Marketing Management

 International Human resource management

1. Many entrepreneurial SME’s do not follow a planned, strategic approach to the issue of internationalization. Most do so by means of an evolutionary strategy based on a combination of methods and options. Using relevant illustrative example for each University of Derby Online Learning approach, review the various options that can be used, the advantages and disadvantages these options and how the probability of success can be maximized.

Entrepreneurial SME’S

These are small and medium sized enterprises where the numbers of people involved is very minimal and limited as according to the size of the company. As compared to the large companies the small companies employ such wide ranges of people and in many cases always outdo the large enterprises in a big margin (Karami, 2007 p.132). They employ employees of less than two hundred and fifty in numbers and use evolutionary strategy in their skills of entrepreneurship. The small enterprises which are categorized in to three groups namely micro, medium and small firms which contribute much in economic development and provision of employment opportunities to many people. For example in United Kingdom the small and medium sized entrepreneurs comprise the highest percentage of the countries GDP and hire most of the people there. The enterprises venture in to high risks business which large countries cannot venture into. Their failure is often linked with their failure to use competent strategic planning in their entrepreneurial activities. Their failure is linked with the fact that they do not plan on long term basis and thus do short term planning which often affects them unlike the large companies where strategic planning is the main key to success (Carayannis, 2013 p.152). Many small businesses are contented to remain small and are not affected by the success of the large companies who emphasize on use of strategic planning. Entrepreneurial SME’S are known to take risks and grow continually for a period of up to three years where the process of making decisions in these firms is very different from that in the large firms.

It is claimed that most of the entrepreneurial of the Small and Medium Enterprises (SME’s) across the globe do not follow a planned, strategic approach to the issue of internationalization. They often do so by a mean of an evolutionary strategy that is based on a combination of methods and options. However, it is essential for them to use a strategic planning as it enhances their performance. It becomes more essential for these organizations to have a proper succession planning at all level. The fact that they do not use or follow a planned, strategic approach to the issue of internationalization, they do not survive the succession from one generation to another. Normally, the entrepreneurs do not use this approach due to the fear of family conflicts on the ownership or stake holding issue (Organization for Economic Co-Operation and Development, 2010, p.42). This means that the decision makers in the Small and Medium Enterprises (SME’s) have a perspective that real entrepreneurs do not plan instead, they assume that it is more effective to use their limited time resources more effectively for operational or sales activities (Peng, 2009,p.140).

In addition, the entrepreneurial of the Small and Medium Enterprises (SME’s) normally regard formal planning as limited to only large enterprises. Therefore, they claim that it is not transferable to the requirement of the quick moving and stretchy structured Small and Medium Enterprises. From an entrepreneur’s perception, there are a number of objections that are expressed against use of a well-planned strategic process in these small and medium enterprises. The first objection of the reason why the many entrepreneurial Small and medium enterprise do not use or follow a planned, strategic approach to the issue of internationalization is that they have a perception that all the strategic instruments limit the elasticity and the capability of their improvisation. This means that they perceive the strategic tools as a preventer for their improvement and succession regarding to the issue of internationalization. In addition, these small and medium enterprises always prefer to use limited time resources for their operational and sales activities instead of strategy development approach (Peng, 2009, p.140). The other objection is that they perceive the strategic management as too inflexible. Due to their lack of using a planned and strategic approach they tend to offer a more limited range of products. This means that they will not be in a position to succeed in the international market as they compete with large companies that offers diverse products. They also have a poor level of resources as well as lesser access to human and financial capital (Lloyd-Reason & Sear, 2007, p.45).

Growth planning approach as an evolutionary approach used by small businesses

The small enterprises growth is attributed and affected by characteristics of the firm and the decisions of the firm owner. The owners are the only decision makers and have control over their businesses in terms of the vision and action of that business. The growth and development of small businesses depend on the opportunity and requirements of the small firm. The owner is the key determiner where they enhance on the use of limited time resources efficiently for operational and appropriate sales methods. This option is enhanced since the owner is in control of the resources allocated to the businesses since strategic planning is not done to determine such fixed allocation of resources (Lloyd-Reason & Sear, 2007, p.45). Growth panning emphasizes on the owner to plan for the future requirement of the business which will contribute to good success of the business. The failure to involve formal strategic planning makes them successful at times since strategic planning is expensive even in large companies. Growth panning is influenced by three factors which include the background of the owner as a way to determine capital required the characteristics of the business and the decisions and plans made by the owner (Lloyd-Reason & Sear, 2007, p.45).

Advantages of using the growth planning approach

The resources and capital required is minimal and very low as compared to the large companies. The owners of the small businesses use less capital thus can start many more companies and employ many more people thus leading to creation of employment opportunities which contribute to economic growth of the owners and the country at large.

The small firms have good relationship between them and their customers. Their setting is informal such that they employ face to face communication to their customers and know the needs and appreciations and the feed back of the customers and thus they are capable of correcting the failure in good time (Portland International Conference on Management of Engineering and Technology et al, 201, p.98).

The small scale enterprises are advantaged in terms of economies of scale where they are flexible and can strike the market very first as compared to the large companies where strategic decisions are clearly made and thus flexibility of change in decision is vey minimal, difficult and also expensive to apply.

Disadvantages of using this approach

The growth is not on a high rate since the capital used is small and the number of employees employed is also small thus making the profits unequal to the large companies. The growth does not involve strategic planning and is so informal which makes the owner change the decisions from time to time which some times affect the growth of the company(Portland International Conference on Management of Engineering and Technology et al, 201, p.98)..

International Entrepreneurship strategic approach as an evolutionary approach

This is an approach which involves combination of risk factors and how to solve them and innovative measures regarding the small businesses. They enhance use of modern technology in manufacture and sale of their products which they apply very fast as away of improving their sales. They apply new and modern technology in developing new ideas which will bring positive results to the business. For example Ford Motor Company uses this approach in the sale of their products which are mostly used by various industries (International Conference on Industrial Engineering and Engineering Management, et al, 2013, p.110). This approach is used as a way of improving technology and sales of the small business firm. There are two types of environment involved in businesses which include external and internal business environment. External business environment includes those factors that affect the business externally for example customers, competition and taxation from the government which affect the business indirectly. The internal factors include the decisions made by the personal owner of that business and ways in which the factors affect the business positively or negatively (International Conference on Industrial Engineering and Engineering Management, et al, 2013, p.110). The combination of both external and internal factors affects the growth and development of the business where the small businesses must be in good relation with the external factors since they are inclusive of the government policies which must be followed accordingly.

Advantages of using this approach

The factors affecting growth of various small firms varies from one country to another. Good government policies favor development of small firms thus improving the economic conditions of the countries. Employees motivation is key factor in small enterprises and thus since the numbers of people employed is few the employees are easily motivated which encourages them to keep supporting the businesses. The small scale businesses are able to link with other huge companies and also link with other small entrepreneurs which easily motivate them and support that success (International Conference on Industrial Engineering and Engineering Management, et al, 2013, p.110).

