Breakfast Cereals in Uk 07 Essays

Breakfast Cereals in Uk 07 Essays Breakfast Cereals in Uk 07 Essay Breakfast Cereals in Uk 07 Essay Breakfast Cereals in United Kingdom 2007 Introduction: Aim: The aim of this report is to discuss whether The change of macroeconomic situation is an opportunity or threat for United Kingdom’s breakfast cereal industry. Compare the external microenvironment that affects firms in which breakfast cereal industry operates with the help of PEST analysis. To evaluate the operational strategy that affects the level of competitive environment in an industry using Porter’s five force model. Why I chose this industry: Cereals are a great start to the day. â€Å"Breakfast like a king, lunch like a prince and dine like a pauper. By Adelle Davis Like most proverb says, this one hold more than a gram of truth. Breakfast cereals are certainly the most important meal of the day. It is a time when we ‘Break the Fast’ of the night, which can be anything up to 10 or 12 hours. The nutritional benefits of breakfast, facts suggest that this important meal provide a number of ot her benefits to give us the best start of the day. Breakfast cereals industry is diverse and has come up with new exciting flavors. There is an increase in the market with consumption of oats, muesli and high- fiber cereals, since 2002. Without doubt, health is the key factor that drives the expansion of the industry and consumption. This is one of the most growing industries despite the market is saturated and that cereals have been facing increasingly fierce pressure from alternatives, such as cereals bars and croissants. The breakfast cereal in United Kingdom has also grown in value terms increasing by an estimated 9. 5% between 2002 and 2006, to ? 1. 23bn at retail selling prices (RSP) reflecting the growth in volume and the shift towards premium – price products. There has been offset to some extent by aggressive price discounting by the major multiples. Some cereals have also come under fierce attack for their allegedly high sugar, fats and salt contents. In addition, they have placed more emphasis on their brands health credentials, and new product development (NPD) has followed this trend. The market appears to be very strong, and has healthy image, are convenient to use and are already a well-established item in most peoples kitchens. However, they should continue to be beneficiaries of the two major trends influencing food and drinks markets, not just in the UK but around the world - namely demand for healthy and convenient products. Boundaries: As the topic of this easy is analyzing the breakfast cereals industry in United Kingdom, emphasis is on the source related to United Kingdom’s environment during the process of collecting materials. The data statistics reports given was collected were one or two years before. There was no much reports available for reference. Moreover, the materials collected in this research are secondary data. To analyse the market efficiently primary report has to be used. Industry Sector: Sector introduction: The cereal market has managed a strong level of growth in the market volume and values in United Kingdom since 2000. The breakfast cereals market has grown over ? 1,090 million (2002) to ? 1,280 million (2007) with over 95% of house stock breakfast cereals [23,24]. There is a strong growth of 17% in the size of household penetration over last five years [23]. The volume of consumption of the cereals has been 432,000 tonnes in 2007 with a growth of just 7% over this period [23,1,2,3,4]. Over 87% of the household consume breakfast cereals twice every weekday. There are reports, which say that United Kingdom is the second highest global consumer of Breakfast cereals, [24]. This has occurred due to strong permiumisation in the market, as there is higher value of products launched. There is always demand for products that delivery high taste and quality with health as superior, [23]. The revolution towards healthy eating has been used by the breakfast cereal manufacturers, who make use of their intrinsic healthiness of their products and there by widening the scientific evidence to support the eating of breakfast cereal. The manufacturers are stressing about their health credentials on packs (like fiber, calories, vitamins, minerals, wholegrain and super food), so that the message reaches the increasing target audiences. However, the hot cereals accounts for only 12% of the market had seen strong until 2006 driven by the growing consumers’ interest in oats, [23]. Therefore, the hot cereals have launches a number of oats based cold cereals, which include oatibix, oatsmore, and cheerios oats, which now have taken over the hot cereals market. There is an ongoing development in the eating on the go and snacking market has played an important part in the growth of the industries. PEST Analysis: The PEST analysis is an analysis of the external microenvironment that affects all firms in which a business operates. The PEST is an ellipsis for the Political, Economic, Social, and technological factors of the external macro environment. These factors usually are beyond the control of firm’s but sometime become threat for the firm itself. This analysis is important when developing a product, business or strategy planning. POLITICAL: This arena will have huge influence depending on the regulation of business and the spending power of consumers and other business. Many political factors affect this industry as it deals with the foods. There are many basic regulations for the food industries but here there are only few important laws and regulations that have been discussed. ACFM Statement on salt: Members of the Association of Cereal Food Manufacturers* (ACFM) have announced a significant 38% reduction in salt which contain an average of 0. 36g of sodium per 100g, which equates to less than 5% of the average adult daily intake. Now, the Breakfast Cereals manufactures are leading the way in product reformulation such as salt reduction and clear nutritional labeling through Guideline Daily Amounts (GDAs). [24 ] ACFM Statement on sugars: The European Regulation (EC) No 1924/2006 stated that product which says as Low Sugar must contain 5g/100g total sugars. Green colour coding for breakfast cereals should be criterion. The regulation also requires the statement â€Å"contains naturally occurring sugars† if the product have natural sugar and if the manufacturer claims no added sugar. These information should be provided in the core of the signpost with the colour coding, which was recommended for each. However, it suggested that cereals that have no added sugar, like fruit muesli, could be excluded from the recommended signposting categories. [24, 26]. The colour code for sugars, Green if total sugars are less than or equal to 5g/100g. The colour Amber if total sugar exceeds 5g/100g and added sugars are less than 12. 5g/100g. The Red colour denoted if added sugars are more than 12. 5g/100g. Fortification Breakfast Cereals: New regulation on food fortification 1925/2006/EC in 2007 for foods, which should be voluntary fortification (breakfast cereals) not for foods that are subjected to mandatory fortification. The recommendation is based on the nutritionists, who says that the breakfast should be provide 20 -25% of daily requirements. The fortified breakfast cereals are more likely to meet their daily requirements of essential vitamins and minerals. For instance, there should be around 20% of total iron, 15% of folic acid, 14% of vitamin B1, 13% of vitamin B6, 15% of riboflavin and 10% of niacin. 24, 27]. ACFM position on Food Labelling – Guideline Daily Amounts (GDA): The Association of Cereal Food Manufacturers have supports the government objectives along with the Food Standards Agency, to provide clear information on the nutritional labeling by implementing the use of Guideline Daily Amounts (GDA’s). Thereby giving the consumer clear informationâ€℠¢s on the nutritional contents in their foods so that they know what they eat, [24,12]. ECONOMIC: The success of breakfast cereals is due to penetration and frequency of usage is high, with more than half of consumer eat cereals at least once each day, [9,10]. As they are well-established market with big brands and huge marketing budgets. The market is a matured due to the popularity that keeps the cereals market sales persistently high. The breakfast cereals are facing increasing pressure from alternatives, such as cereal bars and croissants, [16]. The increasing usage has been the focus of growing market (Kellogg’s challenge, weetabix- more than cereal consumption). They have placed more emphasis on their brands health credentials, and new product development (NPD) has followed this trend. The market is very stable in terms of brand shares and suppliers. There is growing demand for the cereals globally, have increased the price of breakfast cereals and farmers are turning the land over to the production of bio-fuel. The increase in raw materials prices is due to erratic change in the weather and crop damage is becoming common with poor harvest. This have pushed the retail selling price (RSP) of cereals in United States, there by rising the price of breakfast cereals at the point of sales in United Kingdom, [23,17]. The manufacturer has to focus on the production values (such as provenance, organic and even fair trade) to shape the future direction of the market. The survey done by BMRB (British Market Research Bureau) International Ltds Target Group Index (TGI) that cold breakfast cereals remain a family favorites. In 2006, around 86% of adults had eaten cold breakfast cereals over the past 12 months, which is an extremely high rate of household penetration. Hot cereals recorded a much lower level of household penetration than cold cereals, but, at 49. 