools. This type of training allows new employees to develop the required skills within a short period of time, without leaving their work place.Apart from kaiten sushi, the restaurants also serve ala-carte dishes. All members of the service staff are trained with the necessary skills and menu knowledge to provide a consistent level of customer service and to assist our customers in food selection as and when called upon to do so. Sakae Sushi also conducts refresher courses for their staff. Part-time service crew is given on-the-job training by our qualified trainers (A pex-Pal International, 2009). Expenses and Capital Requirements The main expenses of Sakae sushi are the purchase of the raw materials from its suppliers.Since the raw materials have no fixed cost F ; B have to face variable cost of the raw materials. Since the prices of the items on the Sakae Sushi menu cannot be changing constantly, Sakae sushi have to find different ways to maintain their budget and expenses. Every time Sakae sushi opens a new branch it has to incur certain costs like furniture, rent, labor, electricity, operating costs etc. Thus the capital required to open every new branch is different and may vary from places to places and from time to time. In the year 2011 Sakae Sushi spent around S$40,000,000 on the property, plant and equipment.Also the labor cost in Singapore is considerably much higher than most countries, so it is harder to start an F ; B based business like a Sakae Sushi restaurant in Singapore. Balance Sheet (Apex-Pal, 2003) Income Statement (Apex-Pal , 2003) Cash Flow Statement (Apex-Pal, 2003) Balance sheet and cash flow statement of the Sakae Holdings The Group’s cash and bank balances as at 31 December 2011 stood at $6. 1 million, a decline of $6. 4 million during the year, due to increased investment in property, plant and equipment with the construction of new central kitchen in Singapore and setting up of a headquarter in Malaysia.The Group has also made investments in associates in the beginning of the year, which was funded by bank loans. Shareholder’s equity stood at $27. 2 million as at 31 December 2011 (Full Year Financial Statement And Dividend Announcement {n. d. }). The Group was in a negative working capital position of $5. 9 million as at 31 December 2011 due to short-term revolving loans balance of $10. 3 million, which are renewable at maturity. The Group has repaid some of the revolving loans during the year (Full Year Financial Statement And Dividend Announcement {n. d. }). Financial Highlights A.Actual (‘000) Results200420052006200720082009 Revenue45,16151,90566,64583,83893,80488,817 Profit/Loss before tax2,7964,7436,6973,485(3,695)3,336 Profit/Loss attributes to share holders2. 0853,6845,0812,261(3,748)3,262 Non-current assets4,8334,62712,43318,51619,87630,852 Non-current liabilities30128942159058610,088 Shareholders equity10,76213,57620,51516,39811,15320,256 Net assets per share10. 0912. 7414. 4511. 557. 8614. 26 Earnings per share1. 963. 463. 741. 59(2. 64)2. 30 B. Expected (‘000) Results201020112012 Revenue71,69583,644. 1790,058. 03 Profit/Loss before tax2,893. 672,909. 942,604. 4 Profit/Loss attributes to share holders2,104. 172,107. 361,844. 59 Non-current assets15,189. 5016,915. 5818. 963. 68 Non-current liabilities2,045. 832,336. 642,677. 91 Shareholders equity15,443. 3316,223. 5616,664. 81 Net assets per share11. 8312. 1112. 01 Earnings per share1. 741. 701. 40 (*Projected Figures based on previous year average) (Apex-Pal International, 2009) Manageme nt Profile Board of Directors Douglas Foo Peow Yong (Chairman and Chief Executive Officer) Foo Lilian (Executive Director and Executive Vice President) Andy Ong Siew Kwee (Non-Executive and Independent Director)Lim Chee Yong (Non-Executive and Independent Director) Chan Wing Leong (Non-Executive and Independent Director) Audit Committee Lim Chee Yong (Chairman), Chan Wing Leong, Andy Ong Siew Kwee Nominating Committee Lim Chee Yong (Chairman), Chan Wing Leong, Douglas Foo Peow Yong Remuneration Committee Chan Wing Leong (Chairman), Lim Chee Yong, Douglas Foo Peow Yong Company Secretaries Rachel Ng Meijing (CPA, Singapore), Chan Lai Yinb (ACIS) (Apex-Pal International, 2009) Board of Directors â€Å"A  board of directors  is a body of elected or appointed members who jointly oversee the activities of a  company†(Robert, H. , 2000).Other names include  board of governors,  board of managers,  board of regents,  board of trustees, and board of visitors. It is often simply referred to as â€Å"the board†. In a stock corporation, the stockholders elect the board and it is the highest management authority of a company. In a  non-stock corporation  with no general voting membership,  e. g. , a university, the board is the supreme governing body of the institution (Robert, H. , 2000). The duties of the board of directors of Sakae Sushi are as follows: * Establishing policies and objectives. * Selecting, appointing, supporting and reviewing the performance of the  company. Ensuring the availability of financial resources. * Approving annual budgets. * Accounting for the performance of the company. * Managing salaries and compensation of the employees. MANAGEMENT: Mr. Douglas Foo Ms. Foo Lilian Mr. Lim Chee Yong Mr. Andy Ong Siew Kwee Mr. Chan Wing Leong MR. DOUGLAS FOO (Chairman and Chief Executive Officer) Mr. Douglas Foo has been a Director of the Group since 17 February 1997. As Founder and CEO of the Group, he manages the overall management, strategic planning and business development functions of the Group. Mr.Foo started his career as a marketing executive but with his talent and entrepreneurial skills he was able to come up with an idea of opening a garment trading business which was not really successful, so a year later he thought of getting into the food and beverages industry by opening the first branch of Sakae Sushi and has since developed Apex- Pal into a successful enterprise that it is today (Apex-Pal International, 2009). MS. FOO LILIAN (Executive Director) Ms. Foo Lilian was appointed as Sakae Sushi’s Executive Director on 2nd May 2002 and is responsible for the general management of the Company. Ms.Foo handles the Group’s leasing, business development and legal matters. She is also responsible for the consultancy, maintenance and research and development work for all IT-related matters of the Group. In 1997, Ms. Foo joined the Central Provident Fund Board where she was a databas e administrator until February 2000. She also worked with the Keppel TatLee Bank Limited as an assistant manager. Ms. Foo left Keppel TatLee Bank Limited to join Sakae Sushi in January 2001 (Apex-Pal International, 2009). MR. LIM CHEE YONG (Independent Director) Mr. Lim Chee Yong was appointed as our Independent Director for Sakae Sushi on 14 July 2003.From October 1982 to April 1987, Mr. Lim served as a senior corporate banking officer in Overseas Union Bank Limited. In May 1987, he joined Banque Paribas, Singapore Branch as a deputy manager of banking, where he stayed until April 1989. He was appointed an executive director of Alliance Technology and Development Limited, a company listed on the Main Board of the SGX-ST, in May 1989. Mr. Lim left Alliance Technology and Development Limited in March 2000. Mr. Lim is also an independent director of Twinwood Engineering Limited, a company listed on the SGX- CATALIST, from 1997 to 2007 (Apex-Pal International, 2009). MR.ANDY ONG SIEW K WEE (Independent Director) Mr. Andy Ong Siew Kwee was also appointed as Sakae Sushi’s Independent Director on 14 July 2003. Mr. Ong is the CEO of ERC Holdings Pte Ltd. ERC is a leading player in the education industry in Asia. He oversees the regional development as well as the merger and acquisition activities of the firm. He is also the Founding President of the Financial Planning Association of Singapore, a professional body for financial services that issues world-renowned Certified Financial Planner marks. He has written several best-selling books on financial management and business (Apex-Pal International, 2009).MR. CHAN WING LEONG (Independent Director) Mr. Chan Wing Leong was appointed as an Independent Director on 30 April 2005. Mr. Chan holds an honors degree in Economics from the University of Singapore. He started his career in the Administrative Service of the Singapore Government in 1981, and has held stints in several government posts in the Ministry for Trade and Industry and Economic Development Board, as well as in Government- linked Corporations. Mr. Chan was an investment banker in the late 1980s to 1995 at Schroders PLC and Bankers Trust Corp in both Singapore and Hong Kong.In 1995, he returned to Singapore to be Chief Financial Officer of Sembawang Corporation until 2001 (Carter, 2008). Funding Request and Exit Strategy In December 2007, Sakae opened its first outlet in the United States at the Chrysler Building in New York, its 61st outlet worldwide. Initial S$3 million had been invested by Apex-Pal in the outlet. The outlet did not to well because of tougher times and they have since then shut down their operations in USA. Initially, because of the company’s small size, Mr. Foo’s strategy for Sakae’s expansion was to enter into franchise agreements.As the company grew, the company also utilized a strategy of foreign direct investments in those countries where such investments were feasible and also welcomed by the respective governments. Global economic crisis occurred in 2008 and Sakae found its margins reduced by high prices for commodities such as rice and vegetables. The company cut salaries and executive pay but decided against staff layoff. A profit of S$2. 3 million in 2007 was followed by a net loss of S$3. 8 million, in 2008 due to rising rentals, salaries and commodity costs. It was Apex-Pal’s first annual loss.Sakae introduced cost cutting measures such as finding new food suppliers, minimizing waste and tightening other operational practices. The company returned to making profit in 2009, posting a S$3. 3 million profit. Risks and Contingency Planning The Starting Point It is vital that any organization takes development and maintenance, disaster recovery and business continuity plans seriously. It cannot be left until it develops into a serious problem. Impact Assessment One of the first tasks to be undertaken is to prepare a comprehensive list of serious issues tha t can affect the normal operations of a business.This list should include all possible issues no matter how likely they are to occur. Since Singapore is an island one of the major risk factors can be floods. Developing the Plan Once the assessment stage has been completed, the structure of the plan can be established. The plan will contain a range of milestones to move the organization from disrupted status to return to normal operations. The first important milestone is about dealing with the aftermath of a disaster. The next stage is to determine which business functions need to be resumed.The plan will be detailed, and will identify key individuals who should be familiar with their duties (The Contingency Planning Guide, 2002). Testing the Plan Once this plan has been developed it must be subjected to rigorous testing. The testing process must be properly planned and should be carried out in a suitable environment to produce authentic conditions. Those who would undertake the maj or activities of the business should test the plan. The test procedures should be documented and the results recorded. This is important to ensure that feedback is obtained for fine-tuning the Plan.Personnel Training This stage is dependent upon the development of the plan and the successful testing of the plan. It is necessary that all personnel are aware of the plan, its content and their own related duties and responsibilities. Again, it is important that all personnel take the disaster recovery plan seriously, even if the events that would trigger the Plan seem unlikely. Obtain feedback from staff in order to ensure that responsibilities and duties are understood, particularly those that require dependency on others actions (The Contingency Planning Guide, 2002). Maintaining the PlanThe plan must always be kept up to date and applicable to current business circumstances. This means that any changes to the business process must be properly reflected in the plan. Someone must be a ssigned responsibility for ensuring that the plan is maintained and updated regularly and should therefore ensure that information concerning changes to the business process are properly communicated. Any changes or amendments made to the plan must be fully tested. Everyone should be kept abreast of such changes that affect their duties (The Contingency Planning Guide, 2002). Recommendations To develop business in America and to attract American customers it’s important for the Sakae group to develop some American friendly food like Sakae beef burgers, hot dogs, rolls and other food loved by the people there, this will affect the revenue that Sakae can make in that country. * In countries like North Korea, they should find local partners to work out a good franchising option. * Conduct more on the job training activities to enrich the employees to possess all the required skill to excel in their job. * Expand their product base and standardize their products across all their branches to lower their costs. Conduct extensive market research to identify the target market and develop products and services according to the needs of their customers. * Tie up with other food ; beverage organizations to promote and diversify their brand. * Sponsor events like marathons, blood donation drives and cultural fests to attract the masses especially the younger generation to get involved with Sakae Holdings. * As part of Corporate Social Responsibility, Sakae Holdings should adapt eco-friendly practices like recycling, reusing and reducing the waste generated.Also they can contribute towards the environment by implementing energy saving practices like maintaining a constant temperature of 24 degrees while using air-conditioner. * By working with their suppliers they can research and develop new ways to store their inventories effectively by keeping it fresh and ready to use. * They should also develop ways to minimize their transportation cycles and also save on fuel costs and reduce their carbon footprint. Appendix 1. 1 The 4P’s of Service Marketing References Apex-Pal International. (2009). Going Global- 2009. Retrieved 4 5, 2012, from Apex-Pal: http://www. apexpal. om/Files/Apex-Pal%20AR09%20for%20SGX. pdf Apex-Pal. (2003, 8 18). The Innovative F;B People. Retrieved 4 5, 2012, from ir. zaobao. com. sg: http://ir. zaobao. com. sg/apexpal/pages/doc/apexpal_ipo_prospectus. pdf Apex-Pal International. (n. d. ). What's Hot. Retrieved 4, 5, 2012, from Sakae Sushi: http://www. sakaesushi. com. sg A simple goal – to be the McDonald’s of sushi. (2004, February 9). Business Times. Retrieved March 9, 2010, from Factiva. Carter, M. ,  Ã¢â‚¬Å"Overview of Roles and Responsibilities of Corporate Board of Directors†. Free Management Library. Authenticity Consulting, LLC. Retrieved 2008-01-26. Capon, N. , 2009.Capon's marketing framework, Wessex Publishing. Dalrymple, D. J. , Parsons, L. J. (2000). Sales promotion and public relat ions. In Dalrymple, D. J. , Parsons, L. J. , Basic Marketing Management (pp. 272-276). New York, United States of America: John Wiley ; Sons. Japan-guide. com. (2008, 05 31). Sushi. Retrieved 04 10, 2012, from Japan-guide. com: http://www. japan-guide. com/e/e2038. html Lamb, C. W. , Hair, J. F. , McDaniel, C. (2008). Essentials of Marketing. Cengage Learning. Lovelock, C. H. , Patterson, P. G. , Walker, R. H. (2007). Understanding service products, customers and employees. In Lovelock, Patterson, P. G. Walker, R. H. , Services Marketing (pp. 26-30). NSW, Australia: Pearson Education Australia. Robert, H. (2000). Robert's Rules of order newly revised. Philadelphia: Perseus Pub. Sakae Holdings Ltd. (2012, 2 28). Retrieved 4 5, 2012, from http://www. finanznachrichten. de: http://www. finanznachrichten. de/pdf/20120228_172124_5DO_752F7CDF0A7BD282482579B2002082FC. 1. pdf The Contingency Planning Guide. (2002). Retrieved 4 5, 2012, from http://www. contingency-planning-disaster-recovery -guide. co. uk Theresianto, N. (2008, February 11). Apex-Pal expands its Sakae Sushi empire. The Edge Singapore. Retrieved March 9, 2010, from Factiva.

