International Management 7 Essay Example | Topics and Well Written Essays - 1000 words

International Management 7 - Essay Example This led to the two companies forming an alliance to benefit fro each other's strengths and share in the weaknesses. In 2001, Lenovo was the biggest computer company in China and its business was booming since they did not have any serious competitors. Moreover, China had not joined the WTO; hence foreign firms did not have access to the Chinese market. Lenovo therefore saw no need in forming an alliance since the conditions were good for them. However, in 2004, the business environment changed tremendously with Dell emerging as a serious competitor locally. Also, the Chinese market opened up to foreign companies, depressing prices and reducing margins (London, 2005). In 2004, the Chinese companies experienced pressure from foreign firms, which flooded its market with cheaper products, posing a serious threat to the local firms. This pressure transformed Lenovo from being a local Chinese company to a global one, selling 60 per cent of its products to other countries. Lenovo Group's results for the second fiscal quarter of 2006 saw the company's consolidated revenue increase to US$ 3.7 billion. The firm's shipments globally increased by about 10 per cent, this being higher than the industry's average of 8 per cent, with most of the growth occurring in China. This growth has been attributed to an improvement in the company's operational efficiency due to restructuring efforts by the company. However, Lenovo faces some challenges in some of its segments due to competition and slow growth in the mature PC market. Lenovo's brand awareness in the US is very weak compared to that of China, which has strong sales, providing the company with the necessary cash for sustaining losses in the overseas market. Lenovo Group is faced with big challenges in the global markets, notably the tough international price competition. Part Two The Beijing Businessville Hotel and Around the World Hotels alliance Issues need to be considered Beijing Businessville Hotel and Around the world Hotels need to put into consideration a number of factors before they get into an alliance. This is due to the differences in their current environments as well as other key factors. Both hotels must consider how the economic system of the new venture country will affect their business since they operate in two different economic systems. They must also consider the legal systems, political systems, physical infrastructure and technical know-how of the country they will be operating in. They must also find ways of adjusting to these new conditions in order to operate optimally (Lockyer, 2007). Moreover, there are socio-cultural factors to be considered seriously before the alliance. Such factors include the language used by the host country, religion of its people and education. Cultural factors include the beliefs of the people in the host country, their norms as well as values. They must also bear in mind the attitudes of the people in these countries with regard to such issues as change, individualism, materialism, time and work. Moreover, individual and group employee behavior must be seriously looked into, focusing on issues such as

