Introduction To Aircraft Manufacturing Industry Marketing Essay

Introduction To Aircraft Manufacturing Industry Marketing Essay The Aircraft Industry is a duopoly industry comprising of Airbus (EU) and Boeing (US). If there are to be viewed from political consensus they are two-party political system. Anthony Downs proposed a classic model in the political science that suits the situation in the perfect way. His proposal reversed the conservative connection between party ideologies and elections. He said that instead of parties achieving victory in the elections on the basis of the appropriateness of their agenda, his findings give elections pre-eminence, with insinuation that all actions taken by the party are aimed at maximising votes. According to Downes, both parties will try to resemble each other as much as possible. Both parties will keep their policies modestly different from each other. Also majority of voters only want to see minor alterations in government functionality. The Market of large and mid size aircrafts works on the same ideology. There is an immense consensus among market players to what an attractive product comprises, that is, an economically efficient and safe aircraft. But there are also some interest factions that have wagered in product design, just as there are much potential groups within a democratic system(Ibsen n.d.). Â  The Government of the United States and its Federal Aviation Administration (FAA) are considered to be influential as they look upon the largest air transport market in the world. Regulations laid by the European and United states government will prove to be a major driving force for orders of new aircraft in the coming years. In the similar way, the deregulation of European airlines, which begun in 1990s, promises to expand the markets for smaller regional jets(Ibsen n.d.). Trade of large commercial jetliners has been tariff free under the agreement of General Agreement on Tariffs and Trade (GATT). The high degree of political intervention has effect on the purchase of aircraft. The decision of buyers to buy which aircraft depends on the political reasons because the support and interference from the government could effect the future of buyers. For Example, presently Boeings biggest market is China and is estimated to be for next twenty years. As a result Chinas purchase of boeing aircrafts has led to lot of political influence in the United States(Ibsen n.d.). ECONOMIC FACTORS Air traffic in US and UK is likely to increase as they have just recovered from the recession. The commercial aircraft is estimated to rise worth US$ 2 trillion in the coming twenty years, which will result into need of 16,600 new aircrafts (estimated). The largest demand is expected to come from airlines from China, US and India. Huge amount of growth is expected from the Middle East countries. It is expected that China alone will need 2,200 new aircrafts to meet its travel needs. Also, international freight sector is estimated to grow by 253% in the next twenty years (Irwin Pavcnik n.d.). China being the biggest emerging market and considering its population size, the growth in air passengers is likely to shoot up which would result in increasing demand for new aircrafts (The Economist n.d.). High Oil prices: towering oil prices have elevated the operating cost of airlines. In the year 2007, the worldwide airline industry had to pay 136 billion US dollars for fuels, its a 300% increase compared to what they had to pay in 2003. Even in 2008, when crude oil prices fell dramatically, it still accounted for 32% of the operating expenses. Global GDP- the primary factors in determining the demand of aircraft and growth in the industry is the GDP, which is expected to grow by 3.2% by 2030 The global recession: The recession which impelled a theatrical drop in load factors in the middle of 2008. In response, airlines have been putting aircrafts out of service and rethinking plans to order replacement for the existing aircrafts. In the third quarter of 2008 24 airlines went bankrupt. The loses during this period were estimated about 4-8 billion US dollars. The credit crunch: The credit crunch in combination with the above mentioned factors, has made it hard to purchase new aircrafts, airlines are finding difficulties to finance new aircrafts. Despite of the credit crunch, orders for business and commercial jets have seen increase at the beginning of 2008, but the credit crises has resulted in delays and deferrals and failure to take delivery of many aircrafts(Captain n.d.). SOCIAL FACTORS Recent changes in society have led to increase in air travel. Also changes in life style of people and the viewpoint of air journey being a feasible option. Demand of air travel is driven by convenience. However, the trend is changing as the consumers travel decisions is primarily based on price. Rising cost and competition produced by low-cost carriers is affecting majority of Airlines. Business travels, once a stable of income, now is a conduct by corporate travel guidelines. As a consequence, airlines are combining their networks to utilize economies of scale, minimize environmental impact and offer smaller markets with new and improved services. The noise generated and CO2 emission near the airport is also a thing of higher concern as people living near the airport are pressurizing authorities to change their operating style(Ferreri n.d.). TECHNOLOGICAL FACTORS In the commercial aviation industry, there are huge amount of costs connected with Research and development for the development of a new aircraft. European Union governments sustain European technology R D sector, just as the united states government does, though FAA, NASA, Department of Defence (DOD) and programs that reliefs export tax (Colantonio n.d.). Though United states has three times more support than the European union. The Aircraft industry is very demanding with very high quantity of time and money dedicated to innovations and RD. Now a days carbon fiber is used for the construction of an Aircraft body. (example: A350 XWB with 50% carbon fiber body) Concentration on development on making more fuel efficient engines for longer ranges (Szodruch et al. n.d.). Use of alternative sources of fuel to counteract raising oil prices The development of supersonic aircraft is also a chance because it will lead to creation of whole new market segment. Commercial carriers will buy these aircrafts to meet customers demand of reaching the destination quickly and on time. The largest and cost efficient advancement for commercial aircraft industry is the faster designing of planes. The augmented manufacturing time will save aircrafts manufacturers time on labor and help them to better utilize resources. For Example: Boeing 777 used computer to design a prototype, this saved them the cost of building a real prototype(Szodruch et al. n.d.). In todays competitive world, robots are also considered an effective tool for the manufacturing of aircraft. LEGAL FACTORS There are many restrictions when it comes to entering the market but due to globalisation circumstances have changed and also due to US open skies agreement. Open skies agreement has led to smooth flow of national and international flights in and out of US, promoting tours and business activities, improving productivity and creation of job opportunities and economic growth (BBC n.d.). United states open skies policy has been proved very effective in airline globalization. It enabled the airline carriers limitless admittance in the partners market and right to go to