Managing in a Global Economy Essay

Hollister Co. is an American lifestyle brand by Abercrombie & Fitch Co. The company was launched by July, 2000. It is headquarter at New Albany, Ohio. Till 2012, Hollister already has 571 stores in the world [Appendix 1]. Like its parent company, Hollister sells casual apparel which include knit layers, tanks , graphic tees, polo shirt, plaid, classic, sweaters, hoodies, outwear, jeans, pants & shorts, skirts, dresses, sweatpants, and yoga; and the accessories which include totes, belts, socks, and fragrance. The concept was originally designed to attract consumers aged 14–18, at a lower price than the parent brand through its California-style inspired image and casual wear. Goods are available in-store and through the company’s online store. It was ranked as the second most preferred clothing brand of US teens on a long list of actual West Coast companies in 2008 by Piper Jaffray. (Hollister official website, 2012) According to Abercrombie & Fitch’s latest 10-k form, Hollister’s net sales in 2011 and 2010 are $2,022,002,000 and $1,552,814,000, separately. There is 30% increase of net sales from 2010 to 2011. Based on the data, we can figure out that Hollister’s net sales are almost two times to its parent company. Foreign Markets Expanding Motivation The motivations for Hollister to expand in foreign markets will be defined as two categories. First of all, Abercrombie & Fitch wants to get rid of its lower sales in U.S market and earn profit from outside expansion. Abercrombie began to launch its expansion plan outside the USA since 2007, driven at least in part by a weakening of its domestic market. For the quarter ended July 28, Abercrombie reported a profit was dropped by nearly 52%. According to media reports, more than 135 of its American stores have been closed since 2010 and there will be 180 closures in the following year. However, based on Abercrombie & Fitch’s 10-k form, the net sales of international stores are increased steadily. The company therefore has high hopes for the European and Asian markets, where its expansion is being pushed forward. (WSJ, 2012) Hollister, as one of its subsidiaries, plays a crucial role in the expansion plan because it has good performance with higher net sales and large numbers of shop. Another reason for Abercrombie & Fitch is Asia apparel market is keep growing. Asia’s fashion and apparel market will continue to grow at a healthy clip through 2011-2015. The reason why we focus on Asia area is because as forecast last year, clothing demand in Asia is higher than the demand in Western Europe and North America in 2011 [Appendix 2]. â€Å"Many economists predict that demand will be driven by rising personal disposable income levels and an increased focus on fashion apparel, especially in the main cities.† Said by Carrie Yu. As we known, many foreign apparel brands are already present in Asia, and they will spread steadily. Here we have a figure to show the market demand growth in different Asia countries [Appendix 3]. After analysis the data and GDP per person at purchasing-power parity [Appendix 4], we choose three countries-Japan, Singapore and Hong Kong-that are good for Hollister to expand in. Three Study Countries: Singapore, Japan and Hong Kong Japan Our first choice is Japan. Here we have two reasons to support our idea. First of all, it goes without saying that Japan is one of the most potential countries in Asia. For years, Japan has been Asia’s richest and most powerful economy. It was the first Asian economy to industrialize, and the emerging Asian tigers—Hong Kong, Singapore, South Korea. There are three advantages for Japan to become a good expansion country. Firstly, the economy of Japan is the third largest national economy in the world after the United States and the People’s Republic of China and is the world’s second largest developed economy (Oced library, 2010). According to the International Monetary Fund, the country’s per capita GDP was at $34,739 or the 25th highest in 2011. Besides, according to Wipo resources, Japan is the world’s 3rd largest automobile manufacturing country, has the largest electronics goods industry, and is often ranked among the world’s most innovative countries leading several measures of global patent filings. Summing up all these data, we can figure out that Japan is a growing market. Strength The strength for Japan is it got the high purchasing power. According to Appendix 5, the GNI of Japan is 45180 US dollar in 2011, while GNI of US is 48450. However, it doesn’t mean that the purchasing power of Japanese is lower than America citizen. The consumer spending is enormously high in Japan. Spending is an important role of consumers. Consumer spending plays a significantly economic factor since it usually coincides with the overall consumer confidence in a nation’s economy. High consumer confidence indicators usually relate to higher levels of consumer spending in the economic market. Consumer confidence provides governments and businesses with an analysis on consumer perception. (EconomicsHelp, 2011) From CIA factbook, we can figure out that Japanese is the third country which got higher purchasing power parity toward to Asia area, besides China and India. Moreover, The Japanese are very loyal to foreign prestigious fashion brands such as Louis Vuitton and Gucci. The sales of these companies have been growing steadily with support from young consumers. As a subsidiary of Abercrombie &Fitch, Hollister must play a leading role in fashion trends if we focus on marketing promotion. Weakness The main weakness for Japan divided by two parts. Obviously, the first weakness is the unpredicted geography phenomenon. Everybody knows that Japanese business have got a tough time by tsunami and earthquake in recently years. These two disasters are having large negative economic effects on Japan since it is a major role in global supply chain and as a producer of final products. Based on this fact, we think Japan is not a good place to set up facility in order to produce clothes. Second of all, According to Reuters (2011), Japan’s new government faces a dilemma over how to keep its campaign promises while reining in huge debt, a fragile economy that could slip back into recession, and strains in ties with close security ally the United States. Thusly, we think Japan will not be an appropriate country because it got unstable political risk. Opportunity No doubly that Japan is the core of fashion in Asia area. It is famous by its creativity and design toward to the whole world. As a result, as an apparel company, Japanese market has potential opportunity to be entered. According to Japanese fashion market report (2011), here we have two advantages to prove that Japan is a country full of fashion. 1. Japan is a critical fashionable country because it holds many fashion events annually. Thusly, Japanese consumers are sensitive to trend cycles in the international fashion market because there are so many brands enter into Japan market every year. 2. They are significantly influenced by Fashion Magazines. Although technology is developed these years, magazine is still playing an important role in Japanese teenagers’ life, like Mina, Rays, Vivi and etc. So if Hollister invest in Japan, focusing on magazine will be a good choice for this company when they doing marketing promotion. Threat Everything has two sides. Since Japanese fashion market is full of opportunity, it is also highly competitive. According to Imported Luxury Brands Market in Japan: Key Research Findings 2011, imported luxury brands market in 2010 is estimated at 831.4 billion yen, 92.9 % of the size in previous year. This data means that there are many companies already in the market. The number of competitors in Japan is huge. According to Appendix 6, 24% market is owned by US brands. After doing research, we known that Hollister’s main competitors, Gap and American eagle outfitters, have already entered Japanese market. What’s more, even though they are owned by the same company, Abercrombie & Fitch, probably another biggest competitor, entered Japanese market since 2009. [Appendix 7] In a conclusion, although Japan got higher purchasing power and fashion opportunity, it is still not an appropriate country to be entered because of the political risk and high competition. Singapore Singapore is located in southeastern Asia at the southern tip of the Malay Peninsula; the city-state of Singapore consists of a main island and some 60 islets. The country has a population of 4,740,737 in which the capital and major cities occupy 3,654,103 people according to the data last year. Although the country seems not as large as many other countries, Singapore’s gross domestic product was $326.8 billion and its per capita GDP of 61,103.36 US dollars in 2011 estimates is comparable to that of leading Western European nations, and its high standard of living and strong trading links have secured its position as one of ASEAN’s leaders (Global Road Warrior, 2012). Strengths 1) Outstanding tax system.When Japan cuts its corporate tax rate this Sunday, the U.S. will have world’s highest tax rate on business income. The following chart has shown the data. (Figure Source: Isidore (2012), CNNMoney) However, Singapore’s corporate income tax rate is low which in a flat of 17% since 2010. It is often cited as the leading example of countries to reduce corporate income tax rates and introduce various tax incentives to attract and keep global investments. Since January 1, 2003, Singapore has adopted a single-tier corporate income tax system, which means there is no double-taxation for stakeholders. Tax paid by a company on its chargeable income is the final tax and all dividends paid by a company to its shareholders are exempt from further taxation (Janus, 2012). Two of Singapore’s unique advantages are its low effective personal and corporate tax rates. Personal income tax has a tier system that starts from just 0% and goes up to 20% for income above $320,000. Similarly, effective corporate tax rate for Singapore private limited companies for profits up to $300, 000 is 8.5% and capped at a flat rate of 17% for profits above $300, 000 (Janus, 2012). What’s more, there are no dividend or capital gains taxes in Singapore. 2) High purchasing power.The GDP per Capita, in Singapore, when adjusted by Purchasing Power Parity is equivalent to 278 percent of the world’s average. Consumer Spending in Singapore increased to 27,485.40 in May of 2012 from 27,467.20 in February of 2012. Historically, from 1975 until 2012, Singapore Consumer Spending averaged 12,752.67 reaching an all time high of 27,485.40 in May of 2012 and a record low of 3,553.90 in February of 1975 (Trading Economics, 2012). 3) Exchange rate & Labor cost.The USDSGD spot exchange rate depreciated 0.0194 or 1.56 percent during the last 30 days. According to Janus (2012), The Singapore dollar has been consistently appreciating against major currencies. It also got about $260 billion based on average exchange rates or $252 billion based on year-end currency rates last year. Historically, from 1980 until 2012, Singapore Labor Costs averaged 96.00 reaching an all time high of 129.93 in February of 2009 and a record low of 57.37 in May of 1980. These data are all lower than Hong Kong and Japan’s (Trading Economics, 2012). 4) Political stability.Singapore is rated No.1 as the most politically stable country in Asia (Janus, 2012). 5) English is main language.Singapore has a 10-year compulsory education program commencing at the age of 7 years. English is the first language and the medium of instruction in schools (Global Road Warrior, 2012). This means almost 100 percent of People in Singapore speak and understand English well, which would bring much easier communication for Hollister to enter into the country, especially to the communication within the management level of Singaporean while doing business. 6) Quick and easy registration. It only takes about 1-2 days to incorporate a company in Singapore, with the government providing assistance along the way (Janus, 2012). As the easiest place to do business in the world, Singapore company registration is a quick and easy process, which involves just two procedures that can be completed online within 24 hours for a retail outlet. A Singapore subsidiary can be wholly owned by a foreign company and is considered a separate legal entity from the parent company. Also, a Singapore subsidiary is generally treated as a local resident company and therefore is entitled to tax benefits available to local companies (Janus, 2012). Weakness 1) If you want to set up a limited liability company (LLC), there are two conditions that are required: it must have two agents acting on its behalf in the country; and one of them must be a Singapore resident, a native Singaporean, or someone who has a Singapore employment pass. 2) Singapore is among the most expensive in the world, as the cost of living here is very high. 3) Hollister has to hire Singapore resident and qualified Singapore auditors to do the business accountings to work with government. Opportunities 1) Singapore is one of the world’s famous shopping paradises. Its central business district has a lot of upscale shopping square: from the latest fashion clothes, jewelry, watches, perfume, cosmetics to the sports goods and daily necessities etc. Singapore’s retail sector has done well in 2010 and well into this year on the back of the tourism sector’s robust performance and in spite of a slowing economy in recent months. According to the latest retail sales index released by the Singapore Department of Statistics, Singapore’s retail sales excluding automobiles increased 7.4% year-on-year in August 2011(Janus, 2012). Hollister, as the subsidiary brand under Abercrombie & Fitch, has very large opportunity to get benefits from opening retail stores in the country. 2) Singapore is also ranked the No. 1 in tourism so there is the potential to do business. Threats Fashion is a highly competitive industry worldwide, but Asia stands out for its stylish and practical design. Although Hollister is also a very famous American brand under A&F, it still faces strong competition from Asiatic fashion. Since Singapore emerges as global fashion apparel hub with large amounts of upscale shopping squares, the opportunity to open shops in this fashionable country could also become a big threat. Hong Kong Hong Kong is a Chinese special administrative region situated in eastern Asia, with a 455-mile coastline on the South China Sea and a 19-mile border with China. Hong Kong’s population is 95 percent Chinese, with the majority coming from neighboring Guangdong province or within Hong Kong itself. The population was about 7,122,508 in 2011. Cantonese and English are the two official languages. Hong Kong’s free-market economy was vulnerable to the global economic crisis of 2008, but its increasing integration with China helped it to quickly recover (Global Road Warrior, 2012). The GDP in Hong Kong was worth 243.67 billion US dollars in 2011, which roughly equivalent to 0.39 percent of the world economy (Trading Economics, 2012). Strengths 1) Well located.Hong Kong is located at the heart of Asia, alongside many of the region’s most exciting business market such as Guangzhou, Taipei, Manila, and Bangkok etc. And it is the gateway to Mainland China. 2) Free trade port.Easy government policies for foreign fashion brands. Hong Kong is known for its free port status and easy customs procedures. Duty is paid on very few products. 3) Tax-friendly economies.Hong Kong’s profit tax is capped at 16.5 percent according to the 2011 study, and there are no capital gains and dividends taxes (InvestHK, 2012). Weakness 1) Most of good locations have already occupied by large local fashion chains or early entering foreign fashion brands. 2) After the global financial crisis in 2008, the economies of Hong Kong still need to recover. 