Research Articles Base: Global Markets

A Sample Paper Introduction on Global Markets

Introduction               Most companies today especially those playing in the global market have undergone a lot of changes basically to address the issues and problems confronting the company and some for strategic reasons. Whether due to problems faced by the company or as part of the company’s strategy to remain competitive and improve sales, or both of these reasons, organizational development and changes are necessary. These changes may include change in the company’s objective, change in strategy, location, operational techniques or organizational structure.             A company’s organization comprises of individuals, teams and management who are all behind the company’s success or failure. Each individual or team in an organization has different tasks which must be performed effectively in line with the goals and objectives of the company.  A company undergoing organizational changes in order to solve problems and improved the company’s present situation needed to use strategies in human resource management, making each individual and team within the company perform their tasks efficiently. Strategic HRM requires good leadership that can effectively motivate, communicate and lead the company to its success. However, most problems in businesses are people problems; that is why strategic HRM is important in every organization.             This paper discusses about the issues in strategic HRM by evaluating and analyzing the case study of HRD and Change at FumeGo Ltd. By analyzing a company’s situation and identifying its problems, the paper has come up to possible solutions backed up by some theories on strategic HRM. The paper includes discussion of organizational development, techniques that can possibly identify and solve problems, and the importance of organizational change as strategy of HRM. Company Overview             FumeGo Ltd. is a company which manufactures customized cupboards for the laboratories of pharmaceutical companies and universities. The company manufactures the cupboards according to the specification and needs of the customer. Currently, the company is divided into several department departments such as the sales, design, manufacturing and support function departments which includes the payroll, accounting, FIRM, and the administration. The manufacturing department is further divided into different team or section depending on its function or task, which include the plumbing section, electrical section, sheet metal cutting and folding, protective coating application section, and the assembly section. All in all the company employs about 220 individuals of whom 175 belong to the manufacturing department. Although most people in other departments such as those who perform supervisory, sales and design roles seems satisfied with their jobs, there are higher turnover in the manufacturing department.             During the recent years, the company has been experiencing sales decline, lower financial returns, and a noticeable decline on the number of repeat orders from its past clients due mainly to poor quality and delivery performance as well as failure to meet the customers’ needs. To address these issues, the company hired a new Managing Director, MD. With the initiatives and strategies that will be formulated by its new MD, the company hopes for improvement of the company’s organization, gaining new orders and winning back past customers. In other words, the company relies on the efficiency and leadership of its new MD.               In order to identify the company’s problems, the new MD conducted a thorough investigation on the company’s current activities and reviewed the company’s past performances. He found out several problems in the manufacturing and the design departments. First, the manufacturing departments allowed delivery of products with some defects for the sake of meeting delivery dates which led to customer complaints and modification of the products. This wrong process involves additional costs in the part of FumeGo. Another problem found out by the new MD is that the production process of FumeGo lacks efficiency and that the standards used by the company is not enough to be able produce high quality customized products. Aside from these, lack of concern for the company and for the customers, and laziness are evident to the workers in the manufacturing process because of the untidy workplace. In the design departments, there are also some problems which cost a lot to the company such as unnecessary additional features of the products and the department does not involve manufacturing with its design process. Problems/Issues Identification             From the case study, different problems can be identified. The primary problem is lack of adequate skills and knowledge for the employees, not only with the specified departments in the case study like the manufacturing and the design departments, as well as with other departments since, as an organization, different departments are linked directly or indirectly with each other, causing chain reactions which means that a problem with one department may cause problems with the other departments. In the individual level, the problem is that they lack of skillful leaders that will guide and motivate them especially in the manufacturing process. A good leader in the manufacturing department should be well knowledgeable in producing high quality products. High quality products yield to more sales and profits which is the primary reason why the business exists. A good leader is also a good motivator, encouraging his subordinates to perform efficiently with concern to both the company and the customers. Also, the manufacturing department must be involved in the design process in order for the design and manufacturing to be aligned with each other. The design department should regularly check if the products are manufactured according to the design and specifications, while the manufacturing department must inform the design department of the processes that are involved, if there are some specifications that may be altered or can not be done. Furthermore, the individuals comprising the design departments lack the ability to integrate cost-effectiveness while maintaining the quality of the products. These individuals must be focused on how to integrate customers’ specifications while meeting their needs. Also, individuals involve in the design of the products must conduct further research on how to improve the quality of the products they design especially today that most manufacturing companies are driven by technology, making more improved and advanced designs that satisfy customers. In the organizational level, company seems to lack of established mission and objectives that must be formulated by its leaders. The company is seemed to be focus on gaining profit without the realization of how it can gain more profit. The company is focus only on production but not on the quality, on customer satisfaction and improving company performance. The entire company needs good leadership and management that have enough knowledge, skills, and experiences in strategic management, customer relations and human resource management. The company has no goals of satisfying employees, in return, its employees have no concern over the company and its customers, and high labor turnover happened. Another problem is the reason behind the company’s sales decline which is poor responsiveness to customers’ needs. The company’s employees are not oriented in satisfying customer care and satisfying customers’ needs, thus the company is losing loyal customers and having hard times gaining new customers. Behind all these problems, HR management seems to have failure in identifying the problems in the company. The company became aware that problems exist only after a period of sales decline and when the financial return of the company becomes unsatisfying. Credit:ivythesis.typepad.com

A Sample Paper Introduction on Global Markets

Introduction Most companies today especially those playing in the global market have undergone a lot of changes basically to ...