all middle and beyond points. This agreement has offered the most operational flexibility for airline coalitions. This agreement has been successful in achieving over hundred partners from every part of the world and every level of economic growth (BBC n.d.). Also there is IATA (International Air Transport Association). Its aim is to provide assistance to airlines to decrease complexity of their process and increase passenger convenience, decreasing costs and develop efficiency. The pioneering simplifying the business scheme is vital in this area. Moreover, IATAs primary priority is safety and its aims to continuously improve safety standards via IATAs Operational safety audit (IOSA)(Rothman Rothwell n.d.). The Boeing company and government have long complained that Airbus has ignored the 1992 bilateral agreement, which is one of the key agreement, which says that launch aid will be available to Airbus till its in the level of its competitor Boeing, but that is no longer the case with Airbus having 52% of the market share. The US government says that the aid given to Airbus is illegal under the WTO agreement and had also asked for litigation. The case is solved and US won the battle and Airbus was penalised and WTO promised to restore fair trade in the industry (EU Business n.d.). Major regulatory bodies such as EPA, FAA have a major impact on the industry as they decide on the laws and regulations that various suppliers, producers and operators have to deal with. The impact is substantial as they are capable of creating major obstacles in the final approval of aircrafts (Barriage n.d.)(Clarke n.d.). ENVIRONMENTAL FACTORS Environment factors generally include ecological aspect of climate and weather change, which in turn can influence industries such as insurance, tourism and farming. Today, there is an awareness of climate change in the minds of people, which is becoming a deciding factor on how companies function and what are their offerings, because it can lead to formation of a new market or destruction of the present market. ACARE is an European group of airports, eurocontrol, airlines, manufacturers, universities and members of EU and EU commission. Its primary challenges are safety, reasonable, quality, environment and security. Some of their objectives are to reduce air accidents to 80%, 15 minute less wait time on airports for little distance destinations and 50% less time needed to market. One of most popular intention of ACARE was to reduce specific CO2 discharge by 50%, the discharge of NOx by 80%, and to decrease the exterior noise of fixed wing aircraft by 10 db per operation. For example- Boeing is a major element of the commercial aviation industry. It is executing some new plans to improve its aircrafts environmental performance. Compared to present It also claims that it will reduce its greenhouse gas emissions by 25% by 2020(Szodruch et al. n.d.). The purpose of ACARE clearly reflects the demand of society, especially in the area of security and stability of environment. Also, their purpose reflect the requirements of aircraft operators, which are major driver for innovation in technology. The ACARE objectives reflect requirements which are demanded by society, particularly in the areas of environmental compatibility and security. On the other hand, the ACARE objectives also reflect the needs of aircraft operators, which are an important driver for technological improvement. On the other hand, the mounting pressure from society regarding emissions, noise around airports is affecting airline operations(Szodruch et al. n.d.). In addition, with increasing pressure from society as a whole, as well as from local communities around airports, noise and local emissions have an impact on airline operations(Clarke n.d.). CONCLUSION Commercial Aviation Industry is optimistically connected to the world economy. As a result, with the continuous growth of world economy, this industry is also presenting signs of swift growth. Airbus and Boeing forecasted immense growth in the future and adjusting their strategies accordingly. Boeing and Airbus create a duopoly in the market. However they still face competition from small companies located in Russia. Also China is entering the market with its first home made commercial jetliner COMAC C919 coming in 2012. This sector is heavily dependent on outsourcing and external factors. Their operations are carried out around the world so multiple trade policies of different countries affect their strategies. Rising oil prices is a serious problem for the industry; airlines are forced to shut down their old planes because of increased fuel consumption. After the PESTEL analysis, it can clearly be concluded that the biggest challenges are expected to come from economic, legal and e nvironmental factors in the near future. PART B AIRBUS FUTURE FORECAST According to Airbus latest Worldwide market forecast, there will be a delivery of 25,000 new freighter and passenger aircrafts between 2009 to 2028, which are expected to be worth US$ 3.1 Trillion. Rising economies, developing airline networks, extension of low cost airlines and increasing number of big cities as well as growth in traffic and also the also the orders to replace new aircrafts with the new ones which are more efficient are creating more demand for the aircrafts. In 2009, there was a downfall in Revenue Passenger Kilometres (RPKs) by 2%, it is expected to rise to 4.6% in 2010. The forecast also estimates that in next twenty years, passenger traffic RPKs will show resiliency to the repeated effects of the sector and raise itself by 4.7% per year or double in the coming fifteen years. This will only happen if demand rises to 24,100 new aircrafts of value US$2.9 trillion. When the old 10,000 aircrafts will be replaced with the new ones, the global aircraft fleet of hundred seating or more will twofold from some 14,000 today. According to the forecast, airfreight tonne kilometres (FTKs) are expected to increase annually by 5.2%. Pooled with fleet renewal, this will lead to requirement of 3,440 new freighters. More than 850 of these are new, which are expected to valued more than 210 billion dollar, with the remainder converted from passenger aircraft. Economics of Oxford predicts that in the next twenty years, this industry will directly employ 8.5 million people and will add US$ 1 trillion to the world GDP. Other indirect advantage and tourism are even bigger. The biggest demand will come from the Asia pacific and the emerging economies. They are China and India (31%), followed by Europe (23%). Also in terms of domestic market China (10%) and India (7.9%) will be the fastest growing in the next twenty years. But the US will retain its title of being the biggest domestic network. Not very surprising, Airbus also predicts requirements for Very Large Aircraft (VLA) which can accommodate more than 400 passengers like the A380, at above 1,700. About 19 percent by value of passenger and freight deliveries, or seven percent aircraft units are valued at over US $570 billion. Out of these, 1,318 will be used to link the mega cities of the world, which are continuously increasing in numbers. This implies greater increase in air traffic. Also more than half of the VLA will be operational in Asia-pacific. In the segment of twin aisle aircraft which can accommodate 250 to 400 passengers, forecast states that there will be a need of 6,250 new aircrafts in the next twenty years, expected to be valued at US$ 1,300 billion, or 25% by units, 42% by value. Out of these 6,250, 4,240 will be small twin