Electric Scooter Market in China- Market Competition & Opportunities Essay

Research and Forecast of China Electric Scooter Industry, 2014-2018 mainly conducts in-depth market research on Electric Scooter market in the following aspects: market scale, supply and demand, market competition and business performance of major enterprises, meanwhile it makes a prediction about electric scooter industry and provides decision-making references for investors. In 2013, the demand volume of electric scooters in China reached 1. 05 million units, an increase of 31. 25% year-on-year. In current electric scooter market, the products mainly serve for the elderly, the disabled and home women; with the deepened population aging degree and the increased consumption level, the demand for electric scooter is also growing increasingly. Complete Report @ http://www. marketreportschina. com/research-and-forecast-of-china-electric-scooter-industry-2014-2018 . Inquire Before Buying @ http://www. marketreportschina. com/contacts/inquire-before-buy? rname=4357 . Table Of Contents 1. Overview of China’s Electric Scooter Products 1. 1 Product Brief Introduction 1. 1. 1 Brief Introduction 1. 1. 2 Composition 1. 1. 3 Advantages 1. 2 Classification 2. Electric Scooter Situation in Foreign Countries and Taiwan 2. 1 Foreign Countries 2. 2 Taiwan 3. Environment of China’s Electric Scooter Industry 3. 1 Economic Environment 3. 2 Industry Relevant Policies, Standards, Laws and Regulations 4. Characteristics of Electric Scooter Industry 4. 1 Concentration Ratio 4. 2 SWOT 4. 3 Industry Chain 4. 4 Competitive Landscape 5. Supply and Demand in China’s Electric Scooter Market 5. 1 Supply Situation 5. 1. 1 Supply Situation 5. 1. 2 Main Brands 5. 2 Demand Situation 5. 3 Demand Factors 5. 4 Price Situation 5. 4. 1 Price 5. 4. 2 Factors Affecting the Price 5. 4. 3 Price Trend 6. Overview of China’s Low Speed Electric Vehicle 6. 1 Brief Introduction 6. 1. 1 Product Introduction 6. 1. 2 Main Products and the Introduction 6. 2 Development Situation in China 6. 3 Overview of China’s Main Manufacturers 6. 4 Market Situation of Four-wheel Low Speed Electric Vehicle Market and the Forecast 6. 4. 1 Current Application Situation. 6. 4. 2 Domestic Market 6. 4. 3 International Market 7. Import and Export of China’s Electric Scooters 7. 1 Import and Export 7. 2 Sources of Import and Destinations of Export 8. Technological Development of Electric Scooter Products 8. 1 Technological Development Situation 8. 1. 1 Relevant Domestic Patents 8. 1. 2 Research Situation 8. 2 Technological Development Direction 8. 2. 1 Technological Maturity in China and Technological Difference between China and Foreign Countries 8. 2. 2 Technological Development Direction 9. Main Enterprises and Competitive Landscape in China’s Electric Scooter Industry 9. 1 Feishen Group Co. , Ltd. 9. 1. 1 Company Profile 9. 1. 2 Company Strength 9. 1. 3 Independent R&D Situation 9. 1. 4 Business Performance 9. 2 Jinhua ACEME Electric Co. , Ltd. 9. 2. 1 Company Profile 9. 2. 2 Company Strength 9. 2. 3 Development Trend 9. 2. 4 Business Performance 9. 3 Zhejiang Ripu Electronic Science and Technology Co. , Ltd. 9. 3. 1 Company Profile 9. 3. 2 Company Strength 9. 3. 3 Business Performance 9. 4 Wisking Electromechanical Product Co. , Ltd. 9. 4. 1 Company Profile 9. 4. 2 Company Strength 9. 4. 3 Business Performance 9. 5 Xuzhou Maston Mobility Co. , Ltd. 9. 5. 1 Company Profile 9. 5. 2 Company Strength 9. 5. 3 Business Performance 9. 5. 4 Development Strategy 10. Development Forecast and Investment Prospect of China’s Electric Scooter Industry 10. 1 Forecast of Supply, 2014-2018 10. 2 Forecast of Demand, 2014-2018 10. 3 Main Development Direction 11. Investment Suggestions and Opinions from the Experts 11. 1 Investment Opportunity 11. 1. 1 Market Space 11. 1. 2 Industry Development Trend. 11. 2 Investment Risk 11. 2. 1 Horizontal Competition Risk 11. 2. 2 Market Trade Risk 11. 2. 3 Influence of Industry Policy Changes 11. 3 Risk Precautionary Measure and Industry Coping Strategy 11. 3. 1 Precautionary Measure for Horizontal Competition Risk 11. 3. 2 Actively Develop Upstream Sellers and Downstream Consumers to Reduce Market Risk 11. 3. 3 Coping Strategy of Enterprises Request Discount @ http://www. marketreportschina. com/contacts/discount? rname=4357 . Buy Report @ http://www. marketreportschina. com/contacts/purchase? rname=4357.

