Investement

This case was prepared by Boris Morozov and Rebecca J. Morris both from the University of Nebraska at Omaha. The views presented here are those ofthe case authors and do not necessarily reflect the views ofthe Society for Case Research. The authors' views are based on their own professional judgments. Copyright  © 2009 by the Society for Case Research and the authors. No part of this work may be reproduced or used in any form or by any means without the written permission ofthe Society for Case ResearchOn June 1, 2006, the house lights dimmed at the Wall Street Journal's All Things Digital conference. On the large screens fianking the stage, a film called the â€Å"Winds of Change† started. In the film, a dignified white-haired spokesman standing in front of sentimental images of puppies, babies, balloons and birthday parties began talking about the â€Å"golden days† at Kodak— the days of the â€Å"Kodak moment† in photography. Signaling a shift in the tone of the film, the spokesman looked straight into the camera and said, â€Å"Get's ya misty, doesn't it?Yep, they shoveled on the schmaltz pretty thick—but that kinda crap doesn't work anymore. † Now people wanted everything to be digital, the speaker stressed, becoming more frenzied as he spoke about digital photography and Kodak's role in it. The viewing audience chortled when the speaker intoned. You thought they (Kodak) were just hiding out waiting for this ‘digital thing' to blow over didn't you? Oh, sure. For a while they were like, ‘Ohhh, there's no way digital's going to catch on'.. .But now Kodak's back!With swelling enthusiasm, the spokesman extolled Kodak's research and development in digital photography, ending by pulling at his hair and exclaiming, â€Å"You were a Kodak moment once and by God, you'll be one again†¦ only this time its digital. Whooo-yeah! â€Å"^ The spokesman appeared somewhat startled by his own outburst and sheepis hly walked off stage as the film ended and the lights came up. Wall Street Journal columnist, Kara Swisher then welcomed Kodak CEO, Antonio Perez to the stage to the audience's vigorous applause and cheers. Paul Simon's song, â€Å"Kodachrome† played as Perez took the stage.Swisher began her interview saying, â€Å"That was a really funny movie. I liked that film! † Her first question, however, was not so approving. â€Å"What happened,† she asked as Perez settled into his chair, â€Å"What from your perspective happened at Kodak—because it was one ofthe greatest brands in history? â€Å"^ SCR BUSINESS CASE JOURNAL Perez responded without hesitation, saying: First of all there was this notion that came out of incredible success. The notion was that maybe if Kodak doesn't move into digital—the imaging world will never move into digital. .. They (Kodak) were running a business with gross margins between 60-70% and those things are hard to let go, e specially when you are confronting a business model that is going to give you, if you are lucky, something around 30%. So that means that you have to change the whole company. From the way you design, to the way you manufacture, to the way you distribute, you know.. .the whole thing. It is very tough. So Kodak is very late to the digital space. But Kodak was not late in investing in digital. Kodak was very rich.Kodak hired very good people and those people were actually doing the right things. In the last fifteen years, Kodak developed one ofthe most impressive IP (intellectual property) portfblios-in digital capture, image processing, pixel technology and all sorts of things†¦ color management, you name it—actually a leader in all of those spaces. Now, why didn't they commercialize that? I don't know. ^ 22 Referencing Kodak's transition from traditional photography to digital, S wisher asked, â€Å"So, how did you get the film people out—because it's a film comp any? † Perez described his approach saying.Basically, the model that I used when I visited the factories was looking at the audience and say, â€Å"How many [of you] have a digital camera? At that time it was about 60%, and I would say, well, you are the problem we have. We either move to digital—we either do this transformation effectively—or this company basically will cease to exist. There is nothing else. There is no time to argue about it†¦. This is over. We are already very late but we do have the tools that we need to make this happen. â€Å"* Eight months after the All Things Digital Conference, Kodak held its annual strategy meeting in New York City.Antonio Perez announced that Kodak had successfully completed a four-year, $3. 4 billion transformation and was poised for growth over the next four years (20082011). Investors, however, did not share Perez's view ofthe firm. Kodak's share price fell to a 30-year low following the strategy meeting amid skepticism about Kodak's future strategy. ^ Pointing out that Canon had surpassed Kodak in sales of digital cameras and that Kodak's EasyShare Gallery faced tough competition from services like Shutterfiy and Snapfish, analysts wondered whether Kodak had turned the corner. Other investors argued that the Kodak brand still had appeal for consumers and that the company's transformation would take time. Speculation about a possible breakup of the company or mergers with other technology companies appeared in the financial press. ^ Had Kodak successfully adapted to the challenges ofthe digital space? Were there other strategies that Kodak should pursue? SCR BUSINESS CASE JOURNAL 23 Kodak's Digital Strategy in 2003 Any evaluation of Kodak's transformation needed to begin with a review of Kodak's history in digital photography.Despite employing the engineer who invented the first digital camera (patented in 1978) and holding more than 1,000 digital-imaging patents,^ Kodak did not introdu ce a digital camera to consumers until 2001. Kodak's moves paralleled those at many companies whose comfortable business models were threatened by rapid changes in information technology. When asked whether Kodak had moved into digital photography soon enough, then Kodak CEO Daniel Carp replied, â€Å"I saw my first digital camera inside Kodak in 1982. Today, we're arguably one ofthe top three providers of digital cameras in the U. S.So, we did the right thing. At the same time, we shouldn't have walked away from the historical film businesses before they turned down, because it would have destroyed value. â€Å"^ Under slumping economic and competitive market conditions, Kodak faced tough pressure from its existing competitors as well as from new rivals in the area of digital photography—a $385 billion industry composed of devices (digital cameras and personal data assistants [PDAs]), infrastructure (online networks and delivery systems for images), services and media (sof tware, film and paper) enabling people to access, analyze and print images.Even though Kodak had invested $4 billion'^ into digital research and related technologies since the early 1990's and spent many years perfecting its digital cameras, Kodak's status as an iconic brand was threatened by the technological shift away from its cash-cow business of traditional film and film processing. In July 2003, Kodak reported fiat sales and a 60 percent drop in second-quarter profits. Since January 1, 2000, when Carp took over as chief executive of Kodak, the company's revenues and net income had declined, its shares had dropped by 66%, and Standard & Poor's (S&P) had cut Kodak's credit rating by five grades. ^ Kodak had reduced its workforce by 49% since 1989, cutting 7,300 employees in 2002 alone. ^^ Plans were announced to eliminate up to 6,000 jobs in 2003 to stem future losses, cutting Kodak's traditional photography divisions in Rochester, New York to fewer workers than the firm had emp loyed during the Great Depression. ^^ Kodak's balance sheets for 2000 to 2007 are presented in Table 1. Income statements for the same period are presented in Table 2.When announcing the latest rounds of workforce reductions in July 2003, Carp expressed his perspective on Kodak's challenges saying, â€Å"I think we're at the point where we have to get on with reality. The consumer traditional business is going to begin a slow decline, though it's not going to fall off a cliff. † Kodak found itself saddled with assets and employees that were no longer relevant in the world of digital photography. Traditional photography involved factories where film, paper and other silver-halide chemical-based products were made by thousands of chemical technicians, film process technicians and color printer operators.In digital photography, images captured by electronic sensors could be displayed, printed, stored, manipulated, transmitted, and archived using digital and computer techniques, without chemical processing. Kodak recognized that digital photography would require different types of employees and began hiring top executives away from computer printer companies, such as Lexmark and Hewlett-Packard. These employees brou? it needed expertise in consvuner electronics and software development. ‘†* Kodak also began closing traditional fihn processing facilities and laying off workers. SCR BUSINESS CASE JOURNAL 24Table 1 Kodak's Annual Balance Sheet 2000-2006 (In Millions 2006 ASSETS Cash & Equivalents Net Receivables Inventories Other Current Assets Total Current Assets Gross Plant, Property & Equipment Accumulated Depreciation Net Plant, Property & Equipment Investments at Equity Other Investments Intangibles Deferred Charges Other Assets TOTAL ASSETS LIABILITIES Long Term Debt Due In One Year Notes Payable Accounts Payable Taxes Payable Accrued Expenses Other Current Liabilities Total Current Liabilities Long Term Debt Deferred Taxes Minority Interest Other Liabilities TOTAL LIABELmES EQUITY Preferred Stock Common Stock Capital Surplus Retained Earnings Less: Treasury Stock TOTAL EQUITY TOTAL LIABILTTIES & EQUITY 1,487 2,669 1,202 199 5,557 10,372 7,530 2,842 36 420 2,869 1,599 997 14,320 17 47 1,003 764 1,735 1,405 4,971 2,714 1 21 5,225 2005 1,680 2,760 1,140 201 5,781 11,379 7,601 3,778 40 363 2,941 1,144 874 14,921 706 113 996 467 1,958 1,249 5,489 2,764 33 20 4,648 2004 1,258 2,544 1,158 688 5,648 12,694 8,182 4,512 532 188 1,924 1,203 730 14,737 400 69 868 2003 1,261 2,389 1,075 730 5,455 13,277 8,183 5,094 426 310 1,678 1,147 708 14,818 457 489 834 654 1,696 1,177 5,307 2,302 81 45 3,819 2002 578 2,234 1,062 660 4,534 13,288 7,868 5,420 382 53 981 972 1,027 13,369 387 1,055 720 584 1,739 892 5,377 1,164 52 70 3,929 2001 451 2,337 1,137 758 4,683 12,982 7,323 5,659 360 85 948 482 1,145 13,362 156 1,378 674 544 1,635 967 5,354 1,666 81 84 3,283 2000 51 2,653 1,718 869 5,491 12,963 7,044 5,919 0 0 947 0 1,855 14,212 150 2,05 6 817 572 1,358 1,262 6,215 1,166 61 93 3,249 581 1,989 1,083 4,990 1,852 67 25 3,992 12,932 12,954 10,926 11,554 10,592 10,468 10,784 0 978 881 5,332 5,803 1,388 14,320 0 978 867 5,935 5,813 1,967 14,921 0 978 845 7,832 5,844 3,811 14,737 0 978 842 5,852 3,264 14,818 0 978 849 6,840 5,890 1,111 13,369 0 978 849 6,834 5,161 2,894 13,362 0 978 871 7,387 5,808 3,428 14,212 SCR BUSINESS CASE JOURNAL Table 2 Kodak's Annual Income Statement 2000-2006 (In Millions ^'^ 2006 2005 14,268 8,783 2004 13,517 8,311 2003 13,317 8,102 2002 12,835 7,391 2001 13,234 7,749 25 2000 13,994 7,105Sales Cost of Goods Sold Gross Profit SeUing, General, & Administrative Expense Operating Income Before Deprec. Depreciation, Depletion, & Amortization Operating Profit Interest Expense Non-Operating Income/Expense Special Items Pretax Income Total Income Taxes Minority Interest Income Before Extraordinary Items & Discontinued Operations Preferred Dividends Adjusted Available for Common Extraordinary Items Disco ntinued Operations Adjusted Net Income 13,274 8,278 4,996 3,101 1,895 1,331 564 262 86 -727 -339 254 7 5,485 3,485 2,000 1,406 594 211 49 -1,194 -762 689 4 5,206 3,340 5,215 3,339 5,444 3,260 2,184 818 1,366 173 -66 -164 963 153 17 5,485 3,333 2,152 919 1,233 219 -26 -891 97 32 -11 6,889 3,747 3,142 889 2,253 178 96 -39 2,132 725 0 ,866 1,031 835 168 62 -821 -92 -175 2 1,876 858 1,018 148 -23 -651 196 -66 24 -600 0 -600 0 1 -601 -1,455 0 -1,455 -57 150 -1,362 81 0 81 0 475 556 238 0 238 0 27 265 793 0 793 0 -23 770 76 0 76 0 0 76 1,407 0 1,407 0 0 1,407 SCR BUSINESS CASE JOURNAL 26 The switch by consumers to digital photography was coming much faster than expected and Kodak's traditional film, papers and photofinishing businesses were declining. By the end of 2003, analysts expected that digital cameras would begin to outsell film cameras for the first time in the United States. The digital photography industry was fast-paced and more crowded, offering razor thin profit margins.In S eptember 2003, Kodak aimounced an aggressive four-year plan to transform the company into a digital photography firm, replacing decliniag revenues and profits in the traditional fihn segment with growing digital revenues and profits. Job cuts and plant closures were prominent aspects of the firm's restructuring plans. Kodak armounced digital and film imaging strategy focused on four components: â€Å"(1) Manage the traditional film business for cash and manufacturing share leadership; (2) Lead in distributed output; (3) Grow the digital capture business, and (4) Expand digital imaging services. â€Å"^^ The traditional film business would be â€Å"managed† through organizational consolidation, cost reduction and reductions in both advertising spending and the number of unique products.Kodak hoped to expand its leadership in emerging markets, such as China and Russia, anticipating strong growth in these two markets for traditional fihn products. Distributed output referred t o the market for printed photos. Kodak plarmed to dominate all channels for printed photos—retail (minilabs and kiosks), home (printer docks and photo papers) and online printing of photos (Kodak's Ofoto site). The digital capture component of the plan addressed digital cameras and Kodak's plans to become the industry standard for ease of use and to achieve top three worldwide market share by 2006. Last, Kodak planned to expand services both online (photo album sharing) and in mobile markets (sharing and printing of photos captured with mobile phones).By the end of trading on the day ofthe digital strategy announcement, Kodak's stock fell to an 18-year low. Institutional investors criticized Kodak's announced strategy, expressing annoyance at the company's intention to invest in inkjet printing, a business dominated by Hewlett Packard. ^ ^Investment analyst. Shannon Cross, expressed the concerns of many investors saying, â€Å"There are so many questions with regard to Kodak 's future strategy†¦ the track record we've seen out of management in terms of being able to hit targets and implement a strategy has been pretty spotty. â€Å"^' The Years 2003-2007 Although shareholders and numerous investment analysts openly criticized the strategy, Kodak began implementing the new digital vision for the company.Since 2003, Kodak had pared costs through layoffs and plant closings in the traditional film division, sold off underperforming business units and increased its research and development investment in ink-jet printers. More than one hundred buildings in Kodak Park in Rochester, New York that had formerly housed thousands of employees had been razed, imploded, or sold by 2007. ^ ° From the company's peak in 1988, Kodak had cut 115,000 employees through divestitures, plant closings, and layoffs. Kodak expected to end 2007 with only 30,000 employees. ^^ Although job cuts would eventually represent cost reductions and improvements to the firm's bottom line, restructuring costs since 2003 were estimated to total $3. 