aisle (250-300 sitting capacity) and about 2,010 will be twin aisles (350-400). Such sections include members of A330/A340 family. It is also expected that from 2013, A350 XWB will replace the whole twin aisle market requirements. According to the forecast, in the single aisle section, aircrafts worth US$ 1,200 billion or 68% by units, 39% by value will be distributed in the next twenty years. There is comparatively an increase in forecast compared to previous ones due to arrival of low-cost transporters and liberalization in route and increasing requirement of single aisle aircraft in Asia pacific(Leahy)(Airbus n.d.). BOEING FUTURE FORECAST Global economic activity revealed that gross domestic product (GDP), is the most powerful driver of development in commercial aircraft and airlines industry and also affects demands of aircraft. The worldwide GDP is anticipated to rise at an average of 3.2% on a yearly basis for the next twenty years. Revealing on the economic growth, global traveller traffic will rise average 5.3% and cargo traffic to 5.9% over the forecasted period. The traveller and cargo traffic growth rates are comparatively higher than prior years due to fall in air traffic. After calculating the twenty year growth rate on the basis of lower base year results into a higher growth rate. If the low starting point is neglected, it is estimated that traveller traffic will increase to a rate of 4.9 percent and the cargo traffic will also increase to 5.4 percent each year. To meet the current demand of business-related aviation services, the number of aircrafts needed worldwide will increase at an annual rate of 3.2% , doubling-up from 19,000 aircrafts present today to a total of 36,000 aircrafts in 2029. Also airplane deliveries for the purpose of substituting old planes and growth of fleet will total 30,900 over the next twenty years of value US$ 3.6 trillion. Diverse demand for air services: Air travel around the world continues to change in response to challenges and opportunities. New airline Business models and energetic growth of air travel in the emerging countries are expanding the demand of airplanes. Despite the downfall in travel in 2009, there were still several business models and markets that experienced growth. In the next twenty years, seventy seven percent of the demand of new aircrafts will arise from outside of north America, with 34% going to Asian region. According to the Boeing forecast the biggest demand form market value point of view will come from United States, followed by china. Amazingly, the United Arab Emirates, with less than five million population, is home to numerous highly competitive airlines, is expected to be the third biggest market by value (Boeing n.d.). AIRBUS COMPANY PROFILE AND STRATEGIES IMPLEMENTED Airbus is an aircraft manufacturing company based on France, Toulouse, is presently the worlds largest commercial aircraft manufacturer with 52% of the market share in the European market, and has been involved in an intense competition with Boeing since 1970. Airbus is a supplementary of European Aeronautic defence and space space company (EADS). In 2001, Airbus officially became a solo company, BAE and EADS relocated their assets to newly formed company and became stakeholders of 20% and 80% respectively. A shareholder committee that contains seven members and work as an administrative council, 5 members from EADS and 2 members from BAE administer airbus, they approve the investment and make up three year investment plan. In the May month of 1974, Airbus successfully made its first delivery, it was an A300B2, to an air operator in France Airbus has been restructured into centres of excellence and each centre is managing its own policy of buy and make accordingly, making decision to subcontract trying to find out whether they can lower cost, which is the only way to continue profitability. Airbus has also adapted differentiation strategy for its core activities since it rolled out its first wide bodied twin aircraft which differentiates it from its competitors (UscubaComission n.d.). Airbus follows an expansion strategy by proving itself expert in the industry and put it in use in the military program A400M program. Airbus has started research on the new engine option (NEO) that could result into reductions of operating costs. Boeing plans to offer a new aircraft in 2020 followed by 737NG in 2011. The company make use of only prime and properly tested technology to chose its suppliers to assure quality. The company used synergies between its aircrafts, which leads to shorter training time between engineers and pilots, leading to savings in maintenance processes and reduction in spare parts inventory. This leads to monetary gains and competitive advantage for them(Goold n.d.). Airbus functions on the thinking of foreseeing and listening properly to their customers and employees in building more fuel efficient, less noisy and comfortable aircrafts. Airbus operates on the principles of thinking ahead and listening to their customers, passengers, and employees in building constantly more comfortable and efficient aircrafts. Also Airbus corporate culture and diversity is competitive advantage for the company (Composed n.d.). The increment in oil prices and journey cost may interfere in the low cost offerings by Airbus, which may put pressure on the firm to switch to more fuel efficient engines(Chapman n.d.). BOEING COMPANY PROFILE AND STRATEGIES IMPLEMENTED Till now, Boeing has been conventional leader in the global aviation industry, with Airbus lying behind. Nevertheless, in the last few years Airbus has been ahead Boeing repeatedly because of the large number of orders its been receiving and surpassing its deliveries in 2003. Boeing is the key producer of commercial airplanes and the foremost aerospace firm and offer connected support services. Boeing is currently the worlds biggest producer of large commercial aircrafts (LCAs)(Composed n.d.). Boeing has been keeping up with its objective of giving its customer eco friendly products. Boeing has been aggressive in taking over, expanding and putting into practice new technological solutions for reducing aircraft noise, and also maintaining operational effectiveness and customer satisfaction of its products in parallel. The Boeing capital corporation also invests in commercial apparatus and private airplanes. The Boeing is also involved in design, growth, sale, production as well support of industrial jetliners, rocket defence, satellites, space flight of human and launch services and systems. Boeing is one out of the two main producers of 100 plus seat aircrafts for the global commercial airline industry and the second biggest defence constrictor in the United States. Boeings major operations are carried out in the United States of America. They depend heavily on their chain of suppliers, subcontractors and partners which are situated around the globe(Arkell n.d.). Boeing has injected huge amount of capital in the construction of new facilities, equipments to carry out their tests, and to improvise on their noise control and aero-acoustics research. There are also several research project that focus on applying the new technology and implementing it to the production. Most of the important research projects are employed to deal with cost, maintenance, production and cross functional design and problems coming in the adaptation of new technology. NASA Boeing is also a NASA contractor who has worked vigorously in the operations conducted by it and so that it can gain access into new