Alibaba Essay

He and his team have achieved many firsts’ in the area of Chinese Internet Trade. He founded the first internet commercial website in China, and created a 82B marketplace platform to all small and medium-sized enterprises in Asia and around the world. He promoted the â€Å"Trust Pass† plan on the website, which created the world’s first on-line credit platform for companies. Under Jack Ma’s leadership, the Alibaba 82B websites have attracted more than 17 million registered members in 220 countries globally, with daily postings exceeding 35 million, making Alibaba. om the most active Internet market place and 82B community worldwide. Since the inception of the company, more than 400 media have reported about Alibaba and Jack Ma, in dozens of languages. In addition to numerous awards presented to Alibaba. com, Jack Ma was lso selected by the World Economic Forum as one of the 100 Young Global Leaders in 2001; was named Business Leader of 2001 by Asia Commerc e Association of USA; and was featured on the covers of Forbes Magazine, Nikkei Magazine, and Fortune (China) Magazine. In 2004, Jack Ma was honored as one of the â€Å"Top 10 Economic Personas of the Year† by CCTV. In 2005, Fortune Magazine ranked him one of the â€Å"25 Most Powerful Businesspeople in Asia† and this year Business 2. 0 ranked him 1 5th among â€Å"50 Who Matter Now† and Silicon. com ranked him 1 lth among its top 50 â€Å"Agenda Setters 2006. † company, Alibaba. om builds its business success and rapid growth on entrepreneurship, innovation, and service. Says Jack Ma: The company will remain a ‘start-up’ no matter how long it has been in existence. What ever has been stable, I will disrupt that stability. The company needs to continue to innovate and grow. I want the employees to believe that we are a small company, no matter how big we get. I believe we can create a system and culture to perpetuate this culture of entrepreneurial and start-up spirit. To fuel the entrepreneurial and innovative spirit, along with a service attitude, Jack Ma is looking for people with the following characteristics: 1) People with a dream. â€Å"Don’t let your colleagues work for you. They need to work for their dreams! † If people don’t believe in the dream and Join the company purely for money, they won’t stay long (refer to Appendix 2 for Alibaba’s vision, mission, and values). 2) People with shared values. â€Å"The value system is very important at Alibaba. We are crazy for it! In China, we might be the only crazy company who so strongly maintains our value system. People who don’t fit our values cannot survive in the company. † (Alibaba’s six ore values are customer comes first, teamwork and cooperation, embracing change, integrity, passion, and honoring your Job). 3) People with a smile. â€Å"When we hire people, we look for people who are naturally optimistic and happy. In the start-up process we will meet with difficulties and challenges. Optimistic and happy people can better deal with these challenges and succeed. It’s hard to make a happy person unhappy, but it’s even harder to make an unhappy person happy. I am able to tell whether a person is on our staff by their smile. † 4) People who enjoy work and can turn stress and challenges into innovation. Employees must be able to handle pressure and challenges, and turn them into positive energy for innovation, not negative energy for depression. † 5) People who work together. â€Å"We don’t welcome people who think they are smart because they may think they are above others. This industry is so new that it really doesn’t have any real talents. The people who are real talents probably don’t know they are talents. Everyone has tremendous potential. We all use other people’s strengths to overcome our weaknesses We are all ordinary people, but our goals are extraordinary. † While Alibaba seeks people with strong rofessional skills, these characteristics are even more important in deciding whether a person will Join, stay, and enjoy working in the company. 2 Alibaba’s Unique Value Proposition † a Smiling Community with a Dream While Alibaba is clear about what kind of talent they need for business success, the question is: how can the company attract, retain, and engage such talent, especially in the startup stage, when Alibaba had limited resources? The answer is a dream, a dream to make a difference in the way people do business, and a dream to create wealth together. During the start-up stage of Alibaba, Jack Ma often told those nterested in working for Alibaba, not of the great working conditions or the high pay, of what they could earn elsewhere. Alibaba also strives to provide a community, where employees can have fun to work together to pursue their dreams with minimal bureaucracy and politics. Ma recently painted a vivid image of his ideal work environment for his employees as follows: Blue Sky Processes, systems, and decisions need to be open and transparent. There’s nothing that should be hidden from employees. We should be transparent. Solid Ground Everything we do should be honest, ethical and contribute to the welfare of the ociety. The company should be on solid financial ground so employees won’t worry about the financial future of the company. Free-flowing Ocean Talent must be allowed to rotate Jobs across subsidiaries and departments. Green Forest (R Conducive conditions for continued innovation. Harmonious Community Peers with shared values and simple interpersonal relationships. The ultimate objective of such a community is to offer employees a work environment to grow, contribute, and live out their dreams. Bureaucracy, secrecy, and stagnation are all attributes that inhibit employees, and the company must actively seek out these ehaviors and destroy them. Alibaba from the Eyes of Employees To what extent do employees at Alibaba experience what the company intends to offer? Why do they Join the company and how do they feel as employees working there? Our focus group discussion with employees in different functions and levels confirms that Alibaba is indeed a unique company to work with. The following themes and direct quotations capture their experiences and the feeling of working at Alibaba: A leader with charisma and credibility: Jack Ma is the magnet that draws people into the company and provides them with a credible dream. â€Å"When I spoke with Jack Ma, I was impressed with his vision and business model. I had been in the internet business for a while but had not seen a successful model like the one Alibaba is employing. † Tang Zhenrong, International Website Engineering Department, and one year with the company. Although the objectives for each year seem to be very high, somehow we have always managed to accomplish those objectives. With past success, we have built up confidence that we’re able to achieve the objectives no matter what they are. † Lili Li, Sales Research Department, six years with the company. The passion of Alibaba is from within and radiates outward to others. We can see that they truly believe in the company and the culture of Alibaba is built from there, not by programs or processes. † Echo Lu, Director of Organization and People Development. â€Å"The company is true to its values at all levels. When Jack Ma talks to management about hiring, he told us that we must hire people With the same smell. Zhang Yu, Director of Marketing, Taobao. com Changes, challenges, and growth: People grow under tremendous pressure to change and grow. â€Å"The speed of change is three to four times that of other organizations. The objectives are ‘crazy, but when we reach and surpass the targets, we then have a profound sense of accomplishment. With the constant pressure and changes, we’re also forced to evaluate how we do our own Jobs and how we work as a team. Is it sufficient to accomplish the new objectives? Do we need to look at the challenge differently and try different things? † Zhang Yu, Director of Marketing, Taobao. om 4 Communication and transparency â€Å"Jack will meet with all new employees in a group setting, has meetings with management at least quarterly, and bi-annual staff meetings with all employees. On the intranet, there’s a BBS that allows staff to post their thoughts and opinions. Jack often interacts with staff on the BBS in an open and casual way. † Echo Lu, Director of Organization and People Development A company that cares about employees â€Å"During the SARS crisis, because of one suspected case, Alibaba made the decision in one day to have all employees work from home and to pass the required isolation period. As a result of this quick action, we contained any possible outbreak, May. Employees continued to perform Jobs tremendously well at home. We encouraged each other through BBS, phone calls, and e-mails. † Lili L’, Sales Research Department â€Å"The most positive thing to result from the SARS crisis was an enormous amount of pride for employees who went through this crisis together. They built a strong bond through experiencing this event together. It’s still a much talked about event in the company. In fact, some employees have named the day that staff were sent home to contain the outbreak, Alibaba Day, to commemorate the event. The spirit of Alibaba came alive on that day. † Echo Lu, Director of Organization and People Development Leadership and Management Practices that Create the Unique Value Proposition Leadership priority: As CEO, Jack Ma invests most of his time in three areas: vision/ mission/strategy, customers, and employees. By clearly articulating and constantly communicating the vision and mission of the company, he creates the most important foundation in attracting outstanding talent. â€Å"Don’t let your colleague work for you, but work for their dreams! Also, it is important to deeply understand customer needs, not competitor’s actions. Understanding customer needs can help Alibaba develop concrete business plans and focus on realizing its dream. Finally, it is also critical to realistically assess the competencies of employees. It will decide â€Å"how fast,† â€Å"how far†, and â€Å"how’ the company can execute its business strategy and targets in the coming year and next three years. His attentiveness to talent is reflected in two management practices. First, in the monthly senior management meeting, the first question he always asked is â€Å"How is your team doing? † instead of â€Å"How many sales has your team made? † Second, he always spends a lot of time alking around different business units and departments to â€Å"smell† how the people are doing there. If he â€Å"smells† something wrong, he will immediately talk to the unit head to identify problems and improve the situation. As a matter of fact, all senior executives at VP level and above must develop such â€Å"smelling† skills at Alibaba, to make sure that people are being managed properly. Value alignment: Strong shared values are essential in building a harmonious community where people feel comfortable working together and in ensuring that decisions and behaviors are aligned with company direction. Alibaba has gone the extra mile to make sure that people share the same values. When Alibaba hires people, they look for people with th e same â€Å"smell†Ã¢â‚¬ people who are optimistic, happy, team oriented, hard working, and willing to invest their lives to achieve an ideal. When employees Join the company, they attend at least 10 days of orientation, focusing primarily on the company’s vision, mission, and values. When the company assesses the performance of employees, 50% is tied to values and 50% is tied to business results. When employees demonstrate behaviors contrary to company core alues, they are asked to leave no matter how strong their business results are, or very important at Alibaba. People who don’t fit into our values cannot survive in the company. † Stretch opportunities and challenges: While Alibaba offers different training programs for different levels of employees in both technical and management areas, people grow rapidly by achieving â€Å"impossible† targets year after year. Although the objectives for each year seem high and unreasonable, somehow, we have always managed to accomplish those objectives. With past success we have built up the onfidence that we are able to achieve the objectives, no matter what they are,† says Lili Li, of the Sales Research Department. â€Å"At Alibaba I have been stretched and challenged. I have seen myself grow m ore than in my previous Jobs,† says Zhang Yu from Taobao. com. Indeed, Jack Ma believes that all people have potential that can be unleashed in the right environment, allowing them to stretch and challenge themselves. Ma quoted one of his favorite examples, â€Å"Several years ago when I looked at the current COO Li Qi, there was no way he looked like a COO. Nowadays, from all different angles, he really looks like a COO. Talent has tremendous potential to grow. † However, in order for people to grow under challenges, three elements are important. First is teamwork. Alibaba uses teamwork to complement individual strengths and weaknesses to achieve extraordinary goals. Second are the right people, who enjoy challenges and have fun working. Third are line managers who are accountable for personal growth within their teams. Jack Ma remarked that all line managers at Alibaba are entrusted with two scarce resources (capital and talent) to create value for the company. In addition to ensuring good financial returns, they lso need to create value for their talent in terms of their growth and retention. That’s why Jack Ma also walks around the company to â€Å"smell† how people are being managed in different departments, and why he always asks business leaders how their teams are doing in the monthly CEO review. Wealth creation and sharing: All employees of Alibaba receive stock options, and in effect are owners of the organization. At Alibaba, stock options are not a tool for retention but for reward sharing. From five cents per share to five dollars per share in 6 years, many employees have not only shown tremendous pride in the company but also shared the fruits of their collective success for the well-being of both the society and themselves. Transparency and communication: Communication is an important practice within Alibaba that helps maintain a culture of transparency to all employees. Employees have easy access to all executives, including Jack Ma, through the use of email, BBS, and face-to-face meetings (monthly, quarterly or bi-annual staff meetings). Jack Ma sets a high standard for his executives to follow by regularly interacting with employees. â€Å"All decisions are transparent, and people can see how they are made. This transparency is getting somewhat lost as we get bigger, but we’re still given a lot of information when possible. Our trust in the leaders has helped us to overcome this change in transparency. Communication is always good and strong from Sales Research Department. Advice to other CEOs When asked about what advice he would like to offer to other CEOs in China, Jack Ma suggested four: 1) Always believe people are the most important asset, and capital comes second. 2) It is not necessary to find the â€Å"best† talent but the talent that best fits your company. 3) Find and groom the talent inside our company rather than keep searching for talent from outside. The best talent is home-groomed people who fit our company culture. It always takes at least three years before people become fully immersed into our company culture 4) Believe in the potential of talent.

At&T Wireless: Text Messaging Essay

1. Describe the cost behavior in the wireless industry. What are the implications of this cost behavior for cost-volume-profit (CVP) relationships? The term cost behavior is used to describe whether a cost changes as output changes. In this case the costs are tightly shielded. In order to describe the cost behavior of the industry, we have to study the process that results in cost incurrence. Based on the information in the AT&T case, the industry features a high proportion of fixed costs in relation to acquiring spectrum and building a network. Variable costs are relatively low and, in the case of text messages, are very low. The cost structure in the wireless industry is dominated by fixed costs, so the contribution margin ratio is high. The high fixed costs and large contribution margin ratio result in a relatively high percentage increase in profit. The greater the proportion of fixed costs in a firm’s cost structure, the greater the impact on profit will be from a given percentage change in sales. The wireless industry has high operating leverage, because of high fixed costs and low variable costs. Therefore, the industry has a high ability to generate an increase in net income when sales revenue increases. â€Å"Text messages did not use any extra spectrum – once the carrier had paid the cost of the underlying infrastructure and storage equipment. Any revenue received by the provider on incremental text message usage is almost pure profit†. So, we can assume that, the cost does not change as the output changes. As far as I understand, the costs are incurred when the message is actually sent, and all these cost are very low. 2. What are the key cost drivers? Can a cost driver be used to continually raise prices? Cost drivers 1. Number of text messages per minute 2. Number of cell towers per area covered 3. Number of databases needed for a certain volume of messages 4. Number of customers 5. Number of cell phone plans 6. Number of terabytes 7. Number of devices The choice of the cost driver in this industry is not obvious, and the cost behavior pattern can depend on the cost driver selected. In this case the key cost driver is the number of text messages sent/received per minute. Yes and No. It depends on the cost behavior of the business. If the business has high variable costs and low fixed costs then the organization is more effected by a change in the volume. If the business, like in AT&T’s case, has a high rate of fixed costs with minimal variable costs (we assume that they are at the low end of the range of volume per fixed costs because their profit margin is high) then a change in volume will have little to no effect on the actual costs incurred. 3. What does it cost AT&T to send a text message?[Consider costs of the channel, billing cost, storage cost] Based on this cost, what is AT&T’s profit margin as a percentage of its text messaging business? [Consider per-use pricing and package pricing]How strong a relationship should exist? In Plan Channel cost$.0008641 (.07/81) = using voice messages as a reference which cost $.07 cents a minute. There are 81 text messages/minute transmitted per channel. Billing cost .0017283 (.0008641 x 2) = assume billing costs are twice as much as wireless costs Data base cost.0002857 (10M/35B) = AT&T would carry approximately 1% of worldwide text traffic of 3.5 trillion (35B) in their database which costs ~ 10 million dollars Storage cost .0000003837 (13,430/35B) = Worldwide text storage is 1,343 terabytes. AT&T would carry 1% of this storage =  13.43 terabytes. Cost of storage is $1,000 x 13.43 = $13,430. To get the per text cost divide this by 35B. Total cost per text$.002878 Gross Profit Margin = Gross Profit divided by total revenue $.20 per messageplan of $5 for 200 messagesplan of $15 for 1500 messages (.20 – .00278)/.20(.025-.002878)/.025 (.01 – .002878)/.01 =99%= 88%= 71% 4. How strong a relationship should exist between the prices charged to a customer for a good or service and the cost of providing that good or service? We think that companies should calculate their break-even point for their goods and services and to charge the prices according to that figure. This way, they can make sure that their price covers their expenses. In case of AT&T’s text messaging they are charging much more than the cost. But because there are only four national carriers in United States and they control 90 percent of the market, and text messaging had become widely popular, they can afford high prices. They are considering the demand of the service and pricing the product according to demand and supply. 5. Why is the price that AT&T charges to transmit a kilobyte of data via text message so much higher than the price charged to transmit a kilobyte of data via a Smartphone? The fastest growing wireless industry is text messaging. This also reflects the earlier comment that demand for messaging far exceeds supply, therefore driving prices up. Even though it costs less to transmit a text message than data, it is still seen as a very low cost to the average customer. The customer feels like they are getting a good deal because they are using the text messaging more than the data messaging. Part of the wireless industries revenue is from the sale of the devices. Even the cheapest cell phones have the capability to send text messages. Since the company is not making as much of a profit off of the device (cell phone), they are making up the difference in charging more for the text messages. In addition, since voice  messaging is being replaced by data messaging, both text and email, almost all cell phone chains are developing their own version of an IPhone or smart phone. To compete with these other chains, AT&T must charge the lowest price possible for their data to entice customers to buy their products over the competitors. 6. As we move to a service economy, can we expect to have more or fewer businesses with cost behaviors similar to those in the text messaging sector? Explain. I would assume we would see more businesses with cost behaviors similar to the text messaging sector. The reason being is the service industry tends to have more fixed costs that don’t increase linearly with the increase in service. The fixed costs tend to be step-fixed costs, whereas they can maintain services within a certain range up to a point in which they have to increase the fixed costs. The variable costs tend to be minimal since they often don’t have the manufacturing costs of direct materials and direct labor. After a service industry covers the basic operations, less money is needed as sales rise. Once the fixed costs are paid, the expense of processing additional sales is so little that the profits will grow faster than the revenues. The precedence has already been set in multiple service organizations, particularly internet companies. They have shown that once you achieve the hurdle of covering your basic fixed costs, the increased volume of service is very profitable. 7. What should management of wireless firms seek to do now? AT&T should invest in improving the company‘s wireless broadband coverage and its performance. They can improve network coverage by adding cell towers, laying faster fiber-optic cabling, adding capacity to cell sites and upgrading current cell sites to improve internet speeds. By enhancing the network, they can carry a larger volume of data traffic. This will allow them to accommodate more customers and therefore increase their profits.