8 billion. ^ Investment analysts believed that the high costs of Kodak's shift to a digital strategy would be worth the price if the company was successful at growing profits from its digital products. ^^ Other analysts were unconvinced, saying â€Å"We are increasingly skeptical that EK (Kodak) can efficiently generate SCR BUSINESS CASE JOURNAL 27 digital revenue growth and we think additional plant closings, job cuts and development costs will continue depressing results. â€Å"^†* Some analysts worried that the continual charges against earnings and mounting debt might leave Kodak strapped for important funds for research and development. ^^ Competitive pressures in digital photography made innovation important but raised concems for some analysts. Kodak â€Å"lost their magic touch.There are way too many people producing similar technology better,† one analyst said. ^^ The important events in Kodak's history since 2003 are shown as Table 3. Leadership of Kodak also was in transition during this period. In May 2005, Antonio M. Perez replaced Daniel Carp as Chief Executive Officer of Kodak. Perez had come to Kodak in 2003 after working 25 years for Kodak's competitor, Hewlett-Packard. ^^ Perez brought his extensive expertise in digital imaging technologies to Kodak and quickly became the leader of Kodak's digital transformation. Perez had been instrumental in formulating Kodak's restructuring strategy as he was Kodak's President and Chief Operating Officer in 2003. ^ Despite the ongoing criticism of investment analysts, Perez remained optimistic about Kodak's prospects saying. We said in 2003 that it would take us four years to transform this company. The first two years were loaded with restructuring costs, and the analysts are reacting to that. My response is: Well, hello, we are following our plan. We said we'd grow digital revenue and profits, and generate a healthy amount of cash, and we are doing all ^^ SCR BUSINESS CASE JOURNAL Table 3 Key Events for Kodak 2003-2007 28 Date January 26, 2005†²Ã¢â‚¬  February 2,2005†³ March 2005†³ May 11,2005†³ January 5,2006†³* January 12, 2006'^ January 30,2006†²Ã¢â‚¬  March 2006†³ August 1,2006'* January 10,2007'^ February 1,2007 April 26,2007^† May 2007†³*' May 14, 2007^'Event Kodak's digital revenue rose 40% in the fourth quarter of 2004, more than offsetting a 16% decline in revenue for traditional film products. Kodak announced that for the first time, Kodak held the leading market share for digital cameras in the United States with 21. 9% share. Kodak changed the name of Ofoto, the online photo-sharing and printing site they had acquired, to Kodak EasyShare Gallery. Antonio M. Perez was announced as the next CEO of Kodak. Perez took over on June 1, 2005. Former Kodak CEO, Daniel Carp retired at age 57. Kodak announced a 10-year partnership with Motorola to develop mobile camera phones with Kodak sensors. Nikon stopped making most of its traditional film cameras.Kodak's digital revenues for 2005 exceeded revenues from traditional film for the first time. Digital revenues were 54% of total sales. Konica Minolta announced that it was exiting the photography industry. Some ofthe firm's photography assets were sold to Sony. Kodak announced that it would outsource the production of all digital cameras to Flextronics, a leading electronics manufacturing services provider headquartered in Singapore. Kodak announced the sale of the health care imaging division to ONEX for $2. 35 billion. Half of the proceeds were to be used for debt reduction. The sale of the division resulted in a decrease of 8,100 employees for Kodak.Kodak announced the first quarterly profit in eight quarters. Revenues for digital photography products had declined by 13%. Kodak announced a partnership with BestBuy to create the BestBuy Photo Center. The center provided Kodak's Eas yShare Gallery to BestBuy online consumers. The partnership would also provide for display of Kodak Gallery's photo gifts (mugs, purses, etc. ) in BestBuy stores. BestBuy would also offer pre-paid cards for prints and gifts. Kodak's digital consumer group sales (cameras, printers and retail printing) fell 14% due to Kodak's decision to stop offering low-end digital cameras and an industry-wide decline in printing snapshots.Kodak announced a partnership with Target to produce a co-branded site that permitted consumers to order photo prints online and pick them up in Target stores. The partnership also provided for display of Kodak Gallery's photo gifts in Target stores and for pre-paid photo cards. SCR BUSINESS CASE JOURNAL 29 One ofthe important changes championed by Perez was Kodak's new business model in inkjet printers. Kodak was upending the traditional business model in inkjet printers. Instead of pricing the printer devices low and making profits on high-priced ink cartridges, Kodak planned to sell higher-priced printers that used significantly less expensive printer cartridges. For example, Kodak's new line of all-in-one printers was priced at $149-$299, at least $50 more than comparable models. *^ The cost ofthe Kodak printer cartridges was significantly less, however, running $10 for black ink and $15 for the color cartridge. â€Å"*^ The Kodak printers were expected to save consumers 50% over the lifetime ofthe printer due to the cheaper printer cartridges. â€Å"*^ Although some analysts reacted positively to the new pricing model, others were doubtfiil saying. They (Kodak) are not fools, they are going after the sweet spot ofthe market, the people who print a huge number of photos at home, but they are up against big companies that can give a haircut to their own prices if they * ^ There was also some skepticism that consumers would pay more initially in order to save money over the lifetime of the product.A market research analyst described the consumers' perspective saying, â€Å"When it comes to printers, consumers look for the features they want, and then find the least expensive device that offers them. It is only later that they get sticker shock, when they're spending $50 for ink. â€Å"^^ For its part, HP had adopted a â€Å"wait-and-see† posture regarding Kodak's new printer pricing model. If Kodak's printers gained share, HP was prepared to respond. Kodak â€Å"is going into a gunfight with a knife,† responded Nils Madsen, marketing director for HP inkjets. ‘* Kodak predicted that it would take at least three years for the new printers to be profitable. â€Å"*^ Despite reporting a narrower first-quarter net loss in 2007, Kodak's financial results were continuing to show signs of stress.Sales of Kodak's digital camera group (including digital cameras, printers and retail printing) fell 14% during the first quarter of 2007. Traditional film revenues declined 13% over the previous year. ^^ Kod ak was losing less money, however, investors were expecting more. â€Å"Kodak needs not only to restructure, but to change its business. That's a bigger project. They don't have an overnight fix,† said one investment fund manager. ^^ Sacrificing current earnings to focus on long term success was a gutsy decision and members of the investment community wondered whether Kodak's executives had the fortitude to continue to pursue it and whether tiie path Perez had outlined for the company was indeed the right path. One investment manager siunmarized his perspective saying.That company (Kodak) used to be my favorite example of an old-tech company behind the eight ball. Kodak has crossed the Rubicon and gotten past denial. It may be struggling to figure out which road to take, but finally the company understands that the one it was on was getting it nowhere. You know what happens if you sit back and let history happen to you, so you've got to take a shot, and that's what they're ^^ Kodak also had to consider its strategies in light of changes within the digital photography industry. Much had happened since the launch of Kodak's digital strategy in 2003. Important trends included rapidly improving technologies, increases in the quality and use of SCR BUSINESS CASE JOURNAL 30 amera-enabled mobile phones, maturing demand in the United States, rapid adoption of digital photography in foreign markets, and increasing competitive challenges. Improved Technologies and a Shorter Product Life Cycle Like most technologies, the market for digital photography continued to rapidly change. Technological innovations improved the resolution of digital cameras (increased the mega pixels captured and thus improved the quality ofthe photos when enlarged). Improvements in optical and electronic technologies and subsequent reductions in production costs resulted in the introduction of higher margin, digital single-lens reflex (SLR) cameras into the market.These cameras featured in terchangeable lenses and appealed to consumers buying their second digital camera and to photography enthusiasts who could utilize the traditional camera lenses they already owned on the new SLR digital camera bodies. Many digital SLR models offered significantly better image quality than point-and-shoot digital cameras due to their use of larger imaging chips. Industry insiders expected strong growth in the digital SLR segment of the market as consumers looked for more capabilities and flexibility in their digital cameras. Canon, Nikon, Sony and Panasonic dominated the market for low-cost digital SLRs in 2007. Camera makers found the product life cycle of the digital era to be markedly different than the rather stable product life cycle of traditional photography.For example, the Nikon topof-the-line F-series of fllm cameras had been redesigned only six times over ahnost 50 years of production. ^ By 2006, new features-laden digital camera models were introduced every few months rat her than years apart. Makoto Kimura, president of Nikon Imaging summed up the change saying, â€Å"In the past, as a camera maker we were able to take it easy, watch what was happening. Now, we've had to revitalize ourself â€Å"^^ Industry analysts believed that the faster product life cycle and the demands for technological innovations favored consumer electronics companies rather than traditional camera makers—in manufacturing and in distribution.Electronics companies such as Sony possessed the ability to design and manufacture many of the components integral to digital cameras whereas traditional photography companies such as Kodak lacked these capabilities and had to purchase components ftom other electronic companies. ^^ Distribution of cameras also shifted with the digital age in a way that favored consumer electronics companies. Consumers were increasingly purchasing even relatively expensive digital cameras at electronics chains such as Best Buy, Staples, and Circu it City rather than at smaller specialty photography shops. Consumer electronics companies already understood the inventory and logistics demands of the national chains, while traditional photography companies struggled to gain valuable shelf space. As one researcher put it, â€Å"A new wave of technology has given the newcomers the upper hand.For the consumer electronics companies, digital photography has been all upside, while the photo industry was stuck in a slow evolution stage. â€Å"^^ Gains in Mobile Phone Camera Quality and Usage Technological improvements in the resolution of photos captured on mobile phones had increased significantly. In 2006, Nokia offered a mobile phone model with Wi-Fi capabilities and an integrated three-mega pixel camera. ^^ Other mobile phone manufacturers offered phones with an integrated two-mega pixel camera. Consumers increasingly expected that their mobile SCR BUSINESS CASE JOURNAL 31 phones would contain an integrated camera. Approximately 30 million U. S. obile phone owners used their phones to capture images in 2005, an increase of 180% over the previous year. ^^ By 2009, nearlv 70% of mobile phones were expected to contain cameras with multimega pixel resolutions. Analysts further expected that the improved resolution ofthe integrated cameras in most mobile phones would decrease the demand for disposable traditional film cameras and could have a negative impact on low-end stand-alone digital cameras. ^' Because consumers carried their mobile phones with them constantly, the integrated cameras provided a convenient way to capture images during their daily activities as well as at special events, such as concerts and parties.Improvements in mobile phone cormections to wireless networks also made it easy for users to upload and share images with friends and family. Figure 1 depicts the increase in digital image captured using mobile phones. †¢ 62 Figure Digital Images Captured Worldwide, 2002-2009 50OT c 400 D Ca mera phone images captured 9 Digital camera images captured 2002 2003 2004 2005 2{K}6 2007 2008 2009 Source: Lyra Researcti, lrc. , Consumer Imaging Intelligence, Second-Half 2005 Forecast Maturing U. S. Demand In 2006, signs indicated that the digital camera market was maturing. After growing by almost 670% from 2000-2005, unit sales of digital cameras were slowing with an increase of only 26% forecasted for 2009. ^ Prices of digital cameras were also declining, making profitability more difficult for makers of low-end cameras.For example, digital cameras with less than 4 mega pixels of resolution dropped in price by 40% in 2006. In contrast, higher-end digital SLRs tended to maintain the same price points, adding value for consumers by packing each successive model with even more features. There was a glimmer of hope for some growth in the digital photography industry as some analysts believed that U. S. consumers were upgrading their digital cameras more frequently than had been previously expected. The replacement rate was estimated at every two SCR BUSINESS CASE JOURNAL 32 to three years rather than every four years as initially predicted. ^^ However, demand was expected to decline in 2007 and beyond as many consumers had completed their upgrade cycle and fewer new consumers were entering the market. An expected slowdown in the U. S. economy further contributed to a slowdown in demand for digital cameras.Higher interest rates were beginning to depress consumer spending in 2005 as the percentage of disposable income that U. S. households paid for their mortgages and consumer debt was increasing. ^^ Growth Possibilities Abroad Digital camera sales were expected to slow down in North America in 2007, but remained strong in Europe and Japan. Emerging markets were also expected to provide growing demand as camera prices fell. ^ In 2007, digital cameras were in strong demand in Central and Eastem Europe. Unit sales of digital cameras showed substantial increase s in Russia (up 30%), Ukraine (up 70%), Poland (up 15%), Hungary (up 18%), and the Czech Republic (up 7. 