Market

The sac’s Model is a strategic look at the factors needed for success. T was developed by Chicken Omaha. The sac’s model points out that a strategist should focus on three key factors for success. Len the construction of a business strategy,three main players must be taken into account: The Corporation: A medium sized company but efficiency is not one of its strengths. Let has quite a high cost structure. This is not a major problem though,as it sells its premium bottled beers at premium prices,”off-trade” via supermarkets and “on trade” through fashionable,up-market city centre bars.

The products comprise of Hostellers European style lager beer,San Bernard. Camelot. British style dark bitter beer,Ark Royal. British style dark bitter beer Pot of Gold. Loris style dark stout beer This essay is an example of a student’s work Disclaimer This essay has been submitted to us by a student in order to help you with your studies. This is not an example of the work written by our professional essay writers. The Customer: China is undoubtedly the largest consumer market in the world.

A land that promises huge potential and broad prospects,many companies have succumbed to the seduction of the Chinese marketplace and have set foot in the country. Due to the here geographical size of the Chinese territory and the differing rates of growth,the level of economic and social development in various regions varies significantly. The Competitors: In China Competition to serve consumer needs is intense; multinational companies are battling one another and also taking on increasingly sophisticated Chinese players. En of the bigger issues facing multinational companies in China is their ability to serve the mass market cost-effectively-”an important advantage of the local competitors. Bud light beer has been enjoying the lead market share. Various leading layers includes CAB Brewing Company Inc. ; China Food and Beverage Company; China Resources Enterprises,Ltd. (CREE) ; Adagio/Guinness; Ordering; Group Model AS De ICY, Foment IconГ¶mice Mexicans AS De C.V., Fijian Yanking Haiku Brewing (Group) Inc. ; Heinlein NV; Interbred (Ellen); Shrink Brewery Company Ltd; Alcohol Change Beer Co. Ltd. ; Lion Nathan; Planner Barrier Gumbo & Company KEG; San Miguel Corporation; Shapiro Breweries Ltd. ; Scottish & Newcastle; Shanghai Shenanigans; Country Ltd; Toasting Brewery Company Ltd; and Gabrielle PL San Miguel is one of the top three selling brands of beer in Asia and the largest selling Chinese Beer Market Competitor Analysis By Jag-Kong world’s second largest brewer owns 47 breweries in 13 provinces in China and sells Snow brand beer nationwide. Len 2004,Gabrielle purchased three unprofitable breweries in China from Australia’s Lion Nathan for $71 million.

Scrabbles has been producing beer in China since 1991 . Len 2003 it purchased Dali beer,the largest brewer Yuan,and took over Gumming Hash Brewery. Heinlein also has a stake in a large Chinese beer producer. Market Opportunities & Threats in China: The Chinese market offers great business opportunities due to its rapid economic Roth and huge market; however,it has its fair share of challenges,ranging from inadequate market data,inappropriate entry strategy,lack of access to sales channels,difficulty in finding the right partners and cultural differences etc.

Companies have to consider the gap between the developed and less developed markets,where a uniform marketing strategy is not feasible,considering the large scale of the Chinese market. The beer market in China is not national- it is an aggregation of local markets with each region having specific tastes,preferences and spending pattern. As a result of the localized nature of the beer market,small regional breweries dominate these fragmented markets. These regional local brands have a nationwide market share of less than 2%.

The Chinese beer market is still a fragmented market with the top four breweries in China controlling only 45% of the total market share. China Resources Snow Breweries is the top brewery in China,with an estimated nationwide market share of 15% in 2006,followed by Toasting at 13%,Yanking at 10% and Ellen at 7%. Beer Market scenario in China: The Chinese beer market has grown at an astounding pace in recent years,spurred n by the massive levels of foreign investment in the market,along with the rise in the average levels of consumer spending in China,in view of the economic reform policies of the government.

China has now overtaken the US to become the largest national beer market in the world. In 1994 only four foreign beer companies had invested in China. In 1999,there were more than 60. The Chinese operation remains unprofitable. Year Million Liters Annual Growth (%) 2007 3203583 10. 04 2008 33459. 42 4. 44 2009 34 904. 69 4. 32 36,371. 42 4. 20 2011 37. 860. 59 4. 09 . But new research by the McKinney Global Institute (MGM’) highlights the emergence of a far larger,more complex segment-”the urban middle class,who’s spending power,will soon redefine the Chinese market.