3) Hong Kong has the lowest GDP in 2011 compared to Singapore and Japan. Opportunities 1) There are large fashion-hungry population in the Hong Kong market, especially many people from Mainland China love to go shopping in Hong Kong. 2) Some foreign retailers are successful in the Hong Kong retail market. In addition, Abercrombie & Fitch was prepared entering into the country, which would in a sense lay a good foundation to its subsidiary, Hollister. Threats 1) Competition with Many local fashion brands, such as GIORDANO, BALENO, Bossini, Esprit and so on. And what is worsening is that these local brands all offer very cheap prices. 2) Many other foreign fashion competitors: Hong Kong shopping malls are creating space for Swedish brand Monki and U.S brands Gap, Forever 21 and American eagle. Others like H&M, Zara, Mango and Japanese brand Uniqlo have already established outlets in the city (Thondup and Tsang, n.d.). After reviewing the strength, weakness, opportunity, and weakness in the three countries, we chose to expand business into Singapore. We strongly recommend Hollister Co. to invest in Singapore where is a stable and strong economic, and a low risk country in political change. Singapore Marketing Singapore is an island country. The land area is 714.3 Square kilometers. The population in 2011 is 5,260,000. The population density in 2011 is 7,257 per Square kilometers. Shenton Way is the fourth largest financial center, the adjacent Keppel port is one of the world’s busiest ports. According to Singapore’s economic structure, the manufacturing sector accounted for 25%, the construction industry accounted for 5%, wholesale and retail trade accounted for 16%, transportation and telecommunications accounted for 11%, the financial services industry accounted for 12%, business services accounted for 12%, the hotel and catering industry accounts for 3%, the other accounts for 16%. Due to it is a small country, shopping is considered a kind of sport in Singapore. The government draw up a lot of plans on developing their shopping market. For one thing, many shopping malls almost per square mile are located in Singapore. Orchard Road, one of the famous shopping streets, is a 2.2 km long street and it is a retail and entertainment centre in Singapore. Orchard Road also contains a large number of high-end restaurants, coffee chain, nightclubs and hotels. There are many famous building and variety of retail store as well as there is large number of luxurious products with well-known brand. There’s practically a shopping sale of sorts all year round in Singapore, with the most notable one being the Great Singapore Sale. On the other hand, it’s a year-round shopping paradise. You only need to take a walk down Singapore’s iconic shopping districts to find out what’s in store for you. The best time to visit is during its annual eight-week Great Singapore Sale, when all kinds of discounts and deals pop up island-wide from late May through July. Great Singapore Sale 2012 will be held for 8 weeks from Friday, 25 May 2012 to Sunday, 22 July 2012. The Great Singapore Sale 2012 has been timed to coincide with the peak travel seasons to enable visitors to enjoy the fantastic deals all around. During the Great Singapore Sale 2012, you can enjoy up to 70% discount for everything on sale, anywhere in Singapore. From posh shopping centres in Marina Bay and Orchard to small stores in the suburbs, you will find fabulous deals for clothes, gadgets, beauty treatments, spa, attractions, and even food! (Great Singapore Sale, 2012) Furthermore, Singapore set large variety shopping malls to meet the different requirement of various groups. The ethnic shopping enclaves in Singapore include Little India and Chinatown – both are tourist attractions in their own right, steeped in ethnic colors and flavors. (Singapore Shopping Madness, Yong Shu Hoong) For instance, Chinatown mainly offers authentic Chinese products including tea, herbs, medicines, foodstuffs, silks, cheongsams, handicrafts, household items and antiques. Finally, Singapore duty free shopping prices at all three terminals are competitive with most places in Asia. The slippery greenback means rates are fluctuating constantly. Pick up a 50ml Dior j’adore eau de toilette for around S$96 (US$76), Chanel Alure EDP 50ml at S$112 (US$89). (Singapore Shopping Madness, Yong Shu Hoong) Human Resource Management ââ€"†Human Resources Management Practice Due to the explosive growth of the Asian economies over the past two decades, considerable attention has been focused on the human resource management (HRM) practices of Asian businesses. Cultural diversity of workforce in modern business organizations against the backdrop of globalization has attracted the attention of many researchers and analysts. By the 21st century, Singapore has developed into advanced and high-income economies, specializing in areas of competitive advantage. As one of the four little dragons in Asia, Singapore can be an interesting subject to study and it is also important for MNCs to understand Singapore’s advantages and disadvantages of its human resources management practice. Hollister Co. is an American lifestyle brand by A&F Corporation. The concept was at a lower price point than the parent brand through its SoCal-inspired image and casual wear. Hollister Co. could take some advantages of Singapore’s human resources management practice to expand its business in Singapore. According to a demographic survey, as of 2011, the population of Singapore is 5.18 million people, of whom 3.25 million (63%) are citizens while the rest (37%) are permanent residents or foreign workers. The government is considering capping these workers, although it is recognized that they are crucial to the country’s economy, as foreign workers make up 80% of the construction industry and up to 50% in the service industry. (Building and Construction Authority, April 2011) Singapore is a multicultural country with a majority population of Chinese (74 percent), with substantial Malay (13 percent) and Indian minorities (9.2 percent). The country has four official languages consisting of Mandarin, Malay, Tamil and English. English is the main working language and is the mandatory first language in all schools in Singapore. Most Singapore’s Chinese derived from southern China, especially in Fujian, Guangdong and Hainan, of which 40 percent is Fujian, the followed is Chaoshan, Cantonese, Hakka, Hainan and Fuzhou. To developing human resource management practice for Hollister Co., we should understand Singapore’s basic Human Resource Management (HRM). Hollister Co. is categorized as a service business while Singapore is a country which workforces are highly related to services sectors. In addition, considering the features of Singapore’s location, demography and other fields, its human resources is consisted of Western and Asian features. We will focus on Singapore’s HRM style and features of workforces to develop the human resources management practice for Hollister. ââ€"†Human Resources Management Style â€Å"Leadership and the Workforce in Singapore† is a survey that evaluated by the Singapore Human Resources Institute. Data were obtained from 192 respondents who were engaged in a wide variety of Singaporean industries. A total of 68 per cent of the respondents are HRM practitioners. Many of the respondents are supervisors reporting to senior management such as CEOs and managing directors. (Chart 1) All the data shows that globalization has had its impact on Singapore in a much more pronounced way. Singapore has been reputed for very advanced HRM practices both at the national and the international levels. In addition, Singapore has been especially known for its international HRM practices in a small city state. On the other hand, Singapore didn’t focus on manufacturing; it is a city state with a greater focus on financial services and other services instead, such as banking and insurance. Moreover, Singapore has a similar diversity culture of shopping centers manned by equally culturally diverse workforce. (Malikanrs, 2010) Singaporean enhances on performance record and job experiences, appropriate training and seniority when considering promoting its employees. Singapore has no set patterns of recruitment for either the entry level or middle level positions due to affecting by the Western model. However, Hofstede (1984) found that the national culture of Singapore is high in power distance. In high power distance cultures, superiors and subordinates treat each other as unequal. Singapore is also called a â€Å"nanny state’ in which people are supposed to do exactly what they are told. The mixed unique feature of national culture therefore makes Singapore’s HRM practices more complicated. ââ€"†Hiring and Retention The unemployment rate in Singapore was last reported at 2 percent in the second quarter of 2012. Historically, from 1992 until 2012, Singapore Unemployment Rate averaged 2.4 Percent reaching an all time high of 4.8 Percent in September of 2003 and a record low of 1.3 Percent in September of 1997. The employment rate for older residents made good progress. A record 61.2% of residents aged 55 to 64 were working in 2011, up from 59.0% a year ago. The employment rate for both males (from 75.0% to 76.4%) and females (from 43.4% to 46.3%) in this age group rose to new highs in 2011. Singapore’s workforce is inherently diverse due to their multi-racial community. Employees from different generations, gender, nationalities and cultures often work together in the same organization. It is therefore important for organizations to put in place policies and practices to build an inclusive and harmonious workplace. A diverse workforce that is well-managed can bring about better business per formance and higher employee engagement. ââ€"†Training and Advancement The improvement in educational profile of older residents was another contributing factor as the better educated were more likely to participate in the labor market than those less educated. The educational profile of the labor force continued to improve, as the better educated younger residents enter the labor force and the relatively less educated older cohorts retire progressively. The share of degree holders in the labor force almost doubled from 15% in 1999 to 28% in 2010. Conversely, the lower educated labor force from 36% to 22% over the same period. (Chart 2) ââ€"†Compensation Chart 3, 4, and 5 in appendix show the average salary, turnover rate, and worked hours of Singaporeans. The average salary for Singaporean to work 46.3 hours per week is around Singapore $ 4,000(about $ 3,000). The average over-time work hour is 3.7 hours a week. (Employment Situation in Fourth Quarter 2010, 2011) ââ€"†Ideal Human Resource Management First of all, we would like to talk about language skill. As mentioned above, English is the official language in Singapore. In addition, Singaporeans have high level of education and language skills in average. Therefore, the company can hire local employee without worrying about language barrier. Furthermore, we’ll analyze workforce. Due to the mixed unique feature of national culture, Singapore’s workforce is inherently diverse. Employees from different generations, gender, nationalities and cultures often work together in the same organization. On the one hand, it is easy to train and educate new employees to understand Hollister’s organizational cultures and requirements. On the other hand, Hollister Co. also has to understand the mixed unique feature of national culture. With the aging of population, Singapore government also encourage foreigner to go there and look for a job. In the meanwhile, Singapore advocates foreign enterprise producing products which is suitable for the elderly. This is another opportunity for Hollister Co. to expand their business in Singapore. Finally, we’ll talk about hiring, training, retention, promotion and salary. The unemployment rate in Singapore is very low, the educational background of workforce is becoming higher and higher, the low labor turnover and high level of wage show the Singaporeans are likely skill oriented workforces. The average monthly wage in Singapore is around 4,000 Singapore dollars which equals $3,000. It is a little bit lower than the average income that American household makes. (How much does the average American make breaking down the us household income numbers, 2011) Because Hollister Co. does not have to pay so much money for workforce training, we suggest Hollister Co. offer a somewhat high wage than the current clothing stores in Singapore and use bonus to motivate employees. Political and Legal Environment ââ€"†Legal Environment The Republic of Singapore has a legal system largely based on the British Westminster model, where the power to govern and administer the country is divided between the Executive, the Legislature and the Judiciary. Ranked by the World Bank’s report, â€Å"Doing Business 2007: How to Reform† as the most accommodating country to do business in the world, Singapore is a strategic and reliable base for foreign investors to invest in the emerging Asian markets. (Overview of the Legal Environment of Singapore, RSM Chio Lim) Singapore is well known as â€Å"the Switzerland of Asia.† With a population of approximately 5 million people, Singapore has an astounding 90% literacy rate, and over 85% of inhabitants have a secondary or higher education. The country has almost zero crime, zero corruption and no drug problem. (Singapore Incorporation Advantages) (International rankings of Singapore, Wikipedia) Political environment Pro-business environment: One of characteristics in Singapore is its pro-business environment. It means that Singapore has an environment that is favorable for foreign investments and can attract many foreign entrepreneurs. Furthermore, it is easy for investors to set up businesses and make higher profits. Compared to other countries, investors only have to take 1-2 days and they can incorporate a company in Singapore. Because of pro-business environment, Singapore has become one of favorite countries for investment (Singapore Incorporation Advantages, 2012). Financial assistance: In order to help start-up companies to gain funding, the Singapore government agencies set up several financial assistance schemes to let start-ups gain access to funding to turn their business ideas into reality. Moreover, Singapore government sets up many private sectors to help investors improve efficiency strengthen capabilities of their company (Singapore Incorporation Advantages, 2012). Great tax system: For a starting business, taxes cost is always a top priority. One of features in Singapore is its low effective personal and corporate tax rates. For the personal income tax, Singapore government is based on personal income to design a tier system that starts from 3.5% to 20%. For corporate tax, †Singapore private limited companies for profits up to SGD 300,000 is below 9% and capped at 18% for profits above SGD 300,000.