Industries

Executive Summary

Geoffrey Chutter, owner of Whitewater Industries, has to relocate his fiberglass moulding business to one of three locations he has in mind due to the need for expansion, complaints of residents nearby the factory while he keeps in mind the importance of his aspects of operating systems. This new factory must at least be 6040 square meters and be in an area with zoning regulations that allow for fiberglass production Whitewater West Industries has three proposed new locations; [1] the spacious Hiram-Walker plant in Kelowna that needs some land renovations, [2] a complete new build that would result in a perfect building, or [3] a location in Abbotsford that has potential to expand business into many major cities. The company was recommended to spend the extra time and money on building their own facility in order to get exactly what the company needs to reach their goal revenue of six million annually.

Introduction

Fifteen years ago, Geoffrey Chutter, President of Whitewater West Industries Limited, tried his luck building a water park with no real success. After selling that operation he turned his focus to the master planning and conceptual engineering designs of water parks, product manufacturing, and construction services. His company also produces other large fiberglass products that are used in the production of CAT body scanners, cushioned bathtubs, and environmental toilets, just to name a few.

Problem Statement

Geoffrey is faced with the task of relocating his fiberglass molding manufacturing facilities now that plant capacity has been reached and the desire for expansion has increased. The new facility must be located in an area with zoning regulations that allow for fiberglass production and be at least 6040 square meters with extra land for a possible expansion. This is in addition to the growing complaints about the odour emanating from the fumes in the production of fiberglass from the residents who live near the plant. Geoffrey is even considering options of whether he should rent a facility or purchase it. Geoffrey wants to solve these issues and wants this move completed by May of next year (less than one year).

Aspects of Operating Systems

Service: This aspect of operating systems must be considered with the utmost importance during this relocation for a number of reasons. A large portion of this business relies on the timeliness of deliveries to its customers – closer distance to major customers means quicker delivery. However, a move may also increase the distance from the plant’s suppliers of raw material, therefore creating a problem in expected delivery times and availability of parts. A significant portion of this company’s revenue comes from specialized products and services they provide and any location to be considered would need to have a facility big enough to sustain this part of the operation.

Quality: Since the production of fiberglass products is a very specialized industry, there are limited suppliers who manufacture these products outside major centers. The quality of WhiteWater West Industries’ products is essential for the success of the business because a customer will usually pay extra for shipping for a higher quality fiberglass product, especially on materials for items such as CAT Scanners. WhiteWater Specialities also has a competitive advantage in that they will work closely with the customer to design and deliver a product specific to their needs. The company will need to consider that a major relocation may result in the possibility of losing quality employees (Engineers, Production Team, Supervisors) that have made WhiteWater West Industries so successful.

Function: This aspect of operating systems is closely related to the quality aspect in the sense that the design and quality of WhiteWater ‘s products will continue to perform the way they are expected to. When the company relocates it would want to keep the equipment and procedures in place that have allowed the company to be successful in making quality fiberglass products.

Quantity: This aspect is important to note when relocating to ensure that the size of the plant will have enough room to incorporate any of the current equipment to maintain the same standard of quality, as well as
purchasing new equipment with the intention of helping the company expand and increase their sales. A lack of sufficient space to meet demands may result in a loss of revenue.

Price:Price of the products is not really a factor in this relocation, however the company should do its best to keep the total cost of the move within the budget of the company so the price of their fiberglass products does not rise, and potentially losing customers.

Alternative Analysis

Whitewater West Industries has three possible relocation options to consider:

Kelowna — Hiram-Walker Plant
The Hiram-Walker plant is located only 25 kilometers from Kelowna and is the most spacious facility of all three options and will allow them to keep their current workforce. Zoning has already been approved to produce fiberglass since there are no residential buildings right beside the land – this would also solve the problem of residents complaining of the odour coming from the plant. The plant is located close to a major highway so naturally the ease of shipping and receiving products would be increased because of the proximity to major transportation routes. The building is also fire-safe, creating a safer workplace for the staff at WhiteWater West Industries. Most importantly if the company decided to expand, there is sufficient room to do so (64 total hectares of land they could purchase and 22 warehouses on the property).

This plant does have some issues that could prove to be quite costly in both the short and long term. The immediate cost of preparing the land and factory to be ready for operations would be just over $1.5 million dollars bringing the total cost of purchase to $5,127,875. 00. The company would also have to deal over the long term with an increase in heating costs caused by the structural design of the building and an additional cost to deal with the lack of sanitary sewers – the lack of sewers could cause a problem in respect to sanitation issues produced by 215 employees.

Kelowna — Build Option

Building a new facility in Kelowna is the best way for Whitewater West Industries to get exactly what they need to generate more revenue and expand the business. This could become a state-of-the-art manufacturing facility raising the profile of the company, and which could attract young professionals and potential new business. This new building would reduce the maintenance costs associated with the upkeep of an old building and would comply with health and safety standards creating a positive working environment for staff.

However, if funding is an issue, then building a new facility is not the right option for the company as this is the most expensive option. Also, building a brand new facility would take longer than what WhiteWater had initially wanted – one year instead of ten months. Another problem that WhiteWater will have with building their own facility is finding a suitable piece of land to build their plant. Locating an area large enough to support the size of a plant with a possibility for expansion in an area with zoning regulations that will allow fiberglass production may be difficult.

Abbotsford Site

The last of the three sites, Abbotsford, is located 65 kilometers east of Vancouver and a substantial distance from Kelowna. The site includes a large enough total area for what is needed, plus a small amount of room for expansion without having to build an additional building, although expansion could not go any further than that. The potential for getting new customers is extremely promising and achieving revenue of $6 million could be easily accomplished since this site is directly across the border from Seattle and Portland and a short distance from Vancouver. Also this location would save Specialties $100,000 on shipping costs every year. This property could also be divided into sections, the larger building for production and the smaller building for Specialities – keeping both divisions at the same location and at the same time keeping individuality among them.

However, the purchase of the property may not even be suitable to run a fiberglass plant as it needs to undergo an environmental audit due to the storage of PCBs. This could cost WhiteWater West thousands of dollars and potentially the location as a whole. This property is the least safe of three options; a wood building is not the best choice for a fiberglass facility since the operating machines produce a considerable amount of heat causing a potential fire hazard that must be closely monitored. Choosing this location might also result in the loss of many employees from the Specialties department (only 1 out of 90 said they would leave to somewhere outside the city limits). Finding a new, similar team that matches their current workforce would be crucial to the success of this option.

Recommendation
It is recommended that Whitewater West Industries opt to own their building and choose Option #2 – the Build Option. Although this option is the most costly in both dollars and time, it will allow the company the opportunity to achieve their potential. The company would be able to install and arrange their equipment in any manner they wish to optimize production needs and function, enabling the company to reach their desired goal of generating $6 million of revenue annually. This option would also provide sufficient room to expand and have exactly the type of competitive facility they need to be successful. However the company should keep their original plant operating in order to keep generating revenue and providing quality service to their customers during this transition. This will also avoid a stockpile of orders and delays to customers. Although this option does not provide as much opportunity to increase sales as the move to Abbotsford would, it will allow the company to keep an already trained and skilled workforce, and not having to deal with severance packages and then the time and money to recruit and train new staff.

Choosing this option is going to be the most costly and will take the longest. However, money should not be an issue as the financial statements shows sufficient income to pay for the building of a new property and which can be offset from the sale of their old plant when the time comes. The money generated from the sale will pay off most of the new mortgage. The company may still have to deal with the residents who have been complaining about the odour as this plant will need to be kept operating until the new building is move-in ready. Read about Timmons model

Action Plan

The company should immediately begin to look at possible spots to build their new location; somewhere with sufficient space for the new building plus expansion and that meets the zoning requirements. It may be also beneficial for the company to approach the City and ask them to change the zoning regulations for a specific parcel of land if it meets the needs of the company. The long-term benefits of rezoning for the City will ensure that they will not be losing a major employer who is also considering expanding their business. Building will need to start as soon as possible to stay on track and avoid further delay past the desired move in date. In the meantime the company needs to begin preparing the employees for the move. Continued complaints by residents may be alleviated by the fact that the company is moving quickly on finding a new location to build their new facility away from the residential area.

ABSTRACT : Innovation is one of the most important issues in business research today. It has been studied in many independent research traditions. Our understanding and study of innovation can benefit from an integrative review of these research traditions. In so doing, various topics of consideration have been identified and studied.

Consumer response to innovation, Organizations and innovation, which are increasingly important as product development becomes more complex and tools more effective but demanding; techniques for product development processes, which have been transformed through global pressures, increasingly accurate customer input. Innovation is the core business competency of the 21st century. In order to not only compete and grow but to survive in a global economy, businesses must innovate.

To date innovation has been approached in a piecemeal fashion often linked solely to the New Product Development (NPD) process. There has been a remarkable increase in R&D investment by industries at global level over a number of years. The area of R&D in industry with the highest rate of growth over the past six years has been in directed basic research. Innovation and the effective management of technology have become a top priority for nations as well as companies, to stimulate economic development and strengthen their competitiveness.

Allocation of R&D for the development of new businesses is seen as a key growth strategy by firms in most parts of the world. New products are engines to growth and prosperity for all companies in the manufacturing sector or the service sector. In this article, an attempt has been made to explore the drivers of new product performance, with a particular focus on cosmetic industry. P&G is considered to be one of the companies dealing with cosmetics with the best innovation strategies, and hence it has been taken as an example for the study.

The Innovation Diamond is introduced by P&G as an integrative and guiding framework to help management focus on what’s important to success: innovation strategy, a solid idea-to-launch process, portfolio management and the right climate and leadership. (Keywords : Innovation, R&D, Cosmetic industry, P&G, success, Product Development. ) INTRODUCTION : Innovation, the process of bringing new products and services to market, is one of the most important issues in business research today.

Innovation is responsible for raising the quality and lowering the prices of products and services that have dramatically improved consumers’ lives. By finding new solutions to problems, innovation destroys existing markets, transforms old ones, or creates new ones. It can bring down giant incumbents while propelling small outsiders into dominant positions. Without innovation, incumbents slowly lose both sales and profitability as competitors innovate past them. Innovation provides an important basis by which world economies compete in the global marketplace.

