Wells Fargo & Company: Competition, Economy, Technology Essay


Wells Fargo & Company is a banking institution that provide customers with their financial needs. The bank is a diversified community-based financial services company. According to Wells Fargo, in today’s world in the 2nd Quarterly Fact Sheet for 2018, the company has $1.9 trillion in assets. “Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially.” Wells Fargo provides the full spectrum of services, pricing, underwriting, sales, trading with distribution, execution, and structuring. The company provides banking products, investments, mortgage products, securities market, foreign exchange, and services in thirty-eight countries so that customers may conduct business in the global economy. Wells Fargo creates lasting value for customers and increases efficiency for operations. Innovation thinking, leading in technology and the company is willing to update and test the progress. Risk Management is to avoid and reduce the loss for the company. On Fortune’s 2018, Wells Fargo ranks number twenty-six of America’s largest Corporations on their list.


The services offered to the clients and the community are checking and savings accounts, certificate of deposits, credit cards, debit and prepaid cards, loans and credit, merchant services, trust, investments, insurance, retirement accounts, mortgage, buying and selling of foreign currency, online banking, mobile features, the internet services, merchant services, use of ATM’s, and fraud protection. According to Wells Fargo, they have 8,600 banking locations, 13,000 ATMs’ and 265,000 team members. The company’s headquarters is in San Francisco, California. Wells Fargo purchased Wachovia Bank in 2008. The organizational structure of Wells Fargo has a banking President (CEO), and each region has President Managers, three District Managers, Branch Manager, Assistant Managers, Service Managers, Personal Bankers, Trust officers, Small Business Bankers, Investment Bankers, and Mortgage loan Bankers. The Service Managers oversees the tellers by training and coaching them in banking procedures and policies to succeed and grow within the company. Great Leadership is important to the company for continued growth and success. All team members work together to reach the company’s goals and customer expectations and success.


The bank is structured by departments. The first department is the retail banking where the company has personal bankers to open new accounts such as checking, savings accounts, open certificate of deposits, sell investments, accept loan applications for personal and business, accept mortgage applications, and credit card applications. The tellers are there to assist the personal bankers and accept deposits from customers. The next department is the investment department where they deal with stocks, bonds, brokerage services, and securities. The Trust services includes real estate investment trusts. Other departments are Merchant services, treasury management, corporate banking, retirement & employee benefits, commercial financing, equipment financing, asset management, insurance department, and international banking services. Wells Fargo watches the economy closely. When the economy slows down this will cause a slow down in consumer spending which will affect the economic growth. This will cause an increase in unemployment and this will cause a decrease in business growth. Higher gasoline prices will cause less consumer spending. When the economy is uncertain people began to cut back on spending on just about everything. If people are unemployed they cannot meet their bank obligations to make their loan payments or deposit those extra funds in the bank. The account scandal with some of the Wells Fargo employees open fraudulent accounts without the knowledge of the customers. This has caused Wells Fargo to lose customers to their competitors. With all the bad publicity about this scandal it will be easy for the company to lose customers and decrease their bank deposit. Customers are moving their extra funds to other banks. Customers have lost their faith and trust in Wells Fargo.

The non-account holders will think hard before they open an account with Wells Fargo. Their competitors have an advantage over them right now. Wells Fargo revenue has decreased since the scandal. Wells Fargo has since changed the way they conduct business. The company have changed their sales goals to focus on customer service to gain their trust and respect from the customers. One of the banks competitors is Bank of America. Wells Fargo’s bank deposit has since declined. 2. Suggest 2-3 ways in which the primary stakeholders (employees, consumers, supplies, stockholder, can influence the organizations profitability. The stakeholder theory has the most impact on the business environment. Stakeholder is a person or organization that have an interest, stake or concern in a business operation. Examples of stakeholders include owners, customers, government, employees, lenders, suppliers, community, and society. Shareholders are owners of the business and is recognized as a stakeholder. Shareholders own stock in the company. The stakeholder engagement can impact a business performance. Stakeholders participate in the decision making for the business or company. This decision affects the stakeholders. The stakeholders build trust, communicate, handle social issues, listen, and come up with a solution to protect the employees and company from going out of business, handle dispute resolution, legal and ethical issues. Stakeholders engage in the proactive integration of feedback from those impacted by the organization’s operation. Stakeholders engage in ensuring the customers and employees are satisfied. 3. Controversial corporate social responsibility. Wells Fargo Corporate Social Responsibility is rebuilding trust to all the stakeholders. The company top priorities are in diversity and social inclusion. Wells Fargo ensures all people feel respected and have equal access to resources and opportunities to succeed by helping ensure that all people across the workforce, communities, and the supply chain feel valued, respected and have equal access to resources, services, products, which allow them the opportunities to succeed. With the account scandal the company has made many changes for the employees. The aggressive sales goals have been deleted for the company. The employees can concentrate in giving excellent customer service in building back the customers trust in Wells Fargo.


C. Holke, Investment Strategy Analyst, Global Perspectives, October 23, 2018 Wells Fargo Clearing Services, LLC All.
Rights reserved from: https://www.wellsfargoadvisors.com https://www.citizenpolity.com/2010/07/22/defining-corporate-social-responsibility Code-of-Business-Conduct_7397/
http://www.brainkart.com Corporate social responsibility, Financial, Trium Global Executive MBA, (Financial Times 2017) Lexiconft.com Corporate Social Responsibility-Wells Fargo, 1999-2018 Wells Fargo, All Rights Reserved. NM ID 399801, https”//www.wellsfargo.com https://www.lumenlearning.com/suny-hccc-introbusiness/chapter/putting-it-together-6/Definition of corporate social responsibility, ©2018 Mallen Baker. All rights reserved. Mallenbaker.net G. Morgenson, “Wells Fargo Board, Now in Spotlight, Recalls It’s Role”, The New York Times (September 28, 2016) Stakeholder Engagement from: https:// www.linkedin.com https://opemtextbc.ca/projectmanagement/chapter/chapter-5-project-stakeholders-project-management Wells Fargo Announces ,1999-2018, Wells Fargo, All rights reserved. NMLSRID399801 from: https://www.newsroom.wf.com Wells Fargo Competitor, Owler, from: https://www.owler.com Wells Fargo’s Plan to fix Its Culture Scandal, 2017 Time Inc. All Right Reserved. Fortune, From: htpp://www.timeinc.net References: https://www.wellsfargo.com/about/corporate-responsibility/economic-empowerment/ https://www.mallen.baker.net/article/clear-reflection/definitions-of-corporate-social-responsibility-what-is-csr                

The Cold War: a Competition between Two Countries Essay

The United States sought to defeat the communist ideology of the Soviet Union on multiple fronts during the Cold War. Through indirect military interventions, cultural triumphs, and competitions occurring at the national level the two nations would oppose one another. These sorts of competitions proved incredibly effective as a project to help the bankrupting of the Soviet economy and ultimately played a pivotal role in the eventual collapse of the Soviet Union. The Space Race between the two nations was in part merely a strategy employed to laud scientific achievement over the other nation, but the competitive drive instilled in the populations of both countries led to innovations that made voyages into space and onto the moon possible, arguably among mankind’s greatest achievements. Ideological superiority was the crux of this battle and the stakes rose for the first time in human history to a global level, meaning that the motivations to compete for individuals rose to meet those stakes as well. The rapid rate of development of technology that sprouted from this period is still fascinating to learn about, if this same rate of development could be achieved without the baggage of a nuclear standoff and ideological confrontation the results would no doubt again be tremendous as well.

The Cold War was at its core a clash between two differing ideologies. Dating back to the formal creation of the Soviet Union, the indirect nature of the ideological conflict is observable in the actions of President Woodrow Wilson asserts Trani. Wilson then faced a major decision whether or not to recognize the Bolshevik Revolution of November 1917 and Lenin’s communist government. Wilson and the United States immediately perceived this new ideologically run government as a potential threat, and took actions to either indirectly oppose or contain it. Both nations had parallels in their origins though, being created amidst a revolution in an attempt to establish a then experimental system of governing. It was almost as if the development of the two nations into superpowers was pushed through a mirror lens though, because they transformed into opposites in every imaginable sense. These opposing manifestations into culture, economics, and systems of government were a result of the two ideologies themselves being the root of the opposition.

Whether or not Wilson’s decision to greet the newly formalized nation with suspicion was warranted is up for speculation, as a degree of caution in the facing of an unknown entity could either be viewed as a reasonable precaution or a sort of xenophobia. This attitude of suspicion though would continue to exist in the minds of later American presidents, culminating in the nuclear standoff of the Cold War where it is plainly apparent to see. This initial suspicion though became clarified into the identification of an enemy state, as both sides would come to assert that the other’s form of governing could not produce a functional society that existed as Superpower in the global landscape.

The Cold War became framed in a way around the functional utility of the societies and achievements produced by socialist and capitalist ideologies. Both sides felt compelled to produce great feats and accomplishments justifying the existence of their own ideologically propped societies, and revealing the failures of their opponent. On the subject of the Soviet Ideology, Robinson has this to say, If the party could not prove that it was using its power to develop society correctly it became redundant by the terms of its own ideological discourse. While this quote is directly referencing the ideology of the Soviet Union, it can be related to the United States as well.

The overall claim being fought over in the propaganda competitions of the Cold War was ultimately which type of governing system could produce the best society, and if one of the two failed in these challenges, by extension this was a failure of the ideology as well. Suddenly something as recreational as a sporting event was in part being used to determine the viability and fidelity of either western or eastern civilization. This suddenly put both societies under a microscope in the examining of all the different ways a society can manifest and be comparatively measured. Education systems, infrastructure, recreational activities and sporting events all became channels of propaganda that had the stakes of the overall global conflict placed on them.

This propaganda war was fought on every imaginable front, leading to a multitude of bizarre posturing for dominance between the two countries. The Cold War came to shape not just military strength and technology, but culture, and became a struggle between two nation’s attempts at displaying the distinguishability and superiority of their own. Every potential way that the two ideologies could manifest themselves became a new indirect battleground for the two countries. Stone illustrates the extent to which the conflict occurred by saying.how facets of everyday life, from consumption patterns to film, sport or design were all influenced by the Cold War’s ideological strictures.

The nuclear stalemate between the two countries kept them from engaging in direct traditional warfare, and limited it to a seemingly petty rivalry. This element of rivalry separated it from other direct wars and conflicts as concerns of mutually assured destruction forced the two nations to resort to compete with one another, but not directly engage as combatants. This posturing placed enormous pressure on anyone unlucky enough to find themself enveloped in a societal activity that had been hijacked for propaganda purposes. While direct engagement was off the table of options, posturing of military and technological strength remained one as one of the most focused avenues for both sides. Scientific advancement of a tremendous scope is one of the only positive effects that came out of the Cold War.

This rivalry on a national level led to both incredible achievements but also the constant fear of the deployment of nuclear weapons. The nature of these competitions between the two ranged from sporting events all the way to scientific and industrial achievements like the space race. Again at the root of all these competitions was the desire to prove the superiority of their ideology by producing an Olympic winning national hockey team, or a fully functional aerospace division capable of completing missions into outer space. Slotten maintains precisely this by saying, “The nuclear standoff meant that some of the most important battles between the United States and the Soviet Union involved propaganda and symbolism rather than direct armed conflict.

While these types of competitions reached to a level that seemed petty from a present day perspective, they were still supremely significant in terms of producing influence by being in the global spotlight. It is rather comical though to consider the global stakes behind the overlying ideological confrontation manifesting into a game of chess between Bobby Fischer and Boris Spassky. There is another aspect to these competitions that reveals the layer of propaganda behind it, the use of mudslinging tactics in televised encounters. A prime example would be Cassius Clay’s (Muhammad Ali) interview discussed by Wood, in which she remarks, After Clay’s gold medal match, a Soviet reporter, reflecting Cold War strategies and propaganda, asked Clay how it felt to win gold for a country that practiced racial segregation. Obviously there are very few ways to answer such a loaded question like that without helping create a poor outside image of the United States, and that is the point of such a tactic. It is designed in nature to catch the person off guard and sours what should have been a shining moment for Clay and the United States.

This tactic perfectly encapsulates the attitudes of both nations towards the other during the Cold War. It is reflective of a genuine resentment that existed in the collective mindsets of both nations. Even channels of dialogue, that were potentially means of peaceful resolution, became utilized in mudslinging efforts by both countries. Individual interactions between opposing members of these societies would have likely been one of the best ways to let the illusion of the iron curtain fall. In interacting as individuals that originate from foreign groups, one can realize that the other is not merely the stereotypical manifestation of said foreign group, but an individual with their own thoughts, traits, and motivations. Unfortunately Cold War societal attitudes on both sides aroused suspicions on individuals who attempted to bridge this gap. In the U.S., being labeled a Socialist or a Communist could subject someone to harassment from neighbors, police surveillance, and other varying forms of suspicion. The same could be said of Capitalist labels in the Soviet Union. It was a type of ideological xenophobia that either unified or ostracized individuals because of the all-encompassing nature of the Cold War. The echoes of this type of polarity still exist today in both American and Russian mindsets, as allegations of meddling in the American electoral processes by Russian agents are still currently being investigated. Tensions of Cold War magnitudes have been lowered significantly though due to a combination of things, like the collapse of the Soviet Union, the invention of new dialogue mediums via the internet, and lowering of nuclear arsenals.

The ideological conflicts also led to vast advancements in technology in the West, primarily designed for military focused applications, but still significant advancements nonetheless. This technological advancement and production being demanded by the government for military purposes had its roots in the transformative role of the United States government that occurred during World War II. Schaffer promotes this idea by saying, The success of the war effort, particularly the development and production of various weapon systems and the building of a massive manufacturing in- frastructure, quickly solidified the government’s expanded role. Rapid en masse output of tanks, bombers, and other military gear for the wartime effort was something the American people had proved capable of managing. Repurposing that same level of effort towards a singular project like a moon landing with successful results became a possibility in part because of this expanded role of the American government.

The goal of landing a man on the moon also reflects a possibility of a shift from simply pursuing endeavors that show off military strength to endeavors of scientific advancement that could have applications that benefit all of humanity. This is monumental because it opens the door for both sides to realize that ultimately their ideological conflict is inane when compared to a transcendent goal of pure scientific advancement for the sake of mankind. Unfortunately this did not happen, as the resentment in both sides continued until the Soviet Union’s collapse, but the possibility that it opened still exists today. Whether or not the same rate of technological advancement would occur if this sort of idealism were embraced is purely speculative, but it is a goal truly worth pursuing.

American voyages into outer space were largely a response to the Soviet Union’s recently developed capability to send satellites (and potentially nuclear missiles) into orbit. The 1957 Sputnik demonstration may have just been a satellite, but the implications behind what was now technologically possible in the Soviet Union loomed over the United States. The Eisenhower administration sought to immediately take action by dramatically increasing access to Federal Aid for students, and by also creating a number of agencies concerning national security and space travel. The most recognizable agency would be N.A.S.A, and although this tactic was expensive and potentially risky, it would ultimately pay off. Kay lists off some of the miraculous inventions produced from this era by saying, From space travel to stealth aircraft and unmanned aerial vehicle technology to the Internet, the by-products of this degree of government planning and strategic vision were extraordinary.

Eisenhower saw that the will of the American people was capable but that further education would ultimately be necessary to step forward with new technological innovations that would answer the Soviets. What had started out as a flexing match between the nations was becoming more nuanced, as science played a larger role in the development of weapons. Sheer military might was still a prominent motivator, but as the levels of weaponry became more sophisticated, so too did the strain in creating and operating them. Eisenhower recognized that the demand for scientific advancement could satisfy not just a response to the Soviet’s Sputnik, but also strengthen American infrastructure, which would lead to all sorts of future innovations that could exist and operate not just for the purpose of displaying military might. This tilting of attitude toward advancing technology for civilian or practical use is part of what kept American infrastructure so sound. It is a combination of evolution of application, and a then sequential shifting of goals.

The initial drive to innovate may have come from a desire to establish dominance by the means of the military but, once the new technology was invented, new possibilities were suddenly available. These new possibilities led to the repurposing of goals in what exactly to do with this technology. Compare Eisenhower’s foresight with the lack thereof in Soviet leaders toward scientific innovation and it helps illustrate why the United States would go onto advance, and the Soviet Union to ultimately collapse. In discussing the Soviet Union’s tactic of replacing officials frequently in an effort to combat misconduct, Sherman has this to say, Specifically, it caused resistance to technological improvements because these improvements are costly and may pay off only in a longer-run period. The Soviet’s inability to simultaneously solve short-term and long-term problems is primarily what led to their nation’s collapse. Economic collapse is tragic for the denizens of the nation, but it is ultimately better than the looming alternative that almost came to be during the Cold War: nuclear annihilation.

Imagine for a moment that a similar level of rivalry from the Cold War existed in a new pursuit towards scientific achievement, but instead of the ultimate goal being the annihilation of the enemy, it was the betterment of mankind. Consider again the leaps forward made in this era and how although they were in all likelihood created with motivations similar to the former goal, dozens of the innovations had practical applications resembling the latter goal. Similar to the sporting matches or other shows of force, technological breakthroughs were a sort of high stakes competitive game between sworn enemies. Ironically, by bringing new technology into fruition and displaying it on a global scale, both nations were guaranteeing the eventuality that the other nation would be able to produce and improve upon the same kind of technology. On the subject of generational improvements, Jones had this to say, Rather than consensus, the Cold War spawned competing visions of what caused unreliability in electronics, and how this unreliability might be eliminated. If this same rate of high tech improvements could exist today without being overshadowed by nuclear arsenals, the universal applications of all the innovations produced would be unimaginable. The privatization of tech companies has already produced astounding pieces of technology that is continually improving, but to imagine the same national level of unity that existed in the Cold War aimed at a more benevolent goal is dizzying.

The Cold War brought the world to the brink of nuclear destruction, and in the ensuing stalemate also created a rivalry that encompassed almost every conceivable battleground. This rivalry went on not to just create world champions in sporting events, but also create innovations that decades later we still rely on today. An optimistic person would look forward to seeing a friendlier resurfacing of this nature of rivalry, intended only to move human achievements forward, not just national agendas. Modern titans of industry like Elon Musk certainly have made an impact in attempting to keep the rate of innovation and advancement moving forward, but one longs to see a renewed interest in space travel and access to quality education coming from the federal government, not just the private sector. History has proved that incentivizing citizens to receive higher educations ultimately produces a better-equipped and driven workforce.

The other lesson that Cold War history has taught is that the lack of foresight in the Soviet Union to invest in projects and educating their people ultimately played a role in their stagnation and decline. Although the military industrial complex attitude ultimately drove the demand of advancement in technology, individuals like Eisenhower saw the benefit of allowing this technology to be fully realized beyond its initial wartime designations. Part of the reason such astounding results came out of the Cold War era technological fields was due to the insane nature of the stakes. Threats of societal collapse, nuclear destruction, and ideological defeat were ultimately what drove the competitors so hard to succeed. When an individual truly believes his or her life and world to be at stake, they will compete harder than ever before to achieve success. It is doubtful that the world will ever see this rate of development again without the accompanying baggage of Cold War stakes.

A valuable lesson from this period in history to realize though is that competition of a much friendlier nature can still produce unexpected results, and some think this can be achieved while simultaneously removing the world ending stakes of the Cold War.


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  8. Trani, Eugene P., and Donald E. Davis. “Woodrow Wilson and the Origins of the Cold War: A Hundred Years Later and Still Relevant.” World Affairs, 180, no. 4 (2017): 25-46.
  9. Wood, Molly M. “Spanning the Globe to Bring You the Constant Variety of Sports: Teaching the United States and the World in Cold War.” Journal of American History 103, no. 4 (2017): 1004-1011.

Should Economic Efficiency be the Primary Consideration for Competition Law? Essay

Q.3 should economic efficiency be the primary consideration and priority for the enforcement of competition law? It is widely accepted that economic efficiency is the primary consideration and legitimate doctrine when contemplating the goal of competition law. This is agreed upon by both legal and economist scholars. [1] Economic efficiency brings about monumental benefits; it stimulates the economy, reduces the prices of products, and improves development innovation and creativity, creating new sources of capital.[2] Schweitzer has argued that competition law can never stand alone with just economic efficiency in a democratic society. The inclusion of public policy choices is inevitable.[3] This implements an idea that competition law is a myriad of broader national and public policies, strategies, priorities and interests. This suggests that it may not be such a good idea to place economic efficiency as the prime consideration of competition law. Merger regulations provide a good example to foster the idea that the governments’ goal for competition law goes beyond the maintenance of market competitiveness and towards a more social one.[4] Governments may find themselves inclined to prefer non-efficiency motivators due to pressure by interest groups accounting for their social needs.[5] Since there is influence from these non-economic objectives then it would seem that suggesting a framework to accommodate for these objectives would be necessary. However, although this would seem to show that non-efficiency objectives are indeed integrated into the internal part of competition law, this doesn’t mean that such objectives are followed by the judiciary or the competition law enforcement bodies.[6] This idea brings to life the understanding that although non-efficiency objectives are mentioned and voiced, it may only be done to please the many voices for it, as at the end of the day the enforcers have the discretion to pursue the objective which they see more suitable. More often than most being an economic one. In order to be able to appreciate the objectives of competition law, it is important to look at the specific legal system in question, as different systems have different priorities.[7] In less developed countries the focus of competition law policy falls on mostly social objectives. They usually have a liking in the protection of small businesses and decentralization of political & economic power. [8] This would mean then that the idea of economic efficiency being the prime focus of competition law is frustrated. With that being said the question over the objective of competition law policy would be whether to achieve moral goals or to insure that the promotion of competition and economic efficiency is maximised.[9] Government intervention also has an important role to play in indentifying the priority of competition law policy in a country. Conservative and libertarian views are in favour of minimal government intervention and thus would opt for the objective of competition law to be based on economic efficiency.[10] Contrary to that, the more liberal views are more prone to support non-efficiency objectives such as the welfare of small businesses and the dispersion of power, in consequence, they are suspicious of corporate power.[11] When focusing on the economic efficiency, there is a usual disregard for the distribution or equity implications involved.[12] This is why we have the liberals who endeavour to protect those rights. There appears to have been a shift and focus on the objectives taken by different jurisdiction. This change has been towards a more economic efficiency base.[13] This was demonstrated by the UN conference of Trade and Development (UNCTAD), which indicated, ‘the trend is towards relatively greater emphasis upon competition, efficiency and competitiveness objectives.’[14] It has been stated that the allure of economic efficiency may have taken a global turn by different jurisdictions following under the same steps but this does not mean that other non-economic objectives don’t need to be considered.[15] Michael Porter argues that construing an entire body of law solely on consumer welfare theory could result in the overlooking important benefits for society. Competition law would not perform at its best and to its full promise if it did not account for society’s benefit.[16] Porter is not the only believer that a solely economic efficient objective would not be appropriate for competition law policy. Professor Robert Pitofsky, supports this stance and adds that an entirely economic approach would lead to market domination by few corporate giants.[17] As a soltution, Maurice Stucke suggests that different objectives of competition law should be accepted ‘because these multiple goals reflect the various stakeholders’[18] interests and concerns, which they want addressed.[19] It must be noted that judicial and legislative approaches towards non-efficiency goals are troubling. We have mentioned that economic efficiency is the preferred objective. However, it must also be determined that if the judicial and legislative bodies where against non-economic efficiency all together, they would enact or amend so as to provide primacy to economic analysis. This demonstrates that non-economic considerations should play a role within competition law.[20] On top of that, it is maintained by John Flynn that ‘although economic analysis provides valuable insights into business dynamics and the probable effects of a commercial practice in the market place, economics is not law.’[21] The competition policies are passed by politician and not by economists. In order to fulfil the aspiration of the people competition law ought to take into account all the peoples aspirations.[22] Professor Harry First also states that in pursing consumer welfare we inevitably satisfy the desire of citizens as a consumer only and that we ignore the inclination registered politically which consequently does not show up in the analysis of market place efficiency.[23] In focusing on economic efficiency or the ‘market efficiency’ there is the issue that there is a failure to express people’s preference beyond their dollars.[24] So a preference for more expansive opportunities for a small business or preventing concentrations of economic power in private hands cannot be prevented.[25] It does not make sense to ignore these preferences as the politics would point out that the public places value on these objectives.[26] The disregard of the peoples voice means that democracy is being forgone and in the process people may lose faith in competition law policies.[27] So many people are affected by competition law policies, therefore it would make sense that the consideration of both economic and non-economic objectives are accounted for in order to promote fairness. Stucke comments that ‘competition policy in democracy will never be captured by a single economic goal.’[28] The best way to overcome this once again to accommodate the self-interest of the people and lodge their hopes and fears I regards to competition.[29] By looking at what different jurisdiction have adapted we can have an idea of what has been working best. And by understanding what works best then we can determine whether we should focus on economic efficiencies. We can do this by using the merger control analysis.[30] The US courts have proven to focus their objectives on economic efficiency in their merger policies. The merger guidelines of 1992, demonstrate this as it has lowered the standard of proof for efficiency arguments.[31] Canada also provides an efficiency defence in their competition Act under Section 96. In the Act they set out a test to check the effects of the merger and balance it against the efficiency gains.[32] The producer and consumer’s losses and gains are reviewed.[33] The Canadians approach factor non-economic considerations and consider the protection of small and medium enterprises, and the balancing of such mergers against efficiency gains of the merger.[34] In the UK, the objective is on the ‘increase rivalry in the market into account in assessing whether a merger gives rise to any risk of a substantial lessening of competition.’[35] The Office of fair trading which deals with the matter is allowed to use its discretion into these cases. The US holds the leading role of promoting the economic-efficiency objective whereas the European countries demonstrate a state of the mergers of both economic and non-economic efficiency objectives.[36] There has been a rise in the Chicago school of thought, which are fervent believer on the ‘economic approach.’ The Canadian competition law is like Europe in that it has managed to find a relative balance between the two objectives within a statutory framework. However, there is a penchant towards the economic efficient objective in practice.[37] The UK has shown to have preferred the economic efficient approach and has in consequence slowly give less weight to the importance attributed by statute to public interests concerns.[38] The task for a jurisdiction to accommodate non-economic efficiency is extremely difficult. Countries such as Israel are still in quest of a method to implement non-efficiency concerns in the Israeli competition law.[39] It has been found by Areeda and Hovenkamp that two approaches should be followed if economic-efficiency objectives should be applied. a) absence of collision with ambiguous statutory language.[40] b) institutional capability of ‘managing the information and decision-making process necessary’ to implement such approach.[41] It has been pointed out however, that if too much attention is given to non-economic efficiency objectives when decisions are made then in the long run the economy will become less efficient, which will eventually affect the consumers negatively.[42] There seems to be a great need to combine both economic and non-economic efficient objective together. Blake and Jones have cited that the same rule of law may promote both objectives.[43] It is believed that non-efficiency objectives may be reached by ensuring market efficiency. In fact, what is believed is that economic efficiency is the ‘direct goal’ of competition, while the socio-political and other non-economic concerns are considered ‘ultimate goals’.[44] The concern which many have with the Chicago school of thought is that the economic approach they eagerly defend brings about short term benefits. The merger guidelines that defend such thought[45] fails to take into account the social and political impact of mergers , which in the long run may lead to loss or transfer of jobs or an increasing political influence.[46]

[1] Organisation for economic co-orperation & development COECD, competition policy & efficiency claims in horizontal agreements (Paris,) 1996), p.5. [2]O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P2 [3] H. Schweitzer. “Competition law and public policy – reconsidering an uneasy relationship: the example of Art. 81” (2007), p. 13. Available at SSRN : https://ssrn.com/abstract=1092883. [4] A. Ezrachi, “The role of voluntary frameworks in multinational cooperation over merger control”, 36 Geo. Wash. Int. L. Rev. 433, 438, n. 16 (2004). [5] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.3. [6] K.G Elzinga, “The goals of antitrust: other than competition and efficiencies, what else counts?”,125 U. Pa. L. Rev. 1182, 1203 (1977). [7] 6 ICN, Advocacy Working Group, Advocacy and Competition Policy (2002), p. 32; available at: https://www.internationalcompetitionnetwork.org/media/library/conference_1st_naples_2002/advocacyfinal.pdf. [8] M. Trebilcock et al., The Law and Economics of Canadian Competition Policy (Toronto, ON: University of Toronto Press, 2nd ed., 2003), p. 39. [9] P. Slot & A. Johnson, An Introduction to Competition Law (Oxford, UK: Hart Publishing, 2006), p. 4. 35 Gal, “Reality bites (or bits): the political economy of antitrust enforcement”, in: Hawk, ed., International Antitrust Law and Policy (Huntington, NY: Juris Publishing, 2001), p. 605, Part IV; available at SSRN: https://ssrn.com/abstract=901756. [10] Fox, “The modernization of antitrust: a new equilibrium”, 66 Cornell L.R.. 1140, 1155 (1981). P.1156 [11] E. Sullivan & J. Harrison, Understanding Antitrust and Its Economic Implications (Newark, NJ: Bender & Co.: 4th ed., 2003), p. 2-3. [12] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.19. [13] C. Ehlermann & L. Laudati, eds., European Competition Law Annual: The Objectives of Competition Law (Oxford, UK: Hart Publishing, 1998), p. ix [14] UNCTAD, The Basic Objectives and Main Provisions of Competition Laws and Policies (1995), p. 2; available at: https://www.unctad.org/en/docs/poitd_15.en.pdf. [15] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.21. [16] 6 M.E. Porter, Competition and Antitrust: A Productivity-Based Approach (2002), p. 2; available at: https://www.isc.hbs.edu/053002antitrust.pdf. [17] R. Pitofsky, “The political content of antitrust”, 127 U. Pa. L.R 1051, 1056ff (1979) [18] M. Stucke, Better Competition Advocacy (2007), p. 51; available at: https://works.bepress.com/maurice_stucke/1. [19] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.22. [20] Id., p.23. [21] 1 Khemani, “Objectives of Competition Law”, in: World Bank-OECD, A Framework for the Design and Implementation of Competition Law and Policy (Paris, 1997), p. 5; available at: https://www.oecd.org/dataoecd/10/9/27122227.pdf. [22] J. Flynn, “Antitrust jurisprudence: a symposium on the economic, political and social goals of antitrust policy”, 125 U. Pa. L.R. 1182, 1186 (1977).p.1186. [23] H. First, Book review of Posner, Antitrust Law: An Economic Perspective, 52 NYU L. Rev. 947, 947 (1977).p.966. [24] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.25. [25] H. Hovenkamp, “Antitrust policy after Chicago”, 84 Mich. L. Rev. 213, 242 (1985).p.241. [26] Ibid.,p242. [27] J. Burns, “Vertical restraints, efficiency and the real world”, 62 Fordham L. Rev. 597, 628 (1993) [28] M. Stucke, Better Competition Advocacy (2007), p. 26. [29] D. Dewey, “Antitrust and economic theory: an uneasy friendship”, 87 Yale L.J. 1516, 1525 (1978) [30] Competition Bureau (Canada), Treatment of Efficiencies in the Competition Act: Consultation Paper (2004), Appendix C. [31] W. Kolasky & A. Dick, “The Merger Guidelines and the integration of efficiencies into antitrust review of horizontal mergers”, 71 Antitrust L.J. 207, 208 (2003),p.209. [32] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.29. [33] J. Holsten, “The Commissioner of Competition v. Superior Propane – the Tribunal strikes back”, 2002 Canadian Competition Record 26, 31 (2002). [34] 1 Economic Council of Canada, Interim Report on Competition Policy (Ottawa: Queen’s Printer, 1969), p. 22. See Competition Bureau (Canada), Merger Enforcement Guidelines (2004), 8.19 [35] Office of Fair Trading, Mergers – substantive assessment guidance (OFT 561, 2003), par. 4.30 [36] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.43. [37] Ibid., p.43. [38] Ibid.,p.43. [39] Ibid.,p.43. [40] P. Areeda & H. Hovenkamp, Antitrust Law (New York, NY: Aspen Law and Business, 2002), vol. I (rev. ed.), p. 127. [41] Id., p.119. [42] B. Foer, “The goals of antitrust: thoughts on consumer welfare in the U.S.” (American Antitrust Institute, Working Paper 05-09), p. 24 [43] H. Blake & W. Jones, “Toward a three-dimensional antitrust policy”, 65 Colum. L. Rev. 422, 424 (1965). [44] C. Ehlermann & L. Laudati, eds., European Competition Law Annual: The Objectives of Competition Law (Oxford, UK: Hart Publishing, 1998), p. 30. [45] U.S. Department of Justice, Merger Guidelines (1984), reprinted in 4 Trade Reg. Rep. (CCH) A¶13,103 [46] Sullivan, “Post-Chicago economics: economists, lawyers, judges, and enforcement officials in a less determinate theoretical world”, 63 Antitrust L.J. 669 (1995)

Market Structure and Competition in the Banking Sector Finance Essay Essay

The rapid economic convergence of Spain in the European Union in the last

decade has been mirrored by an equally rapid expansion of its banking industry the Spanish banking sector’s total assets over GDP expanded from 70 to 80 percent of the EU average.