Six Stages Consumer Purchasing Process Marketing Essay

Six Stages Consumer Purchasing Process Marketing Essay Consumer buying behavior is study based on consumer purchase decision making process and act of consumers involved in buying and using products. (businessdictionary.com, 2010). Understand the needs of consumers and their purchase behaviors are important when a marketer comes to success delivering products to the market. (Sheth, 1973) However, the most challenging thing about that every consumer is unique and has his own reason for purchasing a particular product in satisfaction of his needs and wants. Consumer buying behavior also trends to move with change continually in influential factors. As marketers, they must know what factors influence consumer purchase. The earliest literature review on consumer buying behavior is the book of Golden Rules of Business Success by Tao Zhu Gong (Fan Li, 439BC), which record about the importance of understanding the current and forecasting the future consumer purchasing trends, and then educating consumers, thereby influence their purchasing decision (Kotler et al, 1994). There is a wonderful example of how does Apple through evaluate consumer behavior to obtain an effective online marketing. Apple assume about consumer behavior are reflected in their online shopping. In consideration of an assumption for consumers time presses and technical savvy, Apple focus on their products and technology, and design with a tag relating to their core products like iPod, iPhone, Mac and iTunes in website. The design aim at facilitate information intensive and more convenient to consumers online shopping based on Apple behavioral assumption for consumers. This is a minimalist method that Apple assumes their target consumers are suspicious of hard sell, so Apple tries marketing toward soft sell approach. 2.2 Six Stages Consumer Purchasing Process A consumer gets through six stages in any purchase (Vashisht, 2005) (see Figure 1). According to this model, a consumer must first be recognizing a problem based on his needs. This perceiving could be external stimulated by marketing communication, physical cues or seeing the product in use (Neal, 2006). When the consumers are aware of they need, and then meaning the identification of product consumer needs, this stage depends on how important the product is to consumer by socially, economically and psychologically (Adcock, 2001). Once the consumers have recognized a problem, they enter the information search stage on products that look for solutions to their problems. Consumers could undertake both an internal search (memory), and an external search from commercial or public sources (Belch, 2007). Consumers will also tryout the product if possible. The consumers will have a rank or shortlist from which they will buy the products by then. After the information search, the shortlisted products will be compared and evaluated by product attributes, subjective factors or personal criteria (Gilligan, 2007). By the end of alternatives evaluation stage, the consumers would have decided on an ideal product to buy. When the alternatives have been evaluated, the consumers will decide to purchase product includes from whom to buy, where and when to buy, even whether to buy (Vashisht, 2005). Khosla, Swati (2002) notice that marketer must facilitate the action of consumers on purchase intention. In the final stage of post-purchase evaluation, the consumer compares it with his expectations and ranks his purchase levels of satisfaction. The evaluation determines if the consumer will purchase this product again and tell others (Mullin, 2008). With the newest MacBook in June, 2012, a case about the influence of Apple successful marketing on a typical consumers purchase decision making process based on six stages mentioned above. At first a consumer is going to recognizing need. This problem is recognized by the stimulus, like Apples secretive press conference. The result as may not be a truly essential item but still become his needs and he so desperately want it. After recognizing his needs, consumer starts an information search stage. Depend on a high interest, he is going to search all pertinent information for the newest MacBook, because he want understand it better, it include opinions for others and reviews to weight his own options. During this consumer to evaluate the alternatives, the result in the newest MacBook is very different from others and it is an innovative product. Now to his purchase decision, he is inclined to purchase the newest MacBook base his evaluations on a truly need level. Lastly, when he has gained the newest MacBook, he feels satisfaction on the post purchase. 2.3 Factors Influencing Consumer Behavior Various analysts categorize the many factors influencing consumer behavior in different classification. Relevant ways are internal and external factors by Koudelka (1996) and categorization in to sociocultural and psychological factors by Hitesh Bhasin (2010). Mowen and Minor (2009) identifies five factors, which they categorizes in to Personal, Social, Cultural, Psychological and Situational factors effect on consumer purchasing decision (see Figure 2). This way is also endorsed by Kujnish Vashisht et al. (2005). 2.3.1 Personal Factors Gilligan (2009) opinion that each of us is unique traits such as age, knowledge, profession, personality, lifestyle and financial situation will influence our consumer behavior. Kotler (2009) identifies that individual factors are highly linked to the human psychological factors. According personal factors, Apple will segment market into a meaningful consumer groups, better serve toward target consumer groups, provide differentiated serve to target consumers and positioning themselves in the minds of consumers. Another compelling example highlights how does Apple utilizes personal factors to implement their marketing successfully. Due to Gilligans opinion for everybody is unique, Apple allow consumer according to their own favor to download the different software in their devices so that assemble into a unique product for theirself, such as iTouch allow consumers to download their own favor games, music or moves by iTunes, thus everyone has a unique iTouch that should aim to maximize consumer satisfaction. 2.3.2 Cultural Factors Bob Perry (2009) suggests that cultural factors has most important effect on consumer purchasing decision due to they are the major cause of a personal needs and behavior. Cultural factors include personal value, attitude, perception, etc. cultural factors dominated by personal social culture, geographical area, education level or religious belief and life experiences of shape the personal consciousness or behavior ways (Wilson, 2009). Berkman (1986) note that social status also plays a role will be reflected in the consumer purchasing habits by a combination of income, wealth, education, occupation and others. For example, consumers used to measure their social status by their consumption level, higher consumption level represents the higher social status, Apple successful utilizes this variable to induce consumers purchase Apple product on an expensive side. Owning an Apple product has become a contemporary social sign. It means that youre doing well enough financial conditions to piss away on a higher-priced consumption level. 2.3.3 Social Factors Human beings live in a society and social factors are really important influence for individual buying behaviors. Family members, friends, relatives or colleagues often form reference groups who play an important role in influencing the purchasing decision of individuals (Hoyer Haythornthwaite, 2002). Hence, Apple did a smart application about networking, public forums discussion, and online reports share to indirect influencing the consumer emotion. Based on the modern socially-connected world, Apple marketing has benefited to public praise, word of mouth way, social proof or media hype by this variable (Macinnis, 2010). 2.3.4 Psychological Factors Psychological factors include personal motivation, views, needs, attitudes or perception. Marshal (2007) believes that individually psychology is the biggest challenges will be managed. If a resource is scarce, people will put a lot of value to it, Fernbach (2012) said, consumers go nuts, and they want to buy it. The rarer a thing is, the more it is value has been become the Apples marketing mantra is used to driven consumers psychology. Fernbach also indicated two other psychological behavioral factors play a role in helping Apple draw their consumer behaviors to marketing are impatience and herd mentality. Apple thinks that when we see others doing something, we will automatically to following. When Apple release iPhone 5 in September 21st 2012, many consumers take the time to line up outside Meadows mall in order to first to get an iPhone 5 (Denver, 2012). Conformity psychological trend will add personal value, acknowledge and self-recognition (Herzberg, 1987). 2.3.5 Situational Factors Foxall (1998) identified that situational factors accounted for a large proportion of consumer purchasing decision. The act of purchase is influenced by many factors: physical environment (mood, weather or lighting), social surrounds (stores atmosphere) occasion (seasonal pressures) and even temporal perspectives (Stewart, 1987). 2.4 Types of Consumer Buying Behavior Henry Assael (1987) divide buying behavior into four types (see Figure 3), depending upon the extent of involvement and degree of difference among products: complex buying behavior, dissonance reducing buying behavior, habitual buying behavior and variety seeking buying behavior. 2.4.1 Brief Four Types of Consumer Buying Behavior Habitual buying behavior in results when the consumers choose between different substitute products with same features and functions, consumers will go for the one that they has been using before or familiar with it. Kotler (2009) is of the opinion that more due to brand loyalty than habit. Variety seeking consumer buying behavior is a randomly buy, the result when the consumer has decided on a different product every time. Adcock (2001) holds that switch a new brand not due to dissatisfaction for old brand, it only satisfy they to try out the new one. Dissonance reducing buying behavior as the third, consumers will be highly involved in this type of buying behavior due to the cost and risk of the purchase, but will recognize less or no product difference between the brands. They feeling distrust or disappoint (Wilson, 2009). Complex buying behavior takes place when highly involved consumers who compare with full brands of the products in the market. This type of consumer will go through a relative lengthy stage of information search and evaluation based on their needs (Baker, 2003). 