Innovation is a broad topic, and a variety of disciplines address various aspects of innovation, including marketing, quality management, operations management, technology management, organizational behaviour, product development, strategic management, and economics. Research on innovation has proceeded in many academic fields with incomplete links across those fields. For example, research on market pioneering typically does not connect with that on diffusion of innovations or the creative design of new products.

Overall, marketing is well positioned to participate in the understanding and management of innovation within firms and markets, because a primary goal of innovation is to develop new or modified products for enhanced profitability. A necessary component of profitability is revenue, and revenue depends on satisfying customer needs better (or more efficiently) than competitors can satisfy those needs. Research in marketing is intrinsically customer and competitor focused, and thus well situated to study how a firm might better guide innovation to meet its profitability goals successfully.

To encourage and facilitate further research on innovation in marketing, we seek to collect, explore, and evaluate research on innovation. Key goals of this paper will be to provide a structure for thinking about innovation across the fields, highlight important streams of research on innovation, suggest interrelationships, and provide taxonomy of related topics. Successful innovation rests on first understanding customer needs and then developing products that meet those needs. Our review of the literature, therefore, starts with our understanding of customers and their response to and acceptance of innovation.

Because we are interested in how firms profit from innovation, the article will then review organizational issues associated with successfully innovating and with how organizations adopt innovations. Customer understanding and the organizational context are underpinnings to innovating successfully. They must be in place before proceeding. Then the flow of innovation will be discussed. SUCCESS FACTORS IN AN ORGANISATION: Success factors for an organisation predominantly identified in the research papers are : • Product innovation • R&D investment • Leadership commitment, Clear understanding of the company’s capabilities, • Strong connection to the customer and a deep understanding of major customer problems, • Willingness to take big but well-understood risks. PRODUCT DEVELOPMENT : Once consumer needs are understood and organizations for innovating and strategies are in place, then begins the execution part of innovation—moving from having a strategy to conceiving a concept to delivering against that strategy, to designing the final product and its manufacturing process, to finally having a (hopefully successful) commercial product.

This section examines research that has sought to improve this process of product development (PD), which is predominantly prescriptive in nature. We begin with a brief review of product development processes, then will discuss about the research applicable to each of various stages of product development. PRODUCT DEVELOPMENT PROCESSES : The emerging view in industry is of product development as an end-to-end process that draws on marketing, engineering, manufacturing, and organizational development. The core of this process is the product development funnel of opportunity identification, design and engineering, testing, and launch.

Previous researches recognizes that, for a single successful product launch, failures will be many, although some may be recycled, reworked, and improved to become successful products. Even when a product has been in the marketplace, innovation continues as the firm continually searches for new opportunities and ideas. Researches also recognize the current hypothesis that firms are most successful if they have multiple product concepts in the pipeline at any given time, forming a portfolio of projects.

These projects might relate to independent products but increasingly are based on coordinated platforms to take advantage of common components and/or economies of scope. Risk is inherent in product development; few of the many concepts in a portfolio are likely to be successful. Information to evaluate alternative concepts is often imperfect, difficult to obtain, and hard to integrate into the organization. For each success, the process begins with 6 to 10 concepts that are evaluated and either rejected or improved as they move from opportunity identification to launch.

RESEARCH CHALLENGES : PD processes are only as good as the people who use them. Structured processes force evaluation, but evaluation imposes both monetary and time costs. Teams can be tempted to skip evaluations or, worse, justify advancement with faulty or incomplete data. There are substantial research opportunities to understand the optimal trade-offs among evaluation costs, the motivations of teams for accuracy, and the motivations of teams for career advancement. For example, advancing a concept to the next stage in either a sequential or spiral process requires a hand-off.

New team members must have sufficient data to accept the hand-off. In some instances, the old team members are now required to look for new projects—a disincentive to advancing a concept through the gate. Marketing, with its tradition of research on people, whether they are customers or product developers, have many research streams that can inform and advance the theory and practice of PD processes. Despite this, we have seen little formal investigation of the link between marketing capabilities and PD processes.

The most critical research challenges in this area include, Improving the effectiveness of non sequential PD processes; Understanding which process is best in which situations; Understanding when it is appropriate to modify processes; Linking marketing capabilities and PD processes; Understanding the explicit and implicit rewards and incentives that encourage PD teams to either abide by or circumvent formal processes. Both market orientation and innovation have been identified as crucial success factors in companies.

A positive impact of market orientation and innovation on company performance has been found in many industries and under a wide range of market characteristics. Research on market orientation is focused in particular on large companies. However, market orientation is expected to be important for small companies as well as large companies. Research in this field for small firms is relevant because small companies are widely represented in important industries like retailing, services and agriculture.

Research has shown the importance of market orientation for the success of product innovations. A market orientation may stimulate innovations and increase the performance of innovations. In this paper we will focus on innovations in small independent companies that do not have the capacity for R&D as opposed to innovations in medium sized and large companies. Various models about the relationship between market orientation and innovation have been proposed examined the impact of market orientation on innovation characteristics using measure for market orientation.

Many studies that focus on factors discriminating between successful and unsuccessful innovations conclude that market orientation is one of the main contributing factors to innovation success. INNOVATION Innovation is the creation of better or more effective products, processes, services, technologies, or ideas that are accepted by markets, governments, and society. Innovation differs from invention in that innovation refers to the use of a new idea or method, whereas invention refers more directly to the creation of the idea or method itself.

The word innovation derives from the Latin word innovatus, which is the noun form of innovare “to renew or change,” stemming from in—”into” + novus—”new”. Diffusion of innovation research was first started in 1903 by seminal researcher Gabriel Tarde, who first plotted the S-shaped diffusion curve. Tarde (1903) defined the innovation-decision process as a series of steps that includes: First knowledge, Forming an attitude, A decision to adopt or reject, Implementation and use, Confirmation of the decision, Innovation.

Innovation is the process by which an idea or invention is translated into a good or service for which people will pay, or something that results from this process. To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination, and initiative in deriving greater or different value from resources, and encompasses all processes by which new ideas are generated and converted into useful products.

In business, innovation often results from the application of a scientific or technical idea in decreasing the gap between the needs or expectations of the customers and the performance of a company’s products. In a social context, innovation is equally important in devising new collaborative methods such as alliance creation, joint venturing, flexible working hours, and in creating buyers’ purchasing power through methods such as layaway plans. INNOVATIONS ARE DIVIDED INTO TWO BROAD CATEGORIES: (1) Evolutionary innovations are brought about by numerous incremental advances in technology or processes and are of two types a) Continuous evolutionary innovations result in an alteration in product characteristics instead of in a new product, and do not require any user-learning or changes in his or her routine. Examples are the multiblade shaving razor, fluoride toothpaste, and laptop computers. (b) Dynamic continuous evolutionary innovations require some user-learning but do not disrupts his or her routine. Examples are fax machines, instant photography, and handheld computers. (2) Revolutionary innovations (also called discontinuous innovations) require a good deal of user-learning, often disrupt his or her routine, and may even require new behaviour patterns.

Examples are photocopier (xerography) machines, personal computers, and the Internet. Innovation is synonymous with risk-taking and organizations that introduce revolutionary products or technologies take on the greatest risk because they have to create new markets. A less risky innovation strategy is that of the imitator who starts with a new product (usually created by a revolutionary-innovator) having a large and growing demand. The imitator then proceeds to satisfy that demand better with a more effective approach.

Examples are IBM with its PC against Apple Computer, Compaq with its cheaper PCs against IBM, and Dell with its still-cheaper clones (sold directly to the customer) against Compaq. Although many innovations are created from inventions, it is possible to innovate without inventing, and to invent without innovating. NECESSITY FOR INNOVATION “Innovation will be the necessity for social and economical growth of the nation in future. We live and die through relative innovation. The world has changed because of innovation only. Science is responsible for all the innovations we feel around,” remarked Srinivasan K.

Swamy, President, All India Management Association (AIMA), New Delhi A light bulb overhead may signal a bright idea in cartoons and comic books, but in today’s business world companies can’t sit around waiting for creative bolts of inspiration. Long-lasting success requires a process of innovation that is predictable and consistent. Today innovation is necessary to survive. The global market has become so competitive that innovation is now as valuable an investment as sales and marketing. Markets are becoming more global, not less, so the value of innovation will continue to increase.

Here’s why: a) The best ideas and technologies spread rapidly around the world now. A company with a new product may make a one-time splash, but before long everyone else will have adopted it. A consistent, predictable innovation process enables companies to overcome this. b) Brands aren’t as powerful as they used to be. Experience is now more important than brand name as the basis for a person’s purchasing decision. The Internet allows people to share experiences about a company with millions of others. People now choose the products that give them the highest value, not just the best-known brands.

Relying on a strong brand name is no longer enough. Consistent, predictable innovation is the answer. The Society of Management Accountants calls “innovation…fundamental to the quest for profitable, sustainable growth. ”3 Peter Drucker, probably the most insightful management guru ever, deems it the one business competence needed for the future. Fortune magazine’s advice to companies who want to be named to its Most Admired List? Innovate, innovate, innovate. Innovation currently accounts for more than half of all growth. And it is enormously profitable.

A study done on the rate of return for 17 successful innovations showed a mean return of 56% compared with an average ROI of 16%. Companies are catching on to this sea change. In an Ernst & Young study, European and North American companies called innovation the most important criterion for success in the future. Even technology firms who presumably are leading this charge consider “making innovation happen” the industry’s single biggest problem. COSMETIC INDUSTRY Indian cosmetics industry has witnessed strong growth during the past few years and has emerged as one of the industries holding immense future growth potential.

The cosmetics industry registered impressive sales worth Rs 288. 7 Billion (US$ 5. 8 Billion) in 2010. The sector has mainly been driven by improving purchasing power and rising fashion consciousness of the Indian population. Moreover, the industry players are readily spending on the promotional activities to increase consumer awareness. According to our new research report “Indian Cosmetic Sector Analysis (2009-2012)”, Indian cosmetics sector is expected to witness noteworthy growth rate in near future, owing to the rising beauty concerns of both men and women.