4% of adults, but the penetration rate was still impressive, [28]. Socio cultural: The breakfast cereals was initial targeted for school going children, aged 11 – 18 years, as they tend to skip their breakfast. This breakfast cereal was successful as they can meet their 20% daily nutrition requirement from their breakfast. Then when the market became saturated, they targeted the ageing population as they have time to have breakfast. They normally do not skip their meal to keep their weight down. These group are health concerning, and these consumer are more keen towards wholesome, unadulterated food with no artificial ingredients rather than light or diet version. As this market is moving towards saturation, the manufacturers are now focusing on the whole family, to get more members of the family eating together. The premiumisation to continue with future consumer’s trends, where health drives both sales and new product development, as there is a growth in sale in the saturated market by increasing spends per head, [5,6,7,11]. The concern on health has put pressure on the manufacturers to reduce salts, sugar, fats and other additives from the cereals. There are several high profile TV programs like Dispatches: The Truth about Your Food and the Consumer Group which? ave identified that breakfast cereals was high in sugar and fats. However, the breakfast cereals manufacturers have acted proactively than other food industries to reformulating their existing product brand and lowering their hidden sugars, fats and salts contents. The manufacturers are now launching new naturally healthier products with sophisticated recipes and health claim s such as high fibers, whole grains, adding dries fruits, supper foods (Jordan’s and Dorset’s Cereals), pre- and probiotic functional ingredients, and organic foods. Many ethical issues concern with the breakfast cereals have arisen concerns over the products. These breakfast fast cereals contain high level of sugars, salts and fats than the recommended level. About three-quarters of cereals had high level of sugar, a fifth had high level of salt and more than 7% of cereals had high level of saturated fat. The breakfast cereals that target the children contain 88% of sugar coated, 13% of salt and 10% of fats. Now the manufacturer is reformulating their product due to increase media criticism by reducing their sugar and salt contains. FSA nutrient profiling and Ofcom Advertising Ban: The FSA launched a nutrient profiling model in April 2007, which was designed to tighten the rules on television advertising to children of foods high in fats, saturated fats, salt and sugar. this Ban on the advertising provoked uproar in the food industry as it was established as this would affect around 80% of cereals, so this banned was softened with some parameters and changing the guidelines for sugars, treating natural sugars and processed sugars. Thus, they changed their target to focus overall family, [23]. Increasing frequency of usage: There is an increase frequency of usage of cold breakfast cereals, which is at 87%, but there are still 13% consumers, who do not prefer having breakfast cereals, [23]. There is still an opportunity to convert the non-user into market and existing consumer to premium options, sourcing provenance-assured, organic and fair trade ingredients, and making favorites healthier will encourage the consumer to trade up. However, communicating these information and benefits to the target consumer will be vital. The other way of improving the frequency of usage will be to increase the occasion through handy/expediency solutions,[9,10]. The overall strategy of the manufacturers is increase the frequency of usage and there by increasing the amount spend on cereals eventually increasing their market value. Attitude and behaviour: There is a strong growth experienced by the hot cereal sector with a growth of 30% at the current price during last forecast period. It is also predicted that there would be a high volume growth in hot cereal sector by 10% when compared to Ready to eat (RTE) cereals, which would be only 2%. Currently there is an increase in the consumption of hot cereal sector, and with 50%, penetration there is still a good potentional for the future growth, [23]. The hot cereals experience both dip in the volume and value of sales in 2007, this is due to strong competition with oats cereals in the Ready to eat sector and the supermarkets bringing out there new cereals with low Retail selling price (RSP). However, in the market â€Å"well know brand† is top factor looked, when shopping for cereals is concerned which is unlikely to be effected. There is a slower growth within the RTE sectors, with 19% steady growth predicted at the current price for last forecast period, [23,5]. Technological Factors: There is tough competition within the industry, so the manufactures need to formulate new products to attract their target consumer and to increase there market share before they decline. The breakfast cereals industry have tried to come out with artificial sweeteners like isomalt. The isomalt, which is an artificial sweetener that would replace sugars in a 1:1 ratio in breakfast cereals. The isomalt is unique in its nutritional and hysiological benefits that make it ideal for use in sugar free, tooth friendly, low-calories and low glycemic products. The isomalt is the only sugar replaces made from the sugar beet that taste as naturally sweet as sugar, [29,30]. Evaluation of Competitive Nature of the Breakfast Cereal Industry: In the above there was an overview on the breakfast cereal industry, now in this there are three majo r competitor that are going to be compared. Even though the market is highly consolidated, with Kellogg, Weetabix and Cereal Partners which markets the Nestle brand in the UK. While, the Weetabix remains the top-selling ready-to-eat (RTE) cereal, followed by Kelloggs Corn Flakes, Crunchy Nut Corn Flakes and Special K, with Nestle’s Shreddies taking fifth spots. There is an introduction about the major competitors: Weetabix: The weetabix food company established since 1932, they also create delicious breakfast cereals using finest ingredients. Since then they have produce many popular cereal brands, which include weetabix, weetaflakes, weetabix minis, weetos, Alpen and Ready Brek, as well as being a major supplier of generic cereals under supermarket own labels, [20]. They are officially the UK’S favorite breakfast, who accounts about 8% of the country’s total cereal sales with annual sales worth over ? 89 million. They also export over 80 countries worldwide, from Middle East and South America to Europe and South East Asia. They also sponsor for Weetabix Women’s British Open Golf Tournament in 2007, [23, 20, 33]. Kellogg’s: William Keith Kellogg established the company in 1906. in 1950s, Kellogg’s introduced anew range of products to cater for differing taste of family, but without compromising its principle of health, balance and nutrition. Reformulating is a key part of Kellogg’s health strategy. They have set up new system to ensure that their products are healthy, which is called Kellogg’s Global Nutrient Criteria. The product states that no cereals will have more than 200 calories, 2 grams of saturated fat, 230g of sodium and 12 grams of sugar per serving. They are also eliminating all tran’s fats. They claim that reformulations should be noticeable and will take place across their range in2007 and 2008. They have also introduced global limits on their use of licensed characters on packs, in advertising and in food forms, in June 2007. They changed coco pops advertising to focus more on the product and removed the frosties websites, with users now redirected to a non-branded educational websites called Heaadstarters, [23,31]. Cereal Partners markets the Nestle brand: Cereal partners UK are part of cereal partners worldwide, a joint venture between nestle and general mills. They sell a number of popular cereals brands under nestle brand, which includes shredded wheat, shreddies, cheerios and fitnesse. All their products are made from whole grains and easy to identify, wholegrain green band on all their packing. They introduced a new range called Oats More in April, which was used to supported by the â€Å"studies show you’ll like it† advertising campaign, [23,32]. Porters 5 Forces Analysis: The porters five forcer helps to analysis the force, which affects the level of competitive environment in an industry. This is a simple tool but powerful to understand where the power lies in business situation. This tool tends to focus on the single, stand alone, business or SBU (Strategic Business Unit) rather than a single product or range of products. The analysis looks at five competitive forces jointly the intensity of the industries competition and profitability, they are the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes and competitive rivalry, which reflects the fact that competition in an industry goes beyond the established players. Competitive Rivalry: The competitive rivalry will be those in which entry is likely substitute threaten and buyers or suppliers exercise control over the organizations. The competitive rivalry has increased as the supermarket has also introduced their branded breakfast cereals along with the top brand like Kellogg’s, weetabix and cereal partners (Nestle). Even then, the consumer prefers getting top branded cereals, where they are more health concisions. Understanding their consumer’s needs, Kellogg’s reformulates their products to reduce the salt, sugar and fats, there by making them healthier for consumption, [22]. They also invent new product developments under same brand name, thereby increasing their product range for the consumers needs. Weetabix on other hand have wide range of cold oats based cereals and Cereal partner’s (Nestle) have wide range of cereals, which would be sufficient to serve a huge markets,[21,19]. Buying Power: Buying power is wide-ranged. The cost of switching from one breakfast cereal to another is very low, as it depend on the consumer whether they are satisfied with the breakfast cereals that they consume. Kellogg’s, weetabix and cereal partner (nestle) have control over their buyers as they cater to different needs of the consumers and have direct contacts with their buyers,[15]. However, it is easy for the buyers to drive down the price of the breakfast cereals by just moving from brand to another to satisfy their health needs. Power of Supplier: The power of suppliers was dependent on the suppliers. The suppliers are the farmers in this case; there is a huge rise in the price of the cereals that is grown. Due to erratic weather change, damage crops and lands turning into bio fuel production area. These factors have affected the cost of the breakfast cereals, which come into market to consumption. Kellogg’s, weetabix and cereal partners (Nestle) have no control over their suppliers, as they dictate the price range of the cereals that is cultivated. Many small suppliers that are involved, thus there would be no huge control over the manufacturers. The government plays an important role in the raw materials selected to make breakfast cereals as they consumed more by the target consumers. Threat of substitutes: This is affected by the ability of the consumers to find different substitute for the particular product. The threat of substitute is quite high in the reakfast cereal industries as they have reached the matured stage of the market but there is always demand for the products. The cereal bars and croissants industries would replace the breakfast cereals in future, as they have started to capture the consumers’ attentions, [16]. Thus, Kellogg’s and Cereal Partner (Nestle) have introduced cereal bars as their product line so they do not loose their market to the substitutes. These product lines will also help the product to be well recognized by the consumer among other competitors. The Threat of Entry: The threat of entry deals with the powers, which is affected by the ability of new competitor to enter your market. The threat of entry is very low, as it would take a long time and huge find to establish themselves among the consumers. As the three major competitors that are considered in this analysis are Kellogg’s, weetabix and cereal partners (Nestle’s). The Kellogg’s keeps developing range of products, which account to ? 1. 1 billion; cereal partner owns ? 1. 1 billion and weetabix with ? 89 million cereals market, [34, 35, 33]. Therefore, for any new small venture company it is difficult to for them to get established into giant firms. Mintel forecasts that there would be a continuous growth for total breakfast cereal market, 20% at current price from 2007 – 2012, resulting in an estimated worth of ? 1. 