7%) over 2005 sales. ^^ Although more cameras were purchased, sales revenues actually declined as a result of declining prices due to technology advances and competitive pressures.The top three vendors in the region in 2006 were Canon, Sony and Olympus (in order of share). ^^ Analysts expected continued sales growth in the region but noted that demand for digital cameras had matured in the Czech Republic.  ° China was seen as a market with enormous potential for digital camera sales due to improving economic conditions and China's more open posture to the rest ofthe world as the 2008 Olympic Games in Beijing approached. Sales were expected to grow from approximately 3 million units in 2004 to between 6. 5 and 10 million units in 2008. ^^ Growth in Chinese disposable income in the major industrialized cities such as Beijing, Shanghai and Guangzhou had created a market of 400 mil lion potential customers for products such as digital cameras. ^^ Interest in photography was keen among Chinese consumers as more Chinese began traveling abroad and wished to bring home photos from their trips. The World Tourism Organization predicted that approximately 100 million Chinese would travel abroad in the year 2020 (an increase of 500% over 2003 figures). ^Digital camera sales to consumers outside urban areas in China were expected to be slower. Lower disposable income and need for higher priority items like household appliances caused rural Chinese consumers to delay their purchase of digital cameras. ^^'*^ Furthermore, distribution channels in rural areas were not well developed. No major electronics chain equivalent to Best Buy or Circuit City existed outside the major ^^ Contrary to earlier industry predictions, Chinese consumers did not buy traditional film cameras as their purchasing power increased, but preferred to leapfrog the older technologies to buy the lates t digital camera models. ^ Sales of traditional film cameras and film canisters declined much more rapidly in China than had been anticipated; leaving companies that had depended on selling these products at risk of being jumped over by the newer technologies such as digital cameras and camera-phones. ^^ By 2006, more Chinese consumers owned cameraphones than digital cameras. ^*SCR Battling for Market Share BUSINESS CASE JOURNAL 33 The disruptive technology of digital photography had proved challenging for many traditional camera makers. In 2006, Konica Minolta announced that it would withdraw completely from the photography industry—despite being the third-largest producer of traditional photo film. ^ Nikon announced plans to gradually halt production of five models of traditional film cameras, leaving only two film cameras in its product portfolio. *^ Other traditional camera companies, such as Canon, thrived in the new digital world. Canon had become the world leader in di gital cameras with an ahnost 19% share in ^^ Consumers were offered more choices in the digital camera marketplace as companies in the consumer electronics industry began offering digital cameras. Notable examples included Samsung, a consumer electronics company with a strong position in the camera-phones segment and Hewlett Packard with strongholds in printers and personal computers.Consumer electronics companies were formidable entrants into the digital photography industry due to their strong brand awareness with consumers, established distribution channels and experience with many of the technologies involved in creating digital cameras. The competitive position of the companies in the digital camera industry rose and fell as consumers demanded more features, improved technologies and lower prices. The U. S. market shares of the top ten digital camera makers are shown as Table 4. Analysts believed that the strong gains shown by Canon and Nikon from 2005-2006 were due to their in troduction of lowcost digital single lens reflex cameras (SLRs). ^^ Worldwide, Canon led in digital camera sales with a 18. % share in 2006. *^ Sony followed with a 15. 8 percent share while Kodak was third at 10%. ** Both Canon and Sony benefitted from consumer interest in single-lens reflex models as well as growing demand in emerging markets. Sony's share ofthe global market increased as a result of its purchase ofthe digital single-lens reflex division of Konica Minolta in 2006. ^^ In the digital SLR segment ofthe industry. Canon held 46. 7% share in 2006, followed by Nikon in second with 33% share and Sony at third with 6. 2% ^^ o H a m en Olympus Samsung Fujifilm Panasonic Casio (N 068, 500 940, 800 867, 000 045, 700 185, 856, 500 496, 400 444, 700 046, 300 955,000 inChange Change From Shipments Market From Previous Previous Share Year Year 21% 000 000 18% 39% 780 000 17% 10% -31% 050 000 25% 44% 31% 326 400 68% 130. 600 18% -5% 964, 800 -15% 120% 680,500 N/A -19% 1,780,600 19 9% 350,000 N/A 136% 405,000 N/A Shipments m ^ ^ 587 600 330 000 880 000 381 600 804 900 317 400 N/A 1,782,600 N/A N/A ^ ^ V/N es H a 2 ‘Ho 2006 2005 2004 Shipments Market Share Market Share cn 00 Canon Sony Kodak Nikon ^ 00 20% 17% 16% 10% cn o o cn ( N g E g o 19. 4% 21. 9% 6. 2% 8. 1% 10. 4% N/A 8. 0% N/A SCR BUSINESS CASE JOURNAL 35 In segmented market share, signincant differences were evident in the purchasing preferences of male versus female consumers.Men seemed to prefer Canon while women preferred Kodak. ^* Analysts attributed the gender difference to women's preference for simplicity and desire for high-quality prints that could be shared with family and friends. Kodak met these needs for women with their point-and-shoot camera models and the EasyShare docking station. Men preferred the SLR models offered by Canon while Kodak was their fourth most popular choice behind Sony and Olympus. ^^ Gender differences were also observed in what users did with their digital pho tos. Women believed digital prints were more important than men (63% versus 53%). ^ ° Women printed approximately 35% ofthe digital photos they took while men printed only 25%. ‘ Men â€Å"took the picture and put it in the computer. But then it was like a roach motel for pictures. They never got out,† one industry insider reported. ^^ Although digital camera makers recognized gender differences in purchasing and usage behaviors, care was taken to address the needs and preferences of both men and women when designing and marketing photography products. For example. Canon utilized Russian tennis star Maria Sharapova in television advertising because she appealed to both men and women. by Representative data on the number of camera models and suggested retail prices offered the top five digital camera companies is provided as Table 5. jaPM a a O -t P GO O PH o O O I U U O m 00 ^ â€Å"3 O) -^ II II ^1 O uj N 0;gt; (Zl H et ‘S a  § PH 11 I « C †S a ON n Os O ON ^ 5 . -i g A †¢a †¢(-. †¢ S †¢^ o 6^ 6O â€Å". agi 00 — 0U-3  « le ^ a† y^ ob ^ e C3 .a o CM s †¢a Pi †¢O 6^ II O O Os  »2 O S— o u 1 o 00 00 o si ‘5b'p -2 S–S fe PL, ao o O ^ g a es .^5 a ^-3S a o U SCR BUSINESS CASE JOURNAL A New Kodak Emerges 37 In January 2008, Kodak announced that its turnaround was officially over. In advance of the company's annual strategy meeting in New York City on February 7, 2008, Perez announced: It is with great pride that I introduce the new Kodak, a company with a new spirit and winning attitude.While completing a difficult and unprecedented business transformation, we also created breakthrough products and services that feature Kodak's hallmark innovation, winning customer acceptance and critical praise for a brand renowned for its smart use of technology. In 2008 and beyond, we will leverage the innovative thinking of Kodak people to deliver on our commitments to sharehol ders and increase the value of this great company. ^^ Kodak executives pointed to multiple metrics to demonstrate the extent of the firm's transformation. Kodak's industrial park in Rochester, New York had been reduced from 1,600 acres to 700 acres since 1998. ^ °Ã‚ ° Eleven film plants had been shuttered, leaving the company with only three film plants worldwide. ^ °^ As shown in Figure 2, the number of Kodak workers had been reduced from 145,300 in 1988 to around 30,000 at the end of 2007.  °^ More than half ofthe remaining employees were considered â€Å"new,† joining Kodak since the launch ofthe firm's digital strategy in 2003. ^ °^ Revenues from the Consumer Digital Imaging Group (CDIG) had increased substantially since 2003. CDIG included digital cameras, inkjet printers, camera sensors, digital picture frames, online photo finishing, and digital photo kiosks. As shown in Table 6, CDIG revenues had almost doubled, growing from $2. 37 billion in 2004 to $4. 63 bi llion in 2007. Kodak did not report profitability data by product segment. SCR BUSINESS CASE JOURNAL 38 Figure 2 Kodak Sales, Gross Profit ; Net Income Per Employee*** 2002-2006 350,000 300,000 250,000 200,000 150,000 = o Q 100,000 50,000 0 50,000 2002 H Employees D Sales/Employee †¢ Gross Profit/Employee †¢ Net Income/Employee 70,000 $183,357 $77,771 $11,000 2003 63,900 $208,404 $81,612 $4,147 2004 54,800 $246,661 $95,000 $10,146 2005 51,100 $279,217 $107,339 $(26,654) 2006 40,900 $324,548 $122,152 $(14,694) o o o o m ( ^ . -H ON o 1-H s? ON ON rj !004 Perc ri †¢n 00 Tl Tl Tl 00 ^H m ON o ON VO O .-H' NO ON Tl .-H in †¢n VO o t^ a O n rj VO O 00 O 1-H 00 CN T-H o o T—H ri VO ri m O a Gro o tems ai a s a O a o (3 S U g u a ‘ S onsnmer Digi CJ r 1 Outside the U. Inside the U. S raphic Comm ilm ; Photofi Outside the U. Inside the U. S U U 11 other ealth Gronp . 5 ‘ 5 s ‘ S e t (3 / anna^ n u SCR BUSINESS CASE JOURNAL 40 Building implosions were another symbol ofthe firm's makeover.Kodak had shed more than 100 buildings since the 199O's, imploding three massive buildings during the summer of 2007 that had formerly housed manufacturing processes for the firm's film, paper and other chemical-based products. ^ °^ As the rubble of the old chemical plants was cleared, Kodak executives gave presentations for technology stock analysts praising Kodak's successful turnaround. The presentations were entitled â€Å"A New Kodak Emerges† and emphasized the end of Kodak's restructuring program; the creation of high margin businesses, such as consumer inkjet printers and camera sensors; and Kodak's expected return to sustainable profitability.According to company executives, Kodak had a clear advantage in the digital space due to its specialized knowledge of materials science (the result ofthe firm's 100-plus years of experience in traditional photography) and digital image science (through the firm's strong intellectual pro perty in digital technologies). However, stock analysts remained skeptical of the success of Kodak's transformation, continuing to question the competitive success ofthe inkjet strategy and Kodak's value proposition for camera sensors. Analysts further questioned the adequacy of Kodak's spending for research and development given the number of major initiatives it was pursuing. In 2007, Kodak spent 5. 19% of sales or $536 million on research and development, while Canon spent $3,351 billion or 8. 22% of sales on a more singular research agenda.  °^ Others continued to express concern about the commoditization of many of the business segments in which Kodak operated, persistently asking Frank Sklarsky, Kodak's chief fmancial officer, â€Å"So, where are you making your money? I just want to know. It isn't clear†¦ â€Å"‘ °^ The stock analysts' continued unease over Kodak's fixture was refiected in their stock recommendations with ten of eleven key analysts rating the shares as either neutral or as Despite the Kodak officers' assertion of successfiil transformation, there was open speculation in the press about the possibility of a breakup of Kodak or mergers with either Xerox or Hewlett Packard.Perez dismissed the notion of a merger with HP saying, â€Å"I don't have any comments about that. All those rumors—^there are many other rumors too. I wouldn't pay much attention. â€Å"^ ^^ Other rumors included mergers with Dell, a leveraged buyout by a private equity firm or billionaire investor. Warren Buffet's interest in Kodak as an investment. ‘^^ When questioned about the possibility of a breakup, Perez retorted, â€Å"They don't know anything about the company. Why would you do that? I don't see any good financial reason to do that. â€Å"^ Were the â€Å"winds of change† continuing to blow for Kodak? Was Kodak's transformation successful or were there other changes needed?Was it time for Kodak to merge or pursue a break up? Or was a leveraged buyout Kodak's best option for remaining independent?EndnotesDigital Camera Turns 30-Sort Of. The Associated Press, http://www. msnbc. msn. com/id/9261340/. Online Extra: What it ‘Boils Down To' for Kodak. (November 23, 2003).

