Delivering Business Value with IT at Hefty Hardware Essay

The mini-case starts with â€Å"IT is a pain in the neck,† which is a wrong notion that most of the business managers have in an organization. The history of IT-business relationships in most of the organizations shows that there is a huge gap between both sides which is getting better over a period of time. Today, managers know the fact that it is the people, technology and information that realizes the value of a company and everytime IT cannot be blamed for everything. The days have gone when IT was looked at as the sole responsibility for a company’s growth or downfall. IT processes along with the ability of the organization to manage information and people’s faith and behavior decide the actual value. Shortcomings of business and IT The partnership between business and IT at Hefty hardware is not so good and each side thinks that the other side doesn’t really understand what their actual requirements and problems are. The business thinks that they are unnecessarily pouring millions of dollars into IT and not getting a real value for it. They think that the IT is so self-absorbed with their work and problems that they really don’t get what the business is trying to do. The VP, Cheryl O’Shea and the COO Glen Vogel believe that the IT doesn’t know the basic functions of business and as part of the higher-level management, they think that it’s their responsibility to take the IT folks onto the field to really make them understand the business operations at all the Hefty stores. The IT has a total different perspective on this. The CIO, Farzad Mohammed and chief architect, Sergei Grozny refer to this whole idea of going onto the field as ‘Boondoggle’ which shows they be lieve that this would bring no value to the work they do and consider it as a waste of time. They think that going to the field would not help them much in understanding the business. Instead, they are only focused on planning the strategic IT architecture for the Savvy stores initiative and other high priority projects. Also, they think that they can send the IT folks onto the field once they are done with the planning and budget cycle. But, little do they  understand here that it would be of no use sending the IT people after the planning as things to be changed as early as possible in a project life cycle. The more delay in the changes, the more complex and expensive the project would be. The IT folks couldn’t communicate properly with the business about their ideas and strategy that confused the business and made them reject the ideas that were actually worth trying. In the market today, business is showing growing interest to partner with IT to make sure they get the value for investing huge in technology. But, still there is a gap between the two departments and the IT folks think that they do not have enough support from the business to ensure the value is realized for the organization. A good example of deep integration of IT and business is the recent firing of the Apple maps chief. The ill-fated Apple maps was the failure of both the IT folks who couldn’t develop an efficient app for maps and also the business who couldn’t gather all the requirements and couldn’t manage the project to achieve the desired output. As a result, the Apple exec Richard Williamson was blamed and fired for the disastrous project and humiliation for the organization. In the past, a good amount was spent by companies in new technological deployments. During this time, there are no returns. Post-deployment, there would be some value realization due to the initial efficiencies but this would be only for around six months. But, after this due to the increase in use, complexities increase which increase the costs. This may lead to losing belief in the initiative but if the faith is carried on, value can be realized by applying people, information and technology more efficiently and simplifying business. Hence, the organization can achieve real long-term if they religiously follow this. Plan for IT and business collaboration for Savvy Store Success The business and IT, both are right in their place but wrong in the complete picture and both need to work on their shortcomings and start working together as a team to achieve the desired value. It should not be a â€Å"you-us† but â€Å"we† oriented efforts and there should be a blurred line between the two. As thought by Jenny, each hold the pieces of the future picture of business. From the business perspective, they need to really understand how to express and explain what it really wants from IT. Also, they need to link the IT value to the business model so that it becomes easy for the IT to really understand what is expected of them and where does their work fit in the  whole picture. The business should seek commitment to all the projects in IT which would increase the efficiency of the overall process. Also, the business needs to get the right people involved in the organization that not only have the technical skills but also can listen and understand the business perspective. So, T-shaped professionals who not only are experts in their own discipline but also can understand other disciplines are required. The IT strategies and budgets need to be reviewed more frequently and the business needs to revisit the business model at regular intervals and make the required changes instead of expecting overwhelming efforts from the IT that not only leads to poor quality of work but also can spoil the reputation of the company. From the IT perspective, they need to increase their knowledge on business and its functions. IT folks need to understand the overall organizational goals and objectives, business requirements, ideas and success factors. This would help them to work towards the organization success and avoid problems with business. From the scenario of not sending the top IT folks onto the field not only reflects the disinterest of IT to actually getting to know the real scenario but also reflects the bitter truth that there is a lack of resources and the associates are getting overloaded. Instead of adjusting with the number of resources and ignoring the important aspects of business, IT needs to express to the business that they need more resources to concentrate on all the areas of work. The IT staff needs to put tremendous effort on communication since that is one of the biggest hindrances between IT and business. They need to work more on their way of expression and simplify things to make the business understand how the initiatives serve the business purposes. They need to understand organizational dynamic and be more professional in what they do. The dedication of IT towards business should increase and it should serve as a trusted advisor to business. A prioritization rubric needs to be maintained by both the departments and needs to be revisited and updated frequently. The client and corporate values need to be incorporated in all the IT work. This gives a clear picture of what needs to be attended right away and what can be postponed. Also, there is a lack of governance structure to manage the overall strategies and identify the interdependencies between business and IT. The business and IT should trust each other and be clear at their expectations  and accountabilities in order to avoid conflicts in the future. References: McKeen, James D; Smith, Heather (2012). IT strategy: Issues and practices (2nd ed.). Boston: Prentice Hall. Kindle Edition.