technologies in the field of aerospace. Boeing also has its full database linked with the NASA. Boeing has been involved with NASA for quite a long time regarding noise problem in commercial planes. This also enables the firm to have a very strong RD department. Boeing has made a decision to market in a different way by turning their focus on small and mid-size aircrafts to increase flexibility between airline operations and to cover longer distances. They focus not on increased capacity but to cover longer distances, this differentiates them. This will enable airlines to provide much convenience to travellers, at much less operational costs, leading to combination of lower rates for travellers and profit for airlines. Their potential success which they foresee is based on three of strategies of running core business values in a healthy way, using strength into new products and opening up new limits (Horton McKay n.d.). Their potential success which they foresee is based on three of strategies of running core business values in a healthy way, using strength into new products and opening up new limits. SWOT ANALYSIS OF BOEING This segment analysis the strengths if Boeing, they will use the strength to meet the upcoming future demand to gain competitive edge. Strength Customer Satisfaction: The project named My Boeing fleet has implemented web service and XML technology to improvise operations, reduce general work errors and decrease costs. Enhanced Customer Satisfaction: Boeing uses the latest IT technology to execute tasks from their work locations. They improve their time spent in meeting to learn new things every time they undergo training. These action lead to rise in productivity. High performing employees: Boeing endeavours to be improve quality continuously and with the help of its workforce benefit programme and maintaining balance between work/life culture. Also, Boeing also recognizes that its competence lies with its employees. Well Developed Organization: Boeing has several dedicated project teams and subsidiaries to give a hand in improving overall companys performance. For example, Aero-info is a subsidiary of Boeing focused on providing aircraft maintenance solutions. New Facility Supply: With the numerous increments in commercial communication satellites, Boeing has decided to build a new construction factory in Alabama and Decatur for the production of newest generation of missiles used to push the satellites into space. Weakness Recent suspension of Boeing from the military contracts and re-assignation of those contracts to Lockheed martin, this occurred to ethical lapses. Columbia Shuttle Tragedy: The name of Boeing suffers drawback every time the tragedy is re-called because Boeing is a very special part of United Space Alliance. Ongoing controversy linking ex-CFO and ex-CEO: This happened due to hiring of a military regulator while negotiating an important contract. Change of Aircraft Supporting: Boeing has decided to fold up the production of Boeing 757, while Boeing 717 and 767 are on lifeline. This could have a bad effect on consumers confidence and interests. Opportunities: Government Support: Boeing is the biggest exporter and second biggest weapons manufacturer in the US and primary contractor in many the countries missile programs, it can gain government support anytime they want. Expected deal from Boeing 7E7 contracts: The program has already started and it has also received orders from All Nippon Airways and also from airlines from New Zealand and Australia. They expect sales of around 500 at the end of the year. Threats Aggressive competition: Boeing is in the middle of a fierce competition, especially from the field of LCAs. It was once leader in LCA but now its on a very close competition with Airbus, which is the leader in producing commercial aircrafts. Foreign Barriers: The growing concern for Boeing is the foreign government involvement in the production of LCA. A term suited to this situation is called Regulatory Nationalism. This can result into refusal of US made aircrafts in some countries(Campbell et al. n.d.). SWOT ANALYSIS OF AIRBUS Strength Diversity in employees: Airbus has been very conscious about its employees, it believes in keeping diversity in their employees. Ingenuity: The ingenuity of Airbus company has enabled it to survive for the last three decades. Since its commencement in the 1970, the has risen to be the leader surpassing its main competitor Boeing in 2005. Freezing of Spare parts: Airbus freezes the price of its spare parts for three years. For example, the prices of spare parts in 2009 were same as in 2006. This practice has gained them lot of customer support. Weakness The A380: The Airbus company invested almost everything in the A380. Even after that it faced delays in the delivery of A380. This lead to a lot of stir with its parent company EADS, so much that its management was changed in 2006. Airbus also made huge amount of cuts by reducing its suppliers from 3000 to 500, resulting into saving of US$ 2 billion and cut administrative costs by US$ 446 million. These steps were taken to accommodate growing needs with the launch of A350. When A380 production was delayed for two years, the parent company EADS reportedly lost US$ 6 billion dollars. After shocks came when FedEx world largest express transportation company, cancelled its ten orders for the double decker and ordered 15 Boeing 777 in place of that. Also one of the major weakness of Airbus is that it has low RD investment compared to its competitor Boeing which can prove harmful in a long run. Opportunities Airbus is continuously going on a green path. This is a very auspicious position for any company who intends to be in forefront of Greening technology. Development of new aircrafts that significantly lower the carbon footprint on the environment is an opportunity no company would pass. Today, people are concerned about the environment and this act by airbus will gain a lot of public support. Airbus plans on being the industry pioneers when it comes to keep the environment clean. All of its manufacturing sites are kept within the environment standard, all ISO14001 certified. Threats Legal actions are inherited in this industry and no one is immune from it. For example, Air France sued the company for the crash occurred in 1992 near Strasbourg. A major finance risk is also there when there are exchange rate clashes. A major part of the revenues of EADS are generated in US dollars and most of its cost incurred are in euro, this can seriously affect profits (Weidner et al. n.d.). Conclusion Airbus strategies are to the point, provide every variety of product available to meet the different requirements of the customers with the latest technology, also maintaining low cost of operations and maintenance expenditure. Airbus implements mixed type of strategies on different types of its products, it follows differentiation strategy on commercial airplane segments for different needs of customers and invent units to operate at lower costs. Boeing has a very strong Research and Development network, the company uses its innovative technology to gain competitive advantage. They know that they are lagging behind airbus but they put high amount of work to improvise the quality of their products. They are going in a different direction by catering to different set of customers. Both Airbus and Boeing cater to different kind of customers. Airbus makes bigger jets and Boeing makes smaller jets. Boeing needs to overcome the situation and regain their position in the market.

