Acquisition is a High Risky Strategy

In the literature, several motives for takeovers have been identified. One is the desire for synergy. That is, similarities or complementarities between the acquiring and target firms are expected to result in the combined value of the enterprises exceeding their worth as separate firms (Collis and Montgomery, 1998). A second motive involves the expectation that acquirers can extract value because target companies have been managed inefficiently (Varaiya, 1987). A third motive is attributed to managerial hubris the notion that senior executives, in overestimating their own abilities, acquire companies they believe could be managed more profitably under their control. Agency theory motive is the anticipation that firm expansion will positively impact the compensation of top managers since there tends to be a direct relation between firm size and executive pay. Contemporary specialists contend that managerial ownership incentives may be expected to have divergent impacts on corporate strategy and firm value. This premise has been recognized in previous studies. For instance, Stulz (1988) has examined the ownership of managers of target companies and has proposed that the relationship between that ownership and the value of target firms may initially be positive and then subsequently become negative with rising insider ownership. Moreover, Shivdasani (1993) empirically shows that the relationship of the ownership structure of target companies with the value of hostile bids is not uniformly positive. McConnell and Servaes (1990) have likewise analyzed the relationship of equity ownership among corporate insiders and Tobins q. Their results demonstrate a non-monotonic relation between Tobins q and insider equity stakes. Wright et al. (1996: 451) have shown a non-linear relationship between insider ownership and corporate strategy related to firm risk taking. Ownership Incentives and Changes in Company Risk Motivating Acquisitions An agency-theoretic motive for acquisitions has been used to explain managerial preferences for risk-reducing corporate strategies (Wright et al., 1996). The implication is that both principals and agents prefer acquiring target companies with higher rather than lower returns. In that, shareholders and managers have congruent interests. The interests, however, diverge in terms of risk considerations associated with acquisitions. Because shareholders possess diversified portfolios, they may only be concerned with systematic risk and be indifferent to the total variance of returns associated with a takeover. Senior managers may alternatively prefer risk-reducing corporate strategies, unless they are granted ownership incentives. That is because they can not diversify their human capital invested in the firm. In the literature, it has been argued that agency costs may be reduced as managerial ownership incentives rise. The reason is that, as ownership incentives rise, the financial interests of insiders and shareholders will begin to converge. Analysts conjecture, however, that such incentives may not consistently provide senior executives the motivation to lessen the agency costs associated with an acquisition strategy. Inherent is the presumption that the nature of executive wealth portfolios will differently influence their attitudes toward corporate strategy. The personal wealth portfolios of top managers are comprised of their ownership of shares/options in the firm, the income produced from their employment, and assets unrelated to the firm. Presumably, as senior executives increase their equity stakes in the enterprise, their personal wealth portfolios become correspondingly less diversified. Although stockholders can diversify their wealth portfolios, top executives have less flexibility if they own substantial shares in the firms they manage. Hence, if a significant portion of managers wealth is concentrated in one investment, then they may find it prudent to diversify their firms via risk-reducing acquisitions. In the related literature, however, takeovers and risk taking have been approached differently from the described approach. Amihud and Lev (1999) have contended that insiders employment income is significantly related to the firms performance. Thus, managers are confronted with risks associated with their income if the maintenance of that income is dependent on achieving predetermined performance targets. Reasonably, in the event of either corporate underperformance or firm failure, CEOs not only may lose their current employment income but also may seriously suffer in the managerial labor market, since their future earnings potential with other enterprises may be lowered. Hence, the risk of executives employment income is impacted by the firms risk. The ramification of Amihud and Levs (1999) contentions is that top managers will tend to lower firm risk, and therefore their own employment risk, by acquiring companies that contribute to stabilizing of the firms income, even if shareho lder wealth is adversely affected. Consistent with the implications of Amihud and Levs arguments, Agrawal and Mandelker (1987) have similarly suggested that managers with negligible ownership stakes may adopt risk-reducing corporate strategies because such strategies may well serve their own personal interests. With ownership incentives, however, managers may be more likely to acquire risk-enhancing target companies, in line with the requirement of wealth maximization for shareholders. The notion that at negligible managerial ownership levels, detrimental risk-reducing acquisition strategies may be emphasized, but with increasing ownership incentive levels, beneficial risk-enhancing acquisitions may be more prevalent is also suggested in other works (Grossman and Hoskisson, 1998). The conclusion of these investigations is that the relationship between insider ownership and risk enhancing, worthy corporate acquisitions is linear and positive. Some experts assert that CEOs personal wealth concentration will induce senior managers to undertake risk-reducing firm strategies. Portfolio theorys expectation suggests that investors or owner-managers may desire to diversify their personal wealth portfolios. For instance, Markowitz (1952: 89) has asserted that investors may wish to diversify across industries because firms in different industries. . . have lower covariances than firms within an industry. Moreover, as argued by Sharpe (1964: 441), diversification enables the investor to escape all but the risk resulting from swings in economic activity. Consequently, managers with substantial equity investments in the firm may diversify the firm via risk-reducing acquisitions in order to diversify their own personal wealth portfolios. Because they may be especially concerned with risk-reducing acquisitions, however, their corporate strategies may not enhance firm value through takeovers, although managerial intention may be to boos t corporate value. The above discussion is compatible with complementary arguments that suggest that insiders may acquire non-value-maximizing target companies although their intentions may be to enhance returns to shareholders. For instance, according to the synergy view, while takeovers may be motivated by an ex-ante concern for increasing corporate value, many such acquisitions are not associated with an increase in firm value. Alternatively, according to the hubris hypothesis, even though insiders may intend to acquire targets that they believe could be managed more profitably under their control, such acquisitions are not ordinarily related to higher profitability. If acquisitions which are undertaken primarily with insider expectations that they will financially benefit owners do not realize higher performance, then those acquisitions which are primarily motivated by a risk-reducing desire may likewise not be associated with beneficial outcomes for owners. Additionally, it can be argued that shareholders can more efficiently diversify their own portfolios, making it unnecessary for managers to diversify the firm in order to achieve portfolio diversification for shareholders. Risk Associated with HRM practices in International Acquisitions There are a number of reasons why the HRM policies and