Oil industry in Russia in 2050 Assignment Example | Topics and Well Written Essays - 2000 words

Oil industry in Russia in 2050 - Assignment Example Of vital significance are the factors, which influence international demand and supply of energy. Owing to the fact that approximately 1.4 billion people in different parts of the world do not have electricity, it is very vital that access to modern forms of energy be enhanced to meet the United Nations Millennium Development Goals of poverty and hunger reduction, as well as the promotion and expansion of health and education. By the year 2050, the Russia will be virtually energy sufficient. The major reason for this is the increased domestic production of oil and shale gas in Russia. The fact that the Russia is among the major players in the international field alongside United States of America and other countries, requires that a national energy outlook report be carried out on the nation. Energy is very significant in different regions of the world since it supports and enhances social development as well as the growth of financial systems in different nations. As a consequence of the universal importance of energy, it is of utmost magnitude that different actors affected by the energy industry, for instance, the consumers of energy, leaders in government, actors in the energy sector, commercial institutes and the civil society, gain a comprehension of the basic actualities which typify the energy sector. This paper aims at describing a national energy outlook report for the Russia in the year 2050. This report will present the long-term projections of the supply and demand of energy in the Russia from the present times to the year 2050. The descriptions and projections made in this paper will focus greatly on the contributions made by the petroleum and gas sectors. The energy resources in the United States, as well as the policies, regulations and ethics, which infl uence the Russian energy sector, will also be examined. An in depth analysis

Stress Management in the Workplace

Stress Management in the Workplace The study of human relations looks at the interaction between people in the workplace. From study of Masters in Business and personal experience, I understand the one major problem for human relations and therefore corporations is how to manage stressful events/issues in the workplace. Highly stressed workers are less productive, change jobs much more frequently, and experience more negative health consequences than their less stressed colleagues (North Western National Life, 1991, 1992). This is exactly the reason why good management is needed to combat the problem of stress. This critical reflection will examine stress management from my personal point of view and reflect on the topics learnt regarding human relations in the workplace. This critical reflection utilizes the knowledge and experience I have gained from my fathers workplace, HDFC Bank Ltd India. This company like most banks can be a very stressful and fast paced workplace and like most companies there is conflict, co-o perative efforts and group relationships. From my fathers management in his company I understand that an employee is not just made up of his/her skills. An employee is a person, a human being, and an effective way of managing human relations is to utilize not just that persons skills but the diversity they bring to the company when individual employees make up a team. Companies must limit the amount of conflict within the workplace in order to increase productivity and maximize the efficiency of their workers. Conflict arises due to a difference in values, interest, cultures and can also arise due to miscommunication. It is important when dealing with conflict, that managers understand the underlying factors of why certain conflict arises. With understanding co-workers, employees become compassionate and empathise with each other as they start to understand and grow to know one another. On the other hand, too much agreement between employees is said to be unhealthy for a company. This does not necessarily mean conflict but rather relates to debate over certain issues. Debate is healthy for companies especially if it generates higher productivity. However, I believe, it is necessary for managers to make sure employees behave in a polite and constructive manner. In my opinion, it is also important for managers to have effective negotiation skills. With the arise of conflict, comes in need for managers to resolve conflict and disputes in a fair and equal manner. The two types of negotiation, distributive and integrative negotiation can be achieved with the effective management. Distributive negotiation refers to one party winning and the other party losing whereas integrative negotiation is a win-win situation. Unfortunately the latter cannot always be achieved and with conflict there is sometimes a losing party. Therefore conflict resolution, as a manager it is important to express the need to compromise when conflicts arise. As a manger, I am striving to create my skill in negotiating, more importantly I believe managers like myself, should increase their skill in collaboration and accommodating negotiation skills. In aiming to reduce stress in the workplace, negotiation skills such as finding a common ground, a common interest can divert a ttention away from the conflict and therefore end the stress. Stress in the workplace does not only come from conflicts between employees. In a bank it is very fast paced and the amount of work that the employees have can also cause stressful tensions. This type of stress is known as the treadmill syndrome. Another type of stress can be caused by interruptions in day-to-day processes. This means that employees that are interrupted many times have higher stress levels. However, other types of stress can come from managers and the employers themselves. Uncertainty in company policies, employee contracts or future employment can also result in tension. From personal experience I believe the manager must always aim to achieve a good relationship with co-workers and also aim to decrease the level of stress through effective management skills. I also believe that treating employees as individuals, respecting the diversity in the workplace can also lead to happy and less tensed employees. In my fathers company one effective way of achieving this is to be inclusive with all employees. This can be difficult when dealing with large teams however being able to make employees feel safe, secure and included can reduce the amount of stress in the job. An example of this is where employees share their knowledge and skills so that the team is not only made up of individuals working alone completing separate tasks, but instead works as a group to achieve a common goal. The effective control of self-esteem is also an important element in stress management. Self-esteem when properly managed, can allow employees to feel engaged and happy in the workplace. An effective level of self-esteem will create an effective worker. From personal experience creating a balanced self-esteem within employees is all about personal development. Setting goals and giving employees the knowledge and skills to achieve those goals can boost self-esteem, create confidence in the employees abilities and decrease the level of stress. Another way of creating confidence is by developing a reward system. A reward system allows for praise to be given when employees deserve it however the management of the system should be carefully scrutinised so that employee do not become dissatisfied when they cannot achieve goals. From personal experience I have seen this system in use and by giving employees praise and rewards for doing a good job the workplace can be comparative and employe es feel good about success thus creating high self-esteem and happy effective workers. Happy effective workers may be easy to establish, however the continuation of this emotion and the deliverance of a low stress workplace can only be achieved through effective management. My view of effective management begins with the ability for managers to be able to set an example of how they want their employees to work. This is closely related to the topic of self- management, which enables a manager to lead by example. The concept of leader and follower is very important to establish for managers. Being able to direct and instruct employees in an appropriate manner can also effectively manage stress. I have seen this when personally dealing with lecturers and teachers. An effective leader, manager or teacher should be able to make people feel calm, valued and secure through their attitude towards work and also the manner in which they conduct themselves. In personal experience teachers have made me feel calm, valued and secure by their positive attitude, friendly personality a nd ability to live what they preach (they lead by example). The managers ability to lead by example also relates to gathering information on employees likes and dislikes and making sure communication between employees is at an effective level. The main aims of communication are knowledge management; decision making; coordinating work activities; fulfilling relatedness needs; inform; express feelings and influence. (Evans, (2010) Communication: Interpersonal Effectiveness, [PowerPoint Slides] retrieved from www.jcu.edu). Although these aims are not directly related to stress management, it can be devised that if these aims are achieved the employees work load and general day-to-day tasks will become less stressful. In this day and age, intellectual technology has allowed fir communication to become more efficiently received. However, communication which has been received electronically has more of a chance at being misread. Email, memos, voicemails etc. can create greater conflicts than there would be with face to face communication. Through p ersonal experience and observing my father I have learnt that extensive training in electronic communication and how to write without mistakenly offending people is very important. Face-to-face communication also allows for employees to disclose certain information, allowing people to become comfortable with each other and work more closely as a team. The stress reduction factor in the ability for employees to communication effectively is seen when communication lowers the risk of conflicts and also decreases the amount of mistakes employees make due to miscommunication. In my fathers company I have heard of many mistakes made due to miscommunication, such as Bank Policies on human relations and employment conditions causing panic and unrest with employees and decreasing efficiency. The miscommunication between bank departments and the creation of rumours results in high levels of stress which could be avoided if better management had been in place. The kind of manager that I want t o be relates closely with the Johari window and the four panes of relationships. I believe that by developing a close, professional relationship with employees can generate trust and great communication skills. I also believe that a manager should have the ability to criticise employees in a way which will make them more efficient at their job. Constructive criticism, as many call this, is the ability to point out a persons behaviour in a way which makes that person examine their behaviour but is done in a positive manner. Learning to restructure the way in which I give criticism so that my communication is positive and employees are able to learn from the criticism I give them. I learnt from my father that the way he manages his employees, that positive language generates more positive responses to productivity. This ability to disclose information, communicate and take criticism can only happen if there is a certain level of trust already gained between co-workers. An example, Emp loyees perceptions of low role overload-quantitative, role overload qualitative and lack of career development as sources of stress most likely result in low job stress; in turn, this would benefit both the organizations and the employees themselves. Low job stress should result in better job satisfaction and organizational commitment, since researchers have found significant negative associations between job stress and both job satisfaction and organizational commitment (Jamal Badawi, 1995). Although communication is vital, being able to communicate with a diverse range of employees can be difficult. That is why it is necessary for managers to learn how to communicate in different styles. For example, in the workplace there may be employees which are able to process instructions which are verbally communicated. However, others may be more visually inclined and therefore managers will need the self-disclosure and close relationship with co-workers to develop and understand what communication styles are needed. However, managers are not able to control every little event that happens in the workplace and conflict can still arise even with good management. A managers ability to observe, notice and counter act any possible conflict is a great skill to have. However, no manager is able to control peoples emotions in this can develop into conflict. The managers job in this case is to educate employees on the proper ways of controlling and handling their emotions in times of high stress. In my point of view, I believe that company retreats where employees get to know one another in an environment other than the workplace can lead to high levels of trust between co-workers and also creates opportunities to develop their ability to handle emotional stressful events. From my personal experience in studying I have learnt how to deal with stressful events and control my emotions so that I make rational decisions through observing how my father deals with stress (Exercise and Hobbies) and also through seminars which have taught me how to understand how people think and react to different saturations. As mentioned above, positive language, communication and good management are all good ways to deal with stress in the workplace. One other way to create a stress free environment is to motivate employees in the belief that if workers are motivated and believe in their job conflicts will be diminished, emotions and irrational behaviours will decrease and staff will be happy within themselves and productive. Motivation, I find is a very hard skill to learn and can sometimes take years to develop. From the personal experience I have witnessed great management and motivational skills from one of my teachers. Her motivational skills came from her passion for her subject and the belief in what she was doing. Her passion and excitement motivated her whole class and her creativity and ingenuity for teaching and learning pedagogies catered to a diverse yet successful classroom. Along with motivational skills comes the ability to be able to observe and distinguish learning capabilities. Not every individual has the ability to learn in the same way, and as mentioned before, some may be visual learners others may be auditory and lastly, managers may come across tactile learners. In believe the ability to encourage employees to continue their lifelong learning is an important skill and through learning comes the ability to gain knowledge and ultimately understanding and consideration for others. As a manager, I believe it is this consideration which is also important to stress management. From personal experience I know that knowledge can bring wisdom and the ability to act rationally when conflicts arise. According to my point of view work life balance can be achieved through proper prioritising between work, career and ambition on the one hand and life, pleasure, leisure and family on the other hand. Through this the manager should be able to promote workplace health and understand the work or family conflict. Stress can be related to this, if an employee is does not have a good work life balance he will undergoing stress in all the ways. I believe that there should be a work life balance in the working environment where the employees should be happy and they can give their own effort to achieve the common goal. An example, Singaporean employee perceptions of a supportive HR environment will be negatively related to their perceptions of role overload and responsibility. (International Journal of Stress Management July 2002). In summary, it is very important for managers to learn this significance of stress management. As a manager I believe it is important to keep in mind the organisations, although made up of individuals are essentially individuals that work together. There may be different departments with different managers and therefore different ways of dealing with tasks however, these departments work as a whole in order to successfully achieve a common goal. This is a significance of why stress management is important. If employees are stressed and goals are not achieved, productivity and the company suffer. As expressed above in the critical reflection stress can arise from many situations caused from over work, interruptions or general conflicts between employees. In dealing with stress in the workplace it is important to continue learning new skills in how to deal with conflicts. Some of the factors underlying conflicts which were examined above included miscommunication, lack of knowledge or understanding over diverse workplace etc. The importance of these factors allows for managers to develop a process or plan helping to deal with these factors. I.E self-disclosure will hopefully create a better working environment due to greater knowledge and understanding of each other and thus the ability to communicate more efficiently and effectively with each other. With conflict comes the need for negotiation in order to resolve conflicts and establish a united workplace. My personal experiences and study has allowed me to develop into the kind of manager I believe is most efficient. This involves the ability to communicate effectively with a diverse range of learning abilities and also able to negotiate to the best of my ability so that compromises can be reached when conflicts arise. But most importantly, I believe in setting a good example for my co-workers which includes continuing my learning through professional development, sharing my knowledge and skills with fellow co- workers, listening and learning from my co-workers and lastly gaining the ability to be emphatic and understanding of diverse cultures and people which I may come across both personally and professionally.