The Cocoa Industrys Effects on Ivory Coasts Economy

The Cocoa Industrys Effects on Ivory Coasts Economy Chocolate is a sweet delicacy that is associated with joy, comfort and delight. However most consumers do not consider the origins of chocolate and the process it has gone through before it is purchased and eaten. Chocolate is a highly consumed treat in Canada and the United-States, and it is one of my personal favorite sweets, yet there are many worrisome issues that happen throughout chocolates production. The cocoa bean, chocolates main ingredient, must be grown in tropical climates and it is therefore grown in several countries in Africa, Asia and Latin America. West Africa is the largest exporting region of cocoa beans, with the Ivory Coast as its principle provider, supplying 40% of the worlds cocoa reserves and it comprising one-third of the countries economic revenue (Isern, 2006). The Ivory Coasts economy is therefore extremely dependant on cocoa bean buyers who in turn rely on the consumption of chocolate in North America and Europe. This has not only led to numerous econom ic problems, including an unbalanced economy and high debts, but also several social problems, such as child labour. It is imperative to understand the conditions that have led to this social injustice, because Sub-Saharan Africa has the leading rate of child labour worldwide, and the Ivory Coast is a key contributor to this problem. (Kielland and Nkamleu, 2005). For my research, I will examine how the Ivory Coast has become dependent on cocoa exportations and the role transnational corporations have played throughout this process, resulting in them having increasing amounts of power in the cocoa industry. I will also examine the effects of these changes on the Ivory Coasts economy and on the labour force. My working thesis is as follows: Due to the liberalization of trade policies, the Ivory Coasts economy has become reliant on cocoa exportations. As a result, transnational cocoa buyers have obtained power over social conditions within the country, leading to the unethical practice of child labour. To fully expand on this thesis, I will firstly explain the conditions that led to the implementation of structural adjustment programs (SAPs) by the International Monetary Fund (IMF) and the World Bank in the Ivory Coast. I will secondly examine the consequences of the SAPs on their economy and the increasing centralized power that transnational buyers have obtained. Thirdly, I will examine the effects this has had on child labour and finally the initiatives the Ivory Coasts government and the global community have taken to eradicate child labour. The Historical Context of Liberalization Ever since the Ivory Coast has become independent from France, its economy has been seriously dependant on primary commodities, particularly cocoa (Ahoua 1993). The cocoa industry was regulated by a public organization established by the Ivorian government called the Caisse de Stabilization (Caistab), that offered subsidies, controlled exports in order to protect the Ivorian cocoa market (Losch 2001). However, regardless of the Caistab, the Ivory Coast did not have the economic capacity or stability to deal with the effects of the oil crisis in the 1970s, which resulted in a global drop in cocoa prices. (ibid). The fluctuations of cocoa prices already impacted the countries inner stability and prosperity, causing the beginning of several long-lasting economic issues. Along with the Caistab, the Ivorian government was equally providing funding for infrastructures, such as transportation and energy, and the development of a nationally owned cocoa transforming industry, called SIFCA (Ah oua 1993). All this led to increased lending from banks, amounting to the formation of enormous debts. From 1987 to 1989, the Ivory Coast actively attempted to exert power on the globally dropping cocoa prices by withdrawing from the markets and stopping all exportations. (Losch 2001) However, the Ivory Coasts government was incapable of sustaining such a protest due to their economys dependence on cocoa profits, forcing them to recommence exportations after two months (ibid). This had little effect prices, since corporations had enough stored cocoa to sustain the protest, however it had disastrous effects on the Ivorian economy, pushing their already indebted economy into a crisis (ibid). All these issues created the conditions leading to the liberalization of the Ivory Coasts economy. To amend their problems, the Ivory Coast needed to receive loan from the International Monetary Fund (IMF) and World Bank (WB). To receive these loans, countries needed to implement Structural Adjustment Programs, fulfilling the stipulations dictated to them by these international organizations. Some conditions included the dismantling of the Caistab, a further drop in the prices of Ivorian cocoa, a cutback in government subsidies given to cocoa farmers, a reduction of tariffs on imports and lesser taxation on industries (Ahoua, 1993). These reforms were suppose to allow the country receive funding from transnational corporations, allowing them to repay their debt. Pardoning the countrys debt was not a considered option by the IMF or WB (ibid). Moreover, social reforms were promised, to ameliorate education and health care, however this was to be effectuated without receiving additional funding and by promoting privatization, which rendered no real improvements (ibid). The Increasing Power of Transnational Corporations All these adjustments were meant to decrease government spending in the cocoa industry and encourage privatization resulting in the development of the country. However, the profits coming from these initiatives were used to further develop the cocoa industry, and not other sectors of the country, increasing the countries cocoa dependency (Isern 2006). Initially, cocoa farmers had control over the markets since there were several buyers competing for their beans, however the centralization of cocoa producer and manufacturers rapidly turned the industry into a buyer-driven market (Folds 2001). Three main cocoa bean buyers have subsequently emerged out of this process: Barry Callebaut, Cargill and Archer Daniels Midland (ADM) (Folds 2002). This oligopoly forces farmers compliance with the conditions demanded by the transnational buyers, otherwise famers are incapable of selling their cocoa beans. The Ivory Coasts cocoa bean processor SIFCA was also bought by Cargill, rendering their gov ernments attempts to influence the processing industry ineffective (Losch 2001). To make matters worse, the global demand for cocoa is far inferior to the supply provided by the Ivory Coast and competing countries, such as Ghana and Indonesia (ibid). This is detrimental because the Ivory Coast is obligate to produce the best quality cocoa for the lowest price possible to attract the investment from the limited number of corporations, resulting in a further drop of the global cocoa (Losch, 2001). Due to this, farmers are often forced to resort to child labour to overcome these constraints. Another dimension that limits the power farmers have in the market is the two-tiered nature of the cocoa industry. Folds (2002) distinguishes them into grinders, who transform cocoa beans into butter, powder or liquor, and branders, who then transform the cocoa into finished products. This division can create confusion when trying to designate whose responsibility it is to ensure the use of ethical labour practices (Isern, 2006). For example, in 2005, Nestlà ©, ADM and Cargill were sued by the International Labour Rights Fund (ILRF) for buying chocolate from farmers using child labour. Nestlà © denied its involvement by stating that it has no direct cocoa procurement in Ivory Coast, since the company directly buys transformed beans from ADM or Cargill (Orr, 2006). Additionally, ADM and Cargill buy their beans from middlemen, and not immediately from the cocoa farmers, giving them the opportunity to once again pass off the blame (Parenti, 2008). As a result, consumers are increasing ly disconnected from the process and conditions laborers are subjected to in chocolates production. However, certain initiatives have derived from trade liberalization that have helped empower farmers and strive for better labour conditions. There is a growing consumer demand for products created under ethical conditions, creating special markets that can have positive effects in countries (FLO 2005). For example, the Fair Trade movement has aimed to eliminate child labour in the cocoa industry and allows consumer to demonstrate their support for this cause by buying products under these labels. (ICCO 2006). Specifically, the Fairtrade Labeling Organization (FLO) has set standards to determine what is considered Fair Trade cocoa, and has certified compliant companies and countries, giving consumers the information needed to make responsible purchases (FLO 2005). The Max Havelaar Foundation has also contributed to this cause by providing fair wages to small-scale farmers, and supporting fair trade cocoa. (ICCO 2006). Nevertheless, Fair Trade cocoa has remained unpopular, representin g 0.1 % of the market (ICCO 