Research Topics

VALUE-CHAIN

VALUE-CHAIN   (DELL COMPUTERS INC.)     Introduction to Value-Chain             The Value-Chain was conceptualized and popularized by Michael Porter in 1985 through his book, a best-seller, Competitive Advantage: Creating and Sustaining Superior Performance. The main thrust of “the value-chain” is to categorize the generic “value-adding activities” of an organization. The value-chain management tool recognizes two value-adding activities in an organization, the “primary activity” and the “support activity”. The primary activities includes the following, inbound logistics, production, outbound logistics, sales and marketing, and maintenance. Support activities include administrative infrastructure management, human resources management, research and development team and procurement (2003). According to Porter (1985) a firm’s value chain is embedded in a larger stream of activities that he termed the value system. Suppliers have value chains (upstream value) that create and deliver the purchased inputs used in a firm’s chain. Suppliers not only deliver a product but also can influence a firm’s performance in many other ways. In addition, many products pass through the value chains of channels (channels value) on their way to the buyer. Channels perform additional activities that affect the buyer, as well as influence the firm’s own activities. A firm’s product eventually becomes part of the buyer’s value chain. The ultimate basis for differentiation is a firm and its product’s role in the buyer’s value chain, which determines buyer’s needs. Gaining and sustaining competitive advantage depends on understanding not only a firm’s value chain but how the firm fits in the overall value system (2003). Simply, the value chain is a model that describes a series of value-adding activities connecting a company’s supply side (raw materials, inbound logistics, and production processes) with its demand side (outbound logistics, marketing, and sales). By analyzing the stages of a value chain, managers have been able to redesign their internal and external processes to improve efficiency and effectiveness (1996).         Porter’s Generic Value Chain             The paramount aim of every organization is to achieve optimization of each element of the value chain. In analyzing various elements, for example, inbound logistics (material handling, inspection, just-in-time delivery), outbound logistics (order processes, transport), marketing and sales (product development, pricing, promotion, distribution), service (on-site and off-site service, spare parts, customer care), organizations ought to gain insight not only into their own potentialities but also of their competitors’ capabilities and competencies. The costs and value drivers of an organization are distinguished for each value activity. The value chain framework quickly made its way to the cutting edge of management zeitgeist as a powerful analysis tool for strategic planning. Its ultimate goal is to maximize value creation while minimizing costs. The Primary Value-Chain Activities <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Inbound logistics: the receiving and warehousing of raw materials, and theirs distribution to manufacturing as they are required. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Operations: the processes of transforming inputs into finished products and services. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Outbound logistics: the warehousing and distribution of finished products. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Marketing and sales: the identification of customer needs and the generation of sales. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Service: the support of customers after the products and services are sold to them. </li> </ul> These primary activities are supported by: <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> The infrastructure of the firm: organizational structure, corporate culture, control systems, etc. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Human resource management: employee recruiting, hiring, training, development and compensation. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Technology and development: technologies that can support value-creating activities. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Procurement: purchasing inputs such as materials, supplies and equipments. </li> </ul>   Value Chains Generic Strategies               The firms profit potential depends on its effectiveness in performing these activities efficiently. By doing so, the amount that the customer is willing to pay for the product exceeds the cost of the activities in the value chain. It is through this activity that the firm can gain the opportunity to generate superior value. A competitive advantage can then be achieved by reconfiguring the value chain to provide lower cost or better differentiation. The value-chain model is a useful analysis tool for defining a firm’s core competencies and the activities in which it can pursue a competitive advantage. <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Cost Leadership </li> </ul> An organization always aims to be the low-cost producer in its industry. If an organization can attain and maintain overall cost leadership then it will reach superior performance. Cost leadership can be obtained by focusing on key accounts, reaping economies of scale, controlling costs. <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal"> A differentiation strategy </li> </ul> This strategy would demand an organization in offering something unique to its target customers. The uniqueness can be concerned to products, the way it delivers its goods and services, the way it markets its products or anything that shapes a customer’s perception in relation to differentiation. This could be the way products and services are branded or designed and the customers perceive such offerings as unique. <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal"> Focus strategy </li> </ul> This strategy involves an organization being selective in terms of the segments it wants to serve and focusing on these segments to the exclusion of other segments. The focus strategy can either be cost focus or differentiation focus. If an organization does not choose generic strategies it wants to focus on then, it will be bewildered and far from its goals. The degree to which a generic strategy can be sustainable will reckon on competitors’ behavior and action. The organization constantly has to be a step ahead of its competitors. Generic strategies affect the following elements of marketing namely (1) costs and pricing, (2) product design, (3) marketing mix, (4) channels of distributions, (5) promotion, (6) segmentation, (7) branding, (8) marketing information, (9) marketing communication and lastly (10) profitability. Cost Leadership and the Value-Chain A firm may create a cost advantage either by reducing the cost of the individual value chain of activities or as what have been said before reconfiguring the value chain to suit lower production costs. Once the value chain is defined, a cost analysis can be performed by assigning costs to the value chain activities. The costs obtained from the accounting report may need to be modified in order to allocate them properly to the value creating activity. In this way cost leadership is achieved by the firm in the Industry it is operating. Cost leadership would then affect cost and pricing of the firms’ product and the more logical strategy that the firm would employ is to lower its product price due to lower cost of production. By doing so, they are gaining comparative advantage with its competitor. Reconfiguration of the value chain also means an innovative structural change with in the organization like for example a new distribution channel, or a different marketing and sales approach. Differentiation Strategy and the Value-Chain             A differentiation advantage can arise from any part of the value chain. A procurement of technology, information, marketing strategy or input that are unique and not widely available to competitors create differentiation. The concept of differentiation stems from uniqueness or brand recognition. This advantage may be achieved either by changing individual value chain activities to increase uniqueness in the final product. Important factors are identified that leads to differentiation advantage. Policies and decisions of the organization is one. Learning curve or mastery of the employees in creating quality products is also one (1985). There are several ways in which a firm can reconfigure its value chain in order to take advantage of differentiation strategy, Dell for example implemented new distribution channels or strategy to be unique. Technology and the Value-Chain Technology also plays a vital role for the firm to gain competitive advantage over its competitor in the industry.  Almost if not all modern firms employ technology in all its value creating activity. Technologies have a very significant role in the organization, changes in technology can impact competitive advantage by incrementally changing the activities themselves or by making new possible configurations in the value chain. There are various types of technologies used in both primary activities and support activities. There is the inbound logistic technology which involves transportation, handling, storage communications etc. Technologies that are used in the production of the products and services are labeled as operations technologies. Production process, materials, machine tools used, packaging and maintenance are examples of production stages that employ technology. If there is an inbound logistics technology, there is also an outbound logistics technology. Outbound logistics refer to as the delivering of the product from the production area to the market or to the buyer itself. Outbound logistics employ almost the same technology used by the inbound logistics, it also requires transportation technologies, the handling, packaging, communication and information systems. Marketing the product and selling it to the market also requires technology through the use of media and information systems. The role of the firm usually do not stop after a consumer purchased a firm’s product, after-purchase services are important and product innovation is a constant process if the firm is aiming to stay at a competitive advantage from its competitors. After-purchase services and product innovation also requires the use of technologies. Because of technologies, innovation and creation of new products to suit customer satisfaction are made faster. We can note that technology is widely used across the value chain, and to the extent that technology affects uniqueness of the product, and this leads to competitive advantage.   