The Law of E-Commerce

English law has long been recognized as respecting freedom of contract. In other words, the state has not, generally, laid down legislation which has interfered with the freedom of parties to agree the terms of their contracts. In more recent years, there have been a number of inroads into the principle of freedom of contract, particularly with respect to consumer protection. It very much remains the case that English law does provide parties with considerable flexibility both as how they conclude contracts and the terms that they include. Offer and acceptance In order for a contract to be binding under English law it requires an offer, acceptance, intention to create legal relations, consideration and capacity. With regard to electronic commerce, the contractual requirements need careful consideration. Offer A supplier offers an unconditional offer which could be accepted by any potential customer. If the customer informs the supplier that he or she accepts the offer ,there will be a binding contract. On the other hand, the supplier could provide to the customer what is known in legal terms as an â€Å"invitation to treat†. This is not a binding offer, but an â€Å"invitation† for the customer to make an offer, which the supplier can then accept. It is very important for suppliers wanting to sell goods through on line to ensure that their websites and other on line advertisements are interpreted as invitations to treat. If a supplier's website constituted a formal offer to provide certain services or goods, the supplier may be in breach of the local laws (both civil and criminal) if there are certain kind of customers who would not ordinarily be entitled to make the purchases which are being offered. For instances, the sale of alcoholic products to minors and guns or other weapons into all countries, when some countries restrict more carefully the circumstances in which guns or other weapon can be purchased. Acceptance English law is generally very flexible about how an offer can be accepted. Acceptance could be communicated by an acknowledgement (e.g. email) or by physical act such as the shipping of the goods. What is more uncertain under English law is when acceptance takes place – particularly in an Internet contract. The general rule is that an offer is not accepted until acceptance is communicated to the offeror. So far there is no case relating to this rule which applies to contracts made over the internet. But however, there is case law which applies to other instantaneous forms of communication, such as telexes and facsimiles, provided that such communications are sent during the business hours. With the global use of electronic trade, the question of when each business day begins may be difficult to determine – particularly when the customer cannot easily work out where the server accessed is based. The major exception to the general rule on acceptance concerns acceptance by post. In the majority of cases, acceptance takes place when the acceptance is posted and not when it is received by the offeror. The â€Å"postal† rule means that the contract will already have been made and the offeror will be bound to complete his obligations, provided that the other party can prove that the acceptance letter has been posted. In some ways, notwithstanding its instantaneous nature, acceptance by electronic means does have similarities to postal acceptance. A common carrier will assume the responsibility in transmitting the message (in this instance the carrier is the Internet Provider). With this kind of communication, it is not easy to determine the receipt with respect to email sent over the internet. What this means is that the sending party will not know when or if the acceptance has been received. Given the fact that it is not clear when acceptance of an offer will occur, any supplier should take care to consider how and when acceptance will take place. This has long been the principle adopted in EDI contracts, and those doing business on the Internet have to ensure that they do not leave anything out for questioning later in the contract. Any supplier should have no difficulty in exercising control over the manner in which the only contracting process is conducted. Unlike the Internet most real world contracts are formed on a person to person basis, either by a face to face conversation or verbally over the phone. By contrast, most Internet contracts are remotely made, impersonal and above all automated. If there is any ambiguity or uncertainty over the transaction but a more likely issue to whether there was a contract at all. Contract terms and liability English law gives the contracting parties the freedom to set many of the terms upon which they will contract the business. But this will be subjected to two areas where the law will imply terms. First, certain terms will be implied by statute. Secondly, the law will imply terms just to give â€Å"business efficiency† to a contract. This happens where either parties have forgotten to deal with an issue expressly in circumstances where they would have done so had they thought about the issue at the time f the contract was finalized. The main terms implied by statute in contracts to sell goods is the Sale of Goods Act 1979. This terms will imply to any contract that: * the goods will be of satisfactory quality; * where expressly or impliedly known by the supplier, the goods will be reasonably fit for the buyer's purposes; * where goods are sold by reference to a description, the goods will correspond to that description. This term is particularly important for internet sales where a buyer may make a purchase of certain goods having visited a supplier's website. If a supplier provides services, the implied term for the services will be that they will be dealt with â€Å"reasonable skill care†, and within a reasonable time frame (Supply of Goods and Services Act 1982). Under the Unfair Contract Terms Act 1977, these terms cannot be exempted in any circumstances with respect to consumers. Sometimes in the contract for a business, a supplier can exclude liability for breach of these implied terms where it is â€Å"reasonable† to do so. Not only the Unfair Contract Terms Act 1977 in which the implied terms under the Sale of Goods Act can be exempted, but the Act also imply other liability can be limited as far as the services concerned. The main provisions deal with: * liability for death and personal injury – this cannot be exempt under any circumstances; * liability in negligence other than for death and personal injury – this can be exempt where reasonable; * liability to a consumer – this can be exempt only where reasonable (except in the case of liability for breach of the terms implied under the Sale of Goods Act; * liability when dealing on the supplier's standard terms and conditions – a supplier can only be exempt liability to his customers where it is reasonable to do so; There are a number of matters with regard to the reasonableness that the court will take into account when questioning each case individually. The questions are undoubtedly related to the insurance carried by both parties; what other sources were open to customers; and whether the buyer knows or ought to know the exclusions and limitations clauses incorporated into the contract. If there are any ambiguities in the terms of the contract, the court will be in favour of the customer. And the supplier will be left to prove that his exclusions are to be reasonable with respect to doing the business. No doubt that many online contracts will incorporate standard terms and many sales will be directly to consumers, the Unfair Contract Terms Act will play a role in determining the exposure a supplier may face in providing the services or goods using the Internet as a communication mechanism. The UCTA will only be using the English law system for a contract of consumers if they are based in the UK and for a contract where there is a choice of law other than English law, when it is selected for the purposes (mainly or wholly) of trying to avoid the effect of UCTA. Apart from the Unfair Contract Terms Act, there is one exception with regard to the contracts conducted over the Internet. It concerns the international supply contracts where the offer and acceptance of the sale of goods take place in different countries or the goods are physically shipped from one jurisdiction to another. Many companies wishing to sell goods through the Internet could use this exception whereby the purchaser accesses the server to order goods from other location which is outside of the English jurisdiction. It should be realized that this exception can be applied even where the English law is governing law of contract. When a contract is considered to be an international one, the Unfair Contract Terms Act will not intervene and a supplier is free to limit or exclude his liability without having to look at the UCTA to see whether if it is reasonable to do so. Although it is likely to apply to sales to businesses only in the light of certain parallel consumer legislation – the Unfair Terms in Consumer Contracts Regulations 1994. In addition to UCTA, any supplier considering doing businesses over the Internet must also bear in mind the impact of the Regulations when dealing with the consumers. These Regulations incorporate into English law of the European Community Directive on Unfair Terms in Consumer Contracts, which provides the entire states of the European Union cases in which it is unfair to limit or to exclude certain rights of consumers by contract terms. If the terms of the contract is considered to be unfair, then it will be declared as void. Furthermore, the Regulations could assist the consumers if the consumers are asked to pay a penalty in the event they fail to complete their contractual obligations and when the supplier restrict the consumers' legal recourse in the event of a breach (for instance, by making the consumer go to arbitration). It is for this reason that it was suggested that the international supply contract with the exception in UCTA will only be of real benefit to those selling goods to businesses. Furthermore, there are also other helpful pieces of legislation which a consumer can depend on: * The Consumer Credit Act 1974 – if a customer has paid for the goods by credit card and the value of each item is à ¯Ã‚ ¿Ã‚ ½100 or more then the credit card company assumes the same responsibilities as the supplier does and a consumer can make a complain to them. * The Misrepresentation Act 1967 – may give a customer the right to return goods and have his money back if he/she has been told something factual about them that made him/her decide to buy but which turns out to be untrue. * The Trades Description Act 1968 – if a seller makes a particularly gross misrepresentation about an article or if he or she is regularly misrepresenting the qualities of any goods then this may warrant a complaint to and investigation by Trading Standards who have the power to prosecute. * Misleading Prices Regulations – the law does not control prices as such but does requires that prices are accurately displayed or advertised. If a seller has incorrectly displayed a price a customer cannot force a sale at that price but it may warrant a complain to Trading Standards. So how can businesses conducting sales over the Internet protect themselves from the inevitability of pricing errors? Hence thousand of orders can be placed with online retailers before they can detect the problem. When the prices are incorrectly displayed and contracts are formed, the sellers are forced to choose between accepting that price as a financial loss in goodwill or trying to consider the contracts under the doctrine of unilateral mistake. Otherwise to avoid the contracts to be binding with customers with the incorrectly pricing, the sellers should employ protective methods of contract formation that assist them to prevent loss. The risks and costs of pricing errors Many online errors result from the fact of proofreading mistakes and software problems, but a lot of mistakes keep increasing because many sellers online tend to change their prices more often than normal and convenience high street stores [1]. Furthermore, online businesses execute sales automatically and therefore lose the added safety of having the human eye confirm the price. The Internet, with all the richness of information resources, can cause some harm. Many of the online shopping combine with chat rooms, emails and bulletin board which in turn can result in a flood of orders and thousands of sales being processed before the sellers is able to pinpoint and correct the mistake. For instance, in 2001, Kodak offered a à ¯Ã‚ ¿Ã‚ ½329 digital camera for à ¯Ã‚ ¿Ã‚ ½100 [2]. At the time the case was decided that Kodak's automatic confirmation email formed legally binding contracts [3], and in the end, the company was forced to honour the sales. The incident caused the company substantial losses of more than à ¯Ã‚ ¿Ã‚ ½2 million [4]. Kodak argued that, if there was a contract formed, that contract could be void by reason of â€Å"mistake† (i.e. the price of the goods offered was so low that there was obviously a mistake). Kodak's refusal to fulfill orders was widely reported. The common law view was that Kodak would lose any actions brought against it because 1) its standard terms were unfair to the consumer; 2) a camera worth à ¯Ã‚ ¿Ã‚ ½300 being sold as a special offer for à ¯Ã‚ ¿Ã‚ ½100 was not an obvious mistake; and 3) Kodak's reply not only to acknowledge the sale, but used the words â€Å"this contract†, Kodak forced to accept the orders. In another example involving Argos, a catalogue online retailer, who advertised a TV on its website for à ¯Ã‚ ¿Ã‚ ½2.99, one one-hundredth of its normal price. Argos received orders worth over à ¯Ã‚ ¿Ã‚ ½1 millions, none of which were acknowledged. Argos argued that there was no contract between the customers and itself, because Argos did not confirm any orders as far as the product concerned. The case was decided confidentially and it is believed that Argos did not fulfill the majority of those orders. The equitable doctrine of unilateral mistake When the online seller make honest and honourable mistake on pricing which result in big losses, their mistake could be considered based on the doctrine of unilateral mistake. What this means is that one party's mistake could make the contract voidable when the mistake concerns a basic assumption on which the contract was formed and has a material effect on the agreement that is adverse to that party [5]. Furthermore, the effected party must prove that: a) the mistake is such that enforcement would be unconscionable, or b) the other party had reason to know the mistake or should have known that the price was a mistake [6]. An unconscionable contract is defined as â€Å"no man in his senses, not under delusion, would make†¦.and which no fair and honest man would accept†¦.† [7]. The contract, if was formed, must cause hardship to the effected party [8]. In addition to this, the court would look to see whether the sale would cause the seller a big loss and not merely a diminished profit [9]. Alternatively, the online seller could also prove that the customers had reason to know or ought to know that the price was wrong [10]. â€Å"Reason to know† means that a person â€Å"has a duty to another† and â€Å"he would not be acting adequately in the protection of his own interests were he not acting with reference to the facts which he has reason to know† [11]. Rescinding the contract is the only remedy option under the unilateral mistake; it is not a basis for reformation [12]. It means that the seller cannot ask the customer to go ahead with the sale at the actual price. But instead, the seller must cancel all customer's order and re-offer the good at the actual price. However, after the re-offering the good the customer might not show any more interest in purchasing it. In some instances, the court might refuse to order rescission. The court will consider whether one party has so detrimentally relied on the contract it would be inequitable to order rescission [13], will be prejudiced by rescission [14], or cannot be returned to the status quo [15]. Furthermore, the court might refuse to rescind the contract when the mistake resulted from the seller's negligence or lack of due care [16]. Case of an e-seller policy Amazon.com provides an example of an online seller who has incorporated a policy into its website to deal with potential pricing mistakes. It provides a direct link to its pricing policy from its term of use. In its term, Amazon states that the price of any products is not confirmed till the customer completes the order. Additionally, Amazon further states that the items in the catalogue may be mispriced and the price will be verified before it's sent out. If the actual price is lower than the stated price, Amazon will charge the lower price and ship the good. On the other hand, if the actual price is higher, Amazon will either contact the customer or cancel the order and notify the customer of its cancellation. Despite all these precautions, however, Amazon has been involved in a number of argument concerning the incorrect pricing. Recently, in the UK Amazon made a mistake in advertising iPaq handheld computers priced at less than one fiftieth of the retail price. But fortunately, Amazon has managed to avoid big losses because its conditions of sale explicitly stated that the contract is not formed till the good was dispatched, giving Amazon the right to cancel most of the orders it has received. The contents of its conditions' statement were the same throughout. On the same token, in America, Amazon mistakenly put on sale a memory module priced at 10% less than the actual price and DVD's priced at 75% of their list price. Amazon in America emailed notices to customers, in according to their pricing policy, requesting if they could pay for the actual price of the products or cancel their order completely. Several customers filed complaints to the Federal Trade Commission and the Better Business Bureau. But it is not clear how these complaints have been resolved. Conclusion In short, to avoid losses caused by pricing errors, online seller can employ a few measures ensuring that his business is protected. One of the thing the seller should do is he should include the terms and conditions in the contract stating that he reserves the right to cancel orders and an explanation that the customer's order only constitutes an offer, which the seller can accept by charging the customer's credit card or by dispatching the good. In addition, the customer should be required to assent to those terms and conditions by clicking â€Å"I accept† during the checkout process. The English cases indicate that the terms of a contract are binding if a seller has made sufficient efforts to bring the terms to the attention of the buyer and if the parties agree to the terms. It is very important that the buyer who buy things online ought to see and accept the terms before an order is placed. However, the terms should allow the sellers to reject orders at any stage before dispatch. Any automatic response to an order ought to let the buyer know that a binding contract has not been entered into and the price is subject to change until it is shipped. Although these precautions has taken place, a seller online may still face potential litigation and consumer complaints, concerning any incorrect prices confirmed by auto-reply emails. The Internet is undoubtedly will grow in importance and it is no more than a tool of communication just like the telephone, telex or fax. Furthermore, electronic contract is becoming more common and right now a substantial percentage of both commerce and consumer contracts is concluded in cyberspace. Although e-commerce contracts suffer some problem, but they can be overcome by applying the three basic questions, when was the contract concluded? What are the terms of the contract? and where is the contract governed? These questions would help us to deal with any contract whether it is formed electronically or by more traditional means. â€Å"It is the moral equivalent of being given too much change in a supermarket and pocketing the money instead of handing it back† ( Bill Thompson, technology analyst).

