Case Study

M&A Case Studies

Case study research helps to improve business processes relatively quickly and at the lowest cost. It allows you to understand how leading companies work and achieve the same or greater results. The value of this method is not only that there is no need to invent innovation. By carefully studying the achievements and mistakes of other crews, you can develop your own maximally effective business model.

Goals and Objectives

The exchange of experience, as well as the case study analysis of others’ developments, has always been profitable. But it is not possible to say that this happens in 100% of cases. Some organizations are so far apart in various parameters that it can be only the cons and disadvantages of the business case study. In this regard, the need for this step should be justified. The crew’s strategic goals should coincide with the need for such a study. This is a full-fledged business management tool, as its goal is to improve the system and increase the company’s competitiveness in the long term. This goal is achieved through the resolution of specific issues. In the process of comparing business schemes of different crews, two main tasks are solved:

• Calculation of the indicators of their own enterprise and comparing them with the selected benchmark.
• Analysis of other people’s experience and its implementation in their crew.

Main Functions

There are main functions of Harvard case studies.

• To give a presentation to management on the current state of affairs in the company, to overcome stagnation in the management sector;
• To strive for improvement;
• In time to find out that the organization is lagging behind in a certain area;
• To identify the crew’s resources and identify weaknesses that need to be improved;
• To put before the company difficult to achieve, but realistic tasks;
• To identify priorities in optimizing work;
• To determine the level of the crew in comparison with the best in the world;
• To calculate the degree of backlog of the firm;
• To identify the best management systems and incorporate them into the work;
• To prepare an action plan for adjusting activities;
• To connect the long-term development plan with the company’s efforts in self-improvement;
• To find previously unused technology or management techniques;
• To concentrate attention on those factors that bring undoubted benefits to the enterprise;
• To achieve large-scale improvements in the work of the organization, a “breakthrough”;
• With the help of someone else’s experience, to save the company from the “necessity” to learn from their own mistakes;
• To create the principle of continuous improvement in the organization;
• To reduce the financial costs of improving the work of the company;
• To reduce risks when introducing new methods;
• To raise the main financial indicators.

Objects of Research

• Products and services. The analysis is subjected to the activities of a competing firm, the moments through which its business is more successful than yours stand out. After that it becomes clear what needs to be done to increase the productivity of the native company.
• The study of business processes is the most effective part of the research. In order to maintain competitiveness in the market, the company should be engaged in the development of the business as a whole, constantly investing in it various kinds of resources and controlling all operations. The capabilities of a particular organization can be “calculated” by its business processes. This type of analysis is particularly important in a situation where two enterprises compete directly with each other, offering the same products to the consumer. An organization that has managed to increase competitiveness as efficiently as possible at the lowest cost will be the winner.
• No business can function properly without a strategy. You can improve the performance of your company by analyzing in the most careful way the strategy and organization of the work of the competitor. To obtain exhaustive information in this case is not so easy. Often, such data is a carefully guarded secret of the company. When studying strategy, it is necessary to use logic, and only then the research will bear fruit.
• Due to the research of the personnel it is possible to compare the activity of own HR-services with the same amid the leading crews of the world by several indicators. Having received the results of the analysis, the company’s management will be able to manage personnel.

Tourism management mainly aims to reduce negative impacts of tourism, so as to achieve a more sustainable form of tourism. Sustainability in this context refers to the ability to develop and operate tourism in a way that both satisfies current needs and assure future viability of the industry. It has been recognised that for sustainable tourism to be viable, efforts need to be made by both public sector and the private sector. Depending on merely market forces will not achieve sustainability.

The public sector, or mainly the government, can lay out laws and legislation, conduct research, as well as provide funds and expertise to aid sustainable tourism development and management, while the private sector can aid research in achieving sustainability, donate to funds and adopt sustainability into their tourism operations. The government can initiate sustainable tourism management. Negative impacts are felt by people involved in tourism, but most of the time, no actions were taken to remedy this problem. The public sector is often needed to initiate sustainable tourism management.

For example, since 1997, the Pattaya Rehabilitation Project, initiated by government authorities and community leaders, has been ongoing to reduce the severity of problems in Pattaya. Also, Zimbabwe initiated the CAMPFIRE program which aided ecotourism development in many communities. One problem faced in achieving sustainability is the availability of funds. It is often hard to gain financial support from the private sector when their motives are profit-based. The government can implement taxes on tourism to finance tourism management.

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For example, a US$90 tax on travellers entering the Seychelles. The revenue from this tax is used in environmental preservation and facilities improvements. Also, the government can provide expertise on sustainable tourism management to the tourism industry. A good knowledge of sustainability is seen to be required in order to plan an effective sustainable tourism strategy. For example, Zimbabwe initiated the CAMPFIRE program to provide knowledge and expertise to the rural communities in developing eco-tourism in their area.

Moreover, the government can implement laws and regulation for preservation and conservation. Many countries have established protect areas such as wildlife reserves and enacted strict laws protecting the animals that draw nature-loving tourists. As a result of these measures, several endangered species have begun to thrive again. For example, in the rainforest covered slopes of central Africa’s highlands, mountain gorilla reserves have been set up to protect this highly endangered species.

It has also been recognised that continual monitoring and research of the tourism industry using effective data collection analysis is essential to help solve problems and bring benefits to the tourism development, destinations, tourist and the local community. However, one limitation is that usually only the government has the means to encourage such research. In addition, the public sector can develop and improve infrastructure needed for sustainable tourism.

For example, in Pattaya, the Pattaya Rehabilitation Program has resulted in the development and operation of a much need facilities such as wastewater treatment plant, water reservoirs, roadways and commercial areas, as well as environmental development such as creation of parks. On the other hand, the private sector also plays an important role in managing tourism. The private sector can share information with the public sector to aid research in achieving sustainable tourism, as well as contribute to sustainable tourism by donations to funds financing sustainable management.