practices of multinational corporations (MNCs) and cross-border acquisitions are likely to be different from those found in domestic firms (Dowling, Schuler and Welch, 1993). For one, the difference in geographical spread means that acquisitions must normally engage in a number of HR activities that are not needed in domestic firms such as providing relocation and orientation assistance to expatriates, administering international job rotation programmes, and dealing with international union activity. Second, as Dowling (1988) points out, the personnel policies and practices of MNCs are likely to be more complex and diverse. For instance, complex salary and income taxation issues are likely to arise in acquisitions because their pay policies and practices have to be administered to many different groups of subsidiaries and employees, located in different countries. Managing this diversity may generate a number of co-ordination and communication problems that do not arise in domestic firms. In recognition of these difficulties, most large international companies retain the services of a major accounting firm to ensure there is no tax incentive or disincentive associated with a particular international assignment. Finally, there are more stakeholders that influence the HRM policies and practices of international firms than those of domestic firms. The major stakeholders in private organizations are the shareholders and the employees. But one could also think of unions, consumer organizations and other pressure groups. These pressure groups also exist in domestic firms, but they often put more pressure on foreign than on local companies. This probably means that international companies need to be more risk averse and concerned with the social and political environment than domestic firms. Acquisitions and HRM Practices: Evidence from Japan, the US, and Europe In contemporary context, international human resource management faces important challenges, and this trend characterizes many Japanese, US and European acquisitions.   From the critical point of view, Japanese companies experience more problems associated with international human resource management than companies from the US and Europe (Shibuya, 2000). Lack of home-country personnel sufficient international manage ­ment skills has been widely recognized in literature as the most difficult problem facing Japanese compa ­nies and simultaneously one of the most significant of US and European acquisitions as well. The statement implies that cultivating such skills is difficult and that they are relatively rare among businessmen in any country. Japanese companies may be particularly prone to this problem due to their heavy use of home-country nationals in overseas management positions. European and Japanese acquisitions also experience the lack of home country personnel who want to work abroad, while it is less of an impediment for the US companies. In the US acquisitions expatriates often experience reentry difficulties (e.g., career disruption) when re ­turning to the home country: This problem was the one most often cited by US firms.   Today Japanese corporations report the relatively lower incidence of expatriate reentry diffi ­culties, and it is surprising given the vivid accounts of such problems at Japanese firms by White (1988) and Umezawa (1990). However, the more active role of the Japanese person ­nel department in coordinating career paths, the tradition of semi ­annual musical-chair-like personnel shuffles (jinji idoh), and the continu ­ing efforts of Japanese stationed overseas to maintain close contact with headquarters might underlie the lower level of difficulties in this area for Japanese firms (Inohara, 2001). In contrast, the decentralized structures of many US and European firms may serve to isolate expatriates from their home-country headquarters, making reentry more problematic. Also, recent downsiz ­ing at US and European firms may reduce the number of appropriate management positions for expatriates to return to, or may sever expatri ­ates relationships with colleagues and mentors at headquarters. Furthermore, within the context of the lifetime employment system, individ ­ual Japanese employees have little to gain by voicing reentry concerns to personnel managers. In turn, personnel managers need not pay a great deal of attention to reentry problems because they will usually not result in a resignation. In western firms, reentry problems need to be taken more seriously by personnel managers because they frequently result in the loss of a valued employee. A further possible explanation for the higher incidence of expatriate reentry problems in western multinationals is the greater tendency of those companies to implement a policy of transferring local nationals to headquarters or other international operations. Under such a policy, the definition of expatriate expands beyond home-country nationals to en ­compass local nationals who transfer outside their home countries. It may even be that local nationals who return to a local operation after working at headquarters or other international operations may have their own special varieties of reentry problems. Literature on international human resource practices in Japan, the US and Europe suggest that the major strategic difficulty for the MNCs is to attract high-caliber local nationals to work for the company. In general, acquisitions may face greater challenges in hiring high-caliber local employees than do domestic firms due to lack of name recognition and fewer relationships with educators or others who might recommend candidates. However, researchers suggest that this issue is significantly more difficult for Japanese than for US and European multinationals. When asked to describe problems encoun ­tered in establishing their US affiliates, 39.5% of the respondents to a Japan Society survey cited finding qualified American managers to work in the affiliate and 30.8% cited hiring a qualified workforce (Bob SRI, 2001). Similarly, a survey of Japanese companies operating in the US conducted by a human resource consulting firm found that 35% felt recruiting personnel to be very difficult or extremely difficult, and 56% felt it to be difficult (The Wyatt Company, 1999). In addition to mentioned problem, Japanese acquisition encounter high local employee turnover, which is significantly more prob ­lematic for them due to the near-total absence of turnover to which they are accustomed in Japan. The US, European and Japanese companies admit very rarely that they encounter local legal challenges to their personnel policies. However, in regard to Japanese acquisitions large   amount of press coverage has been given to lawsuits against Japanese companies in the United States and a Japanese Ministry of Labor Survey in which 57% of the 331 respondents indicated that they were facing potential equal employ ­ment opportunity-related lawsuits in the United States (Shibuya, 2000). Conclusion This research investigates whether corporate acquisitions with shared technological resources or participation in similar product markets realize superior economic returns in comparison with unrelated acquisitions. The rationale for superior economic performance in related acquisitions derives from the synergies that are expected through a combination of supplementary or complementary resources. It is clear from the results of this research that acquired firms in related acquisitions have higher returns than acquired firms in unrelated acqui ­sitions. This implies that the related acquired firm benefits more from the acquirer than the unrelated acquired firm. The higher returns for the related acquired firms suggest that the combination with the acquirer’s resources has higher value implications than the combination of two unrelated firms. This is supported by the higher total wealth gains which were observed in related acquisitions. I did however, in the case of acquiring firms, find that the abnormal returns directly attributable to the acquisition transaction are not significant. There are reasons to believe that the announcement effects of the transaction on the returns to acquirers are less easily detected than for target firms. First, an acquisition by a firm affects only