At the end of 2007, total assets held by the banking sector amounted to 280 percent of GDP; 110 percentage points higher than in 1997.

The Spanish banking sector comprises four types of institutions: (Bank of Spain, data available at 13 April 2010)

A¢â‚¬A¢ Commercial banks – 154 entities, accounting for 54 percent of total credit institutions’ assets, of

which 53 are Spanish-owned, 17 are subsidiaries and 80 are branches of foreign institutions.

Domestic banks are generally market-traded entities mostly engaged in retail banking;

A¢â‚¬A¢ Savings banks (Cajas) -46 entities, with a market share of 40 percent. They are “not for profit

foundations” with strong local government and/or autonomous communities’ participation. They

are not listed or traded in the stock market.

A¢â‚¬A¢ Cooperative banks – 83 entities, with a market share of 4 percent. They are organized under the

umbrella of Banco Cooperativo Español. They provide services based on membership, but can also

offer some financial services to third parties as do other credit institutions.

A¢â‚¬A¢ Specialized credit institutions (SCIs) – 69 entitites, with a market share of 2 percent. Although

carrying out most of the activities of credit institutions, they are prohibited from receiving

repayable funds from the public in the form of deposits, loans, temporary assignment of financial

assets, or other comparable instruments.

Mergers of savings banks, or cajas, are subject to respective regional governments’ approval. Cajas cannot be

purchased by private individuals or institutions due to their legal nature, but they can acquire other companies

and credit institutions. Nevertheless, cajas’ assets and branches can be purchased by individuals, private

companies and commercial banks. For more details, see FSAP (2006) “Technical Note on Regulation,

Supervision, and Governance of Spanish Cajas,” (IMF Country Report No. 06/215).

September 2010 European central bank

Market structure indicators, such as the Herfindahl Index or the share of total assets of the five largest institutions, indicate that the d concentration in Spain, albeit increasing, has remained one of the lowest in the EU (Table A¢â‚¬A¦.). A number of studies have investigated

banking competition in Spain and

results tend to indicate that, on average, banking competition in Spain is intense, including in comparison with that in peer countries.

51. Alongside commercial banks, savings banks have been a major force in

extending services and in fostering competition. Since reforms in late 1970s, savings

banks have gradually reduced their regional specificity and expanded their range of

activities.53 Many medium-sized savings banks have strengthened their national presence

becoming solid competitors to commercial banks. Their market share has steadily increased

from 35 percent in 1999 to 40 percent in 2007.

52. With the exception of the two largest players, the Spanish banking system

remains essentially domestic (Table 3). After building up franchises in Latin America,

Santander and BBVA have expanded in other markets as well. Santander is now a significant

player in the U.K. (Abbey National PLC and Alliance & Leicester PLC),54 in pan-European

consumer finance, and a smaller participant in the US (Sovereign Bank). BBVA has a

non-negligible presence in the U.S., mainly through Compass Bankshare. Foreign activities

are estimated to account for nearly half of both institutions’ earnings in 2008. Other banks

have small subsidiaries outside Spain, such as Banco Popular (Portugal and Florida), Caja

Madrid (Mexico), and Banco de Sabadell S.A. (Mexico and Florida), while La Caixa (caja

from Catalonia) has expanded internationally with acquisitions of Mexico’s Grupo Financiero

Inbursa and Hong-Kong based Bank of East Asia.

B. Main Trends

53. Convergence associated with EMU entry spurred a credit boom that abruptly

ended with the outbreak of the global financial crisis in mid-2007. Interest rate

convergence, both in anticipation of and since EMU membership, fueled domestic

credit growth (Figure 4). Over the period 1997-2007, credit to the non-financial private

sector has increased at an average of 17 percent; about two-and-half times nominal GDP


54. Credit expansion was especially pronounced in the construction and real estate

market. Bank activity has gradually shifted away from interbank lending and lending to the

government and the manufacturing sector, to financing construction and real estate activities

(Figure 5). As of end-June 2008 exposure to real estate financing amounted to 60 percent of

total credit to the nonfinancial private sector, compared to 40 percent in 1997. While savings banks have the highest exposure, commercial banks are those that most significantly

reoriented their domestic activity. Increased competition for lending to real estate developers

has led some institutions to take on added risks by forming joint ventures with real estate

developers-banks granting loans and sometimes taking an equity stake. It is estimated that

this type of lending exceeds the equivalent of 5 percent of Tier 1 capital on average, and can

reach as high as 80 percent of Tier 1 in specific cases.55

53 As part of the deregulation process, savings banks were allowed to carry out universal banking activities

starting in 1977.

54 Amid the U.K. banking crisis, Santander also bought the branches and deposits of Bradford & Bingley.


55. Since growth in customer deposits has not kept pace with domestic credit

expansion, banks have increasingly tapped international capital markets. Between 1997

and end-2007, domestic deposits grew at an average rate of 12 percent, thus financing only

part of the credit expansion of 17 percent. As a result, the loan-to-deposit ratio climbed well

above the Euro-area average. Securitization facilitated access by credit institutions to foreign

savings (Figure 6). Credit institutions have established securitization funds, which in turn

have issued their own securitization bonds, mainly covered mortgage bonds (cédulas

hipotecarias, CH). Given the soundness of the issuer, the quality and size of the mortgage

portfolio, and the level of over-collateralization, resulting from sound regulation, these

securities were attractive to foreign investors.56 Outstanding balances of Spanish

55 Moody’s April 2008.

56 The new Mortgage Law (Law 41/2007) further strengthens the regulatory framework of CH; in particular:

(1) it creates a special register for all mortgage loans and credits forming the collateral; (2) it reduces the

loan-to-value ratio for commercial mortgage loans from 70 to 60 percent while keeping the one for housing

loans at 80 percent (both ceilings may rise respectively to 80 and 95 percent if there are appropriate and

sufficient additional guarantees); (3) it increases the minimum legally required over-collateralization from 11 to

25 percent; and (4) it provides for the possibility of including specific liquid and low-risk assets in the pool of

collateral underlying the CH issue (up to 5 percent).

from A¢”šA¬18 billion (3 percent of GDP) in 2000 to A¢”šA¬350 billion (33 percent of GDP) in 2007.57

Spanish CHs currently represent the second biggest Jumbo segment in European covered

bonds after the German pfandbriefe.58

56. In recent years, the Spanish banking industry has enjoyed significantly higher

profitability than EU peers, despite lower leverage (Figure 7). While high volumes of

intermediation have contributed to this result, higher trading and fee income as well as

enduring cuts in operating costs have been important drivers.

57 It is important to note that the Bank of Spain has adopted stringent criteria regarding risk transfer and control

of special purpose entities. Both steps have reduced drastically the incentives for off-balance sheet

securitization and the resulting capital relief opportunities.

58 Jumbo issues amount to at least a billion euros.

57. To gauge the contribution of different factors, an algebraic breakdown of banks’

return on equity (ROE) has been undertaken (Box 2, Figure 8). The results indicate that

while savings banks’ financial strength (net income over net operating income) has remained

broadly unchanged, commercial banks and cooperatives have experienced some decline in

this indicator in the last years, mainly reflecting provisioning expenses and write-downs. In

the case of commercial banks, this development has been partially compensated by

continuous improvements in cost efficiency whereas savings banks and cooperatives have

witnessed some increase in the burden of their administrative expenses, consistent with the

expansion of their branch networks. While increasing leverage ratios may have weighed on

credit institutions’ vulnerability to shocks, improving (or undiminished) risk-adjusted asset

productivity, more prudent risk strategies (as indicated by declining risk-weighted to total

the impact of the ongoing global financial turmoil

59. The outbreak of the financial crisis in summer 2007 has severely affected the

operating model of the Spanish banks. With wholesale funding drying up, Spanish banks

have started restructuring their balance sheets. On the asset side, credit institutions have

slowed lending growth and tightened credit standards. On the liability side, they have tapped

more extensively ECB refinancing facilities by doubling access from A¢”šA¬22 billion in the

pre-crisis period to A¢”šA¬49 billion recently. Since other banking systems also expanded their

recourse to the ECB, Spain’ access has remained broadly in line with that of Euro-area total

assets (Figure 11). Banks have also competed fiercely for customer deposits, largely at the

cost of redemptions from mutual funds.

60. Banks’ operating environment has deteriorated more rapidly and severely than

expected. Given their retail-oriented nature, Spanish banks have not been directly affected by

the US subprime crisis and its ramifications.60 Nevertheless, they have to face with the bleak

economic situation. Domestic economic slowdown and banks’ deleveraging have been

mutually reinforcing. Households and the corporate sector are highly indebted.

Unemployment is rising. The housing market is rapidly cooling off. The corporate sector is

facing increasing cash-flow and liquidity problems. Several large real estate developers have

filed for bankruptcy. Against this environment, NPLs have increased rapidly but from a very

60 Spanish banks’ total direct gross exposure to Lehman was estimated at US$700 million, with BBVA having

the largest exposure with US$100 million. However, both Santander and BBVA were caught off guard by the

Madoff fraud scandal. While Santander’s direct exposure was reportedly minimal (A¢”šA¬17 million), Santander’s

clients who invested in the bank’s Optimal Strategic hedge fund, had an exposure of A¢”šA¬2.3 billion. BBVA

reported A¢”šA¬ 300 million losses from its activities related to Madoff Investment Securities.

low base.61 Loans to the construction and real estate sectors have witnessed the most marked

deterioration (Figure 12). As a result, savings banks have been most affected owing to their

large exposure to the real estate sector. While banks’ provisions are still at a comfortable

level, the extra cushion provided by dynamic provisioning is falling rapidly.

61. As a consequence, and despite broadly positive results in 2008, market sentiment

on Spanish banks has turned mixed. While Santander and BBVA continued to record high

net income in line with market expectations, their stock prices have declined significantly,

reflecting generalized market risk aversion and in anticipation of very difficult market

conditions yet to come (Figure 13). When the financial turmoil heightened in the autumn,

their CDS spreads trended above those of (retail) peers (investment banks fared much worse),

61 As of end-2007, NPLs amounted to less than 1 percent of total loans; half of the EU average.

mainly owing to the sharp deterioration in the Spanish economic outlook and their large

exposures to emerging markets, especially in Latin America. Since then, however, CDS

spreads have returned in line with those of retail peers, in part helped by the two institutions’

successful market-based capital increases.62 Small banks and savings banks have been

62. Like other European countries, the Spanish government has taken a number of

exceptional measures to shore up confidence in the financial system (Box 3). As part of

the package, the Spanish government established a A¢”šA¬30 billion fund (which may be raised to

A¢”šA¬50 billion)-Fondo para la Adquisición de Activos Financieros (FAAF)-to provide

liquidity to the banking sector by purchasing, on an outright or temporary basis, high quality

bank liabilities (asset-backed securities with 3-5 year maturity).

Box 3. Spanish Government Assistance to Banks

Following the common framework agreed by euro-area countries, the Spanish government has taken the

following exceptional measures:

A¢â‚¬A¢ The limit of the deposit guarantee was raised from A¢”šA¬ 20,000 to A¢”šA¬ 100,000.1/

A¢â‚¬A¢ A A¢”šA¬ 30 billion fund (which may be raised to A¢”šA¬ 50 billion) was established to purchase high quality

asset-backed securities issued by credit institutions: the FAAF.2/ The operations can take the form

of outright purchases or long-term swap operations (12 months or longer). Asset eligibility is

slightly different in the two cases. In particular, outright purchases can be carried out for CHs and

securities backed by CHs issued before October 10, 2008, traded (or in the process of being traded)

in a regulated market, carrying a triple-A rating, and with a maturity no longer than the one

specified in the auction. In the case of swap operations eligible assets comprise CHs and securities

backed by CHs, or credit to individuals or non-financial companies and institutions provided that

these securities have been issued after August 1, 2007, meet the ECB’s eligibility requirements,

and carry at least a rating of double-A. The FAAF consists of two separate portfolios; one for each

type of operations. To safeguard a sufficient diversification, the FAAF cannot allocate more than

10 percent of its resources in each portfolio to a single entity. The FAAF’s operations are

conducted through an American-Type Auction; a fraction may also be allocated through

non-competitive auctions. In each auction, individual allotments cannot exceed the lowest between

the above-mentioned 10 percent limit of FAAF’s portfolio and the result of the product between

2.5 times a credit institution’s share in total credit to the domestic non-financial private sector and

the amount offered.

A¢â‚¬A¢ Government guarantee may be provided for credit institutions’ new debt issues. The amount of the

scheme approved in 2008 is A¢”šA¬ 100 billion to be used by mid-December 2009.3/ A possible

additional A¢”šA¬ 100 billion might be allotted in 2009 if market conditions do not improve. As agreed

within the EU, the pricing depends on debt maturity, CDS spreads, and rating of the originators:

Table 4. Spain: Pricing of the Government Guarantee

Maturity Commission Fee

Less or equal to 1 year Flat fee of 50 bp.

Greater than 1 year Flat fee of 50 bp plus:

A¢â‚¬A¢ For beneficiary institutions with CDS data; the lowest between:

1) the median of the 5 year CDS spreads calculated over the period January

1,2007 – August 31, 2008;

2) 36.5 bp for institutions with AA rating;

3) 44.8 bp for institutions with A rating.

A¢â‚¬A¢ For beneficiary institutions without CDS data, or without representative CDS

data, but with a credit rating:

1) 36.5 bp for institutions with AA rating;

2) 44.8 bp for institutions with A rating.

For beneficiary institutions that are not comprised in the previous two

categories, 44.8 bp plus a supplementary annual fee of 10 bp.

A¢â‚¬A¢ If necessary, credit institutions’ re-capitalization may be carried out through the government’s

acquisition of non-diluting instruments such as preference shares.3/


1/ Royal Decree 1642/2008, October 10, 2008.

2/ Royal Decree Law 6/2008, October 10, 2008.

3/ Royal Decree Law 7/2008, October 13, 2008.

The impact of the credit system

The real estate crisis has had an inevitable impact on the banking system. At the end of 2009, loans to this sector were classified as a bad debt of 9.6% of loans (A¢”šA¬ 43 billion), but still far from a high incidence reached 13% in 1993. A special investigation by the Central Bank, however, stressed that to have a complete picture of the situation must also add to the suffering of A¢”šA¬ 59 billion of other loans uncertain recovery, A¢”šA¬ 60 billion of real estate acquired by banks in payment for loans in the past and A¢”šA¬ 4 billion of loans already written off entirely (write-offs). In short, the downturn in the property sector is thus weigh on the banking sector to A¢”šA¬ 165 billion, 37% of total loans to this sector. Although this is a significant amount, it should not result in system-wide problems of stability since the specific provisions covering these loans to 26%, rising to 35% if you add the general provisions available. The Bank of Spain also estimated that the overall coverage may be increased to 70% if the operating income in 2010 was only equal to that of the previous year. With the exception of finance companies in the real estate sector (about 18% of the loan portfolio), the quality of the portfolio of Spanish banks as a whole appears reasonable given the severity of the economic situation.

A crisis manageable

According to the research department of BNL, “the situation of Spanish banks is attracting too much attention, perhaps especially when compared with the weakness shown by other European banking systems, such as is the case of Germany.” Despite an increase of 65% of provisions, the Spanish banking system ended 2009 with net profits (nearly A¢”šA¬ 20 billion) in limited flexion (-20%), achieving a non-marginal increase of the two main indicators patrimonalizzazione (tier 1 to 9.7% an increase of 1.3 percentage points to 8.1% core tier 1 an increase of 1 percentage point). Detail is not secondary, the increase of these two reports is due entirely to increase the number (net worth +13%) compared to a denominator (risk-weighted assets) remains unchanged. Even the effect of this increase, ROE (Return on Equity) fell by almost three percentage points, ranking still 9%, the highest level in Europe (3.6% in the case of Italy).

crisi edilizia

Le ripercussioni sul sistema creditizio

La crisi del settore immobiliare ha avuto un inevitabile impatto sul sistema creditizio. A fine 2009 i prestiti a questo settore classificati in sofferenza risultavano pari al 9,6% dei prestiti erogati (A¢”šA¬ 43 mld), un’incidenza elevata ma comunque lontana dal 13% toccato nel 1993. Una apposita indagine della Banca Centrale, tuttavia, ha messo in rilievo che per avere una completa rappresentazione della situazione bisogna aggiungere alle sofferenze anche A¢”šA¬ 59 mld di altri prestiti di incerto recupero, A¢”šA¬ 60 mld di proprietà immobiliari acquisite dalle banche in pagamento per prestiti concessi in passato e A¢”šA¬ 4 mld di prestiti già interamente svalutati (write-offs). In definitiva, la sfavorevole congiuntura del settore immobiliare risulta così pesare sul settore bancario per A¢”šA¬ 165 mld, il 37% del totale dei finanziamenti a questo settore. Seppure si tratti di un importo rilevante, non ne dovrebbero derivare a livello di sistema problemi di stabilità considerato che gli accantonamenti specifici coprono questi prestiti al 26%, percentuale che sale al 35% se si aggiungono gli accantonamenti generici a disposizione. La Banca di Spagna, inoltre, calcola che la copertura complessiva potrebbe essere portata al 70% se nel 2010 il risultato operativo fosse solo pari a quello dell’anno precedente. Se si escludono i finanziamenti alle società del settore immobiliare (il 18% circa del portafoglio prestiti), la qualità del portafoglio delle banche spagnole appare nel complesso discreta considerata la gravità dell’attuale congiuntura economica.

Una crisi gestibile

Secondo l’ufficio studi di Bnl “la situazione delle banche spagnole sta attirando un’attenzione forse eccessiva soprattutto se confrontata con la fragilità evidenziata da altri sistemi bancari europei, come ad esempio è il caso della Germania”. Malgrado una crescita del 65% degli accantonamenti, il sistema bancario spagnolo ha chiuso il 2009 con un utile netto (quasi A¢”šA¬ 20 mld) in limitata flessione (-20%), conseguendo anche un aumento non marginale dei due principali indicatori di patrimonalizzazione (tier 1 al 9,7% in aumento di 1,3 punti percentuali e core tier 1 a 8,1% in aumento di 1 punto percentuale). Dettaglio non secondario, l’aumento di questi due rapporti è dovuto interamente all’aumento del numeratore (risorse patrimoniali +13%) a fronte di un denominatore (attività ponderate per il rischio) rimasto sostanzialmente invariato. Anche per effetto di questo incremento, il RoE (Return on Equity) è sceso di quasi tre punti percentuali, posizionandosi comunque al 9%, livello tra i più alti in Europa (3,6% nel caso dell’Italia).

Indian Competition Law Essay

persons causes any AAEC in India subject to conditions under section 3(3) (a) to (d), if it does so then only it will be covered under this section. 5.4 Enterprises:- The meaning of enterprises for the purpose of this Act has been defined under Section 2(h) of the Act as under:-

  • =Enterprise‘ means a person or a department of the Government, who or which is, or has been, engaged in any activity, relating to the production, storage, supply, distribution, acquisition or control of articles or goods, or the provision of services, of any kind, or in investment, or in the business of acquiring, holding, underwriting or dealing with shares, debentures or other securities of any other body corporate, either directly or through one or more of its units or divisions or subsidiaries, whether such unit or division or subsidiary is located at the same place where the enterprise is located or at a different place or at different places, but does not include any activity of the Government relatable to the sovereign functions of the Government including all activities carried on by the departments of the Central Government dealing with atomic energy, currency, defence, and space.

Explanation.-For the purposes of this clause,– (a) A¢â‚¬•activityA¢â‚¬- includes profession or occupation; (b) A¢â‚¬•articleA¢â‚¬- includes a new article and A¢â‚¬•serviceA¢â‚¬- includes a new service; (c) A¢â‚¬•unitA¢â‚¬- or A¢â‚¬•divisionA¢â‚¬-, in relation to an enterprise, includes– (i) a plant or factory established for the production, storage, supply, distribution, acquisition or control of any article or goods; (ii) any branch or office established for the provision of any service;A¢â‚¬-65 The substance of the definition of enterprise is that it can either be a person (section 2(l)) or a department of government subject to the conditions specified in the definition carrying on an economic activity in the supply of goods or services. The definition makes it clear that all person66 or department of the government, any other entity cannot for the purpose of the Act, be treated as an enterprise unless it is engaged in commercial activities.

65 Section 2 (h)
66 Section 2(l)
  • 35 –

5.5 Trade Associations:- Trade associations have not been specifically dealt under the Act but they come under the purview of section 3 for they are merely association of enterprises engaged in similar kind of trade. Trade association can be defined as an association of business organizations having similar concerns and engaged in similar fields, formed for mutual protection, the interchange of ideas and statistics, and the establishment and maintenance of industry standards.67 Trade associations in India, as a socially responsible body and in enlightened self interest, can proactively promote compliance on the part of enterprises as well as themselves. They make a positive contribution to the economy, particularly to the specific industry they represent. They can legitimately lobby the authorities to resolve problems facing the industry, or create awareness about new laws or taxes or environmental issues, or ready the industry to meet new challenges. But the very fact that an association brings together competitors presents the risk that they will enter into an agreement that might violate the competition law. Any such agreement held under the auspices or cover of a trade association, can spell trouble for not only the conspiring firms but also for the association and its office bearers. 5.6 Person:- The term “person” has been defined very widely under section 2(l) 68 it would cover every conceivable entity. It would include an individual, a Hindu undivided family, a company, a firm, an association of persons, whether incorporated or not, in India or outside India, a registered co- operative society, a local authority and every artificial juridical person, not falling under any above said category.

67 Black’s Law Dictionary, 8th edition p. 133

Section 2 (l) “person” includes– (i) an individual; (ii) a Hindu undivided family; (iii) a company; (iv) a firm; (v) an association of persons or a body of individuals, whether incorporated or not, in India or outside India; (vi) any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956); (vii) any body corporate incorporated by or under the laws of a country outside India; (viii) a co-operative society registered under any law relating to cooperative societies; (ix) a local authority; (x) every artificial juridical person, not falling within any of the preceding sub-clauses;

  • 36 –

However it is to be noted that persons and entities defined above will fall under the ambit of section 3 only if their activities results in any of the effect mentioned under section 3(3) and 3(4). 5.7 Practice:- The term practice have been defined under section 2(m) of the Act as “practice” includes any practice relating to the carrying on of any trade69 by a person or an enterprise. It is an inclusive definition. There have been practical difficulties to establish the existence of an anti-competitive agreement between the firms. The fact is that firms engaging anti-competitive behaviour have developed sophisticated mechanics of hiding their behaviour so that they escape the liability under the competition laws. Hence the competition laws of most of the countries have introduced a safety net in the form of prohibition on concerted practices However, in the Act particularly the word concerted practices had not been used it says “practice carried on”, or decision taken by, any association of enterprises or association of personsA¢â‚¬- which indicates meeting of minds of enterprises resulting into practice carried in by associations of enterprises. According to Lord Denning A¢â‚¬•people who combine together to keep up prices do not shout it from the housetops. They keep it quite. They make their own arrangements in the cellar where no one can see. They will not put anything in writing or even into word. A nod or will do. Parliament as well is aware of this. So it included not only an agreement‘ properly so called, but any arrangement‘, however informal.A¢â‚¬- 70 A leading case discussing concerted practices in EU is Imperial Chemical industries v. Commission71 , in which the ECJ defined concertation under Article 81(1) (now Article 101) as A¢â‚¬•A form of coordination between undertaking which, without having reached the stage where an agreement properly so called has been concluded, knowingly substitutes practical cooperation between them for the risk of competition.A¢â‚¬- 69(x) “trade’ means any trade, business, industry, profession or occupation relating to the production, supply, distribution, storage or control of goods and includes the provision of any services

70 RRTA v W.H. Smith n Sons Ltd. (1969) 3 All ER 1065
71 1972 E.C.R. 619at page 64, 65.
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The ECJ further added that by its very nature a concerted practice have all the elements of contract but may inter alia arise out of coordination which becomes apparent from the behaviour of the participants.72 Conceptually concerted practices are not easy to define with precision and its application depends on facts and circumstances of a given case. A concerted practice is a form of coordination between the parties where they have not reached the stage of actual agreement. But knowingly coordinate their actions and cooperate with one another instead of competing with each other. Criteria of cooperation and coordination in no way requires the working of an actual plan and it must be understood in the light of concept inherent in EC treaty relating to competition that each economic operator must determine independently the policy which he intends to adopt on common market including the choice of person and undertaking to which he makes offers or sells. The test for concerted practice is that the parties have substituted for the risk of competition practical co-operation between the parties between the parties, which culminated in a situation, which does not correspond with the normal conditions of the market. In order to constitute a concerted practice, a action by a group of competitors need not reach the level of agreement, but must be knowingly coordinated with the further knowledge that the effect of coordination will be to substitute effectively cooperative for competitive conditions. In addition to constitute violation of Section 3 coordinated conduct must have an AAEC as per the conditions laid down in Section 3(3) (a) to (d) For the purpose of present study Section 3 can broadly be divided into four parts namely:

  1. General prohibition [section 3(1)and section 3 (2)]
  2. Horizontal agreements[section 3(3)]
  3. Vertical agreements[section 3(4)]
  4. Exceptions[section 3(5) and (3) ]
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  1. General Prohibition:-

Section 3(1) is a general prohibition of an agreement relating to the production, supply, distribution, storage, acquisition or control of goods or provision of services by enterprises, which causes or is likely to cause an AAEC within India. Section 3(1) is that such agreement must cause an AAEC within India. So the key elements for application of section 3(1) are agreement between enterprises and its AAEC within India. It is to be noticed that section 3(1) prohibits agreements which causes appreciable adverse effect in India only. On reading the section3 (1) it becomes clear that Act does not provide that agreements between enterprises and persons are prohibited it clearly states that No enterprise or association of enterprises or person or association of persons shall enter into any agreement which causes or is likely to cause an AAEC within India. It is also clear from the provision if an agreement does not have any adverse effect on competition within India then it will remain out of the preview of this provision, but if someone alleges that agreement is likely to cause an appreciable adverse effect, then there will arise an action under this Section. The provision of section 3(1) cast a duty upon enterprises to examine the proposals for agreement from its long term effect on competition in the market. Section 3(2) declares all the agreements void entered into contravention of the provisions contained in section (1).