The DELL Computers and its Value-Chain               As of July 2002, Dell Computer Corporation (Dell) was the world’s largest direct selling computer company, with 34,800 employees in more than 30 countries and customers in more than 170 countries. Headquartered in Austin, Texas, Dell had gained a reputation as one of the world’s most preferred computer systems companies and a premier provider of products and services that customers worldwide needed to build their information-technology and Internet infrastructures. Dell’s climb to market leadership was the result of a persistent focus on delivering the best possible customer experience. Direct selling, from manufacturer to consumer, was a key component of its strategy (2002, ). The company was based on a simple concept: that Dell could best understand consumer needs and efficiently provide the most effective computing solutions to meet those needs by selling computer systems directly to customers. This direct business model eliminated retailers, who added unnecessary time and cost, and also allowed the company to build every system to order, offering customers powerful, richly configured systems at competitive prices. Dell introduced the latest relevant technology much more quickly than companies with slow-moving, indirect distribution channels, turning over inventory an average of every four days. In less than two decades, Dell became the number-one retailer of personal computers, outselling IBM, Hewlett-Packard, and Compaq (2002). The traditional value chain in the personal computer industry was characterized as “build-to-stock.” Computer manufacturers, such as IBM, Compaq, and Hewlett-Packard, designed and built their products with preconfigured options based on market forecasts. Products were first stored in company warehouses and later dispatched to resellers, retailers, and other intermediaries who typically added a 20–30 percent markup before selling to their customers (1999). Computer manufacturers commanded the upstream part of the value chain, while giving the downstream part to middlemen (resellers, retailers and other intermediaries). Retailers justified their profit margins by reasons that they also give free several benefits to customers: easily accessed locations selection across multiple brands, opportunity to see and test products before purchasing, and knowledgeable salespeople who could educate customers about their choices. The 1980’s saw two trends that allowed Michael Dell, of Dell Computers to radically engineer the personal computer industry value chain. First, it was the decade that corporate consumers were becoming increasingly sophisticated and advanced therefore did not require intense personal selling by salespeople. Its individual consumers, especially those buying their second or third computers had also become knowledgeable, computer savvy and experienced technology users. Second, different components or parts of the personal computer like the monitor, keyboard, memory, disk drive, software, and so on become standard modules. This standardization of basic parts of personal computers permitted the mass customization in personal computer system configuration (1998). Part of Dell Computer’s strength in its company’s SWOT analysis is its unique direct to customer model.  The creation of the model was the major reconfiguration of the traditional personal computer value chain, which computer manufacturers and Dell competitor are using. By employing the model, the company outsourced all components but it still performed the assembly. In the process this eliminated retailers and directly shipped the computers from its factories to end customers. This action leads Dell into Cost leadership among the players in the industry. By eliminating the retailers, consumers were buying consumers from Dell with out the extra payment for retailers’ margin. This in turn leads to cheaper computers from Dell compared to its competitors. As the Internet is becoming more integrated into daily life, businesses rely on the Internet for commerce and real-time information exchange; customers go online to shop, bank and conduct personal correspondence. Because of this Dell began to take customized orders for hardware and software over the phone or via the Internet. And it designed an integrated supply chain linking Dell’s suppliers very closely to its assembly factories and order-intake system. With the industry’s most efficient procurement, manufacturing and distribution process, Dell offers its customers powerful, richly configured systems at competitive prices. Every Dell system is built to order. Customers are getting exactly what they want. Dell uses knowledge gained from direct customer contact before and after the sale to provide award-winning reliability and tailored customer service.             By reconfiguring the traditional “build-to stock” value chain model of computer manufacturers, Dell Computers defined its biggest core competency and the activity in which it can pursue its competitive advantage. First Dell gained cost advantage from its competitors by understanding cost drivers (retailers) in its production and squeezing them out. The implementation of the direct to consumer model solved the problem of expensive computer born out of the margins asked by the middlemen. Dell Computers also realized the differentiation advantage by focusing on their efficient model as its core competency which resulted to Dell outperforming its competitors.             Another part of Dell’s strength in its SWOT analysis is its better access to technology compared to its competitors. Dell introduces the latest relevant technology much more quickly than companies with slow-moving indirect distribution channels. Currently Dell’s initiatives include moving even greater volumes of product sales, service and support to the Internet; using the Internet to improve the efficiency of Dell’s procurement, manufacturing and distribution process and further expanding an already broad range of value-added services. By taking its direct business model and its associated customer experience to even higher levels, through the Internet. Dell’s Management Systems             In August 1993, Dell engaged Bain & Company, Inc., a global business consultancy, to help it develop a set of metrics to judge business-unit performance. Thinking over on that experience, Michael Dell said in an interview with Magretta(1998), “It was all about assigning responsibility and accountability to the managers”. Michael Dell wanted the use of data and facts to be incorporated as the cornerstone in every Dell’s manager’s daily decision making. There were some managers who actually resisted the new management style of Michael Dell and some did eventually left. But for the most part of the organization, people were energized by the change. Michael Dell carefully communicated this management move as to what this meant to the future of Dell Computers employee, to the consumers and to its shareholders. It was received by an overwhelming response, “Facts are your friend” become a common phrase in Dell Computers culture. “We are still the same company, marked by the same Dell drive and spirit, but we are better armed to make important decisions” said Michael Dell to conclude his interview.             Dell recognized ahead of time the need for speed, or velocity, quickening the pace at every step of business. The company learned that the more workers handled, or touched, the product along the assembly process, the longer the process took and the greater the probability of quality concerns (2002). Dell began to track and systematically scale down the number of “touches” along the line, even driving it to zero. The company took orders from customers and accomplished them by buying and assembling the needed components. Customers got exactly the configuration they desired, and Dell foreshortened its need for plants, equipment, and research and development department. As a result, Dell turned a product business into a service industry.             The chief financial objective that steered managerial evaluation at Dell was return on invested capital (ROIC). Dell’s scorecard included both financial measures (ROIC, average selling price, component purchasing costs, selling and administration costs, and margins) and non financial measures (component inventory, finished goods inventory, accounts receivable days, accounts payable days, cash-conversion cycle, stock outs, and accuracy of forecast demand). The scorecard was returned on a real-time basis, and related performance measures were broken down by customer segment, product category, and country (2001).             Dell Computers was fortunate to have a leader like Michael Dell who was a visionary and a dynamic catalyst. Michael Dell says his most important leadership responsibility is looking for “value shifts” in his company’s customer base. To identify the shifting needs of customers, he has to stay in close contact with them. To build customer intimacy and loyalty, Dell leverages its customers’ knowledge of their own unmet needs. Dell’s brand image was and is shaped by customer feedback. Summary of Dell Computers Value Chain Analysis Primary Activities Inbound Logistics Here goods are received from a company’s suppliers. They are stored until they are needed on the production/assembly line. Goods are moved around the organization. Dell relies mostly on its highly reliable supplier, where Dell streamlines its operation and relies on its computer monitor supplier to ship directly to the customer. As long as its supplier retains its leadership position, Dell would collaborate with it to achieve mutual success. Operations This is where goods are manufactured or assembled. Every Dell system is built to order. Customers get exactly what they want. Dell uses knowledge gained from direct customer contact before and after the sale to provide award-winning reliability and tailored customer service.   Outbound Logistics When Dell introduced the direct model, its competitors were selling computers to end consumers via distributors. Dell, on the other hand, sells directly to consumers and is continuously communicating with them and benefiting, especially in two areas, seeing sales trends and learning about unmet customer needs. The company also relies on customers’ knowledge of what they want to purchase and when they want to complete the transaction to drive the direct business model. Dell leverages this source of customer knowledge by making it as easy as possible for a customer to place a customized order electronically.   Marketing and Sales Dells direct to customer model solve the problem for additional capital for marketing and sales. By selling directly to consumer it eliminated retailers along the way. One advantage of this kind of system is that the firm is continuously in contact with its customers and they are benefiting in two areas concerning sales and marketing, seeing sales trends and learning about unmet costumer demands. Service Dell spent dollars training well-educated business segment managers provide state-of-the art advice to customers. The company also initiated a collaborative customer-solution teams that collaborate with customers to fulfill any unmet customer needs. Because of the nature of work of Dell’s employees they are continually being inspired to stay abreast of technology threats and opportunities that may alter the competitive landscape in the future.     Support Activities Procurement It is on this activity that Dell is weak because Dell do not enjoy protected by trademark or patent or copyright technology. The technology being used in the industry is shared by all industry players. Technology Development Technology is an important source of competitive advantage. And here is one strength of Dell for the firm enjoys better access to technology. Dell introduces the latest relevant technology much more quickly than companies with slow-moving indirect distribution channels. Human Resource Management (HRM) Dell’s mission statement is “to be the most successful computer company in the world at delivering the best customer experience in markets we serve”. Dell employees, direct salespeople, help-desk operators, engineers, and the like all have to be knowledgeable and customer focused to ensure Dell’s continued competitiveness. Firm Infrastructure Dell revolutionized the traditional value chain of computer manufacturing industry by introducing the direct to customer model. Dell also employed a global business consultancy, to help it develop a set of metrics to judge business-unit performance. By doing so, daily decision making were more efficient. The chief financial objective that steered managerial evaluation at Dell was return on invested capital (ROIC). Which leads to no inventory build-up, Dell turns over inventory every six days on average, keeping related costs low.   Credit:ivythesis.typepad.com