Guess, Inc.

Guess? , Inc. What started as a small family owned jeans boutique has flourished into a global lifestyle brand. Guess? , Inc. currently designs, markets, distributes, and licenses a leading lifestyle collection of contemporary apparel and accessories for men, women, and children that mirror the American lifestyle, while grasping European fashion sensibilities. While the foundation of Guess, Inc. ’s history and massive success can be attributed to their roots in the sale of jeans, Guess, Inc. has now expanded globally, granting licenses for the manufacture and distribution of a full line of product categories. Guess, Inc. perates in 87 countries, with the majority of the stores in the U. S. and Canada. As of 2010, Guess has 1292 stores, 504 in North America, 441 in Europe, and 347 in South East Asia (Breif History of the Company and the Marciano Brothers). The company has agreements with 17 licensees. Throughout the past 30 years, Guess, Inc. has made every effort to maintain t heir status as a global phenomenon. History CEO and Chairman, Maurice Marciano, and Co-Chairman,  Paul Marciano The epitome of a successful family business, Guess, Inc was founded in 1981 by the four Marciano brothers, Georges, Armand, Paul, and Maurice (Guess? Inc. ). They came equipped with experience in the fashion industry, having previously owned and operated a chain of twelve retail stores in France (Guess, Inc. ). The brothers moved to California from Marseilles, France in 1977, where Guess was born, starting as a small jeans company. Georges Marciano was the designer of the jeans, and the brothers gave them the name â€Å"Guess† as they believed that word to be easy to pronounce due to their limited English (Guess, Inc. ). The company’s original jeans were innovative for its time, stone-washed, made to fit tightly, and featured zippers at the ankles. They called this the â€Å"Marilyn Jean† (Guess, Inc. ), and the style lived up to its name, with a sexy, unique style and attitude. They had a softer feel and lighter colors than typical denim jeans. They also featured the classic Guess triangle on the back pocket, which would soon become the distinctive Guess trademark. Believing strongly in his family’s jean business, Georges flew to New York, and convinced Bloomingdale’s to display 30 pairs of his European-style jeans on consignment in the Bloomingdale’s flagship New York store (Guess, Inc. ). Within three hours, Bloomingdale’s sold out every pair. Demand for the jeans soon skyrocketed, and the brothers would find themselves overwhelmed. Though he possessed no previous advertising experience, the brothers appointed Paul Marciano as their advertising director, in hope of expanding their capital. This proved to be wildly successful, as Paul would design an ad campaign that would revolutionize the way jeans and other clothing were sold. Seeking to take a different direction from the typical studio design, Paul brought the models and the jeans outdoors, using grainy black-and-white photography. He had the models show off the jeans using provocative poses, which would later be described by Forbes Magazine as â€Å"catering to teenage cravings for sex, power, attention, and self-love†¦electric not only with sexuality, but with an implicit brutality and exhibitionism as well. † (GUESS INC (NYSE: GES) | Balance Sheet). These controversial ads would quickly create a household name for Guess. By the end of 1982, their jeans produced about $12 million in revenue (Guess, Inc. ). Over the next 15 years, Guess would grow from a company of 30 pairs of jeans, to a globally diversified billion-dollar empire. Legal Battles Overwhelmed by their increasing costs to produce, the Marciano brothers sought a solution to expand their capital and access cheaper foreign labor. In July 1983, they signed an agreement with the Nakash brothers of the company Jordache which would entitle the Nakash brothers to 50% ownership of Guess, Inc. in exchange for $4. 8 million, as well as the use of Jordache’s Hong Kong manufacturing plants (Guess, Inc. ). This deal also licensed Jordache to produce a new line of jeans, entitled Gasoline, using parts of Guess designs in a lower-priced line. However, Guess made a mistake in putting their trust in the Nakash brothers, and neglecting to provide written assurances in the agreement to protect each company against creating knock-off’s of each other’s designs. This mistake would soon come back to haunt them, in their biggest legal battle to date. The Marcianos sued the Nakash brothers on charges of unfair competition, accusing them of using their position on the Guess board of directors and their access to Guess designs in the Hong King plant to produce clothing in their Jordache line that were clear knockoffs of Guess designs. In the suit, the Marcianos sought to null the 1983 agreement that had given Nakashes ownership of half of Guess (Guess, Inc. ). This battle would continue for the next five years, eventually ending with the two sets of brothers settling out of court, and the Marcianos regaining full control of the business. Estimated attorney fees were as high as $10 million per year for each side (Guess, Inc. ). This was an ugly legal battle that cost Guess Inc. an unnecessary amount of funds. 1982 also bought a smaller legal battle with Jeff Hamilton, Inc. Guess sought to enter the menswear market by obtaining a licensing agreement with this company. Under this agreement, Jeff Hamilton, Inc would market a line of clothing under the Guess name in exchange for a 7% royalty fee (Guess, Inc. ). However, Guess soon decided that Hamilton was targeting the young men’s market too strongly, and did not approve of Hamilton’s â€Å"dumping† of Guess merchandise in large discount stores, which was hurting the label’s high-end image. Guess sought to terminate the license agreement, which they eventually succeeded in doing in 1986. This extensive legal battle resulted in a slow growth for Guess menswear. Marketing & Promotional Strategies Guess is backed by their corporate mission statement; â€Å"At Guess, we are committed to being a worldwide leader in the fashion industry. We will deliver products and services of uncompromising quality and integrity consistent with our brand and our image. We are committed to listening and responding to the needs of our customers, associates and business partners, and honor their individual value. We are dedicated to personal and professional enrichment through an environment of open communication, creativity, teamwork, trust, and respect. We continue to give back to the community, support humanity, and protect the environment as part of our responsibility. We remain committed to an entrepreneurial spirit that fuels the growth of our Company and increased shareholder value. Through principled leadership we will embrace diversity, cultivate strength, pride and passion to align our personal life and our professional life. (The Guess Mission Statement). The target customer for Guess is a young, affluent adult, between the ages of 18 and 32. Guess makes every effort to live by this mission statement every day, and uses a variety of creative marketing and promotional strategies to further entice the target customer to purchase Guess products. The mission statement is executed everyday in Guess, Inc’s corporate strategy, which focuses on the long term. Guess is a global compa ny known for their quality, trend-setting styles, and marketing creativity. In realizing the importance of diversity, and consumers’ needs to constantly have something new, Guess never fails to bring forward new products and images to keep their name alive. While originally gaining momentum with their jeans, Guess now manufacturers and distributes a wide range of product lines. Once realizing their success, in the 80’s, the Marciano brothers decided to increase their potential, and expand beyond men’s and women’s jeans. Baby GUESS? , GUESS? watches, GUESS? footwear, GUESS? eyewear, and GUESS? fragrances were introduced. Wishing to continue their expansion, Guess introduced even more products in the late 90’s, including an entire collection of GUESS handbags, active wear, jewelry, swimwear, innerwear, leather, belts, neckwear, and men’s classics (CITE- annual report). Around the millennium, Guess introduced their website, opening the company to a whole other world of potential. Guess operates in 6 different store concepts in an attempt to appeal to a variety of different markets. The original GUESS? retail stores carry a full assortment of full-priced Guess products, including men’s and women’s merchandise, and licensed products. GUESS? factory outlet stores are primarily located in outlet malls, and sell a select assortment of men’s and women’s apparel and licensed products at lower price points. GUESS by MARCIANO stores were introduced in the summer of 2004 (GUESS INC (NYSE: GES) | Balance Sheet), in an attempt to recapture the company’s glamorous image. The Marciano chain offers apparel and accessories that are sexy, yet sophisticated. The target market for these stores is slightly older customers interested in higher-end clothing and accessories such as ritzy evening dresses and fancy jeans. G by GUESS stores offers Guess products at a lower price point than Guess retail stores, in order to target a wider demographic. These stores carry apparel for men and women, as well as a full line of accessories and footwear. Products in this line provide a more fun, youthful image; fashion-forward, yet not cutting edge fashion. GUESS? accessories stores sell GUESS? and GUESS by Marciano labeled accessory products. Finally, GUESS also operates in an e-commerce segment, with websites in 6 different languages (Maurice Marciano and Marciano). Guess is known for their iconic black-and-white print advertisements and logos that have maintained a level of consistency throughout the company’s history. The aim of Guess advertisements is to place more of an emphasis on the brand image than on the actual products (Maurice Marciano and Marciano). All Guess advertisements use similar themes and images, primarily using outdoor images. Guess images have been showcased in international print campaigns in virtually all major magazines, on television, billboards, bus shelters, and advertisements throughout the world. The image of the Guess model has become a pop culture icon in the history of fashion advertising. Guess model, Anna Nicole Smith, in the early 1990’s Drew Barrymore Adriana Lima Paris HIlton Guess brought forth the faces of many future supermodels in their sexy promotional campaigns, including names such as Anna Nicole Smith, Claudia, Schiffer, , Drew Barrymore, Jessica Miller, Cindy Taylor, Minki Van Der Westhuizen, and Shana Zadrick (Guess? Inc. News- Company Information). Iconic models, actresses and all-round sex-bombs have all pouted and posed for these successful Guess ad campaigns. It goes without saying that Guess has been such an influential brand in the fashion world. Sales Trends & Financial Data For the first quarter of 2012, Guess, Inc reported net earnings of $42. 7 million. This was a 15. 2% decrease from the first quarter of the fiscal year 2011, in which Guess, Inc. reported net earnings of $50. 3 million (Guess? , Inc. Reports First Quarter Results). Balance Sheet from www. FORBES. com For the entire year, ending January 29 ,2011, net earnings for Guess, Inc were reported at $289. 5 million, an increase of 19. %, with gross profit increasing to $1090. 2 million, an increase of 15. 8%. Total net revenue increased to $2,487. 3 million, and gross margin decreased from the previous year to 43. 8% of total revenues (Maurice Marciano and Marciano). The decrease in gross margin was attributed to the negative impact of the stronger U. S. dollar on product purchases, increased occupancy costs due to retail expansion in Europe, lower initial mark-ups in Europe , and higher markdowns in the North American retail segment (Maurice Marciano and Marciano). Earnings from operations were reported at $404. million, a 12. 8% increase from the prior year, and other income, including interest income and expense, totaled $16. 7 million (Maurice Marciano and Marciano). As of January 29, 2011, Guess, Inc. had $442. 1 million in cash and cash equivalents, down $60. 0 million from 2010. In breaking down all of their marketing segments, Guess, Inc found that once again, the largest increase in gross profit came from their European segment. In Europe, revenues increased 23. 2% to $920. 3 million. Revenues produced by other segments were reported as follows: North American Retail- Net Revenue: $1069. 9 million * Earnings from Operations: $122. 6 million * Operation Margin: 11. 5% Asia- * Net Revenue: $53. 6 million * Earnings from Operation: $28. 6million * Operating Margin: 14. 3% North American Wholesale- * Net Revenue: $181. 0 million * Earnings from Ope rations: $46. 