The industry holds promising growth prospects for both existing and new players. The baseline for the optimistic future outlook of the Indian cosmetics industry is that, there has been a rise in variety of products offered by the industry players. Moreover, the companies have started opting for online retailing and are offering specialized products to generate revenue from all the corners. Rising usage of Cosmeceuticals and Nutricosmetics by the Indian consumers will also pave way for the Indian cosmetics market during the forecast period.

Our research report incorporates an innovation of the cosmetics industry in India. It provides segment level analysis of the industry along with the emerging trends and innovation that happened in the previous years. INNOVATION IN COSMETIC INDUSTRY The cosmetics industry is a lucrative, innovative, and fast-paced industry. It is also a key market segment in the retail industry. In it they highlight the following products as examples of what cosmetic companies are doing to create “innovative” products. 1. Soap from a lingerie company 2. Men’s cologne in a bottle shaped like a #1 3.

Nanotechnology skin care cream 4. 3D anti-ageing skin mask. The only product that could have some technological innovation is the one based on nanotechnology. Unfortunately, there are no claims given and you could easily make the product by creating a standard skin lotion with added, non-functional nanotechnology. If cosmetic companies really wanted to set their products apart from the competition, they need to create formulas that solve consumer problems in some superior way. Consumers don’t care about how their products work (say nanotechnology), they care about the end results.

The major sections of cosmetics in this industry are : sun care, skin care, hair care, body care and perfumes and decorative cosmetics. SUN CARE The World Health Organisation (WHO) recommends regular sun screen use to help protect skin against UV radiation• Significant industry investment has helped develop increasingly effective and appealing sunscreens that – Offer broad UV (both UVA and UVB) protection – Contain a combination of nano-sized mineraln (e. g. titanium dioxide) and organic UV filters to offer high levels of protection – Have applications that suit all lifestyles and consumer needs

SKIN CARE : Skin maintenance is important because skin is the largest organ in the body, serving as a vital defence barrier. This also makes it particularly vulnerable to damage . Regular cleansing and caring improves hygiene, prevents pores from becoming clogged, removes dead skin cells and protects against external elements Dermatological research continually leads to more effective and gentle applications that address different skin types such as dry or aged skin. • Dec 30, 2011 – Euromonitor Reports Growth in Skin Care Market in Africa & the Middle East Between 2005 & 2010.

As new opportunities for skin care in key developed markets slowly dry up, much stronger growth forecasts for the category in many markets in Africa • Dec 28, 2011 – R Highlight – Angle-dependent Interference Pigments Multilayer pigments alternately coated with layers having high and low refractive index are known in the art. The optical effect of the pigments • Dec 14, 2011 – Editorial – Future-Touch Translates Future Trends into Innovation • Dec 14, 2011 – Article – UK spa company Elemis has established itself as a leading professional spa company as well as a strong contender in the retail cosmetics market.

HAIR CARE : Products: Shampoos, conditioners, hair colourants, texturisers, serums, hair sprays, growth stimulators, anti-dandruff shampoos, lotions. Improved personal hygiene via treatment of dandruff, itchy scalp, greasiness Enables self-expression, helping consumers have confidence in their appearance and greater self-esteem Meeting specific consumer needs such as controlling fly-away hair, taming unruly hair with relaxants, adding texture to limp hair, repairing damaged hair and restoring colour to aged hair BODY CARE :

Products: Soaps, antiperspirants, deodorants, body washes, shower gels, body lotions, scrubs, oils. Benefits: Soap represents a significant historical public health advance, helping break down grease and dirt Antiperspirants and deodorants enhance comfort and hygiene by helping avoid excessive perspiration and resulting body odour Non-soap detergent bars enable mild cleansing for consumers with skin conditions (eczema, rosacea, mild atopic dermatitis, etc. ) PERFUME : Products: Perfumes, colognes, salves, scented oils Benefits:

Fragrances play a significant role in enhancing personal well-being Aromatherapy research reveals that smells influence our emotions, inspire creativity and are the fastest memory triggers The sense of smell is proven to be an important factor in the process through which we form relationships. DECORATIVE COSMETICS : Products: Foundations, blushes, powders, eye Benefits : Make-up enables self-expression, helping consumers have confidence in their appearance and greater selfesteem Clinical research confirms that the ability to take care of your appearance during illness increases confidence and can aid the healing process

Science is at the heart of every cosmetic product. R programmes generate new patents every year and in 2009, over 2600 (an estimated 10% of all patents granted in the EU) were awarded to the cosmetics industry. Scientists from a wide range of disciplines such as physics, microbiology, biology, toxicology, rheology, analytical chemistry and genetics apply their skills in the European cosmetics industry. In total, the European cosmetics industry employs approximately 17,000 scientists.

R programmes investigate consumer behaviour and beauty aspirations, the biology of skin and hair, new innovative technologies and sustainable development; this helps to select the best ingredients which are the most respectful of human health and the environment, and to create new formulations which respond to both expectations and challenges Innovation is vital for the European cosmetics and personal care products industry. It can take over 5 years of innovative research and formulation to bring a new product to the market Every year, a quarter of all cosmetic products on the market are improved or are completely new.

Europe is the flagship producer and mass consumer market of cosmetics and personal care products in the world. Ongoing changes in the environment and in consumer lifestyles require new innovations that meet increasing needs, such as caring for and protecting skin from sun and weather damage SUSTAINABILITY The cosmetics industry is committed to sustainability and aims to: Reduce the environmental impact of the sector and its supply chain, from ingredient sourcing through to packaging. Ensure a balance between the economic, environmental and social pillars of sustainability

WHY INNOVATION IS REQUIRED IN COSMETIC INDUSTRY : Cosmetic products are important consumer products with an essential role in everyone’s life: apart from “traditional” cosmetic products, such as make-up and perfumes, it also includes products for personal hygiene, for example tooth-care products, shampoos and soaps. Today’s cosmetic market is driven by innovation including new colour pallets, treatments targeted to specific skin types and unique formulas concentrating on different needs. Most cosmetics products have a lifep of less than five years and manufacturers reformulate 25% of their products every year.

They need to improve products constantly in order to stay ahead in a highly competitive market where more choice and ever greater efficacy are expected by the consumer. The European cosmetics industry is a world leader and dominant cosmetics exporter, a highly innovative sector and a significant employer in Europe. The EU’s involvement concerns mainly the regulatory framework for market access, international trade relations and regulatory convergence, all aiming to ensure the highest level of consumer safety while promoting the innovation and the competitiveness of this sector.

Innovation is important for any business but for cosmetic industry it is a necessity. Recently Several hundreds of key representatives from the European cosmetics industry have gathered in Brussels to discuss the importance of industry on the European economy and how it can build for a sustainable future. Discussion at the General Assembly focused on “Science, Beauty and Care : Innovating for a Sustainable Future”. Fabio Franchina, President of Colipa mentioned “Today’s cosmetic industry, is more dynamic and innovative than ever, and we are committed to ensuring that we contribute fully to a truly sustainable uture. ” He also mentioned that “innovation is the life-blood of the cosmetic industry” This product innovation strategy guides the business’s New Product Development direction and helps to steer resource allocation and project selection. In the mid-1990s, P&G’s Cosmetics business lacked a business and product innovation strategy, the result being that Product Development efforts were scattered; many different initiatives were launched in many different product categories and segments in a futile attempt to win. There was no focus. The first element was a product innovation strategy.

Indeed, the real breakthrough occurred in the Cosmetics business turnaround when the business leadership team began a rigorous business planning process leading to clearly defined objectives, goals, strategies, and measures. A much more concentrated innovation strategy was elected, focusing on lips, face and eyes, rather than the entire body. Next important facet of strategy meant getting the supply chain under control: end-to-end supply network management. Management streamlined the supply network so that production and shipments were tied to market demand.

As a result, they were able to reduce the time in the supply network, thereby eliminating much of the product obsolescence generated with each new product launch. By focusing first on an innovation strategy for the business, the stage was set for effective Product Development. The message is that if your business lacks a product innovation and technology strategy, you are missing a key element of successful product innovation. This strategy should include the goals for the business’s product innovation effort and how these goals tie into the broader business goals.

This strategy is more than just a list of this year’s development projects. It has a much longer-term commitment. The innovation strategy also includes defining strategic arenas or areas of focus, much like the Cosmetics business did. That is, you need to define the product, market, and technology areas in which the business will focus its Product Development efforts. The key here is focus. Innovation is important on different levels and is also important for different reasons. Innovation is an important driver of Economic growth and improvement. For Cosmetic Industry it is for – • Survival Growth • Shareholder return Individual perspective every industry constantly needs to innovate. Industry changes their route to work to become more efficient. They change how they do something (process innovation). They train to broaden their skills (to gain competitive advantage). Virtually all of the economic growth that has occurred since the eighteenth century is ultimately attributable to innovation. The Economist Intelligence Unit undertook a survey in 2007 which noted that “long–? run economic growth depends on the creation and fostering of an environment that encourages innovation.

Innovation is considered an important driver of long-term productivity and economic growth. Innovation is required to raise productivity, meet the challenges of globalization and to live within our environmental and Demographic limits. Some major reasons for innovation are : ? To survive adverse changes in operating circumstances; ? To make life easier for the customers; ? To gain competitive advantages; ? To protect market share; ? To reposition an organization and raise its profile ? To lead the market and reinforce a reputation as market leader ?