The lure of China’s urban-affluent segment is easy to understand. These consumers earn more than 100,000 remind (about $12,500) a year and command 500 billion remind-”nearly 10 percent of urban disposable income-”despite accounting for Just 1 percent of the total population. Although China is the world’s largest consumer of beer in terms of volume,it is still under-penetrated cause its per capita consumption is still the lowest when compared to the US and European countries. This offers tremendous growth opportunities for the large breweries operating in China.

China total population trends and growth China is the world’s most densely populated country and makes up of one-fifth of the world’s population. Let has a total population of 1321 million as at 31 Deck 2007 with 51. 50% Males and 48. 50% of Females. Her population is nearly five times more than United States even though both have about the same geographic area. China’s rate of population growth has slowed significantly. The country’s population of 1. 3 billion in the early asses is projected to grow by another 100 million by 2050. T is forecasted that India with its higher fertility levels will take over China to become the most populous country by 2035. This essay is an example of a student’s work Understand the risk of entering China market China is a good opportunity for companies to embark on if they want to expand their business in Asia and the world around. However,Seems (small and medium enterprises) like Eire Valley Breweries Pl,may be worried that they do not have the required or enough resources to enter into China market. However,it is not Just about having the capital but applying the correct approach when doing business in China.

A number of foreign companies do not have a good network in China and thus they are unable to find relevant or reliable business partners in China market and meet a lot bureaucratic problems as they are unfamiliar with the laws of China. Cultural Aspects of Chinese Consumers: The Chinese consumers have a very strong national pride and they like to be associated with their nationality and country. Hence,the Chinese consumers are very supportive of their local products. Hence,foreign investors sometimes have a hard mime trying to market their products to the Chinese consumers because their products may seem too unfamiliar and foreign.

Foreign companies need to familiarize themselves with the China market laws and culture before entering it. Law at China: foreign companies are familiar with the Chinese culture,they will be able to understand the Chinese laws better. Eliminating with the locals would also allow a deeper understanding of the Chinese culture. Let is advocate to undertake a local company as a partner to help them with the registration process and negotiation with the Chinese. Geographical Segmentation: China is a complex market, varying widely from region to region. Ended,the country can be described as a collection of regional markets,with very few companies able to operate on a truly national level. The brewing industry has been one of those quickest to modernize in China,and can be seen as a yardstick upon which other industries in China will model themselves. Let may be good to follow a region-centric approach to cater the market Demographic Profile: China market is a complicated field by which only those who are familiar with the Chinese culture would be able to move around in the market. China is a multi- religious country.

Buddhism,Taoism,LULAS,Catholicism and Protestantism,with the first three being more wide spread. Many may not realize that China is a country whereby the Chinese are deal with business according to their social and cultural values. The Chinese have been passing down a set of values since history and the Chinese companies have been carrying out their business and trade according to those values and beliefs. Thus it takes more than Just being able to speak the language. To survive in the China market,one must have good relationships in the market. The

Chinese uses the term,”guan xi” to refer to any kind of relationships; personally or bureaucratically. Chinese companies tend to want to work with people whom they are familiar with as they would be able to develop a trust between them. Distribution of Population income wise: Population (million) Gross National Income (Billion) Low Income 2512 10. 20 Middle Income 2667 49. 22 High Income 955 Source: US census Bureau,World Bank group,McKinney analysis Marketing Mix: Product: China is largest beer market. Beer is most popular alcoholic beer in China. The consumption range between 500 ml to 750 ml.

Offered in cans and Bottles. Beer is often served warm. Beer consumption is still low on a per capita basis: about 18 liters a year,compared to 84 liters in the United States and 75 liters in western Europe. Since taste vary from region to region It is suggested to go with localized taste tastes,volume,bottle shapes,colors,packaging should be according to local preferences Price: The beer is generally pretty cheap,especially the local brands. A large bottle of beer can cost as little as 25 cents. Locally-made foreign brands such as Past Blue Label,Scrabbles and San Miguel are also fairly cheap.