For example, Citigroup Foundation donated $150,000 dollars in 2006 to support the Rainforest Alliance, which promote sustainable tourism development in Latin America. Also, although the government can facilitate sustainable management, the effectiveness often lies on whether the tourism operations abide with sustainability. An example of such cooperation can be seen in Masoka, Zimbabwe, where safari operators remove the rubbish of safari hunters after each hunt. Moreover, the private sector can provide other forms of support to the government’s effort in managing tourism.

For example, in Pattaya, the Pattaya Chapter of the Thai Hotel Association and the Pattaya Business and Tourism Association played an instrumental role in rallying support from the private sector for sustainable tourism in Pattaya. But despite the efforts made, we have to consider how effective they actually are in managing tourism. Sustainable tourism as seen today is possible. Examples of successful sustainable tourism management include Pattaya in Thailand, and ecotourism in areas of Zimbabwe such as Masoka.

However, these successes are mainly the result of a well planned strategy, with sufficient funds, expertise, knowledge, and considerable efforts from both public and private sector. Cooperation between the public and private sector is essential for sustainability to be viable. Lack of cooperation can often result in limited success in achieving sustainability. For example, in Zimbabwe, authority to manage the wildlife resources is actually in the hands of rural district councils, which have a responsibility to devolve management authority to communities themselves.

Not all councils have been willing or have made sufficient effort to devolve authority to these communities. As a result, this created a barrier to achieving sustainability through conservation in these areas. This comes to yet another problem, which is that the private sector should not only include commercial companies. It should also include local communities. It is widely recognised that involvement of the local communities is one of the key to achieving sustainable tourism. Another limitation is that due to profit motives, the private sector may be unenthusiastic in developing sustainable tourism.

Sustainable tourism requires efforts such as cleaning up pollution and improving infrastructure, as well as limiting tourist number to a manageable figure. These can translate to a reduction in overall profits as operational costs increases and overall revenue falls. Also, sustainable management often require large funds in developing needed infrastructure and expertise and knowledge in management. This may not be available to some countries. However, it can be seen today that the severity of this problems are reduced with support from international agencies such as the Worldwide Fund for Nature.

Lastly, one mistake seen in trying to achieve sustainable tourism is the undermining of local community’s involvement. It has been recognised that one of the key to achieving sustainable tourism is a high involvement of local community in the planning, management and operation. Therefore, the private sector should not only include commercial companies, but also the local community. In conclusion, both the public and private sector are important in managing tourism. Successful tourism management requires an adequate level of cooperation between the authority, commercial companies and local communities.

While competitors do everything they can to keep costs down, Apple does what It can to make Its products deferent. In 2007, for the third year In a row, Apple was named as The Most Innovative Company by Businesslike. ; Strong leader. CEO Steve Jobs is “a legend for his design sense”. He is essential to the promotional aspect and public relations of Apple, especially when it comes to the pod. He is the “public face and champion of the brand”. He is also an expert when it comes to talking with the press, maintaining relationships with magazine editors, and creating new relationships.

Jobs has the ability to think of Ideas that he is extremely passionate and energetic about and is always ready to share that idea to gain exposure. * Customer relationships (responsiveness to customer feedback). This ties into Steve Jobs’ strong leadership as he takes action in response to customer feedback to show that the brand is listening and concerned. * Brand Exposure. Part of Apple’s marketing strategy is Its retail stores. Apple has opened more than 200 retail stores located worldwide.

Apple’s retail stores contributed an estimated $200 million, 15 to 16% of Its profits during the past two years. The reasoning behind the stores is the belief that the more people can touch an Apple product and see also offer free group workshops, personal training, and personal assistance for Apple customers. * Strategic partnerships with well-known brands: Apple has created marketing agreements with Volkswagen of America, Burton Snowboards, Nikkei and Struck. This ties into consumer confidence as well as exposure through marketing partner advertisements. * Product design and features.

Products that show superior qualities, that are easy to use and that have a high quality format, but mainly that show a clear product differentiation. * Strong financial performance: throng sales and potential growth, strong cash flows, an increasing net income, decreasing debt and controlled inventory. Weaknesses * Profit per song is low: Even though tunes is simply used as a means to boost the sales of pods, phones and Apple TV’s, Apple makes only approximately 10 cents per * Unpopular Apple TV features: users are not able to download a movie from song. Tunes directly to their TV; they have download it to their PC first. Apple TV requires a HDTV, but the movies that can be downloaded are of such low resolution that the picture looks fuzzy and old-fashioned, and lastly, it has no DVD drive. Hard time finalizing contracts with move studios because of pricing disputes. * Struggle with maintaining good supplier relationships. Many companies have expressed frustration working with Apple because Steve Jobs is very clear on his vision for his products and can tend to be controlling. Incompatible software in computer and digital music format. * 1% of the global cell phone business. Opportunities * Brand exposure through retail stores. * International growth and expansion. Apple is pursuing opportunities to sell the phone globally. It already has partnership agreements with cell phone carriers in France, Germany, and Great Britain. It has also entered the Middle East and Africa regions, ranking fifth next to Monika, Research In Motion, ETC, and Motorola.

Apple is also trying to penetrate the Japanese market since it is one of the world’s largest and most demanding mobile phone markets with almost 100 million mobile phone users. * Expansion in product line. Apple is trying to expand its product line to include media and software in addition to hardware. * Expansion in customer base. Apple is also trying to reach many different consumers rather than its traditional of tech- savvy consumers. Improvements in compatibility. * Improvements in strategic partnerships.

Apple needs to search for more strategic partnerships and better its relationships with its suppliers so effective agreements can be reached. * Growth in new user segments Threats * Competitors’ threats. Realizations sought a price war with Apple by dropping the price to $0. 49 per song and $4. 99 per album compared to Apple’s price of $0. 99 and $9. 99 respectively. Realizations also launched technology called Harmony, which allows Realizations users to translate songs purchased from Relapse music to be played on Microsoft formats.