Importance of Research Essay

Jean Piaget is a trailblazer whose focus was on children’s cognitive development. He lay the foundation by naming four stages sensorimotor, preoperational, concrete operational, and formal operational. Each stage builds upon the other, coinciding with biological development of the brain. Although some of his theories were deemed inaccurate, they paved the way and gave direction for upcoming psychologists who were able to build upon his work by disproving some of his theories simply to develop their own. Just as Jean Piaget, several scientists have theorized on many other parts of psychology, but all with general advantages. They provide us with a better understanding of ourselves, they provide us with a better understanding of others, and they provide us with methods to prevent and/or treat mental illnesses. At times it seems as though we do not know ourselves at all. We question our behaviors and feelings. Psychologically understanding these behaviors helps us to understand that we are probably not alone in our feelings. Also, by having a full understanding of self, psychologically, we can learn how to respond to certain feelings and emotions and how to wean ourselves off of them. In the same way that we can further understand ourselves in the study of this field we can apply reverse psychology to understand others. Being able to do so enhances people’s skills and work skills by enabling you to question possibilities and to address them as needed. This makes for more effective communication skills expanding beyond personal life and into the workforce. Lastly, research/experiments in psychology help to treat and prevent mental illnesses. Scientists have discovered biosocial, cognitive, and psychosocial facts that influence mental illnesses. Case studies allow these illnesses to be identified. By knowing what triggers them, scientists can make the general public aware of those that are most influential and can advise of help if at all needed. Factors are considered, tested, and named. Research further helps us to recognize early symptoms or onsets. In conclusion, effective research/experiments play a large role in today’s society. It helps to influence several work fields such as law enforcement in which psychologists profile criminals to help catch them. In major corporations, psychology is used to screen potential candidates or present employees and even as a part of advertising, appealing to consumer’s wants and needs. Even schools use the influence of psychology to enrich student’s learning experiences via group assignments or to enhance athlete’s performances via pep rallies. You see, Psychology is an inevitable part of everyday life. Effective research and experiments help us to better understand our behaviors, thoughts, and emotions enabling us great communication skills and a better well-being.

Gender Issues in Africca Expressed through Literature Term Paper

Gender Issues in Africca Expressed through Literature - Term Paper Example The rest of this essay will highlight, compare and contrast the gender issues discussed in these novels. In particular it will argue that the two books in question bring key insight, understanding and a message of hope to women’s issues in their respective countries. So Long a Letter (originally published in French as ‘Une si longue lettre’), gives voice to women of Senegal in particular and Western Africa in general. It is written by Mariama Ba and is semi-autobiographical in content. Ramatoulaye Fall is the protagonist and first-person narrator of this epistolary novel. Addressed to her close friend Aissatou Ba, the letter was prompted by the narrator’s recent and unexpected widowhood. Ramatoulaye recounts to Aissatou the circumstances and the shock accompanying her husband’s death due to heart-attack. But having adopted the novel form, the letter touches upon topics far and beyond that of her immediate grief. And through her forays into all aspect s of women’s social rules and restrictions the feminist voice of the author comes alive. (Ba-Curry et.al, 2008, p.112) Especially astute are Ba’s grasp of interpersonal equations and balance of power between the two genders: â€Å"A woman is like a ball; once a ball is thrown, no one can predict where it will bounce. You have no control over where it rolls, and even less over who gets it. Often it is grabbed by an unexpected hand...Whereas a woman draws from the passing years the force of her devotion, despite the ageing of her companion, a man, on the other hand, restricts his field of tenderness. His egoistic eye looks over his partner's shoulder. He compares what he had with  what  he no long has, what he has with what he could have. (Ba, 1980, p.42) The novel Everything Good Will Come by Sefi Atta has thematic similarities in that its protagonist also is a girl living in postcolonial Nigeria and England. But compared to Miriama Ba’s work, Atta’s novel is created in a much broader canvas, covering political developments, ethnic conflict, crime as well as interpersonal relationships. The chief character in the novel is that of Enitan, who is confronting in her life various issues that have engulfed postcolonial Nigeria. Some of the most realistic and poignant passages in the novel pertain to the ethnic strife between groups such as Youruba, Igbo (Biafrans) and Housas, which has stifled progress and development in sovereign Nigeria. (Olowonmi, 2008, p.55) Sefi Atta emphasizes ‘bonding’ as a mechanism for achieving communal bliss. Via bonding, key characters in the story are able to share their burden and fight bravely to resist their oppressors and seek freedom for their loved ones. Dismantling this cloak of disillusionment then becomes a text-type for the survival of democratic governance in her country. According to the United Nations’ Global Human Development Report (2002) governance in action includes i nstitutions, rules and political processes. And these factors determine if economies grow, children go to school, and whether human development moves forward or backward. Thus, this perspective â€Å"is in consonance with the writer's vision when he/she moves through enormous materials to organize and orchestrate in order to open a window to prospective horizons as his/her art reflects reality. And conclusively, the writer caves for the deepening of democratic governance in Nigeria to ensure that the use of power in public affairs gives premium to human

