Research Articles Base: BBA Group

Assessment of the Future Prospects for British Banks

Introduction             Savings is an important determinant of the financial condition of households and economies because this relates to investments in real estate, shares, bonds, as well as other financial instruments together with the existence of finances deposited in banks in support of the investment activities of the bank to generate income. Savings refers to the positive value left when consumption is taken out of income. On the larger scale national savings pertains to personal savings and business savings added to public savings. Business savings equates to the value of undistributed corporate profits while public savings refer to revenues less expenditure for public projects. Savings is closely linked to investment since the money left after making consumer purchases may be allocated for fixed capital such as machineries resulting to greater production that contributes to economic growth. However, savings does not result to increase in investment if the amount is stashed in the house and not deposited in financial intermediaries such as banks to be recycled into investments by businesses. (Sloman & Sutcliffe 2001) Banks play the important role of channelling and transforming deposited savings into resources for investment by lending deposits to individuals and business firms for use in business ventures with interest or by the banking institution engaging in its own investments. Money deposited does not become idle because this is used to support investments leading to earnings and eventually to economic growth. (Siklos 2006) Dynamics of British Banks             According to the British Banker’s Association (2006a), banks can be classified into independent British banks, British banking brand owned by British companies, British banking brands owned by foreign companies, and foreign banks operating the United Kingdom. The number of independent British banks is small because of the consolidation of various banks since the 20th century. In the United Kingdom, there are only a number of independent local banks [See Table 1 in Appendix] unlike in other economies. There are also only a number of independent specialist banks. There are also a significant number of British banking brands controlled by British companies together with an almost equal number of banking brands controlled by foreign banking institutions. There are only limited foreign banks in the United Kingdom carrying brands such as Citibank, ING Direct and Bank of Cyprus. However, on the aggregate, there are currently 223 members of the British Banker’s Association, indicating vibrancy in the banking and finance industry in the United Kingdom. Although there are only a limited number of independent banking institutions in the United Kingdom, this does not mean that the industry is weak since the consolidation of banks to form the present independent banking institutions mean that the operation of these banks have become large scale. Their scale of operation has compensated for the decrease in the number of independent banks. The independent banks also comprise the major players in the banking and finance industry.  Current Performance of British Banks             Based on the September reports of the British Banker’s Association (2006b), mortgage lending continues to increase while consumer credit weakens. In August 2006, the value of gross mortgage lending reached a record high of £20.9 billion, comprising an amount of 9 percent higher compared to July as well as 24 percent higher than the value in August 2005. This means that loans for purposes of real estate or property purchases experienced an increasing trend in the previous months. In terms of net mortgage lending or gross lending less repayments and redemptions, the amount increased to £6.2 billion in August when compared to £5.8 billion in July. The average amount for the previous months has been £5.4 billion while the value for the same months in the previous year was £4.6 billion. This indicates that the banking industry is experiencing increasing earnings from the mortgage loans. The component of the earnings accruing to the bank also experienced change. Previously, there were more mortgage approvals but resulting to lesser earnings while current activities consist of lesser mortgage approvals with corresponding higher value. In August 2006, there were a total of 184,557 approved mortgages for different purposes with a corresponding £19.1 billion aggregate value. The number of approvals was lesser by 5 percent but the aggregate value increased by 4 percent when compared to August 2005. On the average, the loan approved for the purchase of home amounted to £141,500 comprising an amount 8 percent higher than the same month in the previous year. (British Banker’s Association 2006b) In relation to loans and overdrafts, net lending increased by £0.2 billion in August 2006. However, this is a lesser amount when compared to £0.4 billion in the previous month of this year and the average increase in the previous months of £0.3 billion. With regards to underlying net lending through credit cards, the value decreased by £0.4 billion in August 2006 when compared to a decrease of £0.1 billion in July of the same year. This is also a higher decrease when compared to the £0.1 billion contraction in the previous months of this year. (British Banker’s Association 2006) Figures indicate that the values of gross and net mortgage lending primarily for housing and for mixed loans favoured banking institutions. This means that the improvement in the earnings of banking institutions was attributed to changes in the price of housing that encouraged individuals and business firms to obtain loans to finance housing acquisitions rather than increased volumes. Values for the month of August reflects stable and robust demand for mortgage loans directed towards housing purchases. Although there is a decrease in mortgage approvals when compared to the previous months or the past year, earnings from mortgage loans for housing increased relative to the previous months or the past year. The condition of the housing and real estate market for August was favourable to banking institutions and the increased value of approved mortgage loans worked well for banking institutions relative to increased volume of mortgage approvals. This means that the banking industry is affected by changes in the other industries or endeavours requiring financing such as real estate or housing. The industry should base its operations and strategies on relevant changes in other industries and the market. Bank Operations & Strategy             A comparison of the operations of banking institutions in Europe shows a variance in their strategy resulting to differences in performance. According to Llewellyn (2005), substantial variance in the profitability of banks across Europe exists [See Table 2 in Appendix]. In considering the dynamics between competition and profitability, in European banking institutions, British banks are considered as sources of best practices because of their greater profitability relative to other banks in neighbouring countries. British banks have been experiencing excess earnings in the previous decade relative to their counterparts in other European countries indicating the relative profitability of British banking institutions.             The different in profitability of British and other European banks can be explained by considering the extent of utilization of these banks of the stakeholder value (STV) and shareholder value (SHV) paradigms, which correspond to differing business objectives and performance results. On one hand, other European banks try to balance the application and integration of stakeholder and shareholder value while on the other hand, British banks uniquely apply an almost exclusively shareholder value strategy. The success of British banks is forcing other banking institutions in different European countries to consider the British strategy in order to experience the same level of profitability as the banks in the United Kingdom, when the change implies radical change in their business operations and strategy. (Llewellyn 2005) Shareholder & Stakeholder Value Strategies             These value strategies comprise the bottom-line objectives of banks as business firms. Although the difference between shareholder and stakeholder value is complex, shareholder value works for banks through the maximization of shareholder value in order to have a corresponding increase in the rate of return on equity. This business perspective means that the shareholders are the de facto owners of the banking institution so that they in effect embody risks. Stakeholder value covers a banking operation where there are many stakeholders in the bank with only one group of shareholders. (Llewellyn 2005)             In the case of the stakeholder value paradigm, profitability is a bank objective but this is not necessarily the primary or exclusive objective since this approach focuses more on balancing the differing interests of stakeholders in the bank. In effect, this means that stakeholder-based banks would not pursue profitability in the same intensity as shareholder-based banking institutions. (Crockett 2004) The implication of the utilisation of stakeholder value as a business strategy means that the bank does not focus on profitability. Since the banking institutions in other European countries apply stakeholder value policies relative to the shareholder value utilization in British banks, the latter inevitably experience greater profitability relative to their counterparts in other countries in the region.              