To open new horizons so as to get out of a rut or avenues with limited potential ? To attract extra funding ? To raise margins and profitability ? To drive total shareholder returns. FACTORS FOR DEVELOPING AN R&D COSMETIC STRATEGY In this week’s cosmetics and skin care industry post, the New logic portfolio team write about six factors to consider when developing your R&D cosmetics strategy. To research the post we reviewed our cosmetics posts over the last few months, and conducted ancillary research. 1. The Combination of Groundbreaking Formula and User-friendly Packaging

In the cosmetics and personal care industry, breakthrough innovations on formulas and packaging are still keys to success as they directly relate to product performance. Cosmetic and skin care chemists search for the ingredients and technology to advance product efficacy, while they also contribute to design innovative package that improve product applications. This is obvious, but it’s the formula, delivery systems and packaging that make all the difference when it comes to developing innovative cosmetics projects. Your R&D cosmetics strategy has to consider what these fundamentals. . Concentrated Product Development A successful cosmetics R&D strategy is efficient in solving two problems: shorten product development times and improve innovation initiatives. In the cosmetics and personal care industry, the diversity of product lines (face, body, lips, and eyes) creates a barrier that prevents the easy innovation across all categories. Experienced leaders use R&D project portfolio optimization to pinpoint innovation projects that align with current resources and leverage the development of existing expertise in a technology.

The Maybeline “Great Lash” Mascara collection has a history of 40 years, during which period its product profile has continued to expand. Maybelline has focused on enhancing the “Great Lash” product line through conducting consumer insight research, selecting pilot productions and adjusting the R&D process. 3. Consumer-oriented Strategy Any R&D innovations begin with the goal to improve consumer experience. R&D leaders conduct market research to discover problems and collect consumer insights, which if executed correctly can turn into  new treatment solutions and product upgrades.

As increasing numbers of cosmetics companies expand worldwide, consumer-oriented strategy also includes outsourcing or moving R&D centers overseas to enhance local R&D capability. For example, L’Oreal China has improved its shampoo formula in order to cater to Asian hair care needs. Overseas R&D centers help facilitate regional research and local talent recruitment. It may also benefit the R&D process in the host country as such outsourcing enables the exploitation of local technology and resources for company-wide projects. 4. The Challenge of Product Diversification

While expanding a brand’s product profile is more of a business strategy, cosmetics and skin care R&D departments need a comprehensive technology development strategy to help anticipate risks and structure conceptualization. For example, when a successful skin care company is trying to launch cosmetics lines, the company needs to decide which products to start developing pilot engineering programs. A product development plan that’s been optimized for project selection can allow a company to lay a solid foundation and avoid failures at different stages by understanding what’s possible from the projects to select and implement. . Mergers and Acquisitions Mergers and acquisitions allow merged companies to realize the optimal allocation of R&D resources, such as facilities and capital investments. In this way, R&D departments have the chance to share information and develop better products. In the cosmetics and personal care industry, company mergers and acquisitions may not necessarily lead to the merger of R&D departments. However, a well-established parent company can provide its brands with R&D guidelines that improve innovation capabilities and optimize the product development process. 6.

Cross-Industry Development Another future R&D trend are cross-industry solutions, where tighter partnerships with other industries as well as the knowledge of other sciences, such as food and biochemistry enhance R&D knowledge. For example, nutricosmetics was first developed by the Swedish biochemist and scientist Ake Dahlgren, who later founded the first nutricosmetic company Imedeen in the late 1980s. In recent years, L’Oreal and Shiseido have started R&D projects in nutricosmetics, applying what was originally developed from pure science to personal care products. P&G AND INNOVATION

Let us now take an example of a leading company P&G and how they improved in cosmetic industry with its Innovation. P&G’s cosmetics business is a case in point where a dramatic turnaround was achieved via a disciplined, holistic approach to new product management. The story begins when P&G acquired the Cover Girl and Clarion cosmetics brands in 1989. Two years later Max Factor was acquired. P&G then applied its tried-and-true approach of leveraging scale and an innovation strategy with a few, big new products. But there was no real business strategy, and efforts were scattered and unfocused.

And so, by 1994, management was forced to retreat and retrench. They dropped the Clarion line; and through much of the 90s, senior management at P&G wondered if they should be in the cosmetics business at all! A new line, under the Oil of Olay banner, was attempted but failed, and the entire cosmetics business continued to decline. The turnaround of P&G’s Cosmetics business started in the late 90s when business unit management turned to P&G’s Initiatives, Diamond philosophy. Today, P&G’s Cosmetics business is a healthy, growing, and profitable enterprise.

Performance results have significantly improved since the late 90s, and the business is seen as a key growth contributor for P&G. The major factors that drive a business’s new project performance, illustrated in the Innovation Diamond are: Having a product innovation and technology strategy in place for the business; Having an effective and efficient ideato- launch process; Resource commitment, which focuses on the right projects— portfolio management; and People; that is, having the right climate and culture, effective cross-functional teams, and senior management commitment to New Product Development. aha” was that there is no one key to success in product innovation, and thus management stepped back from a focus on individual initiatives and looked at the broader picture. For example, having a great idea-to-launch process is not sufficient; it’s not a stand alone driver of positive performance. P&G’s Initiatives Diamond serves as a guide for each business’s product innovation effort, and helps to focus management’s attention on what is important to success.

According to Bob McDonald, P&G’s Vice Chairman of Global Operations, “The Initiative Diamond played a significant role in improving the business results in P&G’s Household Care global business unit. This work brought us a new discipline to manage our innovation programs and yielded a major increase in the in-market success of our initiatives. They aligned their organization on how to use Stage-Gate® success criteria, and portfolio and resource management to deliver better innovations for the consumers they serve. [pic] [pic]

The top half of P&G’s diamond in Exhibit 2 is strategic in nature, and captures the business’s product innovation strategy: goals, the mix of new products required to meet those goals, and the required resources. Portfolio management (or project selection) is thus closely connected to strategy. The bottom half of the diamond is more operational and focuses on delivering specific new product projects or initiatives: what resources must be put in place for each project; and how individual new product projects are managed so they succeed, using P&G’s idea-to-launch SIMPL™ methodology.

Coincidentally, the two diamonds—P&G’s Initiatives Diamond in Exhibit 2 on this page and the research-based Innovation Diamond in Exhibit 1—are almost the same. Each one or both can be used to guide your business’s new product efforts. Here is a quick look at the four drivers of performance and how they work at P&G. Driver #1—A product innovation and technology strategy for the business Best performing businesses put a product innovation and technology strategy in place, driven by the business leadership team and a strategic vision of the business.

This product innovation strategy guides the business’s New Product Development direction and helps to steer resource allocation and project selection. In the mid-1990s, P&G’s Cosmetics business lacked a business and product innovation strategy, the result being that Product Development efforts were scattered; many different initiatives were launched in many different product categories and segments in a futile attempt to win. There was no focus. The first element of the diamond is a product innovation strategy.

Indeed, the real breakthrough occurred in the Cosmetics business turnaround when the business leadership team began a rigorous business planning process leading to clearly defined objectives, goals, strategies, and measures. A much more concentrated innovation strategy was elected, focusing on lips, face and eyes, rather than the entire body. A second facet of strategy meant getting the supply chain under control: end-to-end supply network management. Management streamlined the supply network so that production and shipments were tied to market demand.

As a result, they were able to reduce the time in the supply network, thereby eliminating much of the product obsolescence generated with each new product launch. By focusing first on an innovation strategy for the business, the stage was set for effective Product Development. The message is that if your business lacks a product innovation and technology strategy, you are missing a key element of successful product innovation. This strategy should include the goals for the business’s product innovation effort and how these goals tie into the broader business goals. This strategy is more than just a list of this year’s development projects.

It has a much longer-term commitment. The innovation strategy also includes defining strategic arenas or areas of focus, much like the Cosmetics business did. That is, you need to define the product, market, and technology areas in which the business will focus its Product Development efforts. The key here is focus. Driver #2—An effective and efficient idea to- launch system Studies show that an effective new product process, such as Stage-Gate®, exists in top performing businesses, a system that drives new product projects from the idea phase through to launch and beyond. In P&G’s Cosmetics business, developing an innovation strategy was a solid first step, but the means of implementing strategy must be in place too. So management turned to a second element of the diamond, namely P&G’s SIMPL™—the Successful Initiative Management and Product Launch model. SIMPL™ is a stage-and-gate new product process, a methodology for driving new product projects from the idea phase through to launch and into post-launch The SIMPL™ model forced project teams to do their homework early in the project.

For example, much consumer research work was undertaken, and consumer insights gained led to winning new product concepts. One big success is Outlast™ by Cover- Girl. This ten-hour lipstick—a kiss-proof, long-lasting lipstick—uses a unique two-part application system (first a color and then a gloss) to produce an enduring lip color and gloss. A second winner—Lipfinity™ by Max Factor—was also introduced, again using the SIMPL™ model. Both new products have been huge successes not only in the U. S. , but around the world.

The turnaround of the cosmetics business was underway! Most companies claim to have a new product process or stage-and-gate system in place, according to a recent PDMA study. 7 Further investigation reveals, however, that most firms’ processes are deficient. They are poorly designed, they miss the mark when it comes to best practices, and they are badly implemented. 2,3 P&G is an exception. Their idea-to-launch process, SIMPL™, is a rigorous process that uses stage-and-gate decision-making complete with clear go/kill criteria and timing requirements.

The SIMPL™ model, shown in Exhibit 3, consists of four main stages, with each stage building in a set of current best practices in the form of key activities, and also clearly defined expectations for project team in the form of end-points. There are also four gates or go/kill decision-points in the model; each gate is comprised of a team recommendation and a management decision. The SIMPL™ Model P&G’s approach is different from that of most firms’, however. Instead of focusing on the process per se (like so many companies do), management stepped back and identified the basic principles that the model is founded on.

These principles are constants across many and varied businesses and geographies. But the constancy of these principles has helped the company adapt the model to many different types of businesses and different types of projects leading to a standardized and globally applied Stage-Gate® process. The principles which underlie the SIMPL™ model are shown in the box on this page and explained here in more detail: Winning in the marketplace is the goal. In many firms, too much emphasis is on getting through the process; that is, getting one’s project approved or preparing deliverables for the next gate. In the past, P&G was no different.

By contrast, this principle emphasizes winning in the marketplace as the goal, not merely going through the process. Specific success criteria for each project are defined and agreed to by the project team and management at the gates; these success criteria are then used to evaluate the project at the post-launch review. And the project team is held accountable for achieving results when measured against these success criteria. (By contrast, the great majority of businesses still do not conduct post-launch reviews on projects; and even fewer hold their project teams accountable for achieving agreed-to project results).