2 million * Operating Margin: 25. 5% (Maurice Marciano and Marciano) Despite setbacks from their legal battles (The Marciano brothers believed they would have exceeded $1 billion in sales by their 10th anniversary, had it not been for the court cases) (Guess? Inc. ), Guess sales flourished from the very beginning. 1984 brought sales of $150 million, and in 1987, the company reached profits of $100 million, with sales reaching $350 million (Guess, Inc. ). At that time, Guess retail stores grew to 19 locations, and sales reached $575 million in 1990 (Guess, Inc. ). In 1991, Guess strategically increased their advertising budget to $22 million. This worked in their favor, as the company earned enough profits to add 33 more stores by the end of the year, including the European flagship store in Florence, Italy. Sales slowed during the recession in the early 1990’s (Guess, Inc. ). However, the men’s collection took an opposite approach, and sales skyrocketed, with a 41% sales growth in 1991 alone (Guess, Inc. ). By the end of the year, menswear sales would account for 40 of total company sales. During this time, Guess also began to see the extensive opportunities available with international sales, as licensing arrangements introduced Guess to over a dozen countries, causing a significant increase in revenues. By 1993, Guess had reached an estimated $700 million in sales (Guess, Inc. . During this time, Georges Marciano decided to step down from his position as CEO, and sell his 40% of the company to his brothers for around $200 million. Maurice was then named CEO, and took over direction of design. Guess then stepped up their promotional campaign, looking to fuel its future growth. Licensing became a vital part of total revenues, with products now including home furnishings, i nfant wear, and junior knit wear (Guess, Inc. ). Meanwhile, sales continued to grow, now focusing on more accessories as well. In 1994, sales of Guess watches exceeded $100 million and footwear more than $60 million. Guess became a publicly traded company in 1996 (Guess, Inc. ). Hoping to continue their uninterrupted success, Guess was disappointed when 1997 sales began to drop. To compensate, Guess created a new line of high-end jeans called Premium Denim for men and women. However, this proved to be another disappointment, and the market share was lost due to competitive pressures and a terrible retail environment. In 1999, Guess decided to start their first e-commerce store (www. guess. om), which gave their sales a much-needed boost. Even in critical times, Guess was able to open 56 new stores in 2000. Annual sales would increase by 32% with the introduction of G Brand, a new complete line of high quality unisexual jeans wear that used Italian denim and European designs. At the end of 2000, Guess had 212 stores in the U. S. and Canada. In 2001, Guess implemented a new marketing strategy in order to keep their profits rising. With these new strong marketing methods, Guess was able to increase their sales, and open 24 new stores in the U. S. and Canada, a total of 249 stores. Guess continues their success over the next several years. As of 2010, Guess has 1292 stores, 504 in North America, 441 in Europe, and 347 in South East Asia (Breif History of the Company and the Marciano Brothers). Looking towards the year ending January 28, 2012, Guess, Inc. expects new revenues to range from $2. 74 billion to $2. 80 billion (Guess? , Inc. Reports First Quarter Results). Operating margins are expected to be between $16. 5%, while diluted earnings per share are expected to be in the range of $3. 30 to $3. 50 (Guess? , Inc. Reports First Quarter Results). SWOT Analysis Like any business, Guess must analyze each of their strengths, weaknesses, opportunities, and threats, and implement a strategy of using each of these aspects to their advantage. Strengths A quick overview of the strengths of Guess, Inc. include maintaining a strong and diversified brand portfolio, a global full lifestyle brand, an effective management team, and solid capital structure. Guess produces a brand that portrays a fun, fashionable, and sexy image, which is developed and maintained worldwide. Guess maintain a massive level of global success, with stores in 85 countries besides the U. S. and Canada. Because of this global diversification, the company is still able to grow, even in tough economic times. International growth remains one of Guess, Inc’s top strengths. Another major advantage Guess has is their use of multiple distribution channels. Not a company to focus solely on one channel, Guess Inc uses retail, wholesale, e-commerce, as well as licensing distribution to sell their products. This proves as a preventative benefit, as their operating results are not relying solely on the performance on one single channel. This also allows Guess, Inc to quickly adapt to ay changes in the distribution or retail environment of any one particular region. Adding to their diversity, Guess also relies on multiple store concepts, including flagship GUESS? full-priced retail stores, GUESS? factory outlet stores, GUESS by MARCIANO stores, G by GUESS stores, GUESS? Accessories stores, and GUESS? kids stores (Maurice Marciano and Marciano). This allows Guess to target multiple demographics in different regions. Weaknesses Like any company, Guess, Inc must also identify their weaknesses. A quick overview of the weaknesses of Guess, Inc. include maintaining a business in a highly promotional environment, the highly competitive nature of the apparel industry, discretionary spending being dictated by the situation in the global economy, and the narrow focus on women’s apparel. While Guess has very diversified products, and targets women, men, as well as children, their heavy focus on women’s apparel could be seen as a big weakness. Only 10% of Guess consumers are men, boys, or babies (Maurice Marciano and Marciano), which may indicate a lack of balance of promotional activities. Guess should assign more of their promotional budget to focusing on these areas, rather than attempting to portray an image of solely a women’s retailer. This also creates an opportunity for competitors to gain control over these sectors. While Guess stores may be growing rapidly in other countries, they must continue to be careful not to saturate the market. Opportunities A quick overview of the opportunities for Guess, Inc. include growing demand in foreign countries, such as China, under-penetrated markets in Europe, growth in the U. S. , and alliances by leasing. The Guess e-commerce environment improves customer relations, and creates an alternative shopping environment. In realizing this, Guess has the opportunity to increase their profits significantly by continuing to offer a wide range of products and keep up with an ever-changing economy. Technology proves to be a great opportunity for Guess, as they can benefit from consumer’s need for convenience. Guess men’s clothing category also has the biggest potential and room for growth. If Guess takes advantage of that, they will allow themselves the potential for a tremendous increase in profits. Guess should also take advantage of the new business casual trend, whereas smart casual clothing is becoming more and more acceptable in professional offices, and more people are looking for an acceptable replacement for their suits, ties, and other â€Å"formal† business attire. Threats A quick overview of the threats against Guess, Inc. include continued weakness in global consumer spending, low entry cost for competitors in the apparel market, changes to import tariffs, quotas, and taxes, and increases in energy and raw materials prices. Competitors are always considered one of a business’s greatest threats. The apparel industry is highly competitive, which may cause difficulties for Guess in the future. During a recession or uncertain economic conditions, consumers may be faced with reduced confidence and spending habits, resulting in a slow-down in sales and profits. While relationships with international markets and suppliers prove to be a steady strength for Guess, there are also threats involved. Since Guess does not own or operate any production facilities of their own (CITE- annual report), they depend heavily on foreign suppliers and manufacturers to produce products of top quality, and exactly to their specifications. Since Guess is a global business, there revenues could inadvertently be affected by factors beyond their control, such as recessions in foreign countries, political instability which may interrupt trade with foreign vendors, reduced global demand, significant fluxations in the value of the dollar against foreign currencies, or local business practices that do not conform to legal or ethical guidelines. Furthermore, Maurice and Paul Marciano currently hold 33% ownership of Guess shares, which is a very significant percentage. Their interests may differ from those of other stockholders, which could present a potential threat to the nature of the business. Competition One of Guess, Inc’s top competitors is Abercrombie and Fitch. Similar to Guess, Abercrombie's positioning strategy involves the use of sexually overt advertising positioned to appeal to young adult markets. Unlike Guess, Abercrombie and Fitch advertisements often depict nudity, alcohol consumption and assorted sexual behaviors. Guess chooses to take a less scandalous approach, and maintain a softer, more classical image. Abercrombie ; Fitch does not have a mass market approach to its advertising. It places print ads in 4 magazines: Vanity Fair, Interview, Out, and Rolling Stone. Abercrombie ; Fitch is well positioned for the future, however it is necessary for them to continue to move forward in their efforts to maintain a new, trendy image. In the face of a falling economy, Abercrombie's advertising stands out to an audience that has been exposed to a lot of noisy ads. In comparison to Guess, Abercrombie has the advantage of selling products under four different concepts, Abercrombie & Fitch, Abercrombie, Hollister, and RUEHL. This provides the added benefit of appealing to different markets and demographics under completely different names, whereas Guess will only sell products with the Guess name , allowing Guess limited access to the market. GUESS? In the Future Immediate strategies to make Guess bigger and better would be to focus more of their advertising and promotional capabilities to their menswear collection. In the near future, I would recommend opening individual Guess for Men stores, which would open the door to an entire new demographic, increasing the potential for an immeasurable amount of profits. Focusing on new markets in Europe should also prove to be beneficial for the company. Currently, this market is under-penetrated, but has great potential for expansion in the future. As for a long term growth strategy, Guess needs to continue increasing their retail presence and expanding internationally. Guess has an excellent retail strategy which needs to be executed in each region of the world. Looking towards the long term, Guess should consider forming an alliance with a major competitor in the market, such as BEBE or Levi’s. Both of these companies have showed evidence of trying to come up with new styles in an attempt to keep up with Guess (Guess? , Inc. ), and are equally dominating the market for jeans and/or casual wear. Merging with either of these companies would prove to be tremendously profitable for Guess, as it would eliminate much of the competition, as well as allow them to dominate more of the market. Celebrating their 30th anniversary this year, Guess, Inc. is now bigger and better than ever, and growth shows no signs of slowing down. As long as they continue to leverage their presence globally and execute their mission statement and creative promotional strategies, Guess will continue to stay on top of the fashion world. Works Cited â€Å"Breif History of the Company and the Marciano Brothers. 25 June 2009. Guess, Inc. 1 May 2011 . â€Å"Guess, Inc. † Funding Universe. 27 May 2011 . â€Å"Guess? Inc. News- Company Information. † New York Times 2011. â€Å"Guess? , Inc. † 2011. Hoover's Company Information. May 2011 ;http://proquest. umi. com. ezproxy. library. berkeley. org/pqdweb? index=4;did=168188551;SrchMode=1;sid=1;Fmt=3;VInst=PROD;VType=PQD;RQT=309;VName=PQD;TS= 1307571605;clientId=11195;. Guess? , Inc. Reports First Quarter Results. Fiscal Results for the First Quarter Ended April 30, 2011. Los Angeles, CA: PR Newswire, 2011. â€Å"Marcianos Go Full Time Now at Guess. † Women's Wear Daily 16 6 1990: 1. Maurice Marciano, Chairman of the Board, Guess, Inc. and Paul, CEO & Vice Chairman of the Board, Guess, Inc Marciano. â€Å"Guess? , Inc Annual Report 2010. † Annual Report. 2010. â€Å"The Guess Mission Statement. † Guess, Inc. 2011 . ——————————————–