part of its businesses, while affecting all the assets (in control-oriented acqui ­sitions) of the target firm. Thus the measurability of effects on acquirers is attenuated. Second, if an acquisition is one event in a series of implicit moves constituting a diversification program, its individual effect as a market signal would be mitigated. It is also likely that the theoretical argument which postulates that related acquisitions create wealth for acquirers may be underspecified. Relatedness is often multifaceted, suggesting that the resources of the target firm may be of value to many firms, thus increasing the relative bargaining power of the target vis-a-vis the potential buyers. Even in the absence of explicit competition for the target (multiple bidding), the premiums paid for control are a substantial fraction of the total gains available from the transaction. For managers, some implications from the research can be offered. First, it seems quite clear from the data that a firm seeking to be acquired will realize higher returns if it is sold to a related than an unrelated firm. This counsel is consistent with the view that the market recognizes synergistic combinations and values them accordingly. Second, managers in acquiring firms may be advised to scrutinize carefully the expected gains in related and unrelated acquisitions. For managers the issue of concern is not whether or not a given kind of acquisition creates a significant total amount of wealth, but what percentage of that wealth they can expect to accrue to their firms. Thus, although acquisitions involving related technologies or product market yield higher total gains, pricing mechanisms in the market for corporate acquisitions reflect the gains primarily on the target company. Interpreting these results conservatively, one may offer the argument that expected gains for acquiring firms are competed away in the bidding process, with stockholders of target firms obtaining high proportions of the gains. On a pragmatic level this research underscores the need to combine what may be called the theoretical with the practical. In the case of acquisitions, pragmatic issues like implicit and explicit competition for a target firm alter the theoretical expectations of gains from an acquisition transaction. Further efforts to clarify these issues theoretically and empirically will increase our understanding of these important phenomena. Bibliography Sharpe WF. 1964. Capital asset prices: a theory of market equilibrium under conditions of risk. Journal of Finance 19: 425-442 Markowitz H. 1952. Portfolio selections. Journal of Finance 7: 77-91 Grossman W, Hoskisson R. 1998. CEO pay at the crossroads of Wall Street and Main: toward the strategic design of executive compensation. Academy of Management Executive 12: 43-57 Amihud Y, Lev B. 1999. Does corporate ownership structure affect its strategy towards diversification? Strategic Management Journal 20(11): 1063-1069 Agrawal A, Mandelker G. 1987. Managerial incentives and corporate investment and financing decisions. Journal of Finance 42: 823-837 Wright P, Ferris S, Sarin A, Awasthi V. 1996. The impact of corporate insider, blockholder, and institutional equity ownership on firm risk-taking. Academy of Management Journal 39: 441-463 McConnell JJ, Servaes H. 1990. Additional evidence on equity ownership and corporate value. Journal of Financial Economics 27: 595-612. Shivdasani A. 1993. Board composition, ownership structure, and hostile takeovers. Journal of Accounting and Economics 16: 167-198 Stulz RM. 1988. Managerial control of voting rights: financing policies and the market for corporate control. Journal of Financial Economics 20: 25-54 Varaiya N. 1987. Determinants of premiums in acquisition transactions. Managerial and Decision Economics 14: 175-184 Collis D, Montgomery C. 1998. Creating corporate advantage. Harvard Business Review 76(3): 71-83 White, M. 1988. The Japanese overseas: Can they go home again? New York: The Free Press. Bob, D., SRI International. 2001. Japanese companies in American communities. New York: The Japan Society.

Does Stendhal have anything important to tell us about love Essay

Does Stendhal have anything important to tell us about love - Essay Example In this paper, the contribution of Stendhal towards love as a topic and a writing theme will be analyzed, judging his writings from the eyes of analysts and critics. In his book on love, Stendhal attempted to make a rational analysis of human emotions, feelings and attitudes towards each other. To make a complete analysis of love and the way it impacts on different people and leaders, Stendhal analyzed four main types of love. According to Stendhal, love can be categorized based on the individual feeling, impact it has on the people and the input that sustains it. Passionate love was initially developed by the Portuguese nuns according to Stendhal and exists between individuals, families and even social groupings. The bond that brings together families and members of a given society, religious group or even political grouping is associated with the passionate attraction that they develop through constant interaction. Families, for example, are determined to protect and provide for their members as a way of showing that their existence goes beyond a social grouping, but a manifestation of passionate love shared (Toker, 2014, p.251). On the other hand, mannered love has its origin in Paris and has been captured in different French memoirs and stories including those involving chamfer and lauzun. Artists have attempted to illustrate the mannered love using different tools including the rosy hues that have no spot to show negativity and ill feelings. Whatsoever is unpleasant in mannered love will result into a breach of the better taste and etiquette that has been developed from this kind of love (Foster, 2014, p311). Any individual who attempts to nurture such kinds of love must first ensure that the rituals and stages involved are observed and followed. According to Stendhal, Mannered love results into more intense

First and Second Industrialization Wave Essay Example | Topics and Well Written Essays - 1250 words

First and Second Industrialization Wave - Essay Example It originated in Great Britain and then made its way through Western Europe, Japan, North America and finally spread all over the world. With the Industrial Revolution every facet of life and living was affected in some way or the other. Prolonged growth of income and population started to take place. In the centuries following the Industrial Revolution, population increased six times and the world’s average income increased ten times1. The time period during which the Second Industrial Revolution lasted (1867 - 1914) has been named ‘The Age of Synergy’ by Vaclav Smill2. The Second Industrial Revolution was characterized by a number of factors. New tools were made of stronger and more durable metals like aluminum and alloys like steel were introduced as well. New substances were used as fuels including petroleum and natural gas and the method of handling business also changed. A small description of the highlights of the Second Industrial Revolution is given below . Forms of business that had never been seen before came into existence and labour became more organized. The heavy industry was capitalized by monopoly, cartels and banks. Monopolies are huge organizations which control the every part of the industries. A cartel is composed of different ventures and fixed prices as well as production allowances and hence cutting down the competition which caused prices to reduce. Germany had a strong base of cartels and banks there protected there investments by cutting the competition down. Trade unions were formed by workers which allowed them to have better working hours and also have some allowances enabling them to improve their condition. The workers made use of strikes to get what they wanted from their employers. By the time the First World War started three to four million workers were part of unions although the total workforce was five times that number of workers. The strikes were mostly walkouts but a few were of a violent nature as we ll (socsci.gulfcoast.edu). The social and political power was in the hands