5 billion. Avoiding the effects of inflation on food real growth is shown to be slightly lower to 10%. Value growth is set to continue but at a much lower rate than value, [13,14]. CONCLUSION: The breakfast cereals have a huge demand in the market as it caters to the taste of the consumer (health). The trend towards the healthy eating continues, consumers are increasingly looking forward for a â€Å"healthier start† to the day. This has resulted in strong growth at the luxury premium end of the market, as consumer trade up cereals contain wholegrain, dried fruits, super food and functional ingredients. There is only around 13% of the market, which do not consume cereals, to target these group there should be new product introduced to cater their needs. Even though the market of breakfast cereals is saturated there is always been a growing demand. The success of frequency promoting campaign have pushed volume growth over the last two years, as consumer start to eat cereal more than once a day and occasional buyer start to eat cereal each day, [18]. The branded products continue to dominate the cereal markets as the consumer trust brands and often finds the quality and taste of own label product inferior to that of branded. In a established market with high penetration and frequency of consumption, brand loyalty is high as the manufacturer allocates a significant amount of marketing spend in developing a long term relationship between the consumer base and their cereal brands. Ready to eat cereals have biggest brands and the largest amount of shelf space given over to them. Evaluation of tools / Limitation: The evaluation of tools / limitation in the pest analysis and porters five forces gives an idea, which is better than the other is to be discussed below: Pest Analysis: This deals with the whole industry as such and it may be difficult to forecast on the future trends about the industries. This analysis gives overall information on the industry that can help in understanding the macro environment of the industry. They deal with all the manufacturer of that particular industry and gives wider knowledge of them. They are potential risk in the market, conducted and regular basis. Porter’s five forces: in this care should be taken that the models is not underestimated or underemphasize the importance of the strength of the organization (inside out strategy). The model helps to analysis individual business strategies, as it does not cope with interdependencies within the range of large companies. From the theoretical perspective, the model does not address the possibilities that an industry could be attractive due to certain companies are in it. The environments, which are characterized by rapid, systemic and radical change, require more flexible, dynamic or evolving approach to formulate the strategy. The strength of this analysis is that its as strong tool for competitive analysis at industry level and provides useful inputs for performing Swot analysis. APPENDICES Appendix 1: UK retail sales of breakfast cereals, 2002-07 000 tonnesIndex? mIndex? m at 2002 pricesIndexâ‚ ¬mIndex 20024041001,0901001,0901001,734100 20034091011,1171021,1031011,61593 20044151031,1431051,1221031,68597 20054191041,1691071,1341041,71099 20064241051,2161121,1551061,784103 2007 (est. )4321071,2801171,1951101,895109 Source: Mintel Appendix 2: UK retail volume and value sales of breakfast cereal, by type, 03-07 200320052007 (est)% change% change m%? m%? m%2003-052005-07 RTE cereal1,049941,084931,195933. 310. 2 Hot cereal686857857250. 0 Total1,1171001,1691001,2801004. 79. 5 000 tonnes %000 tonnes%000 tonnes% change 03- 05% change 05- 07 RTE cereal3668936988380880. 83. 0 Hot cereal43114912511214. 04. 1 Total4091004191004311002. 42. 9 Data have been revised since the last report . Source: Mintel Appendix 3: UK retail volume and value sales of RTE cereal, 2002-07 000 tonnesIndex? mIndex? m at 2002 pricesIndexâ‚ ¬mIndex 20023651001,0241001,0241001,629100 20033661001,0491021,0361011,51693 20043681011,0701041,0501031,57797 20053691011,0841061,0511031,58697 0063721021,1291101,0721051,656102 2007 (est)3801041,1951171,1161091,769109 Source: mintel Appendix 4: UK retail sales of breakfast cereals, 2002-12 Current pricesAt 2007 prices 000 tonnesIndex? mIndex? mIndex 2002404941,090851,16791 2003409951,117871,18192 2004415961,143891,20194 2005418971,169911,21495 2006424981,216951,23797 2007 (est)4311001,2801001,280100 20084301001,3221031,300102 20094351011,3851081,336104 20104371011,4301121,364107 20114401021,4821161,389109 20124421031,5361201,414110 % change 2002-0771710 % change 2007-1232010 Source: mintel Appendix 5: UK population changes, by age and socio-economic status,02-12 Source: National Statistics/GAD/Mintel Appendix 6: Agreement with selected lifestyle statements, 2003-07 Base: adults aged 15+ 2003200520072005-07 %%%% point change Agree: I often skip meals to keep my weight down15. 114. 014. 6-0. 5 Taken from the TGI survey of around 25,000 adults Source: GB TGI, BMRB Q4 2003-07/Mintel Agreement with selected lifestyle statements, 2003-07 Base: adults aged 15+ 2003200520072003-07 %%%% point change Any agree: I am prepared to pay more for foods that dont contain artificial additives34. 843. 545. 8+11 I consider my diet to be very healthy38. 641. 544. 1+5. Appendix 7: Agreement with selected lifestyle statements on food, 7-10s, 03-07 Base: youths aged 7-10 200320052007 %%% Agree: Breakfast is the most important meal of the day56. 756. 863. 5 Taken from the youth TGI survey of around 6,000 youths aged 7-19 Source: Youth TGI, BMRB Autumn 2003-07/Mintel Agreement with selected lifestyle statements on food, 11-14s, 2003-07 Base: youths aged 11-14 2003200 52007 %%% Agree: Breakfast is the most important meal of the day57. 357. 665. 7 Taken from the youth TGI survey of around 6,000 youths aged 7-19 Source: Youth TGI, BMRB Autumn 2003-07/Mintel Appendix 8: Demographic change: UK retail volume and value sales of RTE cereal, 2002-12 Current pricesAt 2007 prices 000 tonnesIndex? mIndex? mIndex 2002365961,024861,09792 2003366961,049881,10993 2004368971,070901,12494 2005369971,084911,12694 2006372981,129941,14896 2007 (est)3801001,1951001,195100 20083791001,2301031,210101 20093831011,2891081,243104 20103831011,3291111,268106 20113851011,3761151,290108 20123861021,4251191,312110 % change 2002-074179 % change 2007-1221910 Source: mintel UK retail volume and value sales of hot cereal, 2002-12 Current pricesAt 2007 prices 000 tonnesIndex? mIndex? Index 2002397666787183 2003438468807285 2004479273867790 200549968510088104 2006521028710288104 2007 (est)511008510085100 200851999110790106 2009521029611393109 20105310510111996113 20115510710612499116 201256110111130102120 % change 2002-07312920 % change 2007-12103020 Source: Mintel Appendix 9: Number of times consumers eat breakfast per week, January 2007 Base: 2,159 adults aged 18+ who eat breakfast Source: Putting Breakfast First Survey Breakfast Cereal Information Service. January 2007 Appendix 10: Product eaten at breakfast and frequency, December 2006 Base: 2,159 consumers who eat breakfast FruitBrown bread/toastWhite bread/toastCroissant/ other pastriesYogurtBowl of cereal Every day12771420 5 to 6 times444-213 3 to 4 times a week99101414 Once or twice a week (usually weekends)711125310 Once or twice a week (usually midweek)911113512 Once a fortnight778556 Once a month666955 Less often15191725159 Never302425495512 Don’t know111231 Source: Putting Breakfast First Survey Breakfast Cereal Information Service. January 2007 Appendix 11: Consumption of cold breakfast cereals in the last 12 months, 2003-07 2003200520072005-07 %%%% point change All users8786. 287. 2+1. 0 Heavy users6. 97. 36. 8-0. 5 Medium users38. 538. 439. 3+0. 9 Light users40. 439. 440+0. 6 Non-users1313. 812. 8-0. 2 Base: adults aged 15+ Heavy users – more than once a day; Medium users – once a day Light users – 2/3 times a week or less Taken from the TGI survey of around 25,000 adults Source: GB TGI, BMRB Autumn 2003, Q4 2005 2007/Mintel Consumption of hot breakfast cereals in the last 12 months, 2003-07 2003200520072005-07 %%%% point change All users42. 645. 750. 34. 6 Heavy users5. 66. 88. 41. 6 Medium users7. 28. 310. 82. 5 Light users27. 328. 329. 51. 2 Non-users57. 454. 49. 7-4. 6 Base: adults aged 15+ Heavy users – once a day or more; Medium users – 2/3 times a week Light users – once a week or less Taken from the TGI survey of around 25,000 adults Source: GB TGI, BMRB Autumn 2003, Q4 2005 2007/Mintel Appendix 12: Signpost: Appendix 13: Value share of sub-sections of the RTE breakfast cereal market, 2007 Cereal? m%Brand examplesG rowing or declining Kids501. 942Coco Pops, Rice Crispies, Sugar Puffs, Mega Munchers, Fruit LoopsGrowing Naturally good346. 629Jordan’s, Dorset, Alpen, Special KGrowing Favorites239. 020Cornflakes, Crunchy NutGrowing Reduced fat/calorie/sugar95. 68Health Living, Reduced Sugar, Reduced SaltDeclining Organic free from12. 01Jordan’s Organic, Doves FarmGrowing * For sector definitions please see appendix Source: Mintel Appendix 14: Seasonal changes: Source: Nielsen Media Research/Mintel Appendix 15: UK retail distribution of breakfast cereal, 2003-07 200320052007 (est)% change% change ?m%? m%? m%2003-052005-07 Grocery multiples1,039931,094941,203945. 310. 0 Convenience404393383-2. 5-1. 5 Independent/others*383363383-5. 36. 7 Total1,1171001,1691001,2801004. 79. 5 * includes health food discount stores Source: Mintel Appendix 16: Opportunities and threats in the competing markets, 2002-06 Market size (2006) % change 02-06Major inhibitorsMajor driversStrategies for growth Fresh fruit ?3,796m +20. 2% Highly competitive market Loss leading itemsThe 5 a day message – This government sponsored guideline is heavily promoted and actively taught in schools. The obesity epidemic a greater focus on health which is leading to increased consumption of fruit and vegetables. Increasign wealth and familiarity with fruits means that consumers are more open to trying new options. Conveniently packaged products that can fetch a higher price. Organic fruit Fair-trade products (particularly bananas) Expansion into premium and rare/exotic varieties The introduction of locally sourced options Superfoods and eating for health Yogurt ?1,397m +28. 6%Pressure on prices Mixed messages and confusing health claimThe rise of healthy indulgence Popularity of functional products Rising levels of obesity Demand for natural products Consumers self diagnosing minor digestive health complaintsOrganic products at competitive prices More premium cream based products perfect for indulgence. Free from range expanding, products catering for different health needs. Child targeted products that please both parent and child. Bread ?2115m +10. 3Rising raw material prices Growing fear of the white bread Awareness of complex carbs Home Baking resurgence Decline in heavy usageHealth eating trends more opportunities for high value breads Rise of the foodie The health movement particularly the turn away from white breadHigh value artesian style breads. Super food breads with toppings including nuts and seeds Smaller more convenient loafs White breads with the goodness of brown Cereal bars ?270 56%The number of consumers prepared to purchase Relative price to breakfast cereals Healthy eating trends Time poor cash rich consumer The resurgence of breakfast from a health perspective The trend towards healthy yet natural products. Large number of market players, who are prepared to innovate Good healthy snack alternativeNatural and free from options Indulgent options that can be eaten as a necessity and a treat. Mixed selection packs. Super food and functional food versions. Source: mintel Appendix 17: Price per Kilo of RTE Brands from Selected Supermarkets, January 2008 Source: Storechecks/Mintel Price per Kilo of Hot-Cereal Brands from Selected Supermarkets, January 2008 Source: Storechecks/Mintel Appendix 18: Main monitored media spend, by advertiser, 2003-07 ?m20032004200520062007* ?m? m? m? m? m Kelloggs34. 