Bottom line pricing is always preferable to penetrate the market. Cost-plus pricing assures that all costs,both fixed and variable,are covered and the desired profit percentage is attained Promotion: Advertising osmosis predominantly play vital role in fixing brand locus. This can be achieved through focusing the promotion strategy on one premium brand. We should ensure that most promotional activities are executed as per marketing plan by distributors. Distribution (place): Beer distribution in China from producers to distributors is via a set of distributors and wholesalers.

Beer producers vary in terms of ownership structure and size. Distributors are usually licensed by the beer producer. Distributors purchase beers from producers or other distributors and sell them to a number of wholesalers. Distributors can also act as wholesalers in order to directly sell products to retailers. Each distributor normally carries a single brand,though the distributor can carry many other non-competing beverages at the same time. Wholesalers procure products from multiple beer and other beverage distributors. The vast market makes foreign players to suffer from effective reach. N this case a local player who has net work of distribution will enhance the availability before aggressive promotion nation wide. N china Joint venture beer producers are Heinlein,Budweiser,Sandhog Yeoman and Sandhog Soaking. Long haul trucking is most often used that contributes to high transportation cost. However,it is faster and more reliable. But only those beer firms are likely to succeed which can strengthen their distribution network and sustain low profitability. Len the long term,increased scale could be the driving force behind increased market profitability.

A piggy back model will help in Distributor- retailer model of channel in getting quick access to market. Len china large retail formats like Supermarkets and hypermarkets and grocery torts do dispense the beer. Hence multi-channel mechanism would be preferable. Marketing Planning: Once the size of the market has been determined,the next step is to define the target market. The target market narrows down the total market by concentrating on segmentation factors that will determine the total addressable market the total number of users within the sphere of the business’s influence.

The segmentation factors can be geographic,customer attributes,or product-oriented. Beer brands should have sufficient support and restrictions forces over market management issues. While some beer producers do have formal product control within their organizations,they will have little control in aspects like products,prices,placements and promotions once the product is released to the market. Entry Strategy: It is always good to enter in to the Chinese market through a Joint venture. For many years,the Eire Valley Breweries Pl,a I-J company focused its marketing effort on premium-priced products.

China’s market for consumer goods is growing quickly,stimulated by a strong economy that is putting more disposable income into emphasizing on aspects such as advertising,product development and the arks,companies must also allocate more resources into channeling and distributing the products,such that the products are readily accessible to the consumer groups. While the distribution system is relatively efficient in the major cities where there is a high concentration of chain stores and departmental stores,the smaller cities generally have a poorly managed distribution chain.

While intensive advertising is one way to persuade potential consumers in major cities,a greater focus has to be placed on “push” marketing,to build up brand presence and product knowledge in the other cities. Conclusion: It is suggested an overall approach for marketing planning,returning the focus to product values,and devising several mechanisms for pricing,channeling,resources management and data management.

What are the lessons for other foreign companies operating in the same industry and also in other industries in China? Overview Challenges Foreign Firms face, Fragmented Industry Fierce Competition Nationwide Presence Cost Advantages Strategies Foreign Investment Enterprises have implemented strategies such as, Join-ventures with Chinese partners Investing equity in big Chinese breweries Acquisition of local breweries Current Beer Trends Premium Beer Trends Premium beer Constitutes 5% of Chinese beer market Projected to constitute 25% in 10 years time Are priced up to 50% more than regular beers

CRY Snow – prominent beer brand Snow Non-premium Beer Market Share Beer Trends Premium Beer Local brew sells for less than ARM per bottle. Foreign premium beer is popular among younger, educated, image conscious Chinese. But Beer is about national pride. Question 3: What strategies did SAAB adopt in China to Outperform other foreign brewers? Guiana Synonymous with networking; process of exchanging favors A major source of competitive advantage Example: SAAB – CRAB Joint Venture Saab’s utilization of Cry’s Guiana network Company Specific Advantages Saab’s success can be also attributed to Company history Company culture

Company experience (overseas) SAAB vs… Other FEES Other FEES faced barriers such as local protectionist policies distribution issues & licenses local knowledge & experience weather, geography, advertising Question 4: China? Why? What are the lessons for other foreign companies operating in the same industry and also in other industries in China? SAAB vs…