Stakeholder value is implemented by the German Landesbanks and Savings Banks, since its equity holdings can be traded in the market. In other European countries, banking institutions are state-owned, semi state-owned or cooperative banks where there is no overt ownership of shares for trading in the market. Due to the lack of shares trading, these banks would not become subject to pressures from the capital market in the same level as shareholder banks that would drive activities towards profitability. In the case of the United Kingdom, all banks are shareholder institutions since there are no state-owned banks and there are only a limited number of mutual bank-like firms such as building societies. In any case, mutual bank-like firms have limited market share and regulation works to limit their range of business operations. While there are also a number of stakeholder institutions in the UK, these compete in fairly small banking markets, primarily for savings and mortgages. (Llewellyn 2006) Shareholder Strategy of British Banks         British banks have become profitable primarily because of the choice or from capital market pressure to become profitable. Apart from this, UK structural conditions; such as flexible labour market legislations, limited number of stakeholder banks, and a minimal mutual sector competing with banks have also supported the adaptation of shareholder strategy. The stable business cycle continuing from the 1990s has supported the goal of banks to achieve high levels of profitability. (Bikker & Bos 2005)                Among British banks, application of shareholder value strategy is done in various ways or a combination of several modes such as: 1) substantial reduction in costs and employment in order to maximize the value obtained when costs are deducted from revenue; 2) branch closure based on population serviced; 3) sale of unprofitable business ventures; 4) exits from unprofitable areas of business; 5) large scale securitisation of assets; 6) withdrawal from investment banking depending upon the profitability assessments; and 7) divestment from unprofitable foreign operations (Quignon 2000). These moves constitute the rationalization of the banking industry (Quignon 2005).       Future Prospects for British Banks             Despite the benefits of having a nearly shareholder value practising industry, this could also result to certain problems within the industry if some probable disadvantages of shareholder value will not be guarded against. If the British banking industry wants to maintain its increasing aggregate earnings, it should consider as its future prospects the maintenance of effective shareholder value activities but guard against the possible pitfalls of the strategy.             Possible problems that could arise is the development of short-term prospects by banks because of excessive focus on earning high rates of return in the short run; subjection to the impulsive nature of the stock market so that shareholders would cease to be the exclusive stakeholders in the bank, with the effect of changing its banking strategy; excessive cost cutting to the extent of compromising service quality; and the exploitation of power in markets with limited competitors or high entry barriers. (Llewellyn 2006)             Apart from these issues, social exclusion (Quignon 2005) has also emerged as a potential problem in the banking industry market. The drive of banking firms to gain profit may cause them to apply exclusionary policies that discriminate against customers not deemed as profitable by the bank based on geographic location or economic status. If demand for banking service from the sector not deemed as profitable or would increase to a certain level, this may increase the number of mutual bank-like firms and stakeholder financing institutions. If this happens, then the dynamics of banking institutions in the United Kingdom could change resulting to lower prospects for profitability.             Moreover, the effect and ramifications of the continued implementation of an uncompromising shareholder value strategy creates indeterminateness in the industry (Llewellyn 2005). This is because if banking institutions are given free reign to determine the type of business that it would undertake, this brings out the issue of the level that the targeted rate of return is to be determined. The liberality in the industry would allow banks to determine increases in the rate of return on equity by pulling out of business areas offering rates of return at a lower level that the target set by the company.             These issues indicate the possibility of the profitability-responsibility paradox (Llewellyn 2006) arising in the industry when the potential situations previously mentioned are not guarded against. The paradox would cause banking institutions to consider non-financial values in their services requiring certain levels of compromise of the profitability focused shareholder value strategy primarily applied in the industry.             Thus, despite the proven effectiveness of the shareholder value strategy, its application by banking institutions should involve certain levels of compromise (Quignon 2005) with market demands or the interests of potential and actual customers. Without compromise, shareholder value as a banking strategy is expected to fail in the long run.  Conclusion             Banking institutions play an important role in economies by acting as channels for investment to catalyze economic growth. This means that banks have to apply effective operations strategies in order to realize their firm goals of obtaining earnings from transforming deposited savings into resources for investment, by lending deposits to individuals and investors for use in business ventures with interest or by the banking institution engaging in its own investments.             British banks have been experiencing constant increases in earnings from mortgage lending continues to increase while that from consumer credit weakens. The positive performance of British banks in the previous months is attributed to the improvements in market conditions and proliferation of finance-based activities in allied industries such as real estate or housing. Overall, the success of British banks is credited to the unique implementation of the shareholder value strategy relative to the stakeholder value paradigm applied by most of the UK banking industry’s counterparts in other European countries. The implementation of shareholder value strategy has created an environment conducive to bank profitability.             However, this strategy involves potential problems, which, if the industry will not guard against could result to the demise of the existing banking system. Future prospects for British banks then involve the possible consideration of the profitability-responsibility paradox requiring certain levels of compromise in the application of the shareholder value strategy such as the lowering of rate of return standards for customers in the lower income levels and the consideration of employee satisfaction as a prerequisite to customer satisfaction. Bibliography Bikker, JA & Bos, JWB 2005, Trends in Competition and Profitability in the  Banking         Industry: A Basic Framework, SUERF Studies, 2005/2, Vienna, SUERF. British Banker’s Association 2006a, BBA Member Banks, viewed 9 October 2006,            http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=103&a=1562. British Banker’s Association 2006b, Continued Strong Mortgage Lending and           Weak Consumer Credit, viewed 9 October 2006,       http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=145&a=7683. Crockett, A 2004, Interview reported in SUERF Newsletter, SUERF, Vienna,  December 2004. Llewellyn, DT 2005, ‘Competition and Profitability in European Banking: Why are      British Banks so Profitable?’ Economic Notes, vol. 34, no. 3, pp. 279-311. Llewellyn, DT 2006, European Financial Integration: Convergence or Diversity in       Banking, Joint SUERF/NIESR Workshop, London, 24th March, 2006. Quignon, L 2000, ‘Are British Banks too Profitable?’ BNP Paribas,      Conjoncture, July 2000. Quignon, L 2005, ‘British Banks at the Peak of Profitability’, BNP Paribas,     Conjoncture, March 2005. Siklos, PL 2006, Money, Banking & Financial Institutions, McGraw-Hill, New York. Sloman, J & Sutcliffe, M 2001, Economics for Business, FT Prentice Hall,     London. Credit:ivythesis.typepad.com