ï ¼â€š(Singapore Incorporation Advantages) After 2010, corporate income tax rate will decrease from 18% to 17% in Singapore. Furthermore, there is no capital gain tax. It represents that Singapore government uses a single -tier tax policy. This policy is that when the income has been taxed at the corporate level, companies can give shareholders dividends for tax free (Singapore Incorporation Advantages). Political systems: Singapore government has an open attitude and its vision is broad to the whole world. Its political system is using a rational, pro-business way to enact laws, decide priorities and sets regulations. For example, there is almost no restriction on foreign investment including manufacturing and service activities. Any business is supported by political infrastructure and given maximum encouragement from the government. This support is an important way to let businesses grow and prosper (Singapore Incorporation Advantages). In addition, the immigration policy is open and flexible in Singapore. It assists the relocation of foreign investors to set up businesses here. If a business entrepreneur needs to run his business or and hire foreign professionals, the government can make appropriate Singapore work visa provisions to meet his needs and wants (Singapore Incorporation Advantages). Free trade agreements: Free Trade Agreements is a significant system in Singapore. It means that most products can be imported without barrier. Businesses can enjoy many benefits including tariff concessions, preferential access to certain sectors, faster entry into markets and Intellectual Property protection. Moreover, Free Trade Agreement is a way to connect Singapore to their trading partners such as United States, Europe, China, Hong Kong and, Japan (Singapore Incorporation Advantages, 2012). (Singapore Incorporation Advantages, 2012) High Quality of Life One of reasons why many investors set up their business and relocate to Singapore is the quality of life. Singapore is in a convenient location and provides a great public and private transportation, a safe and clean environment to live. It also offers an outstanding support system for businesses. Singapore is suitable for work and living. (Singapore Incorporation Advantages, 2012) Economic and Financial Environment In fact, the economic situation in Singapore is very strong and stable, because the attitude of government is open-minded and this country is anti-corrupt. The economic growth is also steady. Singapore is one of countries in the world that has the largest per capital Gross Domestic Product (GDP). The Gross Domestic Product (GDP) is equal to the total expenditures for all final goods and services produced by a country in a period of time and measures national income and output for a country’s economy. According to the World Bank, the Gross Domestic Product (GDP) in Singapore was worth 239.70 billion US dollars in 2011. The GDP value of Singapore is roughly equivalent to 0.39 percent of the world economy. Historically, from 1960 until 2011, Singapore GDP averaged 51.8 billion USD reaching an all time high of 239.7 billion USD in December of 2011 and a record low of 0.7 billion USD in December of 1960 (Trading Economics, 2012). (Trading Economics, 2012) The annual growth rate in Gross Domestic Product (GDP) measures the increase in value of the goods and services produced by an economy over the period of a year. It considers a full year of economic activity and avoids the need to make any type of seasonal adjustment. The Gross Domestic Product (GDP) in Singapore expanded 2.00 percent in the second quarter of 2012 over the same quarter of the previous year. From 2007 until 2012, Singapore GDP annual growth rate averaged 5.1 percent reaching an all-time high of 19.8 percent in June of 2010 (Trading Economics, 2012). (Trading Economics, 2012) Singapore exchange rate is range from $1.30 to $1.50 for the last 10 years. It is kind of stable. Monetary Authority of Singapore (MAS) manages the exchange rate of the Singapore dollar. Investors can transfer funds in and out of Singapore freely in any currency. Furthermore, Singapore government bond has very good rating. Standard & Poor’s (S&P) in August 2011 gave it AAA and Moody’s gave it Aaa in 2008. According to China Post, Singapore banking system is rank top four in the world. When other country have problem with financial crisis, most of Singapore banks were rated B by Moody. We have to realize more about Singapore’s banking system for doing business. Banking System Cash and Check In Singapore, for foreigners or tourists, it is very convenient to bring their own currency and exchange from market to airport. Foreign currency banknotes and travelers checks can also be changed easily at most banks. In addition, ATM link to global banking networks can be found everywhere. Foreigners or tourists can pay for most things by using a credit card in Singapore. (Singapore Banking System, 2012) Singapore banks issue checks that can be processed electronically. Writing check can only use black and blue inks. If a person only wants to deposit and does not cash the check, he has to draw two parallel diagonal lines in the upper left corner. If he crosses out ‘or bearer’, to the right of the payee line – the check can only be deposited into the account of the named payee. When a person deposits check, he has to write his name, account number and telephone number on the back of the check. (Singapore Banking System, 2012) ATM-Automated Teller Machine ATM machines for local banks are everywhere in the Singapore. In fact, all of the Singapore local banks and some of the international banks such as Citibank, HSBC and Standard Chartered have issued ATM cards. It considers that foreigners and investors have to withdraw money immediately in a place. However, there are not many branches and ATMs in the international banks. Here is a limitation and daily withdraw amount from ATM cannot exceed SGD$3,000. (Singapore Banking System, 2012) Cash Flow Because using check will take time to clear the bank, companies have to take that into consideration for their cash flow. There is a well-established banking system with three major local banks that offer a full service of consumer banking in Singapore. It includes ATMs, telephone banking and internet banking. In addition, besides local banks, some international banks in Singapore are doing the same business. Recently, those international banks have been allowed to set up branches and 15 ATMs. (Singapore Banking System, 2012) Accounting Standards Singapore accounting standards are followed the International Accounting Standards and International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board. Financial Reporting Standards (FRS) is accounting standards in Singapore. All companies with financial period starting on or after January 1, 2003 have to comply with Financial Reporting Standards (FRS) (Introduction to Accounting Standards in Singapore, 2012). One of the main principals of Singapore accounting standards is accrual-based accounting. It is the same as United Stated General Accepted Accounting Principle (GAPP). Under accrual basis, the revenue and expenses are recognized and recorded in the period when they occur but not receive or pay cash. They are recorded in the accounting records and reported in the financial statements in a period of time. The function of preparing financial statements on the accrual basis is to inform users not only of past transactions including the payment and receipt of cash, but also of duties to pay cash and funds that have received in the future (Introduction to Accounting Standards in Singapore, 2012). Actually, there are contains about 39 different standards with each standard named as FRS X in Singapore’s accounting system. For example, FRS 1 represents Financial Statement, FRS 2 represents inventories and FRS 18 means revenues. In addition, each standard involves a specific topic like presentation of financial statements, recognition of revenue, accounting for inventories, and so on. (Introduction to Accounting Standards in Singapore, 2012) Cultural of Singapore In Hofstede’s theory, there are five dimensions of culture, which are power distance, individualism, masculinity/femininity, uncertainty avoidance, and long-term orientation. The five dimensions are used to make a distinction between country and country. The society of Singapore is basically consisting of Chinese people. Around 77% of Singaporeans are Chinese. Therefore, the culture of Chinese does influence Singapore a lots. For example, the Buddhist-Shinto societies have an additional dimension which is long-term orientation (Geert Hofstede, 2011). Singapore Five Dimensions Culture Asian Countries Dimension Culture http://www.geert-hofstede.com/hofstede_singapore.shtml (Geert Hofsted Cultural Dimensions-Singapore, 2011) Power distance With Chinese population, Singaporeans are affected by Confucian thinking and values, so they adhere to a hierarchical relationship in their society. They believe that their society is composed of people who are in different standing and unequal relationship. The differences in standing are the signal for people to evaluate each other. The lower standing people should heed what a superior says. In addition, junior and less experienced people are expected to keep their opinions in their hearts. This kind of high power distance has been characterized in Asian society for at least two thousand years (Geert Hofstede, 2011). Individualism In an individualistic society, we can find the relationship of people is loose. The United States is the most individualistic society, but Singapore is ranked 53th out of 66 countries (ClearlyCulture, 2009). In Singapore or other Asian societies, children are raised to stay with the family. Children are educated to be a part of the group and stay in the group when they are infants. Children are taught to be dependent on the group, to make decisions which benefit the group, to support the group, and to maintain the honor of the group. The group can be family, school, or company. All of the decisions which are made by the elders for the children are common. After the Singaporean children become adults, they are not expected to cut off the former relationship (Geert Hofstede, 2011). Masculinity A high score on this dimension means competition can drive this society to success. Traditional Chinese culture is a typical masculinity. Singapore has almost 77 percent of populations are Chinese. Children are always taught to compete with other people in the school. Singapore is in the almost middle of the scale but a little on the feminine side. That means that there are still some softer aspects of culture like leveling with others and sympathy for loser in Singapore (Geert Hofstede, 2011). Uncertainty avoidance Comparing with other countries in the world, Singapore is a country with low degree of uncertainty avoidance. Singaporean comply with their rules because their high PDI. That is why Singapore is a â€Å"Fine† country (Geert Hofstede, 2011). Because Singaporeans are indirect and implicit in their communications, they will not publicly use the word â€Å"no†; likewise, their â€Å"yes† does not usually mean assent (Kwintessential, 2011). Unlike other Asian cultures, the western cultures also affect Singapore’s culture. Therefore, the degree of facing uncertainty avoidance is lower than other Asian countries. Long-term orientation The short-term orientation is related to truth and the long-term orientation is related to virtue. Singapore’s cultural qualities show the perseverance and sustained efforts support the long term investments. People believe that the truth depends a lot on situation and time in a society with a long-term orientation (Geert Hofstede, 2011). Doing business in Singapore, the relationship with other people is very important; especially you must respect the elders. Also, you must be more patient because the organization will show their purpose which is for long-term profit, not short-term gains (Kwintessential, 2011). Organizational Structure An organizational structure is setting the company into different levels, including person and work, so each person needs to perform and accomplish the company goals (Chapman, 2008). There are two types of organizational structures which are flat organization and hierarchical organization. A flat organization is an organization which is few or no levels between managers and employees. The advantage of a flat organization is top management contact directly with the staff level employees. Middle managements are eliminated, so it can also reduce the organization’s budget costs. In this structure, the communication between managers and employees would be improved and the organization is fast to respond to consumers and market conditions. The disadvantage of a flat organization is difficult to maintain when the organization grows bigger. A hierarchical organization is the layout of a pyramid. Every employee obeys someone else in this organization. The advantage of a hierarchical organization is the management can control closely. Also, the role and responsibility of each employee are distinguished clearly. The disadvantage of this organization is the decisions will be difficult to make because the organization is consisted of a multilayer management. It costs a lot to maintain a multilayer management and the communication would be slow from the bottom to the top (Colette). Hollister Co. is a subsidiary company of Abercrombie & Fitch, so the management chart of the Hollister is the same with Abercrombie & Fitch. The following table is Hollister’s organizational structure. In this table, we can consider Hollister is a hierarchical organization. An Executive VP or senior VP head all major business processes of the company. The CEO at the top, EVP/SVP on the second, EVP/SVP on the third and SVP on the fourth level are four basic layers at senior management. This hierarchical structure makes Hollister’s management make decisions quickly and let employees in each group understand their roles and responsibility clearly. On the other hand, there are still some disadvantages, which are high costs and many layers of communications, in this structure. For example, the SVP of Supply chain needs to go through two management layers in order to reach the CEO of Hollister. The hierarchical structure delays the communications between management and employees. A hierarchical structure costs a lot to maintain for Hollister. Hence, in a recession, Hollister might restructure to reduce costs and improve communication. Source: http://www.cogmap.com/chart/abercrombie-fitch-co (2010) Hollister still can use its hierarchical structure into its international markets such as Singapore. Singapore is an open country and there is no limitation in Singapore, so Hollister can use any types of organizational structure they want. If Hollister use the hierarchical structure successfully in its home country and in other international markets, Hollister should use the same structure when they expand to Singapore. Singapore is also a hierarchical structure country because its high power distance. Hollister’s International Expansion Strategies After review Hollister Co. and Singapore cultures and structures, we put forward three strategies which Hollister can use to expand its business to Singapore by exporting, licensing or wholly owned affiliates. Exporting is the first way the company can expand into a new market. By exporting, Hollister does not need to invest in Singapore and can test Singapore’s market. The disadvantages of exporting are Hollister has to suffer tariff and non-tariff barriers, high transportation costs and depend on foreign importers for product distribution. The second strategy is Hollister can give a license of its design to a Singapore Apparel Company. This way Hollister can earn profit without investing and suffering tariff and non-tariff barriers. The disadvantage of licensing its design, Hollister might be subjected to the local apparel company becomes its competitor. Hollister also cannot control the quality of products which the licensee produces, so Hollister’s brand or reputation is on risk. The third strategy is that Hollister can expand to Singapore’s market by itself. Hollister can choose a place where there will be a lot of people, including domestic residents and tourists, to visit such as CentrePoint, the most popular mall in Singapore. The advantages of expanding itself are that Hollister can have complete control and receive all of the profits. The disadvantages of expanding itself are the high costs and the greater loss if it fails. Recommendation After review three strategies, we recommend Hollister to expand itself in Singapore. Hollister has enough capital to invest into Singapore because it has a powerful backing, Abercrombie and Fitch. This way Hollister can keep their quality of products and have complete control. Hollister can test the market and the market condition by opening the first in Singapore. In order to be success, the most important things are that Hollister needs to learn Singapore’s culture and establish the relationship with the consumers and suppliers. Hollister can adapt to the Singapore’s culture and consumer taste by reviewing a quarter of sales. After its sales grow stably, Hollister should continue to open more stores in Singapore.