VALUE-CHAIN

VALUE-CHAIN (DELL COMPUTERS INC.) Introduction to Value-Chain The Value-Chain was conceptualized and popularized b...

Pricing Method, Market, and Marketing

Pricing Method, Market, and Marketing Introduction Every business is finding innovative ways on how to increase the demand on their products and how to fill the missing gaps of their consumer loyalty. Different strategies are being implemented but there are only few recognized benefits. However, the firms that did not cease to encourage their people and system to improve will soon realize the progress. On when or how is the remaining question. Customer-Based Pricing System and Comparison on Cost-Based Pricing Method Pricing methods are applied by the firms in a tactical way where they can easily matched their competitors and accommodate the profitability (Harmon, Raffo, and Faulk, 2005; AARD, 2009). The customer-based pricing is also called value-based pricing method is applied by most of the firms to estimate the market value of the products as much as its various developments. The commitment of a customer-based approach in pricing is mostly on the development of the long-term pricing capital and creating long-term value for the customer. From its word, the pricing method is entirely based on the customer’s perceptions and focusing on capturing the value from a market segment. Firms invest in strategic planning can make better product decisions and development of the process by understanding how customers value their products, the alternatives or substitutes, and their buying behaviors (Harmon, Raffo, and Faulk, 2005). Albeit the customer-based pricing delivers the benefits in the companies, there are noted advantages such as the production costs and the pressures from the competitors may affect the pricing strategy. To implement its effectiveness, the firm should decide how to deliver the products, have value on discounts and other strategies (AARD, 2009). In the comparison of the customer-based pricing to cost-based pricing method, there are obvious differences. Cost-based approaches place the interests of the sellers over the interest of the buyer. The use of the cost-based system slows the raise of prices even if the profit and volume goals are already met (Harmon, Raffo, and Faulk, 2005). Cost-based pricing particularly based on the ingredients and cost of operation. Also, this includes the raw materials, transportation, advertising, wages, rent, and cost of the suppliers. Firms that applied the cost-based pricing ensure the accuracy because of the involvement of cash. However, same as the customer-based approach, the cost-based approach also recognize the disadvantages. It does not consider the customer demands and how its affects the prices and the existence of the competition have a significant effect especially when there are close substitutes (AARD, 2009). Market Segmentation In the industry of construction and mining, the companies that involved in the nature of work have limitations in application of the segmentation criteria. Most of the business transactions in mining and construction industry are planned and with proper timing for operation. In contrast, the companies are not using too much marketing strategies and the outputs are not subjected in low prices. Because they value most of the resources, operational cost, labor, machineries, and other related works, companies are using the cost-based approach. This type of approach help the companies to evaluate the worth of their finish output, including the materials and other requirements to finish the project and profits from the interest, all are added and subjected as the total cost. Marketing and IT In the traditional marketing perspective, the goal to achieve the success starts in determining on what would be the applicable pricing strategy of the company. The company will recognize the success through the return of the investment and meeting the profits (Harmon, Raffo, and Faulk, 2005). To fulfill all of these traits, the aid of marketing is needed. In the introduction of the technology, different organization that acquired appropriate technology, experience it efficiency. Because of the influence of the technology, sometimes the companies are competing on the process on how they created a product. In its application in the marketing, information can provide aid in the strategic direction of the business’s market. Different approaches are finally introduced to fulfill the philosophy of marketing. In the market, the value of the flyers, brochures, poster, or catalogues are decreasing because of the interactive campaign of most of the marketers (ANA, 2008). The mind-setting of the business leaders is on how to accommodate the customers and the potential customers in an easy way. The massive influence of the marketing already ruled over the internet or websites, online ordering (if the company is offering the kind of customer service), information provider and so on.        Conclusion Organizations must learn to balance the different aspect of the creation of business. On the other hand, the business should close its doors for other opportunities that might lead them to success. Sometimes, too much anxiety kills and the leaders might miss their chances. References: AARD, 2009. Methods to Price Your Product, Agri-Facts. Alberta Agriculture and Rural Development. [Online] Available at: http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agdex1133/$file/845-2.pdf?OpenElement. [Accessed 11 Feb 2010]. ANA, 2008. The Continuously Changing Role of Marketing, Association of National Advertisers. [Online] Available at: www.ana.net/committees/getfile/1486. [Accessed 11 Feb 2010]. Harmon, R., Raffo, D., & Faulk, S., 2005. Value-Based Pricing for New Software Products: Strategy Insights for Developers. [Online] Available at: http://cpd.ogi.edu/MST/CapstoneSPR2005/VBSP.pdf. [Accessed 11 Feb 2010].   Credit:ivythesis.typepad.com