Calssification types of friends Essay Example | Topics and Well Written Essays - 750 words

Calssification types of friends - Essay Example Good friends are one of the best means of information. While discussing these subjects with the good friends, not only I find new information, but also improve my social skills. Good friends may argue with me, but the extra effort I have to put in to defend my stance plays a big role in improving my analytical skills. A good friend is not somebody I can tell everything. I never discuss personal matters with good friends. The next time I see a good friend, I may not even remember what the topic we last talked about was. I spend a lot of time with good friends. I may or may not invite them on my birthday, though I would like to be in the company of a good friend when I go for swimming or for playing soccer. I would rather like to play with a good friend than a stranger. Good friends are people I can approach when I am feeling low, not to discuss what is making me feel low, but to get lost in the discussion with them and forget the issue that made me feel low. Good friends make me feel happy. A best friend is a person I allow insight into my personal life. According to Charles Caleb Colton, â€Å"True friendship is like sound health, the value of it is seldom known until it is lost† (Indianchild.com, 2000). I don’t hide anything from my best friends. I talk to the best friends so often that they almost always know what I did from the morning till night. They know what is going on in my life and I know what is going on in theirs. Best friends are the best emotional support for me. They are the ones I can approach when I am feeling low to seek advice about the matter that is making me feel low. From my love affairs to my psychological problems, I discuss everything with my best friends. I don’t have to pretend anything in front of my best friends. They know me exactly as I am. They know the person I am with all my weaknesses and strengths. I always consult best friends when I am in any kind of trouble. I

Porsche Case Study Essay Example | Topics and Well Written Essays - 1250 words

Porsche Case Study - Essay Example Thus, in the mid 1930s, Porsche’s first car, the VW Type 60 was produced, and thereafter a plant dedicated to the production of the Volkswagen was opened in 1938, producing a series of Volkswagen brands such as the VW Beetle (Henderson& Reavis, 2009). Nevertheless, the brand Porsche found its way into the market exactly 3 years after the Second World War had ended, in 1948 where the brand came in form of a branded sports car, and by 1950, Porsche had managed to develop an assembly line that started rolling out its Porsche 356 series brand into the market (Henderson& Reavis, 2009). Another of the Porsche’s brands, which were introduced into the market much later was the Porsche’s Cayenne, the first of its brands outside the sports car market niche in 2003, and then the Panamera sedan which was released in 2005 (Henderson& Reavis, 2009). The major competitors of the Porsche Company brands are the Mercedes, which is closest in the profit margin per unit earning to Porsche, at $59,454 per unit of automobile sold compared to the Porsche’s profit margin of $91,974 per unit (Henderson& Reavis, 2009). The other major competitors to the Porsche brands is the BMW, the Audi and Volkswagen, whose profit margins per unit were much lower compared to those of Porsche. On the other hand, there were a few small competitors in the sports car manufacturing market, such the Maserati, Lamborghini and Ferrari, which could not compete effectively with Porsche, owing to their low production capacity for the sports cars (Henderson& Reavis, 2009). In relation to the competition in the outsourced Engineering services, Lotus Engineering was the major competitor that Porsche Engineering Services (PES) faced (Henderson& Reavis, 2009). The financial position of Porsche Automobile group has been very promising, owing to the fact that the company has been able to

The Role of Research Methods in Education Essay

The Role of Research Methods in Education - Essay Example Many different approaches have been developed for researchers internationally supporting their work in all its aspects especially regarding the gathering of data/ info that is necessary for the development of various scientific projects. It should be noticed that scientific projects are not necessarily practical, i.e. they do not refer only to mathematical figures (statistics etc.); they can also be theoretical, i.e. referring to the structure and the effectiveness of a specific theoretical model (e.g. Porter’s five forces - in the business sector). In the case of education both the above forms of research, i.e. the practical and the theoretical one are likely to be used by all participants in the educational environment (educators, school administrators, students) when having to conduct research on a specific issue which is included in the curriculum. The value of research in education cannot be doubted; various views have been stated regarding the role of research in various educational areas. We could refer indicatively to the study of Randall et al. (1999) who noticed that ‘research in education is a value-free, unbiased, neutral, social scientific pursuit of truth, using the best methods, and models available—or so we were told when we were learning the craft’ (Randall et al., 1999, 7). In other words, research in education cannot be stable; it should be rather active and dynamic being changed continuously in accordance with the needs of the students, the characteristics of the educational environment and the ability of a specific educational organization to respond to the needs and the demands of a particular research project. It should also be noticed that research in education does not have a specific form; it can have either qualitative or quantitative characteristics or even both of them (after appropr iate transformation of the relevant research framework).  

Scripture Inerrancy Research Paper Example | Topics and Well Written Essays - 2000 words

Scripture Inerrancy - Research Paper Example Even though most people where born into the religions of their parents and thus religions that already existed before their births, they have grown to accept the basic teachings and history of their religions as true and factual. It will not be far from right to argue that such people uphold and defend the doctrines of their religions because of documented evidence of the sanctity and authenticity of the stories surrounding their religion. Christianity is one of such religions that have very large following of people who in all cases try to defend the perfection of the religion. Like people of most other religions, Christians are always confident of the sanctity of their religion due to the faith they have in the origin of their history, documented in their holy scripture referred to as the bible. The phenomenon by which Christians attest to the authenticity and sanctity of the bible is common referred in theology as scripture inerrancy (Rhodes, 2001). Scripture inerrancy is regarded as an important subject in theology not because of the need to exonerate Christianity but to offer religious education and enlightenment to the world at large. As an important component of theology, it does not seek to perfect one religion against another but it tries to lay the facts bear so that readers and listeners will be able to make informed decisions for themselves. It is for this reason that research work on scripture is being considered for this research work. Problem Statement The problem under research has to do with scripture inerrancy, which has to do with the inspiration of the bible. As Challis (2006) notes, â€Å"the doctrines regarding the Bible have been discussed and debated at length throughout the history of the church.† Until a common compromise is reached in the discipline of theology on the doctrines of the bible, it is true to say that the debate and research will continue. The topic of scripture inerrancy therefore appears to be a problem that comm on in theological circles and even among religious followers who desire to be convinced of the truth behind various religions. This also means that the research problem

Smart Airlines Research Paper Example | Topics and Well Written Essays - 4750 words

Smart Airlines - Research Paper Example In the course of determining the state of the economy, it is critical to adopt and incorporate Porter’s five forces analysis. It is essential to note that the power of suppliers in the airline industry is immense, courtesy of external environment’s influence that affects the three inputs: fuel, labor, and aircraft, thus the high power of suppliers. For instance, the cost of aviation fuel tends to fluctuate in relation to the global market for the oil because of the geopolitical and other factors. Secondly, it is essential to note that the power of buyers in the airline industry is moderate to high. This relates to the proliferation of the online ticketing approach, as well as distribution systems. Flyers no longer have to be at the mercy of the intermediaries or agents and airlines to the satisfaction of the ticketing needs. In addition, the entry of low-cost carriers has been of great benefit to the fliers or consumers. Similarly, buyers enjoy massive protection in relation to the tight regulation on the demand side of the airline industry. These factors make airline industry to cede power to the consumers, thus the moderate to high threat of power of buyers. The industry requires significant or huge capital investment to facilitate entering or exiting of the sector. From this perspective, the industry boasts of high entry and exit barriers. From this perspective, the industry tends to experience low threats of new entrants because of the high costs. The airline industry in the United States is extremely competitive.