2.4.2 The Application for Apple Company The analysis shows that four types of consumer buying behavior-based, Apple successful built their brand loyalists, this type consumers loyal to Apple brand goes beyond the product itself. For example, the loyalists who purchase Apple Mac because of them like and believe in the Apple brand. Apple positions their brand values in mind of consumers. Apple applies these values to design anything. If Apple were to sale a car as result in they should be also successful with their loyal consumers due to loyalists will believe that the same perceived across every Apple product they offer. In this research, according to the concepts, influential factors, purchasing decision making process and types of consumer behavior, consumers gender, age, education level, and income level as the most important demographic variables will be involved in Apple marketing. Apple applies these individual demographic factors to create marketing mix in order to cater consumers satisfactions. These demographic factors play a major role in consumer purchasing decision making process. Hence, the hypothesis one was stated as follow: H1: The significant differences exist in the relationship between demographic variables and consumers intentions to purchase Apple product. 2.5 Marketing Marketing Mix Adock (2007) using Neil Bordens 4Ps (1953) (see Figure 4), identifies marketing is that a right product, in a right place, at the right time and at the right price. Around this conclusion, the market competition between the businesses has moved from product, price, place and promotion to a single p-people, and that people are the consumers. Marketers are able to obtain more consumers that play a major role in deciding the winner in a diverse, complex and rapid changing situation (Uysal, 2005), because of they recognize that it look unlikely to produce one product that will satisfy all consumers in this competition. Instead, marketers must plan marketing mix to guide marketing. The marketing mix is the strategic framework to focus on developing best tactics and strategies to achieve marketplace success based on objectives of marketing. Marketing mix also as a strategic tool is that used in marketers to communicate their marketing objectives and control variables to their target market (Kolter, 2001). It includes 4 types of variables in marketing mix, also called the 4Ps: (1) product: supply of a tangible or intangible item to meet the needs of consumers, such as brand name, functions, design or packaging etc. (2) price: the amount of money a customer pay for the product, it may include pricing, discounts etc. (3) promoti on: the methods of communication that companies to delivery information to consumers, the means like advertising , sales promotions etc. (4) place: a location where is consumer to purchase, the decision such as distribution channels or transportation (Clemons, 2006). 2.6 The Extended Marketing Mix The Extended Marketing Mix of Booms and Bitner (1981) also called 7Ps (see Figure 5), as marketing tool that increase 3 variables based on 4 traditional Marketing Mix framework for seven. The 7Ps model is more useful for technological-intensive industries to attract and retain their consumers (Mauborgne, 2004). The expanded the marketing mix by replenishing the following three additional Ps: People refer to all individuals directly or indirectly involved in the consumption process. They include the workers, employees, management and consumers themselves. Process as methods, procedures of providing quality services and products and is an essential element of the marketing mix. Physical Evidence refers to both tangible and intangible ability and environment in which the services products are delivered, such as buildings, stores, experience or customers satisfaction (David Pickton Rosalind Masterson, 2009). The benefits about applying the marketing mix are that help marketers to translate their competitive advantages to target consumers helps with goal achievement and promote customers satisfaction (Rice, 1993). A criticism stated that traditional marketing mix is too simply due to consumers environment has become more complex now (Chiliya, 2009), so, in order to extend the usefulness of it, I will try to best research the influences of the extended marketing mix on Apple by a successful 7Ps strategy. Under this criticism, the hypothesis two was stated as follow: H2: The significant differences exist in the relationship between demographic variables and consumers responses for the Apple marketing mix. 2.7 The Application of Marketing Mix for Apple Company If use one word to summarize Apple marketing mix, it should have to be a differentiation. Apple makes huge efforts to differentiate their anything from their competitors. There are several typical examples to respectively reveal how the marketing mix of Apple can differentiate others in success. 2.7.1 Product Almost everyone knows that Apple products are distinct, unique and different from their competitors. All products of Apple succeeded in its innovation for superior design and high-tech functions stand out from their competitors (Diana Samuels, 2010). Apple has been a unified design philosophy is based on their brand cultural for total products. They using similar word named their products: iPad, iTouch, iPhone, iAnyting to create and foster brand identity to consumers (Nick, 2010). In addition, Apples core competitive advantage is control over experience of users by a user-friendly user interfaces and a digital hub strategy with iTunes and App store, etc. Apple has successful integrated hardware and software services from a single supplier to monopoly operations (Arthur, 2011). The long awaited of iPhone5 has just launched and a lot of new design for a smaller dock connector, taller 4-inch screen, 20% lighter than the older version and 18% thinner. The appearance design will deal for users to holding with just one hand. Camera, battery life also has improved and the functional features will support LTE (The Guardian, 2012). And the graphics and processor are twice as faster than iPhone4S by A6 chip. The iPhone5 is identified as a most high-end product in current smartphone market. 2.7.2 Price Premium price is well known as price strategy in Apple, the biggest reason for the success of Apple premium price is that Apple provides a distinct products services and it different from its competitors, so prices will automatically rise and higher than others depend on the distinct technologies provided by each product (Cohen, 2011). The other tactics is skimming price has a great result of sales for Apple. Each time the Apple launch a new product, they will charge a higher price with a hunger sale that they confirm consumers will pay (Benjamin, 2012). And later introduces lower price version with fewer functions (for example, iPod) or a newer version with a higher price (for instance, for the pricing of iPhone 5 is same as previous versions and the older versions will drop pricing) (Jemima, 2012). As the early purchasers are satisfied, and then following the demand curve, the price will be lowered. 2.7.3 Place Apple Store has already successful out there around the world in different places, and will continues expanding in key locations around the world to improve their capabilities of distribution. Not only Apple Store provides to consumers a comfortable atmosphere of shopping, but also delivers a high touch shopping experience and education mode (Wolf, 2011). The place tactics of Apple Store is attention to detail layout, services like the larger Genius Bar and comfortable product-display tables. Consumers can stay in Apple Store anytime they want playing with the any products with website and nobody will boot out them to leave (Brownlee, 2012). 2.7.4 Promotion Apple is very active in its promotional tactics for create hype towards public. The main method is advertising, it can be found on anytime, anywhere and any way (Sean, 2010). This effort has successful in creating excitement and curiosity before the induction of new products every time. Today, the logo of Apple has become one of the most recognizable signs (McManus, 2012). However its worth mentioning, the point of never changed is that Apple Inc. always keep a distinct and consistent style on its advertising (Gilmour, 2011), such as the commercials of company is focused on innovation and the iPod focused on the coolness. The personal selling is one of promotional tool for Apple Inc. (Duckett, 2009) Apple Stores always employ many young and knowledgeable sales representatives to serve their consumers better. Additionally, Apple knows that the word-of-mouth is usually as a more usefully and effective reference for consumers purchase their product (Martin, 2008). 2.7.5 People The continued effect of Steve Jobs celebrity charm brings a large number of Apple fans (Dent, 2011). New Chief Executive Officer of Apple is Timothy D. Tim Cook and today, Apple Inc. owns a various members who are working together with mutual different technology and knowledge area in order to create more effective products and services. 2.7.6 Physical Evidence Distinct design style and comfortable shopping atmosphere environment is major reason of the physical evidence strategy succeeded in revolute the traditional displays (Rachel Lamb, 2012). All experience touch point strong the Apple brand. Moreover, the Apple logo has evolved to an Apple with a bite taken out now. 2.7.7 Process Apple Company seeks to attract new consumers and retain their loyalty through focus on customer service (Peter, 2009). The service consultants are 24/7 available for the best service to their all users in order to help them optimize solution at the first moment. One to One service will help consumers do more than when they after purchase a new Mac (Grace, 2011). Apple has expanded their delivery channels in recent years such as the MacWorld Expo. Although the marketing mix of Apple has been very successful, but it still lead to the difference exist in consumer behaviors. Under this line, the hypothesis three was identified as follow: H3: The positive relationship exists between the consumer buying intentions for Apple product and their perceptions for Apple marketing mix. 2.8 Relevant Theories and Models The objectively explanation theories models to complex consumer buying behavior actions tool a major part in this subject, which based on economics, environics, sociology, ethnic and cultural studies, political science, philosophy, marketing science, psychology, behaviorism and anthropology (Schiffman, 1993). These also bring the wealth of valuable literature available on this subject. 