Use criteria for making Go/Kill decisions. Specific success criteria for each gate relevant to that stage are defined for each project. Examples include: expected profitability, launch date, expected sales, and even interim metrics, such as test results expected in a subsequent stage. These criteria, and targets to be achieved in them, are agreed to by the project team and management at each gate. These success criteria are then used to evaluate the project at successive gates. Risk and rigor must be balanced. Project teams employ appropriate e rigor in learning, planning, and decision- making in order to mitigate risk.

They build in a strong consumer focus and rely heavily on voice of customer research; they front end-load their projects, undertaking appropriate, often extensive up-front homework prior to development; and they focus on developing differentiated, superior products that meet customer needs better than competitors. Note that SIMPL™ is also scalable and is tailored for specific projects based on level of risk and size of investment. Not every project requires the same degree of rigor, front-end work, and market research. Use a common language.

Throughout the 1990s, each P&G business unit had developed its own version of a stage-and-gate new product process. Integration, cooperation, and measurement across businesses thus proved difficult with each business using a different system and different terminology. A GLOBAL PROCESS The current SIMPL™ process is a corporate global process—the same stages, gates, principles and measures—and is universal across geographies and business units. Each business, however, is free to adjust and adapt the process to suit its own business requirements.

SIMPL™ is not stand alone. The idea to- launch process is only one ingredient of successful innovation, a single element of a much larger whole, the Diamond. Individual projects cannot be managed independently of other projects, their priorities, resource constraints, and changing business conditions. Thus the Diamond represents the relationship between these elements: innovation strategy,resource planning, project selection, and the SIMPL™ new product process SIMPL™ Driver #3—Resource commitment, focusing on the right projects and portfolio management

In P&G’s Cosmetics business, portfolio management, a third element of the Initiatives Diamond, was next employed to enable management to look at its entire portfolio of new product initiatives, and secure the right balance and mix. Through portfolio management, the business built a pipeline of new and improved products that established the needed initiative rhythm for each product line (face, lips, eyes). New products and upgrades in each product line created news and excitement in the market. This “launch and sustain” portfolio approach was a key part of winning in the marketplace.

Best performers like P&G have an efficient portfolio management system that helps the business leadership team effectively allocate resources to the right areas and projects. P&G splits this resource commitment facet of the diamond into two parts: project selection and resource planning. The company relies primarily on success criteria as part of the SIMPL™ process to help make better go/kill decisions on projects, as noted above. In addition, a number of P&G businesses have developed screening tools using scorecard methods for early decisions and for the selection of ideas to enter the SIMPL™ process.

When it comes to resource planning for projects in the portfolio, P&G’s methods vary depending on the nature of the business. Many P&G businesses utilize a resource profiling approach to resource planning. The resource profiling method helps to assess future project resource needs based on learning from past projects, and it anticipates peak resource periods of time. This approach enables businesses, such as Fabric Care, to improve the overall portfolio decision process by allocating scarce resources to the highest priority projects globally.

The most technically complex, resource-intensive businesses use purchased resource management software. These software tools look at people available versus requirements for specific tasks on individual projects to focus on near-term resource constraints. P&G’s deliberate approach to portfolio management and resource planning (the resource facet of the diamond) has had a strong positive impact, according to Martin Riant, President of Baby and Adult Care and formerly President of P&G’s Global Feminine Care and Antiperspirants/ Deodorants business. Using the diamond has had a remarkable effect on our business results. It has forced a much higher level of discipline in how we allocate our resources, how and when we make investment decisions and in accountability of projects to deliver what they promise,” he says. Driver #4—A positive climate and environment for innovation People, culture, and leadership make up the fourth driver of performance of the diamond (Exhibit 1). First, senior management must lead the innovation effort and be strongly committed to New Product Development.

This senior commitment is most evident at P&G where Chairman, President, and Chief Executive A. G.. Lafley, makes it clear, “Innovation is a prerequisite for sustained growth. No other path to profitable growth can be sustained over time. Without continual innovation, markets stagnate, products become commodities, and margins shrink,” he explains. A positive climate and culture for innovation and entrepreneurship, combined with effective cross-functional teams backed by strong management support and empowerment are fundamental to success. P&G has focused much effort here in recent years, which has helped it generate a step level improvement in results. The entire innovation effort, together with the Initiatives Diamond and SIMPL™ process, is sponsored and owned by both the commercial (sales and marketing) and technical (R&D and engineering) communities. An important step was the creation of Initiative Success Managers who report to each of the company’s business unit presidents. These Initiative Success Managers make the diamond and SIMPL™ work. QUESTIONNAIRE:

A small survey was carried out to find out the behaviour of cosmetic users. The survey was primarily designed to check on behavioural aspects of the users towards new innovative cosmetic products. The questionnaire is given below, followed by findings : NAME: GENDER: AGE: OCCUPATION: 1. Do you use cosmetics? • Yes • No 2. How much is your income per month? • Dependent • 35,000 3. How much do you spend on cosmetics per month? _______________ ( Do you agree with the following statements? Q4 –Q8 1-strongly agree 2-agree 3-neutral 4-disagree 5-strongly disagree ) 4.

I try new products 5. I switch brands if some other brand comes up with a better product 6. I often find gaps in my current product 7. I wait till I finish my current product till I buy another similar purpose product 8. I would rather reuse a good produce than try a new similar purpose product 9. Why do you switch products (tick all that are applicable) • Price • Packaging • Availability • Fragrance • Utility • Reviews 10. What kind of products do you use? • Herbal • Ayurvedic • Scientific • Any 11. On an average how long do you use a product before changing it? 8 weeks 12. How many times a year do you try a new product? • 10 13. How many times do you reuse a product before trying a new product? • 0-1 • 2-3 • 4-6 • >6 14. Does the range of products available in the market match your requirements? • Yes • No 15. When a new product with a new feature is launched , how soon do you try it? • Within 1st month • 2-3 months • 4-7 months • 8-12 months • >1 year 16. Compared to your current expenditure on cosmetics how much extra are you willing to spend on a new product with better feature/results? No extra money • 1-10% • 11-25% • 26-50% • >50% 17. On a scale of 1-5 , how important is the following feature in a cosmetic product, for you to buy it? Rank the options from 1-5 where : 1-Most important & 5- least important • Packaging • Fragrance • Reviews • New feature • Brand ambassador FINDINGS OF THE QUESTIONNAIRE: • The questionnaire was answered by 25 females and 10 males. • There were 20 from the age group of 30-35 years, 5 from age group 20-25 years and 10 from age group 25-30 years. About 70% of the respondents spend around 3% of their income on cosmetics per month. • 67% of the respondents try new products. [pic] • 63% of the respondents switch brands if some other brand comes up with a better product. • 80% of the respondents often find gaps in their current product inspite of the huge range of cosmetics available. [pic] • 34% of the respondents wait till they finish their current product till they buy another similar purpose product. • 27% of the respondents would rather reuse a good product than try a new similar purpose product. 87% of the respondents switch products due to better utility, 64% on the basis of reviews, 39% depending on availability, 30% depending on price, 12% depending on fragrance and 6% depending on fragrance. [pic] • 58% of the respondents use a product for 6-8 weeks before changing it. • 42% of the respondents try a new product 3-6 times a year. • 60% of the respondents reuse the same product only 2-3 times a year before trying a similar new product. • Despite the wide variety of products available in the market, 66% of the respondents feel that the products in the market do not match their requirements.

Maximum percentage of the respondents buys a new product with 2-6 months of its launch. • 6% of the respondents are willing to pay no extra money for a new product with better features, 15% of the respondents are willing to pay 1-10% extra money for a new product with better features, 33% of the respondents are willing to pay 11-25% extra money for a new product with better features, 25% of the respondents are willing to pay 26-50% extra money for a new product with better features & 21% of the respondents are willing to pay more than 50% extra money for a new product with better features. pic] • For 56% of the respondents a new feature in a cosmetic product motivates them into buying. All the above responses indicate towards the fact that customers are tempted to buy new, innovative, better products. REFERENCES : R. G. Cooper, S. J. Edgett & E. J. Kleinschmidt, New Product Development Best Practices Study: What Distinguishes the Top Performers, Houston: APQC (American Productivity & Quality Center), 2002; Robert G. Cooper, Michael S. Mills, Succeeding at New Products the P&G Way: Work the Innovation Diamond™,working paper no. 1, 2005 R. G. Cooper, S. J. Edgett & E. J. Kleinschmidt, Best Practices in Product Innovation: What Distinguishes Top Performers, Product Development Institute, 2003. R. G. Cooper, Product Leadership: Pathways to Profitable Innovation, 2nd edition. Reading, MA: Perseus Books, 2005. R. G. Cooper & E. J. Kleinschmidt, “Benchmarking firms’ new product performance and practices”, Engineering Management, 1995. John Hauser, Gerard J. Tellis, Abbie Griffin, Research on Innovation: A Review and Agenda for Marketing Science, 2006 M.

Mills, “Implementing a Stage-GateTM process at Procter & Gamble”, Association for Manufacturing Excellence International Conference, “Competing on the Global Stage”, Cincinnati, Ohio, October 2004. R. G. Cooper, Winning at New Products: Accelerating the Process from Idea to Launch, 3rd edition. Reading, Mass: Perseus Books, 2001. R. G. Cooper and S. J. Edgett, Product Innovation and Technology Strategy (Hamilton, ON: Product Development Institute, 2009). PDMA’s quarterly magazine for Product Development professionals, How P&G achieves such stellar NPD results, Insights into Innovation™, October 2005 Vol. XXIX No. 4,

Strengths

The US automobile industry includes the largest automakers in the world: General Motors Company as the largest and Ford Motor Company as the second largest (Davis, Kim, King, Larson, Redmond & Schick, 2008). Other than having the world’s largest industry players, the US automobile industry also has the world’s pioneering automobile companies. This undoubtedly gives the industry in US an edge over the same industry of other countries in terms of world market leadership and model designs.

Being among the battered industries, the US automobile industry has been rescued by the government with its bailout package.