Pricing Method, Market, and Marketing

Pricing Method, Market, and Marketing Introduction Every business is finding innovative ways on how to increase the demand on their pro...

Yankee Airline: Case Study Analysis

Yankee Airline: Case Study Analysis   Yankee Airline Overview   One of the largest service organizations known in the world today are those airline industries. These industries all over the world are now living in an interesting era.  More and more people have been using these industries for every services and purpose they want and for their travel satisfaction.  The process of change as of the old economy to the new global economy has brought tremendous changes and development to the services being offered.  Part of the changes brought by the competition of these industries globally is the new economics, new market structure, new marketing strategy as well as the new technological structures of each and every industry within the marketing service field.  Nowadays, people are more willing to use the services of the airline industry especially those individuals who wanted their travel to be convenient and satisfying which makes all such industries to be in demand. Thus, this paper will critically study Yankee Airline and the strategies that it has been using throughout the years that it is recognized as one of the competitive Airline industry.   Three Impressive Things about Yankee Airline   Being one of the largest airline industries, Yankee Airline has three impressive strategies that makes it different from its competitor and made the industry ranked to be one of the most admired and top performed airline companies in the United States.  The services that Yankee Airline industry is offering with its target market or passengers can be seen as a combination of a traditional and modern way.  One of the impressive things about Yankee Airline is their unique of rendering the services to their customer or passengers. Yankee Airlines have made their focus on its market in a different level of recognition.  In the same manner that they are doing in giving value to their customers as well as valuing the passengers’ comments and feedbacks.  Their strategy includes the style of being customer oriented industry in which the suggestions of the passengers are taken seriously.  As Yankee Airlines realized that their customer is one of the essential stakeholders in order for the whole industry to succeed and achieve its objectives, they used the psychographic approach to determine the demands of their passengers and target market.  However, the company is facing difficulties in terms of the liquidation. In this regard, the company should be able to formulate their financial strategies and in making the financial management effective, proper research and studies should be made in order to define and maneuver the direction of the whole business plan. Setting up the ideas and presenting them to the figures of authority for a rich exchange of views will be helpful in generating plans that will be best for the business establishment. The company should be conscious and cautious in terms of the savings and the transparency of the expenditures. The people involved should also have the guts and the character to make the long-term plans a success by initiating efforts that will make such conjured ideas possible and tangible in the future. Specifying the date and time frame of executing the business plans and strategies that will make its attainment possible will push and business to start right on and take the challenge. As much as possible, hesitations should not be acknowledge unless there are enough reasons to postpone the initial execution of the plans that will be more risky than the imagined drawbacks of the project. They should be sensitive in making delays and lagging off from the defined plan and tactics as well as in the changes and differences of the actual application and that of the plan.             It would also be advisable to get help and consult from a professional finance consultant because they can provide information and views that were not pointed out and brought up during the planning period. There should also be an account to serve as a financial back up for the emergencies and difficulties that were not foreseen while conjuring with the plans. Mack (1994) introduced the most common mistakes that are encountered in managing the finance of a business organization which should be minimized if not totally avoided by the management. These include the failure to research and conduct studies regarding the goals prior or after the planning period, not using an automatic saving plan, being too conservative with long-term investments, the problem of succession, putting off the start of the investment, not getting professional advice, and not setting aside at least three to six months worth of savings in an interest-bearing account.  This leads to reasoning that in managing the financial resources of a business organization, it is of primary importance that the resources of the company are identified. From these resources the people in the general management especially the financial manager to be selective in choosing the resource or resources that the company will invest in. the nature of the resource should be studied so that the opportunities that it offers can be fully exhausted by the company.     Reference Mcmenamin, J. (1999) Financial Management: An Introduction. London: Routledge. p. 9.                       Credit:ivythesis.typepad.com

Yankee Airline: Case Study Analysis

Yankee Airline: Case Study Analysis Yankee Airline Overview One of the largest service organizations known in the world today are ...