2.8.1 Marshallian Theory According to the economic doctrine by Smith and Jeremy Bentham (1879), Marshall propounds the Marshallian model that assumes individual buyer will spend his income on a rational commodity and conscious economic calculation. This theory attempt to driven the buyers equilibrium for their psychological needs of commodity and individual financial situation with supply price (Runyon, 1987). Lets go back to 2001, one of the more prominent example is when iPod introduced by Apple, there were already many other MP3 players on the market, iPod were not the first, it were a new technological product that were unfamiliar to people, and iPod were also on an expensive price. Under the background of global economic crisis, Apple was realizing that likely to be missed out on a potential sales opportunities due to the middle and lower classes whose income levels are so low, and Motherbaugh (2008) indicates that the middle and lower classes make up 75% of global structure for the time. According to this reason, Apple changed the product and price of iPod in order to accommodate to meet a social-demographic structure differentiation. Apple introduced the different memory capacity of iPod such as 8G, 16G etc. and different models like a smaller iPod shuffle. Apple did a clever move by create the new marketing mix to cater the different purchasing power based on different social demog raphic structures. Applying this principle of theory, Apple has successful seized the potential consumers psychology, create products differentiation to handle a consumers needs and strong urge to purchase on a premium price. The main criticism of this theory is that consumers are get affected by other variables such as marketing and social factors observably. Consumers are unlikely to be due solely to the prices of Apple products to decide their purchase intentions. Hence, the theory is ignores all the other aspects, is too simple and inadequate (Arena, 2003). A second view is that the consumers are not likely to fully aware of the market, Kotler (1979) believe that this theory is unrealistic. 2.8.2 Maslows Hierarchy of Needs Theory Maslow is a well-known hierarchy of psychological needs theory (Abraham Maslow, 1943). Maslow categorizes five basic levels of human needs in lower level needs to higher level needs (see Figure 6), range from biogenic need to psychogenic need (Kabuk, 1997). Loudon (1993) support this model is that better understands the consumers motivation and used to market segments. Wahba Brudwell (1976) has argued that found little evidence to rank the hierarchy of needs in their extensive research. Manfred Max Neef (1990) has also argued the result for the hierarchical human needs have not included all, such as freedom. Maslows model has also been criticized as difficult to categorize because of the ever-changing needs along with a changing environment (Della Bitta, 1993). Despite the much criticism on this model, the marketers of Apple think that it is useful in marketing mix strategy as result in it can provides an understanding for consumers perceptions and motivations. For instance, there is main motivation for consumers to purchase an iTouch are to listen to music, play games, or see the moves and as a higher status symbol. These are the primary drives of their motivations to purchase iTouch. The drive of motivations is a pressure that is come from the consumers by their social groups and intentions are the final satisfaction of the buying cycle. The motivate level can be measured through the iTouch if satisfy the consumers expected for quality. According to the Maslow Theory of Need Hierarchy, the consumers purchase the iTouch in order to satisfy their wants and needs due to the iTouch as a luxury product that makes the consumers feel pleasure and satisfy the highest hedonistic needs within total hierarchy. Additionally, Apple use this hierarchy as a comprehensive framework to guide their create advertising through appeals for the need level towards target consumers, focus on their distinct products features and service experience. 2.8.3 Pavlovian Model OShaughnessy (1992) describes that the learning of Pavlovian model is also called classical conditioning (see Figure 7). Pavlov (1890) explains that the relationship with drive, cue and response results in habits. This model contributes to provide insights to research concerning consumer behavior and marketing. Apple marketing is like the dag of Pavlov, the reason is that once the bell of Pavlov rings, numerous consumers are queuing outside the Apple retail store to purchase Apple product around the world, a huge proportion of consumers are almost become habit. For instance, when the iPad 2 was introduced in last year, nobody mind or even aware of its camera was less than 0.92 megapixels, but the Motorola Xooms was 5 megapixels and clearer. The weakness of Pavlovian Model is inability to adequately explain the interpersonal influences, perception etc. to be important result (Gatersleben, 1998). For example consumers may not be able to purchase the Apple product under their financial situations. However, this model contributes to Apple by offers industry insights, in term of guidance for advertising strategy to target consumers. Apple active in a hype way and repetitive slogan has frequent appear in anywhere and anytime to arouse consciousness of consumers and strong brand identify. 2.8.4 Howard Sheth Buyer Behavior Model Howard Sheth Model was considered as an advanced theory of consumer behavior by most scholars (see Figure 8). The major advantage of the model presents with a large number of variables has been linked in the consumer purchase decision based on behavioristics (Bridgewell, 1987). This model help Apple to identify that their target consumers individual characteristics, consumer purchasing decision making process, interaction of their marketing mix stimuli, and consumer responses on Apple products under the macro environment stimuli depend on internal personal stimuli and external force stimuli. Apple applies it as guidance of marketing mix that better understanding for a relationship between the stimuli and the response of the consumers by behaviorism. However, in reality many decisions are not made in awareness of a determined problem by the consumer. However, the limitation of study is that the model too comprehensive involvement of almost all variables and many consumers decisions are not awareness, itll difficult to measurement and cannot be realistically tested (Francesco, 1976). 2.8.5 Porters Generic Strategies Michael E. Porter (1995) developed a model of generic strategies to how a company to sustain the competitive advantage and better position in a market (see Figure 9). Porter suggests three generic strategies of achieve a market leadership position, which are cost leadership strategy, differentiation strategy and focus strategies based on target market. Cost leadership is where the company must offer lowest costs than its rivals (Thompson, 2007). Cost leadership can be achieved by cost-saving, minimizing waste, standardized product and large scale production (Martin 2006). Differentiation strategy makes use of unique product, special brand, innovative services and superior value to capture the market (Stahl, 1997). Focus strategies concentrates on a limited range of market segments. Focus strategy can gain both cost leadership and differentiation (Stopford, 1992). Critics have always questioned the use of generic strategies, its lack specificity, lack flexibility, and are limiting nature (W.Chan Kim, 2009). Two objectives of cost leadership and differentiation will likely conflict mutually (Baden-Fuller, 1994). Based on Porters model, Apple is pursuing a broad differentiation strategy to marketing by providing a wide range of products and services for a high quality, luxury design, distinct features, personalized and user-friendly service. The products and services are breaking through all of race, gender, age and culture targeting populations. The example is personal computers products, such as the iMac, iBook. Apple computers pay more attention to innovation rather than pricing products at lower level. The Macintosh operating system of Apple computers is a unique system in the computer industry. Apple marketing is able to charge a premium price on their products by their differentiation strategy. 2.9 Current Market Trends and Challenges facing the Industry Consumer electronics industry is a very fast moving and continually changing marketplace where new product is launched on an everyday basis. Today the consumer electronics companies work on the mantra of providing more significant product at faster speed than their rivals (Alan Flitcroft, 2008). Time is a key element where the new winner innovative competitive rules at speed (Hart Murphy, 1998). Every day one marketer is rolling out new technology. In such a trend, no one knows what each marketer will bring out tomorrow that will pose threat to others. So fast innovation pace makes the companies challenge is that it have been hit by more competitors who have entered market (Carter, 2005). Thus, the marketers must seek for their competitive advantage, focus on innovate the new selling points to attract or retain customers. The words of Hart (1999) must be able to getting different, which especially in the top managed company to go on the market in an invincible position. 2.10 Conceptual Framework The purpose of this research is to identify the influence of marketing mix on attitudinal buying behaviors consumers. Determine the significant differences exist in the relationship between Apple marketing mix perceptions of consumers and their con