Wall-Mart launched its own online music store and is currently the number one music retailer in the nation, followed by * Technology and entertainment industries are constantly and rapidly tunes. Changing so Apple has to find a way to keep its reputation related to innovative design. * Threat of start-up companies and competitors. The risk of new entrants is high in the player and music service businesses as well as in the mobile phone market, particularly from large, established consumer electronics companies, such as Cassia, Sony and Toshiba (for players) or from on-line companies like Yahoo and

Microsoft or retailers like Virgin Music (for downloads). Given the attractiveness of these markets, new competitors are likely to enter because of low barriers to entry. The notable acceptance and profit made by RIM’s Blackberry demonstrate the potential of new entrants to increase rivalry. Due to the success of the phone and the Blackberry, other producers will undoubtedly attempt to imitate their appealing features and functional applications in order to create customer value and compete effectively with their own smart phones.

In addition, Apple’s exclusive use of Cingular/AT;T does not prevent the phone service provider from entering potentially harmful agreements with the company’s competitors, such as its threatening relationship with rival Palm. * Apple’s dominance and relative power in the music industry (as well as Jobs’ reputation for control) may build resistance among film producers who are accustomed to maintaining their own levels of control over content. * Price sensitivity.

The company’s entrance into the mobile communications industry with the introduction of its phone has placed Apple in another highly competitive industry, where several large, well-funded, and experienced competitors operate. Price sensitivity on the part of consumers is very strong, and rivalry is especially fierce in this market. * A close look at Apple’s competition reveals that the company is confronted by aggressive opposition in all areas of its business.

The markets for consumer electronics, personal computers, related software and peripheral products, digital music devices and related services, and mobile communication devices are intensely competitive. They are characterized by rapid technological advancements, which have substantially increased the abilities and use of PC’s, digital electronics, and mobile communication devices. As a result, a variety of new products with competitive price, feature, and performance characteristics are being introduced into the marketplace. Price competition in Apple’s main product markets has been particularly fervent. Continuous downward pressure on Apple’s margins as it is common for competitors selling personal computers based on other operating systems to aggressively cut prices and accept lower product margins to gain or maintain market share. * Other than price, key competitive factors in the computing market include product treasures, relative price/performance, product quality and reliability, design innovation, availability of software and peripherals, marketing and distribution capability, service and support, and corporate reputation.

As the industry and its customers become more reliant on Internet connectivity, alternative (even substitute) devices are becoming increasingly smaller, simpler, and less expensive than traditional PC’s. These devices compete for market share with Apple’s desktop and content providers to offer integrated solutions that produce more value or exclude Apple from access to content.

Cost’s they overlook the quality. While BC tries to look pretty to their customer, Cost pay less attention to their look and more to provide the lowest prices for their members. From 1997 to 2001, Wall-Mart store numbers were increased by 53, Bi’s stores went up by 50, but Cost went up by 91 . Cost’s business strategy Is very simple, “To generate high sales volumes and rapid Inventory turnover by offering members very low prices on a limited selection of nationally branded and select private-label products In a wide range of merchandise categories” (Thompson, 2008) .

They have able to implement this strategy very successfully. They have also been very successful in making their customer believe that product is a better quality than their competitors, interestingly their competitors in most cases don’t carry the same kind of product. Cost’s marketing strategy is simple yet effective, the idea of providing the lowest price and good quality product is a strategy to be reckon with. Plus there marketing idea of “Treasure Hunt” has allowed them to saved tons of money from broad advertisement.

After a membership base Is established In an area, most new memberships came from word of mouth. This simple marketing and advertisement strategy has allowed Cost to keep Its marketing expenses low relative to those at typical retailers, discounter, and supermarkets. Cost is also known for its price strategy. They have become a master in providing top quality products even including some brand products at the lowest price possible to their customers.

Instead of marking up their cap to 20 or 50 percent like their competitors they decided to cap their mark up to only 14 percent, which itself a key element in Cost’s pricing strategy. This also indicates that Cost is trying to do what it takes to please their customer to increase their profits so they can make their shareholders happy at same time. It’s this price strategy that has allows Cost to only only make profit over the year, but Increase their member to $110. Cost’s product selection strategy Is also very Impressive. Unlike their competitor who carry from where from 40000 to 1 50000 SKU items , Cost decided to selecting Ana prove only auto mess I en last Includes everyday Items sun as kitchen supplies, Electronics, health and beauty products, automotive supplies, gasoline, games, cleaning supplies, canned goods, Food. They categories their product in commercial and professional use. Plus, Cost’s treasure hunt merchandising strategy is also an attention grabber. Out of the 4000 items on the floor about 1000 were the treasure hunt product, meaning their prices with constantly changing.

In most cases these were higher end products like furniture and TV. Cost’s growth strategy is also quite remarkable. On average they have been opening about 20 to 25 new stores each year. Most of them in American but some internationally as well including; Canada, Korea, I-J, Japan, Canada, and Mexico. In recent year they experimented by opening independent Furniture store to sell high end bigger furniture items which resulted in good success. Later rather than opening more stores they instead added extra space about 45000 square feet to the Cost it self and called it Cost Home.

Now the furniture category has become on of the tope 5 selling items on Cost’s website. They are very innovative when it comes to their warehouse and management strategy. Cost’s CEO, Jim Senegal, quoted, “Cost is able to offer lower prices and deter values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing, and accounts receivable. We run a tight operation with extremely low overhead which enables us to pass on dramatic savings to our members”. They stored the inventory on racks above the items being sold in the warehouse. That reduced their labor cost and saved them a lot time on handling and stocking. They treat their manager as entrepreneur and allows them to decide what item should be sold in their store. They adored most of the inventory directly from the manufactures. It either came directly to the store or went to their distribution center called crosschecking depots. The point of these depots were to reduce the transportation cost by making sure all truck are full when they come the store.