of the middle class relative to their economic power. The middle class had a variety of groups. The middle class divided into three classes- upper, lower and middle. The lower middle class was comprised of people working for the class above their own. They were mostly shopkeepers, traders, and peasants. The middle class comprised of doctors, lawyers, merchants, well off merchants as well as professionals in the Civil Services. Due to the expansion of industry because of the Industrial Revolution this middle group kept getting more additions. The new additions were engineers, accountants, architects and chemists. These new additions formed professional institutions to symbolize their worth. Between the lower middle class and the lower class, there was present a group of workers who were basically salesmen, bookkeepers and secretaries. They were paid a little more than the working class and mostly had no proper ties of their own. They were intent on improving their social statuses and worked hard to achieve that target, succeeding most of the time (socsci.gulfcoast.edu). A distinct character of the Second Industrial Revolution was that peasants and artisans were put out of business and they were replaced by machinery and skilled workers who could operate

RESEARCH ON YOUTH CULTURE MOST INVARIABLY TENDS TO ROMANTICISE OR Essay

RESEARCH ON YOUTH CULTURE MOST INVARIABLY TENDS TO ROMANTICISE OR OVER-POLITICISE INSTANCES OF YOUTHFUL RESISTANCE. DISCUSS WITH REFERENCE TO Thornton, S, C - Essay Example There is not one monolithic youth culture that defines all young people. Popular youth culture embraces a diversity of sub-cultures or â€Å"tribes† such as skaters, druggies, snobs, band geeks, Satanists, Jesus freaks, techno-goths, computer dweebs, blacks, Latinos and white trash. Groups distinguish themselves by dress, style, music, body modification practices, race, ethnicity, and language. (Hines, 1999) Thus a researcher, who intends to study the ethnic, racial, political, cultural, sociological or linguistic aspect of a subculture, often ends up in analysing one of the factors and tend to romanticise or over-politicise these aspects. Subcultures were one of the major fields of inquiry at the Birmingham Centre for Contemporary Cultural Studies in the 1970s, and this overview will take as its starting point Resistance Through Rituals, the BCCCS’s 1976 collection of working papers on the subject. In the introduction, the authors acknowledge their debt to the interactionist sociological approach to deviant behaviour, and especially to Howard Becker’s 1963 book Outsiders. Here, Becker’s theoretical work on art worlds and on deviance intersect in the classic study of freelance dance band musicians, whose â€Å"culture and way of life [were] sufficiently bizarre and unconventional for them to be labeled [sic] as outsiders by more conventional members of the community† (Outsiders 79). Becker builds an intricate ethnographic analysis around the values encoded in the concept of â€Å"hipness† (as opposed to â€Å"square† society) and the way such values are made to operate tactica lly within the subculture. This study, published in 1963, is part of the corpus referred to by Gelder and Thornton as the â€Å"Chicago school† whose themes (male urban opposition to ‘mainstream’ commercial and moral values) clearly prefigure the main preoccupations of the British cultural studies

EasyJet emarketing strategies and its implementation

EasyJet emarketing strategies and its implementation Management Summary This report undertakes a study of EasyJet e-marketing strategies and its implementation outlining its impact on EasyJet operations as a whole. EasyJet is an airline company operating in Europe with its base in UK. It was founded by Stelios Haji-Ioannou in mid 1995. EasyJets operations are paperless, with all business transactions done through the internet. EasyJet has experienced a successful online business due to its e-market strategy that aims to provide low cost no frills air transportation. Under the strong and charismatic leadership of Stellios, it has accomplished its goal by creating brand awareness, adoption of an efficiency-driven operating model and maintenance of a high level customer satisfaction. EasyJet conducted its business using telephone in order to achieve the goal of undercutting traditional carriers and increase savings by direct selling. Business was later on conducted over the internet aiming to cut down cost on it call centers, to make flying affordable and to compete even with busses by attracting people who would have otherwise not travelled by air. EasyJet is doing this by using a website which is designed with high usability and has an intuitive navigation allowing user to do booking and purchase ticket online. EasyJet also does promotion on newspaper by running internet only promotion, giving discounts to consumers who purchase online only. This mix has helped in EasyJet promotion giving impressive results by achieving tremendous sales results. The design, structure, usability and usefulness of its website have enabled EasyJet to secure leverage over its competitors. The most important fact is that EasyJet has incorporated flexibility in its e-marketing strategy enabling it to anticipate changes and further develop its strategies to counter-act accordingly. The impact of EasyJet e-market strategy is evident on the growth that EasyJet has enjoyed through the years In general the e-marketing strategy followed by EasyJet works for it. EasyJet is obviously aware of its surrounding environment, and appreciates the magnitude of closely monitoring and control of its strategy, so as to stay ahead in an environment that constantly evolves by keeping a close eye on any happening changes. Its evident that EasyJet takes few risks and applies firm business principles while carefully exploring the market. Introduction Company Background, Financial Performance and Key Services EasyJet is an airline company based in Britain with its headquarters at London Luton Airport. It operates 500 domestic and international routes between 118 countries within Europe, West Asia and North Africa carrying more passengers than any other UK based airline. Its parent company EasyJet plc is listed in London Stock Exchange. (Wikipedia, n.d). EasyJet Airline was founded in Britain by Stellios Haji-Ioannou, holder of masters degree in business and son of a Greek Cypriot shipping tycoon. He started the company with  £5 million loaned by his father after he was approached by Virgin Atlantics Greek franchisee to invest in a London-Athens route and decided to start his own airline instead. The company started with two leased airplanes operating in two routes; London Luton to Edinburgh and Glasgow respectively and later Aberdeen. Stellios was inspired by principle of price elasticity applied by Southwest Airlines based in the United States. Southwest air fares were so low that the airline attracted people who would not have otherwise traveled by air. It aimed to compete with busses as much as it did with other airline companies. In the beginning, EasyJet operated a paper airline contracting British World Airlines to fly and maintain its two 148 seats leased planes. Its base in London was at Low-rent Luton airport. After acquiring its first plane, EasyJet started competing against British Airways and KLM on the route to Amsterdam focusing on short-haul routes aiming to offer half of its competitors fare. Stellios later on capitalized on the Swiss connection buying 40% stake in a failing charter airline; TEA Switzerland. It is believed that, in the beginning EasyJet spent all its revenue on advertising, offering cheap air fares. A specific example of billboards declaring a fare of  £29 for London-Scotland route which was one-tenth the price charged by British Airways. Advertisements on TV directed customers to bypass travel agents and directly call the company reservation number which was also painted on all EasyJet planes. Direct selling was the strategy from start and later the Internet became EasyJets preferred booking media. Dress code for its employees was jeans and orange sweatshirts which reflected a casual yet fast-paced attitude. Only pilots were allowed to wear neck ties. Organization culture of EasyJet