2006). Furthermore, Fair Trade cocoa is not commonly produced in the Ivory Coast, rendering zero sales in 2004 (FLO 2005). Although these organizations have been created through consumer demand for them, they have been unsuccessful in producing sustainable change in the Ivory Coast. This demonstrates the need for different initiatives coming from within the countries, as well as global initiatives to reduce child labour. The Consequences on Child Labour Several initiatives have been established to eradicate child labour in the Ivory Coast and the cocoa industry. In fact, the Ivorian government has officially prohibited children under the age of 18 from working, and has signed the Harkin-Engel protocol to fully abolish child labour from cocoa farms (Parenti, 2008). The International Labour Organization and transnational corporations, such as Nestle and ADM, also voluntarily signed this protocol to abolish the worst form of child labour (Isern, 2006). Prohibited activities include wielding a machete, spraying pesticides and heavy lifting, since they are deemed as harmful forms of labour (Parenti, 2008). However, even with these attempts, little improvements have been made and issues of blame and responsibility have been created. Does the Ivorian governments failed initiatives warrant an increase in activities by international organizations and transnational corporations within their country? Or is this an infringement upon the Ivory C oasts sovereignty? The global community answer to this is that transnational corporations should be held responsible. For example, in the newspaper article Slave Chocolate, protestors in San Francisco expressed their disproval of Nestlà ©s labour practices, determining that it is undoubtedly Nestlà ©s responsibility (Orr, 2006). A solution to ensure the responsibility of transnational corporations, originally proposed by The Harkin-Engel protocol, was to implement a child labour label on chocolate products, in order to easily inform consumers about the labour conditions involved throughout their production. (Parenti, 2008) Although this seemed like a good initiative to reduce child labour, it could instead have harmful effect on the poorest farmers and likewise the Ivorian economy. Consumers would discriminate against chocolate produced with child labour, further punishing the poorest farmers who necessitate its use (Isern 2006). This would ultimately worsen the problem and increase the rates of child labour. This demonstrates that policies will essentially need to target trade laws and try to establish a more just free market. On the other hand, it can also be argued that child labour in the Ivory Coast is not entirely a product of the economic dependency on cocoa exportations. In Kiellands (2006) study, she remarks that most forms of child labour were in fact seen as a socialization method; giving families the opportunity to teach their children the proper methods of farming cocoa. She also remarks that community involvement is a more prevalent value in the Ivorian culture, and therefore child labour is often seen as the childs contribution to society. However, there are also many dangers with child labour such as trafficking, abuse and harmful labour practices. Additionally, children who worked on cocoa farms were less likely to attend school than those who did not farm cocoa (Kielland 2006). She suggested that more a more effective implementation of governmental policies would be necessary to prevent child labour by, for example, providing social services and ensuring that adult wages were sufficiently high, thus making child labour unnecessary (ibid). A stricter implementation of government policies surrounding school attendance could also help eradicate child labour. Conclusion To conclude, transnational corporations have obtained increasing amounts of power in the cocoa industry and the Ivory Coast because of trade liberalization and the centralization of the cocoa processing industry. This has had several consequences, such as an increased economic dependence on cocoa exports and higher rates of child labour within the country. Although the Ivory Coasts government and international organizations have attempted several initiatives to reduce child labour, none have been successful in creating sustainable change. Therefore, it becomes important to try new initiatives that confront the issues of the free market, because there is a direct correlation between child labour and the liberalization of cocoa trade. Furthermore, it is important to understand the surrounding complexities involving child labour, for example the different power relationships that come into play, in trying to effectively abolish it. More research is necessary to find a solution that will allow the Ivory Coasts economy to develop without negatively impacting human rights.

Culture And Defining The Role Of Leadership Essay -- Leadership Busine

Culture and Defining The Role Of Leadership Abstract I believe a person can be taught to lead and manage but one can't be taught how to effectively and successfully lead and manage. I don't believe the corporate culture of the organization has to with it. I think leading and managing has to do with the individual person. How that person is motivated, how that person sees him/herself. Can he/she lead effectively or is managing the nitch that they have. A Leader will effectively orchestrate change, create a vision, inspire people to follow the vision and keep people focused towards an ideal future. What is Culture? I first want you to understand what culture is because to understand culture is to understand the organization. According to Anthropologist James Sparely, culture is "the acquired knowledge people use to interpret experience and generate behavior". Culture can be interpreted in many ways such as national/ethnic culture, secondary or subgroup culture, culture in the anthropological sense and the capital C culture. The national/ ethnic culture is described as how one was raised as a child such as African American culture or Chinese culture. This interpretation is a very narrow view because it is a norm and it also raises challenges in our virtual team communication. Secondary or sub-group culture is described as our social groups such as women's group or golf group. Culture in the anthropological sense refers to behaviors one shares over time and the capital C culture refers to the performing arts. Individuals from different cultures vary in terms of their behaviors and communication styles (Gudykunst, 1997). Edward Halls th... ...wing the Mission and Vision stated this company has greatly succeeded in its leadership in maintaining a healthy organizational culture. I think the key to a healthy organizational culture is truly a great leader. A leader with self motivation, a leader with life skills not just educational skills. This leader should know what to expect from his/or her members because his vision is clear and concise. This leader will not only have plans for present day activities but for future endeavors, making sure that followers can see this future and actually taste success. A great leader trains others to precede him when he cannot lead any longer making certain that his vision stays alive. References Research website www.culture-at-work.com Research website www.tnellen.com/ted/tc/schein.html Research website www.aipfl.com

Marks Spenser in Turkey :: Marketing Strategy

Marks Spenser in Turkey For years, M&S’ marketing strategy was simple: produce high quality products under a famous brand name at affordable prices, and advertise the products in classical ways. However, in recent years this strategy collapsed and the company started to lose its competitiveness. M&S had to find solution to this problem to survive in both domestic and overseas marketing environment. It is known that franchising is one of the most important factors of future development of any company. Consequently it is essential for M&S to have a reliable franchisee as Fiba Holding to become successful in such a big marketing area as Turkey. First of all, franchising allows the company to achieve success in Turkey with minimal economic and political risks. Since opening of own outlet in Turkey requires an agreement with the government and careful research on local market conditions, it is to the advantage of M&S to have a local partner working under company’s brand name. And about 700 outlets in 34 countries is the best show of efficiency of franchising. In Turkey, the Fiba Holding is planning to increase the number of M&S outlets by the end of the 2002. The profit made in recent years encouraged the Fiba Holdng to expand as a M&S franchisee. In addition, a â€Å"M&S credit card† financial service is occured to be very attractive for their potential customers. Another factor making M&S brand name so popular are the cut prices and many types of promotions done by the company periodically. Since M&S has concentrated on middle class customers, the cut price and promotion strategy plays a significant role in increasing the local demand. Furthermore, M&S company tries to behave in such a way that inflation of Turkish currency has a very tiny effect on the prices changing.