As an investor I wouldn’t would want to invest in a company that has a good reputation, consistently growing, good sustainable growth, and good future plans. Let’s talk about sustainable growth rate, which basically means that a firm can grow while keeping its profitability and financial policies unchanged. Sustainable growth model allows us to segregate reasons or changes that have led as a company to substantial growth so at the same time we can segregate the causes for those change. It is represented in four steps.

Consumer Behavior: Singapore and desire for luxury: Singapore is among the top 10 destinations for luxury brands worldwide (69% of all usury retailers present). Luxury stores are present everywhere in the city more particularly In Orchard Road and shopping centers. Between 2006 and 2010, sales of luxury goods grew by 18% 1. Even if the sales have slowed down during the scrolls of 2009, they rose again In 2010 The luxury goods become more and more popular whatsoever watches, clothes or handbags.

One of the mall reasons of this trend Is the growth of high-income households. The annual disposable incomes above US $75,000 increased by 4% between 2006 and 2010, so more Singapore are able to afford luxury goods. On the other hand their awareness to luxury brands (especially European ones) increased significantly. Luxury brands take more and more importance in lifestyle magazines and all others advertising mediums. We know that usually Asian people attach importance to the image. When they buy a product they think about the image returned by this product.

Many business men and women, with high Incomes, deal with foreign clients; they want to present a groomed Image. That Is the reason why they are willing to buy luxury products. Other high-income earners In Singapore are the experts. They tend to buy luxury goods and then Influence the local trends and the way Singapore see luxury products. This desire to own luxury brands coupled to high incomes and advertising presence in Medias will maintain and increase the demand for luxury brands. Luxury companies expected to benefit from important sales over the forecast period.

However, growth of luxury goods seems not be able to affect non-luxury products, because most Singapore are still prudent with their spending. Why Singapore prefer global brands instead of local brands? 2 “Rider’s digest trusted brand survey 2008”, 23 April 2011, My Paper According to the newspaper “My Paper” market survey, 26% of Singapore favor local brands (so 74% favor global brands)2. Even if there are many strong local brands such as Tiger or Singapore Airlines the support of home- growth brands Is very low.

So we will try to understand why Singapore have a preference for global brands instead of local brands. The mall reasons that come In mind are that Singapore attach a lot of Importance to their Image. The 2 notions of status and belonging are key points of the Asians consumer behavior. Singapore is a modern society Tanat Keeps peep collectivist relations slantingly. The Singapore society is highly, individuals are strongly sensible of their place thin the group, institution or society as a whole, and their attitude, dress and speech corresponding to their status.

They are extremely fussy about the need to keep their dignity. They attach great attention to the choice of products; prices, brand and presentation should reflect its own social status. As to personal appearance, color, material and style of clothing, they must match the social status that defines the age, sex, occupation… Singapore wear luxury goods show to others that you are part of high class. The quality of the product has less importance than the image that the brand will reflect. Awaken has the opposite positioning in Singapore.

Belonging It is essential for Asian people to be accepted by his peers and the fear of rejection, exclusion, is intense, creating a need to always be part of the trendy and fashionable group. Singapore have a different approach of buying luxury goods compare to westerns people. They buy this kind of product to be a part of a group, because the trend is to buy western fashion products. It is a consequence of the westernizes. PERSONAL We can compare the Moscow pyramid of the western people and the one of Asian people.

It appears that personal need which is very strong in western societies sonnets exist in Asians societies. Status Self-actualization SOCIAL Admiration Affiliation Belonging Prestige Safety PHYSICAL Physiological The statement that Singapore prefer global brands can be contradicted by the fact that there are only a few Singapore brands, so we have the feeling that Singapore do not support their own brands. But in many industries and especially in the fashion industry, local brands suffer from the comparison with global brands.

For the case of Awaken it is obvious that the brand is subjected to this specific consumer behavior. But in an other hand Awaken achieved to succeed n Hong Kong, a very similar market than Singapore. We can explain this by many facts. First Awaken is not seen as a local brand in Hong Kong, they overcame the Asian consumer behavior difficulties. We will now explain what the main defaults of the brand which prevent Awaken to succeed in Singapore. Brand equity & Obstacles 10 netter unreason ten salmonella’s customer Attlee towards Awaken, lets study the key components of Awakener’s brand equity.

Thanks to the brand equity definition, 3 keys have to be taken in considerations: “The differential effect”, “the brand knowledge” and “the consumer response to marketing”. In the luxury market, the differentiation is based on what the brand reflects to the costumer and less on what the product is. Awaken is trying to differentiate himself from his competitors on the product characteristics (handmade, crocodile skin… ). The Awakener’s differentiation strategy is not appropriate with the luxury market where the differentiation is done through the brand image since the quality is implicit.

Therefore there is a lack into the Awakener’s brand equity. Since the three keys of the brand equity are pretty linked, the brand knowledge is weakened such as the consumer response to marketing. In order to give some recommendations to Awaken, it’s relevant to focus on the sources of brand equity in order to understand what goes wrong with Awaken. There are three sources of brand equity that are: brand association, brand awareness and brand accessibility The brand awareness is the extent for a customer to recognize a brand and its elements.

Awaken does not have a lot of brand awareness. Indeed, as our opinion poll pinpointed only 21% of the people do know that the brand exists. Moreover only 8% of the people recognized the brand logo and 59% did not really like it. Therefore it’s hard to create a favorable attitude toward the brand and receptiveness to the message. The accessibility of the shops reinforces the brand awareness. Accessibility is how easy it is or how easy it seems to be, for customers to interact with and to purchase the brand.