Reason for Seeking a College Degree

The purpose of this essay is to discuss why I chose to seek a college degree, my learning style as discovered by the results of questionnaires, and the fact that I feel the results are accurate for me personally. Everyone has their own individual reasons for pursuing a college degree. For me, it is the desire to become a state Game Warden after retiring from the military. Being a state Game Warden requires that I have a degree in the biological or wildlife sciences. In a profession like this, it is important that one has a clear and concise understanding of wildlife biology at a collegiate level.To be a viable candidate in this profession, a college degree is necessary to present myself as a competitive individual for the job I am seeking to fill. Whether or not I have on the job training or experience, the college degree will show that I have the knowledge base to help me succeed as a warden. The end goal in my pursuit of a college degree is to not only broaden my scope of knowledge and skills, but to unlock career aspirations that would otherwise be unattainable for me without a degree. But before I put the cart before the horse, graduating with degree in hand requires I truly know myself inside and out.Basically I need to understand what my personal learning style is. Learning styles are not exactly chosen, they are natural and inherent to each learner. According to Felder & Soloman (n. d. ) there are several different learning styles: Active, Reflective, Visual, Auditory, Tactile, Sensing, Intuitive, Verbal, Sequential and Global. To find out what kind of learner you are, a simple questionnaire or quiz can be taken to narrow these options down. In taking Felder & Soloman’s Index of Learning Styles Questionnaire (n. d. and the Learning Style Inventory (Penn State, 2010) questionnaire, I have discovered that I am an active learner and a visual learner. An active learner is one who gravitates toward interpreting, comprehending, and retaining information in a â€Å"hands on† or active fashion. In other words they discuss or apply and explain the information to others (Felder & Soloman, n. d. ). The degree program I am enrolled in is online; which presents me with challenges and difficulties in using the active learning style that I normally rely upon.An alternative to active learning for me is visual, which will serve me well because online course material is something I can see to interpret and retain. Visual learners are those who absorb and maintain information efficiently through methods such as charts, diagrams, pictures, films or demonstrations (Felder & Soloman, n. d. ). Suggestions for success as a visual learner include writing out ideas and information for memorization and fully utilizing all course materials, whether they are maps, flashcards, charts or filmstrips (Penn State, 2010).I am someone who always reads the directions prior to completing any task, therefore this fits me perfectly. I fully agree with the r esults of these questionnaires. I am a mechanic- someone who works day in and day out with my hands. The things I am trying to accomplish or figure out require me to read texts, diagrams and pictures and solve the problem using these resources. I also discuss and apply the information found with those who are masters of the mechanic profession. My reasons for seeking a college degree are simple.I need to hold at minimum at Bachelor’s in the wildlife or biological sciences to reach my goal of being a state Game Warden after retirement from the military. To be successful in this means that I understand I am a visual and active learner, as realized after taking the learning styles questionnaires. References Felder, R. M. , & Soloman, B. A. (n. d. ). Index of learning styles. Retrieved from http://www. engr. ncsu. edu/learningstyles/ilsweb. html Penn State. (2010). Learning style inventory. Retrieved from http://www. personal. psu. edu/bxb11/LSI/LSI/htm

September 11, 2001 Attacks Research Paper Example | Topics and Well Written Essays - 2000 words

September 11, 2001 Attacks - Research Paper Example Only after the towers collapsed and news of a similar attack on the Pentagon and an attempt on the White House did the magnitude of the events of September 11, 2001 begin to come into focus. A survey of the damages that would follow would inform of the severity of the September 11 2001 attacks. Those damages would reach beyond the immediate vicinity of the attacks and change our lives in many ways. This research studies analyzes the actual and general damages and consequences of the September 11, 2001 attacks. Actual Damages Al Qaeda’s terrorist attacks on the World Trade Center on September 2001 claimed the lives of almost 3000 persons and caused the area’s economy up to US$83 billion directly and indirectly in losses (Okuyama & Chang, 2011). The damages to New York City were particularly far-reaching since New York City represents the financial center of the US. In addition to property destruction, South Manhattan, is home to New York City’s government and inte rnational commerce. As a result of the attacks, the government and commercial activities were at a complete halt for weeks to come. Office buildings nearby were empty and New York’s subway system came to a complete halt. Thousands of New York residents living beyond Canal Street could not return home. New York’s schools and bridges were closed down (Tucker, 2004). For the entire country and for most of the world, the airline industry suffered the greatest losses. Airports were shut down on September 11 with passengers stranded near and far, putting airlines to the expense of housing passengers. Formal claims by the loved-ones of victims who died in the three crashes resulted in unprecedented insurance and litigation expenses for the airline industry. Airport security also cost the airline industry millions in implementation and administration expenses (Tucker, 2004). With buildings destroyed, transportation interruption and business closures, New York City â€Å"exper ienced massive job losses† (Tucker, 2004, p. 401). The damages to the Pentagon were less extensive but shocking all the same because the attack on the Pentagon symbolized an attack on the US as a whole. On the morning of September 11, 2001, a commercial airline deliberately crashed into the ground floor of the Pentagon claiming the lives of 65 passengers and 125 Pentagon occupants (Bangash, 2006). The ensuing fire caused serious but reparable damages to the building. Engineers have claimed that the strong reinforced columns of the Pentagon mitigated the actual damages (Bangash, 2006). The direct costs of searching for Osama bin Laden and infiltrating terror cells are immeasurable and are costs that will burden the US for years to come (Tucker, 2004). Thus the economic damages directly and indirectly resulting from the September 11, 2001 attacks are difficult to quantify. Thus one of the long lasting consequences of the September 11, 2001 attacks is the realization that economi c loss resulting from traumatic events are not only difficult to quantify but difficult to minimize (Jonkman et al, 2003). General Damages For the purpose of this research study, general damages refer to damages that are not specific and generally not quantifiable in terms of dollars and cents. These kinds of damages are better understood as collateral or consequential damages. It has been established that many persons who survived the attacks and witnessed the

Social Learning Theory & Teaching Adolescents Research Paper

Social Learning Theory & Teaching Adolescents - Research Paper Example Although young adulthood is expected to end at 24 years, there is no clear event that marks it end (Park and Adam, 2006). At this age, most of the young adults are usually employed and have some source of income to take for their financial requirements. However, the health problems that young adults experience in the US are usually similar in spite of their age, gender and socio economic status. The health problems faced by this group range from mental to physical and psychological. The most threatening health problem that this group faces is mental problem which often leads to suicide. In the US, the suicide rate of young adults aged between 18 and 24 have tripled that of adolescents with the rate of males being six times that of females. These suicide cases have been attributed to health disorders that usually begin at age 24. According to researches, between the age of 18 and 24, over 50 per cent of young adults often experience mental disorder, with alcohol abuse and depression b eing the most common (World Health Organization, 2010). A part from mental disorder, young adults in the US also experience problems in their reproductive health.

Cross-cultural management Research Paper Example | Topics and Well Written Essays - 750 words - 1

Cross-cultural management - Research Paper Example e Australians, Filipino Australians and Afghani Australians, all have completely distinct cultural background and they find themselves in greatest of the difficulties in coping up with the working condition that are supplied to them. It is recommended that the Lebanese Australians should adopt that culture, which is based on individualism such that each individual would then be held responsible for his/her own act. Conversely, native managers should also bring flexibility in their own behavior and attitude when dealing with the members of immigrant groups and allow them to interact and understand more with the members of those communities in order to mitigate the cultural barriers. The concept of Culturally and Linguistically Diverse (CALD) is becoming quite popular especially among those groups which have migrated from different parts of the world to Australia. Among those groups, the major groups are Lebanese Australians, Filipino Australians, and Afghani Australians. Since Lebanon, Philippine and Afghanistan are all fundamentally diverse countries as compared to Australia especially in respect of culture and language, therefore, their immigrants also face severe problem in their cultural and linguistic dynamics while residing in Australia. The cultural and linguistic issues have trapped these communities into serious dilemmas as how to interact with the native Australians. At times, they feel it is better to surpass their own recognition, values and beliefs, working styles, and many other cultural and linguistic prospects, mingle around with the natives and follow their ways like a famous quote â€Å"Do what the Romans do†. Conversely, they also perc eive that while adopting the culture of native Australians, they may encounter serious problems and may not adjust easily with the natives as well as may not feel comfortable doing what natives do. To be more specific, the arguments are placed in respect of the cultural context whether to adopt culture based on

Case Analysis Essay Example | Topics and Well Written Essays - 500 words - 13

Case Analysis - Essay Example While exact documents are rare due to the private status of Fresh Direct as a company, there have been rumors that the company posted over $250,000,000 in revenue throughout 2009, making them a rare profitable ecommerce grocer. This distinction attracted the attention of British grocery giants Morrison Supermarkets PLC, who injected the company with an investment worth nearly $50,000,000 US in 2011 that gave them a 10% share. The company will face increased competition from large food retailers as they try to benefit from the growing market. Consumer attitudes about freshness will still be an issue, but it will also be faced by potential competitors. Fresh Direct should continue their progressive expansion into restaurants and new delivery territories as a means of continuing customer growth. Similarly, it would be advantageous to remain aware and adaptive to concerns about freshness and website limitations. This was a thorough and structured case study that provides a significant amount of information about the history of Fresh Direct and the various opportunities and challenges they continue to face in the online grocery

A Rhetorical analysis about I shouldn't have to press '1' for english Essay

A Rhetorical analysis about I shouldn't have to press '1' for english - Essay Example Also there is the political face of it, whereby the economic and political policy’s are established and preserved by the government mainly for the special benefit of the ruling class, the wealthy influential not for the advantage of working individuals, people of color. This economic dismay that we are experiencing is similar for the Latinos and Blacks. This shows the unjust, undemocratic and unequal society we are dwelling in. Few researchers have found out that the mean wealth of the white family is twenty times that of a Black family. The wealth ratios are very unequal rising up a few questions. Is it the color? Is it the inability to do certain things? Looking at inflation, in 2005-2009 the medium fell 53% amid the black households, evaluated with a simple 16% amid the white families. Looking at home equality, Blacks declined by half, illustrating how many were left out. An analysis carried out suggests that the Blacks were forefront of the housing real estate market boil of the 1990s and in the early 2000s however that have since been amid the situations experiencing the steepest turn downs in the housing

Discussion a solution to the problem of dealing with economic crisis Essay

Discussion a solution to the problem of dealing with economic crisis - Essay Example Most of the foreign assets are denominated in dollars and the value of the currency has further appreciated due to the investors winding off their position. This has led the foreign creditors to pull out their money from the country as the value of their debt is falling with the rising dollar. The values of the homes have dropped drastically due to auctioning and early foreclosures. The government can buy back the foreclosure and sell them at a discount to the construction companies with the condition of not building any new houses. This will put a check to the housing surplus. The US trade deficit is very large. This is the result of US corporations outsourcing their production of goods and services. To settle these deficits the countries acquire US based companies, invest in real estate, purchase treasury bonds and invest in derivative instruments like mortgage based securities which are the main reasons for the spread of the financial crisis. These mortgage based securities precipitated the financial crisis. Since many institutions had invested in these instruments which were backed by customers with a bad credit record the default of the customers was inevitable. This calls for the regulation of financial markets. But here also caution should be exercised with regard to over-regulation or wrong regulation. To put a check to the trade deficits steps should be taken for indigenous production of outsourced services. The credit cards should be issued after a thorough scrutiny of the credit history of the applicant. Also, sufficient reserves should be maint ained against the rising outstanding. This will prove to be a cushion in case the cardholder defaults in payment. This will also strengthen the banking system. The government can also lower the tax rates and freezes it for a certain period so that the corporate agencies are encouraged to invest in new avenues. This will solve the unemployment problem, increase the confidence of the people