moralhf charhf Mark Twains The Adventures of Huckleberry Finn †Morality of Hucks Character :: Adventures Huckleberry Huck Finn Essays

Huckleberry Finn – Morality of His Character Many critics of Mark Twain's Huckleberry Finn fail to see the morality and support of racial equality presented in this novel. June Edwards the author of "What's Moral About Huckleberry Finn" also believes that most critics do not understand Twain's method or completely ignore the satires used throughout the novel. Twain uses a unique method to make a point, including racial equality and Huck's highly moral personality. In June Edward's opinion critics who try to censor Huckleberry Finn see Huck as a poor role model for teenagers. They pass this judgment because of his poor use of grammar and his repeated ability to lie. In Edward's article she points out many things that show Huck's morals along with the novels support of racial equality, which differs greatly with those who wish to censure Huckleberry Finn. Unlike most critics of this novel, I happen to agree with Edwards on her position on this novel. One topic of disapproval of this novel is Huck's use of bad grammar making him a poor role model for today's youth. Huck's use of poor grammar reflects the culture that Huck lived in at that time in the south. I believe that if a person uses poor grammar in their speech, that is not a reflection of that person's personality or morality in any way. Huck proves countless times that he is a young man of high morals even if he is not highly educated. Another criticism of Huck Finn is he tricks people into thinking he is something he is not. For example he posed as a girl in a town down the river to see the response to Huck and Jims disappearance. He acted in a similar manor when asked, by slave catchers who was accompanying him on his raft. Huck quickly created a story to protect his slave friend Jim from the feared slave catchers. Huck hides his identity numerous times to protect his friend Jim from danger and possibly death. It takes an extraordinary high moral person to take these kinds of personal risks to protect a slave especial during this time period in the south, but Huck is nothing of the ordinary.

On Arabian Culture Essay

The literature on social diversity and cleavages in Arab society and the Middle East as a whole suffers from several fallacies, two of which are most pertinent here. One is the tendency, particularly among Orientalists, to speak both of the mosaic nature of Arab society and of the existence of a unified mentality, or one Arab mind, without any awareness of the contradiction between these two abstractions. The other is the emphasis either on communal cleavages or on class conflicts, with the result that one becomes explanatory while the other is ignored. The interplay and coincidence of these two cleavages are rarely examined in their historical and social contexts. How can an individual define the diversity of Arab society? The diversity that characterizes Arab society needs to be analyzed within a three-dimensional framework: (a) a homogeneity-heterogeneity continuum; (b) the processes of conflict-accommodation-assimilation; and (c) social class cleavages. The continuum that covers the range from a completely homogeneous society to one of great heterogeneity encompasses a complex system of vertical loyalties and communal differentiations (ethnic, linguistic, sectarian, tribal, local, regional, and the like) that coincides as well as conflicts with social class cleavages. Arab society has historically been highly heterogeneous. Certainly, one may argue that there has recently been a resurgence of communal loyalties and mobilization, confirming the mosaic and segmentary structures of society. What cannot be granted is the static conception of these loyalties and cleavage as permanent, unchanging forms of differentiation. What is Arab society in general? The characterization of Arab society as heterogeneous, however, needs to be accompanied by an explicit clarification that not all Arab countries are similar in this respect. In fact, they differ widely in regard to their positions on the homogeneity-heterogeneity continuum. Compared to other Arab countries, Egypt and Tunisia, for instance, may be described as rather homogeneous as far as communal cleavages are concerned. These two countries tend to have fewer ethnic, religious, and tribal differences (and, hence, conflicts) than other Arab societies, and are characterized more by social complexity and social class cleavages. A second group of Arab countries, such as Lebanon and Sudan, occupy a position close to the opposite end of the continuum, each being more of a mosaic in structure and social composition. A third set, such as Syria, Algeria, Arabia, and Morocco, tend to occupy positions more in the middle of the continuum. Conventional Western literature on Arab and other Middle Eastern societies has persistently avoided any serious discussion of social class structure. Instead, it has conceived of Arab societies simply as a mosaic. At the margin of this mainstream discourse, however, there has been some occasional speculation on problems of social stratification. Whenever a discussion of this nature has taken place, it has evolved into a heated exchange. One point of view reaffirms the conclusions of the mosaic model and questions the relevance of class analysis. For instance, C. A. O. van Niewenhuijze and James Bill, in separate works, dismiss class analysis in economic terms and instead use Weberian concepts of status and power. Similarly, Iliya Harik has more recently dismissed the thesis put forward by some writers that the Lebanese civil war is actually a class struggle and expressed his â€Å"belief that class distinctions in Lebanon are too obscure to sustain the class