The owners of the businesses are the sole business decision makers and thus directors are not involved in running the businesses. The owners will always make decisions that will contribute positive results to the businesses unlike in large companies where directors are the key decision makers and in most cases are not the owners of the businesses. Small businesses are advantaged since the owner will always do things that contribute to the success of the business. They can easily find funds and donors through involving family members for funds and the government as their donors where they easily transform the vision and mission of the entrepreneur in to action.

The entrepreneurial behavior always depends on the motivation of the owner of that organization which is affected by the internal and external factors of the business (Nwankwo & Gbadamosi, 2011, p.380). It is advantageous since the owners link their resources with other resources so as to add value to their firms. Intentionality is highly used in small firms since the firms use it as a way of achieving the set goals of the firms. The set goals in small firms highly depend on the owner and amount of resources the owner is willing to provide as a way of contributing success to the whole business.

Disadvantages of using this approach

The number of employees employed in the small firms is few as compared to the large firms which is disadvantageous to the success of the firms. The owners can make negative decisions regarding the firms and cause failures since they are the only decision makers. They should include some other people in key decision making since errors are prone to occur when one person makes decision where many other employees are affected by the decision (Nwankwo & Gbadamosi, 2011, p.380). This can lead to a negative effect on the growth and success of the business resulting to failure.

The internal and external factors can lead to failure of the business. The government policies some times affect the running of the business since they are not considered favorable to the well being of the business. The change in behavior of the customers affects the business negatively since increase in prices results to decrease in the demand of the goods. Increase in taxation contributes to negative results to the business since the higher the taxation the lower the quantity demanded by the consumers who are the key success factors to given businesses whether small or large.

2. The OECD suggested that SME’s have a tendency to move to market that are geographically or psychologically close to them.
3. What are the advantages of this approach?

Various studies were conducted by the OECD project with an aim of finding why the Small and medium sized enterprise do not move to market that are geographically or psychologically distant to them. By the end of their study they concluded that SME’s have a tendency to move to market that are geographically or psychologically close to them due to their perception of barriers to access to high-growth markets (Nwankwo & Gbadamosi, 2011, p.380). Normally, the small and medium sized enterprises are faced with different constrains that hinders their ability to move to market that are geographically or psychologically distant to them. One of the major advantage of not operating to market that is far much distant is that these small and medium sized enterprises are able to face lesser competitions. This is due to the fact that firms that market only within its national boundaries only has to consider local competition (Nwankwo & Gbadamosi, 2011, p.380). This means that if they could be operating in market that is geographically or psychologically distant to them, they would face a stiff competition. Therefore, their way of operating in a market that is geographically or psychologically close to them helps them to gain a competitive advantage as they are not facing global competition. Additionally, they will only focus on the entire competition that exists between its home markets. The fact that small and medium sized enterprises deals with market that is close to them, this becomes beneficial to them as they essentially deal with only one set of customers. This means that they will not face difficulties as they try to focus on many sets of customers (Nwankwo & Gbadamosi, 2011, p.380).

Another advantage of operating in market that it closer is that these enterprises are able to have an increased market share as they do not confront an increasing competition from emerged and developed economics (Nwankwo & Gbadamosi, 2011, p.380). This means that these enterprises always get an increased profit as they do not compete with large number of marketers. Additionally, due to the fact that these small and medium sized enterprises operate within the market, they are able to study the customer’s preferences. This is due to the fact that they cannot be able to conduct a research for identifying the customers’ taste towards certain goods. This is because they are not operating in larger areas. Firms that operate domestically can be in a position to operate many segments of products. This means that they can be able to deal with various businesses as they are easier to monitor and manage. Therefore, Small and medium sized enterprises have the advantage of operating in many sectors as they are close to its entire market.

1. What are challenges that are presented by moving to market that are geographically or psychologically distant and are these more of an issue for the service or manufacturing sector?

There are many challenges that are presented to enterprises that tend to move to the entire market that are geographically or psychologically distant to them. The first challenge is that the entire enterprises always face a stiff competition. This leads them to incur losses to their market share as they are competing with large number of companies. While moving to market that are geographically or psychologically distant, the entire company can face some risks. For instance, the government can impose different charges that can consequently affect their profit. Enterprises can also loss many customers as they are dealing with long distance customers that they are not able to monitor their taste and preference towards good and service they are provided with. They can also meet different rules that can affect their operations which can lower their entire wages. These issues normally arise to manufacturing sector. This shows that it is essential for companies to move to market that are close to them as they will face less completion. This in advance will raise their market share.

References

Carayannis, E. G. 2013. Creating a sustainable ecology using technology-driven solutions. Hershey, PA, Information Science Reference.

International Conference On Industrial Engineering And Engineering Management, Qi, E., Shen, J., & Dou, R. 2013. The 19th International Conference on Industrial Engineering and Engineering Management assistive technology of industrial engineering. Berlin, Springer.

Karami, A. 2007. Strategy formulation in entrepreneurial firms. Aldershot, England, Ashgate. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=438750.132

Lloyd-Reason, L., & Sear, L. 2007. Trading places--SMEs in the global economy a critical research handbook. Cheltenham, UK, Edward Elgar.

Nwankwo, S., & Gbadamosi, A. 2011. Entrepreneurship marketing: principles and practice of SME marketing. Abingdon, Oxon, Routledge.

Organisation For Economic Co-Operation And Development. 2010. SMEs and entrepreneurship Poland 2010 key issues and policies. Paris, OECD.

Peng, M. W. 2009. Global strategy. Mason, Ohio, South-Western/Cengage Learning.

Portland International Conference On Management Of Engineering And Technology, Kocaoglu, D. F., & Anderson, T. R. 2001. PICMET '01: Portland International Conference on Management of Engineering and Technology : proceedings. Piscataway, NJ, IEEE.

The limits of consumer’s choice

The article discusses the motivation various producers use in order to boot the choice of the customers. With the improvements in technology the consumers have various choices to make regarding the technology, quality, quantity and price of goods and services provided (Lehrer 11). Many services for example air travel services have reduced their prices as a result of competition. Prices are the key factor to determine consumers’ choice for example in the case of natural gas where customers will look at the price.

Using economic knowledge to analysis of the article

Using the knowledge that all goods must have their value the customers are left with no choice but to choose the ones with good values leaving the bad ones behind. For example in the comparison of oranges and apples what matters most to the consumer is the price and how much the customer wants the product that is the value of the product to the consumer (Lehrer 11). The consumers make sure that the value is maximized so as to achieve the marginal utility since the decisions on whether to buy either oranges or apples depend on value and price. Consumers must compare the price with the marginal utility and make sure that the marginal utility is more as per the given dollar.

It is evidently seen that customers will go for the product where they spend less dollar as per the given consumer optimal rule where utility must be maximized since it is seen that consumers will buy little of the products they are used to buying if the prices are increased (Lehrer 11). Consumers will go for the good quality and quantity products which they can easily afford as regarding their opinions. A fall in price means the product will be demanded more thus making the producers profitable.