Business Competition Essay

Abstract   In this paper, I am discussing the relevance of the peaceful humanitarian cocept to the hard environment of business compeition. The paper will elaborate types of competition and how they exist in the global world. The paper also reveals shortly on their roles and benefits in the global world. In the final chapter, the paper discovers that the latest developmet of business practices gave birth to further tendencies toward the peaceful humaitarian concept. The increasing practice of CSR concepts is an indication that the peaceful competition atmosphere is gaining attention within the business world. Business Competition Proposition:  Ã‚  Ã‚  Ã‚   The nature of competition in modern business environment can co-exist with the peaceful humanitarian ideals Introduction Business and competition has always been inseparable activities in life. Furthermore, as activities of business became the most important activities of our lives, we identify our world with competition and competitive acts. In the midst of this hard and competitive world, we often forgot that we do not exist simply to do business; instead, we do business in order to maintain our existence. In the light of this logic, we should be able to comprehend the role of business as one of the facilitators of life and not becoming life itself. Life on the other hand, is depending on how we choose to live. Mother Theresa, one of the most loved humanitarian in the world, often stated that in the midst of all the hub-hubs, people tend to loose their inner peace, in the sense that they forget what they live for or what makes their life valuable. In one of the speech, she stated that this is caused by the tendencies of our environment. Mother Theresa stated that we lost of sense of peace in life because we forget how to care for each other and co-exist in peace. In this paper, I am trying to address the relevance of these humanitarian ideals to the modern business environment. Can there be peace among the competitive nature of the business environment and the peaceful ideals of the humanitarian concept? The paper will display some arguments regarding this topic (‘Competition vs Cooperation’, 2007). Overview   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   In the short, business understanding, competition is the act of striving against other for dominance or attainment of goals. Today, the term is familiar to us in various fields like politics, sports, business, etc. In this paper however, we are aiming to focus on business competitions rather than other types of competitions. Levels of Competitions   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   In business competition has slightly different definition than in other respects. It is the independent effort of two or more parties to secure business by offering the most favorable terms and business conditions to the third party. Competition in the world of business can be found right in heart of every business endeavors themselves. Experts identified three types of competition in its relevance to business. The first type is called direct competition. Direct competition is the field where products that has the same functions compete against each other. Business conditions could lead owners and managers to avoid such competition by differentiating product features, or to seek for it by offering the products with similar virtues as others (Kohn, 1986).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The second type of competition in business is called substitute competition. These means products and services that substitute for each other compete. Business competition can also lead managers to create substitution products to take away a part of the market share from their competitors. The third type of competition in business endeavors is called the budget competition. This is the general form of competition in business. It involves competing for consumer’s disposable income. This means that in the business world, any products with any feature are generally in competition with one another.   Different Forms of Competitions   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Besides existing in different levels, competition in the business world also exist in different forms. For instance, competition exists whether internally or externally within most companies. Beside the external competition we are accustomed with, there is the internal competition that occurs within companies. Often, managers of the company themselves created the competitive atmosphere inside the corporate structure. Sometimes, this is done by deliberately creating overlapping areas which causes divisions to compete against each other. Furthermore, the leader of the company can also instill competition between different product managers or brand mangers. They can compete in terms of sales or growth of sales of the products or brands under their responsibility (Ryckman, 1994). Business Competition and Its Global Practices In the increasingly global atmosphere of competition, companies are now fighting not only against its neighbor companies, but also companies that headquartered thousands of miles away. The prevalence of communication and information technology has allowed this condition. Companies are creating businesses regardless of national and cultural boundaries. Some countries however, reacted by limiting the competition that might occur within their territories by restricting trade activities to certain levels. Because competition is subject to legal restrictions in most independent countries, it can be legally prohibited using monetary or fiscal tools and also trade barriers (Kohn, 1986).. However, instead of limiting competition between them, countries can compete against each other using competition policies and competition law. The competitions between countries are often varying subtle and hard to detect, however, their presence in the global economy are apparent for business observers. For instance, the United States, Japan, and The European Union are always in fierce but disguised competition to achieve economic supremacy in the global markets (Kohn, 1986). Analysis   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Despite the tension and difficulties created by competition, most have understood that competition is a natural part of life. By this, I mean that along with its good and bad effects, the human race will always need competition to survive. This is proven by researches in the biology field, where competition created adaptation and the tendency to constantly improve oneself. In the business world, competition is seen as the pillar of capitalism itself. Competition in the business world stimulates creativity and innovation, supports eficency, lowering prices and enhances product qualities. Competition is also the reason why companies develop new technologies, new products and new services, which provided us better and broader product selection.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   However, competition is also recognized for its negative effects. It leads to duplicated effort and in some conditions, increased costs. Competition often leads to stressful way of life and destructive behaviors. Psychologically, over-competition will create a highly stressful environment which is horrible for a human soul. Materially, competition could lead to unjust acts of economic endeavors. Frauds and similar activities ruin the image of business as they are finally revealed to the society.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Nevertheless, I personally believe that even the harsh competitive world of business has its compatibility with ideals of humectation concepts. For instance, recent development indicated the prevalence of the Corporate Social Responsibility (CSR) demands and initiatives. People are starting to realize that companies are also parts of the society which contains the obligations to co-exist in harmony within its environment. Companies are now demanded that they take full responsibility for their actions in consideration of the economic, social and environmental issues. Ethical concerns and competition laws are gaining people’s attention in evaluating corporate performance. Companies are actually loosing customers for their bad social values (Leef, 1996).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Observing the latest development in the world of business, we can conclude that the humanitarian principles have taken their place in business activities. People in general have started to develop the sense that business endeavors should not be above the values of life. In a sense, the practice of business must now take account of social values and environmental concerns. Although we haven’t seen such a development that would allow Mother Theresa’s philosophy of peace to be the guiding light for global business practices, but the direction of today’s development indicated that the scenario of a peaceful competition atmosphere as suggested by Mother Theresa is gaining supporters. References Kohn, Alfie. 1986. ‘No Contest – The Case Against Competition’. Boston New York London: Houghton Mifflin Co. Ryckman, R. M., Thornton, B., Butler, J. C. 1994. ‘Personality correlates of the hypercompetitive attitude scale: Validity tests of Horney’s theory of neurosis’. Journal of Personality Assessment, 62, 84-94 ‘Competition vs Cooperation’. 2007. Retrieved February 26, 2007 from http://www.huppi.com/kangaroo/L-spectrumfive.htm Leef, George C. 1996. ‘The Virtues of Competition’. Retrieved February 26, 2007 from   http://www.libertyhaven.com/theoreticalorphilosophicalissues/ethics/virtucomp.html      

Testing on Animals Essay Example | Topics and Well Written Essays - 3000 words

Testing on Animals - Essay Example The pure research has only the elements of genetics, behavioral and developmental biology. On the other hand, applied research majorly involves biomedical and drug testing (Conn et al, 2008). Over the years, the non-human animals of different species have been used by researchers in laboratories to establish the root causes of various human health complications and diseases. The testing has also been instrumental in scientific education, especially when illustrating some biological processes such as respiration. As more and new human diseases continue to emerge, pharmaceutical firms have continued to manufacture new drugs that are appropriate for the treatment of such diseases. The new drugs, therefore, must pass a test before they are declared safe for human health; the animal testing. Animal testing, therefore, has been very helpful in determining the effectiveness and safety of any medicine that is intended for treating of human diseases. Some large research institutes and pharmaceutical firms purposefully breed the non-human animals for the sake of the animal testing whiles others prefer capturing the animals from the wild. The commonly used animals during testing in clude rats, mice, rabbit, fish, monkeys, cats, dogs and birds. Animal testing has, for many years, led to the discovery of many medical treatment of various diseases; both in human and in other animals. Those who are for the testing say that animal testing is such a big remedy for health complications, and thus, should not face many stringent laws from the government. However, there are those who are against the popular animal testing. These oppose claim that the animals, though living in the wild, have rights too. These two categories of advocators have put the scientific world on a heated debate that does not seem to come to an end soon. In the 20th Century, the science of animal testing led to the many amazing discovery of medical treatments and advances that aided the treatment

Marginal Concepts in Managerial Economics Case Study

Marginal Concepts in Managerial Economics - Case Study Example The best decision reached after analysis of the marginal concepts was the closing down of the mines (Chapman, Hopwood, and Shields, 1020). Logically, businesses can open up coalmines when situations in the market trends change. Change of these trends would include the rise of the prices of coal in the market. Rise of prices is a good motivation to open up coalmines because companies would make profits. This is because increase in prices of coal will give the company revenue that exceeds the production cost. As long as what they re getting after the sale of extracted coal exceeds the production cost, then the business is viable. Businesses interested in such a venture should consider the cost of production. More importantly, they should consider the marginal cost if at one point production is increased (Chapman, Hopwood, and Shields, 1022). Market demands and cost of increased production are the key determinants of whether a mine will increase production. After analysis of such concep ts, businesses would consider opening up a coalmine if the demand of the product were high. Usually, a high demand would raise the prices. High prices of the product in the market would cater for the increased cost of production. In addition, it would be a viable venture for businesses to open up coalmines if they have an innovative technology that reduces the cost of production. ... One can foresee opening up of coalmines in Britain at a time when businesses are able to combat the challenge of environmental pollution brought about by the mining process. Increased pollution at the site and its environs leads to respiratory diseases. Until a business can address such effectively, it would be futile to open up a coalmine. Addressing the issue of minimizing pollution will definitely lead to higher costs of production. Businesses should analyze the cost of managing pollution and its adverse effects. One can envisage opening of coalmines in places that are relatively safer. Risky places will reduce the utility obtained from mining. If analysis of the grounds near mines indicate a high level of safety, then it is viable to open up a mine. Operating in a safe working environment gives an individual much more satisfaction and is a condition that greatly affects mines. In addition, one can foresee opening up the reserves that are relatively easily accessible. Ease in acce ssibility of coal in a mine reduces the time and cost taken in its extraction. Analysis of the available reserves can tell whether the coal is easily accessible or needs more time and advanced machinery. It is critical that a business analyzes the cost of restoring the mine into a safe condition. In all the above cases, a business must analyze all the marginal concepts. According to Ryan, an understanding of these concepts will determine whether the venture is a viable one (225). Analysis of all the marginal aspects ranging from all types of costs incurred to the revenue gained is very critical. It is only until one of the above factors brings about a marginal change and economic calculations predict profits that businesses

Leadership and Organisational Development Style Essay

Leadership and Organisational Development Style - Essay Example This culture has been described by Hofstede (1983) as akin to a "mental programming" is shared among persons from similar backgrounds. Hofstede has shown that cultures differ in the way they view and interpret the world. Therefore, the management of persons within these cultures can often differ as well. In fact, Hofstede further points out that one should not take for granted that management and leadership methods that work in one cultural arena will do as well in another (1983). In a multicultural society, it is necessary that managers and leaders become aware of the different dimensions of employees and/or followers that exist. It is also necessary that they study the different theories of management and leadership in order to gain insight into how to deal with the different personalities and cultures that are (or might be) represented in their leadership arena (2005). The study of each method of management therefore adds to the repertoire of options a manager and leader possesses to aid in dealing with different situations that may arise. He or she may not use all the knowledge at once, but the acquisition of this knowledge leaves the manager or leader more equipped to deal with situations as employees, followers, and their situations as they change with time. Overview of Oprah Winfrey's Style The leadership style of Oprah Winfrey has demonstrated that these theories and models of leadership often put forth such well-defined characteristics of leadership that few (if any) persons could fit into any one model. Winfrey owns and manages Harpo Productions Inc., a conglomerate that contains her own talk show The Oprah Winfrey Show, as well as Dr. Phil and other television movies. Among other ventures, she also manages the publishing of the successful magazine O and is part-owner of the Oxygen Media, which houses, among other things, a cable network (Sellers, 2002). As manager of so many different business entities, she acts a leader to her hundreds of employees. This queen of talk shows and businesswoman extraordinaire evinces a style of leadership that comes closest to the Transformational Leadership Model, as this model is expressed through combination of the traits of several other theories. Yet, certain transitional periods of her tenure as leader of Harpo Productions have caused her to demonstrate traces of many of the other theories of leadership. This study will provide an analysis of her leadership style within the framework of the different sectors of her conglomerate. Analysis of Oprah Winfrey's Leadership Style: Transformational Theory Trait Theories The Transformational Theory of leadership is known to mix some aspects of Trait Theory with the behavioural theories. Alimo-Metcalfe and Alban-Metcalfe (2005) reviewed the leadership styles of over 3,500 leaders at varying levels of the corporate hierarchy. These researchers found that a model emerged that at once supported and went beyond the Transformation model and led to the development of a "360-degree" Transformational Leadership instrument (questionnaire). The instrument was found