In the case of Awaken this component of the brand equity is well done since the number of point of sales correspond to such a product ‘E: one or two maximum in each principle market. This kind of strategy with a very exclusive distribution channel is very efficient especially in the luxury business. However the flags ships are a bit less luxurious and with less mantra than the other brands. For all those reasons, even if the accessibility is a drawback and could be improved. The last source of brand equity is the brand association. Brand association is relative to past experience between the customer and the brand.

Product use and advertisement are the basis of this concept. As Awaken is not wildly spread in Singapore and does not do any advertisement, the costumer cannot easily associate the brand to anything. According to our opinion poll, it’s clear that a large majority (79%) of the costumers does not have any mental association for this brand since they don’t know the brand. For those that know the brand (21%) the mental map is as follow: As we can see on the mental map ( appendices B) all the associations that are made with the brand are very material and none is related to brand universe, Which is a basic feature in the luxury market.

Now lets consider the uniqueness of the selling proposition that is ” fashionable, handmade and high quality crocodile product that last for life”. This positioning is quiet unique and in one hand can be a compelling reason to buy product from the brand but in the other hand in this market it’s debatable whether this proposition is efficient. Indeed, the kind of costumer that buy products for the quality are not focus on fashion and are more likely to appreciate very classic model with a style that will last over the years.

Last but not least the colors are too flashy for such a proposition ii a 30 years old woman can appreciate a pink purse but will it be ten same when seen Is pyramid of Awaken. Considering all tense International we can Dull As it appears on the pyramid some part of the pyramid are missing. Therefore we can conclude that the brand has not built a brand image yet. In Singapore their target market is very narrow. Indeed they target people with high incomes that are only looking for quality and don’t care about considerations such as: the image that is shown by the product.

In Singapore people buy product to be part of a group and the rich people group like to buy European brands. Therefore the target market is very narrow. Recommendations Awakener’s marketing strategy is not efficient. Gingersnap’s market is a particularly one, as we pointed out in our first part. We do really think that Awaken should first redefine the target. The target is not clear, so the positioning does not match with the target expectations. So the positioning should be created for this specific target. Now, the positioning is focus on the product characteristics.

But in a luxury market customers are less likely to buy a product for rational reasons (product’s characteristics) than irrational ones (brand universe). So the key points on which Awaken should work salience, imagery, feelings and resonance, that is to say the missing points of the CUBE pyramid. Nowadays Awaken focus only on the product and the quality, they should develop their brand. The brand is not valuable in Singapore. They do really have to work on the brand equity. The salience can be improved by the communications. As we mentioned Awaken do not use the media and either did not do any advertisements.

So our recommendations to fix that would be to launch a communication campaign into specialized Medias, such as fashion magazines (Vogue, Ell… ). We could also imagine exposing Awaken handbags in window-store in luxury hotel halls The biggest obstacle concerning the imagery is that Awaken is not seen as an international luxury brand. As explained before Singapore are more willing to buy global brands products instead of local rand’s especially in the luxury market. Awaken cannot hide its Singapore origin, but the can make the customers forget about it.

For instance they should hire western models instead of Asian ones and do brand endorsement with international stars which are particularly famous in Singapore. It will also show that the brand is well- known abroad. According to our opinion poll Awaken has no dominant “feeling”. They should develop the image of the brand so that they would be able to make the customer have specific feelings when they buy a handbag. The main feelings that must be developed are the social approval feeling that is common to almost all luxury brand and the security feeling to differentiate itself from its competitors.

For instance they could associate themselves with a very famous international luxury watch company (as Jaeger Lecture or Role) to make crocodile skin bracelet. Consumer will associate the feelings of security and social approval of the watch brand with Awaken. And it will increase the international image of Awaken. The last feeling that Awaken should work on is the resonance. They should work on the brand universe to increase customer loyalty. Entering Into a Awaken snoop NAS to De a unlike experience. I nee should increase their shop standards.

Consider the case: “Job satisfaction at Omega Technical Services Ltd” by D. Adam-Smith and L. Littlewood. In Adam-Smith, D. and Peacock, A. (Eds), Cases in organisational behaviour (pp. 151-162). London: Pitman and Prepare a report that addresses (i. e. , explains) the situation in the case (i. e. , high job turnover among professional staff) taking the perspective of work motivation and employee attitudes. Word count: 3000 Module: Organizational Behavior Introduction to Omega Technical Services Ltd. A labor intensive medium sized firm “Omega Technical Services Ltd” was established in mid 1950s.

The main focus of Omega was to provide technical services to the different clients mostly from engineering sector. Omega consists of 180 full time staff which is dispersed in eight different regional offices. Main services provided by Omega were to provide documentation service in the form of manuals for operations and maintenance. In 1984 as a result of increased competition and falling profit margins in the field the company planned a cost reduction plan and changes to its management style to improve the efficiency of the organisation and to remain competitive in the business sector.

But at the same time board of directors were concerned about the low morale of the employees and its impact over the performance of the company. There were increased incidences of low quality work followed by high turnover i. e. 33% over the last full year. After going through the provided case study and the relevant study materials, it is established that Directors of the Omega was trying to find out the main reason for low morale within the organisation and to find the recommendation which will improve the job satisfaction of employees which will ultimately improve the productivity of the staff and create new knowledge.

To full fill this objective a formal attitude survey was conducted by the personnel manager of the Omega ltd. with the help of anonymous questionnaire. The questionnaire was designed by using both open ended questions and closed questions. The final questionnaire was consists of 83 questions, out of which 68 were closed questions and 12 were open ended. Closed questionnaires were conducted to address five main areas including, general satisfaction, communication, fairness/supervision, and involvement/identification. Matters relating to other jobs and companies which included some pay issues.