An Investigation Into a Contemporay Health Issue Essay

An Investigation Into a Contemporay Health Issue - Essay Example The ‘Right to Die’ group argues that euthanasia is ethically wrong and is driven by some socio-ethical issues that are propagated by the society. Euthanasia is usually done on the critically ill, physically disabled and other people who are considered a burden to the society. The group cites that the debate on ethical implications of the process has a psychological effect on those who are targeted. This may affect and influence the affected to think in terms of euthanasia as the only way to become independent of their problems. While this may seem like voluntary euthanasia, although it has been aided by depression of the victim, the likelihood of people committing involuntary euthanasia in the future is very real. The argument countered fro by the proponents of Right to Life, questions the ethicality behind killing disabled people in the interests of the society. Governments have a duty to protect the fundamental human right to life, which will be seriously hindered by e uthanasia. The argument that people with disabilities are a burden to the society and should therefore have their lives terminated evokes a feeling of society riddled in unethical and immoral behaviors (Cauldwell, 2007). On the other hand, terminating someone’s life on the basis of incapacitation violates people’s right to life. The unethical nature of euthanasia has been experienced in many cases where people are killed through decisions taken by medical professionals and interested parties. If such a trend continues, the professional ethics and moral obligations will be eroded completely. The Futile-Care Theory and Health Rationing have been used to make euthanasia look ethical and moral. In some countries, healthcare professionals are prohibited from helping patients with certain levels of problems. While in other countries like Holland, euthanasia is legal. Even without the patients’ knowledge, the healthcare professionals result to euthanasia. This deprives people of their

Geography - Economic Growth Essay Example | Topics and Well Written Essays - 1250 words

Geography - Economic Growth - Essay Example According to them, there are two types of the developing world -- one who has globalized their trade and the one who has not. The globalized group of countries has increased their foreign investment and trade well above the rates of rich countries and opposite is the case with non-globalized group of countries (121) Authors believe that globalization has not caused any higher inequality within economies though they also agree that inequality has gone up in China but it has nothing to do with any free trade and investment flows. They attribute it to education, social policies and taxation. What they want to emphasize is that higher economic growth rates translate higher incomes for the poor. For example, in China inequality has increased but at the same time poverty reduction has taken place and that is entirely because of foreign trade and investment. Authors suggest that growing protectionist movement in rich countries does not augur well if full potential of economic integration an d its benefits are to be realized; however, at the same time, developing countries need to change their policies and build up institutions so that they can prosper under globalization (121). Authors argue that further integration is being opposed in the rich countries and their protectionist measures are directed toward agriculture and labor-intensive products (131). Authors argue that human productivity has increased manifold. The world economy, which was crawling at the rate of 1 percent during mid-nineteenth century accelerated to 3.5 percent during1960-2000 because of economic integration among several countries. Authors put forward the argument that worldwide income inequality was on rise until 1970 but thereafter it started reducing. The income inequality in 1970 was at its highest level at 88.1% that subsequently reduced to 77.7 percent in year 1995. According to authors, after 1980 the number of poor has reduced by 200 million. This has been possible due to accelerated growt h rate of China and India (125). Authors advocate migration from poor countries to reduce the poverty and currently that is highly restricted by rich countries because of the fear of high unemployment rate in those countries. Authors strongly argue that the fate of poor also hangs on the rich countries' migration policy decisions (133). Growth with Equity is Good for the Poor Oxfam (2000) argues that 'growth with equity' is a solution to poverty eradication and not growth proposed by Dollar and Kraay. According to Oxfam, growth alone cannot help in reducing poverty. Oxfam advocates poverty-focused growth that reaches to the lowest 20% of the population to bring them up in line with others. They consider Dollar and Kraay's growth model as anti-poor and anti-growth (2). The important thing, according to Oxfam, is how income is distributed among poor. The larger share of income growth should go to poor if poverty is to be reduced. Comparing different regions on economic growth, Oxfam a sserts that East Asia is the only region, which can achieve its goal of poverty eradication by 2015. Due to poverty-focused growth in East Asia, it has raised 22 million people out of poverty, which other region such as Latin America has not been able to do so. At least 3 million people in Latin America would have been out of poverty had it initiated a focused growth (4). Oxfam argues that growth alone is not sufficient to reduce poverty. Oxfam emphasizes that the income distribution is

Manage people performance Essay Example | Topics and Well Written Essays - 1000 words

Manage people performance - Essay Example As the organization is already highly differentiated in terms of market segmentation the overarching company goals are expanding these market elements into larger markets, as well as creating more value for members. Still, within this context of understanding there are specific company goals that further articulate the organization’s strategic initiatives. In these regards, the first company goal has been indicated to be, â€Å"To deliver our core products and services to a standard and quality which meets or exceeds members’ expectations† (‘Racq’). In these regards, the company recognizes that while they achieved significant success, it’s necessary to continue to develop and create customer value in as effective and efficient way as possible. In ensuring that customer expectations are met and exceeded the organization can retain current customers and expand into new markets. A second primary company goal is to develop means of increasing the value of membership in a mutual gains approach for company and customer. While this may seem counter-intuitive, the company understands that in developing greater efficiency measures, strengthened partnerships, and greater strategy, membership can be both expanded as a means of offering greater value to the customer and still retaining an increased profit share. The final company goal is to develop new and sustainable income streams that function within the company’s brand and vision. Since it’s beginnings the Royal Automobile Club of Queensland has been highly successful in not simply gaining members, but also in expanding the membership benefits and sources of revenue. One considers that the company does not simply provide roadside assistance, but also gains revenue from car and automobile insurance. The company then desires to expand into even further markets as a means of gaining profit and developing the organization. There are a number of critical success factors for the

Investment Analysis for the Okura Hotels and Resorts in Connection Assignment

Investment Analysis for the Okura Hotels and Resorts in Connection with Indian Market Entry - Assignment Example This paper aims to establish the prospects of entering the Indian hotel industry by Japanese company Okura Hotels and Resorts. This hotel chain accounts for one of the finest deliverer of luxury services in many countries. The fast growing economy of India stipulated dramatic growth of the tourism sector in the country. There has been a subsequent shortfall in the number of hotel rooms to meet the demand in India. This has been the cause of fuelling room rates across the nation and India turning into a popular hotel destination for businesses. There are a number of MNC hotel giants flocking in the country and many of them are also seen to be entering into joint ventures. The nation’s government has been showing approval for the setting up of a number of new hotels, which is also viewed positively by both local and foreign businesses. The hotel chain groups and hotel industry are seen to be showing bullish behavior and optimistic attitude about their investments plans. The portfolio of the Okura Hotels and Resorts comprises of 23 renowned hotels. Of them, 16 are located in Japan while the rest are located in overseas. Now, the company selects Mumbai to set up their hotels.Some of the weaknesses and threats for the company in establishing in India is the fact the cost of land account for 50% of the project costs which is substantially less at the rate of 15% aboard. Also the existence of large, renowned and international players like Taj and Oberoi are expected to significant competitive threat for the company.

Learning Strategies and Information Processing Development Essay

Learning Strategies and Information Processing Development - Essay Example Learning disabilities remain manifest more as students advance through elementary years and get ready to master readiness skills. Their memory difficulties could be attributed to weak information processing relating to retrieval and storage of information, and ineffective strategies for retrieval and storage of messages (Smith, 2003). How attention, memory, recognition and knowledge relate to learning strategies. Delays in learning strategies and information processing abilities, in addition to a deficient knowledge base on which new knowledge could be attached, affect the capacity of students in processing and recalling information. The opportunity to learn would be lost whenever the attention of a student remains free or not maintained. This loss creates a deficiency of skills and knowledge, therefore, making learning less meaningful and forgettable. The learning-disabled students often become more impulsive and distractible compared to their peers. They also use less psychological control procedures to focus their learning (Smith, 2003). Preschoolers with learning disabilities remain more active as well as having difficulty in directing their attention. However, their activity declines from age three into adolescence. In this regard, their learning strategies should incorporate attributes that would appeal to their attention such as shape, color, and uniqueness. An overemphasis on deficit remediation in the school curriculum does not expose the learning disabled to a wide variety of ideas, information, and language with the ability to stimulate cognitive development. Thinking skills need to be developed from the initial stage of a child’s career at school. These include, but not limited to, skills for developing, interpreting, differentiating, testing, memorizing, organizing, managing time, and solving problems. Special education teachers also need to direct these students on how to solve problems and focus on essential concepts (Smith, 2003). In orde r to develop and maintain short and long-term memory, information should be made memorable through repetition or association. The entry behavior of students also influences their capacity to have a focused attention, memorize, and retrieve information. Long-term memory results from intensive and varied information processing in the working memory during the initial stages. However, the learning-disabled students possess inefficient memory since they have difficulty stimulating information from the memory and associating it with new knowledge. Hence, more information could be learnt when a student possesses more knowledge Smith, 2003). An efficient, long-term memory of information should integrate verbal rehearsal and visualization as learning strategies for enhancing memory. Moreover, naming and grouping of information may also be used especially for younger students to enable them verbalize and memorize concepts. These strategies would mature during the middle and high school years . Conversely, it would be worth noting that the identification of visual-perceptual delays in preschool children remains a difficult process since the basic perceptual skills of space and form develop at early stages of growth and development in life (Smith, 2003). How visual-perceptual, motor and language relate to information processing developmen