Assessment of the Future Prospects for British Banks

Introduction Savings is an important determinant of the financial condition of households and economies because this relates to...

BBA GROUP

Introduction Every business is subject to factors that affect the firm’s function as a whole.  These factors are the ones attributed for the success or even the failure of a business (Oliver 1997).  In the light of this, there are certain ways or techniques that can be considered in order to emerge and continue to be competitive within the market place. The marketing concept has been defined as ‘the key to achieving organizational goals’ and the marketing concept rests on ‘market focus, customer orientation, coordinated marketing and profitability’. In a profit making business the firm obviously has to try and achieve this level of customer satisfaction as a way of staying ahead of the competition and making a profit (Moschis 1994). Today, more and more people and organization are striving to be recognized in the business arena.  With this objective, these organizations had been able to competently and effectively adapt to the situation in the market place by using generic strategies that enhanced their competitiveness.  There are five different generic strategies that a business can choose.  These include cost leadership, differentiation, focused cost leadership and integrated cost leadership/differentiation.  Each generic strategy helps the company to establish and exploit a competitive advantage within a particular competitive scope (Hitt, Ireland & Hoskisson  2003). Thus, this paper will critically examine the generic strategy used by BBA Group. Further this paper will provide an analysis of the company using some marketing tools like PEST and Porter’s Five Forces Model to determine the situation of the company in the internal and external marketing environment. In addition, this paper will also give emphasis on the competitiveness of the company.  Herein, the discussion will include the determination of the strategies used by the company.   Overview of the Company             BBA Group has been established in 1897 as a textile manufacturing industry, named W.Wilson Cobbett Ltd.  At present, BBA groups operate in a global market in two distinctive areas of business.  First the aviation service systems and which consist of Aviation Services and BBA aviation systems, through its subsidiaries in Latin America, US and Europe.  This division provides fuelling and refuelling services, cleaning, maintenance, aircraft sales, servicing, repair, technical support and training of pilots.  Next, BBA develops specific material for different industrial and hygiene sectors. Herein, they provide non-fabric products by the mechanical interweavement of textile fibres for the manufacture of sanitary towels and babies nappies.  This business division also specialises in embossing activities for printing original colour motifs like kitchen paper. BBA Group is publicly recognised company traded on UK stock exchange.  The companies involved in such group focus on providing products and services to aviation industries and speciality materials industries.  The aviation services and systems groups serve regional airline, commercial and military aviation clients and world business aviation by it primary operating industries and their subsidiaries. Some of these industries are Signature Flight Support, International Turbine Service, Dallas Airmotive and others.  The aviation division of BBA is known to be the 5th largest aviation groups in UK and amongst the top 40 largest industries in the world market.             Furthermore, BBA is also a vital player in the aviation support business. Such group has business operations at over 100 locations in the international market including 46 of the world’s top 100 airports.  Part of the companies business is joining mergers and acquisition. Such strategy helped the company to expand its business portfolio and expand their territories in the global market.   Utilizing PEST Analysis In order to analyse the environmental aspects of BBA Group, PEST analysis will be used.  PEST Stands for Political, Economic, Sociocultural and Technological factors that influence Argyle’s overall performance in the market place. ·        Political Sector A company will not be able to gain success, good reputation and trust if it will not consider legal and political sector as part of their strategy.  BBA Group has been able to follow the principles of business ethics. Hence, the company considers legality in all their actions.  They make sure that all their products and services adhere to the standards and wills satisfy their client worldwide.  Politically, BBA group had been able to follow all the standards set by the country and other international organisation satisfies their customers. ·        Economic Sector Economically, it can be said that throughout the years, BBA Group had enjoyed being at the top of its competitors.  The economic status of BBA is highly remarkable that it always give its consumers the best and quality products and services in the two business divisions.  In addition, the company’s growth and expansion on different countries in the world is an obvious evidence that BBA has been able to have a stable economic capacity to sustain and maintain its competitive position in the market place. ·        Sociocultural Sector Culture is an important factor in understanding an industry, because for any organization to operate effectively it must for some extent have a general set of believe and assumptions on how culture will influence the productivity and the success or failure of any company. Culture environment is one of the important principles that influence the organization.  Hofstede (1991) identifies that there are four dimensions that differentiate cultures at a national level (power distance, individualism-collectivism, masculinity-femininity, uncertainty avoidance), which help to understand that people arrive to organizations with their own national culture.  In the BBA, the management sees to it that they value the opinion of their employees no matter what is their nationality.  Since, this company is competing globally; it cannot be denied that they need employees from different cultures to be in the company to help in the decision making.  