was described as brutally transparent, allowing employees in all paperless offices to share all types of information except payroll, by scanning all its documents into a computer system accessible to all employees. The company is lean on services having no in-flight catering, charging for snacks and soft drinks and having no cancellations or refunds option. The three keys to EasyJet strategy were Simplification, Frugality and Friendliness with a motto of Easy come, easy go. Some passengers were apprehensive of low-rate airlines compromising safety, EasyJet had to change tactic in advertising by explaining why it was possible to reduce fares without compromising safety. EasyJet stimulated traffic in all the markets it entered by introducing price competition to a market that was previously driven by free offers such as frequent flier miles. This enabled EasyJet to turn a profit of  £2 million in the year 1997. In 2000 fiscal year, EasyJet declared a profit of $33 million and floated a quarter of the companys stock on the London Stock Exchange with shares offered exclusively to institutional investors, raising  £190 million which was used to purchase 32 new Boeing 737 airplanes. After it merged with Go Fly in August 2002, it became one of Europes biggest and leading low cost airlines. (Business Essays, n.d) Since its establishment in mid 1990s, EasyJet has enjoyed a rapid expansion growing through a combination of mergers, acquisitions and base openings brought about by demand of low-cost air travel by consumers. It now boasts a fleet of over 180 aircrafts with 20 bases across Europe and is ranked as the second largest low-cost carrier in Europe having carried 45.2 million passengers in 2009. (Wikipedia, n.d). EasyJet has had its fare share of legal battles, the most popular one being with British Airways. It has also faced criticism in Germany for not observing the European Union law on compensation and on environmental issues due to its advertisement that EasyJet aircrafts made 22% less emission compared to its competitors. Services offered by EasyJet include real time on-line booking, telephone booking for 3 months before flight bookings, in-flight magazines containing destination guides, holiday and accommodation products, car rentals, airport parking, travel insurance and on-board sales of fragrances, cosmetics etc. Situation Analysis A business does not operate in isolation. Business reactions and decisions depend on what happens on its environment. The factors happening outside an organization are known as external factors or influences. The external factors affect main internal operations and the objectives and strategies of the organization. It is therefore important to identify factors that might in turn affect a number of vital variables that are likely to influence the organizations supply and demand levels and operation costs (Kotter Schlesinger, 1991; Johnson Scholes, 1993). The strategy of EasyJet is to offer low cost, no-frills air transportation. This strategy has enabled EasyJet to prosper. It is however, important to continually strive to satisfy customer needs and stay in a competitive position by evaluating market trends and situation. This calls up the need to do situational analysis which involves the studying of important business elements such as competitors, customers, costs, climate (external environment), collaborators and the company itself. Conducting a situational analysis for a company provides the knowledge and context for planning by describing the companys competitive position, financial and operating conditions and the general state of the companys internal and external affairs. To accomplish this methods such as SWOT and PEST are used. PEST Analysis PEST stands for Political, Economical, Social and Technological. PEST analysis is a framework used to categorize environmental issues that influences an organization Politically, Economically, Socially and Technologically. Papers4you.com (n.d) quoting Kotler (1998) and Porter (1985) states that: Kotler (1998) claims that PEST analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The headings of PEST are a framework of reviewing a situation, and can in addition to SWOT and Porters Five Forces models, be applied by companies to review a strategic directions, including marketing proposition. The use of PEST analysis can be seen effective for business and strategic planning, market planning, business and product development and research reports. PEST also ensures that companys performance is aligned positively with the powerful forces of change that are affecting business environment (Porter, 1985). PEST is useful when a company decides to enter its business operations into new markets and new countries. The use of PEST, in this case, helps to break free of unconscious assumptions, and help to effectively adapt to the realities of the new environment. (papers4you.com, n.d) PEST analysis is therefore useful tool for understanding and determining the market growth or decline of an organization, the position as well as the potential and direction of a business. PEST analysis for EasyJet shows the following: Political The change of government or policy may influence the company profile as new regulations are introduced. EasyJet has been involved in various legal disputes a good example is when Germany criticized EasyJet for not observing the European Union law on compensation. Political changes in the countries where EasyJet has routes. EasyJet operates in different countries across Europe; changes in these countries may affect its operations. Local government councils object to noise and prohibit building of new runways. Governments wanting to promote tourism in their countries may welcome and act in the favor of EasyJet. Different taxes that are charged in different countries for fuel, landing, airport tax etc. Changes in employment laws, trade restrictions and tariffs has impacts on EasyJet business operations for example in April 2000, EasyJet had to launch a campaign to stop Barclays from increasing landing fees by 300%. Economic Economic recession where some countries economy might grow and some might collapse. Uncertainty due to the cost fluctuation of energy and fuel. Business involves having loans; change of interest rates and foreign exchange rates may affect EasyJet long term loans. There has been unrest in consumers attitude due to the September 11th attacks which caused a significant decrease in the confidence of airline travelers. Social Flying with EasyJet may attract companies with employees doing frequent business trip since EasyJet do not offer in-flight luxuries thus less cost to companies. Stability in economy and expansion of tourism means many people want to fly away for holidays. Low cost, no frills attracts wider demographic of consumers including people who would have otherwise not think of travelling by air. Outbreak of contagious diseases such as the bird flu, SARS may cause decrease of travelers. Safety measure applied while on air and on the ground conveys a positive image of the company thus many people feel safe to travel with EasyJet planes. The friendliness and efficiency of EasyJet employees make customers to always want to travel by EasyJet. The growth of population means more travelers and people in a certain life stage have more disposable income to spend. EasyJet runs an environmental friendly business; depending entirely on the internet running paperless operations which means less waste. This gives it a positive outlook from a world that is so environmental conscious. Technological The rate at which technology changes has favored EasyJet by making it possible to conduct paperless operations therefore reducing operation costs. IT technology is available in competitive price thus enabling EasyJet to design a system that can be remotely accessed by all its employees. The growth in technology also ensures the availability of spares and maintenance services to its fleet of airplanes. Technology has become cheaper; it is cost effective in the running of the company but at the same time the entries to barrier are lower for competitors to join in. SWOT Analysis SWOT is an important part of strategic planning that involves a scan of internal and external organization