Whirpool’s Global Supply Chain initiative

EXECUTIVE SUMMARRY   Whirlpool Corporation is a global manufacturer and marketer of major home appliances and nearly 50 manufacturing and technology research centers on the globe. The company markets Whirlpool, Kitchen Aid and other major brand names to consumers in more than many countries. Thus, Whirlpool’s global supply chain process and management can be complex with various areas of concern for the company’s current business challenges’ involving their supply chain management and that Whirlpool is moving towards a better supply chain initiative process relating to their SAP and ERP systems that enables to appreciate its business processes as reflected through its high level balanced scorecard. Thus, it is useful to basically realize that changes and strategic planning of the supply chain initiative is really a relevant source of profit growth and market stability for Whirlpool. In their supply chain initiative, Whirlpool can usually spread various functions necessary to overlay a coordination system along with responsibilities and structures to bring together successful activities within the company among the company’s business partners, the selection of partners, the design of incentives and the design of processes to monitor performance, set goals and solve problems. The strategic and operational activities and the design of the coordinating system will have to provide value on a better, useful supply chain management as Whirlpool may seek to provide prescriptive ways to pursue an optimizing approach given the assumption of a completely rational decision maker.  In principle, there could be such behavioral dynamics on supply chain management that emphasizes key concepts in terms of understanding Whirlpool’s visible stretches of wasted inventory and unmet supply chain process as Whirlpool supply chain limps along, never quite achieving its full potential as a source of competitive advantage or of the reduction of the entry barriers to other competitive settings in improving performance of such resource process. The related issues and or problems require more than IT implementation or optimization algorithms in such observation of the company, there seems to a palpable orientation in managers and executives who purposefully address the behavioral issues in supply chain planning as an optimization problem with objective to minimize forecasting accuracy. Whirlpool Corporation is now using SEEBURGER technology to provide a standardized business integration solution for thousands of trade customers that use Electronic Data Interchange (EDI) to automate business transactions. SEEBURGER adapters embedded in the SAP Net Weaver(TM) technology stack will eliminate the need for multiple solutions and also support Whirlpool’s global use of the my SAP Business Suite as well as the company’s initiatives to implement the Net Weaver platform.  The use of SEEBURGER adapters for data translation and communications will simplify Whirlpool’s network architecture, both by allowing the company to move away from non-SAP-compliant solutions and by eliminating the need to use trade customer integration solutions from different vendors. In addition, AS2 connectivity services provided by SEEBURGER will aid Whirlpool’s efforts to migrate more suppliers and customers to the AS2 standard in order to reduce costs and maximize its investment in global data synchronization through the UCCnet data pool service. Whirlpool is currently using SAP Net Weaver’s master data management (MDM) capabilities to synchronize product item information with UCCnet, the SAP Exchange Infrastructure (SAP XI) to provide integration broker services, and the SEEBURGER AS2 adapter to meet UCCnet’s requirement for Internet-based AS2 document exchange and that data synchronization effort will help Whirlpool comply with its trade customers’ demands for uniform product information, while also lowering supply chain costs by reducing invoice and product shipment errors. ANALYSIS AND DISCUSSION OF WHIRLPOOL’S GLOBAL SUPPLY CHAIN INITIATIVE USING THE BUSINESS ARCHITECTURE FRAMEWORK  Great companies don’t stick to the same supply networks when markets strategies change. Rather, such organizations keep adapting their supply chains so they can adjust to changing needs. Adaptation can be tough, but it’s critical in developing a supply chain that delivers a sustainable advantage. Most companies don’t realize that in addition to unexpected changes in supply and demand, supply chains also face near-permanent changes in markets. Those structural shifts usually occur because of economic progress, political and social change, demographic trends and technological advances. The best supply chains identify structural shifts, sometimes before they occur, by capturing the latest data, filtering out noise, and tracking key patterns. They then relocate facilities, change sources of supplies, and, if possible, outsource manufacturing. Companies that adapt supply chains when they modify strategies often succeed in launching new products or breaking into new markets.  VALUE PROPOSITION Building an adaptable supply chain requires two key components: the ability to spot trends and the capability to change supply networks. To identify future patterns, it’s necessary to follow some guidelines: Track economic changes because as nations open up their economies to global competition, the costs, skills and risks of global supply chain operations change in the rise of specialized firms and companies to see if they can outsource more stages of operation. Make out the needs of the company’s ultimate consumer’s not just immediate customers which amplify and distort demand fluctuations. Whirlpool should ensure that product design teams are aware of the supply chain implications of their designs and must also be familiar with the three design-for-supply principles: commonality, which ensures that products share components; postponement, which delays the step at which products become different and standardization, which ensures that components and processes for different products are the same.    RESOURCES Whirlpool’s global platform provides their operations with resources and capabilities no other manufacturer can equalize as Whirlpool’s global procurement, product development and information technology organizations help the company operations reduce costs, improve efficiencies and introduce a continuous stream of relevant innovation to consumers as the management was inspired by innovations and designs, customers around the globe trust Whirlpool to make their lives easier and their brands are connecting with customers in ways that will last a lifetime. Moreover, Whirlpool Corporation is searching for ways to realize useful efficiencies in its supply chain operations within its eight factories and eleven regional and sixty local distribution centers that could monitor and track facets of its supply chain, from toaster scheduling to deployment and inventory planning. Whirlpool chose to implement a broad range of i2 solutions to integrate and drive greater efficiency through its supply chain and wanted to work with the thought leaders in the supply chain space, says J.B. Hoyt, Whirlpool’s Project Director of Supply Chain. After researching several alternatives, including systems integrators, Whirlpool executives selected i2 Business Optimization Services (BOS) to implement these solutions.  The i2 BOS methodology is a framework of tools and techniques consisting of intellectual property and service offerings required to model build and operate an integrated planning framework to synchronize supply chain operations. With i2 BOS, companies can optimize key business workflows. The first is that the i2 BOS team has great knowledge of the software tools and how the tools work. The second benefit is the intellectual property. The i2 BOS team has the knowledge of where the industry is going, where the future of supply chain planning is going to take advantage of things that are coming down since its implementation of i2 solutions, Whirlpool has achieved significant results in its targeted areas of improvement.   