MARKETING

Abstract   The increasing use of internet and database marketing in relation to relationship marketing is prevalent.  The role of e-commerce plays a very large role indeed in achieving customer retention and customer loyalty by providing customers with long-term satisfaction from the marketers in a convenient way for the customers to indulge.   The shift from traditional marketing to relationship marketing provides an alternative to further increase companies’ profits and in developing better rapport and deeper relationship with customers.   Keywords: customer retention, customer relationship management, relationship marketing, customer loyalty                         Introduction   Relationship marketing is a form of marketing that evokes an emphasis in building longer term relationships with customers other than my mere individual transactions. The focus of relationship marketing is to attract and promote customer retention based on trust, commitment and sharing of information in exchange for customer’s loyalty.  Further, relationship marketing facilitates the efforts of companies in the identification, maintenance of a network of individual consumers and the continuing initiative to strengthen the network.  According to Morgan and Hunt (1994), relationship marketing as a retailer-customer approach that refers to all marketing activities directed toward developing and maintaining successful relational exchanges with customers. The evolution of relationship marketing can be traced back to a passage by (1980) in which he observes: “What is surprising is that researchers and businessmen have concentrated far more on how to attract customers to products and services than on how to retain customers”.  Relationship marketing begins its roots in the industrial and business to business markets where long-term contracts have flourished for many years. According to  (1983), relationship marketing can be applied: when there are alternatives to choose from; when the customer makes the selection decision; and when there is an ongoing and periodic desire for the product or service.  A point of argument should be made here such that the application of relationship marketing should not only be limited or to be consider as an alternative because in order to gain profits, the principle that could underlie in the application of relationship marketing is to attract customers to the products and services at the same time to take care of these customers and treat them as assets that could be a very potent resource tantamount in the expansion of the business.  If its application is limited to the three factors stated above, there would be limitations in customer retention, thus, unable to get customers loyalty.  The continuing efforts to improve relationship marketing enable companies to cater to the different people who have a diversity of preferences. In fact, according to  (1991) claims that relationship marketing has the potential to forge a new synthesis between quality management, customer service management, and marketing.  Moreover means, that quality management, customer service management and marketing should be considered as a whole inseparable entity in the business. However, development in the use of database marketing principles is required to support the foundation for effective relationship marketing.  The key element lies in a flexible and customized sales and marketing database created by tools such as an information system that in turn allows immediate access for marketing information.  A marketing database serves as a strategic weapon in building strategic sustainable relationships with customers amidst the fierce competition in the marketing world.  For example, Burger King uses a database to push brand loyalty while its customers are still in analog mobile phones. Database marketing is the use of databases of customers that able the generation of personalized communication in order to promote products and services.  It emphasizes the use of techniques to develop and assess customer behavior.  Database marketers are heavy users of data warehouses where data and customer information can be kept.  The communications in which it can be generated if unwanted by the addressee may be described as junk mail or spam. The internet and management information system has been the major technology enablers that make relationship management more strategic.  The internet allows businesses to get low cost interactions with customers and can save time.  The management information system on the other hand, allows businesses to generate a single view of customers across all the functional areas in the business.  Both of these systems together allowed for customized communication for their costumers.  Internet marketing from the name itself is the use of the Internet to advertise and sell goods and services that includes the pay per click advertising, banner ads, e-mail marketing and the like.  Internet marketing comprises information management, public relations, customer service, and sales in its broader scope.  It offers benefits to the company such as the availability of information where customers learn have a detail of the products and services being offered.  Internet marketing can help in the expansion of the company from a local market to both national and global marketplaces. Customer relationship management in its narrow definition involves managing detailed information about individual customers in order to maximize costumer’s loyalty through carefully managing customer touch points.  Recently, however, customer relationship management takes its broader meaning which denotes as the overall process of building and maintaining customer relationships profitably by delivering customized and personalized customer value and satisfaction.    Effective customer relationship management in order to be use strategically requires the intelligent application of technology. The effectiveness of customer relationship management is how to use customer’s information valuably to create an ongoing relationship with the customer.  Aside from the intelligent application of technology, customer service management requires that an organizational views customer’s relationship with meaning before being able to learn about customer’s needs and wants deeper and how is it best to satisfy and sustain the costumer at the same time helping the organization meet its objectives. The task of creating and delivering superior customer value should complement with the effective relationship management relationship with the customers. Customer relationship management should be of utmost understanding of what the customer’s worth value to the company that is termed as customer’s equity.  As there is an improvement in the delivering of superior customers value, an improvement in the customer’s equity.  Customer’s equity is perhaps the company’s most valuable asset, continuous improvement in the customers value that it has been giving to its customers.  The determinants in which the company invest to its customers, is the company’s customer equity.  The company should continue to give guaranteed superior service quality and customer service. According to (1990), the increased profitability associated with customer retention efforts occurs because the cost of acquisition occur only at the beginning of a relationship, so the longer the relationship, the lower the amortized cost; account maintenance costs decline as a percentage of total costs (or as a percentage of revenue); long-term customers tend to be less inclined to switch, and also tend to be less price sensitive resulting in stable unit sales volume and increases in sales volume are some of the factors that connotes profitability associated with customer retention.  Undoubtedly, customer retention entails an increased profitability.  Especially now with the emerging e-commerce innovations which serves as a role of a catalyst in the effectiveness of relationship marketing.   Assessment   Shiseido is a company that did not start in a make up products industry but was able to earn its reputation in the make up products industry and is considered to be a top product manufacturer in the business.  There secret lies in the good effective marketing strategy they are using.  Shiseido once has been a limited partnership but became a stock company in Japan and since then it took its course in expanding their markets not only in Japan but in the global market as well.  Currently, Shiseido has sixty-five (65) countries from across the globe with its biggest sales in the European market.  Recently, Shiseido have aggressively expanded to China as their key overseas market.  The reason behind its continuing success is the use of good effective relationship marketing which seeks to identify the touch points of its customers.    As part of the corporate mission of Shiseido, their mission focuses on customer relationship management strategies and in relationship marketing that aims in its dedication in making the realization of beauty come true for its customers.  The integration of their marketing organization is achieved by the marketing, research and development department and the merchandising who works together in knowing the wants of the customers, analysing consumer needs and the market trend as well.   The use of internet and database marketing coincides to what is collectively considered as e-commerce.  With the very highly competitive global market, Shiseido in order to be competent must come up with new innovative means in addressing the need for new marketing strategy and the solution lies in the use of internet and database marketing.  Both new marketing strategy will surely keep Shiseido be at pace with the rival make up companies and with the rest of the make up industry that also spends huge bucks of money in the advertisement, promotions and in the research and design department.    Internet marketing will become a very valuable tool in providing convenience to the Shiseido customers since the customers themselves also is keeping at pace with the face-paced life in this modern world.  The need to find a place for parking and possibly be caught up in traffic would not be a concern anymore because the customers can purchase Shiseido right in a click of a mouse.  Not only that it provides customers with convenience, it can give product information about Shiseido products highlighting the difference of every Shiseido products from the other products available in the market and so as online without the hassle of undergoing persuasion from a sales person.  Database marketing, same as internet marketing, can monitor the customer’s needs and wants that enable Shiseido to better assess and be up-to-date with the changing trends within the external environment that comprises the society.  With the increasing use of both internet and database marketing, it speeds up the establishing of more than a customer relationship with customers.  It fosters valuable importance on the part of the customers that they are being treated as valuable to the company and making the customers feel they are of importance and that they matter.  The establishment of more than a customer relationship increases the likelihood of customer retention and customer loyalty.  Relationship marketing strategies is an alternative means in marketing that provides companies with the opportunity to maximize their profits and reduce its costs.  Compare with the traditional marketing which focuses only on the recruitment of single sale and little attention to customer service, relationship marketing focuses on customer retention and place a value on customer service. The implementation of internet and database marketing must also be in line with the aim of customer retention and customer loyalty.  Customer loyalty occurs when the buying motivations are high and the premise of commitment, preference and repeat purchase are present.  According to(1935), there are four levels of loyalty base on four components: cognitive, affective, conative and action.  The cognitive, affective and conative aspect is what comprises the traditional definition of behavior.  Shiseido should focus and give emphasis on these aspects in such that it is very helpful to get customers be drawn to your products.  Let us note that the customers behavior have an effect in the earning of customer loyalty.  Shiseido may thoroughly study the factors in which that affects customers’ behavior so that they will be given a clue to what the customer demands.  It is focusing on the emotional aspect of an individual would be the key in earning customer loyalty making Shiseido products more than a product for the customer making the customer develops an emotional attachment to it.       The role of e-commerce in the customer retention and customer loyalty is that it enables relationship marketer’s to customize the services Shiseido offers in a likeable demeanor.  For example, the friendly voice or manner of speaking of a relationship marketer can convince consumers to purchase Shiseido’s products.          Further, the aspect of Shiseido’s loyalty programs can also be improvised such that it would only not be limited to the chosen few.  The Shiseido’s customers will not be highly motivated if the loyalty program can only be available for the chosen few.  Internet and database marketing can better put emphasis on this aspect since it can be a medium of creating an awareness of the customer’s part and keep them up to date as well in what they can reap when they stay a loyal customer to Shiseido.  For example, they can introduce rewards point every time they purchase a Shiseido product.  The amount of reward points would be high when the customer purchases a Shiseido product that does not do well in the market. By doing so, it can perhaps generate an increase in the sales of products.  further developed the importance of building customer commitment in his 1996 book The Loyalty Effect. He focused on the cost of customer defection and set the stage for the problem by claiming.  Using examples from financial service companies, advertising agencies, and manufacturing firms,  claimed that even small improvements in customer retention can as much as double company profits.   point hold true because the costs of serving long-term costumers is less since these customers have been committed already to the products, the need to advertise the products to the customer is not that important anymore and the products the customers have been committed to has been instil in their minds as something that had worked for them.  The more they will be resistant to shift in trying and buying other product.  Naturally, customers will always choose the one that works for them.             Conclusion and Recommendations               The internet and database management is now considered a necessity of every company engaging in the global market.  To be able to reach out for a bigger market they have to reach their customers via the internet since customers are also now very technology driven.  The absence of venturing into new effective means of marketing may drive away customers to shifting with new products because the company itself does not keep itself at pace with the customers.  Thus, the probability of customer retention is less likely to happen.  Customer retention proved to be inevitable in every relationship marketing aspect.  From the customer retention engulfs the development of customer loyalty that comes from constantly refining the information available on specific customers that includes customer preferences, buying habits and patterns, product usage, and other data pertinent to individual customers. Effective customer relationship combined with internet and database marketing spells increased profitability in Shiseido.  Some advantages of customer relationship and internet and database strategy are first, the relationship can create a committed customer. A loyal and committed customer is more than repeat purchaser but is likely to have developed an emotional attachment with the products.  A committed customer is likely to be a source of word-of-mouth referrals and are resistant to accept and shift to new brand label.  Second, it can provide a point of leverage to realize economies of scope and further gain understanding customer’s changing trends. Third it has a potential to minimize costs.   Over all Shiseido show a good marketing effectiveness especially in the customer relationship management and relationship marketing aspect. The need for internet and database marketing proved to be a valuable asset if incorporated more in the marketing strategy.  The need for advertisement should not be too costly for Shiseido since it had already earned its reputation in the market.  Shiseido’s main concern now is how to stay competent in the market amidst the heavy rivals they are facing.  Also there is a need for Shiseido to allocate more money in the research and design department rather than in the advertisement because consumers’ trend tends to be moody and welcomes products which are new and very innovative to them.  The imperative need of redefining their products is of apparent importance in order to constantly differentiate their products from the rest of the make up products.     Credit:ivythesis.typepad.com