Air Industry Analysis Essay

Executive Summary Airlines companies are undergoing major changes to cope with the new challenges of the modern economy. Geopolitical factors, such as war and terrorism, the financial crisis of 2009, high entry barriers, as well as extreme weather events, are some of the factors that are driving these changes. Costs in fuel prices, wages and ticket prices are some of the demand drivers of this multi-billionaire industry. Also, there has been an industry-wide shakedown, which will have far-reaching effects on the industry’s trend towards expanding domestic and international services. The perception that air travel is an ordeal continues to grow, making it very difficult for airlines to charge the higher prices that are necessary to return to profitability. Today Airlines provide a vital service, but factors including like the continuing existence of loss-making carriers, bloated cost structure, vulnerability to exogenous events and a reputation for poor service combine to present a huge impedime nt to profitability. While a handful of low-cost airlines have successfully managed to post consistent profits, by and large, profitable airlines are few and far between. Introduction The global airline industry provides transportation to virtually every corner of the world. The airline companies employ many people, hold multi-billion dollar equipment inventory, and generate billions of dollars in yearly gross revenue. It facilitates economic growth, world trade, international investment and tourism. However, the industry can be very vulnerable to government regulations, economic influences, extreme weather events and geopolitical factors such as war and terrorism. The SIC/NAICS code for the industry is 4512 /4811. The NAICS term for the industry is â€Å"Scheduled air transportation† . The industry is further classified into 2 NAICS codes – 481111 for Scheduled passenger transportation and 48112 for Scheduled Freight Transportation. Per NCAIS, â€Å"This U.S. industry comprises establishments primarily engaged in providing air transportation of passengers or passengers and freight over regular routes and on regular schedules. Establishments in this industry operate flights even if partially loaded. Scheduled air passenger carriers including commuter and helicopter carriers (except scenic and sightseeing) are included in this industry.† History The commercial airline industry in the US grew at a fast rate after the World War III. The commercial aviation industry in the United States has grown dramatically since the end of World War II. In 1945 the major airlines flew 3.3 billion revenue passenger miles (RPMs). By the mid 1970s, when deregulation was beginning to develop, the major carriers flew 130 billion RPMs. By 1988, after a decade of deregulation, the number of domestic RPMs had reached 330 billion (Source: Winds of Change). Up to the 1970s the industry was heavily regulated around the world. However, in 1976 under the recommendation of the Civil Aeronautics Board (CAB), the regulatory system was dismantled by the US Congress. Most of the industrialized world soon followed suite. The Airline Deregulation Act passed in the US in 1978 eased the entry of new companies into the business and gave them freedom to set their own fares and fly whatever domestic routes they chose. This lead to a swarm of new entrants, lower fare s and the opening of new routes and services to all over the country. Organization The major Capital expenditure for the airline industry is the cost of the airplanes. Boeing and Airbus are the two major providers of aircrafts to the industry. Other than that the Airports Authorities are the other major service providers to the airline industry. Airline fuel is another major product the the industry buys from external suppliers. The industry itself provides the rest major services- Flight operations, aircraft maintenance, passenger service ( (in-flight food, flight attendants) and Aircraft traffic services (baggage and passenger handling). Governmental Factors As mentioned earlier government factors play a big role in the industry. The growth of the industry post the 1976 deregulation illustrates this point. Government policies that impact the economy also have a big impact on the industry profits as was seen during the 1990 global recession and the 2001 US economic downturn. Wars and Geopolitical tensions that impact the airline fuel supplies also pose threat to the industry. Environmental Factors Environmental factors such as bad weather conditions can force planes to be delayed, canceled or even to divert to another airport. In such cases the airlines are forced to pay for lodging and meals of the affected passengers and in some cases refund tickets. An extreme sample of this is the airline disruption caused by the ash from the volcanic eruption in Iceland in 2010. It could have cost the industry more than $1.7 bln according an estimate by the International Air Transport Association (IATA). Market Structure The airlines industry has undergone major changes since 1978 due to the deregulation and the economic liberalization, where restrictions on the routes and fares charged were removed. Thus in order to obtain the cost efficient and to concentrate traffic to one airport the Hub-and-spokes was created to move passengers from smaller cities and gathered a group of passengers in a major city airport to be transported from a major hub of one city to another major hub. This new system allows the airline industry to retain the oligopolistic market due to the huge barriers that obstruct competition. From one hand the government regulations established barriers for airports such us a slot management system that demonstrate there is a failure in the investment of governments in adequate infrastructure, gate constraints due to exclusive leasing arrangements and gates usage in congested cities is limiting the entry despite the share usage between airlines. â€Å"Airlines need certainty because they have invested billions of dollars in aircraft. They must be certain they will have access to the infrastructure for the next 25-30 years and this is why historic (grandfather) rights are appropriate.