It is also indicated that the international managers has been able to create a positive relationship in the local managers. Moreover, the management of the company has seen to it that they would be fair in treating all their employees. In addition, as mentioned earlier, the company sees to it that their social commitment is being achieved by satisfying the consumers with their quality products and services in aviation and special material industries. Herein, the company values the consumer by knowing their demands and providing their demands and in aviation and special material products. The business division of BBA has been able to make the company more competitive. Moreover, with the BBA core mission to provide customer satisfaction is also given emphasis. Accordingly the company’s mission and vision can only be achieved if and only if they would focus immensely on satisfying their customers and clients. BBA had many consumers all over the world and the company is succeeding due loyalty given by their target market. To be able to serve their customer and clients better, they have initialize a strategy which includes a set strategies that greatly influence the whole corporation in achieving its goal. ·        Technological Sector The complexities of achieving business success through increased efficiency, effectiveness and competitiveness, combined with innovative applications of modern technology, has heightened the awareness of both Technology and business managers towards more strategically oriented approaches for planning and management of any industry (Luftman, Oldach & Lewis, 1993).  BBA has been able to use technological advancement for creating new and innovative products and services needed by its customers may it be from the aviation or the special materials business. Part of this is their utilization of modern technology in producing new products that will meet the demands of their target market. They also use the purpose of information technology by creating their own website to let their consumers have an easy access of knowing the company and the products and services that the company has made for them.   Review Industry Structure             An industry is a group of firms that market its products closely substituted from each other.  According to Porter (1980), some industries tend to become more profitable and competitive than the others. Hence, an existing industry such as the BBA Group based in UK should always remember that their industry will only survive by utilizing a strategy that would enhance the competitiveness of the business. In Porter’s model it is assumed that there are five forces that particularly affect an industry. The model is useful if a manager who strives to get the better off rivals. The framework provides excellent understanding of the industry context in which the firm operates.             Porter’s Five Forces Model includes threat of entrance of new industries.  The main objective of BBA is stay in the competitive position in the global market Although, the company knew that this type of industry belongs to higher entry barriers, the management has been able utilise an approach to make sure that the company will still be competitive in the international level.  In order for BBA to compete and stay in the international marketing environment, the management team had provided a long term vision to be followed by the industry as a whole. The use of merging and acquisitions has been able to strengthen the capability of the company to strongly and efficiently compete within the marketplace in both local and international arena.  The agreement made by BBA with these leading industries has strengthened their capabilities to compete in the global arena in terms of producing quality products and service especially for their aviation systems.  Moreover, with the existence of new entrants in this kind of business, the competition becomes tougher and tougher.  Since, these new entrants can be a threat for the company in terms of substitute products, BBA have again utilizes a strategy that will enhance their product more. The company utilises product differentiation approach as their marketing strategy to ensure that with these new entrants their product will still be different, unique and full of quality to satisfy their target market. The bargaining power of a supplier could be a threat for the profit of the company, and BBA management is aware of it.  Since the company’s goal is to provide the customers they needs and expectations in terms of diamond production, the company has been able to utilize all its resources. In addition, BBA, also uses supply and distribution channel effectively. Porter’s also include in his model the concept of the bargaining power of Buyers. Hence, BBA sees to it that their clients will be satisfied for their products with regards to aviation or special material products or service.  According to the management of the company, the Argyle fundamental premise is a simple as achieving the core mission and objective by merely satisfying their customers and clients. And lastly, BBA also considers the intensity of rivalry.  In this manner, they are willing to provide strategies and techniques in a way that their competitors will see them as a tough competitor for the benefit of the whole organization. Since the competition of these industries worldwide is very strong, BBA utilizes all their resources to enhance the operation of the BBA and to be recognized as the leading industry in diamond production. They also tried to include innovative marketing strategy and used technologically advanced equipments to produce quality diamond products.   Conclusion             Analysis shows that because of the management and marketing strategies of BBA Group, they are still enjoying their competitive position and competitive advantage in the global market.  In addition, it also shows that part of the generic strategy of the company is product or service differentiation and joining into mergers and acquisitions.  The company has been able to adapt to the marketing environment because of its strong commitment of providing quality products and services for both of their business operations.   Reference BBA GROUP (2006).  Available at [www.bbagroup.com]. Accessed on [24/04/06].     BBA GROUP (2006).  Available at [http://uk.finance.yahoo.com/q/pr?s=BBA.L]. Accessed on [24/04/2006].   Hitt, MA, Ireland, RD and Hoskisson, RE, 2003, Strategic Management, Competitiveness and Globalization.  5th Edition. Thomson, Southwestern.   Hofstede, G (1991). Culture and Organization. Software of the mind. New York: McGraw-Hall Book Company   Luftman, J.N.; Lewis, P.R; Oldach, S.H. (1993). “Transforming the Enterprise: The Alignment of Business and Information Technology Strategies.” IBM Systems Journal 32(1): 198-221.   Moschis, G, 1994,  Marketing Strategies for the Mature Market, Westport, C.T.        Quorum Books   Oliver, C, 1997, Sustainable competitive advantage: Combining institutional and resource-Based views. Strategic Management Journal, Vol 18. No. (9), pp. 697-713.   Porter, M. E. (1980).  Competitive Strategy. Free Press. Credit:ivythesis.typepad.com

BBA GROUP

Introduction Every business is subject to factors that affect the firm’s function as a whole. These factors are the ones attributed for...