KEY CURRENT AND FUTURE CHALLENGES The overall response rate of the survey was 42%. Based on that analysis of the result of the questionnaire and supportive reading from the available literature, now we will look at some of the most important current and future challenges which Omega is facing, and which can affect the overall performance of the group in the near future in the strong competitive and innovative market. The key challenges facing Omega can be summarized as follows: 1. Understanding Culture and Employees Management Relationship 2.

Lack of Communication within the Organisation 3. Creating Organizational Knowledge ( lack of investment in Research and Development) 4. Attracting, Motivating and Retaining workers in Omega 5. Rewards system Creating a Knowledge Sharing Culture Gordon (1996) defines an organisation’s culture as the part of its interior atmosphere that includes a set of postulations, values and principles that organisational associates share and use to direct their execution. Omega also has the need to create a strong culture to build relationship among organizational levels.

Hence one key challenge for Omega is the need to build a knowledge culture that facilitates and inspires people to generate, split, and exploit knowledge for the advantages and lasting accomplishment of the organization (Oliver and Kandadi, as cited in King, 2007). Organisational culture is argued as powerful input for effective and efficient management and organizational learning (Janz and Prasamphanich, as cited in King, 2007). In Omega the idea of knowledge sharing needs to be implemented into its organizational culture.

The following facts highlighted in Table 1 below by Gurteen, (1999) illustrate why sharing knowledge is important. Table 1: Why knowledge sharing is essential to the survival of almost all businesses Intangible products| Ideas, processes, information are taking a growing share of global trade from the traditional, tangible goods of the manufacturing economy. | Sustainable competitive advantage| Increasingly the only sustainable competitive advantage is continuous innovation is the application of new knowledge| Increasing turnover of staff| People don’t take a job for life any more.

When someone leaves an organization their knowledge walks out of the door with them. | Accelerating change| Technology, business and social. As things change so does our knowledge base erode – in some businesses, as much of 50% of what you knew 5 years ago is probably obsolete today| Source: adapted from Gurteen, G, (Feb 1999) Creating a Knowledge Sharing Culture, Knowledge Management Magazine, 2(5), www. gurteen. com/gurteen/gurteen. nsf/id/ksculture

Culture is important in shaping assumptions about what knowledge is worth exchanging; when we are creating an environment for the knowledge sharing in Omega, making it means that knowledge sharing the norm and it also motivates the people to work in the team, provides such sort of knowledge which will be fruitful for the organization and employees. Hansen and Oetinger (2001) explain a new T shaped management where a new kind of executives operates breaking away from the conventional chain of command to split knowledge without stinting across the organization.

While the systems are good at transferring explicit knowledge direct personal contact is needed for effective transfer of implicit knowledge which is needed for business solutions and is crucial for innovation. Hence implementing a open structure in Omega the company can apprehend the reimbursement of multi department learning and teamwork without having to establishment top down looms that could undermine the liberty and answerability needed to create exceptional entity unit performance. Trust

As the result of the questionnaire concluded that employees have very little trust on their leaders as they feel that favoritism play a significant role for the growth in the company. Lack of trust on the upper management also plays a vital role on the motivation and commitment of the employees towards organization, which can further results into more people leaving their jobs and increased number of absenteeism. For a sharing culture Omega need to build an environment of trust so that it will establish customs about cross-functional associations and communication. For example, Gold et al. as cited in King 2007) concluded that organizations with open and supportive value orientations are predisposed toward constructive knowledge behaviors. Interpersonal trust in the workplace has been shown to have a strong and robust influence on a variety of organizational phenomena including job satisfaction, stress, organizational commitment, productivity and mostly to knowledge sharing (Mooradian, et al, 2006). Hence Omega needs to create a culture that facilitates the willingness of people to participate meaningfully in its development and trust of the organisation.

Attracting, Motivating and Retaining knowledge workers in Omega In Omega the turnover for the company is 33% over the last full year which means roughly one out of every three employees. Omega faces the vital challenge of retaining and motivating their knowledge worker. From the results of questionnaire we can establish that inequality and favoritism at the work place is one of the main reasons for high turnover, as approximately 70% of the respondents mentioned that they have applied for other jobs with in the last year time period.

The main reason for this because employees at Omega feels that they were not treated fairly and their was lack of respect from their managers. Employees also mentioned that they feel that due to the current economic situation they felt underpaid as compared to the skills, knowledge and value they are generating for the company It is evident from the case that the traditional employment contracts may no longer be effective in bonding knowledge workers and retain their loyalty.

Furthermore, still practicing de-centralized management system, clearly there is lack of any formal communication policy with in the Omega Technical Services ltd. According to Thompson and Heron as cited in (Horwitz, at al 2003) the employment relationship between the worker has changed to a new psychological contract where individuals are seeking market sustainable employability and organization require high work commitment rather than job security and loyalty.

Research carried by Horwitz, et al( 2003) supports that that turnover is usually higher in knowledge workers than non knowledge workers as they try to seek new challenges from more progressive companies. Motivation is argued to be a very individual phenomenon where what motives one doesn’t necessarily motivate the other worker. Understanding individual needs at work helps management to better match rewards with motivation. Much of the motivation theories try to explain what (needs) and how (process) to motivate employees (Maslow’s Hierarchy of needs, Hertzberg Two factor theory, Equity theory and Goal theory).

And most of these theories identify generally that extrinsic (satisfied externally, physical objects) and intrinsic reward (satisfied internally like status and recognition) as the basis of motivating employees. Hertzberg’s two factor theory of motivation in the year (1959) distinguishes between hygienic factors and motivators; the hygienic factors have only the potential to eliminate dissatisfaction, while only motivators have the potential to increase satisfaction. In the case of Omega they were lacking both the hygiene factors and motivators.