Outliers the Story of Success Essay Example for Free

Outliers the Story of Success Essay Outliers: The story of success by Malcolm Gladwell is a very interesting book with realistic contents that I will be applying in my personal and professional life in years to come. I use the term interesting in a sense that not only it is a quick read but it actually provides a method behind the madness of success. The biggest point that the book makes and I don’t agree fully but to a certain degree that there is no such thing as a self made man. Right place, right time, right talent in my eyes are the powerful variables that influence as well as motivate the success of a human being. In order for the chemistry of these variables to work right one has to have a desire to capitalize on these variables in order to be successful. What I mean by desire is hard work and dedication, a relentless want to be perfect, to be successful, and to be an outlier. Like I mentioned above one has to be at the right place at the right time and a will to be successful. I have been in the financial industry for a little over fifteen years with the last seven years in a leadership position. The last few years have allowed me opportunities over time to acquire and develop talent. Over the years I have seen good talent go to waste because the individual would not capitalize on the time, place, and resources available to be successful. Majority of times these individuals would not put in the time to be successful. On the other side of the argument the talented individuals who are successful were the first ones in and last ones out. They were always willing to try new things, were flexible to support the business by embracing change, they were willing to work long hours, and had this enthusiastic drive to â€Å"GET BETTER† at all times and under all circumstances. I have to agree with the ten thousand hour rule that the author talks about especially when he uses the Beatles as an example. In my humble opinion the Beatles are a great example but they are one of many as the ten thousand hour rule is true for all the talent that is out there whether you look at entertainment, sports, corporate world, or entrepreneurship. In others words one has to pay their dues, they have to do their time, they have to stick it out and while doing so they have grow and get better but above all they have to learn from their mistakes and make adjustments as needed, the word strategy comes to mind. As per the National Federation of State High School Association one million high school kids participate in football, one out of seventeen play college football. As per the National Collegiate Athletic Association nine in ten housand high school senior football players eventually end up in the National Football League. In the 2012 National Football League Draft, out of the one million students who participated in high school football only two hundred and fifty three players were selected. As a kid they had dreams to play football and they achieve their dreams by working hard, sometimes studying hard as well, putting in the hours by practicing longer than anybody else around them, learning, understanding, and practicing new plays. As a teenager their lives revolve around football once the love for the game has been developed and it is deep enough for them to work hard at representing their high school with new dreams of playing for a good college or university. So essentially out of millions of kids in America who have a dream to play professional football, thousands make it to colleges and universities with football on their mind. They still have to put in the time, the hours, they have to pay their dues to be successful because the dreams just got bigger as in the National Football League. Out of these few thousand kids and their dreams only a few hundred will be selected to be a part of the National Football League. I can go on and on about any of the professional sports and the success stories behind them or the stories about the shattered dreams based on poor choices but I am not going to; instead I will agree with all the points the author makes in his book. If you don’t put in the time you are not going to be successful no matter what kind of talent you have. If you are than it has to be a pure stroke of luck. The one point that I will not agree with the author is his theory of the self made man. A self made man has the discipline and the drive to capitalize and maximize his potential, his opportunity, the time, the place, and the luck effectively and efficiently. This discipline and drive is what makes him a self made man. Case in point Troy Aikman versus Quincy Carter of the Dallas Cowboys. They both played for the same team at its peak, both of them were early draft picks; both of them had promising baseball careers before they chose football over baseball. One is a hall of famer worth millions and is still going strong in his post football career the other one is an independent coach with a long history of arrest records. Did Aikman put in more time than Carter or was Carter less talented than Aikman? I would agree with the later because Aikman capitalized on his natural ability to throw football with his drive to succeed and is still going on. Carter on the other hand did not capitalize to be successful by making poor choices and not learning from his mistakes or in words he did not embrace change or remember the word strategy mentioned above? Quincy Carter simply did not change his strategy in life. Finally I would rate the book as an eight on a scale of ten with ten being the best. In closing I would like to point out that you don’t have to be Jewish or an immigrant to be successful you have to have the drive, the desire, the need to be successful. In order to do so you have to maximize your potential and opportunity effectively and efficiently keeping in mind that it was your potential that granted you the opportunity. Be willing to change by embracing it and learning from it.