† (Airlines International, 2010). On the other hand the hub and spoke system allows major airline firms to restrict the entrance of new competitor, because they have captured the market of small and big cities with a large economy of scale and a big profit margin, price flexibility, and other rights like reserved slots that was very difficult to be matched by new airlines, protecting them from new competitors developing a mature oligopoly where the prices are set by the leaders and the others airlines followed, practicing parallel pricing. All the studies reviewed suggested that despite the benefits of airline deregulation, there are many factors that continued preventing airlines to get advantage of this economic deregulation due not only to the airport restrictions but also due to computer-reservation systems, benefits of frequent-flyer programs, economies of scale of operation. This fact can be evidence after the deregulation when many new airlines attempted to get into the market but the majority failed due to the high cost associated with gates, slots and other airports facilities did not let them to compete with prices as a result this new competitors were acquired by the already established ones. (Seng, 2007) According to RITA, the U.S., Research and Innovative Technology bureau Transportation’s statistics the largest carrier for domestic market from May 2011 through April 2012 was Delta followed by Southwest and American (see table No.1.) It is important to mention that with the merger of United and Continental, they could become the largest carrier if the tendency remains. (Jenkins, 2011) As we can observe, the 55.9% of the market is hold by Delta, Southwest, American, and United,. In order to open the market for new carriers and generate airfare competition the government has to work on expanding the access to new gates, baggage claim areas and slots, otherwise the existent oligopolistic market will continue prevailing. Industry Demand The US airline industry demand is affected by the current market that has generated unstable conditions due to the high dependency and reaction to many factors like regulation, fuel price, inflation, security and competition. In addition this industry was also affected by the financial crisis during 2009 that had a great impact in market demand, thought due to the revival of the economy the travel demand has started improving since 2010. According to RITA â€Å"There were 2.1 percent fewer passengers in the April 2009 to April 2010 period compared to April 2008 to April 2009. From the year ending April 2010 to the year ending in April 2011, system wide passenger numbers on US airlines increased 2.9 percent† (Smallen,2011) As a result of the deregulation of the airline industry in 1979 the traffic of passengers increased and the ticket prices decreased. In this environment there was more competition and less demand, the operating cost and margin profit were affected and the maj or firms filed for bankruptcy falling from six major airlines (united, America, Delta, Eastern, TWA, and Pan Am) to three by 1991 (United, American and Delta). The new challenge for airlines was reconfigured routes and making improvements in capacity and utilization to reach the expected efficiency and offer better service to the general public. Indeed security had a great impact on the demand of airlines. After attack of 9/11 domestic passengers demand went down by more than 30 percent, which caused a reduction on routes and numbers of flights not to mention that planes were grounded and thousands of workers were laid off. To rebuild the public confidence in the air transportation, both airlines and government started working together. These security measures have managed to allay the public fear. According to Bisignani, â€Å" Despite severe shocks in recent years-including the attacks of Sept. 11, 2001, and outbreaks of avian flu-the demand for air travel is at record levels and is expected to grow an average of 6 percent each year for the foreseeable future. People need to fly. More important, people want to fly†. ( Bisignani,200 6) The peak in oil prices during 2008 and the financial crisis during 2009 affected and slowed down the numbers of passengers ,specially leisure travelers, as the prices of oil pushed up fares, and people’s disposable income decreased. The demand for business travel also shifted left. The industry responded with fiercely competing on the airfare which resulted in huge revenue losses and forced major airlines like American Airlines to be restructured. The airline industry overcame this crisis due to people’s need to fly for business and personal purposes and due to the absence of any other alternate mode of long-distance transportation. The use of substitutes such car, train diminishes with distance travelled. This demonstrates that the demand for air transportation is inelastic for longer flights and for business purposes. The lack of substitutes let the airline industry to move without a real external competitor, the passenger trains, bus and personal automobiles are not a viable option for traveling long distances and for business travel. In addition for leisure purposes the demand is more elastic because travelers are more likely to change destination or postpone trips expecting lower ticket prices. Despite the events of security breaches, wars and the economy, the demand for air flight has increased and is expected to continue increasing. The airlines continue to compete among themselves with pricing and offering complementary goods such hospitality, policies, car rental, hotels and tourist packages as the opportunities to improve their sales. Cost structure In the airlines industry, fixed costs are high, while variable costs tend to be low. Costs are fixed and variable at different points in time. That is, the timeframe in this market is important to categorize cost on their relation to output. With the commoditization of air travel, cost structure is now a key success factor in the industry. Central cost items are fuel, capital and wage costs. Costs in fuel prices, which are exogenous as is the time series for the average fuel efficiency of planes; constant dollar amount per seat mile that grows at the rate indicated by the Producer Price Index; and wages, which are based on several factors, such as inflation, industry margins, and average worker tenure. Concerning wages, they are fixed costs in short term decisions and variable in the longer term, where total wage costs change in relation