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  1. Horizontal Agreements

Agreements prohibited under section 3(3) are described as horizontal agreements for they apply to similar or identical trade of goods or provision of services. A careful reading of section 3(3) prompts that it restricts three things namely agreement, practice and decision including cartels who are identical or similar trade of goods or provision of services. The Act under this sub-section presumes following activities as to have appreciable adverse effect on competition.

  1. Agreement between :-
  • Enterprises
  • Associations of enterprises
  • Persons
  • Associations of persons
  • Person and enterprise
  1. Practice carried by:-
  • Association of enterprises
  • Association of persons
  1. Decision taken by:-
  • Association of enterprises
  • Association of persons
  1. Cartels

Who are engaged in identical or similar trade of goods or provision of services including cartels only if any of their activity:-

  • Determines either directly or indirectly purchase or sale prices.
  • Limits or controls production, supply, markets, technical development, investment or

provision of services.

  • Shares the market or source of production or provision of services by way of

allocation of geographical area of market, or type of goods or services, or number of customers in the market or any other similar way;

  • Directly or indirectly results in bid rigging or collusive bidding73

73 Section 3(3)(a)to (d)

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It is to be noted that under section 3(3) agreements, decisions and practices between similar trade of goods or provision of services is a condition precedent for prohibition. For the violation of Section 3(3) (b), it must be established that there exists an agreement, practice carried on or, decision taken by entities mentioned therein, including cartels, engaged in identical or similar trade of goods or provisions of services, which result in effects mentioned in clauses (a) to (d) of sub- section (3) of Section 3 of the Act. These include acts that limit or control production, supply, markets, technical development, investment or provision of services.74 7.1. Types of horizontal agreement prohibited under Section 3(3):- Section 3(3) of the Act expressly mentions four types of horizontal agreements that are presumed to have an AAEC as mentioned above. Now we will discuss those agreements in detail. 7.1.1 Agreements that directly or indirectly determine purchase or sale prices:- Price fixing agreements, as the name suggests are agreements to fix, directly or indirectly purchase or sale prices. The term price fixing is applied to a wide range of actions taken by competitors having a direct effect on price and includes a number of agreements such as agreements on price, agreements on credit terms, agreements to adhere to published prices etc75 . In Southern Motors Rate Carriers Conference Inc. et. al. V. United States76, it was observed that the term price fixing generally refers to a process by which competitors agree upon prices that will prevail in the market for the goods or services they offer. The Competition Act, however refers to agreements to determine both purchase and sale prices. For instance, if a group of manufacturers of product A¢â‚¬-A‘ enter into an agreement not to sell product A¢â‚¬-A‘ below a fixed price. Price fixing agreements between competitors negatively impact competition as they prevent prices from being fixed by the competitive forces in the market. Consumers may thus, be forced to pay higher prices for good than they would pay in competitive market. The aim and result of every price fixing agreements, if effective, is the elimination of one form of competition. The power to fix prices, whether reasonably exercised or not, involves the power to control the market and to fix 74Shri Govind Agarwal Vs. ICICI Bank Ltd., Shri Norbert Lobo Vs. Citibank, Shri Gulshan Kumar Gupta Vs. BHW Home Finance Ltd.(para 61) Decided On: 07.06.2011 by CCI. (MRTP Cases) 75World Bank/OECD (1998): A framework for the design and implementation of Competition Law and Policy, World , OECD, 1998 76 471 US 48 (1985)

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arbitrary and unreasonable prices.77 The reasonable price fixed today, may through economic and business changes become the unreasonable price of tomorrow. Once established, it may be maintained unchanged because of the absence of competition secured by agreement for a price reasonable when fixed. Agreements which create such potential power may well be held to be in themselves unreasonable or unlawful restraints, without the necessity of minute inquiry whether a particular price is reasonable or unreasonable as fixed without placing on the government, in enforcing the law, the burden of ascertaining from day to day whether it has become unreasonable through the mere violation of economic conditions.A¢â‚¬- 7.1.2 Limits or controls production, supply, markets, technical development, investment or provision of services:- Agreements that limit or control production, supply, markets, technical development investment or provision of services are also considered to be anticompetitive. An example of such an agreement is one where there is a clause that the distributor must ensure the selling of 100 cylinders a month78 . An agreement limiting production may lead to a rise in prices of the concerned product. Similarly, limiting technical development that may help in lowering the costs of a product ,ay affect the interests of consumers. Livingstone notes that limiting production maintains high prices by ensuring that there is no surplus and therefore, demand remains steady; limitation of sales has a similar effect as well as discouraging competition for new entrants79 . Agreement for limiting or controlling production are anticompetitive for two reasons; one that by controlling production. The supply is kept low as compared to the demand creating artificial scarcity; second the agreement, in effect restricts competition between the parties themselves so that the efficient ones among them also cannot go ahead with further production and dislodge the less efficient from the market. 77 See Arizona v. Maricopa County Medical Society 457 US 332(1982); Unites States v. Trenton Potteries 273 US 392(1926)

78 Livingstone, Dorothy (2001): “Competition Act, 1998: A practical Guide”, Sweet and Maxwell, London
79 Livingstone, Dorothy (2001): “Competition ct, 1998”: A Practical Guide”, Sweet and Maxwell, London
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7.1.3 Shares the market or source of production or provision of services by way of allocation of geographical area of market, or type of goods or services, or the number of customers in the market or any other similar way This category covers the agreements referred to as market sharing agreements. Market sharing or market division agreements may be either to share markets geographically or in respect of consumers or particular categories of consumers or types of goods or services in any other way. An example of geographical market sharing would be an agreement between manufacturer A¢â‚¬-A‘ and a manufacturer A¢â‚¬-B‘ (both manufacturers of product A¢â‚¬-P‘) that A¢â‚¬-A‘ will sell product A¢â‚¬-P‘ in a certain geographic area, while A¢â‚¬-B‘ will sell product A¢â‚¬-P‘ in another area and A will not sell P in the area allotted to A¢â‚¬-B‘ and vice versa. Market sharing agreements are considered to be anti-competitive80 as they reduce the choice available to customers in a competitive market. Such agreements also reduce competition between the parties to agreement. Prof. Whish81 observes that geographic market sharing is particularly restrictive from the customers‘ point of view since it diminishes choice; at least where the parties fix prices, a choice of product remains and it is possible that restriction of price competition will force parties to compete in other ways. Market allocation agreements eliminate the need to police the pricing practices of the companies party to the agreement and the need for producers with different costs to agree on appropriate prices82 .

Harrison Bergeron Theme of Competition Essay

Harrison Bergeron was published to give the reader some kind of notion as to what it would be like if there was no competitiveness in the globe. The major character is 14, tall, handsome, solid, athletic, good, and above average in each and every way conceivable. The creator uses humor and irony to depict a relatively terrible tale of a dystopian society the place, all people today had been genuinely and totally designed equal in every single component conceivable underneath the law of the land. The govt produced certain that no a single could be smarter, prettier, stronger, or in anyway much better than the subsequent man or woman. It is not only a tale of governing administration handle but also a tale about social boundaries and conforming to social norms in this manufactured up modern society.

Levels of competition is in our nature as individuals. There is constantly anyone out there that is far better, smarter, much better, and so on that we are attempting to get ahead of. In this limited story a female named Diana Moon Glampers who was the handicapper common was expected to occur up with suggestions to make confident that no 1 had an unfair advantage about any one else. If another person was additional than normal in their intelligence, like the primary character in this brief tale, they had been essential to wear an earpiece 20-four hours a day that transmitted horrible noises into their ears in twenty 2nd intervals to blast out the views. Anyone in this culture was necessary to don sacks with a specific amount of direct balls in them based on their measurement, strength and other aspects identified by the handicapper basic, to weigh them down so that they could not transfer faster than other people.

Although unrealistic, this dystopian society attracts parallels to the world we dwell in currently. Every person usually competing to see who has the most effective task, the finest residence, the best vehicle, and so on. In every little thing we do we are competing from or siblings, friends, and the rest of the planet for some sort of gratification. All little ones get a trophy for getting on a sports activities group just for displaying up for methods and games, just so that they do not feel inferior to the little ones that are athletically inclined or the youngsters who perform harder and place in far more time than the many others to make themselves far better.

The author employs excessive irony all through the shorter tale to illustrate just how absurd daily life was in this created up environment. All Tv set/radio announcers had some type of speech impediment, in some cases so intense that they couldn’t make the announcements that they had been intended to make. For example when the ballerina decided to browse the announcement about dwell television set the narrator explained She experienced to apologize at the moment for her voice, which was a extremely unfair voice for a girl to use. Her voice was a heat, luminous, timeless melody. Excuse me- she stated and commenced all over again building her voice entirely uncompetitive.

The improvement of engineering is a significant concept in this composing due to the fact of the use of all the handicapping equipment. Every person in this modern society had to use a bag chained all around their neck with a selected selection of lead balls so no a single would be more powerful or more quickly than any individual else. For every ball you took out of your bag it was $2000 and 2 yrs in jail. If you experienced extra than common intelligence you were to wear a psychological handicap which played piercing noises in your ears so that you were not able to believe plainly. If you could see better than every person else, you would have to wear eyeglasses to impair your eyesight. And if you did not glimpse regular, you would have to dress in a mask so that no one particular felt threatened by your splendor. The additional previously mentioned common you appeared, the uglier the mask you have been manufactured to put on. The major character, Harrison, had to put on major headphones that included his ears, glasses that impaired his eyesight as nicely as providing him debilitating migraines. He was produced to carry a few hundred pounds of scrap metal on his overall body and, mainly because of his fantastic looks, was usually made to dress in a pink ball on his nose 24 hrs a day and to maintain his eyebrows shaved.

Grocery Retailers Competition in the UK Essay

Introduction “Demand for meals and consume remained rather secure during the recent financial slowdown. Charges of food stuff have not skilled any key modifications, and in truth have been climbing steadily. A main craze in food items retailing has been the transfer in the direction of comfort and in the direction of premium items, which has been a characteristic of several of the major sub sectors and a driver of item enhancement, as perfectly as sales and promoting system.” (International Marketplace Information and facts Databases, Oct 2004) The transfer in the direction of comfort and top quality items has been fuelled by a variety of features of the competitive surroundings, therefore a PEST analysis of the grocery industry will be carried out to decide these factors. Equally, irrespective of the potent performance of the sector as a entire, Sainsbury’s has been dealing with rather lousy performance for quite a few years now and so Porter’s products and theories will be employed to analyse why this may be the circumstance. Ultimately, this piece intends to search at the function and intent of eventualities in serving to organizations to deal with uncertainty, and the extent to which scenarios can be utilized for this goal. Analysis of the aggressive natural environment of the grocery retailing sector in the Uk Politically, the principal effects on the grocery sector is on the so-termed “functional foods” (Global Sector Details Database, December 2003) sector, which addresses organic and natural foods, contemporary foods and equivalent forms, and which, in the United kingdom, has for most of its existence had relative independence absent from laws. Although functional foodstuff has been matter to the very same laws about conventional food, the sector has been equipped to make wellbeing promises on its packaging which has earlier been unregulated by unbiased bodies. This has now changed significantly, and EU laws has guide to significantly tighter controls about what brands can assert, with all wellness statements built needing to be backed up by scientific study. For some smaller sized brands this is creating making these food items progressively value prohibitive, particularly if the energetic substances in their purposeful products are herbal and hence tricky to confirm scientifically. A further political influence, of probably even better great importance, is that the fruit and vegetable sub sector obtained impressive backing in the sort of supermarket promotions, echoing the government’s wellness concept about ingesting 5 pieces of fruit and veggies each and every working day, in get to maximize intake of critical vitamins and minerals essential to retain wellbeing and guard versus most cancers and heart condition.. As a outcome, revenue of fruit and veggies grew solidly among 1999 and 2003, with vegetable sales escalating by about 38%. (Global Current market Info Database, December 2003) Pre-packed vegetables and salads, in distinct, have turn into a lot much more preferred just lately, with a larger variety on give, which includes much more unique international forms nevertheless this is far more of a social effect, comparable to people included beneath. Economically, in terms of fundamental food commodities, meat proceeds to be well-known in the British isles, with beef owning recovered from the downturn triggered by the BSE disaster close to the finish of the 1990s. The provide of lamb was, however, strike really hard in 2001 by the foot and mouth crisis in British farming, and has nonetheless to recuperate entirely in terms of supply and client need. A very similar but considerably less extreme problem exists in the pork current market, when poultry sales are now becoming threatened by less expensive imports. On the total, having said that, price has been managed regardless of drops in quantity, and more a short while ago the sector has benefited from increased uptake prompted by the recognition of the Atkins diet program. Profits of dairy solutions have also been boosted by the Atkins eating plan, which advocates a higher consumption of eggs, in individual. In accordance to marketplace resources, profits of eggs rose by 4% in 2003, in comparison with only 1% in the preceding 12 months. (World-wide Market Facts Databases, December 2003) Nonetheless, in general, financial effects have negligible affect on grocery retailing in the United kingdom, once in a while major to changes in offer, but commonly not significantly impacting the dimensions of the market place as significantly as other effects. (Morrison, 2002) In specific, social effects experienced big impacts, with the major expansion costs from 1999 to 2003 currently being apparent between well prepared food items, as greater sophistication and recognition of food stuff high-quality, merged with a need for foods demanding bare minimum preparation, drove the marketplace for these styles of solutions. British shoppers are now the premier eaters of all set manufactured food stuff in Europe, with chilled foods product sales looking at rises of around 90% involving 1999 and 2003. (World Industry Information and facts Database, December 2003) Revenue of biscuits and bakery products and solutions also showed balanced development, with biscuit product sales expanding by 5% a year, in accordance to business sources, (World wide Industry Info Databases, December 2003) as shifting lifestyle attitudes among the women: fewer are satisfying the conventional full-time wife and prepare dinner job, have contributed strongly to this progress, as properly as the incredible well prepared food stuff advancement. Similarly, the raising range of single human being homes helps make cooking a lonely solution, and elevated ownership of microwave ovens is also an essential element. In all, retailers are maximizing the impression of completely ready meals with premium components and packaging, and pushing up price in the sub sector in response to the social adjustments. 1 closing social improve is the growth of the natural and organic food stuff marketplace in Europe, with fantastic improvements introduced about by the entry of supermarkets on the other hand this sector is still minimal by challenges in the generation of natural foods, and complying with laws. (Sahota, 2004) As this sort of, these social effects are enormously overshadowed by the generate in the direction of benefit. The British isles retail ecosystem is at the moment exceptionally competitive, forcing shops to continually build and improve both of those their offerings and their technological innovation. Possibly the most major changes taking location are coming from not the merchandise currently being marketed themselves, but rather when, how and where by they are staying bought. For illustration, new technologies these types of as the Online, digital kiosks and digital television are opening up new alternatives for suppliers as a result of distant acquiring and supply. Thus, main United kingdom grocery retailers are now employing the Internet to develop worth for their users about and previously mentioned that which is presented by bricks and mortar shops, and the growth of net searching is found as the biggest technological growth in the sector because the introduction of refrigeration. (Bevan and Murphy, 2001) Assessment of J Sainsbury’s industry place and segmentation in 2005 The idea that productive corporations must pursue only just one system and steer clear of remaining ‘stuck in the middle’ concerning a number of techniques, originally articulated by Michael Porter, has develop into an crucial tenet of company strategic thinking. It is sometimes interpreted as information about market positioning in a slim perception it is in some cases offered as prescribing wide strategic clarity and it is in some cases considered extra descriptively as a scheme for classifying companies by strategic results. When interpreted narrowly as referring to the enchantment of a product to its focus on consumers, the proposition that corporations ought to not be ‘stuck in the middle’ has usually been taken to imply that organizations should be down sector or up market place, but very little in between. (Johnson and Scholes, 2003) These kinds of a watch was beforehand belied by the evident accomplishment of Sainsbury’s, which traditionally made substantial revenue in a mid sector place in the grocery sector. As this kind of, Porter can he interpreted more broadly as suggesting that companies need strategic clarity and that they will do far better to go after a single or other of charge or high quality aims than to seek a blend of the two. Nonetheless, Sainsbury’s has due to the fact fallen much driving Tesco, and even Asda, in grocery retailing, and this can be analysed, working with Porter’s model, as getting a result of absence of strategic clarity. In 2004, a retail foods analyst issued a stark warning to the firm that placing its retailer graphic ahead of a price tag centered marketing and advertising tactic was detrimental its marketplace share. Goldman Sachs & Co. govt director of food stuff retail Nick Jones reported whilst Sainsbury’s had lessened the expense of 150 items by 2% due to the fact 2001, investigate by the financial investment lender found that 23% of shoppers considered benefit for income experienced bought even worse, even though 57% mentioned it remained the similar. (Barne, 2004) Nevertheless, Sainsbury’s has now refocused its marketing on strengthening its value notion, and as a result is on the lookout to make improvements to its performance amongst its center class concentrate on segment. People will not come into large outlets unless of course it is mainly to purchase groceries. As a consequence, the multiples are expected to carry on focusing the the greater part of their retail house on food. Other benefit improves, where they do arise, will continue to be achieved by an emphasis on ease: takeaway food stuff, greater good quality gourmet substances, and high quality snack products. Similarly, the dominance of the huge supermarket retailers is set to grow: a lot of supermarkets can now undercut specialist greengrocers and butchers in the sale of primary commodities, though, as shops consolidate their control of the United kingdom food items market place, this selling price erosion may stabilise. As a consequence of this, Sainsbury’s is gearing alone up to concentration intensively on the revival of its British isles supermarkets company during the time period from 2004 to 2008, obtaining streamlined its organization and introduced the introduction of a price tag-cutting coverage. This sort of action will be needed for the firm to fulfill the problems offered by the aggressive discounting approaches of the UK’s two leading supermarket chains, Tesco and Asda, and the elevated threat ensuing from Morrison’s takeover of Safeway. Sainsbury’s additional aggressive method to rising product sales and its new, streamlined framework, which will make it extra adaptable and better tailored to the requires of the modern current market are envisioned to underpin revenue advancement through the 2004-2008 interval. Turnover is forecast to rise by 14% in excess of 2004-2008 in regular value phrases. (Worldwide Current market Information Databases, Oct 2005) Critically evaluate the position and function of eventualities in supporting organisations to regulate uncertainty. In normal, the long term is uncertain, with the only certainty remaining that it will unquestionably be various from the previous, nonetheless we have no know-how in what way the upcoming will be distinct from the previous or the current. It is this uncertainty which would make decision generating this sort of a tricky task, whilst decision earning lies at the foundation of every day everyday living each businessperson, government, residence and enterprise have to consider choices in certain points in time. The setting up point for making these conclusions is information and facts about the feasible decisions, and only when details is valid and complete, may we think that the ‘right’ choices will be designed. Regretably, present information is frequently incomplete and often not valid, and it is this lack of info necessary, sales opportunities to a specific volume of uncertainty. To lessen these uncertainties, decision makers require selection assist instruments, and one particular way to deal with uncertainty is to build various eventualities and analyze the way that the diverse possibilities conduct in every single of them. A situation is a description of a hypothetical long run state of the world, including thing to consider of main uncertainties encountered in transferring significantly into the foreseeable future. Eventualities are neither predictions nor forecasts about the long term, nor do they represent the most likely long run developments relatively they convey to us what may possibly occur. Wright (2005) undertakes a vital thing to consider of the part of eventualities as possible ‘sensemaking’ equipment by the dual theoretical views of social constructionism and narrative. Mainly, the scholarly literature in the fields of strategy and scenario pondering, ‘sensemaking’, social design and narrative are analysed and critically talked over, with their important contributions to the debate identified. The most important conclusions of this investigation recommend that transformational adjust is observed to manifest by means of inductive strategising at the organization’s periphery, in contrast with deductive strategy generating at its centre, consequently supporting the look at that eventualities will offer sensible sights of the extra unsure components of organisations. Wright’s theory proposes that adopting a circumstance outlook and establishing the capacities that comprise ‘sensemaking’ need to increase the capabilities of the inductive strategist. This, in turn, should really help strategists to much better foresee uncertainty, and hence respond better to it when it does occur. As a result of this, supervisors are much more open up to the unforeseen and are able to construct meaning from uncertainty and ambiguity, laying the foundations for transformational strategising, and managing explained uncertainty. Of program, all companies and communities are strongly motivated by elements and situations that lie outdoors their boundaries. A shared knowledge of these environmental influences: in the earlier and the existing, has been an essential component of common significant group decisions and management strategies. Classic circumstance planning has prolonged been a way of confronting uncertainty and complexity about the foreseeable future of environmental influences, and huge group state of affairs planning is an adaptation of common state of affairs preparing. Conference for two or three days, a crucial mass of an organisation or a group can use situations of the long term setting to go further than their pure inclination to feel of the long run as an extrapolation of the previous, and hence handle uncertainty on huge scales. (Steil Jr. and Gibbons-Carr, 2005) Eventualities may possibly in reality be conceived of as imaginary long run scenario experiments, given that they neither claim realism nor predictability: they are just images of the long run which map out hypothetical likely occurrences. Case research, in common, aim to allow people today to get generalized or transferable expertise with the objective to realize complexity, therefore for eventualities, they assist comprehend a sophisticated and uncertain potential earth in buy to produce a reference framework for motion or get hold of a interaction software for final decision generating under uncertainty. (Nijkamp et al., 1998). In recent many years scenarios have turn into a far more popular scientific instrument to discover uncertain futures than conventional forecasting styles, these as statistical extrapolation or mathematical simulation versions, specially in situations with quite a few degrees of independence and of uncertainty concerning the foreseeable future (Masser et al., 1992). Similarly, Nijkamp et al. (2000) declare that, as the long run results of globalization on transportation and the natural environment are not certain, and it is challenging to forecast which developments are probable in the potential and why this is the circumstance, eventualities are essential to forecast how the globalization course of action will build. Rienstra et al. (1996) distinguished 5 functions of situations, together with the “signalling function”: in which situations deliver better insight into uncertain situations and the “communication and studying function”: the place eventualities stimulate pondering about option futures. In accordance to these features, situations can be a valuable instrument to analyse feasible futures, and help us to assess strategies and aid conversations on feasible foreseeable future events. They are a device for discovering the uncertain foreseeable future, and, for instance, plan situations will present us with information and facts on the repercussions of different policies and could contribute to the top quality of selection creating. Conclusion and Potential Developments The aggressive environment in the United kingdom grocery sector is probably to continue on to be identified by the dominance of the huge grocery store suppliers: several supermarkets can now undercut specialist greengrocers and butchers in the sale of fundamental commodities. In the shorter expression, Morrisons’ improved power in the marketplace as a result of its acquisition of Safeway could put even further strain on costs, specifically as Morrisons’ possession of subsidiary foodstuff manufacturers, which provides it reduced operational charges than other retailers. Similarly, Tesco is more and more sourcing deliver from Japanese Europe, in an try to major its current market leader situation. These trends may possibly, nevertheless, be offset by the progress of curiosity in larger good quality organic and natural generate, an interest which is possible to produce in distinctive instructions about the forecast period of time. Local sourcing by supermarkets of natural and organic meat, vegetables, and even produced or usefulness products will develop into additional obvious, and this new emphasis could really encourage individuals to commit additional as they aspire to a more healthy life style. As for Sainsbury’s marketplace place and segmentation, the firm’s model is concentrated strongly on foods, with the weekly grocery store the key rationale why buyers take a look at its suppliers. In long term, one would assume a conventional concentration on fresh and private label solutions to be amplified, in get to restore the retailers’ popularity for impressive and high-quality items at reasonable selling prices. In distinct, by means of sub brand names like ‘Taste the Difference’ and ‘Be Superior to Yourself’, high quality and wellness ranges look to be getting more and more marketed as a considerable point of distinction involving the enterprise and other mass-marketplace operators, and merchandise ranges have also been reviewed to make them far more pertinent to all Sainsbury’s customers. All retailers now carry the exact main product or service providing, with a ‘good, improved, and best’ hierarchy, allowing the business to concentration its targeting on its regular middle course client base, although continue to owning economic system (‘good’) and high quality (‘best’) choices to widen its charm and broaden its focus on segments. As for the job and function of scenarios in aiding organisations to handle uncertainty, this is hampered by the reality that scenarios simply cannot be made use of in all scenarios. This suggests that it is essential to justify their use, in terms of fulfilment of a variety of conditions. In general, eventualities can be made use of if uncertainty about the long term is high, historic designs are shaky and it is incredibly likely that the upcoming will be affected by occasions which did not exist in advance of. 1 issue we can be absolutely sure about is that situations will always be incorrect to some extent however, scenarios could give us insight into achievable strategies to deal with critical issues that could arise in the foreseeable future. As these, eventualities are vitally crucial to organisations seeking to manage uncertainty and should really be utilized wherever probable, having said that it is crucial that organisation recognise the limits of situations, and use them only to extrapolate and hypothesise, alternatively than make concrete predictions and selections. References

  1. Barne, R. (2004) Sainsbury’s impression slated. Advertising and marketing (United kingdom) p. 14.
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  13. Steil Jr., G. and Gibbons-Carr, M. (2005) Large Team Scenario Preparing. Journal of Utilized Behavioral Science Vol. 41, Situation 1, p. 15.
  14. Wright, A. (2005) The purpose of scenarios as prospective sensemaking products. Management Choice Vol. 43, Problem 1, p. 86.

Financial Analysis and Competition of Microsoft Finance Essay Essay

“To enable people and businesses throughout the world to realize their full potential”

The company, founded in 1975, has worked to achieve its mission through developing and marketing of software and hardware and providing services and solutions that delivers greater convenience and add value to people’s lives. Microsoft’s presence is throughout the world with offices in more than 100 countries.

Microsoft generates revenue by developing a larger range of software products and giving support services for various types of computing devices. Few to name are operating systems for various computers, server applications, business solutions applications, software development tools and video games.

It provides support services for its products (customer retention policy) and also gives training to computer system developers. There are a number of Microsoft certified specialized courses. Designing hardware is also a part of their job. Few examples are Xbox 360 gaming, the Zune digital music, and Microsoft personal computer (“PC”) hardware products.

It earns revenues through license fee for software, even as it develops and delivers “cloud-based” computing services.

(https://www.microsoft.com/investor/default.aspx )

Examples of cloud-based services which Microsoft currently offers are:

A¢â‚¬A¢ Bing, its Internet search service;

A¢â‚¬A¢ Windows Live Essentials suite, it allows users to upload and organize photos, make movies, communicate via email and messaging and enhance online safety; and

A¢â‚¬A¢ Xbox LIVE service, it enables online gaming, social networking, and content access.

Current cloud-based services (for business users) are:

A¢â‚¬A¢ Microsoft Office Web Apps (online companions to Microsoft Word, Excel, PowerPoint, and OneNote)

A¢â‚¬A¢ Business Productivity Online Suite (Offering communications and collaboration solution)

A¢â‚¬A¢ Microsoft Dynamics Online family of customer relationship management (“CRM”) and enterprise resources planning services.

Also, Microsoft is in research and development of advanced technologies. Microsoft believes in delivering breakthrough innovation through their integrated software platform in order to meet their customers need and for future growth opportunity. Microsoft focuses on long term growth by improving customer feedback and delivering new products and services and creating new opportunities for its existing partners. Their prime focus is to build on this foundation.


Microsoft operates its business in five segments:

Windows & Windows Live

Server and Tools

Online Services

Microsoft Business

Entertainment Devices

These segments are very cleverly chosen. They enable Microsoft to easily achieve its Mission.

Windows & Windows Live Division

The overall responsibility of Windows & Windows Live Division, also termer as “Windows Division”, is the development and marketing of the Windows operating system, Windows Live and Internet Explorer. Its revenue growth is mostly correlated with the growth of the PC market, as the original equipment manufacturer (“OEM”) distribution channel (e.g., Dell, HP, Lenovo, Compaq, HCL, Sony, Toshiba etc) accounts for approximately 80% of total Windows Division revenue. Some of the factors impacting OEM revenue are:

A¢â‚¬A¢ Hardware market changes

A¢â‚¬A¢ Promotions and pricing changes: Due to variation associated with OEM channel shifts – from local system builders to large, multinational OEMs.