environment. SWOT analysis provides helpful information for fitting organizations capabilities and resources to the competitive environment it operates in. SWOT analysis is used to determine the Strengths, Weaknesses, Opportunities and Threats of an organization. Strengths EasyJet is under the strong and charismatic leadership of Stellios who possesses great entrepreneurial vision, is adaptable to change and is able to identify business opportunities EasyJet is original and has very effective promotional strategies. EasyJet is serving many of the leading city destinations across Europe and is leading as provider of low budget and no added costs air travel. It is a well known, respected and recognized as the leading brand name in travel industry in UK. Has a low running cost due to the use of internet giving its customers the benefit of paying for local calls. EasyJet is easily recognizable and distinguishable from their competitors due to the high distinctive corporate colors on all of its aircraft. EasyJet has diversified into other market such as car rental and internet cafes making life easy for their customers by being served by same company when requiring these services. Has an excellent customer service for example EasyJet offers refunds for flights that have been delayed for 4 hours or more. It operates an efficient and fast service with an average turnaround time of 30 minutes or below thus is able to maintain a hassle free and reliable service to its passengers. It has a very user friendly website showing fully the price breakdown structure for passenger planned trips. Divulging the full breakdown price plan prevents any hidden charges to customers when confirming their booking. It has a sophisticated system that offers online promotion alerts by e-mail to existing customers. Weaknesses EasyJet relies so much on computers for booking and information storage which could be risky. EasyJet flies exclusively within Europe. EasyJet does not offer free in-flight food services. The extreme competitiveness of the domestic air travel industry can restrict and shape pricing policies on some of EasyJets less profitable routes. EasyJet has to charge low rates even on these routes to compete with their competitors which are Jet, BMI Baby, Ryan Air and other smaller independent companies. Opportunities Possible opening of other routes to major cities in Europe such as from Dublin to UK and new links into business flyers to and from UK. Restructured versions of the fly on the wall documentaries would provide the EasyJet brand with more coverage and publicity. Offering free in-flight refreshments would be a bonus and would increase comfort to EasyJet customers. Threats Threat of substitution where travelers travelling as a group might choose other means to save on travelling expenses. Other airlines flying the same routes compete fiercely on price forcing pressure on margin on popular flights and time slots. External market forces such as the rise of price of oil can have major impact on running costs posing significant pressure on the profit of less popular routes and time slots. Day to day operations of EasyJet can be significantly affected by pressure from unions and employee relations committees, strikes have proved to be costly to the company and its image. Economic recession may decrease the number of casual and business travelers. E-Marketing Strategy To fully understand what e-marketing involves, it is worthwhile to revisit the original definition of marketing before it was prefixed by e. Nowsell.com, (n.d) quotes cim.co.uk definition of marketing as follows: Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably (nowsell.com, n.d) The definition accentuates the focus of marketing on the customer, while implying the need to link other business operations to achieve the required profitability. E-marketing is therefore defined as achieving marketing objectives through the use of electronic communication technology which includes internet, eBooks, e-mail, databases, wireless mobile phones and digital television.(nowsell.com, n.d). The internet, as noted by Smith and Chaffey (2001) can be used to support the aims mentioned in the definition i.e. identifying, anticipating and satisfying as follows: Identifying use the internet for market research to find out customer needs. Anticipating the internet provides an additional channel for customers to access information and makes purchases. Understanding this demand is basis to governing resource distribution to e-marketing. Satisfying an important success factor in e-marketing is accomplishing customer satisfaction through electronic channel by making sure that the site performs adequately and is easy to use. Planning is essential in order to succeed in e-marketing. A successful e-marketing plan relies on traditional disciplines and planning techniques that is adapted for the digital media environment and mixed with digital marketing communication techniques. SOSTAC is a generic framework used for e-marketing planning. SOSTAC stands for: S Situational analysis (where are we now) O Objectives (where do we want to go) S Strategy (how do we get there) T Tactics (the details of strategy) A Action (or implementation) C Control (evaluation, measurement) The Situational analysis above has identified the current position of EasyJet using SWOT and PEST methods. The analysis shows EasyJet holds a strong position and has gained a competitive advantage due to the use of technology internet in particular in conducting its business operations. The objective of EasyJet is to increase online revenue, minimize cost and retain their customers. EasyJet has accomplished this by creation of brand awareness, adoption of an efficiency-driven operating model and maintenance of a high level customer satisfaction. Strategy is the process of developing options to achieve a desired outcome. E-marketing strategy therefore consists of steps taken and procedure followed for marketing a brand through the website. (buzzle.com, n.d). The important aspect in any e-marketing strategy is the company website which needs to be properly formatted and designed, so as to give a good impression and attract users and thus increase sales. EasyJet uses internet to meet its objectives. EasyJet has a comprehensive website with good usability and structure that presents EasyJet services without the use of redundant graphics and advertisement which usually distracts website visitors. EasyJet went online because of the need to reduce cost. EasyJet aimed at making flying affordable and urged travelers to deal direct and cut out travel agents. An overview of EasyJet lists the following strategies: Reduction and distribution of costs by online booking. No tickets during travel, just an e-mail with the booking reference is adequate to board the plane. This reduces tasks and costs associated with issuing, distributing, processing and reconciling tickets. Paperless operations making the internet useful in other aspects of the business such as administration and management. EasyJet URL is printed alongside all its planes. The company aimed to scale down its call centers operations by selling most of the tickets online. By putting the company URL everywhere, it increased the use of the website and this helped EasyJet get more customers thus making EasyJet flights prices cheaper. EasyJet also uses the website as an aggressive tool. A good example is the competition to predict BA losses on Go enticing visitors with prizes. EasyJet also had earlier on used a TV series to promote itself in every household in the UK. The value proposition and differential advantage of this strategy can be seen on the benefits offered to customers as well as cost cutting experience by EasyJet. EasyJet operates cheaply making it possible to give its customers reliable, convenient and great value for money service. The EasyJet market mix (i.e. the 4ps: product, price, placement and promotion) can easily be evaluated at the structure of its website. EasyJet has identified its website audience as those on-line visitors living in Europe requiring cheap, comfortable and comprehensive real time travel without needing to go through travel agents. For this, EasyJet offers low cost, no frills flights and other