to volume of activity as a result of recruitment, retirement, and dismissals. Consequently, effective management of fuel, maintenance, and labor cos ts is mandatory in the current environment in this industry (Harmsen, 2007). Fixed costs are costs that are unaffected by changes in volume. These costs are always constant even when production varies. One example of fixed cost is rent of premises. In the extremely short term, all costs are fixed, while all costs may be regarded as variable in the very long term, which will be described later, in this section. A good example to illustrate could be long-term leasing aircraft leasing contracts. In the short run the airline would be unable to avoid these payments no matter how it adjusts output. Therefore, lease payment is a fixed cost in the short run, but in the long run they are variable, because contractual obligations will expire (Vasigh, Fleming, & Tacker, 2008). Variable costs are costs that increase or decrease with fluctuations in production. In the aviation market, infrastructure, wear, and the bulk of the fuel are often placed in the variable cost bracket. These normal variable costs are then adjusted by the eï ¬â‚¬ect of congestion, since large load factors add costs from increased services, cancellations, and many other sources. As mentioned on the fore above, costs in the airlines industry are fixed and variable at different points in time. For the purpose of pricing, for instance, a cost structure is required that expresses the time horizon at which different cost categories may be considered fixed and variable. We will describe them with at least three different time spans: medium-long term, short term, and very short term, as follows. * Medium-long term: once the schedule is in place, the costs of operating air services are relatively fixed. This means that capital costs for aircraft, pilots’ wages, technical staff and other skilled labor cannot be influenced. * Short-term: once the carrier decides to embark on the flight, all costs under the medium-long term heading become fixed as do the costs for infrastructure charges (except passenger service charges), wear and the bulk of the fuel. * Very short term: the costs for ticketing, food, travel agency commissions, and extra fuel consumption due to the advent of an extra passenger become fixed once the carrier has decided to accept a ticket reservation. Moreover, wage, capital, and fuel costs are decided to a great extent in markets where it may reasonably be assumed that a single carrier has little influence over prices. Experience shows, however, that major carriers are able to influence all the above costs through negotiation. It is very difficult to observers outside the airline industry to assess the extent of these potential negotiating gains. Analysis of Competitive Forces (Porter’s five forces) The threat of entry by new competitors The threat of entry by new competitors in the Airline Industry is moderate. Being a capital intensive industry, new entrants would require large amounts of money. However, with easy access to bank loans and credit the likelihood of new airlines entering the market has risen. There are still a lot of barriers to entry in the industry. Higher Oil prices would require the airline to operate at full capacity to be profitable and smaller airports do not provide sufficient passenger traffic. New entrants would also have difficulty getting gates at the airports which major airlines use as their hubs. This acts as a barrier for them to operate on more lucrative routes. Major airlines also have stronger brand recognition and have garnered customer loyalty through their frequent flyer programs. Skybus Airlines, Independence Air, ATA Airlines and Maxjet Airways are among the most recent examples of new entrants that have failed to survive in the industry. Even Virgin America, the most successful of new carriers, has so far failed to turn a profit since entering the market 5 years ago. So while entering the new market might be easy, success stories such as that of Southwest & AirTran & JetBlue have been far and few. Pressure from substitute products The pressure from substitute products is weak for the American airline industry. Air travel being the fastest way to travel from one origin to another has no true substitute. Lack of extensive and long distance public transportation system within US reduces the likelihood of someone taking a train or bus to their destinations. Furthermore, time consumption and convenience would also discourage customers to take these options or to drive themselves.However emerging technologies could, in a long run, generate viable substitutes. For instance, more and more companies adopting video-conferencing could impact business travel for meetings and discussions. People could opt for using online chat to virtually meet with their friends and family instead of spending large amounts of money on airline travel. The intensity of rivalry among existing competitor Airline industry is highly competitive as there are several airlines operating on the same routes. These airlines compete by trying to differentiate themselves from others by providing different services – low-fares, frequent flyer membership privileges, no baggage fee, no cancellation fee etc. Competition between the majors and the low-cost carriers has resulted in a downward pressure on the fares, benefiting the travelers but at the same time lowering the revenue for the airlines (see figure). This combined with lower demand and excess capacity has lead to a consolidation trend in the industry. Recent consolidations include – United & Continental, Delta & Northwest and Southwest & Airtran. Such consolidations could lead to monopolization of a market where the majors already rule the roost. The Bargaining power of buyers The buyers are the passengers, for either business or leisure purposes. In the aviation market, the bargaining power of buyers is quite low. The power that airline customers have varies based on the options available to them and the origin-destination city pair. Even though there are high costs involved with switching airplanes, there is not much ability to compete on service. For instance, the seat in one airline is probably not more comfortable than another, unless a potential buyer is analyzing a luxury liner. Other macro environmental