struggle argument†. Bryan S. Turner, by contrast, has pointed out that anyone â€Å"who wants to develop a Marxist analysis of North Africa and the Middle East must start with a critique of the mosaic theory and all its related assumptions†. Such a critique, he explains, is required because mosaic analysts believe â€Å"that traditional Middle Eastern societies were not class dominated and that in the modern Middle East social class is only in the process of emerging alongside other forms of social stratification†. Nicholas S. Hopkins has applied ideas of class derived from the Marxist tradition to changes in the social structure of an agricultural town in Tunisia, concluding that essential changes in the mechanization of agriculture and in the improvement of communications â€Å"led to a shift in the organization of work away from a pattern based on mobilization of labor within the household or the extended kindred . . . and toward a pattern of labor determined by wage labor†. Consequently, this Tunisian agricultural town has shifted from a society in which rank was based â€Å"on vertical rather than on horizontal links† to one â€Å"based on class†. Hopkins argues further that not only is there class in the objective sense, â€Å"there is also class consciousness, at least in embryonic, symbolic form†. My own view is that the persistence of communal cleavages complicates rather than nullifies social class consciousness and struggle. This persistence of communal cleavages and vertical loyalties in some Arab countries is owing to the perpetuation of traditional systems in which communities are linked to their local za’ims (traditional leaders) through patron-client relationships. To the extent that constructive change can be introduced in these areas, such traditional systems will give way, increasingly, to other social and class relationships. Reference: Gutas, D. (1998). Greek Thought, Arab Culture : The Graeco-Arabic Translation Movement in Baghdad and Early Abbasid Society (2nd-4th & 8th-10th C. ): Routledge. Rejwan, N. (1998). Arabs Face the Modern World: Religious, Cultural, and Political Responses to the West: Gainesville University Press of Florida. Szarmach, P. E. (1979). Aspects of Jewish Culture in the Middle Ages: Albany State University of New York Press

Capsim Report

I. Executive Summary Erie Corporation has been founded in 2011 with the mission is to provide both reliable products for low-technology customers including Traditional and Low End segments; and premium- technology oriented customers including High End, Performance and Size segments. This business plan is written so as to provide the board of directors a detailed picture about the company’s strategies as well as the direction how we can implement these strategies. The plan consists of three parts. The first part is about the corporate objectives and strategy. In detail, at the end of year three, Erie aims to be one of the two leading companies in the market with a net profit of $10,000,000 and 25% of market shares of the whole industry. In addition, the company’s management expects to gain at least 30% of contribution margin for each product, to reduce 60% to 70% of total labor costs and 11. 8% of total material costs. Erie’s strategies are niche cost leadership and niche differentiation. In particular, while products in Traditional and Low End are oriented to operate under the niche cost leader, products in three remaining segments including High End, Performance and Size are aimed to follow the niche differentiator strategy. This is because while price is the most considerable criterion of customers in Traditional and Low End segments, this does not matter to the other three segments’ consumers as long as the products offered are premium-technology. To implement this strategy effectively, Erie should operate under the direction like this, besides revising products to meet customers’ expectation; the company set up a relatively low price for products in Traditional and Low End segments and vice versa for products in the three remaining segments. Simultaneously, the company will invest on capacity and automation gradually for all segments. This will bring to Erie a competitive advantage over other competitors in terms of long-term cost savings. In addition, maximum second shift capacity may be run as much as possible and a significant amount of money will also be spent on promotion and sales budgets so as to capture the highest possible percentage of market shares. Furthermore, Erie is willing to make losses at least in the first two years because in the remaining years of the simulation, when higher capacity and automation are ready as well as Human Resources and Total Quality Management functions are applied, Erie will become more competitive in the market and hence can make profit as the production costs will be minimized. Secondly, specific objectives, key performance indicators and strategy which are followed strictly the corporate objectives of all departments including R&D, Marketing, Production, Human Resources and Total Quality Management will be also set out. Finally, a back-up plan which might be utilized when there is trouble in the operation of the company’s products is also prepared. Under this plan, the failed product will be remained for two years instead of stopping its operation immediately so as to sell its remaining inventory and wait for the new product to be finished and could be sold to the market. Table of Contents Executive Summary 1 Introduction 4 Corporation Objectives & Strategies 4 1. Corporation Objectives 4 2. Corporation Strategies. 4 R&D Department 5 1. Objectives 5 2. KPIs. 5 3. Strategies. 5 Marketing Department 6 1. Objectives 6 2. KPIs. 6 3. Strategies. 7 Production Department 8 1. Objectives 8 2. KPIs & Strategies. 8 3. Strategies. 