Sample Paper on Letter of Pemission to Transfer of Course

June 21, 2007 [Name of Letter Recipient] [Position of Letter Recipient] [Name of School] [Address of School] Dear Sir/Ma’am: Greetings! This is to request your permission to transfer my stream of study from BBA Major in Information Systems to BBA Major in Marketing. By changing my major, I would be studying towards an area of great interest in academic learning and as an anticipated future career path. Studying Information Systems as a major has not been rewarding, personally or academically, to me since I have not been able to develop or maintain strong motivation to complete this course. Since I have already failed one computer course, I would not want to proceed in completing the course knowing that I would not probably be able to succeed. My level of interest in Information Systems as a field of study has not been sufficient to help me cope up with the demands of the course. Concurrently, my interest in Marketing as an area of learning is greater and I believe this would be sufficient to motivate me to meet all the academic requirements of the course while enjoying the learning experience and being a responsible steward of time and resources. I hope for your kind consideration. Thank you very much. Sincerely, Choi Ming Kee Credit:ivythesis.typepad.com

Sample Paper on Letter of Pemission to Transfer of Course

June 21, 2007 [Name of Letter Recipient] [Position of Letter Recipient] [Name of School] [Address of School] Dear Sir/Ma’am: Greetings! T...

BBA GROUP: ESSAY INSTRUCTIONS

CONTENTS *Brief introduction to the company, its stratigic groups,market and/or industry. *company discription identifying and assessing company activities in terms of specialist topics. e.g internal/global business,e-business,technology,resource requirments and access to resources, etc *outline of the company’s generic strategy with supporting examples from its activities. *balance between external and internal analysis [close to 50;50 but not more than 60;40 in any case] *use of appropriate tools, techniques and models of analysis [these may for example, incude Porter's 5 Force analysis, financial ratio analysis, financial trend analysis, core competencies, PEST, SWOT and any other thechniques such as industy life cycle or competitor analysis] *brief justification for the use of each analytical tool, technique or model, i.e. why has the technique been used. *appropriate financial analysis[not just calculations]is expected *focous on analysis using multiple souerce of information, descriptions limited to essential details only *Good use of examples from company’s activities to illustrate points *IT MUST BE 2500 WORDS OR MORE. Credit:ivythesis.typepad.com

BBA GROUP: ESSAY INSTRUCTIONS

CONTENTS *Brief introduction to the company, its stratigic groups,market and/or industry. *company discription identifying and assessing ...