PROCESSES Whirlpool’s trade processes migrated to the SEEBURGER- based AS2 service with UCCnet connectivity that customer’s system will be used to demonstrate the benefits of AS2 and UCCnet to other trade customers with the vast majority of their business coming in on EDI over a value-added network for Whirlpool Corporation’s Global Information Systems. SEEBURGER will help move more trade customers to the AS2 communication platform and expect to see significant cost reductions with VAN elimination while bringing more suppliers and customers into the UCCnet and AS2 fold.  Whirlpool Corporation’s transition to such connectivity solution set is part of the first phase of its SAP Net Weaver and SAP XI implementation. The company is then using the SEEBURGER’s SAP consulting services to deploy the adapters, link to UCCnet and configure the message formats required for each trade customer. The implementation is significant because it reflects two major IT trends for consumer packaged goods companies today. The move to consolidate on a single global platform – my SAP Business Suite and related applications to reduce costs and enable the service oriented architecture required to efficiently link business processes and the push for global data synchronization through UCCnet of providing reliable electronic communication among trade customers support Whirlpool’s efforts in important fields.   PROFIT AND GROWTH Whirlpool success involves customer service and reduced supply chain costs providing financial impetus to drive the remaining systems work, a Web-based collaboration tool for sharing and combining the sales forecasts of Whirlpool and its major trade partners, the advanced planning and scheduling system boosted in North America from 83 percent to 93 percent by having inventories by 20 percent from freight and warehouse costs and Whirlpool spends a lot on manufacturing materials. Its biggest buys worldwide are steel (3-6 million annually), followed by plastic resins and parts (5-5 million), motors and pumps (more than 5 million), fabricated steel components (0-0 million) and electrical and electronic components (5-0 million) Whirlpool company is looking to develop world class suppliers which is capable of meeting today’s needs preparing for the quality, cost and delivery requirements of the future. Whirlpool’s global initiative focused on establishing its presence in North America, Latin America, Europe and Asia and acquires the appliance business which gave the company a solid European operations base. Thus, Whirlpool expanded its involvement in the market and established and appliance joint venture partner and strengthened its position in Latin America and Europe and building a solid manufacturing and marketing base in Asia.  PARTNERSHIP Whirlpool provides the software, training and telephonic support services to their internal applications development group and does on-site support for building new types of applications over the ongoing development of the product in providing the basis of Whirlpool’s ongoing relationship with the supplier and started the working relationship that led the management to communicate with SAP using the tool, give input to other development improvements and develop Lighthammer partnership application functions that have saved significant dollars and improved plant productivity. Whirlpool views the relationship with Lighthammer as ongoing and plans to continuously work with the supplier to improve upon and meet new demands as they are encountered as it has provided a tool set that gives the best of both worlds and continue to manage and deliver value within application landscape and provide Whirlpool with a path of transition to migrate to our global strategy to help drive operational excellence and when applicable, real-time performance management, providing for the capability of a global sustainable competitive advantage that will be drive customers’ needs.  Customer operating partnerships are customer-vendor arrangements that involve tightly linked extended supply chains and offer great gains, including 20 to 35 percent share increases, most profitable accounts and a shift to a strategic positioning as a highly service-differentiated supplier as well as direct-sales relationship with value-oriented top customer executives and highly-defensible competitive position with switching costs. The most desirable customers are seeking more intensive operating partnerships within capable suppliers entailing that price is not the primary factor creating opportunity for managers who develop and offer useful arrangements. Generally, managers who fail to initiate partnerships with their best customers run the risk of losing them and the lion’s share of their company’s profitability and have the capability to develop arrangements with their highest-profit customers. It is crucial to understand that appropriate management measures must be put in place.  Whirlpool Corp. has lived through some difficult IT and e-business hardships and flawed enterprise resource planning implementation and an Web partnership but Whirlpool has learned from their mistakes and is forging ahead with a methodical e-business strategy. The company’s biggest e-business accomplishment of the was not a Web initiative, but the creation of an overarching IT strategy that includes an Internet technology portfolio stretching across major corporate customers and suppliers in referring to their supply chain at getting products to the right place at the right time – the right supply chain strategy, the satisfaction of consumers at the end of the supply chain. Most supply chain initiatives do the opposite: They start with the realities of a company’s manufacturing base and proceed from there. A highly disciplined project management office and broad training in project management were key to keeping work on budget and on benefit and be part of Whirlpool’s supply chain business approach toward quality and productivity enhancement as new product development. Improving customer service via the Web is central to its approach, to live up to their commitment to the customer as Whirlpool is moving ahead with its e-business plans after facing difficulties in the past. Whirlpool was ensnared by SAP implementation for ERP that had gone awry, leading to fourth-quarter distribution and fulfillment problems. Whirlpool admitted it was facing delays in shipping small orders of appliances since moving to the SAP software and ERP implementation to consumers through its Web site, then direct the consumers to participating appliance dealers.   DISCUSSION OF THE INFORMATION COMMUNICATIONS AND TECHNOLOGY CHALLENGES FACED BY WHIRLPOOL IN IMPLEMENTING ITS GLOBAL SUPPLY CHAIN  The supply chain organization was the part of the business that Whirlpool’s salespeople were in the habit of calling the “sales disablers” in 2000. Whirlpool was behind the eight ball, tying up too much capital in finished goods inventory and yet failing to provide the product availability to the customers needs as the availability hovered around 87 percent on the delivery performance of the four biggest appliance manufacturers in the U.S. as Whirlpool is in the fifth place. The company is now proposing a new suite of IT solutions for which the company had little appetite and had flipped the switch on a massive new ERP system, with less than desired effect. Normally, Whirlpool ships close to 70,000 appliances a day to North American customers. Even though the situation was soon righted SAP remains a valued partner, the experience of being treated as a sort of poster child for ERP folly had left scars. Purchasing and supply management are keys to the Whirlpool Corp.’s strategic gamble that it can remain profitable while it restructures, reduces costs and expands manufacturing operations worldwide in the face of a global economic slowdown. Already recognized as one of the world’s best cost-management organizations, the purchasing group at Whirlpool is reorganizing to deliver best-value materials to regional assembly plants. That will be done, says Roy V. Armes, corporate vice president for global procurement, by optimizing the supply base for the world’s largest major appliance company. That means finding the best possible suppliers globally. Whirlpool today is for the performance of the global supply chain. But in 2001, the company utterly new to the supply chain organization to lead its e-business efforts. By contrast, Paul Dittmann, the vice president of supply chain strategy, was a Whirlpool veteran with a tenure spanning a quarter century. ‘’Sales had risen to record levels in 2000 as their launch of some innovative products coincided with an up tick in housing starts. With the rest of the company chugging on all cylinders, there was only one thing holding Whirlpool back: to their supply chain’’ Whirlpool CEO has said. At the top level, it’s a simple formulation: getting the right product to the right place at the right time.  