343. 849. 252. 554. 6 Nestle18. 720. 619. 821. 224. 5 Weetabix8. 04. 19. 311. 910. 9 Jordans0. 50. 71. 11. 81. 7 Quakers1. 71. 70. 11. 70. 4 * Jan-November 2007 Source: Nielsen Media Research/Mintel Appendix 19: Map of manufacturers and brands in the breakfast cereals market, 2008 Kellogg’sCrunchy OatbakesCountry Store All-BranHoney Loops Bran FlakesJust Right Coco PopsLuxury Muesli CornflakesRicicles Crunchy NutStart FrostiesRice Crispies Fruit ‘n FibreSpecial K OptivitaWheats Cereal Partners UK (Nestle)CheeriosFitnesse Oat CheeriosAlmond Oats Shredded WheatNesquik ClustersOats More Golden NuggetsForce Flakes Cinnamon Cookie Crisp Shreddies WeetabixWeetabixOatibix WeetaflakesWeetos Alpen CerealsStars Crunchy BranOatiflakes Ready Brek Source: Mintel Appendix 20: The Weetabix Food Company Timeline 1932 Weetabix founded by two South Africans who introduced the Weetabix breakfast products to the UK 1936 Weetabix Limited was incorporated by, among others, the George family 1967 Weetabix entered the Canadian market 968 Weetabix entered the US market 1971 Alpen Muesli launched 1991 Ready Brek, acquired from Lyons Tetley 2002 Alpen bars launched 2004 Seriously Oaty launched 2005 Weetaflakes launched 2006 Alpen Light bars launched 2006 Oatibix launched 2007 Oatiflakes launched 2007 Alpen Luxury range launched 2007 Alpen Groove bars launched Source: weetabix Ltd. 2008. Appendix 21: The top-selling breakfast cereals in the UK, by estimated brand shares, 2006-07. Source: Mintel 200620072006-07 ?m%? m%% change Weetabix95. 48102. 587. 4 Special K90. 5799. 489. 8 Corn Flakes66. 565. 65-0. 6 Crunchy Nut Cornflakes57. 4564. 6512. 5 Coco Pops39. 9343. 037. 8 Rice Krispies35. 0343. 0322. 9 Shreddies34. 0333. 83-0. 6 Oatso Simple28. 2232. 8316. 3 Cheerios28. 2231. 029. 9 Frosties27. 3229. 728. 8 Shredded Wheat27. 0226. 62-1. 5 All Bran Bran Flakes 27. 3225. 62-6. 2 Fruit and Fibre22. 4220. 52-8. 5 Sugar Puffs20. 4219. 52-4. 4 Kelloggs Variety16. 6118. 4110. 8 Weetabix Minis17. 5116. 01-8. 6 Shreaded Wheat Bitesize14. 6116. 4112. 3 Country Crisp14. 0113. 01-7. 1 Alpen13. 6113. 31-2. 2 Crunchy Nut Clusters11. 7113. 3113. 7 Own Label237. 620243. 0202. 3 Others292. 24310. 0246. 2 Total1,2161001,2801005. 3 Appendix 22: Key developments in the Kellogg’s portfolio, 2007 BrandNew product developmentDriver/Motivation Special KSpecial K Bliss, Special K Susta in, Special K Oats Honey Drop a Jean Size ChallengeMore variation of health options to keep the consumer engaged in the brand A promotion designed to increase frequency of purchase. Special K range Mini BreaksGuilt-free snack designed as a healthy alternative to crisps Coco PopsMega Munchers, Crunchy Curls, Creations, Moons and StarsEngage children in Coco Pops despite limited advertising. CornflakesHint of Honey, Cornflakes MultigrainA more demanding health conscious audience Fruit and FibreRelaunchedA more demanding health conscious audience Source: Mintel Reference: Appendix 1 Appendix 2 Appendix 3 Appendix 4 Appendix 5 Appendix 6 Appendix 7 Appendix 8 Appendix 9 Appendix 10 Appendix 11 Appendix 12 Appendix 13 Appendix 14 Appendix 15 Appendix 16 Appendix 17 Appendix 18 Appendix 19 Appendix 20 Appendix 21 Appendix 22 Breakfast cereals in UK, Mintel Report (2008) http://academic. mintel. com/sinatra/oxygen_academic/search_results/show/display/id=227674/list/id=227674=NSItem=News=1/displ y/id=233120=233120 [accessed on 1/03/2008] 24. Benefits of breakfast cereals, The European Breakfast Cereal Association, (2008) ceereal. eu/documents/20070312%20Final%20Brochure. pdf [accessed on 10/052008] 25. Information nutritional signpost labeling- breakfast Cereals Criteria, Food standard law, (2008) foodstandards. gov. uk/multimedia/pdfs/breakfastcerealpaper. pdf [accessed on 13/04/2008] 26. Regulation and legislation on breakfast cereals, Food Standards Agency (2008) food. gov. uk/foodindustry/regulation/ [25/05/2008] 27. Regulation on Fortification, British Nutrition Foundation (2008) nutrition. org. uk/home. asp? siteId=43=434=323=299=1 [accessed on 14/03/07] 28. The UK Breakfast Cereals Market Has Grown In Value Terms, BNET United Kingdom (2007) http://findarticles. com/p/articles/mi_m0EIN/is_2007_June_11/ai_n19207742/pg_1 [accessed on 2/04/2008] 29. Isomalt- artificial sweeteners information, Palatinit (2008) beneo-palatinit. com/en/Food_Ingredients/ISOMALT/ [accessed on 23/04/2008] 30) Isomalt sweetener information, Isomalt from Palatinit (2008) heingredients. co. uk/Palatinit%20GmbH/isomalt_main_page. htm [accessed on 23/04/2008] 31) Information on Kellogg’s, Kellogg’s (2008): kelloggs. co. uk/ [accessed on 19/04/2008] 32) Information on Cereal Partners, Cereal Partners (2008): cerealpartners. co. uk/ [accessed on 19/04/2008] 33) Information on Weetabix, Weetabix (2008): weetabix. co. uk/ [accessed on 19/04/2008] 34) Case study on Kellogg’s, The Times 100 (2008): theti mes100. co. uk/studies/view-summaryusing-aims-objectives-to-create-business-strategy6-267. hp [accessed on10/05/2008] 35) Cereal partners expand despite falling market, Bakery and snacks (2006) bakeryandsnacks. com/news/ng. asp? id=70006-cereal-partners-worldwide-nestl-cereals-general-mills [accessed on 21/04/2008] Bibliography Books: 1) Fast. B. R et all. , Breakfast cereals and how they are made. , American association of cereal chemists, inc. 2) Johnson. G et all. , (1999). , Exploring corporate strategy. , 5th edition. , Prentice Hall. Websites: 1) A Review of the UK Food Market, Cornwall Taste of the West (2006) ornwalltasteofthewest. co. uk/idupload/images/the_uk_food_market. pdf [accessed on 15/05/2008] 2) Ban on Unnecessary Colour for Children, The Management System Community (2008) http://businessassurance. com/food/news/ [accessed on 20/03/2008] 3) Breakfast cereals in UK, Mintel Report (2008) http://academic. mintel. com/sinatra/oxygen_academic/search_results/show/displ ay/id=227674/list/id=227674type=NSItemclass=Newspage=1/display/id=233120anchor=233120 [accessed on 1/03/2008] 4) Breakfast cereals: Global industry guide, Report Buyer (2008) reportbuyer. om/food_drink/bread_bakery/breakfast_cereals_global_industry_guide. html [accessed on 10/04/2008] 5) Breakfast Food statistics, Topher’s Breakfast cereal Character Guide (205) lavasurfer. com/cereal-stats. html [accessed on 13/05/2008] 6) Breakfast Reports in United Kingdom, The keynote (2008) keynote. co. uk/CnIsapi. dll? fld=Xalias=kn2k1uni=2322SetUserType=1jump=collapseLevel=0fromPage=StatAZAutoShowFirstRecord=1search=SY%20=%2010-1922-55985Browser=NETSCAPE [accessed on 12/04/2008] 7) Benefits of breakfast cereals, The European Breakfast Cereal Association, (2008) eereal. eu/documents/20070312%20Final%20Brochure. pdf 8) Case study on Kellogg’s, The Times 100 (2008) thetimes100. co. uk/studies/view-summaryusing-aims-objectives-to-create-business-strategy6-267. php [accessed on10 /05/2008] 9) Cereal Growth Slow as Challenge Continue, Food Navigator (2007) foodnavigator-usa. com/news/ng. asp? n=79780-mintel-kellogg-general-m

Final examiantion Essay Example | Topics and Well Written Essays - 1250 words

Final examiantion - Essay Example A failed marketing campaign has the potential to sink a small business, whereas a large business can write it off as an acceptable loss. The second biggest difference is in the form of staff. Large business have the luxury of many different departments, with each manned by a number of individuals. In smaller business, the manager of the firm may have to take on several key roles, thus limiting his or her ability to be effective in the marketing role. Finally, the last difference in marketing centers on creativity. Large business often have a lot more contacts in the industry, so their marketing campaigns are more likely to be effective with the market. On the other hand, small businesses do not have the leverage to be creative and often have to design unimaginative yet effective marketing campaigns. 3) Marketing strategies that engage with the customer are the most effective for improving service quality for a small business. Small businesses often do not have large marketing budgets , but that is no excuse for not trying to make a connection with the customer. The great thing about small businesses is than customers often gravitate towards them because of the increased face-to-face interaction. The product or service on offer does influence the marketing strategy to be used. Products or services that require technical expertise will often need to have extensive instruction manuals or allow the customer to inquire further. 4) Social media is a great way for any business to make use of technology to better market itself. There are many benefits to a company being actively involved online, such as the low cost associated with it and also the potential to reach a wide market. Consumers prefer marketing that meets them at a place where they feel comfortable with, and many younger people spend hours on social media sites each week. For a company looking to promote itself, the use of social media is a great way to do so because much of the work can be done by customer s of the brand. For example, on Facebook getting comments or likes on company status updates can attract new customers who are friends with people who like the brand. The potential for businesses to use social media is almost endless. 5) The term customer lifetime value (CLV) refers to the monetary value that a company can gain from a particular customer over the course of their lifetime. Measuring CLV can be a difficult procedure over many years due to inflation and changing customer spending power. Comparing data over many decades presents its own challenges because there is no one way to correlate the data over time periods. Firms use CLV in order to determine if it is worth it to spend heavily on consumer marketing campaigns. If there is very little to be gained from capturing a customer, then it would not make sense to pursue that customer through marketing campaigns. Instead of treating customers like people, the CLV thinks of them as assets and determines debits and credits o n both sides of the equation. Despite this, it is an important part of any business because of the need to weigh up the costs and benefits associated with maintaining a relationship with a loyal customer. 6) 7) When determining how a product reaches a customer, it is important to consider the effectiveness of it and also the costs involved. Customers appreciate a timely delivery once they have ordered a product, and their reaction to it will determine whether they will be a returning customer or not. A

Gold Marilyn Monroe and Self-Portrait with Cropped Hair Essay