Happiness: A Review and Critical Evaluation of Culture and Well-Being E

Ethnic Identity and Well-Being Summary. The purpose of this research is to attain a better understanding of the potentially protective effects of ethnic identity by observing the daily stressful demands of Chinese and Mexican adolescents through a daily diary study (Kiang, Yip, Gonzales-Backen, Witkow, &Fuligni, 2006). The researchers hypothesize that ethnic identity will protect against the negative effect of normative stressors (Kiang et al., 2006). Happiness was measured by factors that maximize quality of life and minimize anxiety through the analysis of ethnic regard, ethnic centrality and the interaction of the two and their affect on well-being (Kiang et al., 2006). The study focused on ethnic identity, self-esteem, stressful demands and daily well being using various scales and a daily diary checklist. The 2 week study consisted of 415 participants of Mexican and Chinese background in the 9th grade from the Los Angeles metropolitan area recruited from 3 high schools (Kiang et al., 2006). Ethnic iden tity was found to play a role in shaping who we are by increasing happiness and reducing anxiety in students with higher ethnic regard (Kiang et al., 2006). These results indicate a direct psychological benefit from holding positive perceptions of one’s ethnicity (Kiang et al., 2006). Evaluation. Consumption and Happiness Summary. The author proposes a theory based on previously tested research hypotheses on the relationship between consumption and selective well-being (SWB) on national and international levels (Ahuvia, 2002). Ahuvia (2002) proposes that SWB is increased by higher standards of living which create a cultural environment where people maximize their personal happiness by minimizing their social ob... ...adapt into men’s rolls, while men stay true to theirs. A study of such immense proportions and complexity has much room for error and thus room for improvement. The researchers should take into account various age groups and participants who are not on college campuses as they are not always a reflection of the society as a whole. Also, in addition to a questionnaire, a peer-review about the participant would be useful in order to more accurately obtain a holistic depiction the participant especially in cultures where pride is enhanced or suppressed. Future research in this area should be promising as women stepping out of homes and into the workforce is more common now than ever. The implications of these actions on the future of our society and its well-being could be better understood through study of the emotional affect of gender roles and culture.

Investment and Retirement Planning Essay

Introduction †¢ Retirement is the point where a person is not in any kind of employment /business/occupation. †¢ This usually happens upon reaching a determined age, when physical conditions do not allow the person to work any more. †¢ Retirement could also be due to personal choice-either due to adequate pension or personal savings or due to a regular unearned income like interest, rents etc. †¢ The retirement age varies from country to country but it is generally between 55 and 70. †¢ Certain jobs, which are of dangerous nature or of fatiguing nature, may have an earlier retirement age. Support and Funds †¢ Retired persons support themselves either through superannuation, pensions, savings or through family (earning children), as in Indian families. †¢ In some other countries the government provides the pension benefit to all its citizens. Retirement Planning †¢ Retirement financial planning refers to a collection of systems, methods and processes which support a family unit’s (client’s) desire to achieve a state of financial independence. †¢ It is a process of determining the financial goals at the point of retirement. †¢ It requires constant monitoring of the progress of the plan and then taking adequate remedial measures Need For Retirement Planning †¢ Increasing Life Span †¢ Low Returns In Conventional Modes Of Savings. †¢ Unintended Contingencies. †¢ Increasing Medical Cost. †¢ Diminishing Trend Of Joint Family System †¢ Inflationary Trends †¢ Absence Of Social Security Benefits By The State †¢ Pursuing Hobbies †¢ Falling Interest Rates Steps In Retirement Planning †¢ Decision retirement about the retirement age option. †¢ Setting of financial goals †¢ Saving of relevant amounts w.r.t. goals †¢ Investing in appropriate modes †¢ Calculation of net worth †¢ Regular monitoring of financial plan and incorporate the necessary amendments in the plan. Factors Affecting Retirement Planning †¢ Life style †¢ Personal values †¢ Nature of income- salaried, business or professional; stable job/non-stable job; private job/government job †¢ Number of years left for taking retirement †¢ Inflation rate †¢ Present net worth of a person †¢ Risk appetite of a person †¢ Services of a certified financial planner †¢ Conviction in the retirement planning effort †¢ Seriousness & perseverance for retirement planning Life Expectancy & Career Stability LIFE EXPECTANCY †¢ Life expectancy is the major ruler of retirement planning. †¢ As per the Indian context, still the importance of retirement planning is not clearly identified. †¢ With the increasing life expectancy, high standards of living and high expectations for the upcoming future, pressure is building up for fund allocation, to meet up the needs of retirement. †¢ Longevity of life expectancy has to be kept in mind while making out a retirement plan. †¢ Key factors to be evaluated while making out a retirement plan are present life style, income and capacity to save, family circumstances, level of inflation prevailing in the economy & the standard one would like to maintain at the time of post retirement INDIA & RETIREMENT PLANNING †¢ 90% per cent of India’s total working population is not covered for postretirement life. †¢ The main objective of retirement planning is to create a well funded and safe future for the client. †¢ Financial needs of the client needs to be clubbed between his/her current income and post retirement expenditure. †¢ To maintain up current life style one has to plan to save almost 65 to 85% of current income. Life Cycle †¢ Every phase of life cycle has a different level of income, expenditure and saving. †¢ The first phase of life cycle is the childhood where an individual has no earnings but certain amount of money is spent on him/her (school fees, clothing, food etc). †¢ Second stage comes where the individual may or may not start his real earnings or a stable career. †¢ In the third stage an individual enters a stable career and has good amount of earnings to save and start planning for his/her retirement †¢ Fourth & fifth stage is time period to save maximum and allocate maximum funds for the retirement planning. †¢ In the sixth stage comes the old age. At this stage the savings tend to reduce because of medical expenses, new expenses related to old age etc. †¢ The last two stages of the life cycle is the retirement period where the saving are utilized to cover the real retirement years or retirement costs. Career Stability †¢ Career stability is one of the most important factor which clearly needs to be evaluated to develop a retirement plan. †¢ Fund allocation for retirement is done with the help of surplus earnings of an individual during his/her pre-retirement period. †¢ Stable career and in return stable earnings provides a scope for having well planned and organized retirement plan †¢ Employers also have a important role in retirement planning as they contribute in pension plans other contribution plans etc. †¢ Career stability helps to draw clear anticipation of future earnings can be