This move serves to show the government support that the industry enjoys as well as the industry’s material role in the country’s economy. Indeed, the US automobile industry has become a mammoth industry that the government cannot allow to fail. Having enjoyed many years of economic growth and profitable operations, the industry players have become major contributors to the country’s total gross domestic product, gross national product, exports and employment rate.

Weaknesses

However, the same bailout package brings in consequences that would serve to limit the freedom of the automakers.

Hence, they would not anymore be free to launch new ventures or new products without government approval, which may take time to secure. Needless to say, the procedures and policies that bailout beneficiaries are now subject to would have a toll on its operations.

High fixed cost and constant Research &Development (Davis, Kim, King, Larson, Redmond & Schick, 2008) have been crippling most of the industry giants. This is among the reasons why despite the recent plunge in the demand for the industry’s products, the automakers were unable to easily switch to a lean mode of operations. Their overwhelming fixed costs eventually led the big players to cry for help.

The increasing bargaining power of buyers of customers, as well, is not helping them. Today’s customers have become more discerning (Davis, Kim, King, Larson, Redmond & Schick, 2008) in the light of the wider choice they have and the easier access to information that internet provides. This development constitutes a disadvantage for the US automobile industry – one that the players would have to deal with in the course of marketing their products.

Opportunities

The developed nature of the US automotive market provides a secure regulatory environment and protection for investors. Thus, the US automobile industry remains to be a lucrative investment hub for incoming industry players.

The public’s increasing consciousness regarding the need for clean environment triggers an increasing demand for cars with cleaner engine emissions. This serves as an avenue worth exploring, and most of the big players in the industry have already begun to tread along this new market lane.

Similarly, the increasing demand for vehicles powered by alternative sources like solar energy and electrical energy, as well as for cars with hybrid engines that require natural gas, ethanol, and vegetable oil ushers in additional opportunities for the US automobile industry players.

Simplification and communization, two related aspects of Design For Assembly (DFA) thinking, will provide the automakers a beneficial leverage by improving the productivity ratings of the auto manufacturers. (Find Articles website, 2008) These are operational innovations that are worth exploring for improved profitability of the industry players.

Threats

Recession and all its consequences like the reported decline in personal consumption from 4. 5% to 2. 9% (Davis, Kim, King, Larson, Redmond & Schick, 2008) paint a gloomy picture of the industry’s performance in the current year and the succeeding ones. Following a 2. 6% contraction in 2007, the US new vehicle market is going through a further slump this year. Sales from January to June 2008 decreased by 10% year-on-year, and analysts predict that the market will see no recovery until 2009. This view is bolstered by the fact that vehicle financing service providers are among the sectors badly hit by the credit crunch. (Bharatbook website)

Then there is the huge competition provided by the Japanese automakers (Davis, Kim, King, Larson, Redmond & Schick, 2008). Indeed, this constitutes a considerable threat for the US automobile industry, especially in light of the fact that it has no space for new entrants. Because there is a small demand base and wide choice available in the market (Davis, Kim, King, Larson, Redmond & Schick, 2008), the US automobile industry would turn out to be a real crowded arena if a new big player of foreign origin decides to embark on an expansion phase with US as the site in mind.

Also interesting US economy SWOT analysis

References

1. Find Articles. (2008). Assembly Plants: how they compare – Harbour Report on automobile assembly plant productivity. Retrieved December 22, 2008 from http://findarticles. com/p/articles/mi_m0FWH/is_n8_v109/ai_20855370/print.
2. Davis, M. , Kim, C. , King, A. , Larson, B. , Redmond, S. & Schick, A. (2008). Automobile Industry. Retrieved December 22, 2008 from http://www. authorstream. com/ Presentation/Goldye-61152-mobilanalysis-Automobile-Industry-Analysis-Major- Strengths-Ford-Motor-Company-a-Business-Finance-ppt-powerpoint/.
3. Bharat Book Bureau. (2008). Automotives Report United States. Retrieved December 22, 2008 from http://www. bharatbook. com/Market-Research-Reports/Automotives-Report-United- States. html.

Industry analysis

Indian tea industry

The tea industry in India is about 170 years old. It occupies an important place and plays a very useful part in the national economy. Robert Bruce in 1823 discovered tea plants growing wild in upper Brahmaputra Valley. In 1838 the first Indian tea from Assam was sent to United Kingdom for public sale. Thereafter, it was extended to other parts of the country between 50’s and 60’s of the last century. However, owing to certain specific soil and climatic requirements its cultivation was confined to only certain parts of the country.

Tea plantations in India are mainly located in rural hills and backward areas of North-eastern and Southern States. Major tea growing areas of the country are concentrated in Assam, West Bengal, Tamil Nadu and Kerala. The other areas where tea is grown to a small extent are Karnataka, Tripura, Himachal Pradesh, Uttaranchal, Arunachal Pradesh, Manipur, Sikkim, Nagaland, Meghalaya, Mizoram, Bihar and Orissa. Unlike most other tea producing and exporting countries, India has dual manufacturing base. India produces both CTC and Orthodox teas in addition to green tea.

The weightage lies with the former due to domestic consumers’ preference. Orthodox tea production is balanced basically with the export demand. Production of green tea in India is small. The competitors to India in tea export are Sri Lanka, Kenya, China, Indonesia and Vietnam. Tea is an agro-based commodity and is subjected to vagaries of nature. Despite adverse agro climatic condition experienced in tea growing areas in many years, Indian Tea Plantation Industry is able to maintain substantial growth in relation to volume of Indian tea production during the last one decade.

There has been a dramatic tilt in tea disposal in favour of domestic market since fifties. While at the time of Independence only 79 M. Kgs or about 31% of total production of 255 M. Kgs of tea was retained for internal consumption, in 2006 as much as 771 M. Kgs or about 81% of total production of 956 M. Kgs of tea went for domestic consumption. Such a massive increase in domestic consumption has been due to increase in population, greater urbanisation, increase in income and standard of living etc.

Indian tea export has been an important foreign exchange earner for the country. There was an inherent growth in export earnings from tea over the years. Till 70s’, UK was the major buyer of Indian tea Since 80s’ USSR became the largest buyer of Indian tea due to existence of the trade agreement between India and erstwhile USSR. USSR happened to be the major buyer of Indian tea accounting for more than 50% of the total Indian export till 1991. However, with the disintegration of USSR and abolition of Central Buying Mechanism, Indian tea exports suffered a set back from 1992-93.

However, Indian Tea exports to Russia/CIS countries recovered from the setback since 1993 under Rupee Debt Repayment Route facilities as also due to long term agreement on tea entered into between Russia and India. Depressed scenario again started since 2001 due to change in consumption pattern, i. e. switch over from CTC to Orthodox as per consumer preference and thus India has lost the Russian market. Another reason for decline in export of Indian tea to Russia is offering of teas at lower prices by China, South Asian countries like Indonesia and Vietnam.

The major competitive countries in tea in the world are Sri Lanka, Kenya, China and Indonesia. China is the major producer of green tea while Sri Lanka and Indonesia are producing mainly orthodox varieties of tea. Kenya is basically a CTC tea producing country. While India is facing competition from Sri Lanka and Indonesia with regard to export of orthodox teas and from China with regard to green tea export, it is facing competition from Kenya and from other African countries in exporting CTC teas.

Because of absence of large domestic base and due to comparatively small range of exportable items, Sri Lanka and Kenya have an edge over India to offload their teas in any international markets. This is one of the reasons of higher volume of export by Sri Lanka and Kenya compared to India. Another important point is that, U. K has substantial interest in tea cultivation in Kenya. Most of the sterling companies, after Indianisation due to implementation of FERA Act started tea cultivation in Kenya. So, it makes business sense for U. K. to buy tea from Kenya and Kenya became the largest supplier of tea to U. K.

Tea is an essential item of domestic consumption and is the major beverage in India. Tea is also considered as the cheapest beverage amongst the beverages available in India. Tea Industry provides gainful direct employment to more than a million workers mainly drawn from the backward and socially weaker section of the society. It is also a substantial foreign exchange earner and provides sizeable amount of revenue to the State and Central Exchequer. The total turnover of the Indian tea industry is in the vicinity of Rs. 8000 Crs. Presently, Indian tea industry is having

• 1655 registered Tea Manufacturers,
• 2008 registered Tea Exporters,
• 5148 number of registered tea buyers,
• Nine tea Auction centres

The Indian tea industry is witnessing a strong revival of fortunes with exports rising and domestic consumption gearing up. The industry saw an impressive 8. 8 percent increase in average tea auction prices in the five months ended August 2004. The tea industry is one of the oldest organized industries in India with a large network of tea producers, retailers, distributors, auctioneers, exporters and packers. Tea is grown in more than 32 countries among which India is the largest producer.

The industry provides direct employment to more than a million workers of which a sizeable number are women. More than two million people derive their livelihood from ancillary activities associated with production, value addition and marketing of tea. The tea trade is a major contributor to the country’s economy. Substantial foreign exchange earnings with negligible import content, contribution to the State and Central exchequers, preserving a pollution free biosphere and soil conversation are some of the important features of the tea industry.

Tea Exports increase Due to global supply imbalance, tea exports from India during the Jan- Aug 2004, period increased to 107. 7 million kg against 92. 4 million kg in the corresponding period last year. However, the average price realizations dropped to Rs 83. 20 per kg in 2004 from Rs 100. 51 per kg in 2003. The rise in export volumes has been boosted by higher demand from Pakistan, Iran, Iraq and other gulf countries.

The unconventional destinations like Japan, Germany, Singapore, Australia, USA and Canada have emerged as potential destinations in recent months where Indian tea is being exported in greater volumes and has recorded 88 percent growth in the first five months of calendar year. The all-India average export realization tumbled drastically by 17. 2 percent to Rs 83. 20 per kg in the five months ended August 2004, from Rs 100. 51 per kg in the corresponding previous period. The fall in the average export realization was relatively modest at 5 percent to Rs 118. 8 per kg in north India, while it was steeper at 16. percent to Rs 58. 61 per kg in south India. Even as exports rose, imports too, jumped sharply. There was a 225 percent increase in tea imports to 17. 83 mn kg in the five months ended August 2004 compared to 5. 47 mn kg in the corresponding period last year. Tea is indigenous to India and is an area where the country can take a lot of pride. This is mainly because of its pre-eminence as a foreign exchange earner and its contributions to the country’s GNP. In all aspects of tea production, consumption and export, India has emerged to be the world leader, mainly because it accounts for 31% of global production.