Works Cited

Lehrer Eli. ‘The Limits of Consumers Choice’, March 14, 2014

Wal-Mart Retail Company

Introduction

The article ‘Forbes 400 Complete’ discusses Wal-Mart as an international private owned company which comprises of retail shops and warehouses. The company is controlled by the Walton family and is the biggest retail shop globally. The Walton family owns over 50% of the most precious company in the world. The founder of the company is one of the family members of the well known Walton family named Sam Walton in October 31, 1969 and made its headquarters at Bentonville (Li, 2010 p.234). It is the largest grocery retail shop in United States. It is the owner of Sam’s club located in North America which is one of the biggest grocery retails. From the report it is said that Wal-Mart rose from being a regional to an international retail company later to an international one thus making it among the most successful and profitable company globally (Li, 2010 p.234). It is seen to dominate the retail business in United States where it has the most income and profits and also generates revenue in large amounts. Wal-Mart is seen to face criticism from a large number of people including its customers, religious leaders, environmental associations and several people who criticize it on a base that it practices racial discrimination and segregation in its policies and management. It is also seen to practice gender inequalities which contribute to its discrimination by many people (Li, 2010 p.234). The working conditions for employees is not the best and even the suppliers complain since the family owned business is governed by poor policies from the family members who are in the list of directors of the company. Wal-Mart defends itself suggesting that it does everything right which is false from the results carried out.

Tata group

Tata group is an international company with its headquarters at Mumbai located in India. The article describes Tata as a company with seven other small companies which are managed by the family. It is still a family owned business with most of its small companies remaining independent. The company though based in India receives most of its income and revenue from outside the country since it is a well known global company (Witzel, 2010 p.54). The members of Tata family are the key shareholders with exception from its chairperson by the name Cyrus Mystry who is the second person outside the Tata family. The company is well established in India with its brand being well valued and loved by the customers and thus generating huge incomes for the economy of India and the Tata family at large. Some of its projects are opposed by the environmental groups since they are not environmental friendly in nature (Ndia Metals Report' 2014 p.4). The company portrays an example of how families can put their company’s management under people outside their families which is different in the Wal-Mart Company (Witzel, 2010 p.54). The former chairperson for the company who is Mr. Ratan Tata did not chose his children to be his successors though he is a bachelor which should encourage other companies to trust other people for their wealth and skills.

Analysis and critique

Wal-Mart Retail Company

The company experienced trouble based on succession position which is portrayed in other private owned companies like Tata group where succession becomes a main issue as family members differ on who to take control of their businesses (LI, 2010 p.234). This is a research well done and analyzed under the Boston consulting group analysis. Wal-Mart is seen to outdo public businesses as a result of the long term running of the businesses. Wal-Mart is said to interfere with other peoples business for example in the sale of solar rings which were the idea of solar sun Rings Company. Wal-Mart declined to discuss anything with that company until it reached the courts where it was accused of interfering with other people’s ideas. It is seen to copy the idea of solar pad from the other company as a research has shown but the family owned business declined this as a factor to damage their well built image (LI, 2010 p.234). Wal-Mart believes in respecting other peoples businesses where it came out clearly to show the differences between its products and those of the Solar Rings Company. Wal-Mart is seen to be criticized by many organizations and groups which term it as a successful company as a result of its low prices. It is loved by shoppers who want to spend less money on the products they require. It is criticized since reports show that it relies so much on Chinese products thereby damaging the economy of the United States. It is seen as the biggest important of electronics in the united states mainly from china and sells its products at very low prices making it preferred by many people at the expense of the local companies who deal in manufacturing of products such as electronics (The Forbes 400 Complete List' 2013 p.12). It has always been sued by its competitors because of its unacceptable low prices paralyzing other local businesses. It also faces criticism of handling its staffs unfairly by exposing them to poor working conditions and low salaries which it should avoid incase it want s to remain successful.

Tata group

Tata group is mainly dominated by the Tata family which takes control of everything in the company. The management of Tata is mainly comprised of Indians who are key controllers and who only believe in Tata’s products. It faces competition from a number of companies especially the motor vehicle industry. It is governed by nepotism but has dealt with the problem by choosing a successor of Ratan Tata who is not actually from the family (Witzel, 2010 p.54). Tata unlike the Wal-Mart company treats its employees with dignity and good salaries such that they are proud of the company. Its main exports are Britain and are also part of the New York stork exchange thus making it successful. Tata was managed under the best leadership under Ratan Tata who introduced a lot of changes in the company and contributed to its success. It is well known to engage in family conflicts and politics which sometimes contribute to the damage of its image and reputation. Tata group helps its employees and caters for the needs of the employees thus contributing positively to the growth of the company and of the economy. It faces various criticisms suggesting that it has grabbed a 3000 acre farm which is a case at the court mainly touching the Tata tea farms located at Munnar (Damodaran, 2011 p.122). Some villagers complained of a steel wall which was being constructed by Tata which caused death to many people where the company suggested that it would still construct the wall even against peoples wish. Tata motors face criticism since they are reported to transport various military weapons which are criticized by human rights and country activists in India. Tata Nano plant is researched to have caused displacements to people who are highly criticized by political leaders and other local leaders (Damodaran, 2011 p.122).

Recommendations

From the above discussion it is clear to site both Tata group and Wal-Mart as successful companies which are a great influence in the economy (The Forbes 400 Complete List' 2013 p.12). The families should not hinder them from success as portrayed by the Tata group who has a chairperson who is not a family member. The companies should employ staff and management who are qualified according to the education and skills they show but not according to the race or family name. It is clearly learnt from the Tata group that good management is the key to success and thus should be maintained always for the family owned businesses to prosper. The families should not conflict on whom to manage the wealth and they should instead focus on the success of their businesses (The Forbes 400 Complete List' 2013 p.12). By avoiding conflicts, the business can also protect their company image, strengthen the power of family-ownership and remain successful the business and the economy at large. The Wal-Mart company should not let family conflict interfere with its management since conflicts and disagreements results to failure and breakdown of such huge companies. Family members in both Tata and Wal-Mart companies should be educated on management skills of the business, ways of promoting and protecting the businesses and always methods of attracting more customers and maintaining the good image of the companies which will result to huge profits and success of the businesses (The Forbes 400 Complete List' 2013 p.12). Wal-Mart should treat its employees with dignity; pay them deserving and good wages which will motivate them more. They should respect the employees by giving them good and proper working environments regardless of their families and race thus promoting success since employees will be comfortable to work under good conditions. Tata Company treats its employees with dignity and good salaries such that they are proud of the company and this encourages them to be more diligent and work hard for the success of the company (The Forbes 400 Complete List' 2013 p.12). Wal-Mart should do this in order to motivate its staffs and gain more profits.