trends are the weather, which is variable and unpredictable, and may shut down airports and cancel flights; and airport capacities. Hence, there are pockets where some airlines have pricing power. In this case, the overall airline industry is characterized by significant buyer power stemming from the intense price competition among airlines (Sundaresa, 2009). Since the concentration and size of the buyers in the airlines industry is relatively lower than the number of suppliers it is not difficult to observe that buyers are more aware of the price, product, and services and discounts available at their disposal. The bargaining Power of Supplier The three major inputs for the airline industry are airplanes, labor and fuel. In terms of suppliers of commercial airplanes there are three major Air Bus, Boeing and McDonnell Douglas, it seems like this few suppliers will have great power in the industry but instead they compete between themselves developing technology, capacity of passengers, mechanics training and giving solutions to improve cost effective exploitation of airplanes between others. The second input is labor such as pilots, mechanics, ground personnel and flight attendants , in general they are unionized playing a critical role in the industry. According to IATA â€Å"About half of all workers in the air transportation industry are unionized, 49.3% of workers being union members and 51.6% being covered by collective bargaining agreements in 2006† (http://www.iata.org/whatwedo/Documents/economics/Hirsch_Unions_Wages.pdf) The fuel is an important variable due to the price and its volatility but the market has many suppliers that compete to sell large volumes of fuel but they do not control the price because it is an external factor. (Hirsch, 2007) Conclusion The growth in the airlines industry shows no signs of slowing. The recent industry-wide shakedown will have far-reaching effects on the industry’s trend towards expanding domestic and international services. Despite the events of security breaches, wars and the economy, the demand for air flight is expected to continue increasing. The airlines continue to compete among themselves with pricing and offering complementary goods such hospitality, policies, car rental, hotels and tourist packages as the opportunity to improve their sales. The industry’s challenges for the 21st century are the rising costs of fuel, labor, maintenance and security, the impact of technology, such as telecommunication and video conferencing, as well as bankruptcies and shutdowns. However, the overall perspective of demand has been consistently increasing. Growth rates are not consistent in all regions, but countries with a deregulated airline industry have more competition and greater pricing fr eedom. This results in lower fares and sometimes dramatic spurts in traffic growth. Moreover, in the aviation market, consolidation is a trend. Airline groupings may consist of limited bilateral partnerships, long-term, multi-faceted alliances between carriers, equity arrangements, mergers, or takeovers. In summary, the perspectives for the airline industry are bright and it also holds many challenges. Macro-external environment may directly affect is profitability and operation. Low cost airlines have radically altered the nature of competition within the industry. For low cost, the airlines companies should continue maintaining the existing business model by reducing the cost to improve their product. Turning a profit in a competitive industry with high fixed costs isn’t about gouging consumers on baggage fees. Rather, it’s about paying careful attention to numerous behind-the-scenes expenses, and looking for opportunities to charge passengers for optional extras while keepi ng ticket prices low. References: Lee, Tail (2002). Competitive Airlines. Retrieved July 13, 2012 from http://www.scribd.com/doc/58820847/31/The-cost-structure-of-the-airline-industry#page=53 Pierson, Kawika (2011). Cyclical dynamics of airlines industry profits. Retrieved July 13, 2012 from http://willamette.academia.edu/KawikaPierson/Papers/461653/Cyclical_Dynamics_of_Airline_Industry_Profits Sundaresa, Sankar R. (2009). Introduction analysis of the airline industry. Retrieved July 17, 2012 from http://bcs.solano.edu/workarea/mgarnier/MGMT%2050/Southwest%20Porters%20-%20Brief%202.pdf The industry handbook: The airline industry. Retrieved July 13, 2012 from http://www.investopedia.com/features/industryhandbook/airline.asp#axzz20tWDcbCM Using macro and micro environment analytical techniques provide a comparative analysis of leadership and the external environment for the following four airlines: AirTran, Delta, West Jest, and Air Canada. (n.d.) Retrieved July 8, 2012 from http://www.businessteacher.org.uk/free-manag ement-essays/environmental-analytical-techniques/ Smallen Dave (2011) April 2011 Airline System Traffic Up 1.4 Percent from April 2010. Retrieve July 12 from http://www.rita.dot.gov/rita_archives/bts_press_releases/2011/bts036_11/html/bts036_11.html) Bisignani, Giovanni (2006) The airline industry is going to collapse. Retrieve July 13 2012, from http://www.foreignpolicy.com/articles/2006/01/04/think_again_airlines?page=full Jenkins, Darryl Consumer Regulation and Taxation of the U.S. Airline Industry Estimating the Burden for Airlines and the Local Impact November 16, 2011. Retrieve July 7, 2012 http://www.aviationinstitute.org/AAIReportNov11.pdf Seng, Pauline.. Increasing Competition in the U.S. Domestic Airline Industry through International Competition.December 20, 2007 Snider, Connan. Barriers to Entry in the Airline Industry: A Regression Discontinuity Approach January 2011. Retrieve July 7 2012. http://www.econ.ucla.edu/people/papers/Snider/Snider507.pdf Hirsch, Barry (2007) Unions and Wages in the US Airlines Industry . Retrieved July 18, 2012 from http://www.iata.org/whatwedo/Documents/economics/Hirsch_Unions_Wages.pdf) Airlines International (2010). Retrieved july 18, 2012 http://www.iata.org/pressroom/airlines-international/august-2010/pages/06.aspx Read more: http://www.investopedia.com/financial-edge/0112/The-Economics-Of-Discount-Airlines.aspx#ixzz21JqFZHYR http://www.firstresearch.com/industry-research/Airlines.html http://voices.yahoo.com/airline-industry-profile-1885428.html?cat=3 http://web.mit.edu/airlines/analysis/analysis_airline_industry.html