Animal Abuse Essay examples -- essays research papers

Animal Abuse Animals are sometimes treated as friends but are also treated as enemies. We keep them as pets, but if it suits us, we slaughter them in their own habitats and in slaughterhouses. If we could kill them in a quick and pain-free way, like a special injection, which is not harmful to us, it would be a lot nicer to the animals being killed. However, the scenes in slaughterhouses are ones of bullying and torture. The people hurt the animals in the most horrific ways possible, for example, slitting their throats while they are still alive and dropping them from great heights to break their legs and necks and other bones. These are just two of the many ways of slaughter that are used today. Meat is needed for a good healthy diet. We should not hunt animals for sport ...

Analysis and Critique on French Education System

In my opinion, the French education system is faulty and undeserving. Meisler portrays for us in animated detail, the torture that French pupils go through in their schooldays. It is also relatively easy for me to understand this scenario because in my country, India, the scene is strikingly similar. It is also the reason that I am here right now–in the United States getting the benefits of the best undergraduate system in the world–to take home with me the accrual of a â€Å"liberal† education. I find the lack of French students in an American institution surprising. Surely French parents will think and re-think before making a choice between their child†s future and the haughtiness of their country†s culture. Do they really want risk their children to go through a system where the chance of getting the baccalaureate degree is only one in three? What is the point of â€Å"attempting† to get an education? The country†s literacy rate reads ninety-nine percent yet Meisler indicates that two-thirds of France is without a reputed degree. These statistics are unheard of in the rest of the world. Students who do manage to get this degree get celebrity treatment and many go on to become Nobel laureates. Nevertheless, what of those who not make it? They live an obscure life, affected by their failure until their dying day. This also happens to be the reason for France†s contemptuous behavior towards tourists. One often comes across a French waiter or low-level bureaucrat or store clerk behaving defensively as they had done with their teachers, desperately trying to evade disapproval. Fear being their motivation rather than the pursuit of success. French education seemingly preaches that France is the world and that there is nothing beyond. Meisler has pointed out a symbolic example when he says that, in English, people usually try to judge the level of comprehension of the person with whom they are conversing. They then try to adapt to the same wavelength so that the conversation carries on with least difficulty. However, to the French, this is an alien concept. If you cannot speak the perfect grammar that they as children have been taught in medieval fashion, you become an outcast. I think the French have to modify their philosophy and look beyond defining â€Å"education† as â€Å"academics†. There is much more to a complete education than precision of mind, command of language and a huge store of memory. They have to realize that Nobel laureates do not mean much until they are representatives of their entire country. Although France may have had several more Nobel laureates than the United States, it has achieved this at a price. The price of disregarding their â€Å"lesser† citizens. The United States on the other hand has gone the Darwinian way–the process of natural selection–and has let the people discover themselves and bring the best out in them. They have not had them molded to become superior beings–which in my vocabulary reads as â€Å"robots†Ã¢â‚¬â€œwhich in turn is defined in the Webster dictionary as â€Å"an efficient insensitive person who functions automatically. † The French education system is in desperate need of a complete overhaul. Otherwise, their nation is going to lose all of the little importance that they have in the world today because of their immodesty and arrogance. France is and will be nothing more than an angry yapping poodle in the midst of uninterested, lazing bulldogs.

The Relationship Between Speech Production and Speech Comprehension and Thought

The Relationship between Speech Production and Speech Comprehension and Thought 1. Is it possible for a child to have the ability to produce speech without having the ability to comprehend speech? * The child must first able to comprehend the meaning of the language before they themselves can produce it. The basic of all language is meaning and without that, children could not begin to produce language meaningfully. Children need to be exposed to utterances with a clear connection to articles referred to before they themselves can begin sat such utterances.They will not learn language if all that they are exposed to is speech sound, no matter how many times it is uttered. 2. Which part of the brain that is related to language comprehension? * The left temporal lobe is thought to be critical for language comprehension and production. Wernicke's Area is the name of the specific region of the temporal lobe that is associated with speech comprehension, whereas Broca's Area is a region of the temporal lobe associated with speech production. 3.Does experience play important rule to help children in language comprehension and speech production? * Children must first be exposed to utterances and it is also necessary that these utterances are related to objects, events and situations in their physical environment and subjective events in their minds (desire, pain and love). Child’s experience with the environment and the child’s experience of its own feeling are assigning the meanings of the word and sentences. 4. Does imitation help children to learn language? Imitation, copying and repeating words loud, is not the fundamental factor for learning a language by a child. It cannot be regarded as basic factor, because it has some limitation. The first limitation is that â€Å"imitation† can apply only to speech production but not to speech comprehension and the second one is that â€Å"imitation† is not involved in construction of sentences. So , we can conclude that imitation is limited to the development of the articulation of speech sounds and the sound pattern of sentences.

Alternative Approaches to the Treatment of Diabetes essays

Alternative Approaches to the Treatment of Diabetes essays Alternative Approaches to the Treatment of Diabetes Diabetes is a general term for a disease caused by defective carbohydrate metabolism and characterized by abnormally large amounts of sugar in the blood and urine. Diabetes is usually classified into two types. Type I or insulin-dependent diabetes, formerly called juvenile-onset, usually occurs in children and young adults; and, Type II, or non-insulin dependent diabetes (formerly called adult-onset diabetes) is found in persons over 40 years old and progresses slowly (Funk and Wagnalls 183). Diabetes is considered a group of disorders with multiple causes, rather than a single disorder. The human pancreas secretes a hormone called insulin that promotes the entry of sugar glucose into all tissues of the body, providing energy for bodily activities. In a person with diabetes, however, the entry of glucose is impaired, either as a result of deficiency in the amount of insulin produced or of a blocking of the action of the insulin. Consequently, sugar builds up in the blood and is discharged in the urine. In a Type I diabetic, the problem is almost always a severe or total reduction in insulin production. In Type II diabetes, the pancreas often makes a considerable quantity of insulin, but the hormone is unable to promote the entry of glucose into tissues (Funk and Wagnalls 183). There are many short and long-term complications from diabetes. If untreated Type 1 diabetes can be quickly fatal. It is accompanied by nausea, excessive thirst, frequent urination, extreme weakness, abdominal pain, and rapid deep breathing. Failure to respond with injections of insulin can result in a diabetic coma, or death (Medical Advisor 319). Long-term complications of diabetes include damage to the eyes, nervous system, kidneys, and cardiovascular and circulatory systems, as well as weakening of the bodies overall resistance to infection. Complications from diabetes are the pri...

Political Philosophy essays

Political Philosophy essays I am not impressed with Socrates arguments of the Laws, particularly the contract argument. While it is true that there is a certain type of obligation, or contract present between a citizen and the state in which he is a part of, that does not give the state the right to wrong him and treat him unfairly, which was clearly the case in this situation. The city wronged me, and its decision was not right, (26). Socrates obviously believes this and he should in turn fight this injustice. Despite the fact that the contract or obligation forces him to obey the laws of Athens, he should also have an obligation to himself and his believed rights as a human being. A contract works both ways even though throughout his life Socrates has indulged in all the advantages of Athenian citizenship he has also done his part and been a model, if not exemplary citizen of the state of Athens. He has done a great deal for the intellectual and cultural life of Athens and deserves a great deal of respect and gratitude from the state. Athens may have given him a great deal during his life, but does that then give them the right to take away the two most important things to him, his life and his freedom? In escaping, Socrates would violate the laws of Athens, while doing injustice to it. However, in its decision concerning the life of Socrates, Athens has also done him an injustice. Laws are not always fair and in certain circumstances they must be challenged and fought against. If no one ever questioned a law then they could never be changed or modified. Society needs to continually evolve and progress. Changing laws that are unjust ensures this development. If laws were never challenged then society would still be sustained by laws and regulations that are clearly outdated and completely irrelevant to the current time. Socrates must live, if not for himself and his friends, ...