9 Human Resource Department 10 1. Objectives 10 2. KPIs & Strategies. 10 TQM Department 11 1. Objectives 11 2. KPIs & Strategies. 11 Finance Department 12 1. Objectives 12 2. KPIs & Strategies. 2 3. Strategies. 12 Back-up Plan 13 Conclusion 14 Reference 14 Appendix 15 II. Introduction Sensor industry is more likely an oligopoly because the products are high technological including cameras, biometric devices and labs-on-a-chip. In addition, there are only six firms dominating the market and the total demand for the whole industry remains stable which means that new firms cannot enter into the market. Furthermore, year after year, while customers’ expectations are becoming higher and higher, the products are getting older and price ranges are stricter. This indicates such a challenge for all companies in the market. A critical successful factor which can assist all companies to overcome this difficulty is that each company should choose an appropriate strategy to follow so as to succeed and become more competitive in the market. Recognizing this fact, Erie has chosen two strategies including niche cost leadership and niche differentiation that are appropriate for each types of segments. In this business plan, these strategies will be examined in depth and detailed actions of all Erie’s departments which are followed these strategies are also sketched out. III. Corporation Objectives and Strategies 1. Corporation Objectives By the end of year 3, Erie will: * Be one of the two leading companies in the sensor industry * Achieve net profit of $10,000,000 * Obtain at least 25% of market shares of the whole industry * Gain at least 30% of Contribution Margin for each product * Reduce at least 70% of the total labor costs and 11. 8% of total material costs 2. Corporation Strategies According to customers’ buying criteria of Traditional and Low End segments, prices are deemed to be the most considerable factor. In fact, respectively, the price ranges of Traditional and Low End take up approximately 23% and 53% over other criteria such as position and reliability. In other words, customers are willing to purchase low-tech products as long as their prices are relatively low. As a result, Niche Cost Leadership seems to be the most appropriate strategy for these two segments. On the other hand, prices are the most insignificant buying criterion in High End, Performance and Size segments. No matter how high the prices are, customers in these segments are more preferable to high-tech product. In particular, for the High End and Size segments, ideal position occupies 43% and products’ ideal age is 29%. Furthermore, reliability is the most important consideration to customers in Performance segment. Hence, Niche Differentiation is a proper alternative for these three segments. IV. R&D Department 1. Objectives * Meet customers’ expectations in all segments * Control R&D budgets for products in Traditional and Low End segments as low as possible * Continuously update products’ positions for High End, Performance and Size segments every year . KPIs * Keep R&D costs for in Traditional and Low End segments maximum at $1,000,000 * Invest minimum $1,500,000 for revising products in High End, Performance and Size segments 3. Strategies a. Traditional and Low End segments For these two segments, Erie decides to invest slightly and annually in performance and size while decrease the mean time before failure (MTBF) of products in year 1. After that, MTBF will be r emained stable during the first three years. | EAT| EBB| | Year 1| Year 2| Year 3| Year 1| Year 2| Year 3| Performance| 5. 7| 6. 4| 7. 1| 3| 3| 3. 2| Size| 14. 3| 13. 6| 12. 9| 17| 17| 16. 8| MTBF| 16000| 16000| 16000| 14000| 14000| 14000| Table 1: R&D investment for Traditional & Low End segment for the first three years b. High End, Performance and Size segments So as for customers to perceive the differentiation of our products in these three segments, performance, size and MTBF should exactly meet the customers’ expectations. Therefore, Erie decides not to launch the products in the first year. Since second year, when the products appear in the market, they will be revised annually in order to appeal to be younger in customers’ perception | Year 1| Year 2| Year 3| | ECHO| Performance| 8| 9. 8| 10. 7| Size| 12| 10. 2| 9. 3| MTBF| 23000| 24000| 24000| | EDGE| Performance| 9. 4| 11. 4| 12. 4| Size| 15. 5| 14. 6| 13. 9| MTBF| 25000| 27000| 27000| | EGG| Performance| 4| 5| 6. 1| Size| 11| 8. 6| 7. 6| MTBF| 19000| 20000| 20000| Table 2: R&D investment for High End, Performance and Size segment for the first three years V. Marketing Department 1. Objectives * Increase sales of 5 segments by 10% each year Increase demand over 10% each year * Reach above 25% of market shares for Traditional and Low End segments, and above 20% for High End, Performance and Size segments at the end of year 3 * Keep the sales forecast error of 5 segments fluctuate between 5% – 10% during three years 2. KPIs * Keep the price of products of Traditional and Low End segments lower than the av erage price of their price ranges; the ones of High End, Performance and Size higher than the average price * Remain the same prices of all products for the first three years, then slightly decrease all prices from $0. to $1 after year 3 * Maintain customer awareness and accessibility of 5 segments from 95% to 100% * Keep the forecast errors for 5 segments not higher than 200,000 units for Traditional and Low End segments; 50,000 units for High End, Performance and Size segments every year 3. Strategies a. Pricing Strategies * Traditional & Low End In a product life cycle, the introduction stage starts when development is complete and ends when sales indicate that target customers widely accept the products. The marketing strategies are ‘fully implemented during the introduction and should be tightly integrated with the company’s competitive advantages and strategic focus’ (Ferrell & Hartline, p210, 2008). Therefore, during the first three years, in light of cost leadership strategy, Traditional and Low End segments will be followed the penetration pricing approach, which is setting relatively low initial prices, so as to maximize sales, gain widespread market acceptance, and capture large market shares quickly. It means that, in order to comply with the low cost strategy, the prices of the segments are set below the average of their price ranges. In particular, the price of Eat, which dominates Traditional segment, is established at $21. 