Business Statistics Term Paper Example | Topics and Well Written Essays - 1500 words

Business Statistics - Term Paper Example Business statistics is used in all the functional departments of an organization – finance, human resource, marketing, operations and management and accounting. In the finance function, it is normally used to make decisions relating to measuring risk using variances, investments in stock markets using means, acquisition of assets and valuations (Keller, pp. 7). In marketing, it allows the managers to make decisions on the four Ps based on the identified consumer patterns and buying behavior using histograms, means and inferences (Keller, pp. 8). It also plays a vital in the company’s operations and management. It allows the managers to decide on the reorder points using histograms, waiting for lines using Poisson distribution, location analysis using regression and quality using variance.Linear Regression is an important statistical technique that compares the change in one variable with respect to another variable(s). It is most commonly used a tool in the business env ironment for various purposes including decision making. This is considered the best method for the estimation of the line of best fit which minimizes the chances of error.Linear regression is being used in a wide variety of business functions across the organizations. In the accounting function, it is used to project the costs based on the level of activity as well as separate the fixed and the variable costs. In another scenario, it allows the analysis to separate the fixed and variable costs from the total costs.  

Risks management analysis during Development stage of the Channel Term Paper

Risks management analysis during Development stage of the Channel Tunnel Project, Including management of environmental risks du - Term Paper Example (Yan-juan, Ding-li, & Jian-jun, 2009 p2). This is then followed by the assessment of the influence of the excavation on underground strata structures, and how such excavation might lead to their deformation. To reduce the probability of these risks, the Construction, Design and Management Regulations have been developed to aid the monitoring and avoidance of the risks. The necessary controls are then implemented immediately, to prevent the occurrence of the risks (Aritua, 2011 p304). When all that information is collected, a program detailing the nature of the strata and how it might be influenced by the excavation of the tunnel is developed (ProQuest, 2012 p2). The details of the settlement and deformation of the strata are recorded, and a scheme to control the occurrence of the deformation of the strata then generated (Yan-juan, Ding-li, & Jian-jun, 2009 p3). The monitoring and current control strategies are then established, to ensure that the influences of the excavation are cons tantly monitored and Consistent management of the site and the assessment of the structures is done on a real-time basis, and any necessary control and rectification implemented. The risks that were poorly identified were the risks to do with site investigation, which forms the basis for providing adequate information regarding what type of products can be undertaken on the area. This resulted to the establishment of risk registers for tunneling that details every aspect of the site, to ensure that all ground risks have been assessed, and the appropriate features registered, to inform the nature of the most viable project (ProQuest, 2012 p1). Environmental Risk Management during the project life cycle The project life cycle consists of four main stages namely the identification, definition, implementation and the closure stage (Lycett, 2004 p292). However, there are various environmental risks factors that are associated with these stages of the project lifecycle, which contributes to the complexity of the project. The competition for contractors was identified as the major environmental risk, since the construction companies with critical resources and the ability to mobiles are always in constant competition (Aritua, 2011 p310). The organizational structure and the project team coordination is yet another environmental risk factor that was identified, that contributes to the complexity of the project, if not adequately addressed. Social complexity is yet another environmental risk factor, which is contributed by the various actors in the project, and their diverse interests, who may include the politicians and the surrounding communities. Their conflict of interest serves to delay the implementation of the project (Clifton, 2011 p47). However, the reputational risk was poorly assessed. This risk emanates from the direct relationship between the project and the end-users, as well as the stakeholders, since the reputation of a project, is considered a vulnerab le asset, which depends on the project environment to have it sustained (Eisner, 2000 p12). The environmental risks were assessed through assessing the interaction between the project, the people and the organizations, in terms of aspects such as politics and ambiguity, which serves to complicate the