Burkean Parlor Definition and Examples

Burkean Parlor Definition and Examples The Burkean parlor is a   metaphor  introduced by philosopher and rhetorician Kenneth Burke (1897-1993) for the unending conversation that is going on at the point in history when we are born (see below). Many writing centers employ the metaphor of the Burkean parlor to characterize collaborative efforts to help students not only improve their writing and but also view their work in terms of a larger conversation. In an influential article in The Writing Center Journal (1991), Andrea Lunsford argued that writing centers modeled on the Burkean parlor pose a threat as well as a challenge to the status quo in higher education, and she encouraged writing center directors to embrace that challenge. The Burkean Parlor is also the name of a discussion section in the print journal Rhetoric Review. Burkes Metaphor for the Unending Conversation Imagine that you enter a parlor. You come late. When you arrive, others have long preceded you, and they are engaged in a heated discussion, a discussion too heated for them to pause and tell you exactly what it is about. In fact, the discussion had already begun long before any of them got there so that no one present is qualified to retrace for you all the steps that had gone before. You listen for a while until you decide that you have caught the tenor of the argument; then you put in your oar. Someone answers; you answer him; another comes to your defense; another aligns himself against you, to either the embarrassment or gratification of your opponent, depending upon the quality of your allys assistance. However, the discussion is interminable. The hour grows late, you must depart. And you do depart, with the discussion still vigorously in progress.  (Kenneth Burke, The Philosophy of Literary Form: Studies in Symbolic Action 3rd ed. 1941. Univ. of California Press, 1973) Peter Elbows Yogurt Model for a Reimagined Composition Course A course would no longer be a voyage where everyone starts out on a ship together and arrives at port at the same time; not a voyage where everyone starts the first day with no sea legs and everyone is trying simultaneously to become acculturated to the waves. It would be more like the Burkean parloror a writing center or studiowhere people come together in groups and work together. Some have already been there a long time working and talking together when new ones arrive. New ones learn from playing the game with the more experienced players. Some leave before others. . . .A competence-based, yogurt structure creates more incentive for students to invest themselves and provide their own steam for learninglearning from their own efforts and from feedback from teachers and peers. For the sooner they learn, the sooner they are to get credit and leave. . . .Given this structure, I suspect that a significant fraction of skilled students will, in fact, stay for longer than they have to wh en they see they are learning things that will help them with other coursesand see that they enjoy it. It will often be their smallest and most human class, the only one with a sense of community like a Burkean parlor.   (Peter Elbow, Everyone Can Write: Essays Toward a Hopeful Theory of Writing and Teaching. Oxford Univ. Press, 2000) Kairos and the Rhetorical Place [W]ithin a rhetorical place, kairos is not simply a matter of rhetorical perception or willing agency: it cannot be seen apart from the physical dimensions of the place providing for it. In addition, a rhetorical place is not just a matter of location or address: it must contain some kairotic narrative in media res, from which discourse or rhetorical action can emerge. Understood as such, the rhetorical place represents a place-bound temporal room which might precede our entering, might continue past our exiting, into which we might even stumble unaware: imagine a true Burkean parlorphysicallyand you will have imagined one example of a rhetorical place as I have tried to construct it.​  (Jerry Blitefield, Kairos and the Rhetorical Place. Professing Rhetoric: Selected Papers From the 2000 Rhetoric Society of America Conference, ed. by Frederick J. Antczak, Cinda Coggins, and Geoffrey D. Klinger. Lawrence Erlbaum, 2002) The Faculty Job Interview as the Burkean Parlor As the candidate, you want to imagine the interview as a Burkean parlor. In other words, you want to approach the interview as a conversation in which you and the interviewers create a collaborative understanding of the professional relationship that might result from the interview. You want to walk in prepared to have a smart conversation, not prepared to give a thesis defense.​  (Dawn Marie Formo and Cheryl Reed, Job Search in Academe: Strategic Rhetorics for Faculty Job Candidates. Stylus, 1999)

Strategy implementation Assignment Example | Topics and Well Written Essays - 500 words

Strategy implementation - Assignment Example The names on the left are pocket-friendly; they are cheaper the further the arrow goes. As one move, the opposite direction to the right brands gets more expensive prices rise. Across the vertical side on the horizontal axis brands are more expensive. The price increase so does the content of the brands. The arrows also mean that one can get expensive and yet light brands or heavy brands depending on the closeness to the axis. All brands above the horizontal axis are heavy brands regardless of the price it costs. All those below the horizontal axis, there are brands that are light whether budget wise or are on the premium side. Above is a perceptual map for the shampoo market. Just like the beer perceptual map, the shampoo perceptual shows the different segments formed in the market for the products. There are different view and test that different people in the market will want. A Price of a product is always a critical factor to consider when purchasing a product. In the case of different types of shampoos, have different scents. The Net worth of a company shows how much a company would remain with is if it decided to end its business operations. When calculating the net worth of an entity or shareholders’ equity, sum up all assets both current and fixed and find the sum of all the liabilities the firm has. They include current liabilities and long-term liabilities To calculate the price-earnings ratio, one just finds the current price of the stock of a company and then divide it by earnings per share. In short, it is a ration of an organization’s stock price to that of the firm’s earnings per share. Outstanding shares are the common stock that a company authorizes to be issued and purchased by investors. Capital change will be the value in the equity column less the value in the increase of the company’s

Compare between two websites Essay Example | Topics and Well Written Essays - 500 words

Compare between two websites - Essay Example These websites provide various services and software products for business management. Halogensoftware’s products are more focused towards talent management part of the business, whereas, Successfactors’ solutions are related to execution of business. Halogensoftware provides following major product package: performance appraisal, goal management, competency management, career development and planning, integrated talent profile, employee on boarding, activity tracker, easy HRIS integration, job description builder and real0time reporting etc. On the other hand, product and service package of successfactors include, business alignment, people performance and integrated business-execution software solutions. Both organizations provide more or less similar range of software products. Halogen provides money back guarantee for its services where as successfactors display Deloitte’s rating for its products. Analysis indicated that the successfactors has better described and marketed their products. For example, both firms offer a product 360-degree feedback; however, successfactors has given a brief comparison of 360 degree and a regular manager feedback to show how 360-degree feedback is better and why should it is adapted. Then, a visual presentation, including snap shots of the software product is available for the buyer. The product consists of three broad sections of information: employee information, employee feedback, and overall rating. A section of â€Å"legal scan† is also provided to serve legal purpos es. On the other hand, Halogen has provided a brief overview about the features, results, and affordability of its 360-degree rater. For another product, Succession planning, halogen has emphasized its cost effectiveness and affordability. The â€Å"talent pool model† is the base for this product. Its implementation is in three phases: First, the firm understands its workforce potential. Second, it develops internal