which helps in retirement planning Major Factors Affecting Career Stability †¢ Job Satisfaction: Job satisfaction covers the factors like the level of pay and benefits, the perceived fairness of the promotion system within a company, the quality of the working conditions, leadership and social relationships, and the job itself. †¢ Alternative opportunities: If the market is opening up for new jobs and careers and individual can provide his works onto those opportunities the career stability can embark for changes. †¢ Employer-Employee Relationship: This issue covers the factors like loyalty of an individual towards the employer, future protection provided by the employer, motivation, leadership, timely appraisals. †¢ Changing economic conditions: The economic conditions of a country like recession cycles, developing sectors, problems related to any particular sector private and public ownership etc also affects the career stability. †¢ There are also various policies and economic strategies of government related to employment & foreign investments etc which have a direct affect on employment scenario. PRE-RETIREMENT COUNSELLING Introduction †¢ It is an planning. interactive part of retirement †¢ In pre-retirement counseling all the basics of the retirement plan are drafted as per the needs and expectations of the client and as per the client’s present and anticipated financial conditions. †¢ Financial planner has to clearly evaluate the needs, attitude & lifestyle of the client to have a strong and trustworthy relationship with the client. Steps For Retirement Plan †¢ Inauguration Of Retirement Plan: Inauguration of retirement plan would depend on life expectancy. If the client starts accumulating funds for his/her retirement early, with small savings & less burden he will be able to achieve the goal. †¢ Desired Retirement Status: This would involve budgeting, income sources and proper asset management etc. Estimated expenditure and sources of income during the retirement years to the client have to be evaluated properly. †¢ Retirement Expenses & Sources Of Income: Clear identification of all the costs & incomes has to be made. Provisions for allocating 65 to 70% of current income for the retirement period should be drawn. Insurance With Retirement Planning †¢ Insurance plans with a cash back or whole life insurance are suitable because they provide insurance as long as the premiums are paid and also accumulates savings, thus it has a cash value. †¢ It also helps to pay off uncovered medical costs, funeral expenses & also acts as an income replacement for survivors. †¢ With increasing life expectancy, and other challenges a life insurance can provide a life-long, worry-free retirement and insurance protection. †¢ Major expenses of the retirement years are the health care costs, health insurance can act as a helping hand in that case to meet up these costs. 26/30 Estate Planning With Retirement Planning †¢ Estate planning is the process of accumulating and disposing of an estate to maximize the returns of the estate owner. †¢ Various tools of estate planning are used like Wills, Trusts, Gifts, Contributions & proper evaluation of Estate taxes. †¢ Estate planning should maintain out the costs of the property and should develop an estate plan to give proper and safe income generation. †¢ Estate plan will cover all the legal formalities and all the documentation regarding future transactions. Tax Planning With Retirement Planning †¢ Savings and investments are interconnected. †¢ Proper management of savings and investment results to tax benefits and these become very important at the time of retirement. †¢ Retirement planner must clearly evaluate the aspects of its liquidity, security, and the most important one the return and tax income over such investments. †¢ Proper tax planning can itself prove out to be a saving tool because with effective tax planning is basic foundation for effective retirement planning.

Mountain Man Brewing Company Case Analysis

Mountain Man Brewing Company does not want to go another year with revenue lost from Mountain Man Lager. By adding a light beer to the product line it could gain loyalty from a younger crowd and attract more then just the workingman. At the same time he does not want to lose the brand equality that has taken years to create. He is also faced with solid monopolies in the beer world that make it hard to keep up. Chris is faced with a hard decision, will taking a chance and changing the image really be the right move for Mountain Man. By introducing a new product line called Mountain Man Light the company would be able to reach a broader audience. They would no longer focus on the workingman, they would appeal to a younger generation of beer drinkers. They would also be able to gain a woman base, women being extremely heath cautious would be more likely to purchase the beer if it came to a â€Å"light† version with fewer calories. By launching a Mountain Man Light it would also play down most peoples perception of the Mountain Man Original being too strong and only a manly mans beer. Mountain Man Brewing Company is a beer for the workingman. It has been around since 1925 and has gained strong loyalty from the baby boomer generation. Mountain Man has strong brand awareness down south and if you asked anyone over the 21 they are more then likely able to recognize the name even if they do not drink it themselves. The brand has been able to stay in the game with strong competitors such as, Anheuser Bush, Miller, and Adolf Coors. The uniqueness of the taste along with the higher then average alcohol content is what makes its loyal customers coming back for more. One alternative to look at for the Mountain Man Brewing Company is to look and see how hard it would be to distribute it into restraints and local bars with the option to have it available on draft. By putting extra money into re-promoting the same recipe it would be a lot less costly. By offering specials at local bars such as dollar Mountain Man’s on Tuesday nights would introduce the beer to a younger generation. Since the younger generation is the one to target because they do not have a beer preference yet this is a way that could get them hooked and at the same time make them proud to share a six pack that both the young 21 year old and his 55-year-old dad would both enjoy by keeping the tradition of Mountain Man beer alive. Other alternatives could be to go with the Mountain Man Light and don’t play it safe what so ever. If you're going to be successful, your products must be different. Mountain Man should use loud colors to attract people attention, along with changing up the shape of your average beer bottle. Other ways to not play it safe while promoting Mountain Man Light could be to use non-traditional shelving system. Instead of taking valuable shelving space away from Mountain Man place 6 or 12 packs in the middle of isles in a pyramid shape, that way people do not associate the two as much. My recommendation to the Mountain Man Brewing Company would be to keep the product just how it is and not introduce a Mountain Man Light. If a brand is able to last generation after generation there is a reason for this. Strong brand awareness is hard to come by with so many new beer products appearing on the shelves each times you walk into any convenience store. The recognizable taste and working man persona is what kept them in the game year after year. If the company wants to boost revenue and assure they last in the future I would look into prompting at local bars and giving the younger crowd a chance to try the beer and even change their old perception about it. West Virginia’s beer should stay as just that and keep the tradition alive.