For example, employee of the Omega were not very satisfied with the working condition with in the company and also reported that they were not treated fairly on work place and showing their concerns about lack of respect from their managers at work. Horwitz et al (2003) proposes a diagram for attracting; inspiring and keeping of personnel which can be a useful framework that Omega (refer to diagram 2 in Appendix). Most favored retention strategies are those that are focused on portfolio of practices where top management support and leadership is important.

While to motivation includes providing more extrinsic rewards like challenging work, creative working culture with autonomy, celebration of success and developing intelligence of purpose, course and enthusiasm. To attract workers the cultural fit is seen as important in Horwitz et al’s schema. Selective employing put into practicing have constructive effects on learning and in relative to organizational learning is the staffing and preservation of esteemed employees (Davenport, as cited in Lopez, et al, 2006). Omega is a service industry business that runs on the ideas, knowledge and knows how of the people who are working in it.

Because of the people focused business this is the demand for the Omega that every individual working in the company should be educated, well motivated and inspire to deliver high performance. But due to the limiting budget for research and development and freeze on the benefits package at Omega, there was very limited opportunities for managers to invest in the research and development and to creat new knowledge for the organisation. Davenport et al. have acknowledged eight data management success features such as (1) technology infrastructure; (2) organizational infrastructure; (3) balance of lexibility, evolution and ease-of-accessibility to knowledge; (4) shared knowledge; (5) knowledge-friendly culture; (6) motivated workers who develop, share and use knowledge; (7) means of knowledge transfer using various information technology infrastructure; and (8) senior management support and commitment (Davenport et al. (1998) sited by Chong (2005) Overall knowledge management has become a people-centric because it is the network of the competent peoples which makes an organization successful.

So, now the question is, what are the sources of motivation for these individuals within the company and also outside of the organization, and is individual motivation is aligned with the overall organizational goals and objectives? Omega needs to develop a reward system which is based on the performance and quality contribution of the employees. First, company has to identify that what are the motivation factors which effect different levels of their employees with in the company.

The motivation factor that attracts and engages the young employees, For example, moving to the top of the hierarchy level was very important for the previous years but this is not the case today, and definitely there will be some resistance to these motivational factors from the different levels of the company. But it does not mean that it shows the absence of motivation in that particular level, but rather the presence of inappropriate will or motivation (Smith and McLaughlin, 2003). Every organization has some sources from where employee motivation sprouts (Amar and Hall, 2004).

So, now it depends upon the management of the Omega that how they loads these sources with the factors that motivate, energize and direct the employees towards the achievement of the organizational goals. These factors may be intrinsic and extrinsic and in contrast to aiming at fulfillment of employees cognitive needs, these factors connect with their psyches (Amar and Hall, 2004). Reward and Recognition System Omega must design a reward and recognition system in such a way that it encourages and motivate the workers to the sharing of vision and task.

The purpose of this system should be made very clear and visible to employees. In addition it is important for Omega to involve and encourage employee participation into the reward system and must measure the level of employee satisfaction with the system in order to design the correct program. Hence one of the key challenges for managers in Omega is to understand what actually motivates individuals to excel in their work and more importantly how to influence what others are motivated to do.

According to Kerr (1995) it is of utmost importance that managers or the senior management recognize the type of activity they are rewarding because the reward and recognition scheme may be ineffective if they are rewarding an activity that they are trying to discourage. Also Cameron and Pierce (1997 cited by Milne, P. , 2007) suggested that verbal and tangible rewards do help in increasing efficiency among the employees, higher level of job satisfaction and overall enhancing motivation. Praising people personally and sincerely for their hard work can actually help create a sense of belongingness.

Employees would feel that their work is being recognized, valued and appreciated. This way employee’s maybe intrinsically motivated to perform and be admired by other colleagues for their contribution. I believe that the partners or the senior management in Omega should not only praise perfection but also praise employees who are showing signs of improvement in their work. Moss Kanter (1987) pointed out that these reward systems can actually motivate individuals to perform effectively only for themselves and not for the organisation.

According to Moss Kanter the amount of reward one gets depends on the position or status in the organisation. Higher the status, higher the rewards. Hence individuals will try their level best to get promoted quickly in order to get higher rewards. Omega must try to develop a reward programme were the reward itself is not the main driver for contributing and sharing knowledge but could be used as a tool for giving directions and purpose to what employees do. Money is normally considered to be the major motivation factor in the organizations, but this is not the only case in the Omega.

In management industry money can be a good source of motivation if it is designed properly and establish a clear linkage what management wants and what its employees can do in their jobs that is with in their control (CEO Sounds-off, 1997) As Omega is facing problems in motivation of employees from different level of employees, it should announce certain goals and targets for the improvement of performance and then relate it with the different rewards for completing these goals and target. This kind of rewards will give the employees a sense of achievement.

Incentives As we discussed above that money is not the only motivating factor in the firms, so the rewards should be expanded to the non-financial incentives, like introduction of some work benefits, promotion and further training opportunities for the personal development. In Omega, these kinds of incentive will be helpful for the future growth of the company, because in case of further training and personal development, it will leads towards the better and improved performance from that employee in the future and will keep him /her motivated to play his/her part.

This behavior is supported by the Maslows theory of “hierarchy of Needs” in which Maslow talks about the need of the self actualization. According to Maslow, if all of these needs are satisfied, we can still expect that there will be development of another need, “unless the individual is doing, what he, individually fitted for” (Mahesh 1993 sited by Amar and Hall 2004). Training

Strategic training is a fundamental tool that facilitates communication among employees, by providing a common language and shared vision and is argued to be one of the most significant HR practices for the organizational learning process (Nonaka and Takeuchi 1995, Ulrich et al 1993 as cited in Lopez et al, 2006). In the case of Omega, questionnaire results shows a clear amount of respondents shows their interest in learning new knowledge and shows their willingness for further training by which they can improve their effiecincy.