It is perhaps the only industry where India has retained its leadership over the last 150 years. Tea production in India has a very interesting history to it. The range of tea offered by India – from the original Orthodox to CTC and Green Tea, from the aroma and flavour of Darjeeling Tea to the strong Assam and Nilgiri Tea- remains unparalleled in the world. Tea trading in the domestic market is done in two ways- Auction and Private Selling. Market Reports are received from the six major auction centres in India, namely, Calcutta, Guwahati, Siliguri, Cochin, Coimbatore.

PEST analysis globally

Political Factors

The UK Government supports the fair trading commitment for both the local consumers and foreign producers (News BBC, 2005). This is observed by a requirement on labeling that a stamp of “Fairtrade” must be included in the products for consumer reference. This is a way to give the buyers a chance to patronize those companies that are producing tea responsibly. However, this also shows that the UK Government do not have strict policies on fair trade.

Due to this, the recent calls of Indian workers for the UK Government to act against Unilever due to unfair trade acts and the inability of the latter to act speedily on the matter have adverse consequences on future exporters. If big and global companies such as Unilever continue to rip profits un-scaled with the source plantation abroad, the competitiveness of new entrants would be reduced. For example, Unilever can engage to price wars as well as incur substantial growth funds. To address this scenario, prospective exporters are expected to create a niche market to go away with direct competition with large companies.

In 2004, the calls of EU Commission against the UK Government to implement the “tea break” law concretized the significant role of tea in the country as well as the Union as a whole (BBC News, 2005). In contrast but in support to the increasing importance of tea in the UK, the Government used the gesture of providing free to all British to motivate them to go to the cherished Millennium Dome. Also, tea giving is also used to foster cohesion among British especially in 2005 where terrorist attacks plague the country (Watley Website).

Throughout the UK political history since the introduction of tea in Britain by Catherine of Braganza and rationing of tea to UK soldiers of First World War, tea played a major role in government affairs. Thus, it can be concluded that the approach of the Government to tea imports are positive. However, there is still a question of protecting their local producers. Specifically, imports will only be allowed if local production is under shortage or if the country cannot get the internal benefits greater the cost of doing business with foreign tea manufacturers (Tea Website).

In contrast, there are similar adverse actions that the Government imposed on tea campaigns (BBC News, 2007). For example, the Advertising Standards Authority apprehended the UK Tea Council, for dis-informing the market about the benefits of tea. Even though the Council cited several papers to prove that the press release is facts, the Authority argued the lack of substantial evidence. More importantly, the Authority wanted the council to avoid making ill-supported ads that may run counter to the health policies of the Government. Due to this, it can be said that the Government does not have a firm stand about the health benefits of tea.

In effect, future ads to increase the market for tea may have weaker impact to consumers due to absence of full government support. However, as history suggests which includes events dated back as far as Opium Wars, UK Government places a substantial importance in tea trade. But the role of exporters such as Chinese merchants fell as UK have established its own tea fields in UK areas such as Cornwall.

Economic Factors

Comparing the UK tea prices of today and 1977 figures, supermarkets are selling tea bags much cheaper compared to several decades ago (Telegraph Website).

This is a good opportunity for exporters because the natural resources as well as cheap labor in their home countries can be used to engage in price competition in the UK. However, there is a pitfall. This is true when the price of exported teas is so low that the operations of the exporters are in jeopardy once the market continuously put pressure on tea prices. There are several risk factors that influence of price reduction in of UK tea which can include competitive policies of retailers to as far as the weak US dollar.

Due to this environment, exporters might not have much incentive in selling in the UK given that there are trade constraints and disincentives coupled with heavy competition. Ultimately, exporters have to battle with volume rather than quality. In contrast, there is an advantage of exporters who can offer innovative products. In this way, the market will not rely on price factors to affect their decisions rather to the qualities of tea products which is also the source of loyalty. There are numerous characteristics of UK that makes it an attractive destination for exporter goods.

Being the second largest economy in Europe, UK is also one of the most globalized advanced economies the world (UK Statistics). There is an opportunity for exporters to exploit the inclusion of UK in the EU and the latter influence in the trade agreements of the former. When this is enforced, entry to UK market may serve as a window of opportunity to infiltrate EU state members. Free market is also the main framework of UK institutions which limits the influence of UK in trades. According to National Statistics, UK also has low inflation, unemployment and interest rates and ranked one of the most superior economies in the region.

With this in mind, exporters can easily attached bulk of positive issues to the production, start-up and marketing environment in the country. In the contrary, UK still has problems in reducing income inequality. Although not a good sign in aggregate, exporters can use niche marketing to exploit this bottleneck. Competition, thus, is reduced when direct rivalry is spread over the income boundaries of the people. With respect to some concepts on tea business, influx of tea exports can reduce the capacities of monopolist but this can result to intense rivalry (Market Trade Fair).

Thus, exporters can reduce the competitiveness of local producers. With cheaper labor and known abundant natural resources in developing countries, UK tea industry may not have the ability to coupe with them. Further, switching costs of tea products are low which makes customers have the higher bargaining especially in terms of price and quality. Considering this, exporters that have the upper hand in bringing broader variety of teas compared to local producers. With Asian touch to the products, the market may also feel that exports have higher nutritional value than local counterparts.

However, there is a very high risk of failure in the industry especially if the location is UK. Profits margins are low, fixed assets are high, inventory are perishable and local producers may have been embedded. This is to exclude adverse corporate responsibility that may result to low margin such as the example of Unilever criticized approach in Indian tea farms.

Social Factors

It is internationally claimed that tea is the second most popular drink after water (Rico Magda Research, 2006). There are at least 800 million cups of tea that are consumed in a global scale.

Of this figure, UK is the country that has the highest share per capita on a daily basis. Without demographic restrictions on the market regarding their preference of tea (i. e. at all ages), the UK tea market loomed to at half a billion value with everyday demand of tea at 160 million cups. According to Mintel Report, green tea is preferred by the market apart from red and black variants of tea because of green tea’s relatively higher pleasurable taste and health benefits. As the country is on the peak of its becoming a cafe society culture (Elopak Website), numerous tea-makers all over the world saw opportunity of this trend.

Not only is the basic qualities tea encouraging UK market to buy them. As a matter of fact, several new entrants that introduced different varieties and innovations on tea products are also becoming successful. Specialty teas such as those with spicy flavors are widely-accepted. The UK market continues to support tea-makers and retailers as long as they are able to address the health, safety and taste needs while innovation serves as a good foundation to introduce new products. If accepted, these innovations can make a demand shift from ordinary tea features to creative ones. Another illustration is the changing lifestyle of the UK market.

The preceding features can also be successful if they are able to make tea as a representation of the one’s consuming them. This is when stylish tea from niche players became critical. Thus, the growth in of tea industry in the UK is expected to be at least 7%. Delving to other health products, UK’s consumption of oatmeal including porridge from 2003 to 2005 significantly increased at least 20% (Baker Website). This indicated that the health consciousness of consumers have revived several years ago. The interesting part is the large part of UK consumption of these products is sourced from cafes shops similar to teas.

Convenience in eating as well as provision for healthy diet is two of the primary motivation of the consumer of their increased support. Parallel to iced tea, the positioning of cold cereal market is good with annual increase of at least 10%. This means that the typical intake of healthy products is changing (Food Quality News). With the aid of governmental information efforts, more UK people are developing the habit of evaluating the nutritional content of each product label before actual purchase. This improvement is an extension of 2000 shifts on health beliefs of the population.

There are many benefits of tea from the Asian tests and experiences that are not yet as many as UK (Info Cancer Website). In fact, there are minimal UK studies to confirm that Asian evidence of cancer-minimizing capabilities of green tea. However, the UK market as well as some UK analyst has concluded that the Asian benefits are yet to be acquired by the country simply because the former is relatively consuming less quantities of tea. On the other hand, there are UK laboratory test that observed that tea has higher caffeine content than regular cola, energy drinks and chocolate.

Caffeine is a substance that has positive effects to people such as increased alertness, treatment of asthma and aids blood flow. To be in safe levels of consumption, a person should not exceed 6 cups of tea in a day. Finally, increase caffeine consumption would lead to inability to sleep, nervousness and frequent palpitation of the heart (Tea Website). There are also studies that showed increased risk of bone illnesses such as osteoporosis and adverse effects on pregnancy if caffeine intake is not regulated. Technological Factors

In European standards, UK agricultural production and its level of technology is efficient and highly-automized. As illustration, only 2% of its labor is in required to support sixty percent of its agricultural sector (Nutri-Ingredients). However, the list of main agricultural outputs of the country excludes tea. This is because that tea is abundant and typical to Asian regions. There are private companies such as Unilever that are able to re-produce tea in the UK. But this is generally limited in variety and in texture.

For example, in 2003, White tea became a successful product introduction in the UK because it is an exotic plant to the consumers. Obviously, the advantage of producing and selling exotic teas in the UK is that it is a good hedge in any technological advancements and efficiency in production of developed countries. Also, medicinal value is believed to be redeemed for products that do not undergo intensive technological application. To this part, exporters would be encouraged to enter and compete the UK market because what they are offering are unique products.

Historically, unique products have the ability to run against market trends (e. g. avoidance of lower prices). UK is one of those developed economies that maintained the role of agriculture in the economy despite radical shift of sectors towards service and manufacturing industries (IATC Website). In fact, the country is one of the leading nations that produce safe and efficient harvests. The quality of UK’s products is reflected in its consumer protection against low quality and sometimes foreign foods. This can be a source of weakness against tea products from developing countries.