Dollar Instability as World Reserve Currency Essay

Dollar Instability as World Reserve Currency - Essay Example This scenario is about to change (Lorimer n.p). Though the mainstream media in the U.S. has been abnormally silent about this, truth is that some of the big economies on the globe are making agreements with each other to shift from using the U.S. dollar in international trade.   Currently, some oil producing countries have begun selling oil in non U.S. dollar currencies. This is a huge threat to the petrodollar system that has been in place for almost four decades.   In addition big international organizations such as the United Nations and IMF have started advocating for the need to move away from the U.S. dollar adopt a new world reserve currency. The operation of the U.S. dollar as a world reserve currency is under threat and the impending shift in international trade will have massive implications on the U.S. economy. There are several reasons as to why countries want to get rid of the U.S dollar as a reserve currency. First and foremost is the instability of the dollar. Big economies such as China already hate having to rely on the U.S dollar. The Federal Reserve’s monetary policy that is notably loose and the rapidly rising public debt of the U.S. are troubling officials concerned with international trade. There is fear that the stimulus measures that were adopted to revive the U.S.’s flagging economy will soon generate a high inflation burst that will further weaken the dollar. Such an occurrence would be detrimental to holders of US government bonds, including China. China has about $2 trillion of its $3.2 trillion currency reserves held are in dollars most of which is in bonds. The U.S. has also lost its triple-A credit due to failure to come up with credible plans to cap its public debt (The Economist). In addition, China as the second largest economy on earth with projections that it will pass the U.S economy by 2016 and be three times larger by 2040, it is difficult for China to continue using the dollar in its economy (Lorimer n.p ). China together with other emerging economic powers such as Russia, over the past several years have been quietly making agreements that will see them shift from the use of the U.S. dollar when conducting international trade. The economy of the U.S. is continuously fading. This is going to make it difficult to argue for the U.S. dollar to continue functioning as the primary reserve currency of the world. An indication of the changing fortunes of the dollar is the recent deal between China and Japan that promotes the use of their currencies when conducting bilateral trade. Currently, they do their trade in U.S. dollars but the instability of the dollar has necessitated such an intervention. In addition to this, another emerging block referred to as BRICS comprising of Brazil, Russia, India, China and South Africa is also planning to move away from U.S. dollar based trade. The block proposes to create a credit facility that will enable these countries to use their local currencies i n trade. For over a year now, China and Russia have used their national currencies when conduction bilateral trade (Lorimer n.p). The growing use of the Chinese Currency in Africa is an indication of a process that is already in motion. In 2009, China overtook the United States of America as Africa’s biggest trading partner. Many African countries therefore prefer to use the Chinese yen in trade With China so as to reduce transaction cost incurred in acquiring U.S dollars. It is approximated that 70,000 Chinese

Law of the Sea Essay Example | Topics and Well Written Essays - 2000 words

Law of the Sea - Essay Example The different provisions of this convention included setting of limits, navigation rules, exclusive economic zones, continental shelf, deep seabed mining, the exploitation regime, prospects of technology, the issue of universal participation in the convention, pioneer investors, protection of the marine environment, marine scientific research, and settlement of disputes3. The present study focuses on the UN Convention on the Law of the Sea 1982 and discusses about the powers that the Convention provides to flag, port and coastal states trying to determine its effectiveness and appropriateness towards prevention, control and minimization of pollution and damage to the marine environment. UN Convention of the Law of the Sea: Article 94 Presenting Duties of the Flag State: According to the Article 94 of the convention, it was the duty of every State to implement authority and be in command of the managerial, procedural and communal matters in regard to the ships flying its flag4. A regi ster of ships is required to be maintained in every State that contains the details of all the ships flying its flags excluding the ones that are not under the policies of international regulations5. While every State should follow their internal laws, they are supposed to execute significant control over the administration of the ship flying its flag as well as the masters, the crew and the officers associated with the ship6. The convention provides that every State has the responsibility to consider measures for safety in regard to the (a) the construction, equipment and seaworthiness of ships; (b) the manning of ships, labor conditions and the training of crews, taking into account the applicable international instruments; and (c) the use of signals, the maintenance of communications and the prevention of collisions7. The details of the ships flying its flag are required to be monitored and evaluated by qualified surveyors not only before the ships fly their flags but also at reg ular intervals once the ships have started. Charts, nautical publications and navigational equipment and instruments that are necessary for the purpose of navigation safety of the ship also need to be available8. Officers and masters in association of the ships should be suitably qualified in seamanship, routing, communications and marine engineering and that the crew members possess sufficient knowledge regarding the type, size, technology and equipment of the ship9. The convention also provides that the crew members as well as the officers and masters need to be acquainted well with the regulations as directed by the law for the safety of life at sea, the avoidance of collisions, the anticipation, diminution and power of marine pollution, and the maintenance of communications by radio10. For the implementation of the above mentioned measures, the convention also rules that every State should be familiar with the regulations, procedures and practices11 internationally stated and th us consider safety measures accordingly. A State has the provision of reporting to the flag State in case any irresponsibility or lack of proper control is observed by the State in relation to the ship flying its flag12. In case of any casualty or incident in navigation leading to loss of lives or in cases of serious

Should the UK government restore the 50% additional rate of income tax Essay - 4

Should the UK government restore the 50% additional rate of income tax - Essay Example From a general perspective, one can easily identify the motives of the UK government in terms of pumping out fund flow from the economy. Observing with an economic perspective, the tax hike initiative of the UK government can be categorized as a major deterrent factor that has slowed down the pace of functionality of this nation’s economy by a considerable extent (Young & Saltiel, 2011). UK citizens, in the present market economic scenario, are literally forced towards paying high rates of taxes whereas the lower income groups are made to pay marginal amounts. Considering all these aspects, the discussion will majorly focus towards answering the currently rising question regarding whether the UK government should restore the 50 per cent additional hike of income tax rates. Maintaining correspondence, the details regarding these aspects have been elaborated in the underneath sections. As mentioned above, the objective of this paper is to analyse the impacts of income tax hike on the overall trade practices and economic pace of development of the UK. Based on the findings generated thereupon, appropriate conclusions will be made constructed as to whether the UK government should bring down its present income tax levels to 50% as previous. In contemporary macro-economic concepts, taxation is deemed as one of the fundamental tenets that holds significant influence on the stability and performance of any nation. It operates as a basic mechanism in the financial system of a country. The history behind imposing an additional 50% on the existing income tax rates can directly be linked with the hollow and un-rational mentality of the coalition government. The coalition government intended to impose a higher level of tax burden upon the richer income groups with the intention of attaining better revenue inflow along with stability in the overall wealth distribution process within

Assistive Technology Essay Example | Topics and Well Written Essays - 750 words

Assistive Technology - Essay Example Introduction Assistive technology refers to the technology used by disabled persons to enable them overcome the difficulties they experience. This technology includes devices such as wheelchairs and walkers, which aid in mobility (Pruski & Knops, 2005). Hardware and software used to access computers and information technologies by disabled people also form part of assistive technology. For instance, persons whose hands have limited function can use keyboards that have large keys or a specific mouse while operating computers. Blind people can use software that generates text in a computer screen from a voice generated by the computer. In addition, people who do not see properly can use software that will enlarge the content in the screen of the computer; while deaf persons may use a text telephone (Solarz, 1990). Research Methods, procedures, and instruments. Data in this research will be collected using the interview method, by asking the participants questions regarding the study to pic. Participants in the study will include beneficiaries of assistive technology; people faced with disabilities to the extent that they wholly depend on assistive technology. Data will also be collected from families of disabled persons, and teachers who use assistive technology while dealing with disabled students. ... Previously documented sources of data can also be reliable as they include empirical findings on research already conducted on the topic. The data collection tools, methods, and instruments will be pretested to determine their validity and reliability. Findings advantages Assistive technology enhances learning in people with disabilities, as it helps them to communicate with ease, and receive instructions in a manner they can easily comprehend. When disabled persons use this technology, they become independent because they can move and play without seeking assistance from other persons (Blackstone, 1990). Therefore, the adoption of assistive technology promotes learning in children with disabilities. Pruski & Knops (2005) assert that teachers and caregivers find the technology useful while dealing with the disabled children, as it speeds up learning in children and enables them to be at the same level with other children. The use of the technology makes people with disabilities to be more functional than they could be without the technology. As a result, the technology turns out to be useful in early interventions to model the disabled persons. Assistive technology enables the disabled persons to access recreation facilities and entertainment. Resulting from the technology, persons with disabilities become rehabilitated; they can be employed in organizations because computers enable them to have the ability to work (Jonge et. al, 2006). Teachers apply different styles of learning to instruct students while using assistive technology. Instructions based on the use of computers improve motivation of the students and gives immediate feedback. Once disabled

Time Warp Essay Example | Topics and Well Written Essays - 1000 words

Time Warp - Essay Example I realized I was in a different dimension. I have traveled back in time. So I went on with my journey. I was hired at Handheld Corp. and was given a rather comprehensive task. I was asked to review Joe Schmoe’s financial report on handheld products sales. Analysis On the PDA simulator I had a final score of 1,185,800,553. I did better than Joe Schmoe by 20,890,196. I have observed that Joe’s strategy was a â€Å"lazy† implementation of marketing. If he took the time to analyze the performance of a product and what prices were appropriate to set, he would yield higher profits. I have made numerous attempts using a simulator to prove that my strategies worked better. I followed the advisor’s analysis and used it as my guide in pricing and allocation of R&D. One strategy I used for marketing handheld products is market segmentation. This is implemented by providing handheld products in different categories (X5, X6, and X7) to serve specific needs of target cu stomers and increasing market share. Even with the discontinuation of X5 handheld in 2009, it was a strategy to market better available products to attract buyers. Pricing strategy was also what I’ve used relative to R & D allocations to generate profits. For instance, X5 sales were starting to decline. In 2008, I did not drop the price significantly or I Time Warp 2 will lose a lot of money. I was able to keep customers who purchased the X5 handheld for $240. Then, I decided to discontinue the product the following year to avoid more losses. R&D allocations were a bit tricky. I used the advisor’s analysis to manipulate the allocations. For example, when X5 was discontinued in 2009, I kept the same prices for X6 and X7 as of 2008 in 2009 and increased their R&D allocations to 30% and 70% respectively. The tremendous increase in R&D had a positive impact on revenues. However, in 2008, I decided to distribute R&D of 25% equally to X5, X6, and X7 handheld products. When I tried to reduce X5 R&D to 10%, I had a higher loss. With 25% R&D I was able to avoid the loss of -9,870,920 and reduced it to a loss of -$6,176,598. If I didn’t adjust that 10% R&D, it would affect profits for 2009. I also based my analysis on the product performance and on what level they are in terms of sales. For instance, X7 handheld was in the ‘growth phase’ in 2006 with a profit of $3,199,108. The following year, I reduced its price to $200 and allocated a higher R&D of 25%. The result was phenomenal. I had a profit of $23,555,939. Maintaining the 25% R&D and price the following year, the profit for X7 was more than doubled. Here’s the breakdown of prices, R&D allocations, and profits for X5, X6, and X7: 2006    PRICE R & D allocation PROFITS X5 255 25% $105,374,127 X6 415 30% $164,680,477 X7 215 23% $3,199,108 TOTAL       $273,253,711  Time Warp 3 I increased the prices for all handheld products and decreased their R&D. As a result, advisor y said X7 handheld was in the growth phase and potential X7 customers were new customers. X7 handheld performance was holding steady while X6 was priced the same as other competing products. Although Joe gained a higher profit of $295,185,49 in 2006, it was only temporary. 2007    PRICE R & D PROFITS X5 245 25% $98,442,902 X6 415 30% $213,598,730 X7 200 25% $23,555,939 TOTAL       $335,100,583  Since X6 performance was better than that of competition, I decided to maintain the price and R&D and it paid off as I had a higher profit. However,