Windows Division offerings –

Premium Operating systems – Those which contain additional functionality (above standard) and are sold at premium rate

Online software and services made available through Windows Live.

Versions of Windows operating system:

Windows 7, Windows Vista, Windows XP Home and other older versions as Windows 98, Windows 2000 etc.


The competitors for Windows operating system are various commercial software products available in the market, offered by some of the well-established companies, including Apple and Google, and from the Linux operating system. Now, Linux (derived from Unix) is available to its users free of any charges. It is one of the first of its kind ” Open Source” operating system.

Some other competitors for Microsoft are:




Opera Software Company

All of the above offers browsers in competition to Windows Internet Explorer.

Server and Tools

Server and Tools segment develops and markets and provideservices and solutions around

Server software

Software developer tools

Products and Services:

Windows Server operating system

Windows Azure

Microsoft SQL Server

SQL Azure

Visual Studio


System Center products

Biz Talk Server

Microsoft Consulting Services

Premier product support services


Computer manufacturers such as Hewlett-Packard, IBM, and Oracle are major players along with Microsoft in this field.

Online Services Division

The Online Services Division (“OSD”) includes online information offerings. Examples are Bing, MSN portals and channels. Microsoft majorly earns revenue from online advertising, including search, display, and advertiser and publisher tools.

Products and Services: Bing

Microsoft adCenter

MSN and Atlas online tools (advertisers and publishers).


Major competitors for OSD division are Google, Yahoo!, and many other Web sites that provide content and online ad offerings to its users.

Microsoft Business Division

Microsoft Business Division (“MBD”) majorly revolves around the following two:

Microsoft Office system

Microsoft Dynamics business solutions.

90 % revenue of Microsoft Business Division is from Microsoft Office System.

Products and Services:

Microsoft Office

Microsoft SharePoint

Microsoft Dynamics ERP and CRM

Microsoft Office Web Apps


Competitors to the Microsoft Office system include Corel, Adobe, Apple, Google, IBM, Novell, Oracle, Red Hat, Zoho, and other local application developers in Europe and Asia. Infor and Sage compete with Microsoft’s Dynamic Business solution in both small and midsized markets. Oracle and SAP are solution providers to large size organizations.

Entertainment and Devices Division

The Entertainment and Devices Division is responsible for developing and marketing: the Xbox 360 platform which includes the Xbox 360 gaming and entertainment console with accessories, third-party games, and Xbox LIVE services.

Products and Services: Xbox 360 console and games; Xbox LIVE; Windows Phone; Windows Embedded device operating system; and numerous consumer software and hardware products (such as Mac Office, mice, and keyboards); and Windows Automotive.


Competitors of entertainment and devices vary in size from very small companies to very large corporations (with substantial financial and marketing resources). Microsoft’s Xbox gaming and entertainment business competes Nintendo and Sony.

Windows Phone faces competition from a large number of players across the globe. Few to name are Apple, Google, Nokia, QUALCOMM, Research In Motion, and Symbian.



Year Ended JuneA 30,








A A 62,484


A A 58,437


A A 60,420


A A 51,122


A A 44,282

Operating income







A  (c)





Net income







A  (c)





Diluted earnings per share











Cash dividends declared per share











Cash and cash equivalents and short-term investments











Total assets











Long-term obligations



A  (a)



A  (b)







Stockholders’ equity











Includes $1.25 billion of convertible debt securities issued in June 2010 and $3.75 billion of debt securities issued in May 2009. See Note 12 – Debt in the Notes to Financial Statements.

(b) Includes $3.75 billion of debt securities issued in May 2009. See Note 12 – Debt in the Notes to Financial Statements.

(c) Includes charge of $1.4 billion (A¢”šA¬899 million) related to the fine imposed by the European Commission in February 2008.

(* All figures in Million)

(Source Annual report, Microsoft Corporation, 2010)

Financial Ratios:

Current Ratio : Total current Asset / Total Current Liability

= $ 55,676 m / $ 26, 147 m

= 2.13

This is also termed as working capital ratio. This ratio gives an idea of how well the company is in a position to pay back its liabilities (short term vs. long term). Compared to Microsoft’s ratio, Google has a Current ratio of around 10 followed by Adobe, which has a ratio of around 3.5.

Quick Ratio : ( current Asset – Inventory ) / Current Liability

= ($ 55,676 – $ 740) m / $ 26, 147 m

= 2.1

Quick ratio tells a company’s ability to meet its short term liabilities with its most liquid assets. Compared to Microsoft’s ratio, here again, Google has a Current ratio of around 12 followed by Adobe, which has a ratio of around 4

Cash Ratio: Total Cash / Current Liability

= $ 36,788 m / 26,147 m


Debt to Equity ratio : (Short term debt + long term debt)/ Total stakeholders equity

= $ 5,939m/ $ 46,175 m

= 0.128

Here, amongst Microsoft’s competitors, Dell has the highest Debt to Equity ratio of 4.It measures a company’s financial leverage by dividing its liabilities to stake holders equity.

Financial Leverage : Total Asset / Total Equity

=$ 86,113 m / $ 46,175 m

= 1.86

Net Profit Margin : Net income / Net revenue

= $ 18,760 m / $ 62,484 m


Return On Asset (ROA) : Net income / Average total asset ( average of current year and previous year)

= $ 18,760 m / $ 82,000 m



ROA for Microsoft is highest amongst its competitors followed by google, which has around 19%.It says, how profitable a company is relative to its assets. This makes Microsoft a better investment option for investors.

Return On Equity (ROE): Net Income / Average total Equity ( Average of current year and previous year)

=$ 18,760 m / $ 42,866 m


(All calculations are based on financial results of Microsoft for 2010, available at public domain of Microsoft, for its stakeholders)

Balance Sheet

(In millions)

JuneA 30,




Current assets:

Cash and cash equivalents





Short-term investments (including securities loaned of $62 and $1,540)



Total cash, cash equivalents, and short-term investments



Accounts receivable, net of allowance for doubtful accounts of $375 and $451






Deferred income taxes






Total current assets



Property and equipment, net of accumulated depreciation of $8,629 and $7,547



Equity and other investments






Intangible assets, net



Deferred income taxes



Other long-term assets



Total assets


A A A 86,113


A A A 77,888

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable





Short-term debt



Accrued compensation



Income taxes



Short-term unearned revenue



Securities lending payable






Total current liabilities



Long-term debt



Long-term unearned revenue



Deferred income taxes



Other long-term liabilities



Commitments and contingencies

Stockholders’ equity:

Common stock and paid-in capital – shares authorized 24,000; outstanding 8,668 and 8,908



Retained deficit, including accumulated other comprehensive income of $1,055 and $969





Total stockholders’ equity



Total liabilities and stockholders’ equity





(# Microsoft Financial Statement, 2010)



Among Microsoft Corporation, The S&P 500 Index

And The NASDAQ Computer Index







Microsoft Corporation







S&P 500







NASDAQ Computer







(# Microsoft Financial Statement, 2010)

As can be clearly seen, No Agency issues or contingent liabilities could be identified from the financial statements of the company.

A company finances its assets through issue of bonds and stocks.

Bonds: Bond is a debt instrument. Through bonds, an investor lends money to an entity (corporate or governmental). In return the entity pays the lender a fixed amount of interest. Bonds are issued for a defined period of time.

Stocks: Stocks represent the original capital invested by the founders of the company. Later, stocks are divided into shares, having a certain face value. Now, there are two types of stocks, Common stock and Preferred stock. A common stock carries voting rights where as a preferred stock typically does not carry voting rights.

Using these two instruments, a company can raise any amount of money to finance its assets.

A company, since has many means of financing its assets, it also has a number of obligations to meet. A company usually splits its liabilities into short term (current liability) and long term. A liability must be settled through the payment of an asset in some time in future. A liability which is expected to be liquidated with in a company’s operating cycle or one year is called short term liability. Now, any other left over liability which is not expected to be paid in a year are termed as long term liability.

( Bragg.M. Steven., The ultimate accountants reference, 2nd edition, 2006)

Failing to Meet Customer Needs — Letting the Competition in | Marketing Essay

This dissertation examines a service company Advanced Alchemy which engages in providing value-added marketing, recruitment and other services to major companies operating within technology industries. The work examines some major marketing theories in order to frame the discussion of the company’s environmental and organisational contexts. These frameworks are then used in analysing how well orientated the company is in terms of its targeted customers through exploiting its internal resources.

The report continues with examining the impact of some of the key environmental factors influencing the success of the company’s strategies. Research including documentary analysis, a questionnaire ,focus groups and semi-structured interviews were used in a performance evaluation of the company’s marketing position and also to explore indetail the attitudes towards the major tensions and challenges facing the company among its staff and customers. The report concludes that while the company has done well historically and may continue to do well in the short term improvement is needed in certain key strategic areas for the company to successfully retain and/or enlargeits market share and retain its competitive advantages within the market given the challenges it faces.

Marketing is a core concept within modern business theory and operation. It has been widely discussed and it is argued that commercial success follows companies which are able to create and retain customers through providing them with better value than competitors. As such a fundamental conception of marketing is that companies achieve their strategic goals in terms of profitability and corporate growth by satisfying customers, (Houston, 1986). With this then there are many marketing theories exploring the idea of a marketing mix which is viewed as an important marketing tool in marketing planning and evaluation. The 4Ps framework is a basic framework reflecting these ideas. However the 7Ps mix is argued to be particularly vital as a tool in service industries. This framework holds that the elements of product (service), price, place, promotion, physical evidence, process and people are basic ones of consideration for service organisations such as marketing services agencies. In this sense a corporate brand name not only refers to product but also means the process and organisational intangible resources such as people and professional services possessed by the organisation, (Jones, Comfort& Hillier, 2004).

The early stages of marketing development theory were concerned more with the marketing concept. Authors such as Felton (1959) proposed that the discipline of marketing focus on the integration and co-ordination of all the marketing functions pursued by companies. However due to the intensive levels of competition in the modern business world the marketing function has become closely linked with gaining competitive advantages for a company. Therefore it is unsurprising to note more companies viewing marketing as a strategic planning function which contributes to achieving long term corporate goals. Kotler et al (1996)suggest that the achievement of organisational goals depends on determining the needs and wants of the target market and delivering the desired satisfactions effectively and efficiently. From this perspective it becomes clear that understanding customers as well as market characteristics and then satisfying these needs better than competitors requires an effective linkage of corporate resources including human resources, financial resources and physical resources. In short a good understanding of the competitive environment and internal strategic resources available is essential for companies choosing between appropriate corporate strategies in order to maintain competitive positions in their respective markets.

The competitive strategy proposed by Michael Porter (1998) to some extent depends on an analysis of the industrial environment in which new entrants, substitution, bargaining power of buyers and suppliers as well as rivalry comprise the competitive overview of an industry. It is useful to be aware that competition goes well beyond the established competitors to include various players. In the business information provision industry for example as buyers (partners) have become more concentrated and specific the industry has come under increasing pressure. Flowing from this once the forces affecting competition positions in a certain industry have been identified the firm is in a position to assess its internal strengths and weaknesses. At strategic level these strengths and weaknesses along with driving forces in the environment are the key elements which affect each competitive advantage which can be exploited by a company.

Based on the analysis of environment and corporate strategic resources it is also important to understand customers in particular in the modern business world. It is argued that an organisation who knows its customers better is more likely to satisfy their needs more effectively. Therefore strategic customer analysis plays a vital role at the marketing planning level while firms which fail to meet or respond quickly enough to customer’s demands will lose their competitive position eventually. As Porter (1998) argues the best strategy for a certain firm will ultimately be a unique one reflecting its own circumstances in terms of tangible and intangible elements. As a result it is essential to examine marketing strategies of particular companies bearing in mind driving forces in the environment along with a good understanding of internal strategic resources. In addition due to new consumerist characteristics of global economies it is critical to look at and consider consumer behaviour at a strategic level. This is particularly the case for service industries such as the business information company Advanced Alchemy which faces challenges from intensive competition as well as pressure from desired customers and internal changing dynamics.

The first objective is to define the major environmental influenceswhich have significant effects on the marketing strategy of AdvancedAlchemy. It is important to be aware that environmental factors includeexternal driving forces as well as internal corporate contexts in termsof organisational culture and strategic resources. According toChisnall (1989) corporate performance is closely related to effectivemarketing strategies along with effective human resource management,R&D design as well as the financial situation of the company.However due to intensive competition in the industry and internalfinancial problems Advanced Alchemy faces major strategic changes atboth corporate level and business level. Of note here then is thatdifferent strategic planning to a large extent depends on bothindustrial characteristics and corporate competitive capabilities.

In addition to environmental forces it is vital to understandcustomer behaviour in particular relating to demands for businessinformation. Consumer behaviour though is a complex phenomenon whichcan be described as a dynamic interaction between affect and cognition,behaviour, and environmental events, (Blythe, 1997). Because of the newcharacteristics of the global economy customers require immediateresponses to their demands in terms of goods and information withtechnology based on e-commerce systems being arguably able to meetthese demands. Therefore the second objective of this work is toexplore the main determining elements on customer’s choices in terms ofutilising e-commerce based services.

The final objective here is to define the competitive strategies forAdvanced Alchemy which assists the firm in exploiting opportunitiesalong with its existing strengths in creating and retaining competitiveadvantages in responding to competition within its market. It isinteresting to mention that in the business information providingindustry differentiation in terms of service and better quality isoften employed by companies as a significant strategic tool nonethelessit is stressed that differentiation does not allow the firm to ignorecosts since price wars often occurs in service industries. According toPorter (1998) cost leadership should be emphasised as a primarystrategic target which contributes to the choices influencing thepicking of the marketing strategy best suited to the firm’s position inthe industry.

Marketing is argued to be an essential ingredient for businesssuccess both in the literature and within the practical business world.As a concept it is concerned with the creation and retention ofcustomers at a certain price namely in the most profitable way fororganisations, (Jobber, 2001). This is because the cost of attracting anew customer is much higher than the cost of maintaining an existingone. Thus firms seek to build up efficient and effective communicationchannels with consumers through the use of an effective marketing mix.However both organisations and individuals have been subject tounprecedented changes in the way they pursue and are involved inbusiness and commercial enterprises in the 21st century, (Kalakota,1999).  Characteristics such as the internationalisation of businessand technological development generate increasingly intensivecompetitive environments which require companies adapt to new dynamicswithin marketing structures. While this true for all organisations itcan be argued to particularly so for service companies, (Chesher &Kaura, 1999). One of the most important challenges for businessescurrently is the need to satisfy increasingly demanding customers whoexpect immediate responses to their requests both for goods andinformation.

The role of marketing in meeting such a need has continued to increasein response customers’ expectations regarding the provision of aprofessional service and product at an effective cost. In Graham’s(1999) outline the term marketing strategy is often linked with theInternet because it provides a wide range of free communication andmarketing channels such as emails, websites and chat rooms in order togather useful business data and exploit these novel communicationchannels through viral marketing techniques for example. Ofconsideration also is the fact that marketing does not solely concernitself with material things but includes intangible elements such asservice quality, experiences and communication on a number of levels.As a result the choice of an appropriate marketing model is clearlylinked with attaining a complex understanding of consumers and theirbehaviours and preferences, (Moore, 2003). The fact that consumerbehaviour is complex means that an effective marketing mix should seekto learn customer requirements through research and the accumulation ofmarketing data and trends. Such measures are necessary in order for thecompany to be a success in the marketplace. At the same time the use ofan appropriate marketing strategy will in turn be constrained by theavailability of corporate resources and the business structure whichallows for internal strengths to be exploited successfully in takingadvantage of external opportunities.

Another important perspective within marketing philosophy is thedistinction between efficiency and effectiveness, (Anonymous, 1989).The essential difference between efficiency and effectiveness is thatthe former is concerned with cost and the latter is customer focused.This can be seen reflected in one of the core features of marketingwhich can be defined as the satisfaction of customer needs in aprofitable way. It is fair to say that the focus on customer needsrequires efficient internal networks in managing the employing ofstrategic resources. This is true in terms of human resources and isparticularly relevant for business models such as Advanced Alchemy’s’. In addition strategies exist and operate at different levels in thecompany. Chisnall (1989) defines marketing strategic planning as marketchoosing, product development, devising effective marketing strategiesin terms of organising marketing resources and forecasting possiblelevels of demand based on customer research. It is obvious thateffective environmental analysis along with an evaluation of existingstrategies provides a basis for the forecasting element of thisdefinition. Based on the idea of a marketing mix service meaningprofessional delivered and provided services should be considered ascentral to the competitive strategy as well as a cost effective methodof implementing such a strategy.

A strategic marketing mix is essentially a conceptual framework whichis able to help companies structure their approach to each marketingchallenge that they encounter within external environments. This meansthat an effective marketing mix should have an overarching focus oncustomers as well as consider the needs of other groups such as thirdparty organisations who may influence the company in terms of product,service and marketing goals. Public relations and engagement with avariety of actors is therefore more and more a particular aspect ofnote in determining marketing strategic considerations, (White, 1991).In the case of Advanced Alchemy the internal financial difficultiesfaced by the company might cause deficiencies and inabilities inmeeting customers’ needs effectively due to the lack of cash flowprohibiting certain responses to adverse market conditions faced by thecompany. At this stage a clear understanding of the demands ofcustomers tends is an important objective for the company so as tominimise the waste of resources and target those resources which areavailable in the most effective and efficient way.

Consumer Behaviour Analysis

Peter and Olson (2005) argue that an understanding of consumers isessential for marketers and in particular marketers of businessinformation services. This is because the nature of B2B models requiresmarketers understand consumers and deliver the products and servicesthey want and need in the most effective manner as major consumers arecorporate entities themselves constrained by strategic considerationsin operating within their own competitive environments. A B2C modelapplied in such instances provides a means of developing one-to-onerelationships with consumer and establishing consumer databases for thepurposes of online research and collation and analysis of data in orderto satisfy these needs more effectively. Therefore a review andappraisal of consumer behaviour is a vital exercise.

Consumer behaviour involves thoughts and feelings as well as actionsthey pursue in the purchasing process. It includes all the things thathave an effect on behavioural patterns such as advertisements, price,product quality and others such as contextual social factors such asincome. As Solomon (2003) argues consumer behaviour is a dynamicprocess which means consumer’s purchasing decisions are a complexprocess and will be influenced by factors such as technologicaldevelopment, word of mouth and most importantly the perceived value ofpurchases. However the fact that the environment in which consumersfunction is constantly changing means it is important that marketersengage in continuous consumer research and analysis to keep abreast ofimportant trends in this external environment. Influences here includefor example the fact that product life cycles in terms of physicalproducts and the provision of services are shorter than ever before socompanies have to create superior value and attract customers throughproduct differentiation strategies. While such points may seem ofrelevance only at first glance to individual consumers the same traitsand characteristics may be applied in limited manners to consideringcorporate or larger organisational customers who form the main customerbase for Advanced Alchemy. 

Along with shortening product lifecycles the development of technologyespecially the Internet has had vital influences on consumer behaviourin relation to new e-commerce models. The emergent global culture whichis a major trend due to the predominance of a global economy isexpected to have influences on people’s attitudes, emotions andbehaviours flowing from increased participation in Internet commerce.In the case of the company focused on here the B2B service process isable to compete through adopting online models such as online trainingand e-planning for business level functions at a variety of levels andleverage communication at a variety of levels through for example theuse of corporate intranets. It is useful as such to examine e-commercefrom a global perspective. Also segmentation is very important inconsumer analysis simply because different consumers have differentneeds, (Solomon, 2003). In applying this perspective it is criticalthen to divide consumers into essential groups of concern for thebusiness in which members are as similar as possible to other membersof the same group but differ as much as possible from members of otherdivisions. In reaching such divisions the necessity of research becomesan even more paramount goal.

It is also important to mention as Gummerson (1996) suggests thatmanaging relationships is a key ingredient to successful organisationalmarketing. He believes that a related relationship involves customers(organisational partners particularly) and suppliers (the third partyand call centres) in which there is a shift from activities aimed atattracting customers towards being concerned with the retention ofexisting customers. In short the premise of relationship marketing isan addressing or balancing of the benefits of certain long termadvantages among all the linked parties including buyers, suppliers,and competitors in the same industry as well as potential entrants tothe industry. The growth of the business information service industryhas resulted in reasonably high profit margins for all of the companiesoperating in the industry. A healthy competitive environment then isable to enhance service quality through refining strategies exploitedby players in the industry in gaining advantage over other actors.

Environmental themes can be grouped into macro and microenvironmental levels. However the influence of each force on a certaincompany varies from one company to the next and varies also across thedifferent levels of environmental concerns. For example managers in thebusiness information company typically note that the pace oftechnological development particularly in e-commerce and the speed ofglobalisation in terms of communications and multinational businessmanagement is influences on their companies but differ from one companyto the next on whether these influences are positive or negative fortheir respective organisations. It is also necessary to be aware thatthe influences of each environmental force may be complex in terms ofisolation and measurement and may also present both opportunities andthreats for the business at the same time. Mintzberg (1994) argues thatenvironmental change is both an emergent and dynamic process andtherefore companies must seek to understand the contexts in which theyoperate.

A means of understanding this is through the use of the PESTELframework which offers one means of examining the external environmentsin which organisations operate in. The elements of this framework aredefined as political, economic, social, technological, environmentaland legal factors, (Johnson & Scholes, 2002). In the case ofAdvanced Alchemy it is important to be aware of technologicalenvironmental factors particularly those related to e-Commerce whichaffects its partners, suppliers and customers to a large extent. Forexample its online recruitment service for partners is useful ingathering large amounts of candidate data in a short time and itsprovision of e-training services is useful for multinational partnerswho require effective training models to be deployed rapidly and at lowcost within different countries. The second important factor for thecompany is economic environmental factors within a national context.This is closely linked with customers’ attitude towards businessinformation services based on economic performance nation wide. Forexample while economic growth has occurred in America it has beenmatched and superseded by a proliferation of entrants within industriesoften amounting to a hyper-competitive market which results in lowerrevenues for companies. These tighter operating margins and marketconditions are true for Advanced Alchemy due to poorer economicperformance generally in the UK and arguably also for its competitorssuch as Harte-Hanks.

In addition to macro environmental forces industrial sectors havemajor effects on corporate marketing planning. According to Porter’s(1980) five forces framework buyers, suppliers, substitutes, potentialentrants and competitive rivalry are significant determinants of thecompetitive capabilities of a company. For service companies buyerbehaviour is more concerned with organisational buying activities. Thismeans those companies buy marketing services to help them achievebusiness goals such as effective training programs, enabling pathwaysto successful product sales as well as improvements to managementmodels. At this stage understanding organisational buying behaviour isabout satisfying their diverse requirements in each single offeringprovided by the company. It is useful to mention that service buyerstake into account lifecycle costs which include maintenance costs andresidual values as well as purchase price when they display preferencesfor business information services. As such a technique advanced servicefor example one exhibiting better quality becomes an essentialprerequisite for Advanced Alchemy in maintaining its competitiveposition in the industry. In the industrial five forces frame work asdefined by Porter (1980) rivalry is seen as a central element whichmeans the survival of a company relies on competing in the industryeffectively and overcoming rival operators. It is obvious that the paceof globalisation generates intense competition for companies in avariety of industries including Advanced Alchemy’s leading to increasedrivalry within the industry. Globalisation also has the effect offorcing Advanced Alchemy to not only compete with local businessservice firms but new international competitors also.

Marketing Mix (4Ps to 7Ps)

Numerous marketing theories deal with suggesting the correct elementsand attributes of an effective marketing mix. Of particular relevancehere though for marketing services is the 7Ps framework which consistsof product (service), price, place, promotion, physical evidence,process and people. It has been a framework that has been widely usedby service organisations such as business information providingcompanies such as Advanced Alchemy, (Jones, Comfort & Hillier,2004).  However due to the rapid changes in the external environment interms of technological development and globalisation this company facesmajor challenges. The nature of these challenges and their relationshipwith the companies marketing strategies means it is useful toinvestigate integration of marketing mix in the business informationservice field.

Utilising a 7Ps framework means conceiving of product as the first andmost important element for any organisation since the core goal formarketing is to satisfy customer’s needs by offering right products(services) to the right organisational customer, (Jobber, 2001). In thecase of business information and service provision companies the corebusiness is to provide useful business analysis as well as marketingstrategic planning resources and tools for customers (partners).Differentiation is an important tool exploited by service firms withprice, which is used by customers as an indicator of quality, playing avital role in marketing and in effective implementation of suchstrategies. This is because a pure price war in this industry placesAdvanced Alchemy in a battle for achieving cost effectiveness based onand matched with high or superior quality of service. It is alsoimportant to mention that managing relationships through for exampleword of mouth is increasingly important for companies in competitivemarkets dealing with organisational customers, (Smith and Taylor,2004).

Another key element in a services marketing mix is place. AdvancedAlchemy sells directly from sales people as well as selling andmaintaining physical presences at trade shows. Blythe (2000) points outthat every element in the mix communicates especially through person toperson channels of communication. Also according to the literaturecustomers are more sensitive, aware and willing to take advantage oftechnological developments and new services forms, (Dennis, Harris andSandhu, 2002). Mass business information channels along withprofessional services combine tangible assets and intangible resourcein servicing partners in profitable ways. Promotional tools includingadvertising campaigns, below-the-line promotions as well as onlinepromotions are used by companies as part of a branding strategycapturing the notion that the best kind of loyalty is brand loyalty,(Kapferer, 2004).

Last but not the least as mentioned in the former section peopleplay a central role in the services industry however it is also arguedthat the serving process is important as a two-way communication simplybecause it is a direct way for sales people to communicate withcustomers, (Harrison, 1995). Staff whom are able to provide highquality service with a customer-friendly attitude is the hallmark andbenchmark of a consumer responsive company. In today’s marketplaceeffective personal communication is a means of achieving success forservice firms such as Advanced Alchemy. Exploiting and capturing theseelements then needs to be a cornerstone within strategic planning forthe company.

The methodology used in the course of conducting this researchaimed at employing a case study approach with Advanced Alchemy beingthe object of the case study. In terms of research tools bothquantitative and qualitative methods were deployed towards collectingdata of relevance to the objectives of the research as set out in theintroduction. These research methods concentrated on exploring externalfactors of relevance to Advanced Alchemy and exploring the manner inwhich internal strengths and weaknesses within the company related toor responded to these.

The first stage of the research was a detailed horizon scanningincorporating elements for a PESTEL analysis towards identifying themajor environmental challenges which were faced by the company.Material utilised here included nationally sourced statistics relatingto economic performance, market performance within the industry,identification of any regulatory/legal structures of concern to thecompany and an assessment of major technological developments with abearing on the company’s business model and modes of providing servicesto its customers. This stage in essence sought to identify themes orconcerns which would serve as the basis for more in-depth researchwithin the company itself, (Bell, 1999).

Following on from the documentary analysis and horizon scanningstage preliminary quantitative research was carried out within thecompany in the form a survey. The sample for the survey was drawn fromfour major groups within the company these being sales personnel, humanresource personnel, line management and executive management. Thequestionnaire sought to collect attitudinal and behavioural data whichwas then utilised in conducting a market orientation assessment of thecompany, (Hooley et al, 2004). This data in terms of analysis wasframed in a manner exploring how well human resource was strategicallyexploited and how well in tune employees in the organisation were withthe demands of its organisational customers.

Following on from this survey follow up qualitatively based researchwas undertaken. This part of the research included five focus groups,four of which corresponded to the groupings outlined above in relationto the questionnaire and one which was a mixed sample of all of thesegroupings. The focus groups sought to collect data related to thethemes and issues raised by the documentary analysis related toperceptions of the major environmental challenges faced by the company,(Saunders, Lewis & Thornhill, 2003). In particular it sought toexplore the different responses to these themes from various levels ofemployees within the company. As well as seeking to collect data inthis regard of interest also to the researcher were the internaldynamics between employees at similar levels or functions within thecompany and with the final focus group between different levels of thecompany. This in particular sought to explore the effectiveness of theflatter communication channels and flatter hierarchical managementstructures employed by the company in its deployment of a corporateintranet. This was a particularly useful means of generating data onhow well management mission statements concerning customer needs werecommunicated to personnel dealing with these customers and also howcustomer needs were translated into effective training schemes forsales personnel, (Fern, 2001).

Along with focus groups six semi structured interviews were carriedout, four within the organisation and two such interviews were carriedout with two of the company’s biggest customers. The use ofsemi-structured interviews allowed for a rich collection of dataallowing for ‘thick’ explanations of themes and issues highlighted bydata generated by other methods to be gained, (Gubrium & Holstein,2002). The interviews within Advanced Alchemy were again divided intothe groupings outlined above with an interview conducted with arepresentative from each. The interviewees were drawn from therespective focus groups. These interviews were conducted where possibleas short a time as possible after the focus groups had been conductedin order that the themes and contents discussed in the focus groupswould still be fresh and thus deeper exploration of the themes easierachieved. The finding from these interviews was used in a comparativesense with the interviews conducted with purchasing representatives oftwo of Advanced Alchemy’s biggest customers. As such data in theseexternal interviews was sought on how well matched the concerns andissues raised by employees within Advanced Alchemy as well asmanagement mission statements matched with or converged with issues andsentiments expressed by its major customers. Such data was in turncompared with the documentary analysis in order to arrive at atriangulated snapshot of how well the company’s marketing plan wasbeing implemented internally and how well it addressed the needs of itscustomers, (Coffey & Atkinson, 1996).