Whirlpool makes a diverse line of products with manufacturing facilities in different countries and sells those through retailers big and small and to the construction companies and developers that build new homes. I agree that Whirlpool needed to formulate a battle plan that would include new information technology, processes, roles and talents by defining their strategy as the company aims to be world-class in supply chain performance by focusing on customer requirements as their approach to developing their supply chain strategy would start with the last link involving the consumers and then proceed backward. The overwhelming tendency in a manufacturing organization is to think about the supply chain as something that originates with the supply base and moves forward. It’s understandable: This is the part of the chain over which the company has control. But the unfortunate effect is that supply chain initiatives typically run out of steam before they get to their end point and real point. Whether or not they make customers’ lives easier becomes an afterthought. Whirlpool asked about their overall availability requirements, their preferences in communicating and would like to see along the lines of e-business along which performance was varying in importance according to the customer. Strategy does not simply address the needs of the moment. It anticipates the challenges of the future. A component of the supply chain strategy was identifying the probable range of future operating scenarios based on industry, economic and technological trends. The enterprise resource planning (ERP) solution, has shipped to customers worldwide a as the world’s premier ERP solution, designed to take full advantage of the industry’s renowned, standards-based SAP Net Weaver(TM) platform that brings new functionality, flexibility and innovation to customers from automating end-to-end processes within an organization to extending processes beyond the enterprise to the entire ecosystem of customers, suppliers and partners, providing companies with one solution to increase efficiency and manage the innovation and growth of their organization giving businesses the flexibility to sense and respond to market changes and continuously align their operations with evolving supply chain demand for services-based business processes which combines software applications and the underlying software infrastructure and enables customers to expose and leverage ERP delivers many new features to help companies improve efficiency and free up resources to invest in innovation and growth. New and enhanced user roles and self-services make the solution easier to use, increasing user productivity and solution adoption.  New role templates provide appropriate applications, information and services to specific user groups and range from job-specific ones, such as plant manager, to general roles, such as employee or manager. ERP features comprehensive analysis, forecasting and reporting tools that support all standard ERP processes such as human capital management, financial operations and corporate services. These enhanced analytical tools are embedded in all processes, adding real-time data analysis capabilities to ERP’s traditional back-office role. This gives employees and executives the appropriate insight into company activities for effective decision-making at all levels of the organization. Analytics from all business processes can be fed into and retrieved from the business information warehouse in ERP. On the B2B side, the company has developed WhirlpoolWebWorld.com, a portal that describes as a doorway for their partners, vendors and trade suppliers and other employees as the site has about 50,000 users and Whirlpool expects to have 25 percent of its North American supplier base and of its procurement organizations worldwide. Whirlpool Web World includes Partner Store, where dealers order from Whirlpool and the company’s Internet-enabled Global Procurement system, accessible by employees and suppliers.    LIST OF REFERENCES Ciarlone, L, 2005, Building a house of brands: Whirlpool Corporation’s Blueprint for success, <http://www.gilbane.com/case_studies/Whirlpool_case_study.html>, Gilbane Report   Bowman, RJ, 2000, Whirlpool: Connecting pieces of a big puzzle, <http://www.glscs.com/archives/07.00.whirlpool.htm?adcode=5>, SupplyChainBrain.com, July   Russell, J, 2004, Achieving Operational Excellence, <http://www.appliancemagazine.com/editorial.php?article=550&zone=1&first=1>, APPLIANCE magazine, July 2003, Customer Loyalty taken to heart, <http://www.appliancemagazine.com/editorial.php?article=157>, APPLIANCE magazine, April   Whirlpool’s annual report     ANNOTATED BIBLIOGRAPHY   Content Technology Works Case Study Building a House of Brands: Whirlpool Corporation’s Blueprint for Success August, 2005 Leonor Ciarlone Whirlpool’s digital asset management architecture provides the enterprise pillar to protect and expand brand value   Content Technology Works (CTW) is an industry initiative, administered by The Gilbane Report, to develop and share content technology best practices and success stories. CTW case studies provide organizations with best practices in content technologies and strategies for securing funding, measuring actual value, and driving adoption. The company’s growth strategy has been to introduce innovative new products, strengthen customer loyalty for its brands, continue to expand its global footprint or enhance distribution channels and, where appropriate, make strategic acquisitions which enhance the company’s innovative global product offering. Whirlpool a valuable asset: a corporate brand that communicates innovation, consumer-driven research and development, and excellence in design and performance. Injecting these principles into internal and customer-facing business processes enables the company to invoke a consistent set of emotional responses from consumers including trust, uniqueness, and most important, loyalty.    Global Logistics & Supply Chain Strategies SPECIAL ISSUE: GLOBAL SUPPLY-CHAIN PARTNERSHIPS Whirlpool: Connecting Pieces of a Big Puzzle By Robert J. Bowman July, 2000   Whirlpool leads the market in the United States and South America, and is among the top three producers in Europe. In addition, it is the largest western manufacturer in Asia, according to Steve Whalen, director of supply-chain operations. Many companies fear outsourcing because of the temporary chaos that results when operations are shifted from one party to another. One thing that did change was Whirlpool’s logistics information systems. Prior to the new contract, the company had been developing software for hand-held personal data assistants, in order to collect electronic proofs of delivery and information on product damage. Penske contributed four systems to Quality Express: a logistics management system (LMS) to track shipments at the order level on a real-time basis, a route optimization system known as Route Assist, communications software from Qualcomm and Penske’s license for the use of a common-carrier optimization system from ITLS, part of i2 Technologies as the elements were integrated into Whirlpool’s new ERP system, acquired from SAP AG shortly before Penske was chosen to oversee Quality Express. Whalen says Penske helped Whirlpool to cope with the usual start-up problems arising from the massive ERP implementation. Whirlpool’s affinity for outsourcing doesn’t stop at the U.S. border. Over the next two years, the company expects to get its third parties more heavily involved in international logistics, both for import/export and in-country operations and that Whirlpool is putting the finishing touches on information systems that control domestic distribution but don’t yet provide the level of detail needed to operate there has to be a goal that should be applied for their global supply chain initiative.   Credit:ivythesis.typepad.com