Lessons learnt from Tata group and Wal-Mart companies

It is true to conclude that for a company to remain successful it should have good management skills, qualified staffs and good relationship between the owners who in this case are family members. The company should also respect environmental laws and follow them since the environment is very important to everybody (The Forbes 400 Complete List' 2013 p.12). The companies should also follow government policies and respect them since they are supposed to be followed by all people. The companies should respect given contracts and agreements for the businesses to run smooth and should also train family members on ways of protecting the businesses. Private companies are seen to be successful if the management involved is the best and follow all the rules of business. Family members should avoid conflict like in the case of Tata where a family member was not appointed as the chairperson. The families should not conflict on whom to manage the wealth and they should instead focus on the success of their businesses (The Forbes 400 Complete List' 2013 p.12). The family companies should respect the employees by giving them good and proper working environments regardless of their families and race thus promoting success since employees will be comfortable to work under good conditions. This will bring success not only to the businesses but also to the country and the world at large.

References

Damodaran, A. (2011). Applied corporate finance. Hoboken, NJ, John Wiley & Sons.

            LI, C. (2010). Open Leadership How Social Technology Can Transform the Way You             Lead.Hoboken,JohnWiley&Sons.      

NDIA METALS REPORT' 2014, India Metals Report, 6, 1, pp. 1-71, Business Source Complete, EBSCOhost, viewed 18 March 2014.

The Forbes 400 Complete List' 2013, Forbes, 192, 5, p. 138, Business Source Complete, EBSCOhost, viewed 18 March 2014.

WITZEL, M. (2010). Tata: the evolution of a corporate brand. New Delhi, Penguin Portfolio.

Market Planning Management and Control

Introduction

Nike is a multinational company based in the United States that was established in 1964 by Bill Bower man and Phil Knight and it started as Blue Ribbon Sports, its headquarters are located at Oregon. The company deals with manufacturing, designing and selling of different types of sportswear, equipment and offers a variety of services. Nike’s earliest retail store started as a BRS retail store which was essentially located in Santa Monica about 1966. In the beginning of 1970's Blue Ribbon Sports went further and expanded beyond the shoe distribution production to huge shoe manufacturers. Around 1978, the company formally became Nike, Inc., a name that is credited to the imagination of the company's first employee, Jeff Johnson (Katz, 2004, p.43). Nike Company manufactures and sells products under its own registered brand all over the world. The company maintains high levels on innovativeness to perfect its operations in order to remain on the competitive edge ahead of other competitors. At the moment the company is well known to be among the largest suppliers of athletic wares and other relevant products worldwide.

On the current world the sports industry is highly growing and this has attributed many investors to establish and invest on this sector thus this has increased competition in sportswear market. As a result, battle of the brands has started with companies competing with each other. For instance, in the United Kingdom, market research conducted by Mintel company estimates that the total worth of British sportswear is approximated to be £2.5billion. Companies specializing in this sector want to have a share of this market by creating innovative brands which exceeds customers’ expectations. This research paper will illustrate on how Nike UK can effectively develop new product ideas so that it can remain on the competitive edge ahead of 2014 football World Cup, which will be held in Brazil and it will portray on different strategies that can be put in place to widen its market (Katz, 2004, p. 126).

Changes that have occurred in sportswear market in the last 10 years or more

In the last decade, sportswear market has enormously grown leading to a worldwide make and at the same time attracting more investors who have established several companies which deal with sportswear. For instance, companies like Nike.INC and Adidas are best known as the leaders in the sportswear market all over the world thus it is largely believed that sportswear market is so volatile as compared to other markers (Carbasho, 2010, p.193). On the same note, several changes are adversely taking place in the sports company and if they are not addressed effectively they largely affect sportswear market. The changes in sportswear market are attributed to be as a result of growth of global sporting industry. Nike promotes its products by venturing into sponsorship agreements with celebrity athletes, professional teams and also the athletic teams. Nike pays the performing athletes in most sport functions in order to utilize their goods and thus support and publicize their technology and skills (Crossan, et, al, 2010, p.145). The current growing trend as evidenced among the teenagers wearing sporting apparel is a good incentive to the growth of sportswear market. This motivated the companies specializing on sports apparel to brand and manufacture products which suit the need of their customers. In addition, the need for sportswear and demand in the world right now has as well attributed and motivated those companies dealing with sportswear to grow enormously thus building a global market. For instance, Nike has sponsored many successful track and field athletes over the years. It is well known for sponsoring many football players and also football clubs in different states for example Manchester united and Arsenal with recent negations with Manchester united in January 2014 over a given number of kits.

PESTLE factors that may have affected changes in the market for sportswear

Pestle analysis is one of the tools that are useful in analyzing landscape in an organization, the features which impact on the organizations performance and operations so as to make the decisions and plans of the organization regardless of the futures uncertainties (PITTS, et al, 2013, p.182). Each letter in the pestle analysis stands for an element of the organizations external operating environment. This analysis generally tackles Political factors, Technological, Economic, Social, Legal and Environmental factors. Pestle analysis of Nike UK will help greatly as it guides the management of this company on key areas where more effort should be added in order to achieve established goals and objectives (Ranchhod, 2012 p.223).For an organization to gain a bigger picture view of the environment, one need to analyze the external and the internal framework. The pestle analysis provides the external perspective thus leading to an assessment of the opportunities and threats. The internal perspective can be determined by a review of both the strengths and weaknesses. (SWOT Analysis' 2013, p.149) The grouping of an external center together with internal perception enable one to access the opportunities and threats from outside the organization and the strengths and weaknesses from inside the organization which is generally known as SWOT analysis (strengths, weaknesses, opportunities and threats).

Political factors

The government is responsible in creating economic policies and regulations which will increase the growth of the business. Nike is a beneficiary of these policies in the United States which provide them with an opportunity to modernize and sell their demanded products. This support by the United States government, the low interest rates, the international competitiveness of the tax system and the stable currency condition has helped a lot in the formation of the foundation which may be sensitive to the growth and development of the Nike Company (Ranchhod, 2012, P.248). Nike company mostly trade in America and United Kingdom as its main potential market.

Economic factors

These factors have various impacts on how the entire company makes its own decision and how it operates its major businesses. In the example of many other organizations and also other companies, the greatest threat in the economy would be the economic recession. The recession always have adverse and harmful effects on the growth, development and advancement of Nike. The number of the consumers is decreasing downwards since it is well known that the United States economy if currently facing a huge downturn. Asia too faces the economic downfall thus contributing negatively to the Nikes sales since most of its products are being manufactured in Asia as well. As a result of the consequences the voices of the labor work and the marital are also increasing rapidly. Notably, economic recession is one of the biggest treat to growth of companies and industries.

Environmental analysis

The study of the environment is not necessarily the inclusive of the overall environment of the earth but it includes all the micro and macro environment surrounding a certain business. Nike has proved itself responsible in all the above three cases. As far as the global environment is concerned Nike is ISO certified from the global environment, pollution and carbon foot prints tracing point of view. Nike is a supporter of the green environment and thus does everything necessary so as to protect the environment. Nike is objected in fulfilling the expectations of the customers, creation of the environmental friendly atmosphere globally, motivating its employees and lastly being on the very top of the legislation. Nike displays its positive attitude in a study towards social and environmental responsibility on various parts of the company’s globally. The company is ISO certified for its ability to conserve the environment Nike has proved that it is a responsible organization.