Gold Marilyn Monroe and Self-Portrait with Cropped Hair - Essay Example The essay "Gold Marilyn Monroe and Self-Portrait with Cropped Hair" analyzes wo paintings, Self-Portrait with Cropped Hair by Frida Kahlo and Gold Marilyn Monroe by Andy Warhol. Self-Portrait with Cropped Hair, by Frida Kahlo hangs at the Museum of Modern Art in New York, currently on show among other masterpieces of the time. Kahlo painted this medium-sized canvas in 1940, shortly after her divorce from Diego Rivera. Theirs was a tempestuous relationship, shown by their remarriage the following year and the content of this picture, which shows Kahlo after she sheared off most of her long hair . Many art critics have opinions about why she painted herself in such a masculine way: short hair, man’s suit, unladylike posture. It is perhaps to state that after her husband’s infidelity with her own sister Cristina, she was making herself unattractive, unfeminine and unapproachable. Others say she always had masculine tendencies, shown by her relationships with women. The tru th lies somewhere between, more related to grief and mourning than to statements of gender. Kahlo was part Jewish. She was very close to her German-Jewish father Wilhelm Kahlo , and was probably expressing the Jewish way of grieving something lost, something dead: her love. The verse from Jeremiah (Ch 7, v 29), in the Old Testament: ‘Shave your head in mourning, and weep alone on the mountains.’ And in Micah Ch 1:1, ‘Weep, you people of Judah! Shave your heads in sorrow...’ are well known. It is almost certain Kahlo would have known.

Global Organisational Environment Of IKEA

Global Organisational Environment Of IKEA In this topic, we learned about the pros and cons of different types of organizations and the main influences of the external and internal environment on these organizations. This subject also analyzes the expectation of the organizations major stakeholders. By using the stakeholder mapping power/interest matrix, the company can identify its major stakeholders, their expectations, and conflicts between the stakeholders. This is very important for decision-making process because if the company can understand thoroughly different stakeholders expectations conflicts, they can have the right strategy to deal with each stakeholder, and so gain the profit of the company. The concept that I found it is difficult is how to identify the correct stakeholders power and interest on the stakeholder mapping. When I did the example together with my classmates, we have different point of views. More or less power and interest of the stakeholder also depends on what view the companies are on. I should practice more from other big companies in the world to see how they identify the expectation of their stakeholders. I can also study from the websites http:www.stakeholdermap.com show us the important of the stakeholders to the growing of the company, and also how to analyze and map the stakeholders power and interest. The article Making Sense of Stakeholder Mapping of Ruth Murray and Peter Simon on 2006 provides us three basic important dimensions when considering stakeholders: power, interest and attitude Power: how much the stakeholders have the potential to influence in the organization Interest: how much they are interest in the projects of the organization Attitude: how they will back (support) or block (resist) to the organizations project. The article also states that if we only consider two out of three above dimensions, it just gives a partial and less than useful picture  [1]   Topic 2: International environment Organization and Institutions (Mark) Multinationals is the corporation that locates its management headquarter in one country (home country), and operates its business in other several countries (host countries). Through this topic, we see the good and bad sides of globalization. We learned the differences between the free trade and protectionism. The benefit of free trade is no longer tariff barriers, so there will be good prices for customer because of increasing competitions. However, the bad side of free trade is that it will create a big gap between rich and poor, harming the environment, and cultural convergence. On this chapter, we also learned more about the benefit of World Trade Organization such as promotes peace, constructive handling of disputes, free trade cuts costs of living, increase choice, raise income, and simulates economic growth. This chapter also includes types and level of integration as well as the effects of integration such as static effects and dynamic effects. The concept that I found it difficult to understand is the Krugmans objections. I do not really thoroughly understand what this concept is about. This is something that I need to spend more time to read more from the book or find more information from internet. It is obvious that the world today is becoming more global. Beside some advantages of free trade by globalization, there are still a number of criticisms that free trade brought to the worlds economic. The term free trade actually depends on the interest of powerful nations and corporations. For example, according to Criticisms of Current Forms of Free Trade article, there is the phenomena of brain drain. It means that some rich countries try to attract educated people from poor countries. Thus, increase bigger gap between rich and poor countries  [2]   Topic 3: Analysis of the Environment Understanding the Managerial Environment The topic, Analysis of the Environment Understanding the Managerial Environment is about learning the external and internal environment and how they are impact to the organizations. This session helps us to understand the different dimension of the environment such as complexity, stability, market diversity and hostility. It is very important for the company to understand the effect of the environment factors to the organization in the future so that they can have the right strategy to develop the company. We learn different types of the organization environment, and how to analyze the environment by using PESTEL framework (political, economic, social, technological, environmental, and legal). PESTEL is a useful tool for understanding the industry situation as a whole; it allows us to have in-depth analysis of the external factors impacting on the organization. This topic is straightforward and was explained very clear in class, so I did not find any concept that difficult in this topic Topic 4: The Macro-economic Environment the Economy and the Role of Government In this subject, we indentified the macro-economy and its objectives. Macro-economic Environment is the first step of a strategic analysis; it is also referred as an external analysis (PESTEL analysis). It helps us to identify what will affect the growth of our industry as a whole. Four essential measures that are used in the macro-economy are inflation, economic output, unemployment, and balance of payment. This topic also raises the impact of the government in the economic system. Government has an important role in economy. These objectives include: a low rate of inflation, a reasonable rate of economic growth, low rates of unemployment, and a balance of payments in equilibrium or surplus. The government uses the fiscal policy to stabilize the economy by controlling interest rates and the money supply. Topic 5: The macro-economic environment. Understanding the Global Environment (Mark) This topic helps us get more knowledge about globalization and the forces that drive globalization. Globalization is increasing global business activities and multinational companies. Globalization also means rising political and social connection between government and people. Globalization helps to improve communication and share information worldwide. Friedman (2007) supposed that globalization is a flattening process. In this book named The world is flat, he indicated ten forces that flatten the world as follow: collapse of Berlin wall, Netscape public offering, work flow software, open source or uploading, outsourcing, off-shoring, supply chain, in-sourcing, in-forming, and the steroids. In other words, globalization is affected by the key drivers namely political, technological, and economic, market drivers, and cost and competition drivers as well. For example, outsourcing and off-shoring in China and India help many multinational companies such as Toyota, Sony and others probably reduce production cost because of low material and labour cost. This results in increasing competitive advantages. However, it also creates more highly completive market in the world. In addition to globalizations advantages, there are some plausible disadvantages in global competitive environment. Particularly, globalization makes to increase the gap between rich and poor countries and people as well. Globalization also leads to cultural convergence. Moreover, it is true to confirm that globalization makes contribution to cause environmental pollution. International expansion of multinational companies has aroused increasingly environmental issues in which they operate. Therefore, in global competitive environment, business organizations today have to confront with some key challenges such as cross-culture management, competition, sustainability as well as global rules. This chapter is straightforward and well explained in class. Thus, I can easy to follow and understand, and I did not find any concept that is difficult to understand. The article Critical Challenges of Globalization to Vietnam  [3]  on CDI website (Center for Development and Integration) states that globalization challenges Vietnam in two ways: Challenges to the country competitiveness: under globalization, the demand for competiveness is much higher. Competition is not only about products but also about competing social settlement Challenges to Vietnams labor, migration, and womens right: women play an important role in growing the countrys economic; however, womens work and value are less recognized than men Topic 6: The global environment: Emerging economic in three continents This topic provides an overview of emerging economies mainly in Asia, America and Africa and especially BRIC countries (Brazil, Russia, India and China). In addition to this, the author would like to compare the different economic, political and other developments between countries. Chapter 14 Contrasting developments in the Americas shows US economic development and its hegemony in international affairs as well. Moreover, this chapter helps me understand the reasons why the BRIC countries have possibly achieved increasingly importance in the eyes of Western economists, investors and politicians. BRIC countries in order to secure their development Chapter 15 Asias economic potential indicates in-depth analysis the major Asian economies and their historical development. Indeed, this chapter describes major characteristics such as geographical, political, economic and cultural diversity of Asia through major countries such as China, India, and tiger countries (Hong Kong, S.Korea, Singapore and Taiwan). For example, at the present, there is no doubt that with high level of education, high saving and investment, modern technology and others, tiger countries completely compete to other countries in the world. Chapter 16 Africas struggle for reform describes a big picture of political, economic and social developments in Africa and major barriers inhibiting Africas development. In particular, African countries have to face some social problems in relation to poor education, housing and