5 per unit compared to $25 of the average price, whereas the one of Ebb, which takes up majority of sales of Low End segment, is set at $18 compared to $20. (Refer to appendix 1b: Pricing Forecast for further details) This approach is suitable for these two segments because of two main reasons. The first reason is that the segments’ customers are price sensitive since prices outweigh such other elements as ideal position and reliability. The other one is due to the fact that R&D expenses are relatively low as customers do not pay much attention on the segments’ characteristics. * High End, Performance & Size Unlike to Traditional and Low End segments, High End, Performance and Size segments are pursued differentiation strategy; hence, price skimming approach seems to be an appropriate alternative. The rationale behind price skimming is to intentionally set high prices relative to competitors, thereby skimming the profits of the top of the market, recovering the high R&D and marketing expenses associated with developing new products. In other words, the prices of these three segments will be set above the average of price ranges and should be, at least, obtain the contribution margins of 30%. In detail, the prices of Echo, Edge and Egg is respectively set at $39, $34. 5 and $34. 5 for High End, Performance and Size segments compared to the average prices of $35, $30 and $30 of each price ranges. Refer to appendix 1b: Pricing Forecast for further details) b. Promotion and Sales Strategies Percentage of products’ awareness and accessibility, which reflect the number of customers who know the existence of a company’s products, and who can easily interact with the company, are determined respectively by each product’s promotion and sales budgets. In order to in crease demand up to 10%, our company, therefore, initially invests $3,000,000 in promotion budgets during the first two year, and $2,200,000 in sales budget of Eat and Ebb during three years because customer accessibility requires long time investment to achieve 100%. Since year 3, when customer awareness achieves over 100%, the investment in the promotion budgets will be scaled back to $1,500,000. For Echo, Edge and Egg, since they will be launched in the second year, there are only $1,500,000 invested in promotion budgets, and around $1,100,000 to $1,500,000 spent in sales budgets in the first year. However, when they are ready for sales, their promotion budgets will be increased up to $3,000,000, whereas their sales budgets will be invested up to $2,200,000 in the second year so as to encourage customers’ demand. (Refer to appendix 1d: Promotion and Sales Budgets for further details) VI. Production Department 1. Objectives: * Achieve a proper plant utilization * Control production costs effectively 2. KPIs By the end of year three, Production manager aims to: * Keep plant utilization ratio from 90% to 130% to minimize machine downtime cost and expensive 2nd shift charge * Decrease labor costs for all segments by 60% to 70% * Maintain overtime ratio at 0% * Minimize inventory carrying costs at maximum 25% of total production per year 3. Strategies a. Automation Due to the fact that each rate of automation will decrease labor costs by 10%, Erie will increase automation in all segments. Even though the costs of automation are high, this is such a short-term aspect. In long-term, the improvement in automation will bring a greater benefit because costs spent on automation just incurred once while the reduction in labor costs is annual. Therefore, Erie plans to raise automation rating for all segments so as to achieve rate at 7 for Ebb and 6 for all other segments in year 3 as set out in table below: | Year 1| Year 2| Year 3| Eat| +1| -| +1| Ebb| +2| -| -| Echo| +1| -| +2| Edge| +2| -| +1| Egg| +2| -| +1| Table 3: Production investment in automation level for 5segments the first three years b. Capacity Using an efficient amount of capacity can help the company to achieve economic of scale as well as to be consistent with the pricing strategy as set out by Marketing department. Furthermore, in order to satisfy higher demands as well as to follow sales forecasts of Marketing department, production manager plans to buy 600 units for Ebb; 300 units for each of Edge and Egg in year two. After that, in year three, 500 units of capacity will be purchased for Eat and Ebb. This will also help Erie achieve plant utilization ratio objective as mentioned above. | Year 1| Year 2| Year 3| Eat| -| -| 500| Ebb| -| 600| 500| Echo| -| -| -| Edge| -| 300| -| Egg| -| 300| -| Table 4: Production investment in capacity for 5segments the first three years Additionally, in case that there is a restriction for purchasing capacity like limitation in the maximum investment or unexpected increase in sales, second shift of capacity will be utilized as much as possible to maximize sales. At the same time, using second shift workers will also be chosen instead of first shift workers with overtime. The main reason is that while second shift workers are paid the same wage rate of addition 50% as first shift workers work on overtime, second shift ones are more efficient as they are not as tired. Moreover, the employee turnover rate is lower which can help Erie to keep talent workers and reduces future recruiting costs. Relying on second shift workers, Erie will also achieve its goal which is to keep overtime ratio at 0%. VII. HUMAN RESOURCE DEPARTMENT 1. Objectives The department intends to: * Increase Productivity Index by 5% * Lower Turnover Rate to 7. 