Society analysis

Since many people in the world are opting to keep fit in order to live longer, Nikes products such as shoes and clothing are in demand in order for people to join the fitness clubs. . Nike has been the most choice of people in purchasing sporting related product. Nike is yet to address the problem for example that of the situation of labor factory at various different locations of the products in India. (Carbasho, 2010, p.229). This has contributed to the negative effects as Nikes sales decreases. In addition, Nike is located in healthy environments which enable it to encourage safety of the environment. Currently, people are getting conscious of their body and health in general hence they have joined various fitness clubs in order to maintain their fitness and health status.

Legal factors

Nike is a multinational which has always maintained the business ethics. Nike has always remained friendly to the environment in accordance with the stated environmental laws in the United States and other countries. It has handled legal issues in accordance with the surrounding the legal issues have been operating in. Nike on entering a new country to increase its manufacture does so in accordance to the existing laws, regulation and practices of that particular company. Nike does anything in order to avoid the unnecessary problems thus whenever they have entered a new country they do so long after they have checked the local laws in detail. (HITT, et al 2013, p.231) In any case the laws are in extreme cases and are not in accordance with what Nike can offer Nike always stays out of trouble by respecting such regional laws. For example, the government policies with regard to foreign investment and permit business are different both in the developed and the under developed world. Nike has always paid attention to this concern. In case the government is too pleasant or strict with them, they always prefer to take one step at a time. Nike Company is involved in much corporate social responsibility in different countries (Wetherly & Otter, 2011, p.487).

Boston Consulting Group’s Product Portfolio Analysis

Boston Consulting Group’s Product Portfolio Analysis In order for Nike to be a successful company it is supposed to produce a collection of products with different growth rates and market shares. The portfolio analysis is a function of the balance between different cash flows (Carbasho, 2010, p.193). High growing products require growing cash inputs. Low growth products should thus generate excess and extra cash. There exist four rules in order to determine the cash flow of the products which Nike as a company should use. These laws include: margins and cash generated are a function of the market share, thus high margin and high market share go together and vice versa. This is well explained by the experience curve effect which is commonly observed. Another law is that growth requires cash inputs in order to finance the added assets. The added cash is required to hold share in the function of the growth rates. In addition, big market share must be earned or even bought which requires a supplementary increase in the investment. The company has impartial collection has cash flow that supply funds for the upcoming development and also has got stars whose large share and development has assurance of the future. Lastly is that there should be no product market to grow indefinitely and it has developed good strategies which address issues related to creating stronger Brand, financial turnarounds, producing diverse products, globalization, developing better marketing strategies competition, organization change, hiring people with right skills, public affairs, adapting latest technology and strategic planning (Lussier, Kimball & Lussier, 2009,p.100).

Ansoff’s Growth Matrix

The Ansoffs growth matrix is very crucial to Nike as the matrix helps the managers reflect on how their businesses can grow through the use of existing or new products or in existing new markets. Through the use of matrix the managers are able to evaluate the opposed degree of the risks being associated with moving their organization in a forward way. Ansoffs matrix provides several alternatives and marketing strategies which give an overview about the products and markets are new or existing and this attributes to enhancing new strategies that are made from the series of analysis that is done every time. However n every strategy there is an opposing level of risk that is being attributed and the Nike Company depicts the four strategies and this includes the following; Market penetration which is involves increasing market share within the already existing market segments (Baker, 2011, P.156). Through the selling more products and services to the established customers and also through finding new customers within the already existing markets they achieve their obligation. Thus the Nike Company is advised to entail on that in order to increase its sales all over the world since it’s the best strategy that should be entailed on. Product development which involves the advancement and development of new products for already existing markets. This involves thinking on how the new products can meet customer needs more closely and thus out do the products of the competitors. Market development involves the finding of new markets for the existing products. Market research and also segmentation of the markets helps to identify the new group of the customers. Nike should use this strategy if it will still remain a diversified and multinational company. Lastly, diversification is another important element and this entails on moving the new products into new markets at the same time in order to widen the diversity. Uncertainties are created more by a company if the company moves away from what it has done in the past. Diversification helps a lot in the spread of risk if the existing activities in the company are threatened. In general, Nike Company can use Ansoff matrix as a planning tool to develop and increase its growth strategies by mainly capitalizing on developing strong market, product development and diversification of its operations needs (Bachmeier, 2009, P.23).

Advantages offered by a geo-demographic segmentation in approach to Nike Company

Market segmentation is important in making sure that a company has a good and inventive market strategy. . The segmentation done can be based on the company’s marketing mix. For one to target a group with the intentions of it remaining a population, one must use the market segmentation. Market segmentation has a number of advantages which are much elaborated below.

Increase in profits

Segmentation contributes to increase in customer retention, brand recall, brand equity, competition, communications and increase in the profits obtainable. There are no negotiations in Nikes showrooms thus they target segments which have no need or for bargaining and negotiations. By doing these bikes profits are always so high. The profits increase yearly as a result of this strategy of not providing any room for bargaining.

Company focus

Segmentation is a successful method to increase the focus of a company on the market segments. Enhanced returns together with the better focus. Nike should thus change its focus for better returns thus for it to increase its focus and profitability, it should base its strategy totally on a new segment. This will increase its sales and improve its image since it is well known as a multinational company.

Market expansion

Expansion is immediately possible with geographic segmentation. The Nike company can simply expand to a nearby territory if it basis its market strategy on the basis of geography. (Dawes, 2009, p.243) If the targeted customers are based on their demography then comparable goods can be extended and thus segmentation plays an important role in expansion. In order for Nike to expand in a territory it has to know the segment of the customers it will be meeting and the various strategies of attracting more customers. Advertising can greatly improve the sales of Nike as a great company.

Better communication

The company’s communication strategy needs to be spot on for its target market thus segmentation goes hand in hand with the target market. Communication is possible with knowing the target market. Good communication strategies should be encouraged in order to attract more customers.

Increase in competitiveness

Market segment greatly increases with an increase in the number of competitors. If Nike is focusing on youngsters then its brand and equity with the youngsters will be high. The market might increase and the chances of the new competitor entering will be low. Thus market segmentation will increase the competitiveness of the Nike Company from a holistic view. Thus competition is highly important if the market is to be maintained in a positive direction.

Retention of customers

Nike should use necessary strategies for it to retain its customers for example offering special offers and discounts regularly .Through use of segmentation, customer retention is encouraged throughout the life of a customer. Nike should make sure it retains its customers.