Memorandum Introduction Assignment Example | Topics and Well Written Essays - 250 words

Memorandum Introduction - Assignment Example A perplexing matter that requires more analysis is why are these residents participating in risky illegal affairs that can result to drastic measures? The paucity of affordable housing in New York City has contributed to most individuals in the city residing, in makeshift apartments. The housing experts estimate that there are 100,000 illegal apartments in New York City. Last year, Buildings Department officials acknowledged 18,126 complaints concerning illegal units (Belsha, n.d.). Furthermore, the group of poor homeowners who pay more than half their income in mortgage are struggling to hold onto their homes, thus are renovating their basement and cellars for occupation. The DOB issues annually more than 4,440 violations for illegal conversion of basements, cellars, and attics: - which are not fit for human occupancy due to health and safety risks as specified by The New York City Building or Housing Maintenance code, Article 5- Occupancy of cellars and basements. Councilman Lander, you have asked me to explore the legalization of basement units, including through the new city council legislation based on the standardization of safety and health measures. In this memo, I will evaluate stakeholder interests, by restoring the preferences given to homeless families. This will be achieved by the creation of a new rent financial support program and reformation of DOB code, Article 5- Occupancy of cellars and basements; that will create a momentous dent in restructuring building codes outlawing basement

Resilient Rowers of the 1936 Olympics Essay Example for Free

Resilient Rowers of the 1936 Olympics Essay â€Å"In an age when Americans enjoy dozens of cable sports channels, when professional athletes often command salaries in the tens of millions of dollarsit’s hard to fully appreciate how important the rising prominence of the University of Washington’s crew was to the people of Seattle in 1935† (Brown 173). As seen by this quote, America is a much different place than what it was in the 1930s. The times have changed significantly. In today’s day and age we have it all too good. The world we live in is one of leisure and not nearly as much hard work as there used to be. Back in the early 20th century the people had it pretty rough and dealt with many frightening problems of their generation such as World Wars and the Great Depression. The non†fiction novel, Boys in the Boat by Daniel Brown, takes place in this turbulent time period of US history that started around the 1930s. The book is the story of how the University of Washington’s crew won the 1935 Berlin Olympics. The main character, Joe Rantz, and his team start off as an inexperienced freshman crew at the university and worked their way to the top amongst many obstacles. The story is one of great heroism and persistence that takes place during the heart of the US’s struggles. The lives of the great Olympic athletes were affected by this time period in several ways. The Great Depression greatly amplified the athlete’s drive to succeed as well as their great sense of patriotism, and the less complicated technology of the time allowed them to invest wholeheartedly in the handcrafted vessel in which they rowed. The book begins in 1933 in Seattle on a gloomy day. It was the fourth year of the Great Depression and at this point it seemed like it would last forever. â€Å"Nobody could say when, or if, the hard times would ever end† (Brown 9). The time period brought on a bleak, depressing, and failing society. Howard Zinn, in his article called Self†Help in Hard Times, provided a great illustration of what the time was like for people of the US through the quote, â€Å"After the crash, the economy was stunned, barely moving. Over five thousand banks closed and huge numbers of businesses, unable to get money, closed too. Those that continued laid off employees and cut the wages of those who remained, again and again. Industrial production fell by 50 percent, and by 1933 perhaps 15 millionwere out of work† (Zinn). This description by Howard Zinn really  paints a picture of the turmoil that was occurring in the US during the depression. The depression caused people to be afraid of the future because of all the uncertainty that came with it. This was especially true for Joe Rantz. Joe came from an extremely poor family and had been hit hard by the depression. He knew that if he wanted to rise above the depression and the sad life he lived, he would have to make the cut for the University of Washington crew team. Joe knew all too well that â€Å"failing at this rowing business would mean, at best, returning to a small, bleak town on the Olympic Peninsula with nothing ahead of him but the prospect of living alone in a cold, empty, half†built house† (Brown 13). It was this that motivated Joe and it was this that pushed him to succeed. The Great Depression sparked the fear of an uncertain future into Joe, which is demonstrated by Brown in the quote,†Whether you were a banker or a baker, a homemaker or homeless, it was with you night and day†Ã¢â‚¬ Ã¢â‚¬ a terrible, unrelenting uncertainty about the future, a feeling that the ground could drop out from under you for good at any moment,† (Brown 9). This fear affected his life tremendously and is ultimately what caused Joe’s drive to win an Olympic gold medal. As well as serving as a motivator for the crew team, the Great Depression also sparked much patriotism into the lives of not only the rowers, but the whole nation. Coming off of WWI the US still had a strong sense of nationalism amongst its people. Once the depression hit and hard times came around, the people of the United States instead of losing their sense of nationalism, held on to it tighter and believed that America would recover back into the prospering nation it once was. For the crew team of the University of Washington, times were challenging however they were proud to be living in America because, as demonstrated by the following quote, they knew that other nations didn’t have the freedoms that they had: â€Å"In a few days, he would be sailing under her on his way to a place where as he understood it, liberty was not a given, where it seemed to be under some kind of assault. The realization that was settling on all the boys settled on Joe† (Brown 289). This place they were about to sail off to was Germany. Germany at the time didn’t have any of the freedoms that America did and was under the control of Hitler. The quote, â€Å"They were now representative of something much larger than themselves—a way of life, a shared set of values. Liberty was perhaps the most fundamental of those values. But the things that held them together—  trust in each other, mutual respect, humility, fair play, watching out for one another—those were also a part of what America meant to all of them†, (Brown 289) reveals the crew team’s feelings about their great American nation. It shows the true level of patriotism that the crew possessed and their deep understanding and respect for the values of America. These true feelings of patriotism were brought forth by the Great Depression and affected the lives of the Olympic athletes by motivating them even more to win the gold for their nation. Another effect that the time period had on the lives of the Olympic Athletes was caused by the lack of advanced technology in the row boat industry. The time period in which the story was based was during a time in which many things were still crafted by hand and not by machine. The handcraftsmanship of the era carried over into the rowing industry. George Pocock, an expert boat builder, designed and built the Husky Clipper, the winning Olympic boat. George Pocock’s expertise is illuminated by the quote, â€Å"A large part of Pocock’s genius as a boatbuilder was that he managed to excel both as a maker of machines and as an artist† (Brown 136). Due to his expertise, the boat became something more important than it seemed. The 9 crew members feel in love with the boat and really became a part of it. Joe began to develop a true connection to the boat when he heard George Pocock describe the wood in the following way: â€Å"The wood taught us about survival, about overcoming difficulty, about prevailing over adversity, but it also taught us something about the underlying reason for surviving in the first place. Something about infinite beauty, about underlying grace, about things larger than ourselves. About the reason we were all here† (Brown 214). The values taught to them through the craftsmanship of the boat aided them in victory and taught them to persevere and push through. Joe Rantz and his eight crew members worked relentlessly to achieve a gold medal at the 1935 Berlin Olympics. By all accounts this was a huge accomplishment because rowing is not only physically demanding but also mentally challenging as seen through the quote from the article entitled Me Time, â€Å"On the one hand they (rowers) must possess enormous self†confidence, strong egos, and titanic willpower. And yet, no other sport demands and rewards complete abandonment of the self† (Crosby). Many factors influenced their success including a strong desire to escape the desolate state of poverty brought on by the Great Depression, a heightened sense of  patriotism, and a great appreciation for their rowing vessel that was meticulously handcrafted. They achieved many successes and experienced failure as well, along the road to Olympic victory. However it was not until the last few hundred meters of the race that Joe felt truly at one with his teammates. Joe finally was able to trust his teammates, which is what he was searching for all along. The true prize of his journey, however, wasn’t really the gold olympic medal. It was the friendships he gained along the way. Works Cited Brown, Daniel. The Boys in the Boat: Nine Americans and Their Epic Quest for Gold at the 1936 Berlin Olympics. New York: Penguin, 2014. Print. Crosby, Josh. â€Å"Me Time.† Rowing Magazine Apr. 2014: 61. Web. Zinn, Howard. â€Å"Self ­Help in Hard Times.† In A People’s History of the United States, 377 ­406. New York : Harper Collins, 2003.