Late FIE entrants Late FIE entrant strategies mimicked aspects of SAAB entering strategic alliances investing in local brands building Greenfield sites Late FIE entrants ALSO introduced promotion of international brands as well as local brands woo tier marketing campaign Saab’s Strategic Response In response to the two tier system SAAB merged with Miller Brewing Company, a prominent global beer brand compliments SAAB, a producer of low end brand To Sustain its competitive advantage cultivation and deepening of existing Guiana networks have positive long term impacts Conclusion “Chinese have a very strong sense of home place… -Lie Guiro, chairman of Toasting Consumer has a preference for their local brew over foreign brews. Consumers are divided into 3 tiers: Economy, standard, premium Local beer- US$O. 85/L Foreign beer- priced 400-500% higher.

Ken Research Increasing popularity of mobile and social games to spur future growth New Delhi: 07/19/2013- The role of toys and games has transitioned from parenting to tools of child learning and development. Parents nowadays are pre occupied with their professional life and hence, the role of toys and games has become more important. Toys and games play a crucial part in child’s development and increasing their overall proficiency. This has helped in the growth of toys and games market in China.

Large variety of toys and games are available in China toys and games market presently. Construction and building toys and massively multi player online role playing games are the most popular categories of toys and games in China. China is a gigantic market for toys and games. It is the largest toys manufacturer in the world with approximately 80% of the toys exports in the world being exported from China. The key growth drivers of this market are small size of families, significantly rising population and a growing affluence of the Chinese people.

With the rising income bevels and improvement in the quality of life, the demand for toys among the Chinese people have transformed. There is a shift from traditional, battery-operated toys, construction sets and decorative toys towards unique and innovative electronic toys, intelligent and educational toys as well as plush toys and decorative fabric toys. The market is driven by established retails and more consumers with high disposable income in the tier one markets as compared to the tier two and three markets. The overall toys and games market in China have will reach USED 70,302. Lion in 2017 registering a CARR of 26. 0% during 2013-2017. According to the research report, it is expected that traditional toys in China will undergo fundamental changes in the future. In future, toy designers will add modern elements to traditional toys in order to give them a new charm. Preschool and educational toys will offer huge market potential in China in the near future. It is anticipated that China toy industry will develop into a more organized market in the near future. The industry would benefit from collaborations and alliances with foreign companies.

The companies would come up with new brands of toys with unique features. This will steer up the competition between the domestic and overseas toy manufacturing companies in the china toys market. China’s online game industry is evolving rapidly which emphasizes the need to adapt to new industry trends, including changes in game players’ preferences, new revenue models, new game content distribution models, new technologies and new governmental regulations. With the increasing social networking population in the country, more users are likely to get inclined towards social games which take the platform of social networking sites.

The shift towards mobile gaming will also invite more companies to launch exciting mobile games which the player enjoys to play even on a small screen of a mobile. It presents immense evolution opportunity 1 This is a licensed product of Ken Research and should not be copied China Toys and Games Market to Reach Used 70,302 Million by 2017: Ken Research By Snatcher Games to Accelerate Market Growth” provides detailed overview on the toys and games market in China. This report helps reader to identify the ongoing trends in the industry and anticipated growth in future depending upon changing industry dynamics in the coming years.

The report will help industry consultants, toy manufacturing and gaming companies, suppliers and other stakeholders to align their market centric strategies according to ongoing and expected trends in the future. For more information on the industry research report please refer to the below mentioned link.

Executive Summary This paper provides a feasibility analyses on development of Perth market, which is located between St Georges Terrace and Victoria Avenue in the centre of Perth. The site is 0. 5 hectares (5000m2) in size, and square. Specifically, it provides a comparative quality versus value analyses of an urban neighborhood, with the intention of coming up with the optimal land utilization for a mixed neighborhood in a 0. 5 hactare piece of land.

The analyses found that construction of either high quality or low quality buildings is not economically viable, and the client should priories the two other development projects in consideration. Planning requirements Because of the relatively small size, the site is less than 75% appropriate for the proposed development according to planning authorities. An underground car park, sufficient with 1 space per 100m2 of gross development space for all commercial and residential uses, should be provided.