Conclusion

From the above it is clearly seen that Nike is a growing multinational company with its products being preferred the most by a large number of people. It is important to conclude that Nike is one of the largest suppliers of athletic shoes and clothing in the world and also a main manufacturer of sports equipment. Nike promotes its products by venturing into sponsorship agreements with celebrity athletes, professional teams and also the athletic teams. Nike pays the performing athletes in most sport functions in order to utilize their goods and thus support and publicize their technology and skills. Nikes good communication strategy and the fact that it doesn’t accept bargains contribute greatly to its success. For Nike to maintain its dominancy in the sports industry it is required to continue with its various strategies inclusive of good communication methods and saying no to bargaining. This will increase its sales which in return contribute to huge and super profits.

References

Bachmeier, K. (2009). Analysis of marketing strategies used by PepsiCo based on Ansoff's theory. München, GRIN Verlag GmbH.

Baker, R 2011, 'Adidas hopes Olympics will see it overtake Nike in UK', Marketing Week  (01419285), 34, 22, p. 6, Business Source Complete, EBSCOhost, viewed 23 February 2014.

Carbasho, T. (2010). Nike. Santa Barbara, Calif, Greenwood.

CROSSAN, M. M., GANDZ, J., SEIJTS, G. H., & STEPHENSON, C. (2010). Cross-enterprise leadership business leadership for the twenty-first century. Mississauga, Ont, Jossey-    Bass.

Davis, J. (2010). Competitive success: how branding adds value. Chichester, West Sussex, U.K., John Wiley.

Dawes, J 2009, 'Brand loyalty in the UK sportswear market', International Journal Of Market Research, 51, 4, pp. 449-463, Business Source Complete, EBSCOhost, viewed 23 February 2014

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Hawkins, D. I., Best, R. J., & Coney, K. A. (2009). Consumer behavior: implications for marketing strategy. Chicago, Irwin.

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Wetherly, P., & Otter, D. (2011). The business environment: themes and issues. Oxford, Oxford

 CocoMojo

Introduction

CocoMojo is a United Kingdom company producing a beverage by the name cocoMojo. CocoMojo is a healthy energy and appetizing drink which has a number of advantages. Its ingredients include coconut water, plaster of coconut milk, added fruits, scented species and a mix well known as mojo mix. The drink constitutes other flavors which include mango, scented spices and ginseng. These flavors are just an added advantage and don’t interfere with the coconut ingredients. CocoMojo is one of the advantageous beverages so as to lead a healthy life style. It is usually well packaged including the least amounts so as to attract its customers and many others irrespective of their economic status. The beverage is well blend and its texture is credible such that its more preferred than other drinks since it came into market. The fact that the beverage is well blend with coconut water and milk makes it refreshing and very different from other drinks like milk shake. CocoMojo is a tasty beverage that making it different from other beverage which is a contributing factor as to why it outshone other beverages in the United Kingdom. CocoMojo unlike other drinks has reduced sugars thus making it healthier and preferred by people who want to live a healthy life.

Advantages of CocoMojo

The beverage provides a natural feeling to people who lead a busy and active life thus helping a lot in maintaining the necessary energy levels which in turn reduces the feeling of being deflation.

The beverage contributes in body and mind relaxation thus energizing and activating the individual taking the beverage (Healthy & Functional Beverage REPORT, 2013). It is therefore recommended to people with busy schedules so that they can feel relaxed and healthier.

The target audience

The target audience involves consumers or customers of the beverage. Age is not a limitation in this, thus anybody can consume the beverage thus inclusive of children, teenagers and adults. It is consumed by people of both genders. The level of education is not a necessity in the targeted audience thus people of any level can consume the beverage. The suppliers and manufacturers should make sure that customers are treated right and given the best quality products. The target audiences are customers with a good knowledge about the product, benefits of the beverage and are aware of the cost of the beverage. I chose these particular ones since they will be able to identify the benefits of the beverage. The beverage is parked in a way that is affordable to all people regardless of the economic status since it is healthy to consume it. The beverage is well distributed reaching a wide range of people as a way of enhancing its consumption and increasing its consumers. Since the beverage is affordable the targeted audience includes those customers who do impulse buying. It is not necessary bought by saving because of its affordable price.

Key competitors of the CocoMojo Company

Competitors are the key factor in the market target. They enable a product to always remain the best in the market for it to get a huge number of customers (the top five, 2013).CocoMojo has a number of competitors namely: Victors Drink which has lately invented the current drinks manufacturing kit in the world. Those kits have a good taste and are original. The company produces drinks like Berry Cider, Apple Cider and Pale Ale kit. The next competitor is Zacely Limited which is a company producing one of the best soft drink and hot beverages in the United Kingdom. Vegesentials is another great competitor in the beverage industry. It produces fresh fruit and vegetable juice which has a great taste. The juice which is half fruit and vegetable is well distributed in the market of the United Kingdom and also in the supermarkets. The juice is advantageous as it lacks added sugars, preservatives, artificial ingredients and other additives. The company caters for all people regardless of their economic conditions. K.HUGHES & CO LTD is also another company producing a 30Omega6 dairy drink which is the only drink manufactured from flax seed oil which is very rich in O mega 3. It is a healthy drink free from cholesterol and is very delicious and nutritious as it contains proteins, calcium and several vitamins. This and so many other companies compete in the manufacture and supply of beverages.

Communication Strategy

The first step in developing a communication strategy is to determine the reason why the communication is necessary. A good communication strategy includes all the goals and objectives the company wants to achieve in considerations of its targeted customers. In CocoMojo Company communication strategy is highly required. A communication strategy will tell what the company wants to accomplish. The company’s good communication strategy enables it to gain more customers by providing good communication channels. They provide customer care services thus making sure the customers complaints reach in time and are addressed in time (Quigley, 2004). The company uses social media especially use of Facebook and Twitter thus enabling customers to follow the company’s developments and new products. The beverage is also advertised in the magazines and televisions thus making it accessible and reaching a range of people. The communication strategy in this company is efficient enough as the customers are well catered for and their needs come first. The company allows shows for its products and has been involved in a number of exhibitions thus attracting more consumers. It is one of the best beverage companies in the United Kingdom and for it to remain successful it must continue enhancing good communication strategies.

Media Strategy

Media strategy is used in advertising and delivery of the required content to the targeted customers. It involves the methods on delivering messages and information to the required customers. It also involves identifying the behavior and character of the targeted customer who receives the message and information, getting to know the characteristics of the media which will be used in advertisement, with the intentions of influencing the character of the targeted customer. Use of the correct media will bring a positive impact to the company and in the case of CocoMojo their media strategy has contributed more to its success (O'Reilly, 2013). CocoMojo uses media strategy example enhancing good public relations, enhancing proper advertising methods and also using media response directly. CocoMojo uses various types of social media strategies namely:

Reputation management and development

This involves developing good reputations to customers and repairing the already damaged one. This is coming up with good leadership skills that enable the company run well. It involves employing qualified staff who will enable maintain the companies good image and reputation. Customers are always concerned about the image of the company they are buying their products from. To attract more customers the reputation should always be maintained and repaired where necessary.

Maintenance of the brand

The company should always respond to comments and complaints on the brand in time. The brands progress should be monitored thus the company should tell if its making progresses or not. The company should monitor if the product is reaching the targeted customers in good time. The company should post updates on the social media for the customers to see the latest products thus increasing the sale of the products which in return amounts to huge profits.