Competition and business risk Essay Example | Topics and Well Written Essays - 2250 words

Competition and business risk - Essay Example Being a multinational company, Company H has eight other competitors in the market considering the fact that its market spreads across four economic zones of North America, Africa, Europe, Latin America, as well as Asia Pacific. Over the fourteen years, I had the biggest challenge and responsibility of making strategic decisions each year to enhance sustained profitability in addition to expanding the company niche in the market. Among other areas where strategic decisions were necessary included branded production and distribution decisions, corporate social responsibility, plant capacity, sales forecasts, marketing and other promotional activity decisions, private label operations, endorsement of celebrities, and most importantly, financial decisions (Goldratt, 1997, p. 63). At the end of each year over the fourteen years, four features served as the yardstick applied by the board to evaluate my performance. They included Earnings per share, credit rating, return on equity, and image rating. To me, it was clear that the operational performance of the company directly influenced these four significant performance measures. Therefore, it was my responsibility to oversee effective running of all operational activities within company H. Assessment of the PESTEL gives insights of company H currently, a position achieved under my guidance. This analysis will allow proper understanding of various factors within the macro environment that influence daily operations of the company. The relevance of evaluating PESTEL is that it brings forth a bigger picture of the environment within which Company H operates as well as opportunities and threats occurring within the same macro environment. Knowledge of the external environment within which the company runs business helps the management on behalf of the company take advantage of opportunities availing themselves and cut down threats posed by external factors. I understood clearly the five force

Nike Essay Example | Topics and Well Written Essays - 250 words - 3

Nike - Essay Example According to Timothy Ryan, a director for the American Center for International Labor Solidarity, the collapsing of the factory was due to lack of regulations by the governments while Nike is constructing its factories. Prior to the collapsing, Nike workers noticed cracks in the building but they were informed to report to work the following day. This was an indication of negligence on the part of the management. The management team in Bangladesh and at the parent company in US experienced bitter regret due to the death and injuries that occurred within Nike premises. Nike, a company that was established in 1964 as Blue Ribbon Sports and later rebranded as Nike Inc in 1971, undertook various strategies to deal with negative public image that arose out of the collapsing of the building. The accident resulted into a bad relationship between the company and the families who were affected. The employees on their part lost motivation and feared working for the company. Nike undertook ultimate action of checking all its factories globally and maintenance was initiated in most factories. The company also started extensive corporate social responsibilities such as joining Michelle Obama’s ‘Lets Move campaign’ that aims at reducing child obesity. In this way, it regained a certain amount of value. Currently, Nike has strong value for ethics and continues to provide proper working conditions. The situation could have made better if the company employed more workers from the affected families and freely provide them with needed skills as well as giving them higher

LAW FOR LICENSED PREMISES IN HOSPITALTY MANAGEMENT Essay

LAW FOR LICENSED PREMISES IN HOSPITALTY MANAGEMENT - Essay Example Moreover, this will also negatively affect the goodwill of the hotel and affect the brand value. In this context, the hotel industry of Manchester has a perfectly competitive market and thus people have their personal choices to choose the hotel according to their preferences and value for money (M.E.N Media, 2014). A hotel may provide wrong or misleading information to the customers in certain aspects including food labelling, prices of the food, and alcoholic strength among others. A hotel may also convey wrong and faulty information to customers through improper labelling for greater profitability (TTB, 2014). Very often it can be found that the hotels sell their products providing wrong information in their labels. Such as, they claim that their foods are fat free or cholesterol free to grab the attention of customers. However, in reality the scenario is completely opposite and therefore the hotel is misleading the customers with wrong information by following unethical practices. Moreover, it is also necessary for the hotels to proper label alcoholic beverages regarding the accurate percentage of alcoholic content. Majority of the times it is observed that the alcoholic beverages are labelled with much lower alcoholic content than the realty, which is completely unethical. The hotels are a lso seen providing misleading information to the consumers about their hotels through advertisements to increase its profit (Jpost Inc, 2014). In order to provoke the customers and attract them, the hotels often exaggerate the amenities that would be actually provided to the customers or the food items that would be available in those hotels. In the present day context, advertisement through social sites is another form of misleading customers by providing lucrative offers and images of the hotels, which may not be true. Moreover, the hotels often mislead customers by