sanitation, low standard of living, disease, and poor public health care. Moreover, poor governance and inability of politicians are impossible to maintain stability. Besides, heavy debts have also become an urgent problem to many countries. It is undeniable that poor productivity and strong dependence on other donation has led African nations at the mercy of world markets. Based on this analysis, the author is willing to discuss the potential solutions to Africas future development and prosperity. Topic 7: The micro-economic environment market structures and industry analysis (Mark) This topic provide knowledge about different types of market structures and describes the link between market structure and companies behaviours and performance through analysis of Porters five forces. To start with, there are three kinds of market structures including monopoly (diamond market), oligopoly and perfect competition market. Especially, in term of oligopoly, in order to avoid price war and compete by non price methods, many companies choose to collude. In addition to this, this topic also describes industry life cycle. In period of introduction, customers buy products regardless of price because of products uniqueness. It is called fragmented industry where no firm has large market share and each firm share small pieces of big market cake. As new competitors enter this industry, prices drop as a result of competition. Companies use experience curve and economic scale to reduce cost faster than competitors. By the time an industry enter maturity, this is a consolidated industry which dominated by a few larger firms struggling to differentiate their products from the competition. As an industry moves toward decline, its products growth of sale begins decreasing; therefore, firms will convert their facilities to alternate uses or sell them to another firm. Moreover, Michael Porter, the author of competitive strategy, has highlighted evidently affect of the level of competition to the level of the specific business unit. Hence, it will help me obtain insight about the organizations competitive environment such as the dominant forces in the industry including threat of entry, power of buyers and suppliers, substitutes, and competitive rivalry, and the factors influencing on these forces. However, Porters five forces have a plenty of shortcoming. For instance, the model is effective in static situation. It assumes that the companies interest and profit always come first. Moreover, the business environment is competitive, hostile and predictable. More importantly, it ignores one of the most significant factors called human resource. In addition to Porters five forces, in oligopoly market, Game theory is considered as a branch of mathematics often used by economics that analyzes situations in which players must make decisions and then receives and then receive payoffs. It is applied for members of an oligopoly because they always face to a prisoners dilemma which is a game in which the gains from cooperation are larger than the rewards from pursuing self-interest TASK 2: IKEA REPORT I. Introduction 1. History IKEA is a home-furnishing retailer founded by Ingvar Kamprad in 1943. The Swedish company that sells and designs flat pack furniture, appliances and home accessories through its stores around the world at affordable price. Since then, IKEA has grown up rapidly and now it becomes the largest furniture retailer in the world. Its mission is to offer a wide range of home furnishing items of good design and function, excellent quality and durability, at prices so low that the majority of people can afford to buy them (IKEA, 2010). 2. Vision IKEAs business idea: To support this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. And its vision is to create a better every day life for the many people (IKEA, 2010). To bring a better everyday life, IKEA are committed to provide well-designed, good quality and durable home furniture and keeps the low price for many people. Keeping low price is a cornerstone of IKEA; however, it does not mean that low price but not at any price. IKEA wants sustainability as a part of its business. In fact, it believes that taking about social and environmental responsibility of its customers, suppliers is a crucial for running good business. IKEA made decision for contribution to create a good world by providing products, service which are beneficial effect on people and environment. 3. Product range There are a wide range of products which inspired and developed based on the essential customers needs of home furnishing. In general, IKEAs product is a combination with three main characteristics: good design, function and low price. That means all IKEAs designers design goods with well designed and functional home furnishing available for everybody that at low price. 4. Store In 2010, there are 316 IKEA stores in 38 countries, and most of them in Europe, North America, Australia and Asia (Swedish Furniture, 2011). IKEA store format is a single-story, large blue buildings with yellow company name. The large numbers stores of IKEA are located suburban because of land cost and traffic access. IKEAs stores open for long hours, normally, 24 hours per day. IKEA always encourages customer to visit its store in order to look inside, touch, try everything, even if walk away empty handed. By this way, IKEA hopes that after leaving its store, customer will have a full of fresh ideas for their own home. II. Stakeholders mapping Employees IKEA does not have its own factories; they give orders to different factories in low cost countries. Hence, it is acknowledged that majority of employees still has low power and interest to the company. Global society / Local community Environmental issue such as friendly, reduced packaging is being promoted by the Government and is concerned by community. However, it may impacts negatively on IKEAs social responsibility and total cost. Thus, local community has high power and low interest to IKEA. Customers The power of the buyers is moderately low because majority of customers are consumers. The company targets the customer who is looking for value and is willing to do a little bit of work serving them, transporting the items home and assembling the furniture for a better price. The typical IKEA customer is young low to middle income family. Competitors IKEA operates in a highly competitive industry, characterized by other low priced furniture producers such as Galiform of England and retailers such as Wal-Mart of the United States. Domestically, IKEA faces the threat of potential entrants; as the dominant firm, holding 25% of the market in its native Sweden for example, there is a very real possibility that others will enter the market to challenge IKEA directly. Hence, competitors have low power and high interest to IKEA. Suppliers IKEA does not only create competition among suppliers but also treats them as long-term business partners. As IKEA offers nearly the same products in its stores all over the world, they can order very high volumes and therefore get cheap prices. Moreover, its suppliers are usually located in low-cost nations, with close proximity to raw-materials and reliable access to distribution channels. These suppliers produce highly standardized products intended for the global market, which size provides the firm with the opportunity take the advantage of economies of scale factors. In fact, IKEA is using its size when dealing with subcontractors in two ways. The first is to put pressure on the subcontractors to become more and more efficient. Secondly, IKEA can use its size to get good discounts from the suppliers. This is done by placing itself as a large customer to the supplier, to get some power in price negotiations. Local government Local government has high power and low interest to many companies. The reason is that changes of laws, regulationns and policies influence the production, total cost and sale of IKEAs products. Shareholders This group can also be considered high power potentially. This is more important in recent years where shareholder activity has increased significantly in the boardroom, and management of firms has been scrutinised much more and even given threats if certain actions favoured by the shareholders were not pursued. Managers Managers play an important role in controlling business activities and improving IKEAs global competitiveness by promoting timely, decision-making for operational matters. In other words, they possess high power and interest from the company. III. PEST analysis The Pest analysis tool looks at political economic, social, technology changes which are likely to affect on the business (Robert, 2004). These varieties of external environment factors in 2010 which IKEA faces are: Political changes: Governments regulation and policy change: Generally, there were sorts of challenges and chances, which IKEA faced in 2010. For opportunities: These host countries changed policies to encourage foreigner companies invest in the country such as reducing procedure papers, exported tariff -exempt,. By contrast, the countries also tied up protectionism and subsidies for its products in order to compete to foreigner products for instants, launching policy of rising imported tariff. Economic factors: Economic growth: Although global economy recovered slowly, it helped IKEA has boosted its market share because of its low-price goods which can compete to expensive retailers in 2010. IKEA group still opened continue to expanse their stores in other countries and increasing sales in emerging economic market-Asia where leading the global economy recovery in 2010. Inflation: It is a true that inflation rising which let price of all commodities rose remarkably in 2010 such as raw materials which led increasing IKEA inputs purchasing cost. In addition to this, fuel price also rose rapidly in 2010 which impacted on IKEAs transportation cost. All of this, affected on IKEA business performance as well as customer purchasing needs. Furthermore, increasing price implicated that IKEA has less competitive advantage in the furniture market. Competition: IKEA is a Sweden giant furnishing company which has strong brand, therefore, there are few competitors running in the market. However, IKEA should not underestimate its competitors. The company should launch innovative and eco-design products at low price for meet a wide range of customers needs. Social factors: Lifestyle: Becoming a global company that means IKEA faces challenges as different culture, language barrier, and taste. Thus, before opening new stores, it should have concrete plans of research market. IKEA has expanded its stores in emerging market like China, India, and Pakistan which society is distinct compared to Western countries. Generally, Asian is savers who do not spend too much money on purchasing. They are willing to buy durable and high-quality products in conventional retailers which are expensive rather than low-price ones like IKEA, a reputation of self assembly. Population growth rate: This factor plays a role for IKEAs development as well as helps IKEA make decision for opening new stores in these regions. These largest populations countries as China and India, people have huge needs for buying low-price products of IKEA. Thus, expanding new stores in the markets bring