Community building

The company should make sure that it builds a good and lasting relationship with both internal and external competitors and also various groups of similar interests. The company should join groups so as to share ideas and advices as well as engaging the community in various activities. The company should be social by involving the community as a whole in its activities.

Influence outreach

The company should always involve influential people in its activities. These people could bring changes to the company. It should partner with such influential people so as to share ideas and exchange views. It should partner with such people who can come up with new inventions and ideas so as to bring new development and technology in that company.

The big splash

The company should hold big campaigns which are creative in nature. The company in order to attract its customers should come up with big and enjoyable offers. The company should hold competitions and exhibitions with other companies so as to outshine other companies and by so doing the sales increases. The company should also offer free gifts and discounts thus enabling its increase in customers and retaining others. The campaigns enable the products to reach a wide range of people and also exposing the brand to new places. The company should use social media in achieving this since many people use the social media and on line services.

Creative briefs

A creative brief contains both the name of the person preparing it as well as the contact information of the client. It contains the background or the overview of the market, objectives and purpose of the brief and the target audience. CocoMojo has been using creative briefs for its targeted customers so as to improve its popularity. For example ‘the company wants people to consume its beverage since it is offering great offers and discounts on customers, you buy two beverages you get one free’. The creative brief should be precise and detailed. The company outlines its targeted customers according to the age and sex but for cocomojo all people is invited to purchase the drink regardless of the age and sex. The creative brief contains the effects and advantages of the product being advertised. It targets the customers reactions and gives the customer directions on how to use the product and where to get the product for example in the case of CocoMojo a creative brief can include “we are encouraging people to buy the new coconut water beverage and use it within two weeks at a special offer, buy two get one free, it can be found at retail stores and supermarkets, it is a healthy drink for the whole family from your company of choice, CocoMojo”.

Recommendations

The entire recommendations found in this article seem to be clear as they present concrete solutions that are able to address the research questions. Normally, recommendations of any articles are based on the developed summary of the article. In this case, it is useful for companies particularly marketers to incorporate social media into their marketing and their marketing strategies. The article has further initiated a recommendation to research on how marketers would prepare applications and content that both assist consumers to follow social media and help the entire audiences to become participants. However, the research does not include limitations that are observed during the entire process of researching and conduction of methodology. This however should encourage the CocoMojo Company to involve more influential people, focus more on its customers as a way of enhancing its success. CocoMojo is one of the multinational companies in Britain thus to enhance and maintain its image, there is need to employ good communication and media strategy and the right creative briefs.

Conclusion

From the above it is important to note that feasible conclusion should be directly related to the hypothesis of the research or should be in a position to answer the customers complaints. CocoMojo as a company has been seen as very successful because of the healthy nature of its products. It has prospered as a result of employing good communication skills and strategies as well as excellent media strategies. The company should however improve on its packaging so as to attract more customers. The company should advertise its products more and offer more discounts and gifts to the customers so as to retain them. For it to remain more successful it has to compete more with its key competitors and thus coming up with other healthy products will boost it more. The company should therefore modernize its technology and remain involved in various shows, campaigns, and different exhibitions and by so doing it will remain outshining the other competitors in the market.

References

Healthy & Functional Beverage REPORT. (2013). Beverage World, 132(10), 41-53.

New drinks review: cacao and coconut make strides in the health drinks market. (2011). MarketWatch: Drinks, 10(6), 4-7.

O'Reilly, L. (2013). Coke coconut water brand takes on Vita Coco with biggest ever campaign. Marketing Week (Online Edition), 10.

Quigley, D. (2004). Simply smoothies: 200 refreshing drinks for life, health, and fun. Avon, MA: Adams Media.

the top five. (2013). Marketing Week (01419285), 5.

The role of transportation in logistic

Introduction

Significance of The role of transportation in logistics

            Transportation takes a crucial part in the manipulation of logistics and thus operation of transportation determines how efficiently moving products will move. A strong transport system needs a clear frame of logistics. This is done to assist logistic managers and transportation planners to define the basic views of logistics.

Scope of the paper

This paper will include the interrelationship a transport and logistics, the role of transportation in quality service, effects of transport on logistic activities and the future prospects of logistics.

Interrelationship between transport and logistics

A well developed transport system brings logistics to its full play. In addition, a good transport system in logistical activities provides better logistic efficiency, operation costs are reduced and there is promotion of service quality. Transport systems should be improved by both public and private sectors.

Role of transportation in quality service

Transportation plays a very complex role. The goods could be present to the right place and at the right time when the means of communication is very well and effective. (Dowlatshahi, July 15) Transportation is the base of efficiency in the business logistics and also it expands other functions of logistics system. In addition, a good transport system performing in logistics activities brings benefits to both the service quality and company competitiveness.

Effects of transport on logistic activities

Transport may play an important role in minimizing the cost and maximizing service in accordance with the business logistic. In order to improve the logistic performance there should be better transport facilities and pressures.

Future prospects of logistic

Due to the worldwide competition, logistic systems should be improved and advanced by both the private institutions and government. (Murray et al, May 2007) Various developments should take place for example, growth of international transport, revolution of logistic operation and specialized logistic delivery.

Conclusion

From the above point of view, it is clearly observed that there exist an interrelationship between transport and logistic. In order to improve logistic, transport should be efficient.

Work cited

Dowlatshahi S. The role of transportation in the design and implementation of reverse logistics systems. International Journal Of Production Research [serial online]. July 15, 2010;48(14):4199-4215. Available from: Business Source Complete, Ipswich, MA. Accessed February 17, 2014.

Farris M. Evolution of Academic Concerns with Transportation and Logistics. Transportation Journal (American Society Of Transportation & Logistics Inc) [serial online]. Fall97 1997;37(1):42-50. Available from: Business Source Complete, Ipswich, MA. Accessed February 17, 2014.

Murray W, Cuerden A. Transport and logistics safety: why it is important and how to improve it. Logistics & Transport Focus [serial online]. May 2007:36, 41. Available from: Business Source Complete, Ipswich, MA. Accessed February 17, 2014.

 Netflix SWOT analysis

 Strengths

The optimization of content suggestions- the company has been able to optimize on the recommendations that they make on for their customers. This has seen the company grow their library viewership (Trefis, 2013). This has meant that a lot of viewers are able to subscribe to their vast library. This is a win-win concept for both the company that has an increase in customers while the customers have variety to choose from.

Competitive advantage- the company was the very first to provide streaming services to the customers (Thompsonet al., 2007). To date, this has served as leverage to the company that is now viewed as the fastest in the entertainment provision industry.

Ready devices- the company has devised a method where they are able to partner with device providers in this deal, the device providers have to incorporate Netflix associated apps in their devices. Some of the devices have even been fitted with buttons that would effectively launch the Netflix apps once they are pressed. This ensures that the company’s customers have easy access to its products from whichever devices they are using.