Enterprise and Entrepreneurial Management Assignment - 1

Enterprise and Entrepreneurial Management - Assignment Example Most companies aim to make a business plan as it helps them in attaining stability and growth. Critical appraisal of the business planning process The business planning process itself has a lot of obstacles and this is one of the reasons many organizations do not make any business plans. These organizations in fact rely on the experience of entrepreneurs and top executives. Let us find out the obstacles faced in the business planning process. Idea generation The first step in a business planning process is to document which product or service the firm wants to sell. It is very relevant to find out and be clear on a business idea. Unfortunately, most business ideas may be implemented. This is because the top executives may not have conducted appropriate research on the customer market before coming out with a business idea. Another problem which individuals may face is the financial constraint. Most business ideas may not receive adequate financial funding. There are several problems which may lead to the failure of the idea. One is that the individuals who wish to launch a new product or service may lack the required skill and competence required, makes hurried decisions without making a thorough analysis of the consumer market or may be ignorant about what is to be done. Hence, most product or service ideas may miserably fail (Flint, 2002). ... These objectives need to be formulated in order to chalk out a path to attaining success. Individuals need to emphasize on certain aspects before formulating strategic objectives. These are monitoring alternatives solutions, future trends need to be predicted, problem areas need to be avoided and fixing both short term and long term goals (Ramanujam, Venkatraman & Camillus 1986). However, most planners may not be able to plan these objectives properly. This is because the above mentioned aspects need a lot of attention and lack of thorough research into these aspects may lead to wrong setting of goals. At times, the top management may set up unrealistic and unattainable goals. Market research and analysis Market research and analysis is a thorough analysis of the customer market and also seeks to find out the opportunities, strengths, weaknesses and threats. All in all in seeks to understand the product or the service market. All these aspects need to be researched in order to develo p a thorough understanding of the customer’s needs and accordingly develop specific abilities and investment required for the necessary resources. Sometimes, lack of thorough product or service market understanding, may lead to the focus on the line of product or service be either too broad or too narrow (Slater & Olson 2001). Also the specifications relating to the performance of the product or service, the prices, and the complementary product or service line may affect market analysis and research. If any of these aspects, have not been thoroughly researched then it may lead to severe problem in the implementation of the business plan. According to

Franz Marc Inspiration By Astronomy Essay Example | Topics and Well Written Essays - 750 words

Franz Marc Inspiration By Astronomy - Essay Example This is a journal that would later become famous due the circle of artists that collaborated in it (Gerald 16). In the year 1912, Marc met with Robert Delaunay; this was an artist whose style was identified by many artists as the futuristic. The futuristic aspect was majorly on the use of color. Roberts work is known to be a major influence of the work done by marc and mainly influenced by the style of futurism and cubism (Wolf, et al, 68). This influenced Marc’s work to be more abstract and stark in nature. The work by Marc was deemed as fascinating as he was able to draw some of his artistic aspects from astronomy. Some of the most famous arts that Franz Marc is known for are ‘The deer in the woods’, ‘the fate of the animals’, ‘the lamb’ and ‘the fighting forms’. Franz marc is known for his fascination in animals of which he incorporated in his paintings. Franz Marc paintings are known for the bright color aspects which man y critics have associated with some cosmology aspects. Cosmology is the study of origins of the stars and the fate of the bodies that forms the universe. Franz in some of his artwork associated mixture of color which is associated with some of the heavenly aspects.... Edmondo Bacci’s painting known by the name, oil with sand on canvas is an example of artwork that was inspired by Vasily Kandinsky and Franz Marc. In the Edmondo’s painting, the similarity to Franz painting is majorly associated with Franz work from the perspective that the three primary colors are the dominating colors in his painting (Marc, et al, 37). Edmondo having drawn inspiration of this art work from the cosmic bodies, Franz work can be awarded similar attributions in his work with the ‘Deer in the woods’. On the astronomical aspect the paintings by Franz marc can be associated by auroras, Auroras are colorful patters that are formed in the sky and are mostly occur in high latitude regions ( Liedke 6). These patterns are made of bright swirling colors that make them magnificent to look at. With the art work of Franz, the swirling effect that can be realized from the viewer’s perspective is relatively similar with the colorful patterns that fo rm the auroras. The first impression that one gets from the look of Franz’s painting is the colorful swirling image, the swirl effect has been referred to as the association with the genesis and the destruction of the heavenly bodies’ theories that have been put forth by many scientist. Van Gogh is one of the people who inspired the art by Franz Marc; van Gogh was popular among the greatest artists for his paintings that depicted the night skies. He is celebrated for his artistic powers in imagination of what encompasses the heavenly bodies. A piece of art that was created in the year 1889 known as the ‘starry night’ is a painting that was done by Van Gogh. This painting was considered as one of the major inspirations for most of the works done by Franz Marc. The inspirations that

Banking Project Research Paper Example | Topics and Well Written Essays - 1750 words

Banking Project - Research Paper Example The three liquidity ratios for the financial analysis are liquid assets to deposit-borrowing ratio, Loan to deposit and Net loan to total asset. These three ratios of both banks are discussed and analyzed below. Liquid asset to deposit borrowing ratio measures the availability of the fund with respect to its obligations. In the year 2010, CIMB Berand Islamic Bank- Malaysia had the capability of covering 34 % of short term obligations while Al-Rajhi Bank was capable of covering 33 % of their short term obligations. In the following year, The Malaysian bank liquid asset to deposit-borrowing percentage dropped down to 26 % and that of Al-Rajhi Bank dropped down to 30 %, this indicated that the liquidity of the Malaysian Bank was less in comparison to Al-Rajhi Bank. In the year 2012, Al-Rajhi Bank liquidity further increased making them capable of covering short-term obligations to about 32% while the CIMB Berand Islamic Bank- Malaysia was not able to increase or maintain its liquidity, which resulted in a major decrease in their liquidity. CIMB Berand Islamic Bank- Malaysia in 2012 was only capable of covering 12 % of short-term obligations. 2013 was a completely shocking for Al-Rajhi Bank as they were only capable of covering 10 % of their short term obligations, which shows that their liquidity dropped down by 22 % while CIMB Berand Islamic Bank- Malaysia maintained their ratio at 12 %. CIMB Berand Islamic Bank- Malaysia loan to deposit ratio in 2010 was 61% and that of Saudi Arabia Bank was 78%, which indicated that the Al-Rajhi Bank had low liquidity as compared to the Malaysian Bank. Year 2011 was other way round as the Al-Rajhi Bank had more liquidity as compared to that of the Malaysian Bank. A reverse patter n was again observed in 2012, which means that both banks were not affected by the external factor. In 2013 the liquidity of both banks increased which means that the both banks had more loans and comparatively less

International Marketing Case Study Example | Topics and Well Written Essays - 3000 words