benefits for IKEA such as increasing business sale, number of subcontractors and so on. Technology: Normally, technology plays an important role for almost companys success especially a global company. For IKEA, it used quality technology to implement better communication services and software modules that communicate to a home base, delivery service and selling online via the Internet. Technology helps company to increase production and employees productivity, improve its business performance, and gain competitive advantage. IV. Market position and segmentation Market position There is no doubt that IKEA is a well- known furniture company in the world. In spite of world economic recession in 2010, IKEA has been growing up and has a leading market position in the future. There are some evidences demonstrating for statement above: total sale rose by 7.7 % to 1.1 billion Europe (FY 2010 report) compared to 2009. In fiscal year 2010, Ikea group opened 12 stores in 8 countries. Figure 1: Annual Sale, Billion Euros (Source: http://issuu.com/interbrand/docs/bgb_report_us_version?viewMode=presentationmode=embed) According to Branding consultancy Inter-brands Best Global Brands 2010( Top 100 brands) released on the fifteenth September 2010, the Sweden giant furniture- IKEA was ranked at 28th place the most valuable brand with brand value is 12,487 ( dollar million) and changing branding value is 4% higher than last year. Figure 1: Best Global ranks 2010 (Source: http://www.interbrand.com) Market segmentation: Market segmentation IKEA uses various mixes of segmentation bases including geographic segmentation, demographic segmentation. Geographic segmentation: IKEA stores are located around the world, however, most stores of them based in at Europe where get the highest sales ( 79%), meanwhile Asia and North America account for 6(%), 15%, respectively. Figure 2: Ikea, sales per region (Source: welcome_inside_2010, IKEA report 2010) Demographic segmentation: According to IKEA, it wants to bring a better life to many people. This means that its customers are people all over the world who are low and middle- income. In addition to this, IKEAs customer target is focus in young people and family who are appealed by stores decoration as well as can take time working together IKEA to design their products. V. SWOT Swot is an acronym of strengths, weaknesses, opportunities and threats which is a useful tool for helping organization to analyze current situation of the organization in order to solve its problems and take advantage to reach its objectives. Strength and weakness are internal environment such as management, operation, finance; meanwhile, opportunity and threat are external environment like economy, society, environment and technology (Andrew, page 7). Strengths: That is any resource advantage and capability of organization which gives competitive advantages in the market. Strengths are organization capabilities such as human resource, management, financial status, service, manufacturing and so on. Strength considers as a basic quality element for evaluating companys success. There are some IKEAs strengths below: Wide range product: IKEA is famous for its wide range of affordable and good-quality products which can meet almost customers needs. Furthermore, IKEA has restaurant, cafeteria, and children- playing room in the each IKEAs store in order to help their customer feel comfortable when shopping here. Less competition: IKEAs business model is quite unique, besides, IKEAs range product is wide that means it meets multi target markets. This leads to IKEA has little direct competition. Global brand: IKEA Company has strong brand reputation which appeals key customers. That also means it provides the same quality and a range of products. Advanced- technology and new materials: IKEA continues to introduce and apply new-technology as well as materials in its furniture industry in order to reduce cost and weight of its products for customers as well as eco-friendly environment. Low price strategy: Because of IKEAs business ideas is offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. That is a priority strategy of IKEA which make the company as a well-known brand. Clear vision and strong concept: IKEA wants to create a better every day life for the many people by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. Supplier-long-term partnership: Supplier plays an important role for IKEA Company. To maintain good-product quality as well low-cost, it creates long-term partnership with supplier. By this, IKEA can buy large volume with negotiable price over many years. Flag-pack furniture: Flag-pack furniture is becoming popular since it was launched by IKEA Company. The most crucial reason that makes flat-pack furniture popular is because of its saving-cost such as transportation and storage cost. In addition to this, flat-pack furniture is easy to carry for both customers and suppliers, assemble at home just following company instructions; minimize shipping damage, increasing inventory capability. Weaknesses: They are internal factors which make company cannot reach its success as well as its full of potential compared to others. Weaknesses can be controlled and eliminated. Each enterprise has to know its weaknesses in order to improve and manage its. IKEAs weaknesses including: Lack of customer service: Low-cost is the cornerstone of IKEA which may not attract customers who are used to go traditional furniture shopping. This lets the customers who feel that IKEA Company does not care about them. Furthermore, scale of company- a global company also makes it difficult to communicate with its customers. Lack of customer service will effect on IKEAs brand. Global company: As a global company, IKEA has encountered problems to control, operate and maintain its stores standard as well as quality of products through the stores chain in various regions. Difficult to balance between low cost and high quality: There is a said that, quality and price accomplish together. The fact that, it is easy to produce good- quality product for high price, but IKEA makes different ways. If it is too focus on cost-saving, it will effect negatively on products safety as well as user. Cost needs to be balanced against quality. Opportunities: They are chances in economy which helps businesses to gain competitiveness advantage, profitability and increasing production. In addition, opportunity arises suddenly, even if, these may arise from competitors, government policy, technology, thus organization should be careful and catch the chances whenever they arises. IKEAs opportunities include: Urban sprawl: IKEAs stores are located at outskirt of centers, because of land cost and traffic access. Nowadays, there is increasing number of people living in metropolitan areas to move far away center which places that are closed to IKEAs stores. In addition to this, most of them are young, educated and rich. IKEAs strategy meets new trends. Increasing demand of low-price products: Because of being effected by depressed global economy, citizens have trend for purchasing goods at low-price for saving their money. In order to meet rising customers demand as well as increasing its sales, the company may design new products, reviewing manufacturing process, materials or labour. This is a chance which IKEA should exploit. Selling online: Selling online is one of opportunities of IKEA. Online shopping makes a revolution to traditional shopping. For global company- IKEA, its online retailers have expanded all markets globally. Its customers in every region can shop just a click mouse and then waiting for goods delivered. This helps IKEA increasing sales, profits, and brand recognition. Expansion into emerging market: There are numerous countries of Asia which are potential markets for IKEA in the coming years. Meanwhile, the demand of citizens living in emerging markets focus on buying good-quality at low-price which is the IKEAs concept. Threats: Threats are used to external factors in environment which effect negatively for profitability, operation enterprise as well as growing new rivalries. Actually, if company is aware of external threats, it can plan to solve the problems. Threats of IKEA derived from: Increasing rivals: There is growing competitors entering low-cost furniture market which impact on IKEA Company such as Wal-mart, Ashley furniture, Howden. These competitors can copy low-cost value model. Therefore, IKEA needs to improve its product qualities to compete with other rivalries. Economic crisis: Businesse

Degradation of Moral Values in Indian Society Essay

Human beings enjoy the maximum freedom and power for governing their habitat and environment. This power sometimes enables them to misuse the resources Materialism has led us to a degradation in our moral values. India is the most ancient civilization. Vedas were written in India. Buddha got divine knowledge here. We are proud of our rich cultural heritage but today we have forgotten those ideals, values and principles which were so dear to our ancestors. Take for example, the concept of joint family. Today, no young couple prefers a joint family. We do not want to be grateful to our parents. Rather, we want to disown them. The next most prominent degradation in our moral values reflects itself in the form of corruption. In India, corruption is prevalent at all the levels and the irony is that even if we accuse that they are guilty, they remain supreme. These developments are not good for the national economy and the moral conditioning of our younger generations. The free market economics has added fuel to the fire. When we find that everybody is corrupt. So, we waste no time in becoming the part of this corrupt system. Another steep decline in moral values manifests itself in the form of our poor educational system and teaching methodologies. In fact, the poor educational system in all the parts of the nation has led to poor moral values in the society The students do not respect their teachers. Copying during the examinations is a common practice. Best of the brains are drained to the West because the offers are tempting- and nobody misses the opportunity if offered once. Further, in Indian society, respect for elders is taking a backseat in the name of modernization. Our cultural values have taught us to respect our parents and help them during the times of their helplessness. However, the growth of nuclear families has led to complete ignorance of parents and elders. We never approve of such a deformed social and cultural chaos in our nation that was known for her warmth and family  traditions for over several hundred centuries. Criminals should be banned from politics and should be treated with an iron hand if they try to disturb the democratic norms laid down by our Constitution†¦ The Election Commission has done well by forbidding candidates with criminal records from fighting elections. In our schools, the traditional Indian values must be taught and reinforced. Schools can change the face of our society. The concept of joint families must be promoted among the young couples. This concept would enable them to take fruitful guidance from their elders. Education should be imparted according to Western norms. However, Indian values must also be enforced so that our children remain in touch with their roots.