BBA GROUP

BBA GROUP   Introduction Every business is subject to factors that affect the firm’s function as a whole.  These factors are the ones attributed for the success or even the failure of a business (1997).  In the light of this, there are certain ways or techniques that can be considered in order to emerge and continue to be competitive within the market place. The marketing concept has been defined as ‘the key to achieving organizational goals’ and the marketing concept rests on ‘market focus, customer orientation, coordinated marketing and profitability’. In a profit making business the firm obviously has to try and achieve this level of customer satisfaction as a way of staying ahead of the competition and making a profit (1994). Today, more and more people and organization are striving to be recognized in the business arena.  With this objective, these organizations had been able to competently and effectively adapt to the situation in the market place by using generic strategies that enhanced their competitiveness.  There are five different generic strategies that a business can choose.  These include cost leadership, differentiation, focused cost leadership and integrated cost leadership/differentiation.  Each generic strategy helps the company to establish and exploit a competitive advantage within a particular competitive scope (2003). Thus, this paper will critically examine the generic strategy used by BBA Group. Further this paper will provide an analysis of the company using some marketing tools like PEST and Porter’s Five Forces Model to determine the situation of the company in the internal and external marketing environment. In addition, this paper will also give emphasis on the competitiveness of the company.  Herein, the discussion will include the determination of the strategies used by the company.   Overview of the Company             BBA Group has been established in 1897 as a textile manufacturing industry, named       .  At present, BBA groups operate in a global market in two distinctive areas of business.  First the aviation service systems and which consist of Aviation Services and BBA aviation systems, through its subsidiaries in Latin America, US and Europe.  This division provides fuelling and refuelling services, cleaning, maintenance, aircraft sales, servicing, repair, technical support and training of pilots.  Next, BBA develops specific material for different industrial and hygiene sectors. Herein, they provide non-fabric products by the mechanical interweavement of textile fibres for the manufacture of sanitary towels and babies nappies.  This business division also specialises in embossing activities for printing original colour motifs like kitchen paper. BBA Group is publicly recognised company traded on UK stock exchange.  The companies involved in such group focus on providing products and services to aviation industries and speciality materials industries.  The aviation services and systems groups serve regional airline, commercial and military aviation clients and world business aviation by it primary operating industries and their subsidiaries. Some of these industries are Signature Flight Support, International Turbine Service, Dallas Airmotive and others.  The aviation division of BBA is known to be the 5th largest aviation groups in UK and amongst the top 40 largest industries in the world market.             Furthermore, BBA is also a vital player in the aviation support business. Such group has business operations at over 100 locations in the international market including 46 of the world’s top 100 airports.  Part of the companies business is joining mergers and acquisition. Such strategy helped the company to expand its business portfolio and expand their territories in the global market.   Utilizing PEST Analysis In order to analyse the environmental aspects of BBA Group, PEST analysis will be used.  PEST Stands for Political, Economic, Sociocultural and Technological factors that influence Argyle’s overall performance in the market place. ·         Political Sector A company will not be able to gain success, good reputation and trust if it will not consider legal and political sector as part of their strategy.  BBA Group has been able to follow the principles of business ethics. Hence, the company considers legality in all their actions.  They make sure that all their products and services adhere to the standards and wills satisfy their client worldwide.  Politically, BBA group had been able to follow all the standards set by the country and other international organisation satisfies their customers. ·         Economic Sector Economically, it can be said that throughout the years, BBA Group had enjoyed being at the top of its competitors.  The economic status of BBA is highly remarkable that it always give its consumers the best and quality products and services in the two business divisions.  In addition, the company’s growth and expansion on different countries in the world is an obvious evidence that BBA has been able to have a stable economic capacity to sustain and maintain its competitive position in the market place. ·         Sociocultural Sector Culture is an important factor in understanding an industry, because for any organization to operate effectively it must for some extent have a general set of believe and assumptions on how culture will influence the productivity and the success or failure of any company. Culture environment is one of the important principles that influence the organization.  (1991) identifies that there are four dimensions that differentiate cultures at a national level (power distance, individualism-collectivism, masculinity-femininity, uncertainty avoidance), which help to understand that people arrive to organizations with their own national culture.  In the BBA, the management sees to it that they value the opinion of their employees no matter what is their nationality.  Since, this company is competing globally; it cannot be denied that they need employees from different cultures to be in the company to help in the decision making.  It is also indicated that the international managers has been able to create a positive relationship in the local managers. Moreover, the management of the company has seen to it that they would be fair in treating all their employees. In addition, as mentioned earlier, the company sees to it that their social commitment is being achieved by satisfying the consumers with their quality products and services in aviation and special material industries. Herein, the company values the consumer by knowing their demands and providing their demands and in aviation and special material products. The business division of BBA has been able to make the company more competitive. Moreover, with the BBA core mission to provide customer satisfaction is also given emphasis. Accordingly the company’s mission and vision can only be achieved if and only if they would focus immensely on satisfying their customers and clients. BBA had many consumers all over the world and the company is succeeding due loyalty given by their target market. To be able to serve their customer and clients better, they have initialize a strategy which includes a set strategies that greatly influence the whole corporation in achieving its goal. ·         Technological Sector The complexities of achieving business success through increased efficiency, effectiveness and competitiveness, combined with innovative applications of modern technology, has heightened the awareness of both Technology and business managers towards more strategically oriented approaches for planning and management of any industry (1993).  BBA has been able to use technological advancement for creating new and innovative products and services needed by its customers may it be from the aviation or the special materials business. Part of this is their utilization of modern technology in producing new products that will meet the demands of their target market. They also use the purpose of information technology by creating their own website to let their consumers have an easy access of knowing the company and the products and services that the company has made for them.   Review Industry Structure             An industry is a group of firms that market its products closely substituted from each other.  According to (1980), some industries tend to become more profitable and competitive than the others. Hence, an existing industry such as the BBA Group based in UK should always remember that their industry will only survive by utilizing a strategy that would enhance the competitiveness of the business. In Porter’s model it is assumed that there are five forces that particularly affect an industry. The model is useful if a manager who strives to get the better off rivals. The framework provides excellent understanding of the industry context in which the firm operates.             Porter’s Five Forces Model includes threat of entrance of new industries.  The main objective of BBA is stay in the competitive position in the global market Although, the company knew that this type of industry belongs to higher entry barriers, the management has been able utilise an approach to make sure that the company will still be competitive in the international level.  In order for BBA to compete and stay in the international marketing environment, the management team had provided a long term vision to be followed by the industry as a whole. The use of merging and acquisitions has been able to strengthen the capability of the company to strongly and efficiently compete within the marketplace in both local and international arena.  The agreement made by BBA with these leading industries has strengthened their capabilities to compete in the global arena in terms of producing quality products and service especially for their aviation systems.  Moreover, with the existence of new entrants in this kind of business, the competition becomes tougher and tougher.  Since, these new entrants can be a threat for the company in terms of substitute products, BBA have again utilizes a strategy that will enhance their product more. The company utilises product differentiation approach as their marketing strategy to ensure that with these new entrants their product will still be different, unique and full of quality to satisfy their target market. The bargaining power of a supplier could be a threat for the profit of the company, and BBA management is aware of it.  Since the company’s goal is to provide the customers they needs and expectations in terms of diamond production, the company has been able to utilize all its resources. In addition, BBA, also uses supply and distribution channel effectively. Porter’s also include in his model the concept of the bargaining power of Buyers. Hence, BBA sees to it that their clients will be satisfied for their products with regards to aviation or special material products or service.  According to the management of the company, the Argyle fundamental premise is a simple as achieving the core mission and objective by merely satisfying their customers and clients. And lastly, BBA also considers the intensity of rivalry.  In this manner, they are willing to provide strategies and techniques in a way that their competitors will see them as a tough competitor for the benefit of the whole organization. Since the competition of these industries worldwide is very strong, BBA utilizes all their resources to enhance the operation of the BBA and to be recognized as the leading industry in diamond production. They also tried to include innovative marketing strategy and used technologically advanced equipments to produce quality diamond products.   Conclusion             Analysis shows that because of the management and marketing strategies of BBA Group, they are still enjoying their competitive position and competitive advantage in the global market.  In addition, it also shows that part of the generic strategy of the company is product or service differentiation and joining into mergers and acquisitions.  The company has been able to adapt to the marketing environment because of its strong commitment of providing quality products and services for both of their business operations.   Reference               Credit:ivythesis.typepad.com

BBA GROUP

BBA GROUP Introduction Every business is subject to factors that affect the firm’s function as a whole. These factors are the ones ...