Analysis of Ethiopia for Business Opportunities

Analysis of Ethiopia for Business Opportunities 1. Introduction 1.1 The Country Ethiopia is almost five times bigger in the size of the United Kingdom and 27 times in the size of the Netherlands, is geographically located in the east of Africa with border line Somalia(1626 km) from east , Eritrea(912km) on north ,Sudan(1606 km) from the west and Kenya (830 km from the south. Ethiopia has geographically importance due to easy access to reach the Middle East and Europe, increase its importance in international trade. Geographically having an area of approximately 1.12 million square kilometers (444,000 square miles) out of which land is on 1,119 million square kilometers and water is on 7444 square meters. Ethiopia is high plateau with central mountain ranges almost over the country is divided by Great Rift Valley. The major rivers in Ethiopia are Blue Nile, Awash, Baro, Omo, Tekezie and Wabe Shebele. Ethiopia has also small amount of natural resources with small reserves of platinum, gold, potash, copper, hydropower and natural gas. 1.2 The People Ethiopia is country with around 80 million people, and in comparison to other country it comes on 14th rank in world. Almost more than 80 percent of the population still lives in the rural areas. The age structure in Ethiopia is 0-14 years are (46.1%),15-64 years are (51.2%) and 65 years and over are (2.7%).Ethiopia has average birth rate of 2.7%. In Ethiopia is total freedom of religious practice, and the Christianity and Islam are the two main religions in Ethiopia with other religions which are in very number most of them are located in south side. Almost two-third of the population used the three main languages Amharic, Oromiffa and Tigrigna the official language of the Ethiopian government is Amharic. In schools, colleges and university teaching and medium of instruction are in English, also used mostly in the banking, insurance and business transactions, Arabic and Italian languages are also widely used in Ethiopia. Almost the 42.7 % of over 15 years old people can read and write mean having basic literacy rate. The Ethiopian government is spending almost 5.5 percent of their GDP in education programs. 1.3 The Government Ethiopia is conventional short form of name, and conventional long form of name is Federal Democratic Republic of Ethiopia. The first time election was held in 1995 and country adopted a new constitution and the government there is known as the federal republic government. The government involves in the foreign policy and relations, defense system and common interest benefits. The Federal State divisions are in nine ethnically based states vested with powers for self administration. The FDRE represent the common peoples interest and peoples of the states, the federal government is structured as a lines of bicameral parliament, with the Council of Peoples representatives being the highest authority of the Federal Government the representative of Councils Members are elected democratically for six year term. 1.4 Cities and Towns Addis Ababa, the largest city and capital of the Ethiopia, also is the seat of the Federal Government of Ethiopia. The capital city was founded in 1887 and population of around about 3 million. Addis Ababa is the host city for Organization for African Unity and the United Nations Economic Commission for Africa; also there is more international organization with their headquarters and branch offices. Addis Ababa I also centre point for business, commerce and industries. In Addis can find different manufacturing plants located in and around the city. There are lots of entertainment and sport facilities in the city, with national parks. The main centre of point are resort centers with hot springs and lake, all of them are easily accessible through road. The other important and big cities in term of trade and industries having potential of expansion are Awassa, Dire Dawa, Gondar, Dessie, Nazareth, Jimma, Harar, Bahir Dar, Mekele, Debre Markos and Nekemte. All of them are interconnected with Addis through road,most of them have their historical importance with good infrastructure facilities. 1.5 THE ECONOMY The Ethiopian economy is totally dependable on agriculture which has 45% of the Gross Domestic Product (GDP), 65 % of total exports and 85% of employment. Coffee is the main export product and its alone having a share of over 85 % of total agricultural exports. In Ethiopia different crops in different area of the country cultivated but the main crops are cereals, pulses, coffee, cotton, tobacco, fruits, sugarcane and oil seeds. The industrial sector plays also big role in economy and having almost 11% of share in total GDP, which provides their product to local and global markets. The most important products in term of local market and export are textiles, foodstuffs, tiles, paper, beverages, cement, semi- processed leather, finished leather products and non-metallic products. In Ethiopia even it is small reserve amount of natural resources and it contribute only 1% to the total GDP, but still there are lots of opportunities in mining to explore and contribute in Ethiopian economy. Communications There is total monopoly of Ethiopian Telecommunications corporations over the telephonic services open-wire, microwave radio relay; radio communication in the HF, VHF, and UHF frequencies; 2 domestic satellites provide the national trunk service. Ethiopia has only 1 public TV broadcast station which broadcasting it nationally and only 1 public radio broadcaster with stations in each state, there are some commercial and dozens of community radio stations. Transportation Till 2010 in Ethiopia there 61 airports, out of which 17 airports are with paved runways and 44 airports are unpaved. The railway is under joint control of Ethiopia and Djibouti, but most of it is inoperable and need lots of improvement and expansion to improve the transportation. The conditions of Ethiopian roads are also not in very good conditions out of 36469 km long road only 6980 k are in better conditions other are unpaved around about 29849 km. Ethiopia has 9 merchant marine 8 cargo and 1 roll on/ roll off, they are landlocked and uses the ports Djibouti in Djibouti and Berbera in Somalia. In Ethiopia transportation is a big problem and effects also in the business. Ethiopian government takes this problem very seriously and many projects are on progress for improvement and modernization of Ethiopian transportation system. 1 .6 Banking Systems 1.6.1 Introduction In Ethiopia banking system was introduced in 1905 with the coordination of Bank of Egypt and the first name of bank was Bank of Abyssinia which is controlled by private company in Ethiopia. Later in 1931 it was replaced by the Bank of Ethiopia. During the Italian invasion period and subsequent British occupation Ethiopia become one of the important places for East Africa Currency Board. Later again it is renamed as State bank of Ethiopia having two active departments involves in the process of separate function of issuing banks and commercial bank. In 1963 the bank is divided into two parts two new bank national Bank of Ethiopia involves in the process of centralizing and issuing bank and the second one the commercial bank of Ethiopia. In 1974 there was merging of maximum of financial institutes available tat time including state owned also some of them are The Agricultural and Industrial Development Bank The Savings and Mortgage Corporation of Ethiopia The Imperial Savings and Home Ownership Public Association The Addis Ababa Bank The Banco di Napoli The Banco di Roma In 1975 change in government policy and change into Marxist government bring again lots of changes in banking system like nationalization of private financial institutes and insurance companies. The big and important commercial bank of Ethiopia is now known as Addis Ababa bank and the total control of all banks and financial institutes are under supervision of National Bank of Ethiopia. The Ethiopian Insurances corporation take all power and control for the all insurance companies and for the home loan and renovation loan is provide by the new Housing and savings bank. 1.6.2 Current Conditions The whole banking system condition is still undeveloped and need lots of improvement and development. In Ethiopia there is also no stock exchange and foreign bank as the banking system is still not globalized, while higher government authorities are afraid of losing control over the economy because of globalizing the banking system. Thats why they have full control over the banking system even they decide the interest rate as per the high inflation rate. Below provided table to have a look on the condition of ease of doing business in Ethiopia. Table 1 Business Climate of Ethiopia As National Bank of Ethiopia is Ethiopian central bank and the state owned Commercial Bank is one of the biggest and largest bank in Ethiopia having approx. control of more than 75% of total banking assets in Ethiopia, tables 2 tried to explain the banking system in Ethiopia. Table 2 Value of Ethiopian Bank Assets Insurance companies and other financial institutions In Ethiopia the Ethiopia Insurance Corporation controls 10 insurance companies performing business in more than 200 branches all over the country Below in the table the number of branches and their capital are explained figures available are from 2007 and till then only nine insurance companies are in business the 10th company (Lion Insurance Company) comes in business after 2007 thats why it is not mention in table. Table 3: Branches and Capital of Insurance Companies in Ethiopia (Capital in Millions of Birr) Stock Market No stock exchange exists Other Types of Finance/Financial Market Micro finance After the establishment of the government in 1994/1995. It started also and supporting for the development of microfinance industry, the purpose of Ethiopian government to developed the microfinance industry to help poor people in both rural and urban area. According to the 2005 microfinance industry report in Ethiopia that there are 23 microfinance industries and around about more than 1 million peoples are connected directly to the industry. As from above it is cleared that government had totally prohibited any kind of foreign company involved in the process of financial or banking services in country. In Ethiopia microfinance industry can be opened by people having Ethiopian nationality and having full 100% share in company or by those organization which are totally settled and have their registration under the law and having their head office in Ethiopia. As in country most of the microfinance initial capital comes from the foreign investors and which leads to the not clear transparency of microfinance industry, normally person investing in the microfinance industry local or foreigner must enlist as a shareholder. As government authorized high authorities decided interest rate according to the high inflation rate, and in microfinance industry there is no fixed interest rate on credit according to law minimum interest on credit is 3%, which is a loss for those people wants to open microfinance industry in rural areas because of added administrative cost in capital of investment. Top ten reasons to do business in Ethiopia Political and social stability; Macro-economic stability and growing economy; Adequate guarantees and protections; Transparent laws and streamlined procedures; Ample investment opportunities; Abundant and trainable labor force; Wide domestic, regional and international market opportunity; Competitive investment incentive packages ; Welcoming attitude of the people to FDI; and Pleasant climate and fertile soils. 2. Foreign Market Entry Strategy 2.1 Introduction 2.1.1 Strategy Strategy is the direction and scope of an organization over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations. 2.1.2 Strategic Decisions Strategic decisions are likely to be complex in nature. This complexity is a defining feature of strategy and strategic decisions and is especially so in organizations with wide geographical scope, such as multinational firms, or wide ranges of products or services. Strategic decisions may also have to be made in situations of uncertainty about the future. Strategic decisions are likely to affect operational decisions: for example, an increased emphasis on consumer electronics would trigger off a whole series of new operational activities, such as finding new suppliers and building strong new brands. This link between overall strategy and operational aspects of the organization is important for two other reasons. First, if the operational aspects of the organization are not in line with the strategy, then, no matter how well considered the strategy is, it will not succeed. Second, it is at the operational level that real strategic advantage can be achieved. Indeed, competence in particular operational activities might determine which strategic developments might make most sense. Strategic decisions are also likely to demand an integrated approach to managing the organization. Managers have to cross functional and operational boundaries to deal with strategic problems and come to agreements with other managers who, inevitably, have different interests and perhaps different priorities. Managers may also have to sustain relationships and networks outside the organization, for example with suppliers, distributors and customers. Strategic decisions usually involve change in organizations which may prove difficult because of the heritage of resources and because of culture. These cultural issues are heightened following mergers as two very different cultures need to be brought closer together or at least learn how to tolerate each other. Indeed, this often proves difficult to achieve a large percentage of mergers fail to deliver their ‘promise for these reasons. 2.1.3 Levels of Strategy Corporate-level strategy: Itis concerned with the overall purpose and scope of an organization and how value will be added to the different parts (business units) of the organization. Business-level strategy: It is about how to compete successfully in particular markets. Operational strategies: These are concerned with how the component parts of an organization deliver effectively the corporate and business-level strategies in terms of resources, processes and people. 2.1.4 Strategic Management Strategic management includes understanding the strategic position of an organization, strategic choices for the future and turning strategy into action. The strategic position is concerned with the impact on strategy of the external environment, an organizations strategic capability (resources and competences) and the expectations and influence of stakeholders. Strategic choices involve understanding the underlying bases for future strategy at both the business unit and corporate levels and the options for developing strategy in terms of both the directions and methods of development. Strategy into action is concerned with ensuring that strategies are working in practice. Strategy development processes are the ways in which strategy develops in organizations. 2.2 Environment The most general ‘layer of the environment is often referred to as the macro environment. This consists of broad environmental factors that impact to a greater or lesser extent on almost all organizations. It is important to build up an understanding of how changes in the macro-environment are likely to impact on individual organizations. A starting point can be provided by the PESTEL framework which can be used to identify how future trends in the political, economic, social, technological, environmental and legal environments might impinge on organizations. This provides the broad ‘data from which the key drivers of change can be identified. These will differ from sector to sector and from country to country. Therefore they will have a different impact on one organization from another. If the future environment is likely to be very different from the past it is helpful to construct scenarios of possible futures. This helps managers consider how strategies might need to change depending on the different ways in which the business environment might change. Within this broad general environment the next ‘layer is called an industry or a sector. This is a group of organizations producing the same products or services. The five forces framework and the concept of cycles of competition can be useful in understanding how the competitive dynamics within and around an industry are changing. The most immediate layer of the environment consists of competitors and markets. Within most industries or sectors there will be many different organizations with different characteristics and competing on different bases. The concept of strategic groups can help with the identification of both direct and indirect competitors. Similarly customers expectations are not all the same. They have a range of different requirements the importance of which can be understood through the concepts of market segments and critical success factors. 2.2.1 Key driver of change Key drivers of change are forces likely to affect the structure of an industry, sector or market. There is an increasing trend to market globalization for a variety of reasons. In some markets, customer needs and preferences are becoming more similar. For example, there is increasing homogeneity of consumer tastes in goods such as soft drinks, jeans, electrical items (e.g. audio equipment) and personal computers. The opening of McDonalds outlets in most countries of the world signaled similar tendencies in fast food. As some markets globalize, those operating in such markets become global customers and may search for suppliers who can operate on a global basis. For example, the global clients of the major accountancy firms may expect the accountancy firms to provide global services. The development of global communication and distribution channels may drive globalization the obvious example being the impact of the internet. In turn, this may provide opportunities for transference of marketing (e.g. global brands) across countries. Marketing policies, brand names and identities, and advertising may all be developed globally. This further generates global demand and expectations from customers, and may also provide marketing cost advantages for global operators. Nor is the public sector immune from such forces. Universities are subject to similar trends influenced by changing delivery technologies through the internet. This means, for example, that there is developing a genuinely global market for MBA students particularly where the majority of ‘tuition is done online. Cost globalization may give potential for competitive advantage since some organizations will have greater access to and/or be more aware of these advantages than others. This is especially the case in industries in which large volume; standardized production is required for optimum economies of scale, as in many components for the electronics industry. There might also be cost advantages from the experience built through wider-scale operations. Other cost advantages might be achieved by central sourcing efficiencies from lowest-cost suppliers across the world. Country-specific costs, such as labor or exchange rates, encourage businesses to search globally for low cost in these respects as ways of matching the costs of competitors that have such advantages because of their location. For example, given increased reliability of communication and cost differentials of labor, software companies and call centers are being located in India, where there is highly skilled but low-cost staff. Other businesses face high costs of product development and may see advantages in operating globally with fewer products rather than incurring the costs of wide ranges of products on a more limited geographical scale. The activities and policies of governments have also tended to drive the globalization of industry. Political changes in the 1990s meant that almost all trading nations function with market-based economies and their trade policies have tended to encourage free markets between nations. Globalization has been further encouraged by technical standardization between countries of many products, such as in the automobile, aerospace and computing industries. It may also be that particular host governments actively seek to encourage global operators to base themselves in their countries. However, it is worth noting that in many industries country-specific regulations still persists and reduces the extent to which global strategies are possible. Also, the early 2000s have seen a rise in citizen activism about the impact of globalization on developing countries most notably at meetings of the World Trade Organization Changes in the macro-environment are increasing global competition which, in turn, encourages further globalization. If the levels of exports and imports between countries are high, it increases interaction between competitors on a more global scale. If a business is competing globally, it also tends to place globalization pressures on competitors, especially if customers are also operating on a global basis. It may also be that the interdependence of a companys operations across the world encourages the globalization of its competitors. For example, if a company has sought out low-cost production sites in different countries, these low costs may be used to subsidize competitive activity in high-cost areas against local competitors, thus encouraging them to follow similar strategies. 