5% in year 3 2. KPIs and Strategies: Erie plans to invest $4 million for Recruiting Spend and 40 training hours in both year 2 and 3 in order to support Production department reducing labor cost. However, 5% turnover rate is unavoidable annually because of retirement, relocation and weeding out poor workers. | Year 2| Year 3| Recruiting Spend ($000)| $ 4,000| $4,000| Training Hours| 40| 40| Table 4: HR investment in recruiting and training for workers the first three years VIII. TQM DEPARTMENT 1. Objectives By the end of year 3, Erie proposes to: * Reduce material costs by 11. 8%, labor costs by 14% and administrative costs by 60% * Shorten the length of time required for R&D projects to complete by 40% * Increase demand by 14. 4% for the product line 2. KPIs and Strategies For each initiative, Erie is planning to invest $1,500,000 in a 3 year cycle. In particular, in year 3, 4, 6 and 7, $1,500,000 will be invested in each initiative; while in year 5 and 8, there is only $1,000,000 budgeted for each initiative. The firm chooses an investment of $1,500,000 because expenditures beyond $ 4 million over 2 or 3 years in each initiative will lead to the diminishing returns. | Year 3| Year 4| Year 5| | Year 6| Year 7| Year 8| Process Management Budgets| | CPI Systems| $1,500,000| $1,500,000| $1,000,000| Vendor/JIT| $1,500,000| $1,500,000| $1,000,000| Quality Initiative Training| $1,500,000| $1,500,000| $1,000,000| Channel Support Systems| $1,500,000| $1,500,000| $1,000,000| Concurrent Engineering| $1,500,000| $1,500,000| $1,000,000| UNEP Green Programs| $1,500,000| $1,500,000| $1,000,000| | TQM Budgets | | Benchmarking| $1,500,000| $1,500,000| $1,000,000| Quality Function Deployment Effort| $1,500,000| $1,500,000| $1,000,000| CCE/6 Sigma Training| $1,500,000| $1,500,000| $1,000,000| GEMI TQEM Sustainability Initiatives| $1,500,000| $1,500,000| $1,000,000| Table 5: TQM investment in each initiative during 8 years IX. Finance Department 1. Objective By the end of year three: Avoid emergency loan * Achieve the cumulative profit between $15,000,000 to $20,000,000 * Utilize debt in investment effectively 2. KPIS * Maintain the leverage between 1. 8 to 2. 8 * Achieve the ROE ratios between 15% to 25% * Maintain closing cash position at around $12,000,000 to $15,000,000 each year * Maintain working capital day from 30 to 90 days 3. Stra tegies a. Emergency loan: In order to finance the maximum investment in the capacity and automation of the first three years, the highest amount of stocks and bonds will be issued in year 1 and continue to be considered issuing since year 2 in case of cash shortage. In addition, to sustain the loss in the first two years for capturing the market shares, a maximum amount of current debt will be borrowed in the first year. This in turn could avoid a 7. 5% of penalty for the emergency loan. After that, our company will continue to borrow a sufficient amount of current debt with the purpose to maintain our cash position at around 12,000,000 to $15,000,000. Besides, the credit for account receivable is set at 30 days so as to have a sufficient amount of cash to avoid emergency loan. b. Leverage The purpose of maintaining the leverage ratio is not to use too much retain earnings for funding the growth and avoiding a high amount of debt which can lead our company to a financial risk because of a significant amount of interest expense. In order to keep an appropriate leverage ratio, the total amount of debt will only be considered in the worst case. However, if the leverage is too high, the production investment needs to be scaled back. c. Cumulative profit So as to achieve the above expected cumulative profit, firstly, the day of working capital needs concerning and maintaining from 30 to 90 days. This in turn can protect our company from a risky position if problems occur as well as help us achieve a higher productive rate. Secondly, the expenditure for HR and TQM will be carefully calculated. Finally, the account payable policy is set at 30 days which will minimize significantly suppliers’ material withholding. Hence, our company’s profit can be improved in case of stock out because of lacking materials. X. Back-up plan Most companies have to confront with several unexpected and difficult situations during operating period. One of these difficulties could be that some companies might collapse as losing their ability to continue to compete with other competitors in some products. The reason for this would be that they no longer make enough sales to cover costs which lead to a decrease in market shares and an extreme financial loss as well. Therefore, in order to avoid this situation, Erie has developed a back-up plan in case that one of our products suffers serious loss. According to the BCG matrix, it is believed that Traditional and Low End segments might be in the ‘harvest’ stage since year 5. This is because these two segments have dominated a large proportion of market shares. Moreover, their growth rates start to decrease significantly for a long time of being operated in the sensor market. As a result, our company intends to adopt the exiting strategies when these segments begin to make relatively small profits or suffer serious loss. Instead, our company decides to develop and launch a new product which will be followed the differentiation strategy like High End and