Whirpool’s Global Supply Chain initiative

EXECUTIVE SUMMARRY Whirlpool Corporation is a global manufacturer and marketer of major home appliances and nearly 50 manufacturing a...

The Global Energy Industry

THE ABBOT GROUP PLC Company Overview             Abbot Group plc is a world leader in providing drilling and related well and facilities engineering services in the global energy industry (Data monitor 2004). Headquartered in Aberdeen, Abbot is the largest offshore platform drilling contractor in United Kingdom (UK) and also happens to be one of the largest land drilling operators outside North and South America (Abbot Group 2004a). In particular, Abbot has a fleet of 45 land drilling rigs and 34 offshore drilling platforms in Europe, the Caspian region, Russia, North and West Africa, the Middle East, Asia and the United States (US) (Duncan 2005; Data monitor 2004).             Core business services of Abbot include: conceptual and front end studies; detailed design; engineering procurement and construction; offshore drilling and work-over; onshore drilling and work-over; drilling and well engineering; rig refurbishment and upgrade; slick-line services and well intervention; integrated project management; technical limit drilling and specialty engineering; and, consultancy services (Reuters 2005). These activities are basically carried out by the company’s wholly owned (operating) subsidiary, KEA DELTA, that is involved with providing drilling, well engineering and facilities engineering services—both onshore and offshore—within the international oil and gas industry (FALL exchange 2005; Abbot Group 2004b). KEA Delta is the offspring of KEA Drilling and DELTA merger, with the latter being acquired by the Abbot Group on October 1, 2001 (Abbot Group 2004b).             Another subsidiary of Abbot is Benter, an international drilling and oilfield systems company, and with BancTec’s expertise in both onshore and offshore drilling operations, the Company provides a range of onshore and offshore drilling facility design, fabrication, installation and project management services (Abbot Group 2004b; Reuters 2005).             Figure 1 (below) illustrates Abbot’s company structure: Figure 1: Abbot Group PLC Company Structure (Source: www.abbotgroup.com) Abbot Group’s Human Resource Management The employees of Abbot Group plc are one of the key stakeholders of the company, and since Abbot have long recognised the importance of balancing the expectations of all their key stakeholders (other key stakeholders include the customers, shareholders, and the communities where Abbot operates) so as to be a well run business, the company naturally has policies and procedures developed and improved “for the management of safety and the environment, and the protection of the welfare of our employees” (Abbot Group 2005, p. 2). This section, however, will focus only on the policies and procedures concerning Abbot’s workforce. Abbot Group employs 3,907 people worldwide (Data monitor 2004). Now, in order to ensure fair and just labour standards for their operations, Abbot implements a framework of policies and procedures to make sure that the company’s operations adhere consistently to labour standards (Abbot Group 2005). Nevertheless, valuing people is the core of this framework of policies, and it follows key principles that include: recruitment and advancement within the business based on ability; recognition of workers’ right to freedom of association and collective bargaining; and, prohibition of the use of forced, compulsory or child labour (Salter 2005a). In particular, recruitment and advancement within Abbot is based on ability, and this is as such because Abbot considers any form of discrimination within their workforce as detrimental to achieving their aim, which is to employ the best people that will meet the organisations and the expectations of the organisation’s clients (Abbot Group 2005). Meanwhile, Abbot’s recognition of their employees’ freedom to association and collective bargaining is accordingly translated into practice through workers councils, trade unions and workforce representatives (Abbot Group 2005). With regards to the third key principle, Abbot accordingly only employs throughout their operations people who are of 18 years, basically because of the nature of work in the company. Abbot Group (2005) further disclosed: “Our operating sites are generally small and the work involved in our operations requires trained labour for often demanding physical work. We believe that these considerations, together with the level of company supervision and training always present at an operating site, minimise the chances for inappropriate labour practices among our contractors taking place” (p. 10). In addition, Abbot Group also have, over the years, developed a business model that “recognises the strength of local relationships and the employment of local staff, and commensurate with ‘best person for the job’ principles, we endeavour to employ local people wherever possible regardless of creed or gender” (Abbot Group 2005, p. 10). In this lieu, Abbot local workforce is supported by undertaking “a variety of activities aimed at personal development and training at all levels of the business” (Salter 2005a, p. 14). Examples for this are: promotion of scholarship awards for students from the Azerbaijan State Oil Academy in Azerbaijan; sponsoring of Human Resources Co-ordinator for a post graduate diploma in Human Resources Management in Kazakhstan; supporting Azeri national students at the Caspian Technical Training Centre in Azerbaijan; and, operating student training scholarship scheme in Oman, “where students participate in work placement with KEA DELTA to enhance their studies” (Abbot Group 2005, p. 10). Abbot Group also focuses on its responsibility to each of their workers to promote human rights in its daily activities, where tangible action to promote human rights, and the commitment of individuals at the management level within the Group, is strong” (Salter 2005a, p. 14). The company also accordingly places great emphasis on the issue of human rights and security in regions of conflict and thus, in 2004, Abbot decided not to carry out operations in Iraq and Sudan (Salter 2005). On the other hand, one key performance indicator for the company is the safety of workplaces, because the objective is to ensure the safety of employees (Salter 2005b). In this regard, Salter (2005b) said that although Abbot exceeded the AID (International Association of Drilling Contractors) measured performance of their peers with regards to providing a safe workplace for employees, the company’s own set target was not met and thus, efforts will be redoubled in 2005 to achieve these set targets. Finally, Abbot Group is accordingly committed to “involving employees in the business through a policy of communication and consultation” (Barnyard 2005, p. 24). In this lieu: “Arrangements have been established for the regular provision of information to all employees through briefings and well-established formal consultation procedures. Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes and abilities of the applicant. If employees become disabled every effort is made to ensure that their employment with the Group continues and that appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of a disabled person should, as far as possible, be identical to that of a person who does not suffer from a disability” (Barnyard 2005, p. 24).       Financial Matters: Highlights of Abbot Group plc’s Fiscal Year 2004             During the fiscal year ended December 2003, Abbot Group’s recorded revenues were only £401.2 million, which is an 8.5% decrease versus year 2002 primarily blamed on discontinued operations (Data monitor 2004). Figures for the fiscal year ended 31 December 2004 shows a 9% decrease of turnover as compared to 2003, with Abbot Group’s sales only amounting to £366.95 million (US0.30 million) (Reuters 2005; The Winthrop Corporation 2005). Accordingly, this turnover “reflects decreased revenues from the offshore and onshore drilling business segment and engineering and other services” (Reuters 2005). With the company currently employing 3,607 people, Abbot Group’s sales of £366.95 million (US0.30 million) accordingly equates to sales of US4,149 per employee (The Winthrop Corporation 2005). Comparing Abbot Group’s turnover against three other Oil and Gas Field Services in Western Europe, namely Presage ASAP of Norway (2004 sales of 3.16 billion Norwegian Kroger [US0.61 million] which 45% was Drilling Services), Smudging ASAP of Norway (3.08 billion Norwegian Kroger [US8.03 million] of which 38% was Mobile Units), and Core Laboratories NO which is based in the Netherlands (342.10 million Euro [US0.29 million] of which 61% was Reservoir Description), Winthrop Corporation (2005) said “the sales per employee levels at the three comparable companies vary greatly, from US,842 to US3,589 [and this variations] may be due to the way each of these companies counts employees”. Table 1 illustrates the sales comparisons of these three companies. Company Sales (Summons) Sales Growth Sales/ Imp (US$) Largest Region Abbot Group Plc 700.295 -8.5% 194,149 N/A Presage ASAP  500.610 8.7% 343,589 Norway (51.4%) Smudging ASAP  488.030 1.4% 130,107 Norway (59.8%) Core Laboratories NO  440.288 -3.7% 97,842 Rest of the World (45.1%)   Table 1: Sales Comparisons (Fiscal Year ending 2004) (Source: The Winthrop Corporation 2005) On the other hand, Abbot Group’s profitability appears to be promising. According to Winthrop Corporation (2005), the gross profit margin of the company is accordingly better in 2004 than in 2003, with the cost of goods sold totaling to £283.74 million, or 77.3% of sales (i.e., the gross profit was 22.7% of sales); these figures are the highest of the previous five years. Further, earnings before extraordinary items at Abbot Group Plc during the same year were £14.44 million, or 3.9% of sales, which is an improvement over the level the company achieved in 2003, when the profit margin was 2.9% sales (Winthrop Corporation 2005). Finally, there is also the improvement on the company’s return on equity from 2003’s 8.9% return to 9.9% return in 2004 (Winthrop Corporation 2005).  Finally, Abbot Group’s financial position also shows improvement. Accordingly, as of December 2004, the long-term debt to equity ratio of the company is 0.27. In particular, the company’s long term debt was £41.09 million and total liabilities (i.e., all monies owed) were £211.00 million, whereas the accounts receivable for the company were £71.10 million, which is equivalent to 71 days of sales (Winthrop Corporation 2005). Credit:ivythesis.typepad.com