MARKETING

Abstract The increasing use of internet and database marketing in relation to relationship marketing is prevalent. The role of e-comm...

Vocational Teaching Personnel For Individuals With Intellectual Disability Term Paper

Vocational Teaching Personnel for Individuals with Intellectual Disability    Vocational teaching  is increasing  worldwide for individuals with intellectual disability.  Various governments are implementing laws for accessing educational facilities to students with intellectual disability.  There are even students who moved out from special schools and moved in the regular teaching settings in  the classrooms with normal students.  In this connection, post-secondary education and vocational training for mental disabled students are being provided  to ensure reasonable adjustments  among students  into the curriculum and teaching methods in order to accommodate the learning needs of students with disabilities, wherever possible. There are also some vocational training centers that cater specifically to people with disabilities, providing the skills necessary to work in integrated settings,  a good example of this type is Dale Rogers Training Center in Oklahoma City. Furthermore, many people with developmental disabilities live in the general community, either with family members, in supervised-group homes or in their own homes .  They are given assistance by a support worker  or vocational teaching personnel on how lives a regular living  with budgeting, shopping or paying bills. At the same time, they are also given  assistance  on how to  deal with household tasks, such as cooking and cleaning, and personal care  like showering, dressing and the administration of  their medication. The  requirement for full 24-hour support is usually associated with difficulties recognizing safety issues on  fire emergency  or using a telephone for people with potentially dangerous medical conditions, and  unable to manage their conditions without assistance. (http://en.wikipedia.org/wiki/Developmental_disability) Moreover, in the United States, there are vocational teaching personnel who  are popularly known as Direct Support Professional (DSP).  The DSP assists individuals with mental disability to communicate with  their needs, self-expression and their plans and goals in life. The support workers also provide assistance to these people in how to  undertake new community services such as education, how to act properly with other people,  how to  interrelate properly and appropriately with  community norms and  how to expand their network of friends in the community.  Most programs at-home and community support are designed with the objective of increasing the individual’s independence, despite the fact that majority of them are being recognized  as not able to achieve full independence in some areas of daily their  everyday life.  Another support center is the Austin State Supported Living Center in Austin, Texas.  This is a residential  accommodation type of  vocational center for the mental disabled individuals.  These support homes have  24-hour staff and it has up to 15 residents. The wide spread of this type of support is gradually decreasing, however, as residential accommodation is replaced by at-home and community support, which can offer increased choice and self-determination for individuals. Some U.S. states still provide institutional care, such as the Texas State Schools. (http://en.wikipedia.org/wiki/Developmental_disability) Subsequently,  employment support is also given to the individuals with intellectual disability.  There is an integrated-based  employment  program for them in the community.  This program teaches them how to prepare themselves for the future employment that they may undertake.  It also increases their skills potentials through a one-to-one small group support on-the-job training.  In this on the job training program, they are taught on how  to deal with an employer or a bullying colleague in a workplace, as well as the complete application assistance for the job.  This condition of employment opportunities for them is separated business services.  But, this is also designed for these individuals to transform their teaching work skills into integrated employment. The types of jobs that included in the  segregated business are  mailing and packaging services, cleaning, gardening and landscaping, timberwork, metal fabrication, farming and sewing.  In this aspect, workers with developmental insufficiencies are being paid less than the normal work force in any industry. However, at this time and age, it is gradually changing with government initiatives, the enforcement of anti-discrimination legislation and changes in perceptions of capability in the general community.  In the United States, different initiatives have been launched in the past decades to eliminate  unemployment among workers with disabilities.   And, majority of these initiatives have been  given attention by the community agencies in order to serve people with developmental disabilities and the government itself.   Normally, there are various vocational  training centers in the United States that accommodate  individuals with intellectual disabilities. They are classified as severe, intense, moderate or mild cases as how each individual assessed by their  support workers.  Generally, those in  mild cases, they are still able to live their lives independently and have the chance to take part in any employment programs.  As a result, the special vocational   workshop centers are being established, as well as the community socialization training mastery program. (http://www.who.int/mental_health/media/en/20.pdf) References: (http://en.wikipedia.org/wiki/Developmental_disability) (http://www.who.int/mental_health/media/en/20.pdf)     Credit:ivythesis.typepad.com

Vocational Teaching Personnel For Individuals With Intellectual Disability Term Paper

Vocational Teaching Personnel for Individuals with Intellectual Disability Vocational teaching is increasing worldwide for indiv...