2.2.2 Industries and sectors The macro-environment might influence the success or failure of an organizations strategies. But the impact of these general factors tends to surface in the more immediate environment through changes in the competitive forces on organizations. An important aspect of this for most organizations will be competition within their industry or sector. Economic theory defines an industry as ‘a group of firms producing the same principal product or, more broadly, ‘a group of firms producing products that are close substitutes for each other. This concept of an industry can be extended into the public services through the idea of a sector. Social services, health care or educations also have many producers of the same kinds of services. From a strategic management perspective it is useful for managers in any organization to understand the competitive forces acting on and between organizations in the same industry or sector since this will determine the attractiveness of that industry and the way in which individual organizations might choose to compete. It may inform important decisions about product/market strategy and whether to leave or enter industries or sectors. It is important to remember that the boundaries of an industry may be changing for example, by convergence of previously separate ‘industries such as between computing, telecommunications and entertainment. Convergence is where previously separate industries begin to overlap in terms of activities, technologies, products and customers. There are two sets of ‘forces that might drive convergence. First, convergence might be supply-led where organizations start to behave as though there are linkages between the separate industries or sectors. This is very common in the public services where sectors seem to be constantly bundled and un-bundled into ministries with ever-changing names (‘Education, ‘Education and Science, ‘Education and Employment, ‘Education and Skills etc.). This type of convergence may be driven by external factors in the business environment. For example, governments can help or hinder convergence through regulation or deregulation a major factor in the financial services sector in many countries. The boundaries of an industry might also be destroyed by other forces in the macro-environment. For example, e-commerce is destroying the boundary of traditional retailing by offering manufacturers new or complementary ways to trade what are now being called new ‘business models12 such as websites or e-auctions. But the real test of these types of changes is the extent to which consumers see benefit to them in any of this supply-side convergence. So, secondly, convergence may also occur through demand-side (market) forces where consumers start to behave as though industries have converged. For example, they start to substitute one product with another (e.g. TVs and PCs). Or they start to see links between complementary products that they want to have ‘bundled. The package holiday is an example of bundling air travel, hotels and entertainment to form a new market segment in the travel industry. 2.2.3 Competitors and market An industry or sector may be a too-general level to provide for a detailed understanding  of competition. For example, Ford and Morgan Cars are in the same industry (automobiles) but are they competitors? The former is a publicly quoted multinational business; the latter is owned by a British family, produces about 500 cars a year and concentrates on a specialist market niche where customers want hand-built cars and are prepared to wait up to four years for one. In a given industry there may be many companies each of which has different capabilities and which compete on different bases. This is the concept of strategic groups. But  competition occurs in markets which are not confined to the boundaries of an industry and there will almost certainly be important differences in the expectations of different customer groups. This is the concept of market segments. What links these two issues is an understanding of what customers value. Strategic groups are organizations within an industry or sector with similar strategic  characteristics, following similar strategies or competing on similar bases. These characteristics are different from those in other strategic groups in the same industry or sector. For example, in grocery retailing, supermarkets, convenience stores and corner shops are three of the strategic groups. There may be many different characteristics that distinguish between strategic groups but these can be grouped into two major categories .First, the scope of an organizations activities (such as product range, geographical coverage and range  of distribution channels used). Second, the resource commitment (such as brands, marketing spend and extent of vertical integration). Which of these characteristics are especially relevant in terms of a given industry needs to be understood in terms of the history and development of that industry and the forces at work in the environment. 2. Market segments The concept of strategic groups discussed above helps with understanding the similarities and differences in the characteristics of ‘producers those organizations that are actual or potential competitors. However, the success or failure of organizations is also concerned with how well they understand customer needs and are able to meet those needs. So an understanding of markets is crucial. In most markets there is a wide diversity of customers needs, so the concept of market segments can be useful in identifying similarities and differences between groups of customers or users. A market segment is a group of customers who have similar needs that are different from customer needs in other parts of the Market 2.2.4 Opportunities and threat The critical issue is the implications that are drawn from this understanding in guiding strategic decisions and choices. There is usually a need to understand in a more detailed way how this collection of environmental factors might influence strategic success or failure. This can be done in more than one way. This identification of opportunities and threats can be extremely valuable when thinking about strategic choices for the future. A strategic gap is an opportunity in the competitive environment that is not being fully exploited by competitors. By using some of the frameworks described in this chapter, managers can begin to identify opportunities to gain competitive advantage in this way: Opportunities in substitute industries Organizations face competition from industries that are producing substitutes. But substitution also provides opportunities. In order to identify gaps a realistic assessment has to be made of the relative merits of the products/technologies (incumbent and potential substitutes) in the eyes of the customer. An example would be software companies substituting electronic versions of reference books and atlases for the traditional paper versions. The paper versions have more advantages than meet the eye: no hardware requirement (hence greater portability) and the ability to browse are two important benefits. This means that software producers need to design features to counter the strengths of the paper versions; for example, the search features in the software. Of course, as computer hardware develops into a new generation of portable handheld devices, this particular shortcoming of electronic versions might be rectified. Opportunities in other strategic groups or strategic spaces It is also possible to identify opportunities by looking across strategic groups particularly if changes in the macro-environment make new market spaces economically viable. For example, deregulation of markets (say in electricity generation and distribution) and advances in IT (say with educational study programs) could both create new market gaps. In the first case, the locally based smaller-scale generation of electricity becomes viable possibly linked to waste incineration plants. In the latter case, geography can be ‘shrunk and educational programs delivered across continents through the internet and teleconferencing (together with local tutorial support). New strategic groups emerge in these industries/sectors. Opportunities in the chain of buyers It was noted that this can be confusing, as there may be several people involved in the overall purchase decision. The user is one party but they may not buy the product themselves. There may be other influencers on the purchase decision too. Importantly, each of these parties may  value different aspects of the product or service. These distinctions are often quite marked in business-to-business transactions, say with the purchase of capital equipment. The purchasing department may be looking for low prices and financial stability of suppliers. The user department (production) may place emphasis on special product features. Others such as the marketing department may be concerned with whether the equipment will speed throughput and reduce delivery times. By considering who is the ‘most profitable buyer an organization  may shift its view of the market and aim its promotion and selling at those ‘buyers with the intention of creating new strategic customers. Opportunities for complementary products and services This involves a consideration of the potential value of complementary products and services. For example, in book retailing the overall ‘ Analysis of Ethiopia for Business Opportunities Analysis of Ethiopia for Business Opportunities 1. Introduction 1.1 The Country Ethiopia is almost five times bigger in the size of the United Kingdom and 27 times in the size of the Netherlands, is geographically located in the east of Africa with border line Somalia(1626 km) from east , Eritrea(912km) on north ,Sudan(1606 km) from the west and Kenya (830 km from the south. Ethiopia has geographically importance due to easy access to reach the Middle East and Europe, increase its importance in international trade. Geographically having an area of approximately 1.12 million square kilometers (444,000 square miles) out of which land is on 1,119 million square kilometers and water is on 7444 square meters. Ethiopia is high plateau with central mountain ranges almost over the country is divided by Great Rift Valley. The major rivers in Ethiopia are Blue Nile, Awash, Baro, Omo, Tekezie and Wabe Shebele. Ethiopia has also small amount of natural resources with small reserves of platinum, gold, potash, copper, hydropower and natural gas. 1.2 The People Ethiopia is country with around 80 million people, and in comparison to other country it comes on 14th rank in world. Almost more than 80 percent of the population still lives in the rural areas. The age structure in Ethiopia is 0-14 years are (46.1%),15-64 years are (51.2%) and 65 years and over are (2.7%).Ethiopia has average birth rate of 2.7%. In Ethiopia is total freedom of religious practice, and the Christianity and Islam are the two main religions in Ethiopia with other religions which are in very number most of them are located in south side. Almost two-third of the population used the three main languages Amharic, Oromiffa and Tigrigna the official language of the Ethiopian government is Amharic. In schools, colleges and university teaching and medium of instruction are in English, also used mostly in the banking, insurance and business transactions, Arabic and Italian languages are also widely used in Ethiopia. Almost the 42.7 % of over 15 years old people can read and write mean having basic literacy rate. The Ethiopian government is spending almost 5.5 percent of their GDP in education programs. 1.3 The Government Ethiopia is conventional short form of name, and conventional long form of name is Federal Democratic Republic of Ethiopia. The first time election was held in 1995 and country adopted a new constitution and the government there is known as the federal republic government. The government involves in the foreign policy and relations, defense system and common interest benefits. The Federal State divisions are in nine ethnically based states vested with powers for self administration. The FDRE represent the common peoples interest and peoples of the states, the federal government is structured as a lines of bicameral parliament, with the Council of Peoples representatives being the highest authority of the Federal Government the representative of Councils Members are elected democratically for six year term. 1.4 Cities and Towns Addis Ababa, the largest city and capital of the Ethiopia, also is the seat of the Federal Government of Ethiopia. The capital city was founded in 1887 and population of around about 3 million. Addis Ababa is the host city for Organization for African Unity and the United Nations Economic Commission for Africa; also there is more international organization with their headquarters and branch offices. Addis Ababa I also centre point for business, commerce and industries. In Addis can find different manufacturing plants located in and around the city. There are lots of entertainment and sport facilities in the city, with national parks. The main centre of point are resort centers with hot springs and lake, all of them are easily accessible through road. The other important and big cities in term of trade and industries having potential of expansion are Awassa, Dire Dawa, Gondar, Dessie, Nazareth, Jimma, Harar, Bahir Dar, Mekele, Debre Markos and Nekemte. All of them are interconnected with Addis through road,most of them have their historical importance with good infrastructure facilities. 1.5 THE ECONOMY The Ethiopian economy is totally dependable on agriculture which has 45% of the Gross Domestic Product (GDP), 65 % of total exports and 85% of employment. Coffee is the main export product and its alone having a share of over 85 % of total agricultural exports. In Ethiopia different crops in different area of the country cultivated but the main crops are cereals, pulses, coffee, cotton, tobacco, fruits, sugarcane and oil seeds. The industrial sector plays also big role in economy and having almost 11% of share in total GDP, which provides their product to local and global markets. The most important products in term of local market and export are textiles, foodstuffs, tiles, paper, beverages, cement, semi- processed leather, finished leather products and non-metallic products. In Ethiopia even it is small reserve amount of natural resources and it contribute only 1% to the total GDP, but still there are lots of opportunities in mining to explore and contribute in Ethiopian economy. Communications There is total monopoly of Ethiopian Telecommunications corporations over the telephonic services open-wire, microwave radio relay; radio communication in the HF, VHF, and UHF frequencies; 2 domestic satellites provide the national trunk service. Ethiopia has only 1 public TV broadcast station which broadcasting it nationally and only 1 public radio broadcaster with stations in each state, there are some commercial and dozens of community radio stations. Transportation Till 2010 in Ethiopia there 61 airports, out of which 17 airports are with paved runways and 44 airports are unpaved. The railway is under joint control of Ethiopia and Djibouti, but most of it is inoperable and need lots of improvement and expansion to improve the transportation. The conditions of Ethiopian roads are also not in very good conditions out of 36469 km long road only 6980 k are in better conditions other are unpaved around about 29849 km. Ethiopia has 9 merchant marine 8 cargo and 1 roll on/ roll off, they are landlocked and uses the ports Djibouti in Djibouti and Berbera in Somalia. In Ethiopia transportation is a big problem and effects also in the business. Ethiopian government takes this problem very seriously and many projects are on progress for improvement and modernization of Ethiopian transportation system. 1 .6 Banking Systems 1.6.1 Introduction In Ethiopia banking system was introduced in 1905 with the coordination of Bank of Egypt and the first name of bank was Bank of Abyssinia which is controlled by private company in Ethiopia. Later in 1931 it was replaced by the Bank of Ethiopia. During the Italian invasion period and subsequent British occupation Ethiopia become one of the important places for East Africa Currency Board. Later again it is renamed as State bank of Ethiopia having two active departments involves in the process of separate function of issuing banks and commercial bank. In 1963 the bank is divided into two parts two new bank national Bank of Ethiopia involves in the process of centralizing and issuing bank and the second one the commercial bank of Ethiopia. In 1974 there was merging of maximum of financial institutes available tat time including state owned also some of them are The Agricultural and Industrial Development Bank The Savings and Mortgage Corporation of Ethiopia The Imperial Savings and Home Ownership Public Association The Addis Ababa Bank The Banco di Napoli The Banco di Roma In 1975 change in government policy and change into Marxist government bring again lots of changes in banking system like nationalization of private financial institutes and insurance companies. The big and important commercial bank of Ethiopia is now known as Addis Ababa bank and the total control of all banks and financial institutes are under supervision of National Bank of Ethiopia. The Ethiopian Insurances corporation take all power and control for the all insurance companies and for the home loan and renovation loan is provide by the new Housing and savings bank. 1.6.2 Current Conditions The whole banking system condition is still undeveloped and need lots of improvement and development. In Ethiopia there is also no stock exchange and foreign bank as the banking system is still not globalized, while higher government authorities are afraid of losing control over the economy because of globalizing the banking system. Thats why they have full control over the banking system even they decide the interest rate as per the high inflation rate. Below provided table to have a look on the condition of ease of doing business in Ethiopia. Table 1 Business Climate of Ethiopia As National Bank of Ethiopia is Ethiopian central bank and the state owned Commercial Bank is one of the biggest and largest bank in Ethiopia having approx. control of more than 75% of total banking assets in Ethiopia, tables 2 tried to explain the banking system in Ethiopia. Table 2 Value of Ethiopian Bank Assets Insurance companies and other financial institutions In Ethiopia the Ethiopia Insurance Corporation controls 10 insurance companies performing business in more than 200 branches all over the country Below in the table the number of branches and their capital are explained figures available are from 2007 and till then only nine insurance companies are in business the 10th company (Lion Insurance Company) comes in business after 2007 thats why it is not mention in table. Table 3: Branches and Capital of Insurance Companies in Ethiopia (Capital in Millions of Birr) Stock Market No stock exchange exists Other Types of Finance/Financial Market Micro finance After the establishment of the government in 1994/1995. It started also and supporting for the development of microfinance industry, the purpose of Ethiopian government to developed the microfinance industry to help poor people in both rural and urban area. According to the 2005 microfinance industry report in Ethiopia that there are 23 microfinance industries and around about more than 1 million peoples are connected directly to the industry. As from above it is cleared that government had totally prohibited any kind of foreign company involved in the process of financial or banking services in country. In Ethiopia microfinance industry can be opened by people having Ethiopian nationality and having full 100% share in company or by those organization which are totally settled and have their registration under the law and having their head office in Ethiopia. As in country most of the microfinance initial capital comes from the foreign investors and which leads to the not clear transparency of microfinance industry, normally person investing in the microfinance industry local or foreigner must enlist as a shareholder. As government authorized high authorities decided interest rate according to the high inflation rate, and in microfinance industry there is no fixed interest rate on credit according to law minimum interest on credit is 3%, which is a loss for those people wants to open microfinance industry in rural areas because of added administrative cost in capital of investment. Top ten reasons to do business in Ethiopia Political and social stability; Macro-economic stability and growing economy; Adequate guarantees and protections; Transparent laws and streamlined procedures; Ample investment opportunities; Abundant and trainable labor force; Wide domestic, regional and international market opportunity; Competitive investment incentive packages ; Welcoming attitude of the people to FDI; and Pleasant climate and fertile soils. 