Criminology Essay Example | Topics and Well Written Essays - 1000 words - 9

Criminology - Essay Example sector including sweatshops is characterized as illegal as well as harmful acts, which could be committed by the leaders and even the employees of the corporations, with the intention to promote their personal as well as corporate interests, to the detriment of many stakeholders. As these crimes could wreck the corporation, shrinking its profits, destroying its brand image, negatively impacting employees’ livelihood and in worst case scenarios total shutting down of the corporation, constructive steps will be normally taken, both by the corporations themselves as well as external stakeholders like governments. On those lines, corporate crimes can be prevented by implementing regulatory strategies or policies, which border on compliance and deterrence. Although, both these policies have advantages as well as disadvantages, compliance would be a better strategy to combat corporate misconduct particularly in sweatshops. Compliance regulatory strategy puts the onus on the sweatshops themselves, while deterrence regulatory strategy brings in the role of external prosecution agencies. Compliance strategy concentrates on the power of regulatory agencies to encourage corporations or sweatshops â€Å"to comply with the law before crimes are committed†, on the other hand, deterrence strategy â€Å"rely on criminal prosecutions to prevent corporate crime after the crime has already been committed.† (Coleman, 2008). Thus, the basic difference as well as advantage is, compliance strategy through regulatory agencies as well as self-regulation could preempt and prevent the crime as well as other violations from taking place, while deterrence focuses on aftermath of those crimes or violations. In line with the old adage of â€Å"Prevention is better than Cure†, it would be better to prevent crimes as well as human or employee rights’ violations, and that is particularly applicable to sweatshops, which employs sizable number of employees and where chances of violation of employee

Cytochrome b6f complex Essay Example | Topics and Well Written Essays - 2500 words

Cytochrome b6f complex - Essay Example As one of the major photosynthetic protein that is widely been explored in the study of biochemistry, the cytochrome b6f complex is commonly found not only in green algae but also in cyanobacteria (Baniulis et al., 2009; Whitelegge et al., 2002). Each time the plants undergo photosynthesis, the cytochrome b6f complex plays a significant role in the process of transferring the electro-chemical proton 11 across the thylakoid membrane (Laisk, Nedbal and Govindjee, 2009, p. 159). In other words, the thylakoid membrane in plants is responsible in introducing some protons within the close surroundings of the thylakoid. As part of analyzing the biochemistry and role of cytochrome b6f complex in the photosynthesis of plants, this study will purposely gather and make use of several scientific-based literature in discussing not only the relationship between the Cytochrome b6f complex and its biochemical structure but also the basic modes of enzyme catalysis in relation to some specific example s. Relationship between Functions of Cytochrome b6f Complex to their Structures To be able to clearly explain the relationship betwen the functions of cytochrome b6f complex and its biochemical structure, it is necessary to first explore the biochemical structure of cytochrome b6f complex followed by discussing the main function of cytochrome b6f complex. ... According to Whitelegge et al. (2002), the structure of cytochrome b6f complex is complex due to the fact that cytochrome b6f complex is composed of as much as eight (8) different polypeptide subunits (Baniulis et al., 2009; Dashdorj et al., 2005; Genji et al., 2004). In line with this, several studies strongly suggest that cytochrome b6f complex is complex since it is composed of a total of seven (7) prosthetic groups (Baniulis et al., 2008; Cramer et al., 2004). Several studies explained that the structure of cytochrome b6f complex is composed of four large subunits between 17 to 32 kDa such as the membrane bound c-type cytochrome f (PetA), cytochrome b6 (PetB), the Rieske iron-sulfur protein which is also known as the Rieske ISP (PetC), and the subunit IV (PetD) (Baniulus et al., 2011; Cramer, Hasan and Yamashita, 2011; Yan and Cramer, 2003; Schneider et al., 2002; Whitelegge et al., 2002). According to Baniulus et al. (2011), petA, petB, petC, and petD are classified as large sub units that can interact well with the redox-active prosthetic groups. Serving as the â€Å"picket fence† type of structure that surrounds the core of cytochrome b6f complex’s four (4) larger subunits, the structure of cytochrome b6f complex is also composed of four (4) other hydrophobic subunits (3.2 to 4.2 kDa) which include the PetG, PetL, PetM, and PetN (Baniulus et al., 2011; Whitelegge et al., 2002). For example, Kugler et al. (1998) mentioned that the chloroplast cytochrome b6f complex is composed of seven (7) different subunits including very small proteins such as PetG, PetL, and PetM proteins. After conducting an ex-ray structure analysis, Genji et al. (2004) found out that the biochemical structure of cytochrome b6f complex in blue-green algae is crystal in form. Because of

Mip for Saint Maybe Essay Example for Free

Mip for Saint Maybe Essay â€Å"Ian had stopped rasping and ran a hand along the slat’s edge, trying to gauge the curve. All his years here, he had worked with straight lines. He had deliberately stayed away from the bow-back chairs and benches that required eye judgment, personal opinion. Now he was surprised at how these two shallow U shapes satisfied his palm. (347-348) 1. Context: This passages is found towards the end of the book in chapter 10,†Recovering from the Heart-of-Palm Flu† While making a crib for his soon to be child, Ian comes across this thought. This was around the time Ian and Rita had gotten married. It show how after Ian let and tried new things in his life that made him happier. Also this made him more open-minded as a person by seeing that there are more ways than just one to do things, and not being afraid of things that are different than what he is used to. Another interpretation is that Ian has been freed from his guilt and is now allowed to experience things, get on where his life left off so long ago. This is really the resolution of the internal conflict that Ian has been going through since the climax of the book at the start. He is now guilt free and able to enjoy life. This also really effects the kids, Thomas, Agatha, and Daphne, because they felt like they had ruined his life by having to raise him, and so they still felt like they owned him. Now they can feel content know that his life is moving forward. The Bedloe’s don’t have to carry their burdens and are all able to carry on now. 2. Significance: This connects to the essential questions and themes of Saint Maybe. Theme #2,† Redemption can only be achieved through forgiveness of oneself and others,† This shows that Ian forgave himself because he changed his life for the better. Had he not forgave himself he would still be using â€Å"straight lines†, or still be the same Ian who felt guilty about causing his brother’s death being cautious not using his â€Å"personal opinion†, and not being able to have â€Å"U shapes† or happiness with his life. So, in a sense, by being able to create what he did show that he has feels redeem, by being able to move on and try new things. This Passage also answers Essential Question #2, â€Å" Does forgiveness need to be earned or should it be given? † because it show how Ian had to work so hard to achieve the â€Å"satisfaction† of being set free from his guilt, or forgiven, for what he thought he did. Had he not tried he would have never been forgiven he would still lead a life of despair and depression and die not ever getting to enjoy his life. Another that can be answered is Essential Question #4,† Under certain circumstances do individuals deserve a second chance? †Cleary Ian need a second for what had happened. Ian blamed himself at first but since he tried so hard and changed what he is used to doing just for forgiveness he is entitled to a â€Å"second chance† a chance to live again and have a good outlook on life, to grow up. 3. Literary Devices: One literary device used in this passage is tone. The tone use here is happy and uplifting. This voice the author chose, by using worse like, â€Å"satisfied† and â€Å"surprised†, tells us he is now not the same depressed person that he once was and that he is content with where his life is now. He has stop dwelling on the past and changed for the better. Another literary device is used here is foreshadowing. It foreshadows that the rest of Ian life, and all the Bedloe’s lives, will not be plague with what had happened and will live normal lives. By being able to try new things such as the â€Å"U shapes† it shows that he has moved on and is able to try new things without the fear of making a mistake. In other words he is no longer a â€Å"saint maybe† and is a new man. This passage is really is symbolism for Ian’s forgiveness and him being able to move on. The â€Å"straight lines† symbolize Ian’s life before he forgave himself not able to put his own â€Å"†¦ judgment and personal opinion† in things because he felt guilty for what he did to his brother and was afraid to do anything like it again because he was so traumatized. After he forgave himself he was able to do the â€Å"bow-back chairs and benches† because he is able to use his opinions. He is able to do so because he is now a different person, a free (forgiven) man, able to do as he pleases, not able to doubt himself anymore. So the change in his style of wood working really displays the change in his life.