The good issues are that China is a close trading partner of UK. The topography of UK includes fertile farmlands, favorable climate, pioneering breeding practices and application of science. However, these features may as well highlight the competitive advantage of Asian tea which is deriving in traditional, religious and cultural uniqueness. Even if some varieties of Asia teas are being able to be re-produced and propagated in UK, the impressions of healthy and effective may not be synonymous to all UK customers.

Conclusion

The PEST analysis above showed that Chinese tea exporters have a good opportunity in the UK market. The tea sector in the country has variety of advantages against exporters. This includes regulatory compatibility, consumer familiarity, efficient production practices, arable lands and high purchasing power of the people. On the contrary, Chinese exports have also its advantages such as traditional approach to production, unique land setting, embeddedness of tea as cultural medicine, competitive prices and a new look to tea products.

The last feature and the health value Chinese tea exports would be the most critical factors for today’s slowing tea sector. To address this issue, iced tea is the answer. This will defeat UK-based products especially if the Chinese exporter can offer cold and unique recipe of tea. Specifically, the ability of its product to be preferred by customers as hot or cold can be an indispensible characteristic to increase its market share abruptly. Silver Step Exports is a trading and packaging company that specializes in high quality.

With a wide variety of product to offer SSE enjoys a premium segment of customers to which it caters with best quality product. Strengths at a glance:

• Superior quality
• Best prices
• Standardized product
• Total quality management programs
• Flexibility and adaptability
• Innovation

Organizations operate in an economic and social environment which are to be taken care of by the organization itself, weakness Is not merely due to one specific factor but aggregate of many , Main weakness lies in, is of inventory a wide variety of tea are available in the market keeping all the stock ready at one point of time is sometimes risky as thw quality may detoriate over a period of time. Hence, piling up inventories is sometimes a problem for the organization.

Tea is an incredibly ancient beverage. For thousands of years leaves have fallen into the cups of great rulers, philosophers and spiritual leaders. Man has learned the way of the leaf. We have made this revered beverage a central part of almost every world culture.

Can there be anything new to add? It’s a question I ponder every year. And, at the beginning of every year here I sit at the computer like a cartoon figure with an angel on one shoulder and a tiny devil on the other, a victim of my own conflicting opinions.

Despite the fact that tea is the most traditional and affordable beverage in India – and probably because of as well – it is perceived as being old fashioned and less functional than some substitute products. With increasing delicacy it is difficult to retain customers for using quality products as the duplicate products are of cheaper quality and therefore are available for low prices Increasing local players. Duplicacy Cheap quality at lower prices General competition level Consumer taste and preferences.

Business model

Marketing plan & its strategies makes product race incompetitive situation and executes brand image, which givesloyal customers to the company. It helps the product to make its independent identity offer diverse brands after taking local tastes into account. Our products vary in terms of blend, pricing and packaging formats to cater to the unique needs of each segment. Strategy is to invest in long-term brand building for sustained growth.

• Strengthen our business in existing geographies
• Expansion into new geographies New product development and building business in – Black Tea – Fruit and Herbal Infusions – Ready to Drink Teas – Out of home
• Building operational capability to enable the commercial business to achieve growth
• Management Strength Increase market share
• Generate brand awareness within consumer target market and business target market
• The road ahead promises plenty

Conclusion

The road ahead promises plenty. Tea market has a very wide potential to grow with wide variety of tea available and increasing demand of tea worldwide, Tea Trade has emerged as a new dimension of trade to the world with ever increasing rise in consumption of tea it has opened a wide new markets to explore and cater to their demand. Besides the domestic consumption a surplus is found to exist in the end which can be used to cater demand of other countries so that

This report is part of my HAND Events Management Course. 1- Definition of events- Give a full definition of the term ‘events’; giving one definition that incorporates an expert’s opinion.. (Also give your own definition of events and relate it to an event you know of or have been to)- Donald Get states “An event can be a planned social or public event organized by a group of people who share a common interest. ” In other words, it’s “An opportunity for leisure, social or cultural experiences outside of the normal range of choices or beyond everyday experience”. 2- Types of events and components-

A mega event means that it has a fixed number of a million, it’s a large-scale event aimed at a large global audience, London 2012 Olympics are a perfect example. Components of London 2012 are Primarily Online ticket sales as many spectators were from outside of the I-J. The games would not have been possible without the huge help from volunteers coming from all over London, helping steward spectators & more. The Olympics is host to thousands of professional athletes from all over the world, all representing their home country in their chosen sport whether it be in the LOL, track or field.

The Olympics is often remembered for it’s breath taking opening and closing ceremonies, often attempting to break world records as well as attract as many big name celebrities as they can. Whereas a hallmark event is specifically a cultural or sporting event, with it’s main goal being to bring tourism and awareness to the host destination. The Edinburgh Fringe Festival is characterized as hallmark event. You would expect to see all sorts of performers from all over the globe, including actors, musicians, singers, Events Industry an Introduction FWIW

By biblical predominantly online however box office tickets often go for higher prices due to the accessibility and their central location. Security and steward numbers will be at an all time high in the city centre due to the large increase of tourists, fringe acts and general busyness. The amount of visual promotion throughout the city increases as banners, flyers, posters and stickers are decorating the town trying to promote their show. Student promoters are situated throughout all of the busiest areas in attempt to sell tickets to their chosen show. On the other hand

I hold a copy of this assignment if the original is lost or damaged. I hereby certify that no part of this assignment or product has been copied from any other student’s work or from any other source except where due acknowledgement is made in the assignment. No part of the assignment/product has been written/produced for me by any other person except where collaboration has been authorized by the subject lecturer/tutor concerned. I am aware that this work may be reproduced and submitted to plagiarism detection software programs for the purpose of detecting possible plagiarism (which may

I am aware that the plagiarism detection software programs are not the only means that will be used to detect plagiarism (I. E. Having a zero report may still result in plagiarism). Signature: Note: An examiner or lecturer/tutor has the right to not mark this assignment if the above declaration has not been signed. ESSAY Assessment question Evaluate business conduct in the mining industry using three ethical principles of the Global Business Standards Codex.

Type your essay below: The business conduct in the mining industry is relatively poor because most of their activities violate the principles of the global business standards codex. Examples of these activities include using violence and the misuse of political power which violates the dignity and citizenship principle respectively. On the contrary, some businesses in the mining industry have proven to conduct business in conjunction with global standard codex. Activities such as decision making to maximize profits by mining project managers could be perceived in favor of the fiduciary principle.

This essay will evaluate the business conduct within the mining industry using the dignity, thespians and fiduciary principle of the global business standard codex. Some mining companies hold no respect for the dignity of people in regards to their health and safety. This reflects poor business conduct as it infringes the dignity principle. The Dignity Principle in the Global Business Standard codex promotes that companies should have protect all people in regards to their health and safety and disclose the use of child labor(Paine et al 2005).

While human rights are important there are no internationally enforced laws (Siegel 2013). It is evident that gold mining impasses have taken advantage of this; by forcing the people living in the villages of Askance in West Africa at gunpoint to leave their homes and lands for gold mining; and using children aged eight above to participate in mining labor (Siegel 2013). Mining companies should refrain from the use of child labor directly or indirectly, while compensation should be made to families who have lost their home.

Using principle which clearly indicates poor business conduct in the mining industry. Mining Companies that operate globally have substantial wealth; a great influence upon government and politics (Northwest 2012). Using wealth to influence the government reproduces poor business conduct as it violates the citizenship principle. One of many key points in the citizenship principle is do not participate improper involvement in politics and government (Paine et al 2005).

A recognizable solution which acts in best interest for the community and workers is introducing government regulations (Campbell 2012). While this proves to be an effective possible solution, many mining corporations have empowerment over politics through wealth (Northwest 2012). Companies are able to purchase political power through funding elections of politicians; as a result there is minor chance for environmental regulations to be introduced (Northwest 2012). Mining companies should not use their wealth to gain influences among government to help sustain their businesses.

Many industrialists in the gilded age were on the border line between a robber baron or a captain of industry. Of these industrialists was an extremely success useful business man Andrew Carnegie. Andrew could be argued on both sides of the matter. Carnegie shaped his steel production business to #1 in the world, he sold it a ND used the money towards many charity organizations.

I believe that Andrew Carnegie e was a captain of industry because he dedicated his life to helping society with public activities and donated more than 100 million dollars to schools, libraries, an d through several other donations. He not only shaped industrialization but the United s tastes. People believe that Andrew Carnegie was a robber baron because he was untrustworthy, selfish, and left workers in lethal work habitats with low wages .

Andrew put his employees in harmful work environments with less than safe equipment NT. Injuries occurred often in Carnegie;s business from exploding iron, flames, and slang. It was hard for the workers to be alert and ready with only a couple hours of sleep and a work SSH fit of twelve. Along with the means unsafe work conditions they had to live off low pay. Carnegie also betrayed one of his closest business friends Henry Fricke by three tatting him to sell his stock in the steel business for cheap.

Many believe that Andrew Carnegie betrayed not only his workers but his friends. Although many will strongly critic Andrew Carnegie as a Robber Baron see h as one of the greatest captains Of industry. Carnegie used his “last days” serve Eng others by building libraries, schools, and giving donations. “Carnegie donated approve imitate 5$ million to the new York public library so it could open several branches”. And even opened up his own university so he could share his knowledge and success the rough future business owners.

Carnegie put his men through hell and back so they c loud have the #1 steel business in the world that would soon sell for more than 200 mill Andrew Carnegie did what he had to do so that he could be successful in the gilded age and lose himself in the service of others. Carnegie changed his life for the beet err in his later years. He wrote books on being socially responsible for the wealthy and enjoyed meeting with other professionals from different fields. Carnegie may have lo deed like just another snotty,cocky business owner but really wanted to help others.

An drew Carnegie was a captain of industry but also a shaped the industrialization by b Ewing an example of smart work and effective actions. In conclusion, Andrew Carnegie was a brilliant business man who ended with the best steel plant in the world. Although he treated his employees poorly he did it to be successful which worked. Carnegie spent the money from his steel production n to help others be successful too. Andrew Carnegie was captain Of industry and made a difference in peoples lives for the better.