Strategies to Sustain Competitive Advantage

Strategies to Sustain Competitive Advantage Q1: Using an appropriate model, evaluate the business model of a company of your choice, describing how the company differentiates itself from its competitors and sustain competitive advantage. 1. Executive Summary Cummins started off as diesel engine manufacturing company since 1919 and now growing as â€Å"power† leader in the world. Cummins expand network through company- owned distributor, independent distributor and dealer to serve customer globally. In 2009, Cummins reported net income of $428 million in $10.8 billion of sales [1]. Cummins have been diversifying its business to broad range of products from power generation, filtration technology, turbo technology, fuel system, emission controls and air handling [2]. Due to external pressure and growing market in Asia, Cummins recently setup Centre of Excellent in Singapore focus more on Marine and Offshore market. In this post module assignment, competitive strategy will only focus on Cumminss marine and offshore business. In this PMA, the value curve is based on own industry experiences assumption. However, analysis on financial will based overall Cummins business listed in stock market which named â€Å"CMI†. 1.1. Vision Statement â€Å"Making peoples lives better by unleashing the Power of Cummins† [3]. Cummins believe in by developing new technology will lead to better living for the people. 1.2. Mission Statement Cummins mission statement as quoted below [3] â€Å"Motivating people to act like owners working together† â€Å"Exceeding customer expectations by always being first to market the best products† â€Å"Partnering with our customers to make sure that they succeed† â€Å"Demanding that everything we do leads to a cleaner, healthier, safer environment† â€Å"Creating wealth for all stakeholders.† 1.3. Cummins compare with Industrial leader Figure 1 Financial Analysis CMI Vs Industry Leader [4] Figure 1 shows overview financial analysis of Cummins (CMI) compare within industry leader [4]. Cummins rank 35 among 379 diversified machinery industries in industrial goods sector for market capitalisation. Cummins stock values increase more than triple over the past 3 years and promise future growth with its business strategy [4]. 1.4. Ocean Strategy Ocean strategy has been introduced by W.C. Kim and R Mauborge since 2004. Starting then, this strategy is adopted and implemented successfully in various organisations globally. Recently, Malaysias Prime Minister Datuk Seri Najib Razak shared his experience on Ocean Strategy when dealing with increasing crime in the country [5]. He is using Blue Ocean Strategy as management tools in order to promote thinking out of the box. Key successful activities such as leveraged untapped resources when replaced police with soldier doing patrolling around countrys border and conduct training for new police force in the underutilised army facilities. This initiative save a lot of money from government and promote cross functioning role among government agency [5]. The principle of the ocean strategy is treating market as universe. There are two oceans available in the universe named Red Ocean and Blue Ocean. Red Ocean defined as known competition. In this Ocean, product is already well defined and competitors only able to compete with price [6] .Customer expectation on the product almost generic and not much technology can be developing in this area. For diesel engine in marine and offshore market, the competitors for Cummins include Caterpillar, MTU and Mitsubishi. How Cummins can break trough become market leaders? Cummins apply Blue Ocean Strategy when dealing with its business. Blue Ocean Strategy defines as untapped market which no competition and industries that do not exist at this point of time [6]. This in return will resulting higher profit compare with conventional approach. This clearly shows in W.C. Kim and R Mauborge studys on business launches in 108 companies. They summarize revenue and profit impact of business launches shows in Figure 2. In this study, 86% business launches within own boundaries (Red Oceans) and 14% business launches looking for new opportunities (Blue Oceans) [6]. Red Oceans approach focus on existing customer by improving their product and study shows that this resulted 62% on total revenue and 39% on total profit. In contrast, 14% of the businesses launches by creating blue oceans can bring in higher return which about 61% of the total profit [6]. Cummins spend heavily on research and development for past 5 years as shown in Figure 3. In 2010 alone, Cummins invest 414million in new technology development [2]. One of recent Blue Oceans initiatives is setting Marine and Offshore Centre of Excellent in Singapore. This business focus on the â€Å"Packaging† instead of selling conventional type of â€Å"bare diesel engine† like other competitor such as CAT, MTU and Mitsubishi. Figure 4 shows pictorial view on the value added components into bare diesel engine 1.5. Strategy Canvas Figure 5 shows strategy canvas of the marine and offshore diesel engine. X-axis represents critical success factors of the markets competition and Y-axis correspond to values perceived by marine and offshore customer. Marine and offshore is a mature and establish market. Engine makers always compete with price, image, brand, delivery, product performance and service availability. Cummins performs averagely in critical successful factors. However, in order to compete in the competitive market, Cummins break through conventional way by creating new team to focus on product value added specifically for marine and offshore customer. Cummins applied Blue Ocean strategy. Figure 6 shows Red Ocean strategy from others diesel engine maker and Blue Ocean strategy from Cummins. Q2: Using either Porters generic strategies or the Strategy Clock, identify examples of organizations following strategies of differentiation, low cost or low price, and stuck-in-the middle or hybrid. How successful are these strategies. 2. Porters 5 forces generic Strategies â€Å"Using the five forces framework, creative strategists may be able to spot an industry with a good future before this good futureis reflected in the prices of acquisition candidates† Michael Porter [7]. Porters five forces: Threat of New Entrants: Analyse potential new comer to market is important to understand potential future competitors Bargaining Power of Buyers: Buyers is the party that create demand for industry, understand buyers requirement will help to maintain competitive advantages. For example, bargaining power of buyers is high if product is standard. Threat of substitute products or service: Buyers always look for alternative or cheapest way to get products or service. Substitute product can bring the overall industry price lower Bargaining Power of Supplier: Supplier supply raw material or service to manufacturer. Bargaining power of supplier is high when to many buyer and less supplier in the market Rivalry among existing competitors: Current fast moving industry, its important understand the strategy of existing competitors. Example: How competitor gain competitive advantages or product differentiation. Porters 5 Forces allowed the company undertand and analyse own industry struture and futher help the management to decide on companys strategy. According to Porter, organisation is able to gain competitive advantanges by strategies the company using one of the â€Å"Porters Generic Strategies† as shown in Figure 8; 1) Cost Leadership, 2) Differentiation, 3) Focus [8]. 2.1. Cost Leadership Strategies Cost leadership strategies emphasize on low cost in company strategies. Company will offer low per-unit cost product or service to customer that sensitive to price. In order to become low cost provider, company can practise integration strategies (backward, forward and horizontal). There are few factors that will affect the strategies include economies of scale, learning curve, productivity, company structure, relationship with supplier and quality control. Several example organizations that practice this are Wal-Mart (general merchandiser), Air Asia (budget Airline) and Macdonalds (Fast Food) [9]. In this PMA, I will use Air Asia as example to study its business model and look into company successful factor. Air Asia strategy as illustrate in Figure 9, the company mission is to continue to be the markets carrier low cost provider. In order to compete with other aircraft carrier and achieve company vision for â€Å"Lowest cost airline†, Air Asia implement a few strategy to reduce operation cost. Strategy implemented as per below: 2.1.1. Keep operation cost low- NO frills In order to compete in this competitive market, Air Asia able to keep operational cost low by implementing few â€Å"NO†s in the strategy [10]: NO meal: No food or drinks will be provided free in the in-flight service. NO frequent flyer program: NO Membership or rewarding program which commonly used for others airline like Kris flyer for Singapore Airline and Skymiles for Delta airline. NO Seat assignment Ticket: In order to keep administrative cost low NO Entertainment: NO news paper and entertainment system such as movie, games and music. No ticket : Ticketless replaced conventional type printed ticket No waiting lounge: NO lounge provide in the airport 2.1.2. Single air craft fleet In order to streamline the operation, Air Asia phasing out its 14 Boeing B737 in 2010 and replace by only operate single air craft which is A320. Few advantages of using single aircraft as stated below Keep inventory cost low Saving cost in service and maintenance such as keeping same model of spares parts. No duplicated resource due to difference Air Craft experience needed Reduce time and training cost due to only one model. This allowed the company avoid going to through the expensive â€Å"learning curve† process and also may dissatisfied demanding customer. Michael and Nikos study on the organisation learning curves for customer dissatisfaction across airlines. They plotted estimate U-Shaped learning curve as show in Figure 10 and show evident that complaint rates followed U-shaped function of experience Able to increase fuel efficiency and improve productivity 2.1.3. Simplified distribution system Air Asia design simple user friendly system for customer to book and check- in their ticket. Customers are able to check in using own mobile as shown in Figure 11. This ticketless system is able to reduce waiting time for customer queuing to check- in at the airport counter. 2.1.4. Point to point network (≠¤ 4 hrs) All Air Asia flight is running by point to point network within 4 hours radius or less as its business model. This model only carry passenger from point A to point B without any connecting flight. This in order to keep operation cost simple in order to reduce costs [10]. 2.1.5. Optimum Aircraft Utilization Another way to keep operating cost low and maximizes profit, Air Asia increase productivity by optimise flight utilisation. Air Asia is the fastest in the region by achieving 25 minute turnaround time. Air Asia is able to achieve equal or more than 75% for last 5 years on the load factor. Once, Air Asia achieve close to 100% load factor for Bali Perth route. Load factor is defined by AirAsia as â€Å"numbers of passengers as a percentage of number of seats flown† [10]. On top of that, Air Asia applies â€Å"Tier based† system for ticketing which depend on supply and demand. When demand is low, the price is low. When demand is high the ticket price will also go high. This system is efficient especially during low season allowed Air Asia maintain the reasonable high percent load factor, 2.2. Differentiate Strategies Differentiation strategies offer service or product which unique perceived by customer. Differentiation strategies do not guarantee good payback especially current standard product offered in the industry is more than enough to meet customer expectation. There will a risk on implementing this strategy and need to study carefully on customer requirement before implementing. Product value added, extra servicing, products flexibility and better compatibility are some of the features that can create differentiate in the industry. Cost is not an issue in this strategy; hence company can demand higher price if customer strongly attached to offered differentiation features. Typical move in this strategy is product development. Organisations that apply these strategies include Apple (Lifestyle product), Raul Lauren (Apparel) and Maytag (Home appliance) Apple is applying differentiate strategies compare with other competitors in the industry by selling lifestyle product instead of conventional electronic gadget. In first 6 months of 2011, Apple spends 1.2 billion in research and development. This is about 40% increase compare with 2010 [13]. One of the successful examples when Apple launches iPad during 2010 and Steve Jobs defined iPad as â€Å"entirely new category of mobile devices†. Apple sold more than 15 million units worldwide after launching [14]. 2.2.1. Innovative and creativity product Apple is a â€Å"trend leading† company in the market. The company famous in creating innovative products and able to capture a significant market share after launching new products. Apple spends heavily in research and development because the company believe RD are critical for future growth and are able to create competitive advantages 2.2.2. Wide range of software and applications Apple created another successful platform for customer to download software and application. Traditional, example like phone, other competitor just focus on few simple features which only contains game, photography function, movie and some basic feature. By introducing new approach, Apple created â€Å"The App Store†. Now â€Å"The App Store† has more than 350,000 apps available for iPhone, iPad and iPod touch globally. The apps offered wide range of application from games, entertainment, utilities, social networking, music and others. In Jan 2011, Apple announces that more than 10 billion apps have been downloaded . 2.2.3. Apple store Unlike others competitors store which only focus on products price and feature, Apple differentiate by giving customer different shopping experience in the store. Apple design Apples retail store to give the patrons good impression of stylish, clean, fashion and stream-lined. The product like i Phone, iTunes and etc will placing in a place that customer can try out the features and application. 