Additionally, landscaping of the site is required, and this will include high quality public open space which will include outdoor areas for both retail and leisure uses. Space provision for retail development and leisure/ restaurant development should be no more than 500m2 for each of these uses. The remaining space should be either office or residential space or a mixture of the two. The building must be no more than 9 floors in height. The summary, therefore, of space allocations is as follows. Total space available is 5000m2.

A 1500m2 space allocation is for residential apartments, and another 1500m2 for landscaping. Leisure and retail will each occupy 500m2. The proposed design Considering the space available the planning guidelines provided, an appropriate design would be a u-shaped building consisting of offices on one wing and residential apartments on the remaining two wings. Parking space will be underground. The front of the building will be landscaped and adequately provided with an amusement park and a restaurant, complete with a water fountain and park benches.

A 500m2 retail allocation, adjacent to the residential wing of the building, will consist of an open-air market and shops. The building will cover the entire 4000m2 of the space allocation, with leisure/ restaurant covering 500m2. Construction costs With the cost of land being $10m for a 0. 5 hectare piece of land, price indicates this is prime property. As such, it is more justified to construct high quality development rather than low quality.

Low quality will not only significantly reduce the overall value of the property, but will also reduce profit margins for the client. The cost for constructing high quality neighborhood is approximately 24. 6m. An additional $10m is required for land acquisition, set at $10m. The total therefore is 34. 6m. On the other hand, the construction cost for low quality is $15. 2m with land costing $10m. Thus, $25. 2m is required for low quality. Comparative cost of computations for both high quality and low quality for this particular site are summarized in the table below.

Looking at political factors affecting Colleges in the Country both positive and negative, in recent years, Government policies such as Top up Fees leaves some students (home students) in huge financial problems after graduation Another Government policy that would have negative effect on colleges is widespread reforms to funding, according to recent budget announced by Gordon Brown, The Department for Education and Skills is to get a real terms 2. 7 per cent increase between 2008 and 2010-11. English education’s share of that is 2.

5 per cent a year on average in real terms, taking spending from 2010 in England to 74. 4bn. That is more than ministers feared when the spending round began. It is less than many in education would have hoped for. But it is not all bad news, there are other Government policies which benefit some Colleges and Universities, for example, the announcement of the planned  25m investment in science and engineering departments is a welcome sign of the government addressing the financial difficulties affecting many of our universities. (Financial Times http://www.efinancialnews. com/, visited on 20-04-07).

There are some Economic factors affecting colleges in the Country, for example, the recent report by the BBC reviewed that Colleges are spending more money on entering students for exams than they are on heating, cleaning or computers, they say, this is as a result of government policy which requires colleges to use external qualifications as a pre-condition for receiving funding. ” The continuing rise in exam-fee expenditure above 10% a year is unsupportable and will deny other resources to students. “

On a more positive side, the recent proposed Bill (College Student Relief Act (H. R. 5) this bill is designed to make college more affordable and accessible by reducing the interest rate on subsidized student loans for undergraduate students. Over the next five years, the rates will be half of what they currently are for a brief period of time (Stafford loan consolidation, www. studentloanconsolidator. com/stafford-loan-consolidation/HR5-bill. shtml, visited: 23/04/07) Drug, Alcohol consumption, antisocial behaviors are some of the Social issues affecting Students at the Colleges in the UK.

According to recent report commissioned for the launch of the independent UK drugs policy commission, says that education programs aimed at steering young people away from drug use appear to have had “very little impact” on experimentation with illicit substances. Questionnaire conducted by Blackwell Synergy found that 25. 6% of male students and 14. 5% of female students drinking more than their safe limits of 35 and 21 units per week respectivelyThere is no doubt that Technology has made a massive impact in Colleges in the UK.

In the case of Bradford College, The College in partnership with Tektra (One of the UK’s largest IT training Organisation) has invested in a superb new IT Learning Centre. The Centre will support learners in a relaxed and comfortable environment A Centre Manager, a team of tutors and administrators will ensure that learners receive a quality learning experience whilst achieving nationally-recognised qualification in information technology applications.