services such as car rentals and accommodation (product) at reduced online price with no hidden-added cost (transparency) showing fully the price breakdown structure (price), that can be purchased direct (disintermediation) online without the need to go through third party travel agents (placement), letting travelers know where to buy ticket by advertising on TV, newspapers, EasyJet planes and through e-mails (promotion). The website has all the required information readily available in all dominant languages of the continent and is sectioned under different tabs of accommodation, travel insurance, car rentals, flight bookings and airport related transport to enable users to go directly to the service they require. Moderate use of text eradicates wastage of time yet communicates accurate message to website visitors to guide them through various links based on logical visitors usage. It also has enough information on each page to support the need of visitors without abstract marketing banners to distract real buyers. EasyJet website gives attention on usability and reliability of information rather than visibility and colorful display alone; it however does not lack color. Orange color has consistently been used throughout the website helping clients to easily associate the website with the airline. EasyJet maintains a website that can be considered an ideal re-intermediation where service provider is in direct contact with the consumers via an electronic medium (Internet). This reduces cost to both consumer and service provider and creates business value. (businessteacher.com, n.d) Implementation The implementation of EasyJet e-marketing strategy has been achieved on the companys website. The EasyJet website has been designed to offer high usability to visitor and is simpler to use compared to some of its competitors. It is simply designed, with an intuitive navigation allowing users to move from page to page without the need to go via home page. It has high functionality and is without excess baggage. It was created with the intention not to tire the visitor with redundant graphics and advertisements which would distract its visitors and make them walk away from the website. It employs moderate use of text eliminating time wastage while conveying accurate message to guide users through various links. Each page on the website consist enough required information without abstract marketing banners to sidetrack real buyers. For example if a user wants to book a flight, he would enter the date of travel, destination and check flight availability then move on to make booking or p urchase. How the managements creates new core and extended value for customers The purpose of setting up an on-line business is to ensure growth, efficiency, competitive advantage and leverage over competitors.(businessteacher.com, n.d). Using the internet, EasyJet has been able to reduce running cost and to cut down its supply chain by removing intermediaries and dealing direct with customers enabling it to sell almost 90% of its flight over the internet. EasyJet website targets business and leisure travelers who are keen on saving time and money and do not want to deal with third party intermediaries, providing them with easy access to booking, flight scheduling, transportation and accommodation. Facilities such as choice of airport lounges or parking are important in completing the process of travel booking, and having this on the website EasyJet extends value for customer. They also analyze consumer e-mail queries and use these to formulate services according to customer needs. Operating in this way reduces cost and helps the company, by use of technology mediation, to sell its product and services and create business value. There are exclusive promotions for on line booking customers and all customers who book online receive discount for each leg of the journey example EasyJet was able to reduce  £1 for people who booked online. Online customers also get the benefit of paying the price of local call. EasyJet make it a point to put all cheap flights online and customers can search flights by fair and view flights that are available over two weeks. Customers can make flight transfers, change names, reschedule flight bookings, and request duplicate confirmation by e-mail and check in on-line. There is also an option of speed boarding which enables the passenger to board the flight before other passengers. They also have flight promotions which intend to avoid customers who would fly with EasyJet. These promotions are advertised few minutes before the flight time aiming to get rid of empty seats. Balancing online and offline promotion methods The management balances online and offline promotion by using newspapers to advertise about new online promotions and offers by calling or e-mailing journalists and referring them to the website. EasyJet does this by putting internet-only promotions in newspaper encouraging travelers to purchase their ticket online. The guess BA Go Losses and the section entitled Battle with Swissair were advertised on newspaper to lure more people to the website. Impact of the implementation of the strategy on business performance The implementation of the strategy has an impact on the business performance because the site is well integrated into EasyJets existing systems and business process. A good example is the ability to feed press release into the site through electronic and new destination appearing automatically once fed into the companys information system. Also the effectiveness of the website was proved when the dedicated phone number on the site hit six months target within six weeks. The log file recorded 8 minutes average time spent on the website per person and almost each caller made a purchase. The website proved that EasyJet phone operators were busy selling tickets rather than answering questions over the phone. Legal and Ethical issues The use of Internet in e-commerce has brought up invasive legal and ethical issues. This is partly due to its underlying features and the way it has been exploited by businesses disrupting existing social and business relationships and understanding. EasyJet like many other businesses has benefited from commercial development of the internet but this commercial development demand a price from individuals. EasyJet gathers and processes customer information and uses this information for marketing by sending e-mails. This is regarded as intrusion of solitude because once a customer registers in the EasyJet website, then they will be receiving constant emails which can be really annoying. This has resulted to consumer use of spam guard (junk mail filters) to stop receiving unsolicited emails. Sherrington (2009, p 19) emphasizes that the status of a business is not respected; it is earned (Sherrington, 2009, p 19). It is not good for a business to burst into peoples inboxes or profiles on social networks such as Facebook, advertising their brands just because it has spotted a potential customer. Consumers regard this as abuse and violation of their privacy and some can punish the business by never purchasing their product or service. It is important in e-marketing to demonstrate integrity, honesty, respect and a willingness to share and apply the golden rule of treating consumers as you would like to be treated. This can be accomplished by letting consumers know before their information is gathered, give consumer the opportunity to agree or deny secondary usage of their information, give consumer access and the right to review personal data, store accurate consumer information and have in place a clear means by which consumer can address the situation if any of their right is violated. The use of cookies, spyware and other techniques enables tracking of consumers online behaviors, recording searches and sites visited by individuals. This helps business such as EasyJet in profiling customers and targeting them for specific marketing campaigns. The law and consumers regards this as intrusion of privacy (like stalking in the physical world). As a result there are a number of privacy advocacy groups on the web that monitor developments in privacy.(Laudon Traver, 2008, pg 500). The use of internet excludes a certain group of people who do not make use of internet. A good example is older people who do not seem to grasp the use of computers. EasyJet are likely not to have customers from this group of people. The use of internet sometimes violates copyright laws where intellectual properties such as trademarks of others are used without consent. EasyJet went through a legal battle with British airways for using a slogan that resembles that of BA. EasyJet called itself The webs favorite airline mimicking the BA slogan The worlds favorite airline. Conclusion This report mirrors EasyJet strategy for its online business model. In wide-ranging EasyJet strategy works well for the company. EasyJet is aware of its business environment and realize the importance of monitoring it. Through the use of internet, EasyJet succeeded to be among the top low cost, no frills airline companies in the UK. The design, structure, usability and usefulness of its website have enabled EasyJet to secure leverage over its competitors. The most important fact is that EasyJet has incorporated flexibility in its e-marketing strategy enabling it to anticipate changes and further develop its strategies to counter-act according