Performance segment since these segments are just in the ‘hold’ stage at that time, hence can catch up with other competitors’ products. XI. Conclusion In conclusion, relying on the application of such strategy, Erie’s products will be high-recognized in the market as they are revised regularly and efficiently. In addition, through the advantage of an initially significant investment, the company could become more competitive in the market as its production costs are minimized. Furthermore, by accepting a little bit of risky at about the first two years, Erie will gain a competitive advantage over other competitors in terms of long-term cost savings and hence could provide cheaper products and increase sales in later years. XII. Reference * Ferrel. O. C. & Hartline. D. M. 2008, Marketing Strategy 4e, South- Western Cengage Learning, the USA. XIII. Appendix 1. Marketing Forecast a. Sales Forecast | Year 1| Year 2| Year 3| Eat| 2,000,000| 2,200,000| 2,420,000| Ebb| 2,200,000| 2,420,000| 2,665,000| Echo| 430,000| 475,000| 525,000| Edge| 350,000| 385,000| 425,000| Egg| 400,000| 440,000| 485,000| b. Price Forecast | Year 1| Year 2| Year 3| Eat| $ 21. 5| $ 21. 5| $ 21. 5| Ebb| $ 18| $ 18| $ 18| Echo| $ 39| $ 39| $ 39| Edge| $ 34. 5| $ 34. 5| $ 34. 5| Egg| $ 34. 5| $ 34. 5| $ 34. 5| c. Sales Revenue Forecast | Year 1| Year 2| Year 3| Eat| $43,000,000| $47,300,000| $53,030,000| Ebb| $39,600,000| $43,560,000| $47,970,000| Echo| $16,770,000| $18,525,000| $20,475,000| Edge| $12,075,000| $13,282,500| $14,662,500| Egg| $13,800,000| $15,180,000| $16,732,500| d. Promotion & Sales Budgets | Promotion Budget (000)| Sales Budget (000)| | Year 1| Year 2| Year 3| Year 1| Year 2| Year 3| Eat| $3,000| $3,000| $1,500| $2,200| $2,200| $2,200| Ebb| $3,000| $3,000| $1,500| $2,200| $2,200| $2,200| Echo| $1,500| $3,000| $3,000| $1,500| $2,200| $2,200| Edge| $1,500| $3,000| $3,000| $1,100| $2,200| $2,200| Egg| $1,500| $3,000| $3,000| $1,100| $2,200| $2,200| . Production Plan PROUCTION PLAN Year 1 – 2011| | Eat| Ebb| Echo| Edge| Egg| NA| NA| NA| Total| Units sales forecast| 2000| 2200| 430| 350| 400| Â  | Â  | Â  | 5380| Inventory on hand| 189| 39| 40| 78| 62| Â  | Â  | Â  | 408| Production schedule| 1800| 2200| 400| 300| 340| Â  | Â  | Â  | 5040| Production after Adj. | 1782| 2178| 396| 297| 337| Â  | Â  | Â  | 4990 | Margins| Â  | 2nd shift production %| 0%| 57. 10%| 0%| 0%| 0%| Â  | Â  | Â  | Â  | Labour cost/unit| $8. 22 | $8. 26 | $9. 39 | $9. 39 | $9. 39 | Â  | Â  | Â  | Â  | Material cost/unit| $10. 96 | $7. 63 | $15. 53 | $15. 45 | $13. 3 | Â  | Â  | Â  | Â  | Total unit cost| $19. 18 | $15. 89 | $24. 92 | $24. 84 | $22. 62 | Â  | Â  | Â  | Â  | CM| 10. 8%| 11. 7%| 36. 1%| 28. 0%| 34. 4%| Â  | Â  | Â  | Â  | Physical plant| Â  | Total| 1st shift capacity| 1800| 1400| 900| 600| 600| Â  | Â  | Â  | 5300| Buy/sell capacity| –| –| –| –| –| Â  | Â  | Â  | Â  | Automation rating| 4| 5| 3| 3| 3| Â  | Â  | Â  | Â  | New automation rating| 5| 7| 4| 5| 5| Â  | Â  | Â  | Â  | Investment| $7,200 | $11,200 | $3,600 | $4,800 | $4,800 | $0 | $0 | $0 | $31,600 | Workforce| Last year| Needed| This Year| 1st shift| 2nd shift| Overtime| Â  | Max Invest| 32,694 | Completement| 700| 820| 820| 705| 115| 0%| A/P Lags| 30| (days)| 3. Profo rma Financial Statements a. Balance Sheet PROFORMA BALANCE SHEET| ASSETS| | Cash| 28034| Accounts Receivable| 10240| Inventory| 1055| Total Current Assets| 39328| Plant & Equipment| 145400| Accumulated Depreciation| (47626)| Total Fixed Assets| 97774| | Total Assets| 137102| | LIABILITIES & OWNER'S EQUITY| Accounts Payable| 7699| Current Debt| 20341| Long Term Debt| 60694| Total Liabilities| 88734| | Common Stock| 32060| Retained Earnings| 16308| Total Equity| 48368| Total Liabilities and Owner's Equity| 137102| b. Cash Flow Statement PROFORMA CASH FLOW STATEMENT| Cash Flows from Operating Activities| | Net Income (Loss)| (13274)| Adjustment for non-cash items| | | Depreciation & Writeoff| 9693| Change in Current Assets and Liabilities| | | Accounts Payable| 1116| | Inventory| 7562| | Accounts Receivable| (1933)| Net cash from operations| 3165| | Cash Flows From Investing Activities| | Plant Improvements| (31600)| | Cash Flows from Financing Activities| | Dividends Paid| | Sales of Common Stock| 13,700| Purchase of Common Stock| | Cash from long term debt | 18994| Retirement of long term debt| | Change in current debt (net)| 20341| | Net change in cash position| 24600| | Starting cash position| 3,434| Closing cash position| 28034| c. Income Statement PROFORMA INCOME STATEMENT| Product Name| EAT| EBB| ECHO| EDGE| EGG| Total| Sales| 42385| 39600| 16770| 12075| 13757| 124587| | Variable Costs| | Direct Labor| 16227| 18156| 4043| 3284| 3748| 45458| Direct Material| 21632| 16771| 6682| 5403| 5279| 55768| Inventory Carry| 0| 33| 18| 75| 0| 127| Total Variable Costs| 37859| 34960| 10743| 8761| 9028| 101352| | Contribution Margin| 4520| 4640| 6027| 3314| 4729| 23235| | Period Costs| | Depreciation| 3120| 3173| 1320| 1040| 1040| 9693| SG&A: R&D| 269| 0| 1000| 1000| 1000| 3269| Promotions| 3000| 3000| 1500| 1500| 1500| 10500| Sales| 2200| 2200| 1500| 1100| 1100| 8100| Admin| 365| 341| 145| 104| 119| 1074| Total Period Costs| 8955| 8715| 5465| 4744| 4759| 32637| | Net Margin| (4429)| (4075)| 562| (1431)| (29)| (9402)| | Other| 1635| EBIT| (11037)| Interest| 9384| Taxes| (7147)| Profit Sharing| 0| | Net Profit| (13274)| d. Cash Budget CASH BUDGET| | Total| Beginning cash balance| 3,434| Cash from operations| 3,165| Total Available Cash| 6,599| Less:| | Capital expenditures| (31,600)| Interest| (9,384)| Dividends| 0| Debt retirement| 0| Other| (1,635)| Total Disbursements| (42,619)| Cash Balance (Deficit)| (36,020)| Add:| | Short-term loans| 20,341| Long-term loans| 18,994| Capital stock issues| 13,700| Total Additions| 52,035| Ending Cash Balance| 16,015|