The concepts of empowerment Essay Example for Free

The concepts of empowerment Essay Question 1 Explain the concepts of empowerment, self-managed teams, and cross-functional teams, and develop an essay that argues for their inclusion in either a tall or flat organizational structure. Empowerment is the process of giving employees the authority to make important decisions and to be responsible for their outcomes. Empowerment should exist in tall organizational structure because if the size of the tall organizational structure is bigger is operating process or more tasks appear or tasks become more and more complex, managers at the top of hierarchy will gradually lose the control regarding their work. Self-managed teams reflect self-lead work groups consisting of people who are jointly responsible for ensuring that the team accomplishes its goals. Self-managed teams should exist in flat organizational structure because self-managed teams need to be control well with a few levels to avoid hindering communications. Cross-functional teams are groups of employee from across an organization’s different functions who are empowered to direct and coordinate the value-creation activities. Question 2 Bureaucracy is a phenomenon that presents itself in varying degrees in organizations. When does bureaucracy become a problem in an organization? How can the principles of bureaucracy help managers to design the organizational hierarchy? What can managers do to prevent bureaucratic problems from arising? Bureaucracy becomes a problem when it hampers the work of the organization. When there are too many steps involved and too many people involved to solve issues and make quick decisions, then bureaucracy is a problem. When the hierarchy is inflexible and difficult to wade through, it is a problem. Decisions should not be made without adequate information and time, but when the decisions are bogged down in bureaucratic red tape, the rules and layers of approval, then companies can lose business and opportunities to  act in tune with the market. The principles can help identify the form and the job functions. It helps design the jobs and the technical skills needed to do the jobs so that the best people can be hired to do the job. The principles establish the rules and the focus of the company so there are firm expectations and goals. When all of these are put in place the managers then have the path to follow to create a successful company. Managers must remember that each person is hired because of their skills if the principles are followed. The need for decisions must not be hampered by a top heavy group of decision makers and the rules are in place to guide the decision making process. The hierarchical structure is a form, not a law and when rules and the hierarchical are the only considerations in decision making the systems becomes bogged down and inflexible, or worse, time consuming. In addition, the job and the functions of the company should be impersonal and so should the treatment of employees. Equality is important in an organization. Listening to everyone, accepting diversity in culture, experience, and knowledge can help a company avoid many problems in a bureaucracy. Reference: http://www.bustingbureaucracy.com/excerpts/weber.htm

Voluntary Involuntary And Non Voluntary Euthanasia Essay

Voluntary Involuntary And Non Voluntary Euthanasia Essay In 1995, the Australian Northern Territory was the first place in the world to legalise voluntary euthanasia under the Rights of the Terminally Ill Act 1995. The first person to voluntarily end their life on Sunday, 22 September 1996 was Bob Dent, a terminally ill patient with prostate cancer (Grey 1999, p.19). As a reaction to this law and Bob Dents death a Liberal Party backbencher, Kevin Andrews introduced the Euthanasia Laws Bill 1996 which being a Federal Act over road the Northern Territory Act making euthanasia illegal in all States and Territories of Australia. Nonetheless, the vast majority of Australians from doctors to philosophers support voluntary euthanasia. For example, Australian philosopher, Peter Singer, actively supports euthanasia in his book of Taking Life: Human while pro-euthanasia Doctor Phillip Nitschke assisted Bob Dent to die by a lethal injection. This essay explains what euthanasia is and discusses whether voluntary euthanasia should be a right of the terminally ill. Euthanasia means a gentle and easy death, (Oxford Dictionary of Phrase and Fable 2006) and it is usually used to refer to the induced death of those who are incurably ill and in great pain or distress in order to spare them further suffering or distress. It is often referred to as mercy killing. Singer (1993, p.175) classified euthanasia as voluntary, involuntary or non-voluntary. Involuntary euthanasia means without the consent of the person who dies even if they express a wish to live and is effectively murder even if the motives are to benefit the deceased. Non-voluntary euthanasia occurs where a persons mental age is or has always been that of an infant so that they have no capacity of express any preference to live or die such as when someone is severely disabled infant since birth or those who suffer severe brain damages after accidents and become permanently mentally disabled. Sometimes people in this situation are allowed to die by withdrawing medical services such as intensive care treatment. Voluntary euthanasia which is where a person consciously chooses an early death (Singer 1993, pp.175-177). This essay will only focus on ethical arguments as to whether voluntary euthanasia and non-voluntary should be legalised. One argument for euthanasia is the utilitarian principle which says that the lives of some people can be sacrificed for the benefit of others deemed more worthy of care. It has been said that When applying the utilitarian theory to the ethics of euthanasia, can it not be said that Self Deliverance for a competent terminally ill patient is an unselfish act (Maj 2002)? Utilitarianism is commonly expressed as the greatest good for the greatest number (Rohnann 1999, cited in Rich Butts 2005, p. 9). A moral theory is utilitarian if and only if it assesses rules in terms of nothing but their utility. Jeremy Bentham, invoked what he described as a fundamental axiom it is the greatest happiness of the greatest number that is the measure of right and wrong (Bentham 1823). Utilitarians theorise that there is the same ground for voluntary euthanasia as for non-voluntary euthanasia as death is the benefit for the person killed but is it possible to justify ending the life of a human being who lacks the capacity to consent in the same way as where people are capable of consenting, and do in fact consent (Singer 1993). Utilitarians consider that death will bring peace to the patient, family and friends and can be justified purely on the utilitarian grounds that a terminally ill person has lost the ability to pursue the intellectual or physical life they once had or has lost dignity by becoming dependent on others for fundamental needs such as going to the toilet. (Maj 2002). Something I can identify with having seen my once proud grandfather after a stroke having to wear a nappy. In my opinion for many once dignity and self sufficiency are lost death is a release. The strongest argument for active voluntary euthanasia is based on respect for individual autonomy or self governance. Autonomy is the belief that every person has the right to shape their own life through their choices which includes the right to choose the time and circumstances of their death and is expressed concerning basic human dignity (Grey 1999, p.21). The principle of autonomy is an expression Kants ideal that having ones own choice whether that choice is good or bad is of paramount importance for life. Kant believes that suggesting someone knows better than yourself in such a personal thing as death is a dubious paternalistic presumption (Grey 1999,p.21) in many ways similar to this current governments belief that they know best what you should see or read on the internet. J.S. Mill in his expression of the harm principle state: the only purpose for which power can be rightfully exercised over any member of a civilised community, against their will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant. (Grey 1999, p.21) Autonomy acknowledges an individuals sovereignty over all acts which only affect self on the basis that it is insupportable to have someone else choose the timing of ones own death. (Grey 1999,p.21). This is difficult to argue against since only in the most horrendous crimes do States now have the power to deprive a criminal of life yet involuntary euthanasia suggests they have the right to kill non criminals. However if a person chooses to die we should respect that wish. Peter Singer believes voluntary euthanasia is a matter of respecting a persons preference and overall well-being, welfare or interests in their particular circumstances such as when they are suffering from cancer. In Holland, a nationwide government survey found that Many patients want an assurance that their doctor will assist them to die should suffering become unbearable (Singer 1993). One argument for euthanasia which involves utilitarian theory is the need to reduce societys costs in an ever more crowded world by reducing the number of people needing intensive care. There are many arguments against euthanasia. The possibility of abuse is one of the most common arguments against euthanasia. Abuse may mean patents are pressured by families or medical facilities to agree to ending their own life. Family may want to see the suffering end but they may also want to see the inheritance now. Doctors may wish to free up scare medical resources for those they believe they can save and in fact hospitals make these sort of choices by withdrawing medical support for the terminally ill. Opponents argue that we can never be sure that a request to be killed is the result of a free and rational decision, particularly as they are likely to be suffering pain, very probably drugged and confused (Singer 1993). Depression is also an issue because it is a form of pressure from within. A depressed person is more likely to choose to take their own life whether or not they are terminally ill. Another argument against euthanasia is the level of protection required to ensure it is not misused will actually make it more painful. No one who is ill is going to want to face a barrage of questions and forms to choose death yet leaving the documentation to Doctors or Family or some other party leaves open the door to abuse. There is also the opening the floodgatesor Slippery Slope argument that if society accepts euthanasia as a universal right of competent terminally ill patients to decide their fate (Maj 2002) then how long will it be before society decides what should be done with the chronically ill, handicapped or simply old who no longer contribute but are a burden on society. The Catholic Church objects to euthanasia on religious grounds saying that the church opposes euthanasia as that life which God has bestowed on each one of us, can never be sacrificed for the sake of the good of self-determination as it contravenes the Thou shalt not kill commandment (Demarco 2003, p. 154).However, the church distinguishes euthanasia from decisions to forego aggressive medical treatment which are medical procedures which no longer correspond to the real situation of the patient, either because they are by now disproportionate to any expected results or because they impose an excessive burden on the patient and his family (Demarco 2003, p. 155). In conclusion, voluntary euthanasia may be seen as a way of giving respect to those who are in distress and paid and wish to leave life, family and friends with dignity. While there are arguments against voluntary euthanasia they are, apart from religious moral concerns, easily overcome by putting in place appropriate safeguards such as a number of independent witnesses who must ensure that the person who is contemplating euthanasia is fully aware of what they are doing and that there is no going back. Non-voluntary euthanasia is more difficult as no consent is possible but can be justified on the grounds that the benefit to society is larger than the detriment to the individual particularly if the individual is and has been so damaged that they cannot appreciate the life they live. Singer says in his book of Rethinking Life and Death We should say theyre alive but nonetheless their life is not viable. They are alive but that life is not worth living (Singer 1999)