A clear understanding of Omega’s missions and values will help to ensure the right direction for the learning processes. Training should be orientation towards developing culture of commitment to learning and should demonstrate to employees and management framework link to the company strategy. Training should be practical support for organizational goals and work related technologies (Bassi and McMurrer, 2007).

The training programs should also favour the sharing of ideas and best practices improving the level of openness to new ideas thus promoting flexibility in acquiring critical skills needed for effectively responding to competitive challenges ( Lopez, et al 2006). There is empirical evidence to indicate (DiBella et al, 1996; McGill and Slocum, 1993 Nonaka and Takeuchi, 1995; Ulrich et al 1993 as cited in Lopez) the idea that training plays a critical role in maintaining and developing the capabilities both individual and rganizational and also substantially contributes toward the process of organizational change. Job Description In Omega, it is recommended that job should be the first motivating factor for the employees. Company need to redesign the job descriptions of the employees, so that they can attract and retain the best people. While designing a job responsibility, company can include the factors that attract and motivate the employee’s interest and mind and glue them to put effort in their respective jobs towards the achievement of the organizational objectives.

This will leads towards the improved loyalty with the firm and motivate people to do their best and it will also reduce the loss of knowledge by people leaving the Omega. In case of young employees this approach frees their minds, which allows them to engage them in the activities which brings innovations to the company, which is very important for the Omega. According to Amar and Hall, companies should allow the people to think innovative ideas while managers patrolling the boundaries (Amar and Hall, 2004).

Another important point which also needs to be considered is family-friendly working schedule. Employees prefer those jobs and job schedules, where they can adjust their family and social life with out any significant impact on their job responsibilities. CONCLUSION In this assignment we discuss about the different challenges to Omega and what are the possible recommendations to address those challenges both for the current and future time. Clearly there is struggle by Omega management to keep staff motivated and there is no actual implementation of motivational theories.

Due to the shortage of funds as 80% of the company’s funds are already allocated to employee’s wages, management needs to consider non-monetary incentives and rewards as we discussed in the main body of the assignment. It is concluded that in a knowledge intensive service firm, individuals are the most valuable asset and technology can only provide the relevant support for the creation and management of the business. So it is the peoples who need to be motivated to give maximum output for the company. We have looked at the different motivation factors and how to create the work environment that’s helps to achieve the rganizational goal. Based on the observations and the supported study material it is recognized that there are different sources for the motivation for the Omega employee, like how to define the job description, rewards, incentives and use of the technology to support individuals. So the combination of these factors will result in the working environment where every individual is performing his duties up to the best of his potential with the sense of responsibility and putting his/her share in the progress of the company. REFERANCES:

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MIMIC still rely on AT&T facilities to carry calls from its subscribers to MIMIC transmission centers in each metropolitan area. PAYOFF, MIMIC revenue $6. MN, losses of $38. 7 MN. MIMIC has exhausted its credit from its banks. MIMIC sold shares for $8. MN. 1976, ‘exeunt’ service. And revenue started roaring. 1976 revenue, 28. N, first profit $100,000; 1977, 62. MN; Between 1976-1978, lease financing of new fixed Investment was the only substantial source of funds available. 1978, withdrawal of the court’s ‘exeunt’ DCE. 1978, the public market to issue convertible preferred stocks. Preferred offerings allowed MIMIC to retire its short to intermediate-term bank debt and to issue further debt of a longer-term kind. 1980, MIMIC provided ‘executions, residential customers. Strong growth but constrained only by a lack of investment capital. July 1980. Leasing actuality decreased.

FYI 981, demand for investment fund Intensified. Offer convertible bonds. Jan. 1982: Antitrust settlement between AT&T and LIST. Department of Justice. AT&T will need to break up before 1984. Economics of scale and scope are important; basic call service and value-added services.

Increase in access charge after the AT&T antitrust settlement

1. What are the business problems facing MIMIC? After the settlement of the antitrust case of AT&T, the differential In access charges will be phased out through charging MIMIC 80% more and this In turn Increased Mi’s operating expense. MIMIC could lose its cost advantage to the competitors and lead to decreasing sales and profits. AT might also reduce its price to prevent its erosion in market share. AT communications was the main competitor. MIMIC needs to dial 20 digits ATT dial 11 digits.
2. How do these business problems translate Into financing problems? More we can see the graph, we saw a sharp rise in both external financing and internal financing, with external financing even a bit higher than internal financing.
3. To what extent can traditional financing strategies work for MIMIC? It is getting more expensive for MIMIC to acquire further funding through issuing debts and MIMIC will become riskier if take on further debts; If MIMIC simply issues equity, the public might read this move as the stock has been overpriced and now the firm is trying to push down the price. Thus, the share price of the firm might go down.
4. Based on projected financial statements in the case – income statements, balance sheets, and projected capital expenditures calculate Mi’s projected needs for external financing during the years 1984 through 1988 inclusive, for each year. Analyses the consequences of alternative financing policies of MIMIC during these years – as sequences, such as first debt, then equity, then debt again as needed –on the projected financial condition of MIMIC in the (fiscal) year 1990, in terms of measures such as debt to equity ratios and interest coverage ratios.
5. Suppose that for its initial financing “trance” of $1 Billion by the end of 1984, MIMIC decides to choose NOW between a Straight Debt issue of 20-year maturity with an interest rate of 12. 5%, with no sinking funds (early repayments), versus a Convertible Debt issue of the same size, of notional maturity 20 years with an interest/Coupon rate of 7. 75%, and a conversion price of $ 55 per share. Assume further that IF the conversion option is not exercised within the following 5 years then it would expire (unlike in the case), and this would continue as (cheap) debt. Which of these two debt issues should MIMIC choose in March 1983, to maximize shareholder value? Assume that the annual standard deviation of returns on Mi’s equity value is either 20% or 30% and that the interest rate on (safe) MIMIC debt equals 12. 5%.