MANAGING INFORMATION AND COMMUNICATION IN ORGANIZATIONS

Research Paper of BBA 302 Business Communication Today       TITLE : MANAGING INFORMATION AND COMMUNICATION IN ORGANIZATIONS           Written By     CONTENTS :   - Executive summary :  Introduction - Literature Review : I.      Good Information Management Model I.1 Emphasized on information not on data I.2 Focus on people I.3 Focus on processes I.4 Mixture of information origin II. Evaluation of Information Management : A Case Study III. Evaluating the value of communication methods III.1 According to elements and capabilities III.2 According to dimension III.3 Analysis of different communication channels IV. Overcoming Barriers to Communication IV.1 Classify the barriers IV.2 Rationalize resources on the type of medium to be used IV.3 Improve the face value of one organizational speaker - Conclusions - Recommendations - Bibliography   I. Executive Summary II. Introduction A business information system (BIS) is the process of converting raw data to useful information which makes BIS strategies to require cooperation of both managers and rank-and-file employees.  It is proved that BIS can improve both the internal efficiency of the organization but also to bring a source of competency (2005).  This paper considers the importance of BIS to organizations especially those firms that cannot operate effectively within accurate and reliable information to base their operational and strategic decisions.  The company in focus is FInnair, a European company within the airline industry, which will provide a god benchmark for evaluating the performance of BIS in the real corporate settings.  The other side of the paper is about communication wherein different channels are evaluated while constructing a model to minimize their weaknesses.      III. Literature Review III. 1. Good Information Management Model III. 1. A. Emphasized on information not on data.             One common problem in the workplace is cluttering of papers and other records which is an indication of information bottleneck and record mismanagement.  This usually cause managers to sort data by segregating the relevant from the irrelevant which leads to time extensions before coming-up with decisions ( 1984).  As a result, the lag between decision-making and implementation impedes the efficient resolution of problems at hand.  In addition, the formalized systems of keeping records and other pertinent data in each department can reduce the creativity, entrepreneurial spirit and self-esteem of the workforce ( 2003).  Data-mining can also increase the operational costs of the company if it is not efficient and if the workforce does not support such strategy.                               According to (2006), data are considered strategic asset if they provide the right information, they are accessible, they are readable and they are available when needed.  Due to these features, BIS can provide savings that can be transferred to more productive projects like employee training and monetary incentives.  As a proxy to BIS, managers can provide the necessary skills to promote strategic data asset by applying their expertise and experience in segregating and mining data.  However, this system limits the ability to of data to become strategic asset due to lack of readability of individual users like rank-and-file employees.  Lean and mean management indicates that data should be kept in minimum but considered useful in several purposes (2000).        People, processes and presence of managerial judgment are factors absent in raw data.  In addition, strategic data asset can serve as organizational reference in every decision-making effort.  As illustration, data on customer orders can have importance to sales team but this same data can impact how the finance department forecast future expenses and income streams.  The role of managers is to measure the compatibility of departmental needs to available data and the organizational culture, relationship with other divisions and the level of risk associated in such data especially if discarded.  Important data need are not emphasized by simply keeping them in file or database rather those data that become information because the organization are involved in identifying its real users and implementation appropriate systems to control them.   III. B. Focus on people To succeed in information management, both managers and employees are required to support the engagement.  This will necessitate managerial leadership to take-over the front seat to minimize potential resistance to change by staffs ( 2004).  Several notes should be taken.  First, the workforce should develop concrete idea behind the value-added features of their products.  Second, they should understand the limits of their work to efficiently approach the incoming data that they are contacted with.  This will not only make them more empowered and accountable but also prevent them on having data overload.  The organization can create a culture of responsibility through this system.  Lastly, the company can implement certain trainings in information management to integrate individual differences in segregating data from information.  This will promote work ethics to individual employees.   III. C. Focus on processes  Policies are inevitable inputs to increase acceptability and compliance of information management.  For example, a new approach to network access control (NAC) is developed to integrate access controls with current policies of a firm ( 2006).  Even though not intended to strictly punish non-conforming staffs, these will serve as an alarm clock to ring their consciousness every time crucial information came their way.  By doing so, it is also inevitable to create a knowledge inventory and information audit to strengthen policy implementation.  This involves identifying the cost and benefit of information management in order to place rationale to every involved procedure and eliminate ones that have returns below its costs.  As such, scanning the internal as well as external environment becomes necessary (2003).  This provides the current variables that can measure the level of importance of a specific knowledge inventory.   III. D. Mixture of information origin For small organizations, limiting information search using its own employees or noting its own experiences is not only usual but also practical.  But for large firms, this thinking can bring devastative effects due to absence of pro-activeness ( 1990).  It can be applied with competitive strategies by its competitors without even knowing how it came and for what purpose.  The lack of preparation speaks for this problem.  They are eaten by competition before they can act.  The myopic view of internal information gatherers about the current situation and future consideration is convergent to the adage that “Mirrors are deceptive”.  They tend to miss the loopholes of firm operations because they are acting out to prevent or cure them.  Hence, gathering relevant data to resolve such issues are unconsciously or consciously undermined.                   In this view, information search can reach other firms or industries.  By doing so, knowledge inventory are filled with new ideas that can maximize the opportunity to be at a pro-active state.  It can be argued that this may lead to burn-out/ overload, however, the processes described will weigh the cost and benefit of deriving and keeping the information.  In addition, the approach to people will also hold in such a way that managers will store primary knowledge while considering secondary ones.  Further, consultancy services can be tapped in order for a broader look in organizational operations can be conducted and the avoidance of personal biases or hindrance can be invoked.  Pepsi succeeded to cut down its operational costs when it hired PA Consultancy Services for advice (2006).  This option cannot only bring another alternative information source for the firm but also indicate fresher knowledge guided by theoretical background.  This is important to avoid subjectivity in vital managerial decisions.        IV. Discussion/ Result          IV. A. Evaluation of Information Management of FInnair             When one crosses an organizational issue about information, the first thing that comes into mind is information technology.  Technological change provides competitive advantage to firms that adapt it first ( 2003).  Being a subset of a larger strategy, information management relies on the level of available technology.  This is why a Finish-carrier and international airline, Finnair, outsourced IT programmers and bought packaged software (2004).  The action made the firm more efficient because it can strategically plan its flights based on market considerations.  Not only that, the firm also derived growth outcomes in the advent of the new technology making it expand its hubs to cater to a larger customer base and air traffics.                Most of the acquired technology and software is intended for executive and managerial decisions in the areas of scheduling, pricing, profit maximization and growth (2004).  