2.2.4. Provide good service and maintenance Apple provides good service respond compare with others competitors like Samsung and Nokia. In Singapore, Apple provides one to one exchange for i Phone if there is defect and still under warranty. This is different from some of the competitors, depend on the level of repair, some will take about 2 to 3 weeks. This will create some issue for some consumer that only has one hand phone. 2.3. Focus Strategies Focus strategies offers product or service to fulfil the requirement for targeted groups of customer in the industry [9]. Focus strategies can be categorized into 2; Focus cost leadership which focus on low cost solution in narrow market and Focus differentiation provide customised product or service to niche market [16]. Market penetration and market development can be use when applying focus strategies [9]. Focus strategies beneficial when competitors are not able to support on unique requirement of certain group of customer. Organisation which pursuing this strategies include IKEA (Furniture), Ferrari (Automotive) and Federal Express (logistic) 2.3.1. Focus Cost Leadership Strategy IKEA is the Swedish global furniture company that applied focus cost leadership strategy in their business strategy. IKEA offering wide range of home furnish product with low price so that many people can afford to purchase. In order to achieve the strategy, IKEA apply below concept: 2.3.1.1. Design and develop base on price In order to keep competitive price, IKEA design and develop product base on price. The price is â€Å"fix† even before the product is launch. The designer will have to work directly with supplier to ensure meeting low cost by optimised productivity, material efficiency and process improvement [17]. 2.3.1.2. Reduce logistic, handling and operating cost In order to reduce logistic, handling and operating cost, IKEA designer always consider flat-pack transportation and self-assembly during design and development phase. Flat-pack furniture is often delivered in multiple sub assemblies together with simple instruction manual and required customer to perform self assembly. This modular concept is able to save transportation, handling and operating cost. For example, assembled furniture tends to be more bulky and is more expensive to store in warehouse and transportation. Besides, that, IKEA is able to save operating cost by reduce one â€Å"Assembly† process in production . 2.3.1.3. Self-Service in IKEA Store In order t keep the operating cost low and reduce the needs of sales assistance, IKEA design the flow of store layout and display the product effectively by using â€Å"actual room† concept. For example, sofa is placed in â€Å"living room† section and bed is placed in â€Å"Bed Room† section. All the furniture is clearly labelled and useful information like dimension is easily located in the display product [17]. 2.3.2. Focus Differentiate strategy Ferrari is applying focus differentiate strategy by develop high performance car within automotive industry. Ferrari focus on high end consumer compare with other automotive competitors like Honda, Toyota or Ford which target more broad customer. Below is the strategy for Ferrari: 2.3.2.1. New Way of Purchase Car Ferrari compete created innovative approach by introduce new way of purchase car â€Å"Premium Ownership Program† to serve its target customer. This program include insurance, maintenance, warranty , Ferrari tailored made driving course and pit stop service which provide the customer â€Å"mind free† after owning and driving Ferrari car [18]. 2.3.2.2. Innovative Technology Ferrari developed own software to meet customer service expectation such as rapid response times, up to date database and personalise customer service. One of the latest features such as, the customer can view the look of the vehicle and change the preference in â€Å"Service configurator system† even in pre-order stage [19]. 2.3.2.3. Best Dealer Ferrari believes choosing the right strategic partner or dealer is the right way to serve the customer. In order to motivate the dealer, Ferrari created prestigious award Podio Awards for supplier or business partner recognition. 2.4. Stuck in the middle or Hybrid Strategies Porter does not recommend â€Å"Stuck in the middle† or Hybrid strategies if the company want to achieve above average performance in the industry. Company must choose either one of the strategy in the Porters Generic strategy. He claimed that it is difficult for a company to strategies the business to produce low cost product but still remain unique perceived by customer [8]. However, Rodney Goon argues on Porters theory and commented some of the company such as Singapore Airline (SIA) are able to success using â€Å"Hybrid strategy†. Figure 12 shows business strategy applied by SIA which plotted by Rodney [21]. Singapore Airline have been awarded 2nd place in World Top Airline in 2010 by Skytrax in Hamburg [22]. Figure 13 shows main operating cost for SIA. Top 3 costs consist of Fuel, Aircraft and People [23]. In order to achieve competitive advantages, SIA apply below approach: 2.4.1. Become Market Leader Differentiation Strategy SIA founded in 1972 started as small airline company and now evolve become the world trend leading company for Airline industry. SIA become market leader by setting trend started since 1970s when introducing headsets, drink and choice of meals in Economy Class. Figure 14 shows overview on SIA trend setting for more than 39 years in the industry. In 1991, SIA introduce satellite- based telephone to enable passenger to call to ground during flying. In 1998, in order to improve the quality and standard of in-flight meal, SIA formed International Culinary Panel which involves renowned chef from all over the world. By doing this, the passengers are able to enjoy world class cuisine even during travelling. In order to improve customer service satisfaction, SIA introduce in-flight entertainment system named Krisworld which include Audio and Video system. Passenger can watch movie, listen to music and playing game during flying. In 2004, SIA reach another milestone by flying world longest non-stop flight from Singapore to New York (Newark). In 2007, SIA flying new Airbus design A380 which is world largest passenger Aircraft from Singapore to Sydney . 2.4.2. Brand â€Å"Singapore Girl† Differentiation Strategy SIA successfully improve its service compare with others competitors by creating unique iconic image for SIAs air stewardess as â€Å"Singapore Girl† and promote â€Å"Youre a great way to fly† started in 1972. This iconic brand is famous of caring, elegant and good looking girl whom will provide good service for the passenger during on board the plane. â€Å"Singapore Girl† has continuously won many awards in Airline and Travel Industry over the years . 2.4.3. Low Cost -Cost Leadership Strategy â€Å"Everything behind The Scenes Is subject To Rigorous Control† quoted by Rodney . SIA spend heavily on the area that customer can be seen as discussed above in order to remain premium in the industry but cutting cost for area that behind the scene in order to remain cost compatible. Total cost for Singapore airline is about 14.2% is the lowest in the market compare with other competitors like American Airline which labor cost is approximately 31% of total operating expense . Other than that, average price per aircraft purchase is less than other airline provider. This is due to SIA is the market leader in trendsetting and always working with aircraft builder like Airbus when there is new product launching. First purchase in world for A380 allowed SIA command a better purchase price. Q3: What are the major advantages and disadvantages of an integrative strategy? 3. Integrative strategy Organisation is able to gain competitive advantages by using integrative strategy. Integrative strategy can be categorized as vertical, backward, forward and horizontal integration. There are advantages and disadvantages when applying each concept and detail discuss as below: 3.1. Vertical Integration Vertical integration is business strategies which expand its business either through gaining control over company that distribute or selling its product (Forward integration) or taking control over company that provide the raw material for finish goods (Backward Integration). Figure 15 illustrate 4 typical stages for value added chain in PC industry (27). Example for Dell or Hewlett Packard, in order to produce a personal computer, assembly components such as chips, microprocessor and disk drive etc is needed from others manufacturing company (Intel/ Micron). Similarly, component parts manufacturing needs raw material like chemical, metal and ceramic to manufacture the component. Kyocera is one of the suppliers for those materials. Backward integration strategy in this case is trying to taking control over components parts manufacturing and raw material supplier. Whereas for forward integration strategy, PC maker try to gains control over the company that selling or distribute the final product such as OfficeMax and ComUSA [27] This company provide platform to reach end user. 3.2. Forward Integration Forward integration strategy involves increase ownership or control over retailers or distributor and illustrates in Figure 16. One of the effective mean of forward integration is through Franchising [9]. Approximate $2 trillion revenue created annually through franchising business every year globally. This equal to 4th largest Gross National Product in the world [28]. Advantages and disadvantages as discuss below: Advantages: Getting understanding customer better One of the companies using forward integration strategy successfully is Dell. Dell founded in 1984 by Michael Dell with one direction â€Å"selling final products to customer directly† [29]. By doing this, company able to reach end user and getting feedback instantly through companys distributor and retailer without filtering. Low development and training cost By introduce franchising; the company are able to reduce development and training cost. Franchisor will provide training, equipment and product to franchisee. This in order to skip the â€Å"trial error† phase for franchisee and able to help franchisee generate profit with less risk. Example companies like Subway, McDonalds and 7-eleven. Provide better services Company can provide better services through its own controlled network and services. Provide lower cost of sales In order to compete in this competitive world, price of the end product is always one of the critical successful factors for the company. Dell is using this strategy to reduce price bypassing third party involvement such as retailers etc. No mark up from other company in the finished goods Disadvantages: Increase bureaucratic cost Expanding business forward which also means that increase bureaucratic cost for whole value- added chain activities. Due to uncertain demand in current market, it will post some risk to the company Increase Inventory Getting control over distributors or retailer, indirectly manufacturer may have to manage whole product cycle inventory include end products. Company may incurred higher inventory cost if wrongly manage 3.3. Backward Integration Manufacturer need supplier provide raw material in order to produce its end products or service. Backward integration allowed company gain control toward supplier as shown in Figure 16. Advantages and disadvantages as discuss below: Advantages: Getting better quality control Company are able to apply standard quality plan throughout the value chain. This is especially important when dealing with sophisticated components such as crankshaft, piston and turbocharger for engine. By improving the quality of this critical component will increase competitive advantages among the rivals Reduce threat from powerful vendors By increasing control over the vendors, it will reduce threat from powerful vendors. Optimized supply chain â€Å"Keeping track of so many suppliers is onerous† says Mark Shimelonis of Xerox [9]. Nowadays, a number of companies following Japanese firms lead in managing the supply chain to ensure uninterrupted supplies and low prices. Lower structure cost Outsourcing is one of the examples of the backward strategy. Outsourcing strategy will able to reduce cost when company engaging third party specialist that performing charging lower than company own operate value-chain activity. Cummins outsource IT support to India Company and panel design to CMR or Auto Maskin to keep the company structure cost lower. Nike outsourcing its manufacturing plant in China due to lower labor cost [27]. Disadvantages: Technology change Technology change is inevitable in current competitive market. But backward vertical integration may lock a company â€Å"way of doing business† and prevent organisation changes due to technology change. One of the examples is when radio manufacturer acquired a manufacturer of vacuum tube in 1950s to reduce production cost. When, transistors replace vacuum tube in 1960s, the competitor rapidly change to latest technology. However for this radio manufacturer company, the management refuse to change and as the result, lost in the competitive advantages and cause business failure. Thus, backward integration can cause serious disadvantages when trying to match rapid technology change [27] Risk of information loss Increase control over the supplier which mean also potentially important information flow to the supplier. For example, Cummins need to provide important parameter and interfacing information in the engine control module to backward supplier like CMR and Auto Maskin in order to joints develop the engine protection panel. Technical drawing will be shared among backward supplier and manufacturer. Potential high cost Less supplier competition will lead to less efficiencies when produce a product. The backward support company will work in the â€Å"comfort zone† and less initiative. The manufacturer is â€Å"forced† to get the input from â€Å"internal supplier† even there will be some others external supplier can produce lower cost .As the result will cause potentially higher production cost . 3.4. Horizontal Integration Horizontal integration refers to company that use â€Å"single industry strategy† and seeking control over competitor in same market. A number of the company apply this concept as growth strategy. Merger and acquisition allowed the company to expand its core business and technical capabi Strategies to Sustain Competitive Advantage Strategies to Sustain Competitive Advantage Q1: Using an appropriate model, evaluate the business model of a company of your choice, describing how the company differentiates itself from its competitors and sustain competitive advantage. 