The Global Energy Industry

THE ABBOT GROUP PLC Company Overview Abbot Group plc is a world leader in providing drilling and related well and facilitie...

Global Marketing

TABLE OF CONTENT   executive summary.. 3 standardized global marketing.. 3 concentrated global marketing.. 4 Differentiated global marketing.. 5 Conclusion.. 9 References.. 12                                                   1.      Executive Summary   Nowadays, global marketing is a great important in international, group companies and individual companies.  Global marketing means that the companies focus their resources on the global market (more than one country) opportunities and threats.  According the performance of their companies’ activities designed to plan, price, promote and direct the flow of the company’s products and services to customers’ more than one nation for a profit.  Marketing is means that has a set of concepts, tools, theories, practices, organizations and experience.  Many companies and industries participant in global marketing so many businesses will need to know and understand the global dimension.    Two tasks for global marketing, they are controllable and uncontrollable.  Example for controllable are price, promotion, product and distribution.  Example for uncontrollable are political forces, cultural, economic, competitive forces and technology.  Companies should identify what the global customer needs, how satisfy their global customers…   There have 3 criteria to presented global target market strategy; there are Standardized Global Marketing, Concentrated Global Marketing, and Differentiated Global Marketing.   In this report will give you some examples and ideas for Standardized, Concentrated and Differentiated Global Marketing.    2.  Standardized Global Marketing:   Standardized global marketing is means that it attains the lower cost of position, great sales volume and use the best global marketing strategy to sell the standard products.  Company should standardize theirs marketing mix has become one of the most strategy around the world.  Companies using a standardized strategy can achieve the benefits such as cost reductions, improved quality of products and enhanced customer preference.  For example Budweiser is one of the largest global brands, they are fortunate in a global position, they use the standardize products and use the attractive advertisement to develop and promote them such as advertising, program and sponsorships.  They sponsors the racing soccer, they have their own Budweiser Team.    3.  Concentrated Global Marketing:   Concentrated Global Marketing means that plan a marketing mix to reach a single segment o the global market.  This approach will make the originations’ markets narrowly.  The companies will develop a product that caters for the needs of their particular group.  For example Rolls Royce cars aim their vehicles at the premium segment with same as Harrods within the UK.       4.  Differentiated Global Marketing:   Differentiated Global Marketing is a means that the companies target several segments with different marketing mix strategies at the varying groups.  For example Cathay Pacific Airline.  They offer different classes with separate marketing programmers to attract different type of people. Credit:ivythesis.typepad.com

Global Marketing

TABLE OF CONTENT executive summary .. 3 standardized global marketing .. 3 concentrated global marketing .. 4 Differentiat...