We should not add our parents in facebook

We should not add our parents as friend on backbone According to the statistic updated in year 2013, there are total numbers of 1. 26 billion of Backbone users. It is common to have a Backbone account, vice versa. The percentage of teenagers that add their parents as friend on Backbone Is 70%. 70% of them think that there is no problem to add their parents as friends on Backbone. However, It Is my view that I should not add my parents as friends on Backbone as It retrains me from being myself, Invades my privacy and makes me feel embarrassed.As I am a normal 18 years old teenager, I have a Backbone account too. I have added my mum as friend 3 years ago. When the first time I posted a selfless of myself on my Backbone wall, my mum mandated me to delete the photo. The reason she said Is, â€Å"The photo Is ugly, don't put out your tongue when you take a picture! † I had followed what she want me to do, but also remove her from my friend list. There are millions type of me inside , my mum want me to be a teenager that has good image, but what I want to do is being myself.I think adding parents as friends on Backbone retrain me room being myself. There is no freedom to post a picture or a post on my Backbone, as parents will afraid that we have no good impression in others mind. In addition, there are no privacy between me and my parents if I added them as my friends on Backbone account. It is because they can see whatever things you post on your Backbone wall. They will constantly stalking your page and bombarding you with questions that make you feel like you have no social life or privacy.When you post a status written about you are feeling blue today, your parents will try to know about hat happen on you even though you choose not to tell them. Although it is a responsibility of parent to know more about their children, but there is a wall of privacy between parent and children. If children choose to make the thing happen on them as a secret to their pare nts, but they want to share it with friends, they will face â€Å"to be or not to be, that is a question. † Lastly, adding parents as my Backbone friend make me feel embarrassing.As I am from different generations with my parents, we would have different views and thoughts on certain things. My parents judge me In a way that make me feel uncomfortable, misunderstood, or even worse, embarrassed as they are made fun and chastised by my friends because of Judgments made by my parents. When they comment on each of my picture and post, they TLD notice that the comment sounds like talking to a small kid. They treat me childishly Like a kid as they didn't notice that I am already an 18 years old teenager. It Is so embarrassing If my friend see what they comment.As a result, there are many disadvantages If teenagers add their parents as friends on Backbone. Therefore, teenagers should not add their parents on Backbone. Whether the reasons are for being themselves, privacy or image pr oblem, they should delete their parents from the friend list. We should not add our parents in backbone By Koala-Neon percentage of teenagers that add their parents as friend on Backbone is 70%. 70% of However, it is my view that I should not add my parents as friends on Backbone as it retrains me from being myself, invades my privacy and makes me feel embarrassed.Backbone wall, my mum mandated me to delete the photo. The reason she said is, â€Å"The photo is ugly, don't put out your tongue when you take a picture! † I had followed would have different views and thoughts on certain things. My parents Judge me in a parents. When they comment on each of my picture and post, they didn't notice that the comment sounds like talking to a small kid. They treat me childishly like a kid as they didn't notice that I am already an 18 years old teenager. It is so embarrassing if my friend see what they comment. As a result, there are many disadvantages if

Understanding Americas Digital Divide

While America’s once vast digital divide is narrowing, the gap between groups of people who have those who lack access to computers and the internet persists, according to data from the U.S. Census Bureau. What is the Digital Divide? The term â€Å"digital divide† refers to the gap between those who have easy access to computers and the internet and those who do not due to various demographic factors. Once referring mainly to the gap between those with and without access to information shared via telephones, radios, or televisions, the term is now used mainly to describe the gap between those with and without internet access, particularly high-speed broadband. Despite having some level of access to digital information and communication technologies, various groups continue to suffer the limitations of the digital divide in the form of lower-performance computers and slower, unreliable internet connections such as dial-up. Making quantifying the information gap even more complex, the list of devices used to connect to the internet has grown from basic desktop computers to include devices such as laptops, tablets, smartphones, MP3 music players, video gaming consoles, and electronic readers. No longer simply a question of having access or not, the digital divide is now best described as â€Å"who connects to what and how?† Or as Federal Communications Commission (FCC) Chairman Ajit Pai described it, the gap between â€Å"those who can use cutting-edge communications services and those who cannot.† Drawbacks of Being in the Divide Persons without access to computers and the internet are less able to fully take part in America’s modern economic, political and social life. Perhaps most significantly, children who fall into the communication gap lack access to modern educational technology such as internet-based distance learning. Access to broadband internet has become increasingly important in carrying out simple day-to-day chores like accessing health information, online banking, choosing a place to live, applying for jobs, looking up government services, and taking classes. Just as when the problem was first recognized and addressed by the U.S. federal government in 1998, the digital divide remains concentrated among older, less educated, and less affluent populations, as well as those living in rural areas of the country that tend to have fewer connectivity choices and slower internet connections. Progress in Closing the Divide For historical perspective, the Apple-I personal computer went on sale in 1976. The first IBM PC hit the stores in 1981, and in 1992, the term â€Å"surfing the internet† was coined. In 1984, only 8% of all American households had a computer, according to the Census Bureau’s Current Population Survey (CPS). By 2000, about half of all households (51%) had a computer. In 2015, this percentage grew to nearly 80%. Adding in smartphones, tablets and other internet-enabled devices, the percentage rose to 87% in 2015. However, just owning computers and connecting them to the internet are two different things. When the Census Bureau began collecting data on internet use as well as computer ownership in 1997, only 18% of households used the internet. A decade later, in 2007, this percentage had more than tripled to 62% and increased to 73% in 2015. Of the 73% of households using the internet, 77% had a high-speed, broadband connection. So who are the Americans still in the digital divide? According to the latest Census Bureau report on Computer and Internet Use in the United States compiled in 2015, both computer and internet use continue to vary based on a variety of factors, most notably, age, income, and geographic location. The Age Gap Households headed by persons 65 years and older continue to lag behind households headed by younger persons in both computer ownership and internet use. While up to 85% of households headed by a person under age 44 owned desktop or laptop computers, only 65% of households headed by a person age 65 and older owned or used a desktop or laptop in 2015. Ownership and use of handheld computers showed an even greater variation by age. While up to 90% of households headed by a person less than 44 years of age had a handheld computer, only 47% of households headed by a person 65 years and older used some type of handheld device. Similarly, while up to 84% of households headed by a person less than 44 years of age had a broadband internet connection, the same was true in only 62% of households headed by a person aged 65 and older. Interestingly, 8% of households without a desktop or laptop computer depended on smartphones alone for internet connectivity. This group included 8% of householders ages 15 to 34, versus 2% of households with householders age 65 and older. Of course, the age gap is expected narrow naturally as younger current computer and internet users grow older. The Income Gap Not surprisingly, the Census Bureau found that using a computer, whether a desktop or laptop or handheld computer, increased with household income. The same pattern was observed for a broadband internet subscription. For example, 73% of households with annual incomes of $25,000 to $49,999 owned or used a desktop or laptop, compared with only 52% of households earning less than $25,000. â€Å"Low-income households had the lowest overall connectivity, but the highest proportion of ‘handheld only’ households,† said Census Bureau demographer Camille Ryan. â€Å"Similarly, black and Hispanic households had relatively low connectivity overall but high proportions of handheld only households. As mobile devices continue to evolve and increase in popularity, it will be interesting to see what happens with this group.† The Urban vs. Rural Gap The longstanding gap in computer and internet use between urban and rural Americans not only persists but is growing wider with the increased adoption of new technologies such as the smartphone and social media. In 2015, all persons living in rural areas were less likely to use the internet than their urban counterparts. However, the National Telecommunications and Information Administration (NITA) found that certain groups of rural residents face a particularly wide digital divide. For example, 78% of Whites, 68% of African Americans, and 66% of Latinos nationwide use the internet. In rural areas, however, only 70% of White Americans had adopted the Internet, compared to 59% of African Americans and 61% of Latinos. Even as internet use has increased dramatically overall, the rural vs. urban gap remains. In 1998, 28% of Americans living in rural areas used the Internet, compared to 34% of those in urban areas. In 2015, over 75% of urban Americans used the internet, compared to 69% of those in rural areas. As NITA points out, the data shows a consistent 6% to 9% gap between rural and urban communities internet use over time. This trend, says NITA, shows that in spite of advances in technology and government policy, the barriers to internet use in rural America are complex and persistent. People who are less likely to use the internet no matter where they live—such as those with lower income or education level—face even greater disadvantages in rural areas. In the words of the FCC chairman, â€Å"If you live in rural America, there’s a better than a 1-in-4 chance that you lack access to fixed high-speed broadband at home, compared to a 1-in-50 probability in our cities.† In an effort to address the problem, the FCC in February 2017, created the Connect America Fund allocating up to $4.53 billion over a period of 10 years to advance high-speed 4G LTE wireless internet service primarily in rural areas. Guidelines regulating the fund will make it easier for rural communities to get federal subsidies for advancing internet availability.