A number of methodological problems were faced in the conduct ofthis research. First and foremost was the often sensitive nature of thedata collected in terms of business practice related to competitiveperformance, (Chisnall, 2005). In order to gain participation andconsent from the company research findings were discussed in anextensive manner with key personnel in the company with a right of vetobeing offered towards any data deemed to be of too sensitive a nature.In the main however through pointing out the advantages of the researchto business practice internally such fears and considerations wereusually allayed. This problem in turn was connected to and related toethical considerations and problems of participant bias related to morejunior level employees in the company, (Strati, 2000). Both of theseproblems were addressed through the seeking of full informed consent toparticipating in all of the research methods used and the ensuring ofconfidentiality and anonymity over responses to questions, particularlywithin the interview setting, (Marshall, 1997). The researcheracknowledges however that in the case of the focus groups and inparticular the mixed focus group participant bias may havesignificantly influenced the content of the data due to the internalpower structures of the group reflecting wider organisational powerstructures.

Marketing Mix (7Ps)

Advanced Alchemy is a leading provider of marketing and salesdevelopment support to IT, telecoms and other technology companies.Thus the major products provided include lead management (inbound andoutbound lead management), consulting based on market research, partnerrecruitment and management, field sales , partner/channel telemarketingas well as sponsored distributor support and ecosystem building,(Advanced Alchemy, 2005). In short the products are based onprofessional services for marketing activities in particular for IT andtechnology related companies. As discussed in the literature reviewevery element in a marketing mix communicates with customers. Productsfor Advanced Alchemy as such are professional services provided fortheir clients in an effective way in terms of cost and quality service.It is important then to look at the service provision process which isargued to be the most important and direct way of communicating withcustomers and attract potential consumers, (Duncan & Everett,1993).

The servicing process is delivered directly through sales peoplenamely who in this case are professional marketing consultants. Theywork with two types of client, large enterprises and smaller venturecapital funded companies looking to expand and gain rapid market share.During this process the team members discuss with partners continuouslyin order to communicate effectively allowing adjustments to be made tocope with partners’ requirements. A key finding of the interviewsconducted with the company’s customers was the acknowledgement of highresponsiveness in most cases from sales personnel. However dueintensive changes particularly in technology related industries delayeddecisions by clients was identified in the focus groups as causinginefficiency for Advanced Alchemy in terms of human resource costs bychasing unwanted leads for example. A strength emphasised in theinterview conducted with a line management representative was that athorough understanding of the IT market especially in Europe allowedthem to provide useful advice and effective marketing models includinglead generation campaigns, channel support for distributors as well asother marketing initiatives for customers.
It is unsurprising to note that people played an essential role in themarketing mix for Advanced Alchemy since a professional workforce withoutstanding marketing knowledge in IT, telecom and technology linkedfields contributed to the achievement of corporate strategic goals andcustomer demands. This was highlighted in particular in the mixed focusgroup but this quality was also confirmed in the customer interviews.Firstly sales objectives were achieved by people along with conductingpromotional activities in order to help partners make a purchasingdecision, (Wernerfelt, 1995). The interview with a sales personre-iterated the positive benefits to sales people in attending tradeshows where up-to-date market knowledge and positive customerinteractions could be achieved. It is fair to say that the majorcommunication goals were generally achieved by sales personnel. Thisagrees with points raised by Torrington, Hall and Taylor (2002) in thathuman resource is the most important strategic resource for anyorganisation and in particular service based companies who rely ontheir front-line staff to support brand images.

Unlike other manufacturers or retailers the major products forAdvanced Alchemy are services thus the most important tool used forpromotion is the provision of quality services in terms of superiorknowledge in technology and marketing fields as well as support from aneffective business model. Therefore Advanced Alchemy utilised acorporate website, public relation campaigns in Planet Hollywood aswell as direct marketing in order develop an integrated promotion mix.In the mixed focus group the response to such promotions was positivehowever in interviews with line management and the sales person a themeexpressed was that the PR activities of the company needed to be bettertargeted to the environments in which its major customers operatedwithin. Public relations as discussed in the literature review havebecome one of the most effective communication channels with consumers.The usage of sponsorship for TBC Advanced Alchemy aimed at establishinggood relations with customers and the general public. In addition topublic relations another promotion tool exploited by Advanced Alchemyis direct marketing at the sales spots. Again in the interviews with aline management and sales person it was felt that certain methods weremore successful than others such as engaging with the public generallyversus pitched sales spots.

Price element is often used by customers as an indicator of thequality of products. The price structure used by the company is basedon day rate and risk reward basis generally. However Advanced Alchemyseems to be in a weak position in the price war due to its limitedfinancial resources compared with its major competitors. This point wasrepeated in concerns expressed in customer’s interviews over therelative inflexibility of pricing offered by the company.Differentiation in the service field is then arguably the mostimportant strategy for Advanced Alchemy in maintaining customers. Thephysical evidence and place support Advanced Alchemy’s marketingactivities. The corporate website can be seen as important evidencewhich helps existing and new customers acquire useful information andspreads the brand name through viral marketing. As Heyman (1999) arguesviral marketing can be especially effective when a website communicatesefficiently bearing in mind in the value chain each functioncontributes and interacts in achieving corporate goals. It isreasonable to say that the physical evidence and marketing place to alarge extent support other elements in the marketing mix. Again incustomer interviews the sophistication of the company’s web presencewas highlighted.

Environmental and SWOT Analysis

Rooted in the environmental analysis literature the PESTEL frameworkallows for examination of the external environment a company operatesin. It is necessary to look at the macro environment which AdvancedAlchemy operates in. The economic situation in the UK has significantinfluences on Advanced Alchemy’s marketing strategy. The poor economicperformance nationally has limited the budgets for companies’ onpurchasing marketing services from outside agencies such as AdvancedAlchemy. This has resulted in a price war in the information serviceindustry in order to keep market share through price tooling whichgenerated threats and challenges for Advanced Alchemy. In additiontechnological development has had major impacts on the company’sstrategic decisions since customers are more technology sensitive anddemands for technological advanced marketing models showing increasedreturns on investment have increased. The interview with an executivemanagement representative saw the point being made that AdvancedAlchemy saw opportunities in using e-marketing models in satisfyingcustomers as well allowing for expansion of the company. However alsonoted in the interview was that technological development results inmore demanding clients who expect better quality and advanced marketingmodels, channels and support in their service provision, (Ziithaml,Parasuraman & Malhotra, 2000). Government support for certainindustries such as IT, telecom and automotive industries alsoinfluenced Advanced Alchemy in terms of potential businessopportunities.

Based on Porter’s (1980) industrial five forces model it is usefulto look at the micro environmental context. It is obvious that rivalryinfluences Advanced Alchemy’s performance to a large degree. Due toglobalisation they not only have to compete with local companies butalso international companies such as Harte-Hanks. Furthermore the powerof customers has increased to a large degree since how to meetcustomer’s demands effectively but at a profitable price is a challengefor Advanced Alchemy and one noted in all of the focus groups. At thisstage customer focus should be central to the corporate positionhowever due to the lack of budget Advanced Alchemy fails to meetcustomer needs in some respects. In particular the HR focus groupexpressed concerns over the lack of budget being available for trainingschemes for sales personnel to equip them with the most currentknowledge responsive to customer needs and market conditions.

Call centres can be seen as the suppliers for Advanced Alchemy and as aresult it is vital to establish good relationships with them. Due tothe decline in the national economic growth rates it is unclear as towhether new entrants will seek to gain entry into the industry. Howevercompetition based consistently on marketing specialists has becomeincreasingly intense with pressure coming mostly from existingcompetitors locally and internationally. Moreover marketing consultantcompanies face the threat of substitution from professional softwarewhich can set up technologically advanced marketing models forcompanies. However in the HR and Sales personnel focus groups it wassuggested that a possible strategy for the company could be to investin developing these models internally through investment in employeeswhich would allow for the company to maintain a technological edge aswell as a human resource edge over these types of competitors.

Table 1 SWOT Analysis

• vertical business opportunities (auto)
•Growth in areas like Adrenalin
•potential new clients
•increasing sales within existing client base Threats
•intensive competition
•volatile market
•decline of UK economy
•mature market size

•Strong client base
•Well known brand name within event circuit
•Strong reference base
•Successful campaigns
•Increasing client attrition rate
•professional workforce
•strong organisational culture 

Differentiation strategy 

Cost Effective Strategy
•lack of marketing awareness in some field eg. Outside Baptie circle
•inconsistent branding strategy
•inconsistency and unreliability in call centre 
Inconsistent Branding Strategy 


As discussed in the methodology a questionnaire was employed togenerate broad attitudinal data from employee groups within the companywhich was used in conducting a marketing orientation assessment. Oneclear finding from the questionnaires was a sense of disconnectednessfrom the customers of the company.  The impression given from the datawas that the mission of Advanced Alchemy was unclear and un-clearlystated in relation to customer needs and failed to build a strong senseof satisfying customer demands directly. Data from the interviewssuggested that Advanced Alchemy was focused more on the quality oftheir products more than understanding of consumer demands.

Table 2   Customer Orientation
 Strongly agree
   5 Agree

   4 Neither

   3 Disagree

   2 Strongly Disagree
    1 Don’t know
Information about customer needs  collected regularly  

Our corporate objectives and policies are aimed directly at creating satisfied customers      

Levels of customer satisfaction are regularly assessed and action taken to improve matters  

We put major effect into building stronger relationships with key customers and customer groups   

We recognise the existence of distinct groups or segments in ourmarkets with different needs and we adapt our offerings accordingly  

Total Score 13     

Information about major competitors was collected by AdvancedAlchemy however evaluation and analysis of their products were notcompleted regularly according to the line management focus group. Thisinefficiency in analysing key competitors resulted in low reaction tocompetition. Also noteworthy is the fact that the differentiationstrategy did not work properly due to the lack of understanding towardskey customers and customer groups.

Table 3 Competitor Orientation

 Strongly Agree
    5  Agree

    4 Neither

    3 Disagree

     2 Strongly
    1 Don’t
Information about competitor activities is collected regularly  

We conduct regular benchmarking against major competitor offerings   

There is rapid response to major competitor actions    

We put major emphasis on differentiating ourselves from the competition on factors important to customers   
Total Score 11     

The ability to meet customer needs in service organisation depends on aprofessional workforce a point highlighted in all focus groups andinterviews. From the survey data it was clear that effective team workcontributed to the company’s previous success but that changes in theexternal environment generated major challenges for Advanced Alchemywhich the company was unable to respond to due to budgetaryconstraints. A strong sense of team spirit was highlighted at all ofthe focus groups and was confirmed to lesser degrees in the interviewsconducted.

Table 4 Inter-Functional Co-Ordination

 Strongly Agree
     5          Agree

   4 Neither

   3 Disagree

    2 Strongly
     1 Don’t
Information about customers is widely circulated and communicated throughout the organisation  

The different departments in the organisation work effectively together to serve customer needs  

Tensions and rivalries between departments are not allowed to get in the way of serving customers effectively   

Our organisation is flexible to enable opportunities to be seized effectively rather than hierarchically constrained   


Total Score 14     

It is obvious that a strong organisational culture resulted inskilled human resource including senior management team and employeesbeing available to the company. Their understanding of their role inmeeting customer needs was a central tenet the company’s organisationalculture. In both focus groups and interviews as well as the customerinterviews the team values and reflected organisational culture of thecompany was continually highlighted as a positive feature.
Table 5 Organisational Culture
 Strongly Agree
   5 Agree

    4 Neither

    3 Disagree

     2 Strongly Disagree
    1   Don’t
All employees recognise their role in helping to help create satisfied end customers  

Reward structures are closely related to external market performance and customer satisfaction  

Senior management in all functional areas give top importance to creating satisfied customers  

Senior management meetings give high priority to discussing issues that affect customer satisfaction 

Total Score 17     

Budgetary constraints drove Advanced Alchemy to focus more on shortterm profits rather than long term market share with possibleramifications for future customer relationships, a concern highlightedin the executive focus group and customer interviews. However thismarket-orientated approach allowed the company to focus on the market.Namely they adopted a market driven strategy in order to maintain longterm competitive position, (Webster, 1994). Generally speaking AdvancedAlchemy performed with a long term framework in mind however their weakfinancial background puts them into a poor position of fundingstrategic plans over the long term.

Table 6 Long-term Perspectives
 Strongly Agree
    5 Agree

   4 Neither

   3 Disagree

    2 Strongly
     1 Don’t Know
We place greater priority on long term market share gain than short run profits  

We put greater emphasis on improving our market performance than on improving internal efficiencies  

Decisions are guided by long term considerations rather than short run expediency   

Total score 10     

The total score for Advanced Alchemy using this evaluation too is 65which indicates a moderate market orientation has been made by thecompany. This is an assessment in tune with the qualitative data whichhighlighted the past successes of the company, its ability to performwell certainly in the short term but fear and uncertainty associatedwith longer term strategic ability for the company to competesuccessfully. Definite areas of improvement were suggested in terms oftraining, in more targeted marketing activities and clearercommunication of mission goals and customer needs to all levels of thebusiness.

In consideration of the analysis of resources in Advanced Alchemy itcan be argued that human resource is the most important ingredient fora successful service based company. Intensive competition in themarketing service industry forces companies compete in terms ofworkforce rather than products and the efficiency of service processrelies on skilled personnel at all levels, (Pfeffer, 1994). Accordingto Hooley, Saunders and Piercy (2004) any organisation should have aclear understanding of the resources they have but most importantly itis vital to identify the significant resources that can help createcompetitive advantages and can be sustained into the foreseeablefuture. In the case of Advanced Alchemy their human resource is able toovercome their weaknesses in terms of a weak financial position andcontribute to differentiation strategy. However without investment inhuman resource it is doubtful whether this function can be sustained inthe long term a point re-iterated in both the focus group and interviewinvolving human resource personnel.

The lack of up-to-date knowledge related to current customers may alsolead to loss of competitive position and even failure for the companyconsidering the high cost of its services. It is interesting to notethat due to the characteristics of the marketing service industryparticularly in IT and technology related fields there areopportunities for Advanced Alchemy to employ a cost orientated strategythrough utilising an e-commerce model. This was a point which theexecutive management focus group was keen on. It has been suggestedthat the use of e-commerce not only helps companies build up effectivecommunication channels internally but also allows integration withsuppliers and customers as well, (Porter, 2001). The corporate websitedid not work effectively in some aspects such as gathering feedbackfrom partners through questionnaires and attracting new customersthrough strategic web-linking. Blythe (2003) argues that the when adiscrepancy appears between expected performance and actual performancemanagers have to take action. While rhetoric was observable in thefocus group little direct action was taken to rectify this. Blythe(2003) also suggests that criticisms should be communicated asconstructive feedback in order to avoid negative sentiments occurringwithin employees.

Market-led strategy to Custom- orientated strategy

The results showed that Advanced Alchemy exploited a market-ledstrategy which can easily lose competitive position for the company dueto environmental factors. Bearing in mind the objectives related toobtaining market share good quality products are essential. In AdvancedAlchemy’s industry the company which meets customer needs is able toobtain a stronger position in competing. A gradual shift away from anemphasis on market or service to an emphasis on customer value requiresAdvanced Alchemy to exploit effective tools to communicate with itstarget consumers and relate this communication to internal networks. Inaddition target segmentation based on the understanding of thecharacteristics of different customer groups means Advanced Alchemyshould concentrate more on how to add value to customers in differentsegmentations.

Arguably it is easier to create an initial good position in themarketplace rather than sustaining competitive advantages in a longterm, (Hooley, Saunders, and Piercy, 2004). Human resource and goodreputation in the field as well as having a positive reference groupmeans Advanced Alchemy generated competitive advantages quickly yet thelack of knowledge and reliable understanding of customers allowedcompetitors to re-establish their own positions. This process has beencompounded by the weak financial position of the company. The retentionof competitive advantages requires value products as well as cleartight definition of market targets namely through effectivesegmentation, (Payne, 1993). The more clearly a firm focuses ontargeted markets the more likely it is to serve those targetssuccessfully. This was a point raised in the focus group and interviewsconducted with line management in that in the case of Advanced Alchemythis is significantly vital in developing supporting channels fordistributors.

Figure 1 Innovation through marketing, quality and customer service

Competition is increasingly intensive thus it is necessary forAdvanced Alchemy to compete through strategic innovation. Innovatoryprocesses can be obtained by human resource where investment in thisresource is of a sufficient level to create an organisational culturefostering innovation. However innovation relies on knowledge ofconsumer behaviour to a large degree and the ability to manage changetends to be important in completing innovation cycles, (Roger, 1962).Innovation also can be generated during the branding process anddifferentiate Advanced Alchemy as a technological advanced andcustomer-orientated caring company. The role of technique relatedsupporting programmes can be provided to customers in terms ofexclusive service and know-how with customer-focused specialistshelping to maintain old customers and attract new customers. It isessential to control the service process thus a feedback system shouldbe established in order to gather fresh data about customer needs andcommunicate to them and channel this communication to all levels of thecompany. Good relationships with customers and suppliers as well asemployees could be achieved by regular and effective communication,(Ulrich, 1992).

Competing through relationship marketing

Figure 2 Relationship marketing orientation

                        CS = customer service
           RM = Relationship Management

Relationship marketing has been a topic of lengthy discussion amongacademic and practical marketing executives. In this process humanresource is viewed as the major trend in marketing and a key point insuccessful business management, (Christopher et al, 1991). According toEgan (2001) customer service needs to be placed in a central positionsupported by the seven marketing elements outlined in the literaturereview. However Gummesson (1996) argues that the term mix should bereplaced by relationship since each element interacts thus the maintask is to manage the relationship amongst all the factors effectively.Customer service then is about building long term relationships ofmutual advantage to both parties and the provision of quality customerservice involving understanding about what they buy and the determiningfactors which influence their buying behaviour. In short customerservice is not only a HRM concept but also a marketing principle whichrefers to interactive reflexive relationships between personnel and thecustomer. However building relationships is time consuming and costlyhence Advanced Alchemy should form a strategic agenda dealing withawareness about consumers to begin with. The goal for continualincrease in benefits obtained by the exchange partners and theirincreasing interdependence is able to add value to integration amongsuppliers, customers and ultimately ensure Advanced Alchemy’s survivaland continued profitability in the short term and long into the future.

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External Factors such as Competition Essay

External components these as competitors, legal, technological and social improvements are pertinent in the Prepared Parenthood (Gelman, et al., 2017). Different companies are affected by mild environmental improvements that impact their security and effectively-being. Other than the marketing and shipping of care are vital in generating cohesiveness. It is important to go over the both equally the interior and external environmental factors and their consequences on the Planned Parenthood organization advertising and marketing and the shipping and delivery of care. Also capturing the threats, chances, strengths as nicely as weaknesses in relation to the approach and marketing and advertising.

Threats Inner and external aspects derails the progress of clinical delivery. Components these kinds of as competitiveness interferes with the concrete balance as properly as no cost stream of solutions. Diverse affiliate marketers are inclined to omit their intended purpose and focuses on heightening their generation (Luk?- ?­k et al., 2016). As a result item s of minimal-quality as well as substandard solutions may possibly be realized in scenarios of delivery. Moreover, social variations and acculturation destructs concrete move of health-related shipping and delivery in just an organisation. Some markets ae not authorized to access some services therefore killing the development of the process. Moreover, laxity in technological modifications lowers the high-quality of solutions rendered in the parenthood organisation. Most routines are rendered worthwhile thereby killing the morale of support delivery as effectively as advertising and marketing pursuits. Chances External an inside things open up much more gates for exploration in the healthcare procedure.

Much more technological progress are realized as different practitioners with gentle specialized know-how are used to meet up with the quick moving environment (Luk?- ?­k et al., 2016). Similarly, legal adjustments enables the advertising office to have free of charge circulation of their products and services as a result of a rational platform. The legal adjustments makes it possible for marketing and advertising extend their boundaries for substantial income throughout diversified borders. In addition, level of competition improves internet marketing s additional products and solutions are introduced in the technique. It allows in employing capable personalized who can compete with the environment market in the health-related subject. Other than, opposition will increase promoting tactics as perfectly as using treatment of the sufferers in get to expand the market values. Weaknesses Sufferers are the significant worry in the Prepared Parenthood, their nicely-getting and high-quality services are paramount in noticing a cohesive internet marketing technique.

Even so, inner factors this kind of as kind of leadership and management hinders the kind of products and services that are becoming delivered (Gelman, et al., 2017). The method and success of the procedure are diminished to fewer price as the enterprise struggle to regulate other elements. Furthermore, the credibility of the tactic and marketing and advertising system in the Planned Parenthood is a important menace that not only derails the form of expert services to be shipped consequently interfering with the advertising needs. Strengths The nature of the exterior and inner variables in relation to the marketing and advertising system builds a unified system in the companies delivery in the health care fields. It prospects to the increase of diverse attitudes toward the reproductive flexibility of females (Ciabuschi et al., 2015).

Similarly, it heightens the development of Foodstuff and Drug Administration (Fda) which is an essentiality in approving the sale of historic drugs that are utilized in the beginning method and treatments. Furthermore, the abortion conditions have discovered ground and are now staying seen to be much less destructive and unethical as evident in the earlier encounters. The nature of Planned Parenthood is a important components in the progress of a steady health and fitness treatment procedure.


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  • Components impacting conclusions to have a second child: exploiting the principle of prepared conduct. Polish Psychological Bulletin, 47(4), 421-430.

Competition Law under EU Law Essay

Competitiveness means that businesses are underneath consistent force to be far better than their opponents, in buy to acquire clients. Levels of competition functions as a driver for innovation and technological development, and this improves shopper welfare. Therefore, the interests of shoppers are at the heart of competitors coverage. In a competitive marketplace, every single organization attempts to be “optimal” and attract people through lessen rates and make improvements to the high quality of its merchandise or solutions. With the enable of customers, authorities this kind of as the European Fee can get more productive action to avert or prohibit anti-competitive tactics in some cases observed on the marketplace. Competition law in the theoretical product in a society sellers create homogeneous goods and all pertinent shoppers are fully informed before shopping for a product or service. Some targets of competition regulation is

  1. Workable level of competition, No avoidance, restriction or distortion of competitiveness, Lower costs, Fantastic high quality, Safety of people, Economic performance, Security of opponents, Protection of SMEs, Financial development of all geographical regions, Employment, Independence of agreement, Competitiveness on other markets, Democratic values ,Security of inner sector. Also EU opposition legislation is generally concerned with the complications that may possibly come about when an enterprise or two or a lot more undertakings have or receive substantial sector ability (+ inside industry) and undertakings that have considerable current market electrical power enjoy some of the benefits out there to a correct monopolist (Sector electrical power enables undertakings to limit output and raise charges, unsafe to economic, efficiency and shopper welfare.

In EU accession involve the Utmost value of competitors law – harmonization ,Stabilization and affiliation agreement, Relevance of implementation, Practice, Administrative capacity, Application of European legislation ahead of accession Art 74 Croatian Levels of competition act. EU opposition legislation are incorporates Arts 101-106. Write-up 101 (ex Report 81 TEC): In this posting prohibits what follows as not compromised. Substantially prevent any motion or decision of undertakings which may possibly have an impact on, prohibit and restrain trade among countries negatively. Posting 102 TFEU delivers: Any procedure undertakings of a dominant posture into the internal marketplace or in one particular of the major aspect of it should be forbidden as Non-compromised electrical power to the internal industry in so much as it might affect commerce concerning States. Such abuse may perhaps, in particularly, consist in:

  1. In accordance to EU Competitors Regulation “Directly or indirectly commanding unfair industry or providing costs or other unfair trading situations (b) Limiting manufacture, marketplaces or complex advancement to the prejudice of buyers (c) Making use of disparate circumstances to parity transactions with other investing functions, therefrom placing them at a aggressive disadvantage”.[1]Some “new markets” economy has resulted in the network externalities.

Community outcome: Microsoft (2007): EU Competitiveness defines that “In industries exhibiting robust community results, client desire depends critically on anticipations about upcoming purchases. If customers hope a business with a sturdy name in the present-day (merchandise) technology to thrive in the future generation, this will have a tendency to be self-satisfying as the buyers direct their purchases to the solution that they imagine will generate the best networks gains”[2] Posting 106 (ex Posting 86 TEC): In the circumstance “of community undertakings and undertakings to which Member States grant particular or special legal rights, Member States shall neither enact nor retain in pressure any evaluate opposite to the procedures contained in the Treaties, in unique to those procedures furnished for in Report 18 and Article content 101 to 109”.[3] “National courts can use Articles 101 and 102 TFEU devoid of it being important to utilize national levels of competition regulation in parallel. Nevertheless, the place a nationwide court applies national level of competition legislation to agreements, decisions or techniques which could affect trade in between EU countries in the this means of Write-up 101(1) TFEU (ex-Report 81(1) TEC) or to any abuse prohibited by Posting 102 TFEU, they also have to implement EU level of competition regulations to these agreements, decisions or procedures. The parallel application of national competitiveness law to agreements may perhaps not guide to a different outcome from that ensuing from the application of EU opposition regulation.”[4] Microsoft is one particular of the most famous companies in the earth which supplies functioning techniques for desktops and laptops. In 1998 acknowledged the initially complaint by an similarly dynamic enterprise which giving computer software, programming languages (this sort of as her own development of Java) and sells marketplace desktops, the Sun Microsystems Inc. The complaint that received the DG Group refers to the abuse of dominance manufactured by Microsoft’s OS current market and refusing to present the facts interoperability about the computer software products presented. This resulted have an impact on deprived and unfavorable competitive providers considering the fact that they could establish their products and solutions had been suitable with the running techniques Home windows. “However, the Commission achieving the February 2000 opened Microsoft’s case, on its own initiative, underneath Regulation No 17, which was patented as Scenario COMP/C-3/37.792 which was related to the integration of Windows Media Player in OS of Home windows 2000. Just after a 12 months in August 2001, an announcement of objections (SO) was sent to Microsoft relating to the Media Participant evolving, and the Fee included into this an before SO relating to the interoperability concern. Microsoft responded to the Statement of Objections on17 November 2000.1.”[5] The Commission afterwards proved that aside from the Sunshine there were other firms experienced refused this details, and continual non-disclosures by Microsoft have been a strategic goal was the deviation of competition from the current market. The tying of Microsoft’s media participant product or service resulted other than the foreclosures of opponents, was also lessened shopper preference, on the floor that the other competitors at a disadvantage without the need of it getting similar to the worth and top quality. Quite a few are the factors that already demonstrate a pattern that prevails in favor of Home windows Media Player and common know-how of Home windows. If there was no intervention by the Commission, the connection of Windows Media Player with Windows is certain to be created the buy definitively in favor of Microsoft and of course there would be the case with a monopoly. This way permits Microsoft to inspect similar markets in the digital media, such as encoding engineering, software for broadcasting of audio in excess of the Web and electronic rights administration etc. According to Osterud (2010) “The Fee observed that Microsoft’s actions must be analyzed in the gentle of two important situation. And The European Commission has made the decision, just after a 5-yr investigation, that Microsoft Corporation insolvent European Union opposition law by leveraging its much too near to monopoly in the market

  • First of all, Microsoft liked a situation of extraordinary industry energy on the marketplace for client Laptop working programs.
  • Next, interoperability with the client Computer working system was of considerable aggressive great importance in the market place power on the buy of some function of a doing work team on servers systems”[6]

as for the interoperability remedy, where Microsoft has to disclose absolute and correct information on all the interfaces that will allow for non-servers of Microsoft workgroup to accomplish the full interoperability with Home windows PCs and servers, his skills might be used in examining no matter whether Microsoft’s protocol disclosures are comprehensive and correct and whether or not the terms under which Microsoft makes the protocol specifications out there are sensible and non-discriminatory. On tying, the Trustee could be asked to analyze whether Microsoft has duly implemented the demand to recommendation to Laptop constructors a version of its Windows client Personal computer operating method without having Home windows Media Participant. Also the commission necessary it by Microsoft to established remedies in relation to both equally get the job done team server operating systems and media gamers. For these causes, Microsoft has been forced to enable all European buyers the independence to select yourself which browser they want and make it possible for all computer system suppliers not to integrate the World-wide-web Explorer or disable it. “Specifically for the continual illegal conduct Microsoft it purchased to reveal to competition, in just 120 times, the borders compulsory for their items to be capable to ‘talk’ with the omnipresent Home windows OS. Also within just 90 times, Microsoft need to make the proposal to difficulty Home windows devoid of integrating Home windows Media Participant or provide as isolated” In general a wonderful up to Microsoft for abuse of electricity in the EU sector amounted to €497 million. Microsoft is also heading to publish commitment now which will allow the publication of facts about interoperability problems. In accordance to European Commission “The Standard Court docket primarily upheld the Commission’s most important findings that Microsoft’s pricing of interoperability information was not compliant with the 2004 Microsoft Decision, while cutting down the penalty payment marginally from €899 million to €860 million. In specific, the Common Court docket confirmed that in the absence of convincing proof as to the progressive character of Microsoft’s non-patented interoperability information and facts, Microsoft’s remuneration techniques prior to 22 Oct 2007 were unreasonable beneath the 2004 Microsoft Conclusion. In this regard, the General Court confirmed that allowing Microsoft to demand for just interoperating with its dominant Pc and operate group server functioning procedure – the really essence of the unique abuse – would in effect allow it to transform the benefits of the abuse into remuneration”[7]. Finally, While Microsoft has violated the legal guidelines of competitiveness The Court docket nevertheless reduced the fine marginal thinking of the truth that Microsoft had to do with the availability of interoperability to 3rd events. This judgment corroborate that non-compliance with an antitrust selection helps make up vital misconduct which the Commission is entitled to sanction in order to obligate compliance. Bibliography European Competitiveness Regulation Prof. Fabio Bassan a.a. 2013A¢â‚¬A14 European Competitors European Fee IP/04/382 Brussels, 24 March 2004 Commission concludes on Microsoft investigation, imposes carry out cures and a good EU Commission: Antitrust: Commission welcomes Normal Court judgment in Microsoft compliance circumstance EU Level of competition Legislation Rules Relevant to Antitrust Enforcement Volume I: Common Guidelines Situation as at 1st July 2013 pp.11 Eric Osterud (2010) Determining Exclusionary Abuses by Dominant Undertakings underneath EU Levels of competition Law: The spectrum of tests (chapter7) pp.238

Sandra M. Colino(2011)Levels of competition Law of the EU and British isles(7th edition) pp.446

Links https://europa.eu/legislation_summaries/level of competition/companies/l26110_en.htm Cardiff Satisfied College

[1] European Competition Legislation Prof. Fabio Bassan a.a. 2013A¢â‚¬A14 [2] European Level of competition [3] EU Competition Law Guidelines Relevant to Antitrust Enforcement Volume I: Standard Rules Predicament as at 1st July 2013 pp.11 [4] https://europa.eu/legislation_summaries/levels of competition/firms/l26110_en.htm

[5] Sandra M. Colino(2011)Level of competition Law of the EU and Uk(7th version) pp.446

[6] Eric Osterud (2010) Determining Exclusionary Abuses by Dominant Undertakings Less than EU Competitors Legislation: The spectrum of tests(chapter7) pp.238 [7] EU Commission: Antitrust: Commission welcomes Normal Courtroom judgment in Microsoft compliance circumstance

Competition between Traditional Luxury Brands and Recent Development Luxury Essay


This article examines an analysis of fashion and accessible luxury in the industry which gives out clusters of different companies which could be identified based on the base of the set contingent variables which are derived from there supply chain. Our accord will be based on different luxury companies which belong to different industrial sectors. According to the recent service oriented most of the customers and suppliers are centered in the shift firm which is focused on one brand of the fashion at a residual time and this ensures that different authors of the article to give focus on the theoretical framework of different types of the luxury brands. Most of the brand names in the fashion industry are different as we compare with the traditional luxury brands and difference comes in the pricing of the brands which to some extend its unreasonable as addressed in the findings. In the recent changes some industries are publishing more than 100 fashion brands whereby the highest percentage is based on the recent development in the market sector. Then in the process some question arises which focus on the formation of new brands and they can be for human desires. In this article will examine some of the hidden facts about some of the aspects which rely on this brands marketing, imaging and the quality of the product as we compare between the two sessions.