New Kind of e-Business Essay Example | Topics and Well Written Essays - 2000 words

New Kind of e-Business - Essay Example 2 Nature and Purpose of Business The nature of this business will be to go beyond dog training. Many people have dog trainers or have experience them and they teach everything from traditional training to Cesar Mellan techniques. However, there are no DVDs that go beyond this typical training to doing creative calisthenics with the dogs. The purpose of the business would be to keep dogs fit without having to walk them everyday or run them everyday. Just as humans become bored with routine, the DVDs would insure that dogs not only were exercised, but they would be exercised in a creative way. The individual pet owner could do these simple calisthenics with their jobs or they could hire a certified trainer in this method to come to their home and give the dog a workout. Many people hire dog trainers and they expect their dogs’ behavior to improve through training. Often this helps, but there are dogs with so much energy that they need to have more than one way to expend this ene rgy. According to Liz Palika, author, there are many benefits of training your dog. Some of these benefits include: a better behaved dog, bonding between human and dog, it can be fun for both the human and the dog (especially if the dog learns how to do tricks). Although Palika talks about traditional dog training, these same benefits can be used to help people understand how to do doggie calisthenics. 2.1 Why Doggie Calisthenics The word calisthenics means to do small exercises that are geared to develop muscle tone and overall physical well-being. When this definition is applied to dogs, it means creating interesting small exercises that will help to increase the dog’s overall health. Obviously many people use running and walking their pets as the way to keep them healthy, but dogs need other types of exercise to insure they are keeping muscle tone and not turning into those pudgy animals that begin to have health problems. Doggie callisthenic DVDs would be perfect for high energy dogs and small toy breeds that have lots of energy. Some examples of these exercises are playing fetch, cycling with your dog (although the dog must be well trained as well), gym workouts (with treadmill or obstacle courses in a gym), or stair climbing. All of these are examples of calisthenics that are easy to do and that can be done with anyone. Of course, all pet owners should have their dog checked at the vet before starting any exercise program. Doggie calisthenics would not be done to take the place of walking or running, but they would be used in addition to these other methods of training. They would be used as a warm up exercise or they could be used when the individual pet owner was not able to get their dog outside for a walk or a run. The DVDs would promote a 10-15 minute workout which could be done along with the pet owner’s workout. The DVDs would show step-by-step how to get the dog interested in the exercise, how to monitor their heart and pulse and it would provide safety tips to show how easy it is to keep a dog healthy and make sure they are fit. There would also be a list of dog breeds that came with the package that would tell which dogs were more prone to need more exercise. 3 Competitive Advantage There are several competitive advantages that this business would have as an e-business. The pet owner would be able to either purchase DVDs or the various programs or they would be able to

Write a report on the company called Marks & Spencer Essay

Write a report on the company called Marks & Spencer - Essay Example It is this overall sales figure where the returns on the shareholders’ stake in M&S business will be later derived, as well as the company’s sustainability of operations over the long run. Figure 2 highlights the changes in the different sales figures (M&S 2004-2008). By looking at the growth of sales using the previous year as benchmark, the increase or decrease in the company’s efforts to generate more sales can be later probed more deeply; that is, whether this increase or decrease in the growth can be attributable to management’s practices or external factors. Figure 3 shows the different areas of M&S, which include: UK general merchandise business; UK food business; International general merchandise business; and the International food business. The company’s overall increase in sales will be determined by the increase in the different business areas of the company, thus it is helpful to learn the contribution of the different areas by looking at the company’s sales breakdown. People. As the change in management results in a more experienced senior management and executive committee, the development of management capability gives the M&S an opportunity to develop its skills. Since these people are new, although experienced, the whole management capability of the company is not yet fully developed. Thus, this is a weakness to the company. Resources. By dividing the total liabilities figure by the M&S total assets figure (M&S 2008, 96), the debt ratio of 86.9% is derived. With this very high debt ratio, there is a possibility that the company will have less access to debt as its credit rating changes as more debt makes it riskier to the eyes of investors. The firm’s only choice can be equity financing for its future expansion. This is a weakness to the company. Innovation and Ideas. The company emphasises innovation as one of the company values. Apart from innovation in product development, this