ASTRAZENECA PHARMACEUTICAL COMPANY: CASE STUDY

Introduction               One of the international pharmaceutical companies struggling to compete in the pharmaceutical market is AstraZeneca International. Operating in over 100 countries, it can reach sales of billion, with an operating profit of .5 billion (AstraZenca, 2006). This case study explores the company, specifically how it operates under the growing but pressured pharmaceutical industry. It explores the basic structure of AstraZenca, as well as the key external drivers that impacts upon it. It also explores and discusses how the organization adds value to its products and services. The future strategic directions of the organization are also identified. Suggestions are provided, on how the organization can improve and can rise above the competition.   AstraZenca International: Profile and Organization Structure             AstraZenca International claims to be one of the world’s leading pharmaceutical companies, dedicated to the discovery, development, manufacturing and marketing of high quality, effective prescription medicines that bring benefit for patients and add value for shareholders and wider society (AstraZenca International, 2006). However, it seems that those statements were not merely blind claims as the company has evidences of its success. Their products are available in over 100 countries (AstraZenca International, 2006). In 2005, the totaled sales reached billion, with an operating profit of .5 billion (AstraZenca International, 2006).             Albeit the issue of limited research and development of pharmaceutical companies (Piachaud, 2002), AstraZenca International is one of the companies that basically invests considerably on R&D. The company spends over million every working day on the research and development of new medicines that meet patient needs (AstraZenca International, 2006). Also, it employs 12,000 people in research and development at 11 R&D centres in seven countries: Sweden, the UK, the US, Canada, France, India and Japan (AstraZenca International, 2006). Furthermore, the company has some 14,000 people at 27 manufacturing sites in 19 countries, and generally employ over 65,000 people worldwide: 58% in Europe, 28% in the Americas and 14% in the rest of the world (AstraZenca International, 2006). Although the company is headquartered in London, and has the R&D headquartered in Sweden, it currently enjoys a major presence in the United States (AstraZenca International, 2006).               Aside from its handful of employees, AstraZenca International is of course made up of Board and Senior Executive Team (AstraZenca International, 2006b). The Senior Executive Team is composed of: David Brennan (Chief Executive Officer); Bruno Angelici (Executive Vice President for Europe, Japan, Asia Pacific and ROW); John Lundberg (Executive Vice President, Discovery Research); Martin Niklasson (Executive Vice President, Global Marketing and Business Development); Barrie Thorpe (Executive Vice President, Operations); Tony Bloxham (Executive Vice President, Human Resource); Tony Zook (Executive Vice President, North America); Jonathan Symonds (Chief Financial Officer); and Barry Patterson (Executive Director Development) (AstraZenca International, 2006b).               On the other hand, the Board of the company consists of positions such as Non-Executive Chairman of the Nomination Committee, Non-Executive Deputy Chairman, Non-Executive Director, Executive Director Development, Executive Director and Senior Non-Executive Director (AstraZenca International, 2006b). The Board Committee is basically made up of four departments, which are: Audit Committee, Nomination Committee, Remuneration Committee, and Science Committee (AstraZenca International, 2006b). Several core remit of the committee include review and report to the board on: the scope of and plans for audits of the Group by the external auditor and the internal audit function; the implementation of the external and internal audit plans and the handling of any material issues arising from those audits; etc. It also brings attention to the board issues such as: any significant concerns of the external auditor about the conduct, results or overall outcome of the annual audit of the Group; any significant concerns of the Chief Internal Auditor about the conduct, results or outcome of internal audits; etc. (AstraZenca International, 2003a). The group is also responsible on: overseeing the establishment, implementation and maintenance of the Group’s Code of Conduct and other related policies and establishes procedures for the receipt and handling of complaints concerning accounting or audit matters; appointing and agreeing the compensation for the external auditor subject; and reviewing and approving the appointment and any dismissal of the Chief Internal Auditor (AstraZenca International, 2003a).               The Nomination Committee has a different responsibility. It is responsible on making proposals to the Board for any new appointments of Executive or Non-Executive Directors of the Company (AstraZeneca, 1999a).               The Remuneration Committee, then, is responsible on making recommendations to the Board of Directors on the Company’s policy for executive remuneration and to determine, on behalf of the Board, the entire individual remuneration package, including the terms and conditions of employment and the retirement/severance provisions (AstraZenca, 1999b). This Committee is also responsible on making recommendations to the Board for the Company’s Executive Share Option Scheme and Employee and Executive Performance Bonus Schemes (and any other similar schemes) and to exercise the powers of the Directors under the rules of such schemes (AstraZenca, 1999b).               Finally, the Science Committee review and assess the international competitiveness and quality of science within the Company. Specifically, it covers the strengths and limitations of the Company’s R&D science in the Research / Therapy Areas in which the Company is active or is considering becoming active; and enabling Science and Technology (AstraZenca, 2003b). It also considers the effectiveness of the Company’s delivery on specific projects in those areas, and the adequacy of the Company’s R&D skills base in those areas. It also handles significant scientific advances and their potential impact on the Company, and any other significant developments in the scientific environment which may affect its interests (AstraZeneca, 2003b).   SWOT Analysis               The strengths and weaknesses of AstraZeneca International were derived from the annual reports and articles about the company that are readily available in the Internet.   Interestingly, the company claims that its core strength is derived from its outstanding portfolio of products, its global reach and, above all, the creativity and commitment of its employees. It has ten products each with global sales of over billion i.e. products such as Nexium, Seroquel, Crestor, Arimidex and Symbicort (McKillop, 2005). The global reach of the company is also becoming strong, as it is starting to show signs of success in China, growing their business there by over 200% over the past five years. Strong growth is also being achieved in other Asian countries, in Latin America and in Eastern Europe (McKillop, 2005).   On the other hand, there are also several weaknesses that serve as barriers for the success of AstraZeneca. One of them is some failures of gambles on important pipeline medicines. Specifically, one case that tells this is the gamble of the company on Iressa – a supposed-to-be breakthrough cancer drug. The drug failed to show a survival benefit. There have been safety flags raised with Crestor, for cholesterol, and with experimental drugs Exanta, a blood thinner, and diabetes drug Galida (Forbes.com, 2004). It may create a reputation for the company as a business making unsafe or ineffective drugs (Forbes.com, 2004).   Another weakness of the company is that it is also being affected by the drug shortage crisis. For instance, AstraZeneca has discontinued its Cefotan products. Cefotan has been in short supply due to manufacturing problems and there came a point when the company had reached zero supply (American Society of Health-System Physicians, 2006).   