1. Executive Summary Cummins started off as diesel engine manufacturing company since 1919 and now growing as â€Å"power† leader in the world. Cummins expand network through company- owned distributor, independent distributor and dealer to serve customer globally. In 2009, Cummins reported net income of $428 million in $10.8 billion of sales [1]. Cummins have been diversifying its business to broad range of products from power generation, filtration technology, turbo technology, fuel system, emission controls and air handling [2]. Due to external pressure and growing market in Asia, Cummins recently setup Centre of Excellent in Singapore focus more on Marine and Offshore market. In this post module assignment, competitive strategy will only focus on Cumminss marine and offshore business. In this PMA, the value curve is based on own industry experiences assumption. However, analysis on financial will based overall Cummins business listed in stock market which named â€Å"CMI†. 1.1. Vision Statement â€Å"Making peoples lives better by unleashing the Power of Cummins† [3]. Cummins believe in by developing new technology will lead to better living for the people. 1.2. Mission Statement Cummins mission statement as quoted below [3] â€Å"Motivating people to act like owners working together† â€Å"Exceeding customer expectations by always being first to market the best products† â€Å"Partnering with our customers to make sure that they succeed† â€Å"Demanding that everything we do leads to a cleaner, healthier, safer environment† â€Å"Creating wealth for all stakeholders.† 1.3. Cummins compare with Industrial leader Figure 1 Financial Analysis CMI Vs Industry Leader [4] Figure 1 shows overview financial analysis of Cummins (CMI) compare within industry leader [4]. Cummins rank 35 among 379 diversified machinery industries in industrial goods sector for market capitalisation. Cummins stock values increase more than triple over the past 3 years and promise future growth with its business strategy [4]. 1.4. Ocean Strategy Ocean strategy has been introduced by W.C. Kim and R Mauborge since 2004. Starting then, this strategy is adopted and implemented successfully in various organisations globally. Recently, Malaysias Prime Minister Datuk Seri Najib Razak shared his experience on Ocean Strategy when dealing with increasing crime in the country [5]. He is using Blue Ocean Strategy as management tools in order to promote thinking out of the box. Key successful activities such as leveraged untapped resources when replaced police with soldier doing patrolling around countrys border and conduct training for new police force in the underutilised army facilities. This initiative save a lot of money from government and promote cross functioning role among government agency [5]. The principle of the ocean strategy is treating market as universe. There are two oceans available in the universe named Red Ocean and Blue Ocean. Red Ocean defined as known competition. In this Ocean, product is already well defined and competitors only able to compete with price [6] .Customer expectation on the product almost generic and not much technology can be developing in this area. For diesel engine in marine and offshore market, the competitors for Cummins include Caterpillar, MTU and Mitsubishi. How Cummins can break trough become market leaders? Cummins apply Blue Ocean Strategy when dealing with its business. Blue Ocean Strategy defines as untapped market which no competition and industries that do not exist at this point of time [6]. This in return will resulting higher profit compare with conventional approach. This clearly shows in W.C. Kim and R Mauborge studys on business launches in 108 companies. They summarize revenue and profit impact of business launches shows in Figure 2. In this study, 86% business launches within own boundaries (Red Oceans) and 14% business launches looking for new opportunities (Blue Oceans) [6]. Red Oceans approach focus on existing customer by improving their product and study shows that this resulted 62% on total revenue and 39% on total profit. In contrast, 14% of the businesses launches by creating blue oceans can bring in higher return which about 61% of the total profit [6]. Cummins spend heavily on research and development for past 5 years as shown in Figure 3. In 2010 alone, Cummins invest 414million in new technology development [2]. One of recent Blue Oceans initiatives is setting Marine and Offshore Centre of Excellent in Singapore. This business focus on the â€Å"Packaging† instead of selling conventional type of â€Å"bare diesel engine† like other competitor such as CAT, MTU and Mitsubishi. Figure 4 shows pictorial view on the value added components into bare diesel engine 1.5. Strategy Canvas Figure 5 shows strategy canvas of the marine and offshore diesel engine. X-axis represents critical success factors of the markets competition and Y-axis correspond to values perceived by marine and offshore customer. Marine and offshore is a mature and establish market. Engine makers always compete with price, image, brand, delivery, product performance and service availability. Cummins performs averagely in critical successful factors. However, in order to compete in the competitive market, Cummins break through conventional way by creating new team to focus on product value added specifically for marine and offshore customer. Cummins applied Blue Ocean strategy. Figure 6 shows Red Ocean strategy from others diesel engine maker and Blue Ocean strategy from Cummins. Q2: Using either Porters generic strategies or the Strategy Clock, identify examples of organizations following strategies of differentiation, low cost or low price, and stuck-in-the middle or hybrid. How successful are these strategies. 2. Porters 5 forces generic Strategies â€Å"Using the five forces framework, creative strategists may be able to spot an industry with a good future before this good futureis reflected in the prices of acquisition candidates† Michael Porter [7]. Porters five forces: Threat of New Entrants: Analyse potential new comer to market is important to understand potential future competitors Bargaining Power of Buyers: Buyers is the party that create demand for industry, understand buyers requirement will help to maintain competitive advantages. For example, bargaining power of buyers is high if product is standard. Threat of substitute products or service: Buyers always look for alternative or cheapest way to get products or service. Substitute product can bring the overall industry price lower Bargaining Power of Supplier: Supplier supply raw material or service to manufacturer. Bargaining power of supplier is high when to many buyer and less supplier in the market Rivalry among existing competitors: Current fast moving industry, its important understand the strategy of existing competitors. Example: How competitor gain competitive advantages or product differentiation. Porters 5 Forces allowed the company undertand and analyse own industry struture and futher help the management to decide on companys strategy. According to Porter, organisation is able to gain competitive advantanges by strategies the company using one of the â€Å"Porters Generic Strategies† as shown in Figure 8; 1) Cost Leadership, 2) Differentiation, 3) Focus [8]. 2.1. Cost Leadership Strategies Cost leadership strategies emphasize on low cost in company strategies. Company will offer low per-unit cost product or service to customer that sensitive to price. In order to become low cost provider, company can practise integration strategies (backward, forward and horizontal). There are few factors that will affect the strategies include economies of scale, learning curve, productivity, company structure, relationship with supplier and quality control. Several example organizations that practice this are Wal-Mart (general merchandiser), Air Asia (budget Airline) and Macdonalds (Fast Food) [9]. In this PMA, I will use Air Asia as example to study its business model and look into company successful factor. Air Asia strategy as illustrate in Figure 9, the company mission is to continue to be the markets carrier low cost provider. In order to compete with other aircraft carrier and achieve company vision for â€Å"Lowest cost airline†, Air Asia implement a few strategy to reduce operation cost. Strategy implemented as per below: 2.1.1. Keep operation cost low- NO frills In order to compete in this competitive market, Air Asia able to keep operational cost low by implementing few â€Å"NO†s in the strategy [10]: NO meal: No food or drinks will be provided free in the in-flight service. NO frequent flyer program: NO Membership or rewarding program which commonly used for others airline like Kris flyer for Singapore Airline and Skymiles for Delta airline. NO Seat assignment Ticket: In order to keep administrative cost low NO Entertainment: NO news paper and entertainment system such as movie, games and music. No ticket : Ticketless replaced conventional type printed ticket No waiting lounge: NO lounge provide in the airport 2.1.2. Single air craft fleet In order to streamline the operation, Air Asia phasing out its 14 Boeing B737 in 2010 and replace by only operate single air craft which is A320. Few advantages of using single aircraft as stated below Keep inventory cost low Saving cost in service and maintenance such as keeping same model of spares parts. No duplicated resource due to difference Air Craft experience needed Reduce time and training cost due to only one model. This allowed the company avoid going to through the expensive â€Å"learning curve† process and also may dissatisfied demanding customer. Michael and Nikos study on the organisation learning curves for customer dissatisfaction across airlines. They plotted estimate U-Shaped learning curve as show in Figure 10 and show evident that complaint rates followed U-shaped function of experience Able to increase fuel efficiency and improve productivity 2.1.3. Simplified distribution system Air Asia design simple user friendly system for customer to book and check- in their ticket. Customers are able to check in using own mobile as shown in Figure 11. This ticketless system is able to reduce waiting time for customer queuing to check- in at the airport counter. 2.1.4. Point to point network (≠¤ 4 hrs) All Air Asia flight is running by point to point network within 4 hours radius or less as its business model. This model only carry passenger from point A to point B without any connecting flight. This in order to keep operation cost simple in order to reduce costs [10]. 2.1.5. Optimum Aircraft Utilization Another way to keep operating cost low and maximizes profit, Air Asia increase productivity by optimise flight utilisation. Air Asia is the fastest in the region by achieving 25 minute turnaround time. Air Asia is able to achieve equal or more than 75% for last 5 years on the load factor. Once, Air Asia achieve close to 100% load factor for Bali Perth route. Load factor is defined by AirAsia as â€Å"numbers of passengers as a percentage of number of seats flown† [10]. On top of that, Air Asia applies â€Å"Tier based† system for ticketing which depend on supply and demand. When demand is low, the price is low. When demand is high the ticket price will also go high. This system is efficient especially during low season allowed Air Asia maintain the reasonable high percent load factor, 2.2. Differentiate Strategies Differentiation strategies offer service or product which unique perceived by customer. Differentiation strategies do not guarantee good payback especially current standard product offered in the industry is more than enough to meet customer expectation. There will a risk on implementing this strategy and need to study carefully on customer requirement before implementing. Product value added, extra servicing, products flexibility and better compatibility are some of the features that can create differentiate in the industry. Cost is not an issue in this strategy; hence company can demand higher price if customer strongly attached to offered differentiation features. Typical move in this strategy is product development. Organisations that apply these strategies include Apple (Lifestyle product), Raul Lauren (Apparel) and Maytag (Home appliance) Apple is applying differentiate strategies compare with other competitors in the industry by selling lifestyle product instead of conventional electronic gadget. In first 6 months of 2011, Apple spends 1.2 billion in research and development. This is about 40% increase compare with 2010 [13]. One of the successful examples when Apple launches iPad during 2010 and Steve Jobs defined iPad as â€Å"entirely new category of mobile devices†. Apple sold more than 15 million units worldwide after launching [14]. 2.2.1. Innovative and creativity product Apple is a â€Å"trend leading† company in the market. The company famous in creating innovative products and able to capture a significant market share after launching new products. Apple spends heavily in research and development because the company believe RD are critical for future growth and are able to create competitive advantages 2.2.2. Wide range of software and applications Apple created another successful platform for customer to download software and application. Traditional, example like phone, other competitor just focus on few simple features which only contains game, photography function, movie and some basic feature. By introducing new approach, Apple created â€Å"The App Store†. Now â€Å"The App Store† has more than 350,000 apps available for iPhone, iPad and iPod touch globally. The apps offered wide range of application from games, entertainment, utilities, social networking, music and others. In Jan 2011, Apple announces that more than 10 billion apps have been downloaded . 2.2.3. Apple store Unlike others competitors store which only focus on products price and feature, Apple differentiate by giving customer different shopping experience in the store. Apple design Apples retail store to give the patrons good impression of stylish, clean, fashion and stream-lined. The product like i Phone, iTunes and etc will placing in a place that customer can try out the features and application. 