Online Shoe Company Business Strategy

Online Shoe Company Business Strategy INTRODUCTION The business strategy game is an online, PC-Based game in which you run the world wide athletic footwear market in confronting each other competition against other markets companies run by different group of students into different industry. But this paper only focus on the industry 10 where 12 different companies named Air Nike, Dolce and Banana, IMF vs WTO, Fabulous Foots, Galpha, BAD BOYZ III, Legs supreme, CHU WUB CHU WUB, KVincci, , E-XIE, HA-N Ltd., and Just walk are included. In my industry BAD BOYZ III includes five members (Virayudh Baram, Saif Ur Rehman, Ying Zhao, Maliha Hasin and Imran Shahzad) are responsible for managing all aspects of the companys operation. Every company tried to use their best technique and execute well planned strategies for their company specially considering against the strategies of competitor companies, delivers good bottom-line results (Net Revenue, Earning per share (EPS), the return on equity (ROE), stock price, credit rating and image rating ) and builds shareholder value. This paper is divided in three main sections. First section describe the strategy adopted by BAD BOYZ III Company with the help of Michael Porter â€Å"Five Forces† theory, second section describes the external analysis of company using PESTLE analysis and at end the BAD BOYZ III company analysis from year 11 to year 17 will be discussed with each year progress diagrams shown in Appendix. BUSINESS STRATEGY IMPORTANCE The business strategy game is real time practice business environment. In this game our role is as Manager who responsible to use productive and efficient strategies for company production and profit. In strategic management the role and effect of top managers on company performance and importance of this relationship how may be affected by companys strategy is always recognize as critical issues (Hambrick and Mason (1984), Gupta and Govindarajan (1984), Gunz and Jalland (1996)). Business strategy is influenced by top management team of any firm (Hambrick and Mason, 1984). MICHAEL PORTER (1985) BASIC STRATEGY MODEL Michael Porter (1985) describes market Industry constitution and arrangement within the market is key factor for establishment of competitive strategy. Competitive advantages of any company against other competitors can be described by the â€Å"Five Forces† diagram shows the main idea of Porters theory of competitive advantage. This theory helps companies to know about the rules and regulation of competition in market. Porter argues, The ultimate aim of competitive strategy is to cope with and, ideally, to change those rules in the firms behavior (1985, p. 4).† According to Porter five forces find out company prosperity and profitability. Micheal Porter (1985) five forces are given below: Threat of substitutes Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Competition among existing companies Porters 5 Forces Elements of Industry Structure In strategy implementation, competitive advantages, utilizing new production, new inputs for Foot Wear industry Porters Value Chain and Activity Mapping ideas give us useful information to applying these all activities. The value chain activities help BAD BOYZ III Company for examining all activities related to company performance and interaction such as (e.g. development, marketing, sales, operations, etc.) as a potential source of advantage. In year 12 company situation was little bit down and we were losing market shares in such situation we adopted the value chain activities of Porter. These activities help company existing and potential sources of differentiation e.g. products, associated services. The reason to choose this strategy ‘low cost and value chain system was helpful to underline the competitive advantages that cannot come from production side but anywhere from value chain. It also helps us to fit into value chains like suppliers, buyers and channels. PESTLE ANALYSIS PESTLE analysis is usually used to measure the organizations external factors like position, potential and direction for a business or organization. PESTLE is an acronym for Political, Economic, Social, Technological, Legal and Environmental factors. BAD BOYZ III Company PESTLE analysis is measured below: Political Factors Political factors illustrate that how and to what extent government intervenes in the investment. The main politics factors are trade barriers, tax policy, trade policies, labor law, export tariffs and environmental law. As concern to BAD BOYZ III Company not much influenced by these factors as all four regions North America, Asia Pacific, Latin America and Europe are associated with WTO. Economical Factors Economic factors show how business operate and what of decision would be make, these factors include economic growth, interest rates, exchange rates and the inflation rate. In the success and development of BAD BOYZ III company exchange rate, affect the costs o exporting products and the supply and price o imported product in an economy, plays a major role. From year 11 to year 17 company maintained a steady exchange rate. Even though company made some mistakes but due to healthy exchange rate company never fall badly. Social Factors These factors show cultural effects, health and safety aspects, people their age, population and growth rate, age and careers approaches. BAD BOYZ III Company participated in charity an as well Corporate Social Responsibility (CSR) and also providing complete health and safety environment. Technology Factors Technology factors are ecological and environment aspects like Research and development (R D), technology usage rate and automation, determine barriers to entry, low productive manufacturing level and impact on outsourcing decisions. BAD BOYZ III knows the importance of technology and benefits in business environment. Company all private label capacity stocks in Latin America and Asia Specific was up to date because these technology shifts can affect costs, quality, and lead to innovation. Environment Factors In environment major factors are weather, climate and variation in climate include weather, climate, and change. These factors can be analyzed as company insurance, farming and tourism. Up to date with weather inform company operation according to weather and products they offer to their customers. Legal factors Legal factors determine company legal boundary, discrimination law, consumer law, antitrust law, employment law, and health and safety law. These are average fixed value of any country and companies cannot across these boundaries. ANALYSIS OF BAD BOYZ III COMPANY FROM YEARS 11 TO 17 A complete and in depth analysis of BAD BOYZ III company is given below: Year 11 In the begging of year 11, BAD BOYZ III has total production plant capacity 6,000,000 to complete the requirements of production only for two regions North America and Asia Pacific. BAD BOYZ III Company has also managed to fulfill the production requirements of remaining regions Latin America, Europe-Africa. In the start of year 11 the demand in North America and Asia Pacific is not much high as compared to present production. So our company decided to sell 200,000 production in North America and 800,000 in Asia Pacific. BAD BOYS III adopt strategies free shipping, model offer and attractive price and advertisement in internet segment and in whole sale garment we offer rebate and model with delivery time guaranteed and advertisement to compete in competitive market. With these strategies we got good market share in internet segment but the market share in whole sale was not according to wish. At the end of year 11 our companys progress was good in contrast with other market companies with 7th position out of the 12. BAD BOYZ III company overall progress was good in footwear industry with revenue $266583000, net profit $ 30224000 with credit rating A-. Year 11 complete detail of BAD BOYZ III competitive strengths and weakness and development can be seen from appendix-1. Year 12 In year 12 BAD BOYZ III company co-managers made some changing in their management and business strategy to get maximum profit from footwear industry market. As the result of year 11 and market competitive approach we decided to sell our products with high and standard quality. As the result of new strategy, quality of product, profit was good and also helped to get high position. In internet segment our competitive strength was marketing, celebrity appeal, S/Q rating and model offer but with some weakness like retail price and shipping charges was some kind of not good factor in competitive market. In whole sale market our S/Q rating, rebate offer and retailer supports were our competitive strength points while the competitive weakness were wholesale price and retail outlets. At the end of year 12 because of some weaknesses in whole sale market and internet segment, company overall progress and position of BAD BOYZ II was down 10 out of 12 with revenue 201395000, net profit 8,587,000, EPS 0.86 and credit rating â€Å"c†. The complete description of BAD BOYZ III company year 12 weaknesses, strengths and overall progress is shown on appendix -2. Year 13 Year 12 result forced the BAD BOYZ III management to seriously take the notice of company performance that is going down. After a long discussion among BAD BOYZ III company co-manager we concluded that we should re-evaluate the company strategy and offer high quality products with low price that strategy lead to ‘low cost and increase market shares described by Portal(1985) five forces theory which is focus on high quality with low price. To achieve maximum profit and top position in footwear market we also considered about the private label segments. Year 13 is the year of thinking for us as the result of year 12 that make us to re-think our all strategies and policies that makes impact on our competitive strategies. With adoption of new strategy our competitive strengths retail price, advertising and model significantly increased but still some weaknesses are shipping charges and retail outlet are there. Because of change in strategy and improvement in retail segment, at end of year 13 Company received very good response in private label segment and got satisfaction results in other segments like revenue $ 393,872,000 that is double of last year 12, net profit was $ 31,854,000 with the ratio of earning per share equal to 3.19. These out comes caused companys rank improvement like was 8th out of 12th. In appendix-3 the BAD BOYZ III Companys year 13 overall progress including strength and weaknesses has shown. Year 14 Year 13 results increase our confidence and courage to getting more effective and efficient in the market and also lead us to understand the purchasing behavior of consumers. In year 14 we continued our last used strategy high quality with cheap price to attract more and more customers. It can only be achieved with high production as amount of consumers increased compared last year. To complete this target we need high amount money thats why BAD BOYZ III Company took a long term loan $ 248,000,000 from the bank. That loan enabled us to fulfill the production plant capacity 4600,000 per year in North America. To get high profit and maximize the sale production we seriously focus on private label that enables BAD BOYZ III competitive strengths increased as compare to the year 13 and sufficient reduction in weaknesses like internet segment and wholesale segment. End of the year 14 BAD BOYZ III Company almost received 100% response and overall progress was getting better with revenue $577,496,000 and net profit $41612, 000. In private label segment company done well and sell all pairs in private label segment caused the market share of private label segment increased such as 76.6% in North America, 52.0 % in Asia-pacific and 62.9% in Latin America as contrast to other market shares. This year increase in private label segment and overall progress helped BAD BOYZ III Company to improve its position like 6th out of 12th. For over all progress see Appendix-4. Year 15 Year 15 was little bit thinking year for BAD BOYZ III management team as the competition and consumers increasing unexpectedly. So our management decided to fix with no cost leadership and customer purchasing behaviors strategy by following Porter (1985) five forces and considering more on North Americas private label segment. The main reason to focus on North America was company high expenditure in this region because of more consumers and demands. Company wanted to get 100% feedback from that region as last year our management bought new plant capacity for it. Increased in demand and production caused the increase in BAD BOYZ III competitive strengths as compare to previous year such as ‘celebrity appeal but weakness remained same as ‘model availability. End of the year 15th brought good news in market share as BAD BOYZ III achieved all market share from North America in private label segment as compared to other regions but with some sad news as company lost his market share in rest of regions. The total revenue was $ 530,284,000 and net profit $ 55474,000 which is somewhat increased as contrast to year 14. In BAD BOYZ III company success story another success was stock prize $ 102.49 and company also offered amount 10,135,000 dividend this year. The company rank was getting better and better as was 5 out of 12. In Appendix-5 year 15 overall progress is shown. Year 16 In year 16, BAD BOYZ III Company decided to remain fixed with same strategy as in year 15 company sold almost all products. To achieve this target company decided to increase the production and plants in different segments especially in North America and Asia Pacific to produce more revenue. Company was getting satisfaction feedback from North America, so company decided to build more plant capacity in North America as well in Asia Pacific region. BAD BOYZ III Company purchased 1500 plant capacity and build 500 in North America and also considering Asia Pacific purchased 800 plants capacity in that region. In year 16th the companys competitive strengths were celebrity appeal and advertising same as last year and company also tried to get rid of the weakness related to company production and profit. Company decided to sell quantity of 500 stocks in the price of $ 96.72 as stock price was really high. At the end of the year 16th the BAD Company revenue was $ 537,898,000 that is little bit high as contrast the previous year and net profit was $30,721,000. As company was getting almost 100% market share in private label from North America caused BOYZ III market share strong position in foot wear market. Appendix-6 represents the Year 16 over all progress. Year 17 Year 17 was decision year for BAD BOYZ III management because company management decided to buy new plant in North America with capacity of 1,900,000 pairs per year. This decision is made on behalf of the year 16 results as consumers increase unexpectedly. Company also reduced the 50% prices of pairs to sell more and more products in all regions to accomplish this strategy and apply these prices we need more and more stocks. Company decided to purchase new 3135 stocks with the price of 57.73 per share. These share prices were higher than the average market shares and company still focusing on North America private label segment with 90.5% share. As mentioned above year 17 was decision year for BAD BOYZ III to make another major decision in market. For this purpose we make a commission to discuss all aspects of Footwear Company including stocks and competitive environment. In this commission we included that we should offer 4000 pair at price of $ 40, was doubled as compare to last year, in North America private label region. That decision is made on two reasons: From the last few years company was getting required feedback from North America. There were no strong competitors in North America. At the end of year 17th the decisions made and strategies applied resulted in excellent outcomes. In North America private label company sold 3546 pairs out of 4,000 at double price $40. BAD BOYZ III company revenue was 690,317,000 and net profit was 107,491,000 increased highly up to 300%. These successful factors boost company rank to top three positions like was 3rd out of 12. The other big achievement was in region of Earning per Share (EPS) that was $14.33 helped to come in 76th position from all over the world in footwear industry. APPENDIXES Appendix-1 Year 11th BAD BOYZ III Annual Summary Report Appendix-2 Year 12th BAD BOYZ III Annual Summary Report Year 12th BAD BOYZ III Annual Summary Report Revenue Net Profit Earnings Per Share Stock Price Return On Equity Image Rating Credit Rating $201,395,000 $8,587,000 $0.86 $21.07 4.60% 61 C North America Internet Segment: Wholesale Segment: Private Label Segment Actual Industry Average Actual Industry Average Actual Market Demand Price $75.30 $68.57 $62.66 $52.47 MAX $47.47 Model Offered 200 168 200 192 Advertising $15,000,000 $6,959,000 $15,000,000 $6,879,000 Celebrity Appeal 100 23 100 21 S/Q Rating 6 5 6 5 4 Market Share 10.0% 9.1% 6.6% 8.3% 0.0% 100.0% Europe Africa Internet Segment: Wholesale Segment: Private Label Segment Actual Industry Average Actual Industry Average Actual Market Demand Price $75.30 $69.52 $62.80 $53.32 MAX $48.32 Model Offered 200 166 200 192 Advertising $15,000,000 $6,771,000 $15,000,000 $6,771,000 Celebrity Appeal 70 18 70 18 S/Q Rating 6 5 6 5 4 Market Share 9.4% 8.3% 7.2% 8.3% 0.0% 100.0% Asia Pacific Internet Segment: Wholesale Segment: Private Label Segment Actual Industry Average Actual Industry Average Actual Market Demand Price $75.30 $68.57 $95.53 $51.88 MAX $46.88 Model Offered 