In terms of opportunities, the company has many to be glad about. First, its recent success in countries such as China, Latin America, and Eastern Europe can open up many possibilities. Another opportunity for the company is the increasing need for innovative drugs, especially on diseases that are currently difficult to cure such as cancer and diabetes. The company has the potential to create breakthrough drugs as shown in their development of Galida and Crestor.               Finally, threats for the company are plenty, specifically the current condition of the pharmaceutical industry. One problem is the increasing cost of prescription drugs. There has been more and more demand for budgets of those who have been paying for healthcare (AstraZeneca Annual Report, 2005). Pricing pressures were placed on the industry through legislation not only in major established markets, but also in China and India (AstraZeneca Annual Report, 2005). There are also concerns on productivity and innovation, as well as on drug safety, competition, reputation, and regulation AstraZeneca Annual Report, 2005). These threats, if not carefully planned and addressed, may hamper the growth of AstraZeneca to a great extent. Many pharmaceutical companies are struggling to meet these demands just to survive.   Drivers               There are four main drivers of pharmaceutical industry. Piachaud (2002) stated: “From the standpoint of the pharmaceutical industry, the impetus for change is the result of a combination of political, economic, technological and social factors; all of which have helped redefine the dynamics of this particular industry”. Those were the same factors that affect the operations of AstraZeneca.   Political                 The company is obviously being influenced in the political perspective. In the previous years, the issue on whether or not Crestor or Galida is safe has been a political issue in the United States. There were basically different factions that are against or favor the drugs, affecting the whole marketing strategy of the company.   Economic   AstraZeneca is being affected by the economics of the pharmaceutical industry in terms of increasing prices of drugs as well as increasing demands. There has been an increasing need to demonstrate the economic as well as the therapeutic value of their medicines to those who pay for healthcare (AstraZeneca Annual Report, 2005).   Social     The social concern of the company is how well the consumers will accept and see their products. Drug safety is one issue here. Accordingly, decisions on acceptable benefit/risk profiles for medicines have the potential to be positively or negatively affected by a number of factors. These include pre- and post-marketing clinical data and regulatory judgments that reflect society’s concerns and aspirations (AstraZeneca Annual Report, 2005). The norms of people toward drugs can also be an issue, as there are some who do not take drugs seriously, resulting in the decrease of market share.   Technological               The pharmaceutical industry is characterized by stiff competition. The international competitors of AstraZeneca are international, research-based pharmaceutical and biotechnology companies that also sell branded, patent-protected, prescription medicines (AstraZeneca Annual Report, 2005). Being ahead in R&D, specifically in technologies, is a must because it will leverage a company to the top. Technologies may ease working loads; make them faster and more accurate.   Added Value                 The added value that AstraZeneca offers to its customers are: patient benefit and safety continue to be the core priority; Safety, health and environmental issues remain a fundamental Company consideration; the individuality, diverse talent and creative potential that every employee brings to the business are fully valued and respected; they maintain high ethical standards in their research and development of new medicines; they maintain high ethical standards of sales and marketing practices in all countries of operation; they make a positive contribution to the communities in which they operate; as a minimum, they meet national and international regulations; their CR or customer responsibility commitments are expanded by encouraging their suppliers to embrace standards similar to their own; and new and emerging issues relating to CR are dealt with appropriately and effectively.   Future Strategic Directions               The company has 5 main strategic priorities, which are: products; pipeline; productive use of resources; people; and reputation. In products, the company plans to maximize sales growth by: releasing the full potential of their marketed brands throughout their lifecycle; growing their position in existing markets; expanding their presence in key emerging market; and vigorously defending their legitimate intellectual property rights (AstraZeneca Annual Report, 2005). In pipelines, the plan is to deliver a portfolio of differentiated medicines that meet patient needs by: successfully delivering the next wave of products in development; further improving the productivity and efficiency of their drug discovery and development; strengthening the pipeline through appropriate external targeted acquisition, licensing and partnership opportunities; and rigorous management of their portfolio of products in development, to mitigate risks associated with new innovative products (AstraZeneca Annual Report, 2005). In terms of productive use of resources, the company plans to improve its leadership, maintain best practice, and develop new practices. People are also a concern, as the company plans to strengthen more the company culture and create more programs to motivate employees. Finally, as a remedy to one of their weaknesses – reputation- the company sought to maintain the trust and confidence of patients, customers, employees, shareholders, regulators and wider society by: understanding their needs; ensuring that they deliver on their business promises; and living up to their core values and publicly stated standards of ethical behaviour, wherever they have a presence or an impact (AstraZeneca Annual Report, 2005).               Based on the reports, the main aim of the company is to improve its management and marketing strategies. In the next years, it can be predicted that the company will become more concerned with its employees and customers, and will release programs to inform them how important they are to the company. Furthermore, the company will also become aggressive in marketing as it tries to sort out loopholes and problems in areas of distributions such as in the United States and China.   Conclusion               So far, as can be reflected from the paper, AstraZeneca International is fairly successful in meeting its endeavors as an international pharmaceutical company. Its strengths such as being able to reach more global scale, strong product portfolios, and the ability to convince customers can be attributed with the main drivers that were discussed earlier. For instance, the strong product portfolio or the popularity of the company’s products may be due to the fact that some of its products have been given enough media exposure of their controversial characteristics. Positive or negative, the company had enjoyed being recognized because of those exposures. The good thing is, some of the issues are not yet closed and in most of them, the company won the case. Being able to increase distribution into past places where sales were down can also be due to the increasing demand in prescribed drugs, and the increasing cases of cancer and diabetes around the world. The issue on high cost of drugs can also be pinpointed as factors as consumers look for better alternatives if not on price, on the cost and quality. On the contrary, the company has to work on and improve its R&D so as to avoid similar incidents such as that of Crestor and Galida. R&D should firstly conclude and proven that the products being developed are safe and will not be the object of criticism by medical experts. The company should also work on its reputation. Fortunately, they already figured this out. A good Public Relations practitioner should be hired to clear the name of the company. The company should also improve its logistics to keep in track and manage drugs that are difficult to obtain and are limited in supplies.     Credit:ivythesis.typepad.com

ASTRAZENECA PHARMACEUTICAL COMPANY: CASE STUDY

Introduction One of the international pharmaceutical companies struggling to compete in the pharmaceutical market is Astr...