The strengths for my product Coca Cola is that it is virtually the best brand in the world, therefore it has least worries form competition, and the product will be advertised All over the world. The other strength is that teenagers will consume the drink, and would expect the drink to keep them going. This drink would be cheaper and easier to access as it would be replacement for tea and coffee. Weaknesses The weaknesses for coca cola zero product could be that it may need to establish it as a new product by its brand name in order to make it well known.

The other weaknesses could be by adding less sugar on the product as there is concern about too much sugar in soft drinks. Opportunities The opportunity for launching Coca cola products is that it may be introduced under their own brand name. The coca cola company may decide to release a new product such as coke zero in a new market, such as the health club and in leisure centres as it may have less sugar in the drink. Threats The threats for the product could be that it may be high in fat, as people are more aware of their weight, this may lead to a loss in sales of the product therefore I will be adding carbohydrate on the drink.

Although Coca Cola is the ‘world best brand’, if other competitors such as Pepsi decide to launch a similar product and succeed then this could affect the Coca Cola market heavily and lead to a failure of the product. PEST analysis Political The political aspects towards my product are also important as business decisions are influenced by political decisions. For e. g. although in recent years many people have been encouraged to become self-employed, there has been a feeling among many of these people that they are over-regulated. Influences include changes in the tax structure, privatisation and trade unions etc.

Also if funds are collected from social programmes like computers for schools, then it will be helping the government develop technology in schools/colleges. Coca Cola may do this as the ring pulls and bottle tops are in different colour so the market can collect them. Economical Though the economic environment is influenced by domestic economic policies, it is also dependant upon World economic trends. Rates of economic growth, inflation, consumption patterns, income distribution and many other economic trends determine the nature of products and services required by consumers, as well as how difficult it becomes to supply them.

Social The social influence is regarding the people’s taste, interest and lifestyle and the effect that it may have on the product because people are more concerned about healthy living, therefore it may have a negative effect on the product because they have a lot of sugar in their soft drinks. As will changes in cultural values and social trends, such as family size and social behaviour. Factors may include the consumer lifestyle changes; as if the consumer decides to drink drinks with high fat etc, then the coca cola product will face huge problems.

Further more if the product contained animal fat or such, then this will put off potential buyers as they may be vegetarian or it may be against their religion. If consumers or any other organisations are unhappy the product Coca cola in anyway, they can either set up or join a pressure group. Protection pressure groups may be set up to fight a specific issue, such as the closure of a plant or the increased traffic on a road as a result local business. Promotion pressure groups are usually more formal and would be set up to fight highly organised campaigns across a range of issues.

Technological In making goods and services, organisations must become of new materials as well as developments in manufacturing and business purposes. At the same time, organisations to look at the nature of products and, in particular, they’re cost effectiveness, as well as their performance in relation to the competition. The Boston Matrix The Boston matrix is a useful tool to understand product/services portfolio in multi product firms, the Boston matrix classifies products on the: o Expected growth rate, measured by expected growth in sales revenue

o Market share relative to rival products The most appropriate marketing strategies based on the Boston matrix are those, which aim to keep a balanced portfolio of goods or services ensuring that there is enough cash – generating products to match the cash-using ones. All of the sections in the Boston Matrix represent where a business’s products are in the market and how they are doing. Most of Coca-Cola products would be in the star section because they are in a high growth market with a high share of that market and they generate a high amount of income.

Stars need to be in a balance by not having problem child, dog, or cash cows. The funds generated by the Cash Cows are used to turn problem children into Stars, which may eventually become Cash Cows. Some of the Problem Children will become Dogs, and this means that a larger contribution from the successful products will be needed, to compensate for the failures. Here I have looked in to each section and placed it in the matrix. This is does for every product in the range in order to plot the products of their rivals to give relative market share.

Therefore coca cola product fits into star section in the Boston matrix because it is a existing product which has a high market share and is doing very well in the market. One example of this is ‘Red Bull’ this is because it hasn’t been on the market for too long and is still selling well. Problem Children- These are products with a low share of a high growth market. They consume resources and generate little in return. They absorb most money as you attempt to increase market share.