Sample Global Business Retailing Strategy on Wal-Mart as a True Global Firm

Wal-Mart as a true Global Firm A global firm or a multinational corporation like Wal-Mart is a corporation or an enterprise that manages production establishment in at least two countries. Wal-Mart Stores, Inc. operates in 15 countries worldwide aside from the United States. It has more than 2,400 units in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Germany, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico, South Korea and the United Kingdom. Aside from that, Wal-Mart own more than 3,800 facilities in the United States. It employs 1.6 million associates and serves more than 138 million customers per week visit in Wal-Mart stores worldwide. In fact, Wal-Mart Stores, Inc. is the world’s largest retailer with 5.2 billion in sales in fiscal year ending January 31, 2005.             If for sheer size alone and the number of countries Wal-Mart is operating, then truly this largest retail store is a “global firm poster child”. However, a global firm strictly defined is not only a firm that have business ventures in two or more countries other than its origin but is a firm that incorporates a worldwide perspective in its operations rather than inheriting the local perspective of the country of its origin.             Wal-Mart attends people around the world. People with different culture and therefore, sometimes people with different needs or preferences. It is a very diverse market in which Wal-Mart operates. Wal-Mart foresees the need to adapt and incorporate the culture of its host country if it wants to be successful in its investment. Wal-Mart as a company experienced international success through its ability to adapt Wal-Mart’s unique concepts to each new country. Wal-Marts associates are involved in local communities and cultures. They respond to customer needs, merchandise preferences and local suppliers. By serving each local market in its own unique way, Wal-Mart International has realized significant growth with potential for much greater development worldwide.             Wal-Mart usually go into joint ventures or into buying big local retailing companies outright in its international expansion. By doing so, it retains the culture of the old company which is a native to the foreign country while changing only its name to Wal-Mart. Wal-Mart associates adopts a global perspective in its international operation instead of following the corporate culture and portfolios of the original store. Like for example in Brazil, it developed what is now called small format stores or “Todo Dia”. These smaller stores enable Wal-Mart to enter crowded Brazilian neighborhoods where they could never locate a supercenter. In its international ventures, Wal-Mart learned a very important lesson of flexibility and adaptation. This is much obvious in Wal-Mart’s store design. The neighborhood market is now also used in populated cities in China.             Another proof of Wal-Mart’s associate’s global perspective is its global sourcing of products. It first identifies a product commonly used by all its consumers around the world, and then Wal-Mart look for opportunities to improve the products supply to provide for its international costumers. With increase product supply, economies of scale is usually gained thereby reducing the price of the product. Wal-Mart then retails these products to its worldwide chain of stores.     Wal-Mart International Success             Wal-Mart has been hugely successful in its ventures to Latin countries like Mexico and Puerto Rico. Wal-Mart moved also to South America by opening ventures in Argentina and Brazil. The investment in Brazil is also promising but its counterpart, Argentina was been hugely affected by political turmoil and economic crisis. China, the dream market of every retail industry player proved to be another “good business” endeavor. Wal-Mart only started operating in China in 2000 but it is expanding its retail outlets left and right before the end of 2003. So what could possibly be the common factor between the countries mentioned where Wal-Mart yielded good investment returns? Among the four countries mentioned where Wal-Mart generated good return of investments, Brazil and China belongs to the top 10 most populous countries in the world. Mexico is at number 11 of the 2005 ranking.  It has always been an unspoken retailers dogma that the more the number of expected buyer, the better chance of business growth. Wal-Mart was been widely known as a retailer store that offers products at a cheaper price. Another consideration to look up to as to explain Wal-Mart’s success in the mentioned countries is the individual countries Gross Domestic Product (GDP). GDP is defined as the total output of goods and services for final use produced by an economy, by both residents and non-residents, regardless of the allocation to domestic and foreign claims. It does not include deductions for depreciation of physical capital or depletion and degradation of natural resources. In simple terms if the GDP is divided by the population, it gives us an idea of how wealthy the people are on average with in a particular country. GDP may be used as one of many indicators of the standard of living in a country. Based on the recent estimates of the CIA factbook on the countries ranking of GDP per capita as of 2005, Puerto Rico is registered at number 56 of 232 countries. Puerto Rico have a GDP per Capita of ,500. Mexico ranked 86 with a per capita of ,000, followed by Brazil with a per capita of ,500 and is ranked at number 93. China, despite its recent economic boost, ranked at a lowly number 118 with a GDP per capita of ,200. If we would compare this to United States GDP per capita of ,800, the above mentioned countries can be classified as generally poor. Though it should be noted that GDP is not the sole estimate of a particular country’s living standard. Wal-Mart’s success can be generally attributed to the large population and the low cost of living standard on the above mentioned countries, other factors not in consideration. With Wal-Mart’s affordable goods and services, people would logically shop at Wal-Mart’s store. Wal-Mart’s Expansion Plan According to the Retail Construction Magazine, announced its plans for the continuation of its aggressive unit growth for the fiscal year beginning Feb.1, 2005. Domestically, the Wal-Mart division plans to open 40 to 45 new discount stores and 240 to 250 new Supercenters in the fiscal year. The company expects that relocations or expansions of existing discount stores will account for approximately 160 of those Supercenters, while the remainder will be new operating units. Wal-Mart International plans to open 155 to 165 units in its current markets. The company anticipates that relocations or expansions of existing stores will report for approximately 30 of these units, while the remainder will represent new operating units for the company. Wal-Mart is still currently doing its own research and feasible studies as to which country it is planning to conquer next. I can suggest India as my top prospect for opening another giant supermarket named Wal-Mart. Population wise, India ranked among top 10 of world’s most populous country, a common denominator among countries where Wal-Mart proved successful. It also has a GDP per capita estimate as of 2005 of $ 3, 400, way below also if compared to the United States, which is another factor it shares with the other countries where Wal-Mart gained success in its operation. Other than that, India being a one billion country of people now has a large young working population with a median age of 24. The number of nuclear families in urban areas is growing fast. Then there is the increase in working women population. Add to these the emerging opportunities in the service sector. Next is the astonishing consumer finance boom. Add to this the growing credit card spend. And last but not the least, the changing pattern in rural consumption, a sure sign that the consumer revolution will soon spread to rural India (Business Standards, 2004). Rated the fifth most attractive emerging retail market, India is being seen as a potential goldmine. It has been ranked 2nd in a Global Retail Development Index of 30 developing countries drawn up by A T Kearney. The list was developed as a response to requests from retail chains facing saturated demand in most western markets (IBEF, 2004). A.T. Kearney has estimated India’s total retail market at 2.6 billion which is expected to grow at a compounded 30 per cent over the next five years. India’s vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets (IBEF, 2004).             India seems to have all the ingredients Wal-Mart is looking for in brewing another foreign venture. Corporate studies done by international consulting firm also affirms to the good prospect India is giving to the retail industry. And another good thing about India is its culture is a mold between the East and the West, a big advantage for a global firm like Wal-Mart who is looking also for global customers.             Credit:ivythesis.typepad.com

Sample Global Business Retailing Strategy on Wal-Mart as a True Global Firm

Wal-Mart as a true Global Firm A global firm or a multinational corporation like Wal-Mart is a corporation or an enterprise that manages ...