2. Foreign Market Entry Strategy 2.1 Introduction 2.1.1 Strategy Strategy is the direction and scope of an organization over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations. 2.1.2 Strategic Decisions Strategic decisions are likely to be complex in nature. This complexity is a defining feature of strategy and strategic decisions and is especially so in organizations with wide geographical scope, such as multinational firms, or wide ranges of products or services. Strategic decisions may also have to be made in situations of uncertainty about the future. Strategic decisions are likely to affect operational decisions: for example, an increased emphasis on consumer electronics would trigger off a whole series of new operational activities, such as finding new suppliers and building strong new brands. This link between overall strategy and operational aspects of the organization is important for two other reasons. First, if the operational aspects of the organization are not in line with the strategy, then, no matter how well considered the strategy is, it will not succeed. Second, it is at the operational level that real strategic advantage can be achieved. Indeed, competence in particular operational activities might determine which strategic developments might make most sense. Strategic decisions are also likely to demand an integrated approach to managing the organization. Managers have to cross functional and operational boundaries to deal with strategic problems and come to agreements with other managers who, inevitably, have different interests and perhaps different priorities. Managers may also have to sustain relationships and networks outside the organization, for example with suppliers, distributors and customers. Strategic decisions usually involve change in organizations which may prove difficult because of the heritage of resources and because of culture. These cultural issues are heightened following mergers as two very different cultures need to be brought closer together or at least learn how to tolerate each other. Indeed, this often proves difficult to achieve a large percentage of mergers fail to deliver their ‘promise for these reasons. 2.1.3 Levels of Strategy Corporate-level strategy: Itis concerned with the overall purpose and scope of an organization and how value will be added to the different parts (business units) of the organization. Business-level strategy: It is about how to compete successfully in particular markets. Operational strategies: These are concerned with how the component parts of an organization deliver effectively the corporate and business-level strategies in terms of resources, processes and people. 2.1.4 Strategic Management Strategic management includes understanding the strategic position of an organization, strategic choices for the future and turning strategy into action. The strategic position is concerned with the impact on strategy of the external environment, an organizations strategic capability (resources and competences) and the expectations and influence of stakeholders. Strategic choices involve understanding the underlying bases for future strategy at both the business unit and corporate levels and the options for developing strategy in terms of both the directions and methods of development. Strategy into action is concerned with ensuring that strategies are working in practice. Strategy development processes are the ways in which strategy develops in organizations. 2.2 Environment The most general ‘layer of the environment is often referred to as the macro environment. This consists of broad environmental factors that impact to a greater or lesser extent on almost all organizations. It is important to build up an understanding of how changes in the macro-environment are likely to impact on individual organizations. A starting point can be provided by the PESTEL framework which can be used to identify how future trends in the political, economic, social, technological, environmental and legal environments might impinge on organizations. This provides the broad ‘data from which the key drivers of change can be identified. These will differ from sector to sector and from country to country. Therefore they will have a different impact on one organization from another. If the future environment is likely to be very different from the past it is helpful to construct scenarios of possible futures. This helps managers consider how strategies might need to change depending on the different ways in which the business environment might change. Within this broad general environment the next ‘layer is called an industry or a sector. This is a group of organizations producing the same products or services. The five forces framework and the concept of cycles of competition can be useful in understanding how the competitive dynamics within and around an industry are changing. The most immediate layer of the environment consists of competitors and markets. Within most industries or sectors there will be many different organizations with different characteristics and competing on different bases. The concept of strategic groups can help with the identification of both direct and indirect competitors. Similarly customers expectations are not all the same. They have a range of different requirements the importance of which can be understood through the concepts of market segments and critical success factors. 2.2.1 Key driver of change Key drivers of change are forces likely to affect the structure of an industry, sector or market. There is an increasing trend to market globalization for a variety of reasons. In some markets, customer needs and preferences are becoming more similar. For example, there is increasing homogeneity of consumer tastes in goods such as soft drinks, jeans, electrical items (e.g. audio equipment) and personal computers. The opening of McDonalds outlets in most countries of the world signaled similar tendencies in fast food. As some markets globalize, those operating in such markets become global customers and may search for suppliers who can operate on a global basis. For example, the global clients of the major accountancy firms may expect the accountancy firms to provide global services. The development of global communication and distribution channels may drive globalization the obvious example being the impact of the internet. In turn, this may provide opportunities for transference of marketing (e.g. global brands) across countries. Marketing policies, brand names and identities, and advertising may all be developed globally. This further generates global demand and expectations from customers, and may also provide marketing cost advantages for global operators. Nor is the public sector immune from such forces. Universities are subject to similar trends influenced by changing delivery technologies through the internet. This means, for example, that there is developing a genuinely global market for MBA students particularly where the majority of ‘tuition is done online. Cost globalization may give potential for competitive advantage since some organizations will have greater access to and/or be more aware of these advantages than others. This is especially the case in industries in which large volume; standardized production is required for optimum economies of scale, as in many components for the electronics industry. There might also be cost advantages from the experience built through wider-scale operations. Other cost advantages might be achieved by central sourcing efficiencies from lowest-cost suppliers across the world. Country-specific costs, such as labor or exchange rates, encourage businesses to search globally for low cost in these respects as ways of matching the costs of competitors that have such advantages because of their location. For example, given increased reliability of communication and cost differentials of labor, software companies and call centers are being located in India, where there is highly skilled but low-cost staff. Other businesses face high costs of product development and may see advantages in operating globally with fewer products rather than incurring the costs of wide ranges of products on a more limited geographical scale. The activities and policies of governments have also tended to drive the globalization of industry. Political changes in the 1990s meant that almost all trading nations function with market-based economies and their trade policies have tended to encourage free markets between nations. Globalization has been further encouraged by technical standardization between countries of many products, such as in the automobile, aerospace and computing industries. It may also be that particular host governments actively seek to encourage global operators to base themselves in their countries. However, it is worth noting that in many industries country-specific regulations still persists and reduces the extent to which global strategies are possible. Also, the early 2000s have seen a rise in citizen activism about the impact of globalization on developing countries most notably at meetings of the World Trade Organization Changes in the macro-environment are increasing global competition which, in turn, encourages further globalization. If the levels of exports and imports between countries are high, it increases interaction between competitors on a more global scale. If a business is competing globally, it also tends to place globalization pressures on competitors, especially if customers are also operating on a global basis. It may also be that the interdependence of a companys operations across the world encourages the globalization of its competitors. For example, if a company has sought out low-cost production sites in different countries, these low costs may be used to subsidize competitive activity in high-cost areas against local competitors, thus encouraging them to follow similar strategies. 2.2.2 Industries and sectors The macro-environment might influence the success or failure of an organizations strategies. But the impact of these general factors tends to surface in the more immediate environment through changes in the competitive forces on organizations. An important aspect of this for most organizations will be competition within their industry or sector. Economic theory defines an industry as ‘a group of firms producing the same principal product or, more broadly, ‘a group of firms producing products that are close substitutes for each other. This concept of an industry can be extended into the public services through the idea of a sector. Social services, health care or educations also have many producers of the same kinds of services. From a strategic management perspective it is useful for managers in any organization to understand the competitive forces acting on and between organizations in the same industry or sector since this will determine the attractiveness of that industry and the way in which individual organizations might choose to compete. It may inform important decisions about product/market strategy and whether to leave or enter industries or sectors. It is important to remember that the boundaries of an industry may be changing for example, by convergence of previously separate ‘industries such as between computing, telecommunications and entertainment. Convergence is where previously separate industries begin to overlap in terms of activities, technologies, products and customers. There are two sets of ‘forces that might drive convergence. First, convergence might be supply-led where organizations start to behave as though there are linkages between the separate industries or sectors. This is very common in the public services where sectors seem to be constantly bundled and un-bundled into ministries with ever-changing names (‘Education, ‘Education and Science, ‘Education and Employment, ‘Education and Skills etc.). This type of convergence may be driven by external factors in the business environment. For example, governments can help or hinder convergence through regulation or deregulation a major factor in the financial services sector in many countries. The boundaries of an industry might also be destroyed by other forces in the macro-environment. For example, e-commerce is destroying the boundary of traditional retailing by offering manufacturers new or complementary ways to trade what are now being called new ‘business models12 such as websites or e-auctions. But the real test of these types of changes is the extent to which consumers see benefit to them in any of this supply-side convergence. So, secondly, convergence may also occur through demand-side (market) forces where consumers start to behave as though industries have converged. For example, they start to substitute one product with another (e.g. TVs and PCs). Or they start to see links between complementary products that they want to have ‘bundled. The package holiday is an example of bundling air travel, hotels and entertainment to form a new market segment in the travel industry. 2.2.3 Competitors and market An industry or sector may be a too-general level to provide for a detailed understanding  of competition. For example, Ford and Morgan Cars are in the same industry (automobiles) but are they competitors? The former is a publicly quoted multinational business; the latter is owned by a British family, produces about 500 cars a year and concentrates on a specialist market niche where customers want hand-built cars and are prepared to wait up to four years for one. In a given industry there may be many companies each of which has different capabilities and which compete on different bases. This is the concept of strategic groups. But  competition occurs in markets which are not confined to the boundaries of an industry and there will almost certainly be important differences in the expectations of different customer groups. This is the concept of market segments. What links these two issues is an understanding of what customers value. Strategic groups are organizations within an industry or sector with similar strategic  characteristics, following similar strategies or competing on similar bases. These characteristics are different from those in other strategic groups in the same industry or sector. For example, in grocery retailing, supermarkets, convenience stores and corner shops are three of the strategic groups. There may be many different characteristics that distinguish between strategic groups but these can be grouped into two major categories .First, the scope of an organizations activities (such as product range, geographical coverage and range  of distribution channels used). Second, the resource commitment (such as brands, marketing spend and extent of vertical integration). Which of these characteristics are especially relevant in terms of a given industry needs to be understood in terms of the history and development of that industry and the forces at work in the environment. 2. Market segments The concept of strategic groups discussed above helps with understanding the similarities and differences in the characteristics of ‘producers those organizations that are actual or potential competitors. However, the success or failure of organizations is also concerned with how well they understand customer needs and are able to meet those needs. So an understanding of markets is crucial. In most markets there is a wide diversity of customers needs, so the concept of market segments can be useful in identifying similarities and differences between groups of customers or users. A market segment is a group of customers who have similar needs that are different from customer needs in other parts of the Market 2.2.4 Opportunities and threat The critical issue is the implications that are drawn from this understanding in guiding strategic decisions and choices. There is usually a need to understand in a more detailed way how this collection of environmental factors might influence strategic success or failure. This can be done in more than one way. This identification of opportunities and threats can be extremely valuable when thinking about strategic choices for the future. A strategic gap is an opportunity in the competitive environment that is not being fully exploited by competitors. By using some of the frameworks described in this chapter, managers can begin to identify opportunities to gain competitive advantage in this way: Opportunities in substitute industries Organizations face competition from industries that are producing substitutes. But substitution also provides opportunities. In order to identify gaps a realistic assessment has to be made of the relative merits of the products/technologies (incumbent and potential substitutes) in the eyes of the customer. An example would be software companies substituting electronic versions of reference books and atlases for the traditional paper versions. The paper versions have more advantages than meet the eye: no hardware requirement (hence greater portability) and the ability to browse are two important benefits. This means that software producers need to design features to counter the strengths of the paper versions; for example, the search features in the software. Of course, as computer hardware develops into a new generation of portable handheld devices, this particular shortcoming of electronic versions might be rectified. Opportunities in other strategic groups or strategic spaces It is also possible to identify opportunities by looking across strategic groups particularly if changes in the macro-environment make new market spaces economically viable. For example, deregulation of markets (say in electricity generation and distribution) and advances in IT (say with educational study programs) could both create new market gaps. In the first case, the locally based smaller-scale generation of electricity becomes viable possibly linked to waste incineration plants. In the latter case, geography can be ‘shrunk and educational programs delivered across continents through the internet and teleconferencing (together with local tutorial support). New strategic groups emerge in these industries/sectors. Opportunities in the chain of buyers It was noted that this can be confusing, as there may be several people involved in the overall purchase decision. The user is one party but they may not buy the product themselves. There may be other influencers on the purchase decision too. Importantly, each of these parties may  value different aspects of the product or service. These distinctions are often quite marked in business-to-business transactions, say with the purchase of capital equipment. The purchasing department may be looking for low prices and financial stability of suppliers. The user department (production) may place emphasis on special product features. Others such as the marketing department may be concerned with whether the equipment will speed throughput and reduce delivery times. By considering who is the ‘most profitable buyer an organization  may shift its view of the market and aim its promotion and selling at those ‘buyers with the intention of creating new strategic customers. Opportunities for complementary products and services This involves a consideration of the potential value of complementary products and services. For example, in book retailing the overall ‘