2.2.4. Provide good service and maintenance Apple provides good service respond compare with others competitors like Samsung and Nokia. In Singapore, Apple provides one to one exchange for i Phone if there is defect and still under warranty. This is different from some of the competitors, depend on the level of repair, some will take about 2 to 3 weeks. This will create some issue for some consumer that only has one hand phone. 2.3. Focus Strategies Focus strategies offers product or service to fulfil the requirement for targeted groups of customer in the industry [9]. Focus strategies can be categorized into 2; Focus cost leadership which focus on low cost solution in narrow market and Focus differentiation provide customised product or service to niche market [16]. Market penetration and market development can be use when applying focus strategies [9]. Focus strategies beneficial when competitors are not able to support on unique requirement of certain group of customer. Organisation which pursuing this strategies include IKEA (Furniture), Ferrari (Automotive) and Federal Express (logistic) 2.3.1. Focus Cost Leadership Strategy IKEA is the Swedish global furniture company that applied focus cost leadership strategy in their business strategy. IKEA offering wide range of home furnish product with low price so that many people can afford to purchase. In order to achieve the strategy, IKEA apply below concept: 2.3.1.1. Design and develop base on price In order to keep competitive price, IKEA design and develop product base on price. The price is â€Å"fix† even before the product is launch. The designer will have to work directly with supplier to ensure meeting low cost by optimised productivity, material efficiency and process improvement [17]. 2.3.1.2. Reduce logistic, handling and operating cost In order to reduce logistic, handling and operating cost, IKEA designer always consider flat-pack transportation and self-assembly during design and development phase. Flat-pack furniture is often delivered in multiple sub assemblies together with simple instruction manual and required customer to perform self assembly. This modular concept is able to save transportation, handling and operating cost. For example, assembled furniture tends to be more bulky and is more expensive to store in warehouse and transportation. Besides, that, IKEA is able to save operating cost by reduce one â€Å"Assembly† process in production . 2.3.1.3. Self-Service in IKEA Store In order t keep the operating cost low and reduce the needs of sales assistance, IKEA design the flow of store layout and display the product effectively by using â€Å"actual room† concept. For example, sofa is placed in â€Å"living room† section and bed is placed in â€Å"Bed Room† section. All the furniture is clearly labelled and useful information like dimension is easily located in the display product [17]. 2.3.2. Focus Differentiate strategy Ferrari is applying focus differentiate strategy by develop high performance car within automotive industry. Ferrari focus on high end consumer compare with other automotive competitors like Honda, Toyota or Ford which target more broad customer. Below is the strategy for Ferrari: 2.3.2.1. New Way of Purchase Car Ferrari compete created innovative approach by introduce new way of purchase car â€Å"Premium Ownership Program† to serve its target customer. This program include insurance, maintenance, warranty , Ferrari tailored made driving course and pit stop service which provide the customer â€Å"mind free† after owning and driving Ferrari car [18]. 2.3.2.2. Innovative Technology Ferrari developed own software to meet customer service expectation such as rapid response times, up to date database and personalise customer service. One of the latest features such as, the customer can view the look of the vehicle and change the preference in â€Å"Service configurator system† even in pre-order stage [19]. 2.3.2.3. Best Dealer Ferrari believes choosing the right strategic partner or dealer is the right way to serve the customer. In order to motivate the dealer, Ferrari created prestigious award Podio Awards for supplier or business partner recognition. 2.4. Stuck in the middle or Hybrid Strategies Porter does not recommend â€Å"Stuck in the middle† or Hybrid strategies if the company want to achieve above average performance in the industry. Company must choose either one of the strategy in the Porters Generic strategy. He claimed that it is difficult for a company to strategies the business to produce low cost product but still remain unique perceived by customer [8]. However, Rodney Goon argues on Porters theory and commented some of the company such as Singapore Airline (SIA) are able to success using â€Å"Hybrid strategy†. Figure 12 shows business strategy applied by SIA which plotted by Rodney [21]. Singapore Airline have been awarded 2nd place in World Top Airline in 2010 by Skytrax in Hamburg [22]. Figure 13 shows main operating cost for SIA. Top 3 costs consist of Fuel, Aircraft and People [23]. In order to achieve competitive advantages, SIA apply below approach: 2.4.1. Become Market Leader Differentiation Strategy SIA founded in 1972 started as small airline company and now evolve become the world trend leading company for Airline industry. SIA become market leader by setting trend started since 1970s when introducing headsets, drink and choice of meals in Economy Class. Figure 14 shows overview on SIA trend setting for more than 39 years in the industry. In 1991, SIA introduce satellite- based telephone to enable passenger to call to ground during flying. In 1998, in order to improve the quality and standard of in-flight meal, SIA formed International Culinary Panel which involves renowned chef from all over the world. By doing this, the passengers are able to enjoy world class cuisine even during travelling. In order to improve customer service satisfaction, SIA introduce in-flight entertainment system named Krisworld which include Audio and Video system. Passenger can watch movie, listen to music and playing game during flying. In 2004, SIA reach another milestone by flying world longest non-stop flight from Singapore to New York (Newark). In 2007, SIA flying new Airbus design A380 which is world largest passenger Aircraft from Singapore to Sydney . 2.4.2. Brand â€Å"Singapore Girl† Differentiation Strategy SIA successfully improve its service compare with others competitors by creating unique iconic image for SIAs air stewardess as â€Å"Singapore Girl† and promote â€Å"Youre a great way to fly† started in 1972. This iconic brand is famous of caring, elegant and good looking girl whom will provide good service for the passenger during on board the plane. â€Å"Singapore Girl† has continuously won many awards in Airline and Travel Industry over the years . 2.4.3. Low Cost -Cost Leadership Strategy â€Å"Everything behind The Scenes Is subject To Rigorous Control† quoted by Rodney . SIA spend heavily on the area that customer can be seen as discussed above in order to remain premium in the industry but cutting cost for area that behind the scene in order to remain cost compatible. Total cost for Singapore airline is about 14.2% is the lowest in the market compare with other competitors like American Airline which labor cost is approximately 31% of total operating expense . Other than that, average price per aircraft purchase is less than other airline provider. This is due to SIA is the market leader in trendsetting and always working with aircraft builder like Airbus when there is new product launching. First purchase in world for A380 allowed SIA command a better purchase price. Q3: What are the major advantages and disadvantages of an integrative strategy? 3. Integrative strategy Organisation is able to gain competitive advantages by using integrative strategy. Integrative strategy can be categorized as vertical, backward, forward and horizontal integration. There are advantages and disadvantages when applying each concept and detail discuss as below: 3.1. Vertical Integration Vertical integration is business strategies which expand its business either through gaining control over company that distribute or selling its product (Forward integration) or taking control over company that provide the raw material for finish goods (Backward Integration). Figure 15 illustrate 4 typical stages for value added chain in PC industry (27). Example for Dell or Hewlett Packard, in order to produce a personal computer, assembly components such as chips, microprocessor and disk drive etc is needed from others manufacturing company (Intel/ Micron). Similarly, component parts manufacturing needs raw material like chemical, metal and ceramic to manufacture the component. Kyocera is one of the suppliers for those materials. Backward integration strategy in this case is trying to taking control over components parts manufacturing and raw material supplier. Whereas for forward integration strategy, PC maker try to gains control over the company that selling or distribute the final product such as OfficeMax and ComUSA [27] This company provide platform to reach end user. 3.2. Forward Integration Forward integration strategy involves increase ownership or control over retailers or distributor and illustrates in Figure 16. One of the effective mean of forward integration is through Franchising [9]. Approximate $2 trillion revenue created annually through franchising business every year globally. This equal to 4th largest Gross National Product in the world [28]. Advantages and disadvantages as discuss below: Advantages: Getting understanding customer better One of the companies using forward integration strategy successfully is Dell. Dell founded in 1984 by Michael Dell with one direction â€Å"selling final products to customer directly† [29]. By doing this, company able to reach end user and getting feedback instantly through companys distributor and retailer without filtering. Low development and training cost By introduce franchising; the company are able to reduce development and training cost. Franchisor will provide training, equipment and product to franchisee. This in order to skip the â€Å"trial error† phase for franchisee and able to help franchisee generate profit with less risk. Example companies like Subway, McDonalds and 7-eleven. Provide better services Company can provide better services through its own controlled network and services. Provide lower cost of sales In order to compete in this competitive world, price of the end product is always one of the critical successful factors for the company. Dell is using this strategy to reduce price bypassing third party involvement such as retailers etc. No mark up from other company in the finished goods Disadvantages: Increase bureaucratic cost Expanding business forward which also means that increase bureaucratic cost for whole value- added chain activities. Due to uncertain demand in current market, it will post some risk to the company Increase Inventory Getting control over distributors or retailer, indirectly manufacturer may have to manage whole product cycle inventory include end products. Company may incurred higher inventory cost if wrongly manage 3.3. Backward Integration Manufacturer need supplier provide raw material in order to produce its end products or service. Backward integration allowed company gain control toward supplier as shown in Figure 16. Advantages and disadvantages as discuss below: Advantages: Getting better quality control Company are able to apply standard quality plan throughout the value chain. This is especially important when dealing with sophisticated components such as crankshaft, piston and turbocharger for engine. By improving the quality of this critical component will increase competitive advantages among the rivals Reduce threat from powerful vendors By increasing control over the vendors, it will reduce threat from powerful vendors. Optimized supply chain â€Å"Keeping track of so many suppliers is onerous† says Mark Shimelonis of Xerox [9]. Nowadays, a number of companies following Japanese firms lead in managing the supply chain to ensure uninterrupted supplies and low prices. Lower structure cost Outsourcing is one of the examples of the backward strategy. Outsourcing strategy will able to reduce cost when company engaging third party specialist that performing charging lower than company own operate value-chain activity. Cummins outsource IT support to India Company and panel design to CMR or Auto Maskin to keep the company structure cost lower. Nike outsourcing its manufacturing plant in China due to lower labor cost [27]. Disadvantages: Technology change Technology change is inevitable in current competitive market. But backward vertical integration may lock a company â€Å"way of doing business† and prevent organisation changes due to technology change. One of the examples is when radio manufacturer acquired a manufacturer of vacuum tube in 1950s to reduce production cost. When, transistors replace vacuum tube in 1960s, the competitor rapidly change to latest technology. However for this radio manufacturer company, the management refuse to change and as the result, lost in the competitive advantages and cause business failure. Thus, backward integration can cause serious disadvantages when trying to match rapid technology change [27] Risk of information loss Increase control over the supplier which mean also potentially important information flow to the supplier. For example, Cummins need to provide important parameter and interfacing information in the engine control module to backward supplier like CMR and Auto Maskin in order to joints develop the engine protection panel. Technical drawing will be shared among backward supplier and manufacturer. Potential high cost Less supplier competition will lead to less efficiencies when produce a product. The backward support company will work in the â€Å"comfort zone† and less initiative. The manufacturer is â€Å"forced† to get the input from â€Å"internal supplier† even there will be some others external supplier can produce lower cost .As the result will cause potentially higher production cost . 3.4. Horizontal Integration Horizontal integration refers to company that use â€Å"single industry strategy† and seeking control over competitor in same market. A number of the company apply this concept as growth strategy. Merger and acquisition allowed the company to expand its core business and technical capabi