Research Paper of the Challenges in the Global Market and International Competition

Introduction             This paper will identify challenges firms meet in the hyper competitive conditions being international corporations, discuss different cooperative strategies that can minimize difficulties and maximize potentials, and finally, explain the role of strategic management leadership in the implementation of these strategies.                      The Challenges in the Global Market and International Competition             In the desire of companies to obtain advantages by operating to other countries, it enters a different environment that puts its resources and core competencies at high risks.  There are many challenges a firm will encounter in the highly competitive market from the pre-operation until it is already magnetized by the market. Price and Quality Positioning              In the global market, domestic and foreign companies will be the fierce competitors of a firm.  They can usually fight and gain the market in terms of price or quality.  They can use price strategy that is a result of improved primary and secondary activities that ultimately minimize cost, and therefore, provides more price control.  On the other hand, differentiation strategy relates to the ability of the company to transform their product with added value that customers can see a premium in it, and therefore, the latter are willing to pay also at a premium price.  Basically, the target market of price strategy is low-to medium- end customers that are price sensitive while differentiation is high end and customers who are after luxury goods or services.                The challenge of a firm is to develop a strategy that can fit into its culture and system.  The difficulty arises as there are also available focused strategies for products which target a specific market segment.  In addition, price and quality positioning can also be combined to exploit both the underlying advantages.  In the case of Southwest Airlines, it integrates four important areas for a business: price, customers, service and employees.  It offered point-to-point and less traffic service flights, kept price of almost 20% less than other competitors, provided free-overnight stay in the firm’s agents homes and maintained employee motivation.              The inability of the firm to pinpoint the best strategy that can stimulate competitive advantage for its resources, capabilities and core competencies can undermine its value, reduce efficiency and loose profitability.  The decision to select certain strategy is not an easy task.  The initial phase is to scan the specific foreign market’s background in its important aspects through PEST and SWOT analysis, competitors and available support intermediaries.  Then, such factors will be subjected to a firm’s internal features.  One wrong consideration may take away potential or aggravate problems and difficulties.  At the time of operation, contingency plans and its implementation is necessary that can even call for a change in the strategy already identified.              The difficulty converges on the question of flexibility of the strategy.  Since global companies are situated in a complex environment, to be able to be successful and maintain it, a firm should be flexible enough to counter the effects of competitor sudden moves, legal restrictions and economic recessions.  Not to mention that it should also its own undetermined internal problems that could originate instantaneously.  Establish First Mover Advantage and Create New Know How                 Aspects of price and quality are only one-half of the strategy available to the firm.  For the biggest technological breakthrough of the inception of information technology and computer age, innovation and speed-to-market are the two most crucial strategies for a firm.  They can create core competencies from the capability of a firm to create and develop innovative products to satisfy the fast and ever-changing customer needs and tastes.  eBay’s delayed response to Yahoo! Japan’s enter to online auction market service in the country resulted for only a tiny 3% market share against Yahoo’s 95%.              Although can serve a dramatic positive turn-over for a firm, first mover advantage and ability to create new know how set drawbacks and constraints that a firm cannot sustain, if not, survive of its implementation.  It requires huge financial budget to build facilities for research and development and customer awareness through advertising.  A successful technology does not dictate success in this strategy.  It will be less appreciated by the market if other companies have substitute products at competitive price.  Almost as expensive as the individual firm’s net worth, strategies dedicated for hi-tech product innovation are high risk.  This is the reason why multi-national companies are not encouraged to deal with the complexity and cost of producing hi-tech products.             The challenge is not only stemmed on cost factors, it also asks the question of corporate willingness to continuously operate in a dynamic way and invest in ventures that success are not eminent.  Creating and upgrading a certain product through extensive research every now and then establishes continued learning of the human capital, systems improvement and technological change.  The company culture may not hold such characteristics that hinder its participation in the industry even if it has financial capability to do so.  Protection/ Invasion of Established Products and Geographical Markets             Creating a product and successfully situating it in a specific market completes the duty of manufacturing and sales departments.  However, protecting the added value found on the product and interested market segment is a corporate consideration.  Being a first-mover and earning profits from it in a sustainable manner is a result of a firm’s conviction to patent its product design and continuously improving its usability for the appreciation of the customers.  It also needs some advertising to remain active in the competitive landscape.              In the contrary, a firm can exploit the competitor’s advantages that can be seen in its products and market through invasion of some aspects of them.  It can range from simple counter-advertising to a more aggressive product imitation.  The latter is defined as adoption of a competitor’s innovation that oftentimes can be priced relatively cheaper but limited in product features and durability.  It is effective to offer in a low-end, non-critical market.  Sometimes, product and market invasion can be achieved by attracting and importing employees from competitor’s workforce.  The process is generally prohibited when caught, but if successful, it not only entails imitation but the true formula, process and technique of creating the competitor’s product.             Thus, the challenge is a two-way process: offensive and defensive, that oftentimes overlaps each other.  A firm may admit it invade product features to protect its market share.  In one way or the other, the processes involve financing for official patent or trademark, advertisement and promotions, research and development, and possibly employee importation.  More importantly, a firm should also possess loyal and dedicated employees to ensure zero knowledge-spill which is not easy to generate because of individual goals and monetary drives.  Credit:ivythesis.typepad.com

Research Paper of the Challenges in the Global Market and International Competition

Introduction This paper will identify challenges firms meet in the hyper competitive conditions being international corporations...