As such, legal requirements of air authorities can be realized without putting pressure on growth due to some regulations and traffic constraints.  On the other hand, access is limited to schedulers and managers undermining participation from staff-level employees.  For example, flight and land stewards are not aware of the bulk of passengers they will serve for specific schedules.  This may result to ambiguity in their task that can adversely affect performance.  The technical lay-out of information encrypted in databases may also be found by staffs ineffectual.  For the firm to be able to comply with people focus condition, the technology should be made understandable to staff-level.               Further, the technology-based information management of the firm deviates from time criteria of data.  The inclusion of software support into the system requires testing and evaluation (Moorman 2004), thus, trial and error method would be probable.  This could diminish the short-run benefits from the system as completion requires both financial and business sacrifices.  In addition, the firm insisted to integrate all necessary inputs into the software development without making the completion process longer.  In effect, the firm is emphasizing more on data not on information which can disrupt the value of the technology.  Too much dependence on technology also signifies the weakening of the firm’s trust on its managers and staffs.  Entrepreneurial spirit is not fed in favor of technology.               Inputs being supplied to the software to incur reliable information come from its users.  Therefore, the inability of the firm to focus on people instead of data is a clear manifestation of data emphasis.  Overload will be the likely outcome if not resolved.  The process is also with loophole. Finnair engineers and the software development provider are under siege to expedite the completion (2004).  The lack of precautionary measures to halt behavioral differences like policy agreements had contributed to slow-up of the process.  The firm wanted customized services with 100% software capability utilization.  With the demand resulting to human conflicts against consultants and delay, it can be concluded that the information management of the firm has its over-maximizing criteria or simply they wanted a perfect result.  However, without the four criteria above, strategic asset through information can be hard to obtain.   IV. B. Evaluating the Value of Communication Methods    Media/ Dimension/ Characteristic Conditions Audio tape and CD/ Recorded and passive/ Spoken The message can be conveyed using only sound like educational contents.  Its value increase when the recipient is on the move and outside business premises.    Video tape/ Recorded and passive/ Spoken and other images including written words The message content requires long-lasting retention that can be filled by memorable impressions in the video and its technicality can ensue boredom. Letters and memos/ Recorded and interactive/ Written and other images The message is personal to the recipient.  The cost and effort made to produce the letter reflects how the sender emphasized the endeavor. Manuals/ Recorded and passive/ Written and other images When the information is intended for visitors within the office premises that make it inappropriate for intranet to be used.  Fax/ Recorded and passive/ Written The message is suited in a form of letter but with immediacy importance. E-mail/ Recorded and interactive/ Written  Effective to send messages to multiple recipients without printing and messenger costs. Intranet/ Recorded and interactive/ Written and images When the message requires attachments, say, confidential map in which local network can only view the message. Radio/ Live or recorded and passive/ spoken The message is immediate and can be obtained using sound. TV/ Live or recorded and passive/ spoken and images Requires actual images in order for the message to have value. One to ones/ Live and interactive/ spoken, written and other images The message requires meeting a certain agreement with immediacy to perform the participant’s respective duties. Meetings/ Live and interactive/ spoken and other images The same as the preceding but with minimal number of participants known to the speaker. Phone/ Live and interactive/ spoken The message is personal and immediate. Video conferencing/ Live and interactive/ spoken and images When meetings are held in a distance and the parties have to see each other.   V. Conclusions and Recommendations  V. A. Plan to Achieve Strategic Data V. A. 1. The nature of information has direct implications to communication methods.  If the information is crucial to decision-making, this can be resolved by using a type of communication model that can preserve its confidentiality as well as detailing the facts involved.  As a result, it is important to identify information and classify them in several categories (employee use, organizational, confidential, general, etc.).  In doing so, storage and retrieval using communication methods can be cost and strategy effective.  The communication method should adapt to the content of the information.  This should alert the records section of the organization to be able to sort out this information in a way that can be retrieved and disseminated using compatible communication methods.  The input to the desired output is information and communication method serve as channel to achieve the outcome according to the criteria of the sender as well as conditions of the receiver.   V. A. 2. Continuous review of information and communication relationship is necessary.             As most information that requires urgency is guided with technological advances; the suitability of messages flowing into electronic media should be monitored in their effectiveness.  As technology use suggests cost-efficiencies, the organization can limit its value-creating aspects within machines. Hence, competitive advantage is less likely.  Interdepartmental communications using face-to-face interaction can provide inimitable asset to the organization that other competitors can hard discover and inappropriate to apply.  At times of stagnant growth, the management should consider revising or testing their communication methods to suit not information content and potential to create competitive advantage.                V. B. Overcoming Barriers to Communication V. B. 1. Classify the barriers  When an organization is confronted with minimal responses from a company-wide message, the problem can be approached in varying directions involving numerous variables that can be technical and behavioral in nature (Hargie & Tourish 2004 pp. 190-195).  Without holding the bull on its horns, the golden time can diminish in thin air which can have financial and business implications to the organization.  This problem can also be continuum because the root has yet to be discovered.  In view of this, there is a need to create an information system and database that can provide the organization useful techniques on how to address communication barriers.  The occurrence of the barrier can also be discovered where it happened within the communication process.  In effect, preventive/ curative measures can be efficiently applied.   V. B. 2. Rationalize resources on the type of medium to be used As observed, different forms of media only differ in the level of technology applied resulting to augmented efficiency of the communication process.  If the organization does not have the technological resources to let them exploit electronic media, they should be able to accept such fact.  They may be too small to introduce hi-tech media under the conditions of economies of scale (Rowe 1999).  In addition, it can also promote organizational ties between managers and employees as the latter will see themselves as important part of operations considering that managerial messages are transmitted with personal touch.  The firm may not have valuable physical resources but it can shift its focused into more valuable and inimitable human/ organizational resources.        V. B. 3. Improve the face value of one organizational speaker  In view of the growing gap between managers and employees and cost-reduction schemes of some industry challengers and followers, it is helpful to create a spokesperson that will connect the Board and other key organizational departments to the rest of the staffs.  This can aid in building a trustworthy figure within the organization that staffs can have attachment and build communication relationship.  This is a solution to minimize departmental jargons in a meeting or one-to-ones forum.  In addition, it can also provide an environment in which each employee is at ease in listening with the speaker.  Charisma is something few people have and so the organization should choose the most compatible person for this job.        Credit:ivythesis.typepad.com

MANAGING INFORMATION AND COMMUNICATION IN ORGANIZATIONS

Research Paper of BBA 302 Business Communication Today TITLE : MANAGING INFORMATION AND COMMUNICATION IN ORGAN...