Therefore this may relate to Coca cola as such their soft drink Fanta because it needs a lot of money in order to increase the market share by investing in advertising and on promoting the product. Cash Cows- These are products with a high share of a slow growth market. Cash Cows generate more and more than is invested in them. One example of this is Coca-Cola classic, this is because the product has been out for a long time and is still selling well and is one of their best selling products after all the years its been out.

It was a challenge to take a hard look on which routes the operations had to be cut and on which routes flights had to be added. The change managers were guided by pure facts and not by the machinations of the vested interests. Those routes where occupancy was poor and costs were high were closed. Based on the financial information, more flights were added if the demand and potential revenues gave positive indications. Another challenge was to define what constituted better service and right price. If it was not defined accurately, higher prices would not be accepted by the customers.

They determined that convenient flight schedules, services from locations where they were most needed, clean and safe floors, reliable service, more pleasant travel experience, and desirable frequent flyer benefits would justify charging of higher prices; these components of service were ensured seamlessly. Higher prices were accepted by customers because of improvements in such areas. Change Implementation Process The change implementation process adopted by Bethune and Brenneman broadly resembled the eight- step process suggested by John Kotter ( Businessballs, 2003).

A brief discussion on those steps is attempted in the following.

1. The change managers had demonstrated the ‘sense of urgency’ of change among employees. Their first critical and hard steps in closing certain operations, announcement of incentives on-time arrivals, new performance appraisal systems, recruitment of outsiders for key positions, generation of enough and the like gave clear signals that the change was seriously intended; those did not comply with the change mandate would get boot.
2. Right ‘team’ was created. Bethune and Brennerman made the right team. Efficient hands from outside were brought in. Pay and benefits were most liberally set. Inefficient people whose team work and quality of contribution was poor were discharged.
3. The ‘vision and strategy’ were formulated right: they were simple, easy to understand and well communicated. The vision centred around sustained profitability by continuous improvement in profitable operations, efficient customer service, efficient marketing, cost reduction, team work and fair compensation. It is quite appropriate to remember that many change programme get disjointed and run into sand because of lack of clarity and alignment with destinations ( Colenso, 2000)
4. The vision and strategy were communicated right through ‘proper communication’ systems. Everything was transparent. Every employee was kept informed of where Continental was headed for and where it was at a particular point of time.
5. The employees were ‘empowered’ by throwing out all rule books and supplying broader guidelines. Enough authority was taken by the change managers from the board to launch a large-scale change.
6. ‘Short term wins’ were created. Improvements in cash position, good ratings on on-time performance, monthly bonuses and the like, though small wins, filled enough psychological energy among the members of the organisation.
7. There was ‘no let-up’ in the change process. They did not sleep on short-term wins. They kept raising ‘performance’ bar in the offerings: products and services. Whoever came in way were discharged. They kept measuring the performance and innovating the ways of doing things better.
8. The change process was made permanent by attempting to change the work culture, particularly in regards to the team work. Recruitments, incentives, promotions, products, marketing and financial plans were all continuously integrated with the needs of the market, goal of profitability and staying ahead of rivals. Taffinder (1998) observes that substantive change, also called ‘transformation’, must be systemic and so affects the entire system. That was what Continental did.

Outcome of the change programme

Continental had a remarkable turnaround by 2000 after five years of change programme.

Important achievements include improved cash position, excellent on on-time performance, profits, boosted employee morale, high occupancy ratio, industry-par wages and salaries, repurchase of its own stock and avoidance of Chapter 11 bankruptcy. A few facts on its turnaround are :

1. In March, 1995, Continental was ranked first in on-time arrivals, with 83% on-time arrivals.
2. Continental repurchased its stock at a cost of $1. 2 billions through December 2000.
3. Continental was the first airline to be designated Airline of Year by Air Transport World magazine twice in a five-year period.
4. Passenger revenue per seat/mile increased from 7. 22 cents in 1994 to 9. 84 in 2000.
5. Net income which was negative at $613 millions in 1994 was improved to $455 million in 1999.
6. Earnings per share which were negative at $ 11. 88 rose to $6. 2 in 1999.
7. Passenger load factor increased from 63. 1 in 1994 to 74. 5 in 2000.