mutlicultural education :: essays research papers

Multicultural Education: (Amer. Educators Encyclopedia) curricula designed to recognize the integrity, contributions, strengths, and viability of different cultural, language, and social groups in society. -Its about creating structures and process’s that allow for the expression of many civilizations, communities and individuals we are. -Each group has a different history of why they immigrated and their experience. US is an intellectual and fast paced country, its a melting pot, each culture combined with another makes the US what it is today - so therefore we should learn about every origin and its contributions. Questions: 1) Who is benefiting from the education? 2) How should we present the material in a way so as to offend the least amount of people? Hispanic Facts Dropout rates -High school drop out rates are more than double that of white students -Most dropouts are:   Ã‚  Ã‚  Ã‚  Ã‚  Male   Ã‚  Ã‚  Ã‚  Ã‚  Above age (2 levels behind)   Ã‚  Ã‚  Ã‚  Ã‚  Low grades   Ã‚  Ã‚  Ã‚  Ã‚  Behavioral problems   Ã‚  Ã‚  Ã‚  Ã‚  Low income families, no encouragement   Ã‚  Ã‚  Ã‚  Ã‚  Low educational attainment -Drop out to help family (Hispanic culture family = core of life). -Ethnic identities influence their self esteem and assimilation into a culture- hence not as much effort dedicated to schooling. -Hispanics are the fastest growing ethnic group in the US public schools. -2 Factors that standout out are a.) segregation b) bilingual education -1 out of 4 Americans identify themselves as black Hispanic, Asian, Pacific Islander or American Indian.   Ã‚  Ã‚  Ã‚  Ã‚   -In 1996 950 Hispanics received their doctorates (2nd lowest compared to Indians) 26,363 whites received it. Answers -The more ethnically integrated a school system is, the easier it will be for a teacher to develop a well rounded teaching style that would in turn benefit all students. -Teachers should attend workshops on Ethnicity and culture. -States and Federal Gov’t should either provide special funds to teach minority children in their own language (which may hurt them b/c English is a crucial element to get ahead) OR teach both English and Spanish (which is proven to higher GPA’s and credits)

Internal Rate of Return

Many companies wants to have a return on their Investment In a few years and begin to evaluate their projects optimistically calculating an Internal rate of real return not yielding results In the end. This does not end up being expected by the companies; According to the article the authors John C. Keller and Justine J. McCormick . They suggest that there is a tendency to a risky behavior, Companies started to run the risk of creating unrealistic numbers for themselves and shareholder expectations, which it could confuse communications with investors and inflating managerial rewards.This confronts us with a real and serious problem when it comes to investing in projects because later we can not generate the expected return and risk of failure in the project, the AIR can generate two different values for the same project when future cash flows switch from negative to positive (or positive to negative). In addition, since the AIR Is expressed as a percentage, and This can make small p rojects appear more attractive than large , although large projects with lower AIR may be more attractive as NP of smaller projects with AIR .The management of the AIR must be just when the project generates no Interim cash flows – or when those Interim cash flows really can be invested in real AIR otherwise would not be realistically analyzing the viability of the project, and this is not what you want if you really are expecting to thrive in a project, The best you can do is to get real results that can assess the potential risks of the investment and the real return of the project.Among its disadvantages we can find that requires finally are compared with an opportunity cost of capital to determine the decision on the project. That project in which the internal rate of return, we will accept it greater than the discount rate investor (relevant Interest rate), the AIR criterion is not reliable to compare projects and only tells us whether a project Is better than the altern ative profitability. The AIR , only evaluates local Impacts that do not necessarily Impact the company as a whole system , which alms to make more money.The AIR Is Important to calculate the profitability of resources. The VPN allows feasibility analysis, when this indicator is positive projects are attractive and allows optimizing resources when the project has a higher NP than others. The AIR, only evaluates the feasibility, when this is greater than the rate of chance, but definitely does not optimizing resources. When you are evaluating projects for enterprise systems for profit, the criterion to be used, is the VPN.In non-profit companies, the appropriate criterion may be the AIR , because it allows to identify the financial feasibility and optimization of resources, meets the criteria or indicators of social evaluation, where the owner of the project, the population Is required greatest need and urgency. Taking Into account the point of views of the authors we have to mention something Important, and that Is when the cost of capital Is used, the true annual equivalent yield of a project can be significantly reduced – again , especially with projects they reported high Minimal IRS .When executives review projects with IRS that are close to cost of capital of a are not particularly real because the rate distortion reinvestment is more noticeable precisely when managers tend to think that their projects are more attractive. In conclusion, the simplest way to avoid problems with the AIR , is not use it to calculate profitability of projects because we do not want to invest on wrong assumptions , no tater whatever it's used to review projects , it is important that projects are based on real and figures close to the company objectives.This is important to achieve the desired performance as stakes and risk capital investment, An option can be for small projects because it is the most practical thing to do, but for big projects it is recommended not to f all into this kind of assumptions not realistic to avoid disappointment , you must learn to avoid the risk and not be tempted by fast optimistic estimates or investment returns that does not show us the big picture , Executives should use at least a modified internal rate of return.It is better if they use MIR to calculate the profitability because It allows users to set rates more realistic interim reinvestment and therefore to calculate a true annual equivalent yield, Other aspect to consider is whether the internal rate of return is greater than the discount rate, the project should be accepted as a higher yield that estimated the minimum required, but you can do this Just when the net cash flows are reinvested. You should think, if the internal rate of return is less than the discount rate, the project should be rejected because lower yield estimates is the minimum required.