Brand is an image that is associated with product that is particular to a certain company and to some extend it can be associated with the entire company depending on the level of customer’s choice. In this article there are different brands that have been focused based on the competition and how we can achieve its marketing and exposure of the brand? Most of study shows that for any brand to be known there are must some positive results which will recognize the preferably of the product. As an example, the American apparel had its fair publicity in the past as it focused on traditional brands, which suffered major, loses form the negative imagine of the brands form customers (Reddy & Parent, 2009, p. 192).

Luxury is an old view which was started in the traditional errors, however the idea of luxury brands has a special form of branding which is accompanied by the workforce and the affluent of consumption lifestyle. Therefore, due to some of the changes in the years, the market expanded and started offering some transformed fashion, which erupts from small level to family owned businesses (Phan, 2011, p. 84). Most of the changes were effective based on the value of the fashion brand if we compare between the two level states. Due to this some corporations were made which focused on the investment of the strategic management, brands design and marketing and capabilities of outcome that one can obtain from the luxurious brands which compete over its development. The study is focused on that competition with emergence on the global luxury of the brand industry and some of the conceptualization which address on matters of development in the luxury fashion brands (Liu & Warnaby, 2016, p. 363). In this endeavor, the discussion will focus on the evolutionary growth which is the mandate of the industry and market as it entail on matters of cultural and social platform. Some of the prices in the fashion brand belief that this goods are highly priced because of the quality of the product. Though, some are scares and difficulty to quantify especially the traditional brands which are on the views of most customer’s satisfaction.


In this article our main focus of the relationship will be addressed based on the competition of the different brands which are in the traditional and fashion brands and some of the perception with which the context of the media relies on and which are on the development. Both the qualitative and quantitative elements which features on the same brands have some equity in them and we shall base it on company brands rationale. The focus of the article will be on the value of the customers and how they feature the brand including its history which creates the current market of the luxury goods. Additionally, the supply change it’s included in the fashion brands which adds value to the production process and beyond the level of recent development.


The luxury brand industry is an industry classification which is under the accord of certain forces of analysis and which operate in different framework. Most of the luxury brands addressed cannot be formally be based on independent industry but rather vary on terms of the automobiles which are indeed rare to imagine. However, it is evident that most of the recent fashion brand offering vary though they provide either consumers with comparable symbolic and different benefits being traditional or the new upcoming development (Amatulli & Guido, 2016, p. 251). It is common that the brand positioning has some shared customer base which has resulted in different practitioners consolidating the industry segment. Hence, when one base on luxury we simply feature to an exclusive group of different brands across different segment which are distinguished by the basic ability to convey some of the consumer elements and its characteristics in the market. Historically, any market brand, which comprises of either small or in large quantities must have some value on matter of the quality and efficiency of the product (Brioschi, 2006, p. 180). To a large extend our competition will basically rely on the multinational market brands which were in the early ages of 2000 and which were termed as traditional. In particular, some of the prices had to have inflation for the market to undergo some changes which was more effluent on consumers taste and preferences.

According to most of the diversification in the market field any increase in international market leads to a direct increase in customer’s relation as there is the idea of profit gain which is more significant in the fashion brands and customers diversity (Brun, 2017, 15). Although, most of the luxury brands are changing in terms of market expansion there are some generating views which strengthen this competition based on the industry commitment? The managers of the luxury brands either traditional or in the recent development should invest substantially in a manner that can renown the competitive positioning based on the linked values of the products. It is also crucial in luxury brands to focus on either the market strategy, which enhances the need for this competition through social, or self-esteem (Bowler, 2010, p. 1271). According to the recent research it is evident that this article has some superior quality which is distinctive based on the consumer’s perception. Any branding given has some image in it which can add value to the company product due to the choice of the buyer who focus on the luxury corporations.

To get a better understanding of this article, one has to value some of the processes which are used to create the exact fashion products under the supply chain of the industry. The supply chain of some of the fashion brands which are accessible is close and similar with those which were in the traditional luxury only that some advancement have been done in the framework of commodities. The first part of the supply chain of the fashion is competitive to its different blends which give multiple designs and colors made in the test product (Cailleux & Kapferer, 2009, p. 408). Then, for mass approval fashion brands has some line of the mass quantity which differs due to change of customer’s perception. It is either in an outsourced manner of the company or the plans of the customer’s relation in the market gap (Berthon & Berthon, 2009, p. 53). Generally, any supply has to link with different customers who give different returns based on the quality of the goods and accessible ones. During the last few years this brands expanded in the global and were more competitive in the emerging market which projected that in the near future it will outweigh the traditional luxury on matters of economic rationale and love of the luxury brand.


Valuation of the Different Brands

Value Chain

In any production of any brand either on matter of traditional luxury or in the new market development, the company should feature on different methods which add some value to the firm. In putting this extra effort the research of the article has shown advertisement forms the superior part of the product. This matter may even be based on the pricing, perception of the brand image and some of the distribution matter, which has an attempt of raising the brand value (Kaplan & Haenlein, 2010, p. 65)


This is one of the largest competition that the customer should focus on. If the demand it’s too high it will tempt to lower the price of the luxury brand which to some extend may lead to low value outcome form it. If we compare the recent and the traditional luxury it is clear that there is some sensitize price inflation which will lead to comical outcome (Janssen & Lefebvre, 2014, p. 55). Some of the recent companies tends to manipulate it and make it at the same level throughout. Generally, luxury brands offers a discounted price in any industry.


Any availability of the product create more desire for production of another one. Therefore in most of the companies which prefer to maintain this luxury must focus on the distribution of the products in the system and some of the limit which gives out the inner outcome of the different types of luxury (Hwang & Kandampully, 2014, p. 104).

Brand Images

The image of any brand has some value depending on the luxury of the accessible product. It is clear that most of the said brand has some image in it which has some significant in some of the developed nations. Most of the brand images in our comparison will be based on the customers concern and willingness with which may prefer to buy (Hennigs & Klarmann, 2012, p. 31).


In most of the findings was done using different methods of data capture which focused on more than one nation and its residence in specialty of cultural type and influence and gender. Among the people, that the article interacted in the outcome of this topic gave different opinions which was done under excluded sample forms and on the right group (Fionda & Moore, 2009, p. 355). The analysis of the data were revealed based on the respondents who had different citations. Minority featured on traditional luxury as they mentioned their brands based on the category of the people. Again, some of the self-satisfaction from the respondent’s observation was low as they expressed their feelings in a luxury fashion which was on the art form of the daily life routine. Most of the views lied on the communication of the new traditional luxury media, which was addressed, based on its features and quality although it was more competitive (Dall’Olmo & Lacroix, 2003, p. 102). According to the discussion which the article has addressed most of the consumers are influential on the fashion design luxury brand as they feel a good sense of the participants feeling in viewing and comparing with the traditional luxury. Hence, survey shows that it is irrelevance to focus on change of development lacking clear thoughts of information with which one can gain trust in it.


In conclusion, luxury brands have a unique sociocultural meaning which is based on consumer’s views. Most of the brands offer a simplicity taste of reference which is effluent based on the lifestyle of a particular brand. In this witness, some of the cultural and social platform have different meaning which focus on the characteristics of luxury brands towards the phenomena of the socio cultural influence in pursuit of the luxury surveys in the consumer’s culture and nature of the new brands in consideration. It is clear that a higher brand value would mean less price when it is sensitive to its audience while lower brand will mean low potential which is accessible by a large number of people. In this competition there are many different types of models which focus on fashion brands and which it’s accessible due to technology impact and can determine the correlation inclusive of the price. It is therefore of vital to have a building brand which is essential for the longevity of any of the company as it maintains the secrets of the company based on the brand and consumers who are the real investors and creates the competition.


Amatulli, C., Mileti, A., Speciale, V. and Guido, G., 2016. The Relationship between Fast Fashion and Luxury Brands: An Exploratory Study in the UK Market. In Global Marketing Strategies for the Promotion of Luxury Goods (pp. 244-265). IGI Global. Berthon, P., Pitt, L., Parent, M. and Berthon, J.P., 2009. Aesthetics and ephemerality: observing and preserving the luxury brand. California management review, 52(1), pp.45-66. Bowler, G. M. J., 2010. Ethnography: A Method Specifically Designed to Study Cultures and Communities Online. The Qualitative Report, 15(5), pp. 1270-1275. Brioschi, A., 2006. Selling dreams: The role of advertising in shaping luxury brand Meaning. In: J. Schroeder & M. S. Morling, Eds. Brand Culture. London: Routledge, pp. 177-188. Brun, A., 2017. Luxury as a Construct: An Evolutionary Perspective. In New Luxury Management (pp. 1-17). Springer International Publishing. Cailleux, H., Mignot, C. & Kapferer, J.-N., 2009. Is CRM for luxury brands? Brand Management, 16(5/6), pp. 406-412. Chandon, J.L., Laurent, G. and Valette-Florence, P., 2016. Pursuing the concept of luxury: Introduction to the JBR Special Issue onLuxury Marketing from Tradition to Innovation. Journal of Business Research, 69(1), pp.299-303. Dall’Olmo Riley, F. & Lacroix, C., 2003. Luxury branding on the Internet: Lost opportunity or Impossibility? Marketing Intelligence & Planning, 21(2), pp. 96-104. Fionda, A. M. & Moore, C. M., 2009. The Anatomy of the Luxury Fashion Brand. Brand Management, 16(5/6), pp. 347-363. GAO, L., Norton, M.J., Zhang, Z.M. and Kin-man To, C., 2009. Potential niche markets for luxury fashion goods in China. Journal of Fashion Marketing and Management: An International Journal, 13(4), pp.514-526. Hennigs, N., Wiedmann, K.-P. & Klarmann, C., 2012. Luxury Brands in the Digital Age – Exclusivity versus Ubiquity. Marketing Review St. Galen, 9(1), pp. 30-35. Hwang, J. & Kandampully, J., 2014. The role of emotional aspects in younger consumer-brand relationships. Journal of Product & Brand Management, 21(2), pp. 98-108. Janssen, C., Vanhamme, J., Lindgreen, A. and Lefebvre, C., 2014. The catch-22 of responsible luxury: effects of luxury product characteristics on consumers’perception of fit with corporate social responsibility. Journal of Business Ethics, 119(1), pp.45-57. Kapferer, J.N. and Michaut-Denizeau, A., 2017. Is luxury compatible with sustainability? Luxury consumers’viewpoint. In Advances in Luxury Brand Management (pp. 123-156). Palgrave Macmillan, Cham. Kaplan, A. M. & Haenlein, M., 2010. Users of the world, unite! The challenges and opportunities of Social Media. Business Horizons, 53(1), pp. 59-68. Kim, A. J. & KO, E., 2012. Do Social Media Marketing Activities Enhance Customer Equity? An Empirical Study of Luxury Fashion Brand. Journal of Business Research, 65(10), pp. 1480-1486. Liu, S., Perry, P., Moore, C. and Warnaby, G., 2016. The standardization-localization dilemma of brand communications for luxury fashion retailers’ internationalization into China. Journal of Business Research, 69(1), pp.357-364. Nueno, J. L. & Quelch, J. A., 1998. The Mass Marketing of Luxury. Business Horizon, 41(6), pp. 61-68. Phan, M., 2011. Do Social Media Enhance Consumer’s Perception and Purchase Intentions of Luxury Fashion Brands. Vikalpa: The Journal for Decision Makers, 36(1), pp. 81- 84. Reddy, M., Terblanche, N., Pitt, L. and Parent, M., 2009. How far can luxury brands travel? Avoiding the pitfalls of luxury brand extension. Business Horizons, 52(2), pp.187- 197.

Competition and Manufacturing Essay

Liberalization in India has allowed for increased competition and manufacturing as a result of pressure to improve quality, which was necessary for growth and survival; as against the early days of Independence which monopolized markets where consumers had little choice. Organizations have undergone a paradigm shift from an inward-production-led philosophy to an outward-customer-focused approach (Sureshchander et al., 2002) with an increased focus on understanding consumer needs and innovating to cater to them. With less of a focus on the initial entry and with a longer-term view of what a thriving Indian business would look like, the more successful companies has invested time and resources to understand local consumers and business conditions (Paurav Shukla, 2005). This was because the Indian consumer was largely different from their global counterparts due to dependence on culture and values. This is evident in the various product and communication modifications of various international players while entering India. Some of them that can be quoted are: Mc Donald’s, Nokia, Ariel etc.

In this light several researches have been carried out on understanding various concepts in India such as family values, buying process, decision making, children as influencers etc. With the advent of malls in India a change in the decision making process has occurred where the retailer acted as an innovator in providing more choices to customers, thus changing the buying process from need-aspire-buy to aspire-need-buy process. This process has also been widely researched with focus on marketing communications, cross-selling opportunities etc.

However due to the high cultural association of family with Indian mindset, there has been not enough research done on understanding the needs and aspirations of the Indian couples without children, as against Western countries where specific offerings have been created and served for couples in particular. Seeing this as a potential market segment this research is aimed at understanding the needs and aspirations of couples in India in terms of their service needs, and aspirations about entertainment and bonding. Once established the outcome of the result would be taken and used to develop a strategy for providing offerings to this segment in India that would be demonstrated by experiment in a simulated scenario as part of Venture Incubation Project.


“Hum Tum – Celebrating Togetherness”? is the platform for facilitating couples to follow the The 7th vow of marriage – Togetherness. Lost in the mundane routines of day to day work both in and outside home, “Hum Tum”? helps couples to bring back the moments of togetherness and fun which strengthen relations and makes life happier.

India with a geographical spread of 3,287,240 square kilometers accommodating 1177 million (estimated for 2010) people has a rich cultural diversity where 325 languages are spoken by people of different caste and creed. Referred to as the ‘log book of the world’ by National Geographic, with the intermingling of races that occurred due to multiple invasions in the past, one of the hot buttons in India is “Family”? – a basic foundation of Indian culture. To market products and services targeting a family seemed the most feasible option with family pack as the easiest way to reach and attract customers. With increasing competition and segmentation children, young adults, and older people have been grown to be separate segments with customized products, services and segmentation. However with strong importance attached to the roles and responsibilities both at home and towards the society, couple as a unit was never segmented and targeted as a unit of consumption. This could also be because of the strong guilt associated with thoughts of indulging themselves sans the family in the Indian couples. The emphasis shift in marketing and communication was largely from loners to families, in crafting and designing marketing activities except for a few specific products and services like tourism, family planning and sensuous products etc.

This social trend of guilt, social responsibility and complying to societal regulations however is seeing a change in today’s situation with most couples making an effort to understand and explore each other. Marriage today is no more an obligation by the society; rather it is seen as a journey of togetherness, sharing and love. Couples are ready to invest more time for them, to travel and enjoy their life together while giving sufficient time to family and work. With increasing financial and social freedom of women, the expectations and demands from the spouse also have changed considerably. Though this has increased the disposable income lack of time is still a problem today. While household duties and societal norms gave no time for couples earlier, today it is the dual jobs scenario that has made time available more scarce and quality of time spent more important. Options like shopping and movies that exhaust time with no active involvement are no longer on the top of the list for favorite pastime today. Hobby classes, long drives and adventure sports are moving up the ladder suggesting that they would want to invest time more efficiently since they understand its limited and valuable. Also more than spending time with relatives as part of committing to societal norms today the emphasis is more on finding people with similar interests and improving their skills and spending time in a meaningful way.

Based on these trends the following analysis has been done to understand how couples can be targeted as a unit of consumption and to identify entrepreneurial opportunities in providing leisure and entertainment options to couples that would build and strengthen the feeling of togetherness in couples demanding their active involvement.

Market opportunity analysis :

Industry Analysis: Leisure and Entertainment Industry –

Fun today is serious business with Indians moving away from the era of savings to the era of indulgence. International companies expanding into Asian countries consider India as becoming one of the fast growing markets for spends in leisure and entertainment industry. This can be attributed to the increasing family income with the spouses earning, reducing family sizes with nuclear families, and the new mantra of “live life to the fullest”?.

Compared to about three times a month in 2003, many urban Indians now eat out five to six times per week in 2010. A sample survey of 1,500 couples by the Associated Chambers of Commerce in 2008 found that 65% of dual working couples spend an average of Rs10, 000 a month on eating out four to five days in a week and watching minimum four to five movies a month.

Some of the key characteristics[1] of the needs of Indians pertaining to leisure and entertainment industry are:

  1. “I want to invest my time on weekends”? :
  2. Though most couples spend leisure time during weekdays on TV and weekends in shopping and films there is a little thought that lingers across their minds on the usefulness of the time spent on watching television and a plan to invest in hobbies and healthy activities. More so since the bulk of TV viewing is spent on soaps and film-based programmes.

  3. The emerging “Gamester”?:
  4. Gaming as a pastime has spread across SEC’s and urban rural divisions indicating the potential growth prospects. Though most active gamers are mostly male, female gamers have grown to a sizeable 24% suggesting the scope for the growth of gaming as one of the most favored pastime activities in families.

  5. Earn more, spend more:
  6. From a country known for savings for tomorrow, couples today are eager to earn more for a capability to spend more. Self indulgence and splurging using credit cards, and schemes to buy luxury goods is not uncommon today. In the case of double-income-no-kids families, a greater proportion of disposable income is spent on leisure and recreation, eating out and health and fitness.

    Expert Speak:

    The service providers in the Leisure & Entertainment industry foresee many changes in years to come; options that will force the Indian consumer to look beyond TV as a source of entertainment. Some of the trends they foresee are: The industry will be characterised by convergence of media, with content that is more interactive, participative. They believe that ‘themes’ will be a major part of entertainment – theme parks, for events (theme shows), and other one-off activities like runs and marathons. This will be accompanied by emergence of recreational resorts like Disney World and Universal Studio and niche activities/facilities like wax museums, innovative film city and bungee jumping.

    Marriage & Expectations:

    Marriage had been the anchoring point on which the whole of India’s social structure of family has been maintained. There is no greater event in a family than a wedding, dramatically evoking every possible social obligation, kinship bond, traditional value, impassioned sentiment, and economic resource.

    Marriage has been defined in ancient Indian literature as the entrance into Grahastha Ashram from Brahmacharya which signifies moving from bachelorhood to being a householder. The Grahastha Ashram in initiated with marriage where in the householder is supposed to take up the responsibility of procreation and then bring up children similar to his ancestral norms and customs. In doing so the householder has to do the 4 Dharmas of life – Dharma, Ardha, Kama and Moksha i.e. be truthful to the society, earn enough to substantiate the family, enjoy sexual pleasures with one’s spouse and finally perform religious duties to attain Moksha.

    As seen above, marriage has been always associated with responsibilities and duties, with relatively less importance attached to the bonding or the feeling of togetherness among the couples.

    A marriage was believed to be sacrosanct and divorce an anomaly. Societal norms, interdependence and children were the key factor that bound spouses together more than affection and togetherness among the couples. Social customs and beliefs held paramount value with the belief that marriage is sacred and had to be maintained despite internal disparity between the couples. Joint families were the norm with little scope and space for the couples to understand and relate to each other. Pro-creation and other responsibilities were associated with the definition of marriage. Even though a few couples were dissatisfied with their relation it usually ended with interference from parents or the local heads to avoid a social disgrace.

    Through this sustained for many centuries, the generation today is demanding more from the relation. The boundaries between men and women are fast diminishing and demands are fast rising from both the spouses from the marriage as a relation. Material comforts are no more sufficient today to sustain and build a marriage. While love marriages are definitely on a rise with couples interacting well before marriage the fact remains that there are increasing number of marriage counseling centers, divorce cases led and family problems. While these problems are usually attributed to the increasing demands of today’s youth, lack of emotional support from elders in the family the prime factor perhaps is the lack of a strong relation between the man and woman in a marriage. Lack of understanding, co-ordination and primarily a feeling of togetherness in couples are leading to increasing distances.

    Analyzing industry cross TG: Leisure spending habits of couples in India:

    The options for leisure and entertainment in India are aplenty in the form of movie theatres, sports, clubs, restaurants, malls, holiday packages etc to name a few. However one important point to note is that traditionally, Indians tend to spend more time inside the home with their families, especially married couples with children. According to a McKinsey Report on ‘How Half of the World Shops’, nearly 70% of India’s shoppers always go to stores with their families, and 74% – more than twice the average of Brazil, China and Russia –view shopping as the best way to spend time with family. The preference for family-oriented shopping is consistent across all age groups, income segments, regions and city sizes. Watching movies is another common pastime across all age and income groups and regions, which is again largely a family affair across India.

    Culture, leisure in Ahmedabad:

    Ahmedabad, the commercial capital of Gujarat is a culturally rich city with a population of about 52 Lakhs. There is a strong Gujarati culture where the chief wage earner is into business and the joint family is typical among Gujaratis, with a household consisting of two or three generations of men and their dependents. Celebrating in groups with lot of sound, music is the norm here, and most outings include the whole family and even other families along. This is attributed to the cost saving plans inherent in businessmen and the ingrained definition of fun as including large groups of people.

    Ahmedabad was the first city in India to have a multiplex which shows that leisure is serious business here. Drive-in, multiplex, single screen put together there are about 40 cinema theatres in Ahmedabad. Family Clubs, events in performing arts and growth of sports like golf suggest that there is indeed a great demand for better and innovative ways of spending leisure time.

    Literature Review:

    Shopping behaviour:

    Shopping experience is a utilitarian effort aimed at obtaining needed goods and services as well as hedonic rewards (Pavleen Kaur, 2007). The number of working women is increasing in India and it accounts for the considerable increase in disposable income plus rising personal consumption for the dual-income family. The consequent time poverty necessitated changes in shopping basket composition and patterns. Apart from shopping patterns undergoing a change owing to time-pressures and higher disposable incomes, the motives for people to shop also changed. Therefore, the concept of economic/utilitarian shopping, that is, seeking the best buy, was coupled with other hedonic motives. Interestingly, the shopping activities ostensibly undertaken to maximise value obtained were highly enjoyable. (Ray and Walker, 2004; Spears, 2005). Tauber (1972) identified that social interaction which consists of a variety of social motives, such as, social interaction, reference group affiliation and communicating with others having similar interests also was an important reason for shopping. The information-seeking motive, as proposed by Tauber, included information seeking, comparison, and accessing in a retail context. According to Pavleen Kaur (2007) shopping is also seen as a means of diversion to alleviate depression or break the monotony of daily routine.

    Change in retail environment:

    According to Pavleen (2007) the ever mounting customers’ needs and expectations were largely catered for by the new and emerging organised retailers who offer a wide array of goods at affordable prices more conveniently to the customer. In other words, growth in incomes made it essential for the retailing firms to modify their existing ways of doing business according to the changing requirements of the customer. The present environment exposes consumers to a plethora of purchase options and in return they may even be compelled, in certain situations, to redefine their shopping styles according to the available options.

    Buying behavior:

    Consumption decisions made in the market cannot be viewed as an independent event – these are closely related with values and social relationship and cultural allegiance (Saikat Banerjee et al. 1999). Children have also come to constitute a very important consumer group that influences family purchases of various products in many ways. Finally with the advent of malls the definition of shopping has changed to a way of socialization, where both husbands and wives tend to have high involvement in shopping. Martinez and Polo (1999) studied family purchase behaviour by surveying 600 Spanish married couples. They found that couples would make joint decisions only when the couple was young and the wife worked; in couples where the wife did not work or the spouses had been married for many years, the husband would usually make decisions alone.

    In specific Indian context Hofstede (1980) identified Indian society as ‘‘collectivist’’. India had been patriarchal with the Chief Wage earner being the decision maker. However changes in education, the advent of career women, and the growing number of dual-income families have challenged earlier beliefs on role structure and purchase influence (Webster, 1995) thus making spouse and children an important part of the decision making process in most categories.

    Service Quality Parameters:

    Analyzing services industry in particular, service firm marketers are aware that quality superiority provides significant strategic advantages such as customer loyalty, responsiveness to demand, market share growth, and greater productivity (Malhotra, 2004). However evaluation of service quality becomes difficult due to three characteristics that are inherent in services – intangibility, heterogeneity, and inseparability (Berry and Parasuraman, 1991). In this context the ten determinants or dimensions of service quality as proposed by Parasuraman (1994) are: reliability, access, and understanding of the customer, responsiveness, competence, courtesy, communication, credibility, security, and tangible considerations. According to Malhotra (1994) environmental factors like culture, communication infrastructure, education, technology, and economic development impact the service quality dimensions of a society.

    The New Age Couple:

    Most Indian couples today are far removed from the widely researched traditional family system of India. As the political independence of 1947 and the economic reforms of 1991 transformed India into one of the world’s largest democracies and business entrepreneurship respectively, the rise of the New Middle Class (NMC) referred to as The Call Centre Couple, has transformed India’s family structure, markets and workplace as we know them today (Jagdish Sheth, 2009). The CCC is a young family where both husband and wife have college degrees and both have to work to economically survive and achieve their aspirations. Neither wants to have their parents live with them. They believe parents will deprive their freedom and independence, and possibly interfere in their new lifestyle. What matters to this NMC is personal independence and freedom. Time has become a scarce resource and since both work, there is permanent time shift and time poverty for daily activities of shopping, workings, sleep and recreation. Sundays become very precious and the couple resents any intrusion from the boss or from other family members. To cope with life, both are desperately latching on to spirituality (but independent of religious rituals) and to a “holistic”? life style with yoga and meditation. CCCs are everywhere and transcend the traditional metro vs. non-metro market definitions as they also transcend religion and subcultures of India. This NMC or the CCC is widespread, one-way and a permanent discontinuity from the past.