Conclusion

Continental Airlines with revenues close to $6 billion was reporting a net loss every year from 1985 till 1994. Continental Airlines filed Chapter 11 bankruptcy protection petition in 1983 and again in 2000.

It was saddled with a heavy debt burden and hamstrung for cash. The on-time arrival performance record of its flights was the worst among 10 US Commercial Airlines in 1993 and 1994. Many earlier change programmes did not bring enough success. Employees’ morale was low and there was infighting among employees. Employees played by the rule book. Bethune and Brenneman launched a major change programme with components like changing the routes of operations, cutting costs, improving cash and profitability position, improving products and services, and changing the employees mindset for change.

In this direction, several initiatives were taken. Unprofitable operations were closed, flights on profitable routes increased, unproductive costs cut, and interest and lease payments renegotiated. Rewards were linked to customer service and incentive paid correctly and on time. Team work was encouraged. Those standing in the way of change were dismissed. Monthly performance appraisal system was designed and implemented seriously. Performance metrics were set. Change was communicated correctly.

Proper communications across the levels and among the employees were put in place. Employees were empowered. Rule books were destroyed and broad guidelines were created. Proper cost data was provided. In five years, Continental had a remarkable turnaround with an increase in income and decrease in costs and inefficiency.

References

1. Balogun, J. (1999). Exploring strategic change. Essex, England: Pearson Education Ltd. Bethune, Gordon. (2007). Gordon M, Bethune 1941-. Retrieved May 14, 2008 from (http://www. referenceforbusiness. com/biography/A-E/Bethune-Gordon-M-1941. html

I felt as if was really running a business and that I had to be 100% committed to every decision we made. I was very involved in every part of this project. I was also very eager for market day to come to see if the product we spent months making would be a best seller come time. What made you discouraged? The only thing that tended to discourage me was when I found out three other groups were making a very similar product to ours and selling it at a lower price. This made me feel like our shirts were not going to sell and we would have failed. If you could assign a grade for this reject, what grade would you give?

1. Explain why you believe that grade would be fair. I think I would deserve an A because I was putting in all the work necessary to receive an A. Not only was I the president of the company, was involved in all of my team members jobs as well.
2. Financial Analysis of the Company – How many products did you sell? We sold all of our products (36 shirts). What was your sales revenue? Our total sales revenue was $453. What was the amount of your total expenses? Our total expenses added up to $392. Did your company make a profit or take a loss? How much? We made a profit Of $61. How did you personally invest in the company? I invested $1 00 into our company. How much money did you take home after market day? Took home $1 13 after market day. What was your personal profit or loss on your investment? I made $13 profit on my investment. Did your group meet their financial goal? Explain. We originally set a higher goal for our profit, but in the end we are just glad that we left market day with a profit at all.
3. Level of cooperation from Other Members of the Team – Discuss the amount of cooperation and involvement of other team members: My other team members split up all of the work very equally. One person stood out in my group though, and that was Taylor Casey. She was the one who volunteered to drive all the way to Tempe to pick up our product when it was finished. Was very surprised that in our group every member pulled her weight, and that’s why we were so successful.
4. Business Plan – How were sections of the business plan divided up among your team members? We divided up the business plan based on our areas of responsibility for the company, (the Vice President of Finances took Over all the sections having to do with our finances, etc. ). Which sections were you reasonably responsible for? Id a large variety of sections considering that I was the president, but one section specifically to name was the biographies. When you were writing your sections, did you refer to the business plan outline that was provided so that you would know what questions to answer? Yes I did constantly refer back to the business plan so that I wouldn’t leave any questions unanswered. Did you use your time in the computer lab wisely? Our group got all but two of our slides done in the time allotted in the computer lab, so yes we did use our time very wisely. What was the hardest art about writing the business plan? The hardest part about writing the business plan was making sure that we added every slide and answered all Of the necessary questions in a logical order.
5. Knowledge Gained From this Experience What did you learn about opening and running a business from this project? I learned a few key aspects about running a company and that was be careful who you choose as business partners and never wait until the last minute. For your business partners, I learned tattoo should choose someone who you know will consistently agree with you, and you will agree with them so that arguments never arise.