Nescafe Today And Introduction Of The Company Commerce Essay

Nescafe Today And Introduction Of The Company Commerce Essay In the following assignment I will be talking about Nestlà ©s background, vision and mission statement, objectives, business strategy, marketing position, competitors, SHRM at Nestle/my view, Nestlà ©s 3 HR policies and my views/recommendations, changing role of HR Managers, and finally my conclusion and recommendations. 2. Nescafe Today and Introduction of the company At current time Nestle is one of the worlds leading Food Company, with its headquarters based in Switzerland. Till moment company has more than 280,000 employees and has over 500 factories in 86 countries. Its major market segments are Africa, America, Asia, Europe, and Oceania from where it generates huge profits. Its main motive now is to setup factories locally wherever it can, and then hire local employees. It also tends to rely on local resources and raw material. Therefore, a lot of attention is paid towards its professional training and its social environment. Nestle was founded in 1866 in Vevey, Switzerland, and is a public own company. The company has over 250,000 shareholders and out of those no one owns more than 3% of the stock. Only 1.5% of its profit is generated from its homeland, and rest is from the other 12 factories that it has overseas. Nestle is known for its wide range of products, such as; baby food, dairy product, beverages, pet care, ice-creams, and pharmaceuticals products, etc (Nestle 2010). With the help to all these products it covers a vast market and therefore, provides its shareholders with a long term profitable growth. 3. Nestlà ©s Vision To keep its consumer satisfied, by providing them with best high quality food, and dairy product. 4. Nestlà ©s Mission The foremost motive is to keep its customer happy by making products as per to the individual taste, lifestyle, and needs which is good for health. 5. Objective of Nestle Want to sustain its long term image by manufacturing and marketing its Companys products in such a ways, which links with its customer needs and lifestyle. Turning short term profit into long term. Want to carry on its trust and brand image in customer and employee mind by looking after their values and beliefs. To recruit the right person for the right job, because professionalism is very much required to survive in todays competitive world. 6. Business Strategies 6.1 Corporate Level Strategies Improve its products growth through renovation and innovation in process and technology. Want Long term potential Business should be done by holding on to the values and management principles of the organization. Build its organization on the basis of human values and principles (Scribd 2010). 6.2 Business Level Strategies To provide low cost products to its consumers to reduce competition. Have the concept of Differentiation By this I mean to reduce the risk of complexity of supply chain and lower attractiveness for discounters. 7. Market Positioning: Nestle tries to position its product as a superior quality product and consumer focused. Therefore they have this attracting slogans and messages, such as; We know your taste better than you Nestle Milk pack is now at your door step Add additional flavors to your life These all slogans will attract the buyers and would therefore help Nescafe to show its picture clearly and differently. For example, milk pack will position Nescafes product on a better platform against the competitors and therefore would gain competitive advantage. Another way of promoting would be displaying their products on the events like Valentine day, Fathers day, Christmas, etc, so that people get familiar with their products. 8. Competitors In todays time any company that runs a business face competition in this competitive market. Nestle is a multinational company, and therefore has a competitor as well in this global market. A main competitor of Nestle at this time is Kraft, which has recently taken over Europes No.1 Cadbury Company also. Besides this there are other competitors like; Mars (in chocolate), Dannon and Yoplait (in yogurt), General Mills (in flour), etc (Castelar Articles 2005). 9. SHRM at Nestle NESTLE A HUMAN COMPANY Nestle is a human Company and I can say this because they pay special attention to the individual needs of their customer and employees. You can see from their attitude and sense of responsibility that how much they are concern for their people. Its true that Nestle wants to increase its profit, sales, market segment, but not at the cost which would affect the quality life of its consumer and employee. Whatever Nestle is today, it gives all this credit to its people because without them they wouldnt have come so far. Its their peoples strength and energy which got them so far, and therefore, people are their real asset. The company has always promoted and encouraged open and active communication among its employees. Therefore taking in mind their employees ideas and discussions, Nestle today has resulted into improved Company overall. Therefore, Nestle believes in; High Performance High Involvement High Commitment. 10. My views on Nestlà ©s SHRM According to me I think that Nestle has done a great job in meeting its strategic HRM. This is because Nestle has successfully linked its HRM with its strategic goals and objectives in order to improve its business performance and long-term customer relationship. The company has aligned its HR strategies with its business goals, through which it achieved its core values. It kept its employees and customers satisfied by looking after their needs and requirements. Nestle totally achieved its strategic HRM by meeting its objectives which were; Market its Companys products in such a ways, which links with its customer needs and lifestyle. Turning short term profit into long term. Wanted customers and employees trust in its brand To recruit the right person for the right job Therefore, its proved that Nestle did meet its Strategic HRM, but with this it doesnt mean it stops here. Nestle has to keep on changing its Strategic HRM with the changing time and needs of the customers. And hence it proved that its SHRM is equal to HRM and vice-versa and it both goes together in order for company to succeed and perform better. 11. Nestlà ©s HR Practices Nestle is a company whose HR strategies or practices are developed by keeping in mind the Business objectives of the company and the strategies devised to run the business. The HR strategies are always in alignment with the business goals. Nestle is unique in the sense that it has been able to successfully inculcate its business objective as well as its core values, consistently in its employees day-to-day activities starting from recruitment till continuous performance appraisals. Today, Nestle has one of the most recognized HR functions globally. (Nestle Careers 2002) Three Nestles HR policies that I will be talking about are as follows; 11.1 TRAINING AND DEVELOPMENT Theory discussed As per to Drucker the one contribution that manager should make it that he should provide better vision to other, so that they could perform better. So basically main work of manager is to motivate, train, and develop people in through the means of training. According to Kirkpatrick there are four level of learning evaluation which is through reaction, learning, behavior and finally the result. If you follow these four principles you will get to know how to train your employees and in which field they need improvements in (Business Balls 2009). Nestlà ©s Training and Development process At Nestle Training and Development is very important, from bottom to top. Everywhere in the world, every company runs its own training and development methods, such as; classroom courses, e-Learning, etc. Therefore, Nestle also got its own training and Development procedure, which is as follows; Nestle provides the following- Literacy training-to upgrades essential literacy skills, especially for workers who operate new equipment. Nestle Apprenticeship Programs. Local Training Programs-on issues ranging from technical, leadership, and communication and business economics. My views on Nestles Training process According to me Nestle is not doing a good job in its training and development department, therefore with the changing time it should also be changed and improved. By doing this it will help Nestle to improve their business productivity and growth. Therefore, a special attention should be paid towards the training process of employees, so that the company performs well in the long run. My recommendations In todays time it is very important that training practices should be changed as the business strategy changes. Therefore you should always keep in mind few things when you are developing a training strategy, such as; Always recognize the skills and abilities needed by employees. Then have an outline which will describe that how your investment in training will help in meeting business goals. Finally, execute the plan you made and monitor the progress that it resulted into (tutor2u 2009). In case of small scale organization, training can be given by a supervisor or a skilled man, whereas in large organizations, there should be a full time training officer on training department for the employees. The training methods that I would recommend for Nestles are as follows; Training on the job By this I mean that training should be provided at the work place. For example; A proper instructions and demonstration should be provided to the trainee regarding their job. A special coaching should be provided to employee. By this I mean that there should be close working relationship between an experienced employee and the trainee, so that trainee can learn and adapt to new surroundings. A job rotation should be done regularly. By doing so a trainee will learn and experience different task and activities that are going on in the organization. Advantages of- on the job training Its very cost effective for the company. It seems to be very productive, because while learning they are also working. By having someone standing on the top, give employees more confidence, because they know they are doing good job. Training off the job Off the job training means that employees have to take training by staying away from work place. This is a very formal kind of training provided to employees. Off the job training can either be provided by the companys training department or through external provider. The examples of off the job training are as follows; First one is Day release. It is when employee has to take some time out from the routine working hours and have to attend training centre The other one is that you have to take evening classes outside the work premises and hours. Then you have sandwich courses, where the employee has to spend around 6-9 months in college before joining work. Advantages of off-the-job training: A special outside trainer is appointed by the company, so they save money by not hiring trainer on fixed salary. Employee can pay his full attention on training rather than working and getting distracted. The employees will get opportunity to meet other business employees who are there to learn the same techniques. Demonstration It is one the most effective training skills. In this trainer show trainees how they have to work and perform their task. In some cases trainer should include the trainees in his demonstration so that they could feel and observe the work practically rather than just looking at it. Therefore, Nestle could provide any of above training options that I have recommended. By doing so, it will improve its productivity, because now employee will better understand their work. As of now they have done proper training in the field they were lacking before. RECRUITMENT AND PLACEMENT Theory discussed According to Sam Paul it is not necessary to do recruiting yourself, either it is better if you higher and external source for recruiting on your behalf. By this you can just give them the structure or guidelines, from which they will choose a candidate for you. This is very time saving and proves to be cheaper most of the times (Free Articles 2010). Samta Sharma on the other hand says that recruiting proves to be very costly component for most of the industries. Therefore, company should adapt to online recruitment by installing new software known as resume parser. This software can automatically short list the best candidate needed for that post. After that interview could be arranged. This will save a lot of time and money of the company, because now they dont have to go through the complete process of recruiting (Amazines 2010). Nestlà ©s Recruitment and Placement process Nestle has a very outstanding recruitment practices. Nestle, just doesnt fill jobs, instead they look for the right person for the right job to maintain work efficiency. Nestle works very hard to get the right set of people so that it can survive this tough market competition. (HR resource 2010) The recruitment process at Nestle is clearly defined according to its business needs which is; People with qualities like dynamism, realism, pragmatism, hard work, honesty and trustworthiness are looked for. Match between candidates values companys culture are recruited. Recruitment for management levels take place in the head office by top management and all others at the branch level. The existing employees are promoted to higher posts as per the requirements. There are no lateral recruitments. Another source of recruitment is campus placements and human resource consultancies to look for the enthusiastic, motivated and fresh pool of talent. Decision to hire a candidate is finally taken by HR professionals only and no preference is given to external consultant. This is done to finally have the judgment power in the hands of Company. Recruitment process is also totally based on hiring and recruitment of people who bring in new ideas. My Views on Nestles Recruitment Process According to me Nestles Recruitment process could be changed or improved in many ways. Nestle do have some good recruitment policies but at the same time its old, and to survive in todays stiff market competition one has to keep updated. Therefore, I would like to give some recommendations regarding how Nestle can improve its recruitment process. My Recommendations Therefore, according to me they should have a totally new recruitment process, which should be like; The company should first identify the vacancy, under which the requirement should be; what posts to be filled, number of persons required for the post, what duties they have to perform, and finally the qualifications required for hiring. Should prepare the job description and the person with what kind of skill is required for that job. Should give advertisement on the TV, Newspaper etc mentioning the skills they looking for. From the response that came in, Nestle should short list the people who best fit the job description (Recruitment 2007). Then the company should arrange the interview with the chosen candidates. Finally they should conduct the interview and get back to them with their final decision. After this the recruitment process should be immediately followed by the selection process. The employee should be hired based on the requirement, and the formalities should be taken care off. Recent Trend in Recruitment Nestle should adapt to OUTSOURCING It is when the external firm helps the organization by looking for the candidates according the needs and requirement of the organization. So in simple terms outsourcing firm gets the right candidate for the organization as per their needs and requirements. In turns of this, organizations pay huge amount of money to the outsourcing firm for their services. Example of outsourcing process is in the following table; POACHING/RAIDING It is one of the most common techniques applied in todays business. Poaching means that you can directly buy the persons talent, rather than developing it from the start in new person. All the skills that you required for the job could be in this person, who is doing the same work in some other reputed company, which could be your competitor. So the question is what can you do to get him? The answer is simple; you could offer him or her attractive and enhanced pay package with extra facilities (like, holiday packages, car, driver, house, etc). This will surely attract him, and he will shake hands with your company. By doing this you have weakened your competitor, and saved training and recruitment cost and time (Articles Base 2008). E-RECRUITMENT In todays time many big companies use internet for recruitment. Through the means of Internet, company can post its requirement for the vacant job. Then people can send in their CVs/Resume if they think that they are applicable for the job described. By doing this it saves a lot of time for both candidate and the company. Because now company can just reply or call in the person for interview who they think best met the requirement. REWARDS INCENTIVES Theory Discussed According to Stephen Burg it is very important to keep employees satisfied and happy so that they could work efficiently. The organization can do this by providing them with some kinds of rewards such as; appraisal, incentives, promotion, gifts, etc. According to Daniel it is very important to give rewards and appreciate your employees work, but at the same time it should be related to their performance, and their competitive nature. Company should not just give rewards if the person is just doing his or her job, because they might get lazy and think that they dont have to work more hard as compare to what they are already doing. Therefore, company should give rewards to those people only who keeps on performing better and are innovative. Nestlà ©s Rewards and Incentives Process Passion to Win awards- These quarterly awards have been institutionalized to reward those who over-achieve their targets. Long-service Awards- To recognize employees who have been with the company for more than 30 years. Nestle Idea Award- It was found from the correspondent that the company institutes Nestle Idea Award every quarter to recognize and award employees who come up with relevant and innovative ideas which have the potential of being implemented at Nestle. For all aspects of Reward, Nestle applies the following fundamental principles; Reward Principles Performance Driven The reward is directly related to the performance of the employee. The better the performance, the better the reward is going to be. Competitive Nestle benchmark its all aspects of Reward to ensure that they offer all their employees a competitive Reward package Inclusive The reward program is made so that everybody could see the contribution that employees make for the organization, not just senior managers. My Views about Nestles Rewards and Incentives process This is the process where I am very satisfied with the Nestles rewards and benefits for its employees. But at the same time you could add a lot to what they already have. Therefore, I would like to give just few recommendations on how they can appreciate their employees work with few tips on no-money reward and recognition. My Recommendations Besides what Nestle does for it employees it should also provide some kind of extra benefits to them. By this I mean; (Articles 2009) Benefits should be provided to all employees, with no discrimination such as; Leave-Personal Medical (fixed no. per year) Children Education Assistance Scheme Provident fund Retirement Gratuity Scheme Group Insurance Accidental Insurance Scheme Monthly health check-ups free consultation for self family etc. These all things will really motivate employees to do their task better, because now they are more satisfied and think that company treats them as a part and asset of the company rather than just an employee. 12. Recommendations Hr strategies that Nestle should follow according to me With the changing time Nestle should practice following HR practices: Communication Strategy: Nestle should have an effective communication strategy in todays changing scenario. Therefore, employees should be well trained and educated with the changes in the market and organization. And this can be done by having open-end discussions in meetings. Effective Training and Development: At Nestle most of the trainings are done by in-house trainers. But with the changing time they should call external trainer for specialized training. Besides this Nestle should also have training abroad program, so that employees get the feel of global market by working outside. Entrepreneurship strategy: Every employee needs to be an independent entrepreneur, who can generate ideas and bring them to reality by using the existing resources and support of the organization to create innovative and creative products and services. Recruit purposefully In todays time when most of the organizations are firing people you should have more recruitment going on for the search of talented people. So its a great time for savvy companies to hire talented people who have been down-sized by other organizations. This will give advantage to Nestle in coming years. 13. Conclusion Thought Nestle did everything that it could to survive in todays competitive environment. But this competition will never stop and will get more intense with the time passing by. Therefore, beside my recommendations in its HR strategies, it should also pay attention to its VRIO approach). This is the approach which I think is very much required in todays time and changing environment. Its because if NESTLE will keep up with its VRIO structure it will be unique and different than others, therefore will face less competition in the market. How can it do this? Answer to this is by maintaining its VRIO (Valuable, Rare, Inimitable, and Organized) structure, which is as follows; Valuable A resource is valuable if it helps the organization meet an external threat or exploit an opportunity. If a resource helps bring about any one of these four things then it is valuable: Efficiency, Innovation, Quality and Customer responsiveness. Valuable resources of Nestle are: Human Resources Brand Name Research development processes Rare A resource is rare simply if it is not widely possessed by other competitors. Rare Resource of Nestle: Its uniqueness in Infant food products Processes and ingredients they use are rare. A resource is inimitable and non substitutable if it is difficult for another firm to acquire it or a substitute something else in its place. This is probably the toughest criteria to examine because given enough time and money almost ANY resource can be imitated. Therefore, one way to think about this is to compare how long you think it will take for competitors to imitate or substitute something else for that resource and compare it to the useful life of the product. Inimitable resources of Nestle are: Corporate Culture Values followed at Nestle Reputation Organized A resource is organized if the firm is able to actually use it. However, if you analysis does turn up a valuable, rare, and inimitable resource that the firm is not taking advantage of, then the resources of the firm are not said to be organized.