    Three dimensions – attraction, centrality, and self expression – have consistently been shown to be applicable and reliably measured within leisure settings (Dimanche et al., 1991; McIntyre and Pigram, 1992; Havitz and Dimanche, 1997; Wiley et al., 2000). The origins of leisure participation and continued involvement are more often influenced by ‘the social circles of workmates, family and friends’ than by individual causes (Burch, 1969, p. 138). Burch termed this influence the ‘personal community hypothesis’ of leisure which shows that affiliation is a must. Affiliation referred to interacting and sharing oneself with others and consisted of six components: (a) affirmation of family and friends, which referred to leisure contexts that supported ties to family and friends; (b) satisfaction with family and friends, which referred to the satisfaction derived from shared leisure experiences; (c) development of children, which referred to leisure contexts that permitted opportunities for parents to model their children’s values and impart their own sense of morality; (d) development and maintenance of relationships, which referred to contexts that enabled informants to spend time with friends or make new friends; (e) interaction with others, which referred to leisure contexts that positively influenced informants’ affect which, in turn, effected their interactions with those around them; and (f) location, which refers to the ‘container’ or settings in which informants’ experiences occurred.Alternately, leisure as agency referred to contexts where experiences facilitated the development and realization of aspects of the self.

    As seen above extensive research has been done to understand the buying behaviour, service quality expectations of Indian consumers; both at an individual and family level. However the global trend today is an increased focus on carrying out research on couples to understand their needs and preferences. Primarily in the hospitality and tourism industries offers specifically designed for couples which include specially designed hotel rooms, resorts, holiday tours etc are more common place now. The services have extended to homes by providing personalized services at home including housekeeping, garden designing etc thus highlighting the scope of this segment as a potential source for creating new markets. In this context the following problem definition has been identified.

    Venture Incubation Problem:

    Entrepreneurial opportunities:

    So far the marketers have used their strategies and processes of targeting people as an individual/family or Corporates as a unit of consumption. Therefore most products/service offerings today are concentrating on segmenting consumers in terms of gender (man/woman), age (children, youngsters, and old people), social and economic classification etc. The couple as a single unit and their joint consumption needs and patterns have largely been ignored in terms of couple/pair, husband/wife who aspires to live together and explore all possible ways of living in togetherness – through pursuing joint hobbies, developing new set of skills, occupations and social interaction patterns.

    In view of the above it seems that seeing a couple as a unit of consumer is an unexplored area and therefore offers tremendously new set of opportunities through uncovering new set of needs and aspirations for joint consumption of a couple which would lead to new value offerings in terms of new a set of services, repackaging services to offer a new method of the delivery of services as they may desire to consume it together rather than as individuals. This has been seen growing in India recently where many clubs are encouraging couples to participate in dance classes, fashion shows etc.

    Innovative marketing

    Since marketers have to a larger extent ignored this particular aspect there are no management/marketing developed in this context for providing value to couples. Also there has been no adequate market research done to understand and derive insight about needs and aspiration of consumption as a couple. An in depth understanding of these values and needs might be used to develop a new marketing model for delivery value to couples in India.

    Implementation Plan:

  1. Conduct a market research as explained below to understand the needs and aspirations of couples with respect to service needs and entertainment. (Stage 1 in Research)
  2. By selecting some of the service/entertainment options based on research carried out in Step 1, simulate a test environment to create an experience for a select set of couples. The customer response can be measured here which can be used to suggest a framework for entrepreneurs and marketers looking to target couples in India.
  3. Develop and test an innovative marketing model on how to address the needs and aspirations of couples in India. (Stage 2 in Research)

Research Design:

The research design for achieving this objective was carried out in 2 phases, secondary and primary research.

Secondary Research:

The objective of secondary research was to understand the history of marriage and its value to Indians, how Indians moved across different stages of life cycle and what are the common aspirations, expectations and values derived from marriage. This was carried out through reading articles and opinions of historians, psychologists, articles on Hindu culture, marriage and the changes that have been happening to the system of marriage and family in India.

Marriage is an important institution in almost all societies in the world. The results of numerous studies suggest that people tend to be both healthier and happier when they are married (e.g., Gottman, 1994; Orbuch & Custer, 1995;White, 1994).

According to Mansfield and Collard married women talk about ‘togetherness’ in marriage and sharing a ‘common life’ with their husbands (by this they mean sharing interests and time with their partner). Men, on the other hand, maintain a concept of togetherness that contains elements of traditional marriage. They are more likely to emphasise the importance of knowing that a wife can be a source of support if necessary, and are less likely to stress the need to have time for talking together. For young husbands’ views of togetherness have more to do with geographical than emotional closeness. It is possible that the women’s movement has been an important catalyst in the progress towards an increasingly strong emphasis on equality and sharing in marriage. Women seem to have moved towards the relationship model of marriage earlier and at greater speed than men.

Togetherness in marriage:

The 7th of the Pheras which form an important part of every Indian marriage signifies togetherness. As part of this Phera the couple asks for companionship, togetherness and loyalty and understanding forever in their relation. They promise to remain friends and be mature enough to carry that friendship through all travails of life. At the end of it the husband and wife commit to the friendship for life and thus the marriage is complete.

Beyond these vows, togetherness in a marriage was confined to behind closed doors in Indian sub-continent. Earlier, conversations between couples were hugely restricted to bed rooms and that too only in the night. Even these came down with the birth of a child since children usually slept with parents till they passed their teens. Couple speaking in front of elders were considered to be disrespecting elders and hence strictly avoided. Even eating together was rare since the wife was supposed to eat only after the husband completed his eating. Couples rarely went out together except for attending social functions where their presence together was more of a social norm. For the society the man represented the couple outside the house and the woman represented the couple inside the house. Hence togetherness was more of a social norm then an expectation or an aspiration earlier. While men’s expectations from marriage were confined to domestic assistance and extending his family, women’s expectations from marriage were motherhood, financial and emotional security. Women were not a part of any decision making except in meager matters like kitchen, and food. Key decisions of the house, including the future of children were controlled by the heads of the family and the man who was the chief wage earner of the family. Together child was the only common aspiration that both men and women had from marriage and sex was perhaps the only common activity because of the societal norms and cultural inhibitions. It was more of an outside in approach where marriage was an activity performed for social acceptance than personal preferences. There was a term “marriageable age”? where the social custom of marriage was bound to happen irrespective of the thoughts of the couple. While it was child marriage primitively with marriages happening soon of the child birth, it gradually moved to post puberty. With the influence of Western culture and women empowerment the expectations from marriage today have changed considerably. The importance of marriage has changed from just procreation and a societal norm to be accepted. Today a marriage is more about togetherness, about doing things together, understand each other and the world better and in the process also contribute positively to the society. Women becoming financially independent and well educated gave them a scope to offer their own point of view and actively take part in decision making. Though even today the decisions are hugely controlled by men, women’s role in decision making is more than what it was earlier. Couples are planning and delaying their children for having a good married life, with just their spouse. Developing their relation, going around visiting places and accumulating finances are more important than children for most couples in the first few years of marriage today. Also the concept of marriageable age is no longer strong today with youngsters deciding to marry late, based on their commitments at studies, work and their aspirations in life. They want to achieve some independent success before getting into marriage which they want to make successful. They believe marriage needs time and ready to invest in it but only after satisfying their personal goals and aspirations.

How Indian couples spent leisure time:

Leisure was entirely a gender based concept earlier with men resorting to discussions with friends and elders while women largely got together with neighbors and elders in the afternoons for chit-chat while parallelly doing some household activities. Tours were confined to pilgrimages usually to fulfill the wishes of the elders than for pleasure. Later movies and TV were the major sources to spend leisure time. This has bought the family together with most programmes watched by the whole family and movies a monthly or a periodic affair where the whole family went as an outing. The culture of picnics, family get-togethers, clubs, theme parks, brought in more avenues of leisure and entertainment. Children were usually part of the activity unless it was late in the night or involved alcohol since there was guilt in spending time without children. From this family oriented leisure lifestyle today India today is moving towards an individual leisure lifestyle where both the spouses have their own ways of spending leisure time and there is no more any guilt of not spending time with children or spouse and family since they believe its their life and they have a right to spend it in their own way.

Togetherness outside home:

Touch is perhaps the most primitive demonstration of our emotional selves that remains unchanged throughout humankind’s evolutionary history. All living beings carry with them a sense of personal space which is shared through touch irrespective of social and cultural differences. Touch may be defined as the highest level of acceptance since people usually move to touch only when the degree of comfort is high.

Discussing the societal norms in terms of couples, public display of affection is still a taboo in Indian society and most couples prefer not to be physically together in any public place. This could be one of the main reasons why Indians do not enjoy leisure time as much as foreigner do since they take physical intimacy as accepted even in a public place.

Another important factor is that couples love the romantic moments in their first few days of marriage, and wish some of it gets rubbed back sometime again. The element of fun and togetherness in the first few days of marriage is cherished by most couples.

According to some sociologists, almost all the couples like to show off that they are having a good happy married life. One of the main reasons for couples to go out beyond enjoying their time to movies, restaurants etc is to flaunt their happiness though it is not entirely conscious. However once they make a family i.e. become parents, they are supposed to be more responsible in societal norms and hence are not any more interested in outings as a couple. Most couples would still prefer going out only with their spouse to new places, provided their children are taken care of by parents and believe they can spend good time together.

Primary Research:


The objective of primary research was to understand the aspirations of couples in Ahmedabad from marriage, the value of togetherness in the relation of marriage at different stages after marriage. Also attempt was made to understand how they spend their leisure time and the latent and unmet needs with respect to leisure and entertainment in Ahmedabad for couples.

Universe and Sample Size:

The universe of this research is the married couples of Ahmedabad belonging to the SEC A+, and not planning to get divorced. While choosing the sample there were several factors that were considered like: Time for which the couple was married, existence of children, age of children, financial independence, joint/nuclear family, compatibility between couples with respect to education and culture, dual income/single income, existence of family help etc.

The above factors were found to be some of the prime factors that impact the relation between couples with respect to understanding, compatibility, availability of time, leisure, physical and financial capability etc.

Hence the sample was as follows:

  1. C1:Gujarati couple married for 1 year, dual income, nuclear family– No children
  2. C2:Couple married for 1 year, dual income, nuclear family, shifted to Ahmedabad from Delhi, existent family help – No children
  3. C3:Gujarati couple married for 1 year, joint family, single income – No Children
  4. C4:Gujarati couple married for 5 years, nuclear family, single income – 2 Children (Aged 1 and 3)
  5. C5:Gujarati couple married for 10 years, joint family, single income – 2 Children (Aged 8 and 5)
  6. C6:Gujarati couple married for 25 years, joint family, retired, financially independent, living with son
  7. C7:Gujarati couple married for 40 years, nuclear family, financially independent, not living with children, recently shifted from USA, lived in USA since marriage
  8. C8:Couple married for 2 years, love marriage, against elders, double income, 1 child
  9. C9:Couple married for 4 years, love marriage, accepted by elders, single income, 1 child aged 4
  10. C10:Gujarati couple, graduates, to be married in May 2010

Sampling Technique:

Couples from SEC A+ were chosen by following random sampling in the members of Karnavati Club and snow balling through contacts in Ahmedabad. Screening questions were asked to ensure they met the criteria of the sample. Here one unmarried couple which got engaged also was taken into consideration since this would give better understanding of the aspirations of couples before marriage as against the responses of married people about their aspirations earlier.

Information Areas:

  1. Perception of Marriage – Aspirations and expectations from spouse
  2. Value of togetherness – Need, level of existence in relation today, how it changes with children
  3. Weekday, weekend routine
  4. Leisure time – Amount of time and how it is spent: Personal, with spouse, family, holidays
  5. Aspirations in the context of spouse – Activities, leisure, impact of societal norms, existence of options

Research Tool:

The research tool used here was In-depth Interview of each spouse in 5 couples, dyads of 5 couples.

As part of the interview projective techniques, word associations, interpretation of ads were used to understand the respondent.

Interpretation of ads:

  • Ads shown: Bru coffee, SBI Life Insurance, Onida TV ad
  • Liking towards the ad and what was the one thing they like about the ad

Data findings:

Common patterns:

  1. The definition of marriage was centered on understanding, love and a feeling of togetherness with different sets of people highlighting different aspects as the most important.
  2. Children represent togetherness after some time as couples get engrossed in their own worlds with reducing time spent together.
  3. Another important fact that came across was that any activity that demanded complete involvement from them would make them happy and increase the bonding. Children for one could be the highest in this aspect since there was complete involvement and attachment in rearing the child. Again when couples had common interests they were completely involved and hence enjoyed the time doing that activity.
  4. Movies were mostly preferred with partners only by young couples, while all the others saw it as a waste of time since they are passive most of the time looking at the screen and cannot really connect with the partner. Middle aged couples preferred to with friends who share common interests over the spouse with different interests as it is boring for the partner to sit through for 3 hours.
  5. Dinners were usually a family affair and trips in holidays usually included family and friends which were planned well ahead because it was economical and had a lot of fun to travel in groups.
  6. Fun was mostly associated with activities in groups, and families by most couples except the couple which came from Delhi. Only they defined fun as trekking, cooking together; while for the other married couples any activity with just the couple did not give any element of fun. Being with spouse alone was a good feeling as most people put it than fun.
  7. Most couples across age groups and family life cycle stages opined that the lack of fun was the fundamental deterrent to the marriage which makes it boring and agreed that marriage is a relation which needs constant effort from both sides to ensure it goes strong. Women said that it all depended more on the women as men tend to find others options of leisure and entertainment beyond their homes, while women are bound by responsibility towards home and children. Men on the other hand felt women had no time left after taking care of the children. According to one of the respondents “If there is an element of fun in the relation then it becomes easier to say something we don’t like in the other person in a teasing manner without hurting them”?.
  8. The definition of togetherness was marriage and spouse for the young and the old couples, while for others it was handling tough situations like someone in the family falling sick, who can be reached for help anywhere anytime. This definition included friends, family and relatives along with spouse.
  9. Almost all the couples across the sample preferred to go on long walks on the sea shore, and long drive together. The vastness of the road ahead and the sea was the reason behind with the color of sky and water – blue bringing in serenity. According to one of the respondents “Sitting in the beach or a long walk makes us feel that we are ahead and the whole world is behind, and there is so much vastness ahead, be it the sea or the sky”?.
  10. Most couples were skeptic about touching each other in public outside the room and public display of affections was a strict no since it’s against the societal norms. They were ok with holding hands among other couples but not in front of parents or children since it meant disrespect for elders and spoiling the children.
  11. Most couples said marriage is a relation which needed constant effort from each of the spouse to ensure that the togetherness is enriched and not lost in daily mundane activities. “It is not possible to just live on memories for ever. There should be new memories and new experiences which will make the bond stronger and the relation long lasting”?
  12. Men say marriage is not between 2 families its rather between 2 people, whereas women thought it was between 2 families
  13. In DI’s both women and men were more vocal about their aspirations before their marriage than in the case of dyads where they spoke more about responsibilities than aspirations.

Other findings:

  1. Specifically couples in the middle age segment where the woman was a house wife with growing children the definition of marriage “Marriage is a compromise, an adjustment, and some love”?
  2. Asking for products that can be provided for them to consume together, most couples talked about exercising together. Playing games was the 2nd most preferred activity since it helps them connect back to their courtship days.
  3. Most people wanted their dinner and outings to be secluded, away from the world gaze if it were to be only with the couple, since they wanted to be physically close. However most of them usually went along with family and friends.
  4. Newly married couples with no children and old couples living alone rated the feeling of togetherness in their lives as very high. According to them doing every activity together gives them utmost pleasure and happiness than being in a group of either friends or family.
  5. In both these cases, men said they would want their wives along with them in whatever they do, always, women preferred to do some activities alone, like going for shopping, mother’s place etc since they knew that men would get bored, and hence should not be asked to come along even while the men refused that they would get bored.

  6. One of the couples, moved to USA immediately after marriage. According to them facing every problem independently from setting up the house, to dealing with pregnancy, child birth and rearing them up had ensured that their bonding became stronger and remains so till today. Even today they preferred to go out together and prefer spending time with each other singing and listening to devotional songs.
  7. In the old couple living with the son, the man defined marriage as togetherness, co-operation for showing love and affection. According to the lady marriage was more about finding a purpose in life. After education there is a vacuum created in life, where people become emotionally capable to give and take love and marriage gives them the right opportunity to do so within societal norms and conditions. Marriage gives a belief that there is someone for you which gives the motivation to work and do daily activities which are superficially mundane.
  8. In the new age couples women talked about marriage as more about partnership and companionship and about growing old together. However men were of the opinion that one gender doesn’t have the capacity and maturity to have an overview of life, hence its two people coming together to have a holistic understanding of everything around, which brings completeness to life.
  9. For most couples in the mid marriage scenario, spending time alone with the spouse was not very high on the list as they opined that they had their own set of friends and other activities. They would want to spend time alone but not regularly and did not think it was possible for either of them to enjoy it more. However before marriage both of them said that they aspired to love travelling with their future spouse.
  10. One couple said “A chit chat at the seashore or a good restaurant activates the five senses and hence makes the whole experience more lively and interesting than a closed room or home which is very predictable”?. In the case of the sea, it’s the blue sky, the smell of the sea, water touching the feet, the sand and the junk food that can be eaten.
  11. In the case of a restaurant the ambience and the food make the most important factors since that effect the mood of the discussion and how long they can spend at the restaurant.

  12. According to one of the couples the feeling of togetherness is more of an output and trust is what is more important for a long lasting relationship. However for being satisfied and happy they said togetherness is needed and trust alone would not be sufficient and most couples survive on just the social obligation to be together than even such other factors.
  13. For most dual income couples, weekends were usually spent in completing household chores, which left them with really less time for leisure except during festivals which are again filled with family and friends leaving them with little time for themselves.
  14. Give some arguments on what are the actvitites they like together in link with what you wrote here

Interpretation of advertisements:

All the couples liked the ads above 5 on a scale of 1 to 7. The best element according to all of them was the mischievous act which they all have done at least once and it reminded them of that.

All except the C6, C7 liked the ad showing the couple going into the rain, as it was like going against social norms and seemed to bring back their youth. Segmentation:

Avenue seekers: Couples, who value togetherness, spend time together and are now looking for new avenues to spend time together

Facilitator seekers: Couples, who value togetherness, but are restrained by responsibilities, social norms and are looking for support in handling their responsibilities for them to spend time together.

Satisfactors: Couples who are satisfied with the current way of life, and do not want to change anything for bringing in togetherness into their relation.

Implication of research findings:

  1. Togetherness is perceived to be important in a marriage for a happy relationship.
  2. Children tend to become the only representation of togetherness in couples due to the lack of time and commitment towards family.
  3. Societal norms about public display of affection prevent most couples from exploring togetherness outside home.
  4. This has come out clearly where almost all the couples wanted to be either on the beach or an empty road facing vastness (either sea or road) which made them feel the whole world is at the back and they are away from everybody, alone in the world.

  5. Complete involvement gives more fun and happiness in doing activities than passive participation
  6. As long as the fun in a relation is retained there will be lesser conflicts among couples.
  7. There is a desire for bringing back the memories of youth and courtship days
  8. A place which delights the 5 senses tends to attract larger crowds.
  9. It feels good to go as a couple and get appreciated. Showing off that they are having a happy married relation makes them feel good.
  10. There is a clear lack of options in Ahmedabad for exploring togetherness due to the crowded restaurants usually with families, and there are few entertainment venues other than cinema

Venture Incubation Framework:

Based on the research conducted above, it was observed that there were different sets of couples, with different levels of togetherness seeking behavior based on the years of marriage, children, available free time, compatibility in terms of interests etc. However one common factor across couples was the lack of enough avenues for couples to explore togetherness. Family responsibilities and societal norms were other factors that impeded couples from spending time together.

Considering this as the need gap this venture tries to build a facilitator for couples to build the feeling of togetherness by providing them a platform to explore leisure time together while also providing them with the necessary support systems to handle their other responsibilities.

Value Proposition:

To provide a platform to build and nurture the feeling of togetherness in couples and let them explore each other more, to have fun together, to spend time together while other priorities are taken care of.

Entertainment options to be provided:

  1. Exclusive coffee shop: – Each coffee table would have a veil that ensure privacy. A single semi circular sofa would ensure the couples sit together and enjoy their own personal space.
  2. Cooking club: Couples can come and cook together here using the latest kitchenware and can also sell the recipes. This would generate trial for the latest brands and also provide fun for the couples as most couples like cooking together.
  3. Organize camping, adventure sports, trekking in the weekends
  4. Dance clubs:
  5. Candle light dinner – An option to arrange a candle light dinner at home is provided where the food from their choicest restaurants would be bought and the dinner arranged at a place of their choice.
  6. Competitions among couples – Puzzles, Chinese building blocks, pottery, carpentry, Sing for the partner, Know your partner, Best proposal , write a letter to your partner
  7. Events would be conducted where events involving solving puzzles, building blocks etc would be conducted to test co-ordination among couples.

  8. Personalized movie screening for couples on special occasions – Most couples have a few specific movies which they would want to watch along with their spouse even before marriage. A screening room would be set up which can be booked for a screening of their favorite movie.
  9. Provision to design jewelry, apparels and order for production
  10. Theme based weekends – Karaoke day, rural day, Treasure Hunt day, trekking day, digital de-toxication day, Dream Day

Rural day: Plan and organize an event where a couple can go and spend one whole day in a village with all amenities provided.

Digital detoxication day: Plan and organize an event where they need not use any digital product, and provide options for leisure and entertainment

Dream day: One of the spouses can gift a dream day for special occasions where the whole day is planned earlier based on what they want to do together

Some other services intended to be provided include:

  1. Exhibition place to display individual/group talents like painting, embroidery, wood work etc
  2. Training classes for etiquette, English
  3. Bill payments, ticket booking services

Target Group:

The target group for “Hum Tum”? would be the couples across age groups who value togetherness and are looking for newer avenues to explore togetherness. In future couples who value togetherness yet do not find enough time to explore together would be targeted through plans targeted for lesser time thus introducing them to the idea of celebrating togetherness. Through co-development the services provided would be further refined and modified to satisfy the customer needs and aspirations.

  1. The promotional campaign would be initiated through a news paper advertisement inviting the first 50 interested couples to come and avail the services once in the first week for free.
  2. Launch:

  3. The first event of the weekend would be preceded by a PR event with a renowned psychologist as the chief guest followed by a competition to find the “Fevicol Couple”? among these 50 couples based on activities testing co-ordination and mutual understanding
  4. The chief guest would discuss about the importance of togetherness and fun in marriage and how such elements would ensure more happiness and well being in life.
  5. The entire event to be covered in print.
  6. Post launch:

  7. Invitations to be sent to specific couples based on snow balling technique
  8. Offer discounts to couples who can get other like minded couples to join along.
  9. A website to be developed to plan the events before hand for couples to make plans accordingly and co-ordinate new for new events.

Business Model:

Customer Problem:

The transition from a couple to parenthood leads to the changing perception of family as sacrifice and responsibility rather than a joy or a satisfaction of sharing which in turn impacts the happiness index of the whole family. The problem here is to ensure that the fun, joy and the feeling of togetherness in the relationship of marriage is sustained despite new responsibilities and roles.

Product that addresses the problem:

The platform “Hum Tum”? provides the opportunity to connect more with the spouse while ensuring the needs of other members of the family are met through activities that include fun while ensuring the bonding of togetherness is built stronger. Hum Tum provides a platform where togetherness is celebrated in a couple among themselves and along with other couples where they get to avail services, play and do activities that nurture togetherness and improves co-operation in the process.

Core Capabilities:

The core capabilities required for implementing this venture are:

  1. Capability to understanding the needs and aspirations of the customer and design services to cater to those, and market them effectively by using effective communication methods.
  2. Efficient management of the demands of the customers with the various service providers like – tour operators, event management companies etc
  3. Ensuring that the values offered meet and exceed the customer expectations
  4. Capability to make customers as co-developers through motivation and implementation of efficient customer feedback mechanism

Key Partners:

Who: The key partners in this venture would be

  1. Retail space owner:
  2. Tour operators and vehicle vendors
  3. Event managers
  4. Psychologist/Sociologist

What: The key resources acquired from partners:

The dependency on all the 3 partners is high here since they provide the basic infrastructure for the venture to be successful. In the long term these resources should be developed in house to reduce dependency. Here the key resources acquired are:

  1. Retail space owner: Space for setting up the various facilities offered to the target segment, ambience etc
  2. Tour operators/vehicle vendors: Infrastructural capability to provide vehicles for different routes and number of people
  3. Event managers: Capability to organize events based on themes
  4. Psychologist/Sociologist: Inputs for understanding the latent value and benefit needs from couples

Key activity of Hum Tum:

  1. Hum Tum: Co-ordinates, packages and markets the combined services of all the partners in an effective way, manage customer acquisition, retention and feedback.

Key activities that partners perform:

  1. Retail space owner: Lease space, responsible for hygiene factors like elevator, cleanliness etc
  2. Tour operators and vehicle vendors: For infrastructural capability to provide vehicles, logistics and support systems at other locations based on the demands aspirations of couples
  3. Event managers: For planning events effectively ensuring that couples are actively involved and enjoy the time spend with “Hum Tum”?
  4. Psychologist/Sociologist: To suggest new and innovative methods of bringing the feeling of togetherness in couples based on the analysis lifestyle and behavior of couples coming to Hum Tum.

Revenue Structure:

The revenue source would be multiple streams in the case of Hum Tum as follows:

  1. Volume or unit based: Customers pay a fixed price for every visit to Hum Tum.
  2. Transaction fee: Hum Tum gets a percentage of the trip cost arranged for couples
  3. Advertising based: For events like Treasure Hunt etc, Hum Tum gets a percentage of the products & services used for product placement, sampling etc.
  4. Hum Tum would not collect any percentage from the sales of couple’s work.

Cost Structure:

The costs involved in setting up and running Hum Tum are as follows:

  1. Lease space in a mall, set up the space, ambience – High fixed cost
  2. Expert advice – Low Fixed cost
  3. Services from partners – Event managers, tour planners – Medium variable cost
  4. Maintenance – Ambience, hygiene factors etc – Medium fixed cost
  5. Infrastructure – Games, puzzles, chairs, tables, cooking equipment etc – Medium fixed cost
  6. Employees – Medium fixed cost

Expected customer relation:

  1. Avenue seekers: To provide new and exciting opportunities for the couples to enjoy time together
  2. Facilitator seekers: To provide assistance in managing responsibilities in addition to providing opportunities for spending time together

Cost of satisfying the expectations:

  1. Avenue seekers: Low, since the cost incurred is usually passed on to the service providers
  2. Facilitator seekers: High, since the requirements might vary and hence have to provide customized services which will increase the overall cost.

Experimenting the business model:

Research Methodology:


To test the relevance of the entertainment options offered in Hum Tum with respect to satisfying the leisure needs of avenue seekers and the level of acceptance from facilitator seekers.

Research Tool:

Projective techniques used to understand the response of couples to the suggested list of entertainment options.

Universe and Sample Size:

Sampling Technique:

5 Couples from SEC A+ in the age group of 25-30 with no kids were chosen by following random sampling in the members of Karnavati Club and snow balling through contacts in Ahmedabad. Screening questions were asked to ensure they met the criteria of the sample. 5 couples were randomly picked from various age groups and the same technique was implemented.

Data findings:

  • Most couples liked the idea and were ready to spend till Rs. 1000 a month in availing these services. Veiled coffee tables and rural day were liked by most couples in the age group 25-30.
  • The idea of bringing back the romanticism of courtship excited most couples.
  • 6 out of the 10 couples liked the name “Hum Tum”? while others suggested names like “Saath Pal”?, 8th Vow.
  • Couples with young children expected complete care for their children with cradles, trained nurse etc. For couples with elder kids and parents at home they wanted to have a helper sent to home who was reliable and accountable to help till they went back home.
  • Most couples loved the idea of a special screening of the movie but wanted the screen to be larger compared to a TV screen and expected to be served food too. The maximum they were ready to pay for this was around Rs.2500 to Rs 4000.
  • Playing games with friends families seemed interesting for most of the couples provided the winner was rewarded and would like it to be a regular event with new competitions for every other period.

Innovative marketing techniques:

As discussed earlier most marketers in India target family as a unit of consumption and market several products through family packs, offers for family etc. However of late there is a growing trend in a few categories where couple as a unit of consumption is being targeted with considerable success. Segments like beverages (Coffee), television, mobile and other such white goods (Onida), IPL are good examples where couples are being targeted as a unit of consumption and effectively marketed to achieve considerable results.

Another good example which has effectively used the concept of togetherness in marketing is Moov which showed involvement and togetherness to reach the right TG and communicate the message effectively.