2 Online Shoe Company Business Strategy Online Shoe Company Business Strategy INTRODUCTION The business strategy game is an online, PC-Based game in which you run the world wide athletic footwear market in confronting each other competition against other markets companies run by different group of students into different industry. But this paper only focus on the industry 10 where 12 different companies named Air Nike, Dolce and Banana, IMF vs WTO, Fabulous Foots, Galpha, BAD BOYZ III, Legs supreme, CHU WUB CHU WUB, KVincci, , E-XIE, HA-N Ltd., and Just walk are included. In my industry BAD BOYZ III includes five members (Virayudh Baram, Saif Ur Rehman, Ying Zhao, Maliha Hasin and Imran Shahzad) are responsible for managing all aspects of the companys operation. Every company tried to use their best technique and execute well planned strategies for their company specially considering against the strategies of competitor companies, delivers good bottom-line results (Net Revenue, Earning per share (EPS), the return on equity (ROE), stock price, credit rating and image rating ) and builds shareholder value. This paper is divided in three main sections. First section describe the strategy adopted by BAD BOYZ III Company with the help of Michael Porter â€Å"Five Forces† theory, second section describes the external analysis of company using PESTLE analysis and at end the BAD BOYZ III company analysis from year 11 to year 17 will be discussed with each year progress diagrams shown in Appendix. BUSINESS STRATEGY IMPORTANCE The business strategy game is real time practice business environment. In this game our role is as Manager who responsible to use productive and efficient strategies for company production and profit. In strategic management the role and effect of top managers on company performance and importance of this relationship how may be affected by companys strategy is always recognize as critical issues (Hambrick and Mason (1984), Gupta and Govindarajan (1984), Gunz and Jalland (1996)). Business strategy is influenced by top management team of any firm (Hambrick and Mason, 1984). MICHAEL PORTER (1985) BASIC STRATEGY MODEL Michael Porter (1985) describes market Industry constitution and arrangement within the market is key factor for establishment of competitive strategy. Competitive advantages of any company against other competitors can be described by the â€Å"Five Forces† diagram shows the main idea of Porters theory of competitive advantage. This theory helps companies to know about the rules and regulation of competition in market. Porter argues, The ultimate aim of competitive strategy is to cope with and, ideally, to change those rules in the firms behavior (1985, p. 4).† According to Porter five forces find out company prosperity and profitability. Micheal Porter (1985) five forces are given below: Threat of substitutes Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Competition among existing companies Porters 5 Forces Elements of Industry Structure In strategy implementation, competitive advantages, utilizing new production, new inputs for Foot Wear industry Porters Value Chain and Activity Mapping ideas give us useful information to applying these all activities. The value chain activities help BAD BOYZ III Company for examining all activities related to company performance and interaction such as (e.g. development, marketing, sales, operations, etc.) as a potential source of advantage. In year 12 company situation was little bit down and we were losing market shares in such situation we adopted the value chain activities of Porter. These activities help company existing and potential sources of differentiation e.g. products, associated services. The reason to choose this strategy ‘low cost and value chain system was helpful to underline the competitive advantages that cannot come from production side but anywhere from value chain. It also helps us to fit into value chains like suppliers, buyers and channels. PESTLE ANALYSIS PESTLE analysis is usually used to measure the organizations external factors like position, potential and direction for a business or organization. PESTLE is an acronym for Political, Economic, Social, Technological, Legal and Environmental factors. BAD BOYZ III Company PESTLE analysis is measured below: Political Factors Political factors illustrate that how and to what extent government intervenes in the investment. The main politics factors are trade barriers, tax policy, trade policies, labor law, export tariffs and environmental law. As concern to BAD BOYZ III Company not much influenced by these factors as all four regions North America, Asia Pacific, Latin America and Europe are associated with WTO. Economical Factors Economic factors show how business operate and what of decision would be make, these factors include economic growth, interest rates, exchange rates and the inflation rate. In the success and development of BAD BOYZ III company exchange rate, affect the costs o exporting products and the supply and price o imported product in an economy, plays a major role. From year 11 to year 17 company maintained a steady exchange rate. Even though company made some mistakes but due to healthy exchange rate company never fall badly. Social Factors These factors show cultural effects, health and safety aspects, people their age, population and growth rate, age and careers approaches. BAD BOYZ III Company participated in charity an as well Corporate Social Responsibility (CSR) and also providing complete health and safety environment. Technology Factors Technology factors are ecological and environment aspects like Research and development (R D), technology usage rate and automation, determine barriers to entry, low productive manufacturing level and impact on outsourcing decisions. BAD BOYZ III knows the importance of technology and benefits in business environment. Company all private label capacity stocks in Latin America and Asia Specific was up to date because these technology shifts can affect costs, quality, and lead to innovation. Environment Factors In environment major factors are weather, climate and variation in climate include weather, climate, and change. These factors can be analyzed as company insurance, farming and tourism. Up to date with weather inform company operation according to weather and products they offer to their customers. Legal factors Legal factors determine company legal boundary, discrimination law, consumer law, antitrust law, employment law, and health and safety law. These are average fixed value of any country and companies cannot across these boundaries. ANALYSIS OF BAD BOYZ III COMPANY FROM YEARS 11 TO 17 A complete and in depth analysis of BAD BOYZ III company is given below: Year 11 In the begging of year 11, BAD BOYZ III has total production plant capacity 6,000,000 to complete the requirements of production only for two regions North America and Asia Pacific. BAD BOYZ III Company has also managed to fulfill the production requirements of remaining regions Latin America, Europe-Africa. In the start of year 11 the demand in North America and Asia Pacific is not much high as compared to present production. So our company decided to sell 200,000 production in North America and 800,000 in Asia Pacific. BAD BOYS III adopt strategies free shipping, model offer and attractive price and advertisement in internet segment and in whole sale garment we offer rebate and model with delivery time guaranteed and advertisement to compete in competitive market. With these strategies we got good market share in internet segment but the market share in whole sale was not according to wish. At the end of year 11 our companys progress was good in contrast with other market companies with 7th position out of the 12. BAD BOYZ III company overall progress was good in footwear industry with revenue $266583000, net profit $ 30224000 with credit rating A-. Year 11 complete detail of BAD BOYZ III competitive strengths and weakness and development can be seen from appendix-1. Year 12 In year 12 BAD BOYZ III company co-managers made some changing in their management and business strategy to get maximum profit from footwear industry market. As the result of year 11 and market competitive approach we decided to sell our products with high and standard quality. As the result of new strategy, quality of product, profit was good and also helped to get high position. In internet segment our competitive strength was marketing, celebrity appeal, S/Q rating and model offer but with some weakness like retail price and shipping charges was some kind of not good factor in competitive market. In whole sale market our S/Q rating, rebate offer and retailer supports were our competitive strength points while the competitive weakness were wholesale price and retail outlets. At the end of year 12 because of some weaknesses in whole sale market and internet segment, company overall progress and position of BAD BOYZ II was down 10 out of 12 with revenue 201395000, net profit 8,587,000, EPS 0.86 and credit rating â€Å"c†. The complete description of BAD BOYZ III company year 12 weaknesses, strengths and overall progress is shown on appendix -2. Year 13 Year 12 result forced the BAD BOYZ III management to seriously take the notice of company performance that is going down. After a long discussion among BAD BOYZ III company co-manager we concluded that we should re-evaluate the company strategy and offer high quality products with low price that strategy lead to ‘low cost and increase market shares described by Portal(1985) five forces theory which is focus on high quality with low price. To achieve maximum profit and top position in footwear market we also considered about the private label segments. Year 13 is the year of thinking for us as the result of year 12 that make us to re-think our all strategies and policies that makes impact on our competitive strategies. With adoption of new strategy our competitive strengths retail price, advertising and model significantly increased but still some weaknesses are shipping charges and retail outlet are there. Because of change in strategy and improvement in retail segment, at end of year 13 Company received very good response in private label segment and got satisfaction results in other segments like revenue $ 393,872,000 that is double of last year 12, net profit was $ 31,854,000 with the ratio of earning per share equal to 3.19. These out comes caused companys rank improvement like was 8th out of 12th. In appendix-3 the BAD BOYZ III Companys year 13 overall progress including strength and weaknesses has shown. Year 14 Year 13 results increase our confidence and courage to getting more effective and efficient in the market and also lead us to understand the purchasing behavior of consumers. In year 14 we continued our last used strategy high quality with cheap price to attract more and more customers. It can only be achieved with high production as amount of consumers increased compared last year. To complete this target we need high amount money thats why BAD BOYZ III Company took a long term loan $ 248,000,000 from the bank. That loan enabled us to fulfill the production plant capacity 4600,000 per year in North America. To get high profit and maximize the sale production we seriously focus on private label that enables BAD BOYZ III competitive strengths increased as compare to the year 13 and sufficient reduction in weaknesses like internet segment and wholesale segment. End of the year 14 BAD BOYZ III Company almost received 100% response and overall progress was getting better with revenue $577,496,000 and net profit $41612, 000. In private label segment company done well and sell all pairs in private label segment caused the market share of private label segment increased such as 76.6% in North America, 52.0 % in Asia-pacific and 62.9% in Latin America as contrast to other market shares. This year increase in private label segment and overall progress helped BAD BOYZ III Company to improve its position like 6th out of 12th. For over all progress see Appendix-4. Year 15 Year 15 was little bit thinking year for BAD BOYZ III management team as the competition and consumers increasing unexpectedly. So our management decided to fix with no cost leadership and customer purchasing behaviors strategy by following Porter (1985) five forces and considering more on North Americas private label segment. The main reason to focus on North America was company high expenditure in this region because of more consumers and demands. Company wanted to get 100% feedback from that region as last year our management bought new plant capacity for it. Increased in demand and production caused the increase in BAD BOYZ III competitive strengths as compare to previous year such as ‘celebrity appeal but weakness remained same as ‘model availability. End of the year 15th brought good news in market share as BAD BOYZ III achieved all market share from North America in private label segment as compared to other regions but with some sad news as company lost his market share in rest of regions. The total revenue was $ 530,284,000 and net profit $ 55474,000 which is somewhat increased as contrast to year 14. In BAD BOYZ III company success story another success was stock prize $ 102.49 and company also offered amount 10,135,000 dividend this year. The company rank was getting better and better as was 5 out of 12. In Appendix-5 year 15 overall progress is shown. Year 16 In year 16, BAD BOYZ III Company decided to remain fixed with same strategy as in year 15 company sold almost all products. To achieve this target company decided to increase the production and plants in different segments especially in North America and Asia Pacific to produce more revenue. Company was getting satisfaction feedback from North America, so company decided to build more plant capacity in North America as well in Asia Pacific region. BAD BOYZ III Company purchased 1500 plant capacity and build 500 in North America and also considering Asia Pacific purchased 800 plants capacity in that region. In year 16th the companys competitive strengths were celebrity appeal and advertising same as last year and company also tried to get rid of the weakness related to company production and profit. Company decided to sell quantity of 500 stocks in the price of $ 96.72 as stock price was really high. At the end of the year 16th the BAD Company revenue was $ 537,898,000 that is little bit high as contrast the previous year and net profit was $30,721,000. As company was getting almost 100% market share in private label from North America caused BOYZ III market share strong position in foot wear market. Appendix-6 represents the Year 16 over all progress. Year 17 Year 17 was decision year for BAD BOYZ III management because company management decided to buy new plant in North America with capacity of 1,900,000 pairs per year. This decision is made on behalf of the year 16 results as consumers increase unexpectedly. Company also reduced the 50% prices of pairs to sell more and more products in all regions to accomplish this strategy and apply these prices we need more and more stocks. Company decided to purchase new 3135 stocks with the price of 57.73 per share. These share prices were higher than the average market shares and company still focusing on North America private label segment with 90.5% share. As mentioned above year 17 was decision year for BAD BOYZ III to make another major decision in market. For this purpose we make a commission to discuss all aspects of Footwear Company including stocks and competitive environment. In this commission we included that we should offer 4000 pair at price of $ 40, was doubled as compare to last year, in North America private label region. That decision is made on two reasons: From the last few years company was getting required feedback from North America. There were no strong competitors in North America. At the end of year 17th the decisions made and strategies applied resulted in excellent outcomes. In North America private label company sold 3546 pairs out of 4,000 at double price $40. BAD BOYZ III company revenue was 690,317,000 and net profit was 107,491,000 increased highly up to 300%. These successful factors boost company rank to top three positions like was 3rd out of 12. The other big achievement was in region of Earning per Share (EPS) that was $14.33 helped to come in 76th position from all over the world in footwear industry. APPENDIXES Appendix-1 Year 11th BAD BOYZ III Annual Summary Report Appendix-2 Year 12th BAD BOYZ III Annual Summary Report Year 12th BAD BOYZ III Annual Summary Report Revenue Net Profit Earnings Per Share Stock Price Return On Equity Image Rating Credit Rating $201,395,000 $8,587,000 $0.86 $21.07 4.60% 61 C North America Internet Segment: Wholesale Segment: Private Label Segment Actual Industry Average Actual Industry Average Actual Market Demand Price $75.30 $68.57 $62.66 $52.47 MAX $47.47 Model Offered 200 168 200 192 Advertising $15,000,000 $6,959,000 $15,000,000 $6,879,000 Celebrity Appeal 100 23 100 21 S/Q Rating 6 5 6 5 4 Market Share 10.0% 9.1% 6.6% 8.3% 0.0% 100.0% Europe Africa Internet Segment: Wholesale Segment: Private Label Segment Actual Industry Average Actual Industry Average Actual Market Demand Price $75.30 $69.52 $62.80 $53.32 MAX $48.32 Model Offered 200 166 200 192 Advertising $15,000,000 $6,771,000 $15,000,000 $6,771,000 Celebrity Appeal 70 18 70 18 S/Q Rating 6 5 6 5 4 Market Share 9.4% 8.3% 7.2% 8.3% 0.0% 100.0% Asia Pacific Internet Segment: Wholesale Segment: Private Label Segment Actual Industry Average Actual Industry Average Actual Market Demand Price $75.30 $68.57 $95.53 $51.88 MAX $46.88 Model Offered 2