Agreements on revenue sharing- the company has been able to set up a number of agreements with regards to revenue sharing with other. These agreements are mainly applicable in the pay-per-use packages that they have with other service providers (Duncan, 2011). This ensures that both parties are able to benefits from the arrangement and make profit.

Weaknesses

Storage and delivery of content- the storage of the company’s content is through amazons cloud storage. This particular medium is also used to stream the content to the customers. Amazon has recently also entered the same market as that which Netflix operates in which translates to conflict of interest as well as competition between the two companies.

Supplier bargaining power- most big films are produced by equally big studios. These studios have the bargaining power as far as setting the prices of their films are concerned.

Faults in management- the company has over the years had bad relations with its customers as far as pricing is concerned and while this may effectively be out of their league at times, it has managed to deal a blow in the company’s reputation (Trefis, 2013).

Opportunities

Internet growth- today so many countries are able to access high speed internet that is relatively affordable. This means that the company’s opportunity to expand to other countries is also equally increased.

Independent studio growth- the company does not need to be held hostage by the prices and terms of the big studios since there are so many smaller studios that have come up that are able to provide quality content. This means that the company can be able to negotiate for better deals even with the bigger companies due to the strong competition.

Mobile internet growth- the rate at which mobile internet is growing is at an alarming rate. This means that the number of individuals that can access videos via streaming on the internet has been able to increase significantly (Shields, 2014). The same can be said for the ease access to mobile devices that are able to support the web streaming.

Improved Infrastructure capability- the prices of a lot of bandwidths packages have significantly been dropped by bigger providers such as times Warner (Flacy, 2013). While this might mainly be attributed to competition, it is an added advantage to the company for it will mean that they use less costs.

Threats

Internet fraud- recent years have seen a spike in internet fraud related crimes. This means that the customers are reluctant to pay for the company’s services because they can access those services for free elsewhere.

FCC- net neutrality regulations have not been expanded by FCC. This means that content providers such as Netflix can be charged streaming content fees by ISPs.

Porters five analysis

The movie industry is one that is extremely competitive. This is because of the large number of companies that are involved in this particular business. It should also be considered that the amount of sources where customers can be able to access movies at cheaper rates and even for free has increased substantially. Competition also means that the switching costs that are available for the customer are considerable low and consumers now have to choose between varieties of low cost entertainment service providers.

The company however does not necessarily have to care about the threat of new entrants. This is because this particular business of stocking up on entertainment requires a substantial amount of capital and capacity. The large companies that already exist have already established know brand names that are relatively hard to beat. There is also the cost of capital spent on adverts and marketing.

The company has however to be alarmed as far as the threat of substitute products is concerned. This is because people do not necessarily have to watch movies. They could watch television, listen to music or even browse on the internet. There is also the fact that there is a large of people who still prefer renting their movies.

Buyer burgeoning power is very high. A lot of buyers have brand loyalty and while individual buyers are not likely to make any effect, the larger picture is altogether different. It should also be considered that the switching costs have considerable changed to either low costs or no costs at all.

There is moderately high supplier bargaining powers. This is because they are able to impose their own prices or even reduce the quality of the films they produce. This is likely to have an effect on the company’s profits (Lieberman, 2013).

Bibliography

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.

The Impact of Supply Chain Risk in Small Business Manufacturing

Background of the problem

            It is the dream of every business whether big or small to be able to achieve maximum profit. This is always evidence that the business is making progress. Despite it all, there always un-foreseeable factors that come in that if not anticipated may end up ruining a business. Supply chain risk is one of these factors. The supply chain is an integral part of any business more so those in manufacturing. This is because the chain explains how the goods from manufacturing to the consumer. In between, there are many steps than need to be taken depending on the product.

            A survey by the American business continuity institute in 2011 found that that at least 85% of companies who had a global supply chain experienced at least one global supply chain disruption in a year. Often than not the cost of such disruptions is often very high and often lead to fewer revenues, delays in delivery, customer loss, increased down time and even loss of reputation. In fact, some companies have experienced lower shareholder returns due to such disruptions.

            Supply chain risk can arise from any point of the supply chain. These can be very challenging to any business owner. The key to managing them is being able to identify them then subsequently minimize them.

Problem statement

            Supply chain risks are a very costly business. This is because a problem in one part of the chain is likely to cause a ripple effect in the whole chain (Waters, 2011). This means that if there is a problem in say production, then ultimately delivery will not be able to take place. Most costly outcomes of risk events in a supply chain include margin erosion (Zsidisin & Ritchie, 2008). This happens where the profits of the company start going down and in some cases, the company incurs losses. Margin erosions in most cases scare away investors as well as shareholders.

            The second highest outcome is usually sudden demand change. In this case, the consumers of the product change the demand that they had of the product. In most cases, the demand of the product greatly diminishes (Gurnani, Mehrotra & Ray, 2012). This means that the company will have to cut down on its production or risk losses. This change ultimately deflects on the profits by creating a loss.

            Physical product flow disruption is also a consequence of supply chain risks. In this case, the product stops moving. This impacts the supply for the products do not reach the consumers. A standstill also affects the workers as well as the management of the business (Khan & Zsidisin, 2011). It should also be noted that product flow disruption also makes the consumers loose faith in the product which is also another bad for the business.

            The quality of a product relies on its supply. A customer will judge a product depending on the state in which the product reaches them. This means that any problem that may occur in the supply chain may end up affecting the quality of the product. Poorly produced or distributed goods mean that the customer will rate the quality as poor. Ultimately, this will lead to the customer opting for other products that are of a higher quality than that of the manufacture. That is bad for business (Kouvelis, 2011).

            It has been noted that there is a lot of laxity where a supply chain risk has been noted. This laxity leads to non-compliance of regulations by the relevant stakeholders as well as or with worker safety failure. Such laxity is often detrimental to the company who not only have to repair the damage and salvage what was lost but are also likely to face steep penalties that only serve to increase the loses (Sodhi & Tang, 2012).

            Finally, supply chain risks are likely to affect the manufactures social responsibility. Not only is the company obliged to its suppliers but also to the people who work in the company and the community as a whole. Losses mean bankruptcy which means shutting down and loss of jobs and poverty in the community.

Purpose statement

            The purpose of this study is to outline the impact of supply chain risk in small business manufactures which is ultimately detrimental. Small business manufactures should be able to anticipate supply chain risks that come in form of internal operational risks, Functional support risks, extended value chain risks and Macro-environmental risks Problems. Indeed, like the bigger competitors, they are likely to face these problems. This knowledge will help them look for ways to minimize the risks, if and when they come. It should be noted that these risks are very devastating to smaller manufacturing businesses and may even lead to their demise if not properly monitored, reduced and managed.

Works Cited

Gurnani, H., Mehrotra, A., & Ray, S. (2012). Supply chain disruptions: Theory and practice of managing risk. London: Springer-Verlag London Limited.

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Zsidisin, G. A., & Ritchie, B. (2008). Supply chain risk: A handbook of assessment, management, and performance. New York: Springer.