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Risks and Uncertainties in Innovation and Competition Essay Example Pdf Essay

Most small business choices are made with incomplete information and an uncertainty future. Professionals have to deal with challenges each and every working day. Extra distinct a firm may have a wonderful new engineering but client acceptance of this innovation is mysterious. A competitor could be tempted to have interaction in direct competitors with a company or may well choose that the income of a divided current market are too trim and go on to glimpse for other alternatives. Uncertainty includes both of those identifiable traits whose depth and timing can only be guessed at and surprising situations whose influence is speedy. What is risk? (Doherty Neil A. built-in chance management, mc graw hill expert 2000) Risk is existing when the consequence of some described action is not regarded. Danger refers to the variation in the range of possible results, the larger the likely variation, the greater the hazard. In the economic perception danger does not refer to the adverse excellent of some results likes losses as a substitute of revenue but alternatively to the deficiency of expertise about which of various outcomes could prevail. A possibility is implied by our incapability to forecast the long run. What is certainty? Certainty is a procedure that constantly present you the way for a certain result. Uncertainty Uncertainty refers on a problem of not having additional information about the future. It is necessary in an natural environment of conclusion generating. Administrators must take care of the uncertainty in a way that the likelihood of generating mistakes will be in rational stage. For instance costumers’ acceptance of a new product can be further than the most hopeful prediction. Threats Threats are pitfalls from the behavior of others. For example when goody’s enter to the Greek marketplace wherever McDonalds was making profits then there is a threat for mc Donald’s due to the fact this may decrease their revenue. The lower gains can be envisioned but the moves of the other rivals organization just cannot be predicted with sureness. A chance condition is a placement where by the effects are unfamiliar to the determination maker. For illustration a supervisor is not assured about the outcome and uncertainty may lead to undesirable options. Industry hazard is something that organizations concern mainly because if their hopes about the long run industry predicament are incorrect then they have losses. It is a all-natural portion of investing and market place involvement. It can be management but not lowering it. If supervisors use future contracts then they are not nervous about any loss may possibly have due to the fact they will choose some gains. Prepayment risk refers to the probability that the resources may perhaps be pay as you go before than their selected day.( fiscal marketplaces and establishments j, Madura cengage studying 2008) Credit rating risk refers to the risk that a decline will occur since of the defaults on the deal. Business nervous about the steadiness of their inventory. The financial long run of a small business just can’t be predicted with self esteem. A company could possibly fail about their credit price. In get to establish threats that a business could possibly have professionals must inquire their selves: what can go wrong?’ for illustration if Starbucks corporation needs to make a espresso with a unique component and the provider don’t carry it on time then they faced an unexpected danger. Supervisors ought to introduce a analysis and growth for reaching higher performances. On every single situations challenges can estimated in two classes noticeable and average. A considerably less than obvious is when a senior manager leaves from the firm but the other manages have a good succession plan for product sales and earnings that will not have an affect on them. Visible activities are factors this sort of as the current market entry of a tiny competitor. This entry has been predicted and as extensive as the competitor stays in its slim current market there is a tiny loss in product sales that necessitates no distinct response. The failure of the provider with tiny possibilities moves or an entry of a competitor with the same technological innovation are details that have moderate collision. New small business faced with the problem of getting new capabilities. The strategic selections that ought to contemplate are which competencies should enter? How they will enter them? When they will enter them? These are tricky to respond to due to the fact of the uncertainty that the market setting have. Getting into into a new marketplace can be risky but it well worth it in purchase to realize new enterprise options. For the reason that of the higher degree of uncertainty professionals are not self-confident that the new field that they are going to lengthen will be rewarding. A enterprise has a good deal of selections to enter. They can wait until eventually the uncertainty and hazard have greater or they can acquire a sturdy posture early. A firm can be tempted to favor versatility about determination and to postpone the investments required right until a lot of the current market uncertainty is solved. But in potent environments characterized constrained probabilities of opportunities a business enterprise may haven’t the right ability at the correct time. Threat return Some claimed that when we acquire huge dangers we be expecting large returns. Hazard relates with return in some way. Anything is about to maximizing the return and the profit so a business has to take all the dangers. If you know all the necessary points then you do not acquire any risk, but if you do not know all about the long run, which you do not!, then you acquire a hazard. Risk and uncertainty are consequently correlated. Threat/Return Return small threat- low return High chance- high potential return Risk A chance could be handle if professionals have the needed facts and understanding about this dilemma. They ought to concentrate on other options may well have, collect extra facts, check out to obtain different capabilities of the dilemma and examine the issue to lessen the risk and finally hold up the final decision. place When a country transform their political routine it could possibly direct to improve taxes, leaving out the repatriation of organization revenue to the residence country, power them the exchange fee controls and deny to let them new know-how techniques. All these concerns managers should issue and make your mind up if this place is well worth it to expand. ” , a country’s economic risk points to economic forces that may well outcome in drastic changes in the business setting that are harmful to enterprise pursuits. Financial mismanagement and corruption are chief among the brings about of elevated economic hazard, normally resulting in significant inflation, funds flight, and financial debt defaulting.” Tradition Between the country and the intercontinental nation there are change in tradition, norm and values. This qualified prospects to an uncertainty and price of conducting enterprise in intercontinental current market. Lifestyle dissimilarities influence international organization judgments like market entries, entry manner choice, effectiveness of world-wide procedures, and neighborhood responsiveness. Managers want to make overseas expansion in international locations with the exact tradition, norms and values in order to lessen the hazard of probable failures of the goods and products and services in these nations. Also managers are absent from marketplaces with distinct cultures that they don’t recognize the small business history and norms. The more cultural variances existed among the dwelling place and the worldwide country the far more options of not accomplishing business in that place and it can considerably affect the internationalization course of action. Professionals need to identify two sorts of danger evaluation. The internal threat which are distinct current market and sort of expenditure, and external which are local weather and political modifications, changes in rules and policies. Conclusion Lots of professionals have the mistaken feeling that investing in overseas nation is riskier than investing in their dwelling countries. Exploration displays that invest in overseas have the identical possibility as spend in your residence nation. Mc donalds Mc Donald confronted the challenge of generating retailers in India. The chance was that India has diverse practices and society. They are not consuming beef or pork. As a consequence there was risky to open up shops there and have substantial profits because mc menus have meat. McDonalds assumed to make food and pricing methods that can match to India’s sector. So they make a menu that really do not have beef or pork but a vegetarian menu. Vegetarian products and solutions are independent in the course of the sourcing cooking and servicing procedures. Rather of obtaining Major mac in India the purchase Mc AlloTikki or Mc Veggie burger. Euro Disney Walt Disney Corporation resolved to grow the theme park in Europe. Walt Disney system of entry in Japan had been licensing. But Disney selected to invest in other European nations that theme park has proudly owning 49% and 51% general public. The dilemma was the internet site so the company evaluates the standards for picking out a locale. Other difficulty was the euro Disney job illustrate that even if a corporation has been profitable in the previous, long term accomplishment was not absolutely sure when it moves to a diverse state and tradition. The alterations for nationwide variances must often be measured in get to keep away from danger. Disney thought to have the identical recipe of fantasy and magic in Europe in order to have large profits. But in some countries wasn’t acceptable for the reason that they think that this was a danger to their culture. euro Disney should focus on the aspects inside the park, superior food stuff and the price composition for the international current market in get to succeed to entry in new marketplace without having having substantial risks of failures and struggle for a extended endure in other countries. Framework Sector place efficiency Product or service features Host market qualities Residence current market attributes Organization dimension Entry manner system Political danger The chance that political conclusions, gatherings or conditions will have an impact on a countrys business environment in ways that will price tag investors some or all of the benefit of their financial investment or power them to settle for decrease than projected charges of return. Big dangers get a company when they develop in yet another state for the reason that a country may transform political leaders, opinions and guidelines. It may well be costly to businesses simply because of the reduction or problems to their property and the will need to alter to variations in the guidelines hovering company. For case in point Bolivia is a risky surroundings for overseas investors since of the demonstration and violence and coca cola has law enforcement defense of its vans and telephone connections in Angola. As a end result managers should really forecast the likelihood of owning a political danger but it’s tricky simply because past political incidences predicaments adjust for far better to even worse and predicament variations in just countries and providers. Also professionals really should choose some viewpoints from political leaders to determine their impression about foreign business enterprise relations and their wondering about international countries. They should inform from the global newspapers or world wide web or television about the political activities that could have an effect on their organization. Professionals should check out the nations around the world that they are interested and focus on small business folks, journalists and labor leaders that might improve and have an impact on the company sector and commonly have an affect on political conditions. Monetary threat A enterprise motivated from trade prices. Additional unique if the value of a international currency is modify then the price will be significantly less competitive for the reason that it will expense more the product or service or services. Also it motivated from the funds that moved out of a state. If a business desires to commit in a foreign place then the ability to get funds from the country is an challenge. Firms must acknowledge the variable that if they want to transfer their money resources there is a chance to have lessen return. Aggressive possibility A corporation good results is dependent on competitors moves. Professionals really should consider that when they work in a overseas region with significantly less acquainted environments it may well be high dangerous due to the fact international nations around the world are not survive than the nearby organizations that know their local market. Having said that if overseas businesses be successful to study additional about their new market and handle effectively all the issues that may possibly confront then they can attain their new current market. As a firm learns much more about buyers, opponents and governments designs they reduce uncertainty. So supervisors favor to spend in international locations that located near to them with related language, society, authorized system and market ailments in get to reduce uncertainty and have a competitive gain that fits to their regulations. Also a company thinks about the nearby resources if there are available in affiliation with their requires. Much more particular a enterprise may possibly want to find area staff that know the organization. Corporations stick to rivals into foreign marketplaces and match their investments with the rivals. They took gain from that mainly because they know that this locale is acceptable for this product or service or company they want. There are clusters of opponents that use them in get to have superior competitive placement and discover information and info from them. Nevertheless SOME Corporations Favor TO make investments into a current market to start with in purchase to obtain competitive benefit and build a powerful brand name and have potent shopper romance. So it has the prospect to be a current market leader with much better product or services and distributions. As a end result it decreases the competitive threat. For case in point, Amazon.com may perhaps not have been the 1st vendor of books on-line, but Amazon.com was the first significant company to make an entrance into the on the web e book marketplace. There are 4 styles to pick out how to enter a overseas industry. The 1st form is exporting that a product creates in 1 state into yet another. The 2nd is licensing a firm use the house of the licensor in the state that they are fascinated. They should spend a payment in order to use this assets. The third is joint venture that two or a lot more have a program for a small business and approve to share the gains of the small business organization. Finally is the foreign immediate market that the region businesses have an possession. It has a significant manage of the means (technologies, personnel and capital.) as a outcome you have the chance to know your client and competition. Features of cultural length Different languages and religions unique social norms Options of organizational length Political unfriendliness govt rules Geographic distance Dimensions of region various climates Economic length Distinct earnings diverse human and natural resources

Defend itself from Competition Essay

Now, Boeing is experiencing a incredibly sturdy competitors with Airbus because of to boost of market place share of Airbus in the current market. In purchase to gain again its model loyalty and current market share, Boeing should respond and react to the level of competition. Despite the fact that no one can demonstrate that Airbus is performing the business in an unethical methods, but we ought to acknowledge that competitors in between Boeing and Airbus is acquiring robust. Of bring about we cannot reported that Boeing will act unethically to contend, but most most likely, Boeing will rearrange their means of doing company as very well! We analyzed in advance of that to get competitive edge corporations can possibly contend with cheapest selling price or better quality at larger value. Of lead to Boeing as an aircraft corporation are not able to occur out with the goods of lower quality with least expensive price tag because it relates to thousand of people’s lifetime. But it can create aircraft that are higher in high-quality with better price. Soon after some time, persons will know that Boeing is a trustable agency thanks to the substantial excellent merchandise that worry about people’s daily life. Boeing might modify their target industry to those developing nations as perfectly. Previously, Boeing was targeting all those nations around the world that are greater designed this sort of as US, British isles Singapore, and airline that are popular and common in the sector. But just after the entries of Airbus into the competitors, folks switch their head to Airbus owing to better promotions and presents by Airbus. Thus, Boeing can basically lessen the levels of competition by concentrating on some nations or airways that are not been qualified by Airbus. Moreover all these over, Boeing can also offer much better services to receive the gross sales. Expert services available can be soon after-profits expert services or in advance of-product sales companies. Equally are crucial to greatly enhance the clients and produce brand loyalty. With superior expert services, people today can basically decide the ability of company and examine with Airbus in term of providers. Finish up Boeing with better providers may well get hold of the profits that make manufacturer image and excellent useful. Product sales marketing in global advertising and marketing is one of the crucial approaches as effectively to contend. Most of the time, Boeing provide intercontinental client a lot more that community clients. The overseas consumers are come from various qualifications and various standing. Individuals creating countries could possibly not ready to acquire aircraft in such a big sum. At this certain time, sales promotion, price price reduction performs roles to greatly enhance the gross sales. At last, Boeing has to fully grasp effectively their clients no make any difference in term of language or even culture. As the textual content talked about, Airbus been suspected bribed when offer with Japanese officials. To prevent identical matter happened, Boeing need to has a perfectly knowledge in direction of the society worth of each individual of their shoppers. Perhaps the steps do not imply so, but someday folks from various history watch it differently.

A Perfect Competition Essay

When analyzing if there genuinely is these types of a matter as perfect level of competition, there are 5 most important factors to search for. First, all corporations ought to market an similar product. Second, all corporations should be price takers. Third, every single vendor has a tiny sector share and can not influence the sector price considerably. Upcoming, customers and sellers are both equally thoroughly educated of the nature of the products and solutions readily available. At last, the market is characterised by the strategy that sellers can enter and exit the sector freely (Gallant, 2018). Even though fantastic competitors is great in theory, there are practically no markets in the true world that fulfill all of these rigid needs (“(Im)Perfect”, 2015). In an perfect earth, excellent competitiveness would exist and gain consumers and producers in a quantity of means.

Owing to the reality that it is practically unattainable to get hold of perfect competitors in the actual planet, there are number of markets that exhibit a most of the demanded traits. The agricultural current market is 1 of the greatest examples we have observed of excellent level of competition. There are numerous farmers during the market that sell the exact same fruits and vegetables for relatively the exact value and do not command the price they provide their make for. Also, just about every purchaser is absolutely educated of the solutions they get from farmers. Suppose a farmer has a undesirable yr for developing corn and are unable to sell any corn. That a person farmer would not have an effect on the sector pretty a lot because of to the actuality there are other farmers to offer the merchandise, so we can say that every single farmer has a modest current market share. Folks who grow and sell agricultural goods also do not experience several barrier to exit the marketplace. However, they do facial area boundaries to enter the market with items such as higher startup charges and deficiency of obtainable land to purchase. Although the agricultural market place is not excellent levels of competition, it is as seemingly close as we can get in the authentic planet.

Another current market that displays features of excellent competitors is the absolutely free software industry (“Simple”, 2018). Everyone is free of charge to enter and exit with out obstacles. All software is available to customers and they are absolutely free to do with it whatever they want with no implications. The software package rates are controlled by the market as an alternative of the distributor as properly (“Simple”, 2018).

One particular closing illustration of ideal levels of competition would be the road food items vendor sector (“Simple”, 2018). Even though going for walks down the street in a major city, it is straightforward to discover hundreds, if not thousands, of street food vendors. This satisfies the necessity of excellent competitiveness that there is several purchasers and sellers. Each and every seller, while they attempt to differentiate them selves, fundamentally market the same food stuff with pretty slight discrepancies. So people can basically go from one particular seller to a different and have the similar decisions. It is also challenging for each and every vendor to established their possess individual price ranges because of to the sum of opposition, so the charges are established by the market as a substitute. There are also not a large amount of boundaries to enter or exit (“Simple”, 2018). This example is not perfect, but it is shut to the definition of fantastic competitiveness.

The governing administration has established antitrust laws to reduce highly effective producers from generating entry boundaries for their weaker competitors (“Guide”, 2017). These regulations boost competition amongst corporations that might usually merge and engage in anticompetitive small business methods. The govt also can develop opposition by controlling the selling price a company have to cost for their product (“Guide”, 2017). This also encourages competitiveness for marketplaces like monopolies where by competitiveness is not by now current.

Antitrust Guidelines had been made to shield shoppers from dangerous small business practices. Congress handed the 1st antitrust law in 1890 it was also known as the Sherman Act. The function was to preserve cost-free and unfettered opposition as the rule of trade (The Antitrust Regulations.) In 1914 there were a further legislation handed 1 was the Federal Trade Fee Act and Clayton Act.

In a completely competitive marketplace, the desire curve is properly elastic. The perfectly elastic curve is represented by a straight horizontal line. Consequently, which means that a selling price modify would remove all need for a certain item. The desire curve for fantastic competition is downward sloping to present that the much more the rate of a products rises, the more the demand for that merchandise decreases. The supply curve would be inversely proportional to the desire curve and would be upward sloping. These two curves intersect at the equilibrium level.

Great opposition has a several positives elements and results for both equally the customer and producer. For the producer, there are virtually no limitations to enter or exit the market place. The purpose of the producer in excellent competitiveness is to optimize income rather of concentrating on acquiring rid of competitors (“Perfect”). There also would be a very low price of output for producers since the equilibrium stage for marginal profits is at its least expensive level. Products would also be readily available at a low charge of for buyers simply because of the lower generation costs (Shehzad). For the customer the outcome of best competitors is even improved. People would be educated on what they are obtaining and never have to offer with unlawful pricing methods from the producers. Great opposition also offer greatest efficiency for utilization and for generation of products and solutions. Just about every resource would be put to use in the most acceptable issue, and by concentrating on maximizing gain, output would be maximized as perfectly. Enhanced performance of items would profit society and its pleasure demands (Shehzad). Nonetheless, given that it is approximately unachievable to absolutely generate great level of competition, these pros are pretty idealized.

Though it may not seem to be like it, damaging aspects of perfect level of competition do exist. Very first, if each and every corporation was only targeted on maximizing gain and not concentrated on their competition, there would be no innovation or have to have for advertising. Advertising tactics are specifically produced to drive out competitors of a business or model. If there is no need to have to do this, there would be no need for internet marketing (“Perfect”). There also would be no want to innovate to build new items to get in advance of a company’s competitors. A entire world without having regular innovation would hold back profit for these businesses and would also hold back our society from advancing. An additional destructive facet would be how each and every products marketed is the identical. Getting the identical merchandise accessible for all customers can stunt trade growth inside the market (Shehzad). Whilst society would be sacrificing promoting and innovation with ideal levels of competition, they would be gaining the the extra successful use of assets, very low price of output, minimal product expenditures, no limitations to enter or exit a marketplace, and far more client trust in organizations in general.

Based on an economic and social welfare standpoint, best level of competition would be suitable for each individual sector. But in actuality, best levels of competition does not exist. Nonetheless, in a ideal earth, great level of competition would be everywhere. There would be income that do not use illegal pricing methods and every seller would create a position the place the families on social welfare would have a spot to invest in what they want. All people would have entry to the similar items at the very same rate and marketplaces would aim entirely on maximizing earnings. Perfect opposition would profit both the customer and producer in many ways. Even however excellent opposition would be useful in idea, it can not exist in real earth business enterprise tactics. If existing in everyday business observe, consumers and producers alike would advantage from fantastic competitors.

Perfect Competition and a Monopoly Essay

The two industry buildings of Perfect Competition and a Monopoly have lots of differences, in essence becoming the reverse of a person a different. Excellent competitiveness is a theoretical sector structure in which the adhering to standards are met: all companies sell an identical product, all firms are price takers, which means they can not impact the current market selling price of their solution industry share has no affect on selling price purchasers have complete or “perfect” information and facts – in the past, existing and potential – about the item currently being sold and the selling prices charged by just about every company methods this sort of a labor are properly cellular and corporations can enter or exit the sector without having expense.

Best competitiveness is the opposite of a monopoly, in which only a solitary organization supplies a fantastic or company and that firm can cost what ever cost it would like, because buyers have no solutions and it is tricky for would-be competition to enter the market. Below excellent levels of competition, there are numerous prospective buyers and sellers, and prices replicate provide and desire. Organizations make just enough earnings to continue to be in organization and no more. There are a massive variety of customers and sellers in a perfectly competitive market. The sellers are small companies, as an alternative of significant corporations able of controlling price ranges via provide adjustments. They provide merchandise with minimum differences in abilities, options, and pricing.

This guarantees that prospective buyers can’t distinguish among items centered on actual physical attributes, these as dimension or colour, or intangible values, such as branding. A massive inhabitants of the two purchasers and sellers makes sure that provide and desire stay continual in this current market. As this sort of, purchasers can quickly substitute products and solutions built by a person firm for an additional. A monopoly refers to a sector or business dominated by a person corporation, organization or entity. Monopolies can be regarded an extreme consequence of totally free-current market capitalism in that absent any restriction or restraints, exactly where a single organization or group will become huge plenty of to own all or just about all of the market (products, supplies, commodities, infrastructure and property) for a certain style of product or services.

Antitrust guidelines and rules are place in location to discourage monopolistic functions – preserving people, prohibiting procedures that restrain trade and guaranteeing a marketplace stays open up and competitive. “Monopoly” can also be used to suggest the entity that has complete or in close proximity to-whole control of a marketplace.

Literature Review: Globalization and Competition Essay

LITERATURE Critique Typically, advertising focuses on your wishes of the operator, promotion and marketing and advertising inside of the requirements of the purchaser (buyer). The intention of business enterprise is commonly to acquire as nicely as maintain a buyer. Or possibly, to make use of Andrew Drucker`s considerably a lot more refined making to crank out as effectively as keep a buyer. (Via item differentiation as perfectly as value competitors) Intercontinental advertising and marketing and advertising entails your advertising and marketing of items as nicely as companies past the organization`s residence land. International advertising and marketing and internet marketing is a sophisticated style of abroad promotion and promoting which engages a lending broker inside of promotion and promoting functions in numerous nations. Worldwide promoting and marketing and advertising signifies advertising and marketing and marketing pursuits synchronized as well as incorporated across a amount of areas. Technological innovation as effectively as globalization designs the earth. The 1st makes it possible for ascertain guy preferences your second, fiscal realities. Standardized customer merchandise, decreased rate as perfectly as technological innovation commonly are guidelines regarding prosperous globalization. Your globalization of areas is at palms. With this, your worldwide skilled world nears its quit, and so could your global business. Your world`s wants and wants are now irrevocably homogenized (sector wants). This distinct will make your intercontinental enterprise outdated and the entire world extensive small business overall. No a single can be chance-absolutely free by means of throughout the world get to and the irresistible providers of level (reduction of rates as nicely as selling prices) as well as placing. Your global as effectively as around the world company will not be the same thing. Your worldwide business operates in a large amount of countries as effectively as tunes it is merchandise as nicely as techniques inside of every single on substantial comparable rates. Worldwide advertising and marketing and internet marketing could be the approach of placing attention a great organization`s suggests within just the collection as perfectly as exploitation of throughout the world field possibilities constant with as effectively as faithful of its speedy as perfectly as very long-expression perfect targets as nicely as targets. With this paper, my lover and I experimented with to examine your tactics a company competes inside around the world surroundings by implementing assorted tactics. Individual’s procedures modify in numerous approaches a company’s features as very well as enthusiasm allow. A corporation ought to be careful within applying these techniques prior to globalizing its features. Basically mainly because normally these methods may crash as perfectly as finish in reduction of profit or even quite possibly closure of the business. I counsel assisting audience for acquiring more facts with this concern. For example, they might contact the corporation, beneath secretariat of Overseas Offer, ideal Chambers of Commerce or even each other community or even own corporation positioned in Egypt or even in another state. They will could possibly also employ any sort of stockpile or even website usually means. (Akkaya, 2005) Inside of the region of abroad marketing and marketing, your concern on the degree of standardization or even version possesses entertained a big component of past investigate. The situation, nonetheless thoroughly reviewed, hasn’t been fatigued yet, provided that, in-depth statistical examination as well as way of measuring of the similar bodyweight of factors affecting your selection will even now be needed to improve every of our awareness on it. This particular review makes a considerable stage towards taking away that room and offers an critical health supplement both of those to assist theoretical comprehending and managerial packages on the subject. Vignali as nicely as Vrontis (1999) expose until finally this query initiated due to the fact 1961, any time Elinder (1961) imagined to be this with respect to around the globe advertising and marketing. In that time period of time, advertising and the want for overseas standardization ended up currently being in the centre of your problem (Kanso as well as Kitchen’s, 2004). Intercontinental internet marketing standardization can have necessitated a regular internet marketing strategy relating to marketing ads of global enterprises. This certain problem subsequently expanded via advertising and marketing to the marketing blend and currently will involve the entire advertising and promoting blend (Schultz as nicely as Kitchen’s, 2000 Kanso as well as Kitchen’s, 2004 Kitchen’s as perfectly as de Pelsmacker, 2004). Remarkably, virtually 50 percent a hundred yrs later on, your question on standardizing marketing and internet marketing internationally, can be constant (Vrontis as very well as Kitchen’s, 2005). Even a cursory overview of your literary is effective pinpoints a pair of main strategies together with awesome endurance, that is, edition as properly as standardization of abroad promotion and marketing and advertising procedures. Ryans(2003) claim that in the very last forty five decades there is a sizeable enlargement of faculty study in your neighborhood of overseas promoting and promoting standardization. In the course of this period, scientists applied substantially much more remarkable statistical tactic. Also, they reveal which fiscal as properly as aggressive circumstance have modified around that time time period. Just before, fiscal progress finished up remaining concentrated within the excessive of exports about imports. Organizations had been concentrated purely upon minimizing expense as nicely as raising exports. Nevertheless, as a end result of enhancements inside fiscal circumstance, corporations comprehended which expense minimization by you can be insufficient. By usually means of modifying, corporations grew to develop into considerably far more buyer oriented and far more excellent techniques experienced been designed as properly as provided to confirm as well as satisfy consumers’ wants. Fans of standardization thought of locations simply because more and extra homogeneous as well as throughout the world inside of placing as well as stage as effectively as presumed the essential pertaining to your survival as properly as expansion is a multinational’s capacity to standardize items as well as organizations (Fatt, 1967 Buzzell, 1968 Levitt, 1983 Yip, 1996). Fans of standardization stipulate which clients desires wants as well as requires are inclined not to differ significantly throughout spots or even nations all-around the planet. The typical conceptual disagreement can be the globe has grown far more and far more equivalent inside of text of environmentally friendly factors as properly as shopper demands as perfectly as no make a difference bodily spots, clients establish the equivalent calls for. For instance, Levitt (1983) in a pretty landmark papers, proposed which standardization of the advertising and internet marketing blend and the style of an sole system for your globally marketplace, offers companies of stage inside of output as effectively as advertising and marketing and marketing as properly as furthermore can be constant with specifically what he or she termed your “mobile consumer”. Conversely, promoters of edition like Kashani (1989) expose complications inside by employing a standard method and as a consequence aid industry tailoring as effectively as variation to healthy your “unique dimensions” of assorted abroad parts (Thrassou as nicely as Vrontis, 2006). Much more specifically, supporters of the overseas Edition College of Believed argue there are insurmountable variances regarding countries and also concerning destinations in the equivalent land (Papavassiliou as very well as Stathakopoulos, 1997). It is proposed which marketers normally are ruled by quite a few macro-environmental elements, like local climate, fight, topography, vocations, flavor, laws, culture, technological innovation as well as fashionable culture (Czinkota as perfectly as Ronkainen, 1998). Paliwoda as effectively as Thomas (1999) broaden that amount to incorporate consumer choices, disposable funds circulation, taxation, nationalism, local community work charges, literacy as well as numbers of training and mastering. Supporters with this university stipulate which international businesses need to have to obtain out how to adjust his or her advertising and marketing system as properly as techniques (marketing mix components) in get to match marketplace needs. Every faculties of considered within by themselves feel to be realistic, sensible as well as coherent, showcasing associate applications as properly as rewards which a worldwide business enterprise could attain by making use of both system. It is only if 1 focuses on your extreme placement of possibly which they generally periods develop to be not useful as nicely as incoherent. Promoting and advertising actuality pertaining to multinationals will not relaxation inside possibly of the a couple of polarized positions, due to the fact the two operations may very very well coexist, possibly within the identical organization, manufacturer products line, or even manufacturer (Kitchen, 2003 Vrontis, 2003 Soufani et al., 2006).These certain papers swells on current operate on the topic to review your subtle interrelationship of assorted parts worried for the adoption of the pair of strategies (adaptation as nicely as standardization). This provides beneficial insights into your degree as very well as character with this link as effectively as pinpoints practical complications in relation to overseas advertising and marketing and advertising and marketing techniques. Specially, that paper investigates your techniques used within the finest a single thousand United kingdom-dependent multinationals in terms of assorted business accessibility processes. “Multinationals” in the context with this analyze necessarily mean corporations which in transform are by now functioning inside of or even transferring to help unconventional regions on the volume of no significantly less than a few many years. Your look with this examine stems from its outstanding statistical modeling system, which in convert corroborates further than study via substantially a lot more in-depth statistical assessment as well as through its results, that are fitted with proven the promoting and internet marketing great explanations yanking toward edition or even standardization are inclined not to have the equivalent diploma of relevance inside tactical carry out (advertising mix structure). Additionally, the examination isolates these types of in “significant” as properly as “peripheral” variations as effectively as includes success in prescriptive effects as nicely as managerial implication. (Vrontis, 2009)