International Marketing - Case Study Example He contended that a lot depends upon the differences in the extent of geographical location and the degree to which the company is centralized for decision making. International marketing is different from home-country marketing and the success or failure of the decision basically depends upon; International market situations happen to be multilevel in their decision focus, with a hierarchy of decisions from country assessment and performance measurement decisions through to more traditional marketing mix allocations and programs. For the purpose of this assignment we choose 'BARCLAYS BANK', a UK-based financial services group, with a large international presence in Europe, the USA, Africa and Asia. Barclays is one of the largest financial services companies in the world, In terms of market capitalisation. It has been operating for more than 300 years with more than 25 million customers and 118,000 employees in over 60 countries. Barclays origins can be traced back to a modest business founded more than 300 years ago in the heart of London's financial district when goldsmith-bankers provided monarchs and merchants money for funding their business ventures. John Freame and his partner Thomas Gould established one such in Lombard Street in 1690. The name Barclay became associated with the company in 1736, when James Barclay also became a partner. The company amalgamated with the London, Provincial and South Western Bank in 1918 to become one of the UK's 'big five' banks. By 1926 the bank had 1,837 outlets. The modern banking business though started picking up in 1925, with the merger of three banks - the Colonial Bank, the Anglo Egyptian Bank and the National Bank of South Africa to form Barclays international operations. This helped the bank in adding more business in Africa, the Middle East and the West Indies. Besides the banking operations the Barclays' group has business interests in a range of fields like fund/ capital management, investment advisors, insurance, etc. But for our study we'll limit ourselves mainly to the banking operations. Some of the historical milestones and salient features about the Barclays' operations are; Barclays acquired Martins Bank in 1969, the largest UK bank to have its head office outside London. In 1981, it became the first foreign bank to file with the US Securities and Exchange Commission and raise long-term capital on the New York market. Taking giant strides towards global acceptance Barclays listed its shares on the Tokyo and New York stock exchanges in 1986, thus becoming the first British bank to do so. In 2000 it took over the Woolwich, a leading mortgage bank and former building society founded in 1847. In July 2003 Barclays acquired the Banco Zaragozano, one of Spain's largest private sector banking groups, which was founded in 1910. Keeping pace with technological advancements Barclays started the telephone banking service Barclaycall in 1994 and later on-line PC banking in 1997. Barclays has also introduced

Banking Project Research Paper Example | Topics and Well Written Essays - 1750 words

Banking Project - Research Paper Example The three liquidity ratios for the financial analysis are liquid assets to deposit-borrowing ratio, Loan to deposit and Net loan to total asset. These three ratios of both banks are discussed and analyzed below. Liquid asset to deposit borrowing ratio measures the availability of the fund with respect to its obligations. In the year 2010, CIMB Berand Islamic Bank- Malaysia had the capability of covering 34 % of short term obligations while Al-Rajhi Bank was capable of covering 33 % of their short term obligations. In the following year, The Malaysian bank liquid asset to deposit-borrowing percentage dropped down to 26 % and that of Al-Rajhi Bank dropped down to 30 %, this indicated that the liquidity of the Malaysian Bank was less in comparison to Al-Rajhi Bank. In the year 2012, Al-Rajhi Bank liquidity further increased making them capable of covering short-term obligations to about 32% while the CIMB Berand Islamic Bank- Malaysia was not able to increase or maintain its liquidity, which resulted in a major decrease in their liquidity. CIMB Berand Islamic Bank- Malaysia in 2012 was only capable of covering 12 % of short-term obligations. 2013 was a completely shocking for Al-Rajhi Bank as they were only capable of covering 10 % of their short term obligations, which shows that their liquidity dropped down by 22 % while CIMB Berand Islamic Bank- Malaysia maintained their ratio at 12 %. CIMB Berand Islamic Bank- Malaysia loan to deposit ratio in 2010 was 61% and that of Saudi Arabia Bank was 78%, which indicated that the Al-Rajhi Bank had low liquidity as compared to the Malaysian Bank. Year 2011 was other way round as the Al-Rajhi Bank had more liquidity as compared to that of the Malaysian Bank. A reverse patter n was again observed in 2012, which means that both banks were not affected by the external factor. In 2013 the liquidity of both banks increased which means that the both banks had more loans and comparatively less

Summary Essay Example | Topics and Well Written Essays - 250 words - 91

Summary - Essay Example One does not have to complicate issues but rather perceive things as they are and slowly move to understanding the reason why they are as they are. The writer insists on keeping one’s eyes and mind open to diverse modes of reasoning. He explains that even in the darkness or blurriness of fog there seems to be specks of light. He states that in darkness there’s a great deal of light, the same lies for where there’s too much light. As he concludes, the writer describes the secret path to illumination. The writer talks about the ethics of journalism. This regards the type of imagery and language they use in describing events or people. He gave an example of black suspect whom the newspaper presumed guilty and as a result printed a photo that gave him a more sinister look that aimed at showing blacks are criminals. Ethics lay all round, including writing the truth in the newspapers and no amount of captioning can make a visual lie to be true. Disregarding the misrepresented information a lie still remains a lie. In conclusion, it is rather a question of ethical responsibility than just putting the message

E-Commerce and Economic Development in Angola

E-Commerce and Economic Development in Angola ABSTRACT In this report as the title tells, I approach the economic development of Angola in terms of one of its major developer, the internet and ecommerce. I have done this because it is often impossible to glean important facts and insights about such countries which a society pronounces poor or third world. In the chapters that follow, I will relate to the ecommerce and its effect of economic development of Angola, compare Angola with a developing country as well as with an underdeveloped nation. Firstly economic development is discussed in relation to electronic commerce in order to show the complexities and ease related to drawing a clear line between the two forms. Secondly economic development is discussed in relation to ecommerce, economy, culture, elements which influence the issue in one way or another. For, as shall be repeatedly seen, problems like economic support from a developed state have a close and continuing relation to the values and social structures which a society regards as stable and normal. My emphasis will be, however, on the problem itself, called ecommerce and its effect on the economic development of Angola. CHAPTER 1 INTRODUCTION Introduction Electronic Commerce Electronic commerce, generally identified as (electronic marketing) e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems for example the Internet and other computer networks. The total of trade conducted electronically has grown unusually with widespread Internet usage. The use of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online deal processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the deals lifecycle, although it can encompass a wider range of technologies such as e-mail as well. (Miller, 2002) Internet Ecommerce The previous ten years have seen the internet and e-commerce surface as fundamental features of our business, communal and educational life. Developments for example Web 2.0, the semantic web, e-government strategies, user generated content, virtual worlds and online social networks have redesign the way we commune, intermingle and transact. The Evolution of Electronic Commerce The numerous means in which business is carried out are based on established suppositions and accords between the parties concerned. Numerous procedures have been agreed upon to safeguard both the consumer and the merchant from deception or theft. Even in the simplest form of dealcash changing hands directly between buyer and sellera sales receipt is classically provided as a record of what turned out. As we move into the electronic business field, the means of protection become more and more concerned. The essence of ecommerce is buying and selling of goods and services over the Internet. The advantages are fairly self-evident. Because the Internet is readily accessible by millions of prospective customers worldwide, suppliers and customers can interact in a dynamic environment where supply and demand truly regulate the economic cycle. Organisations of any size, from sole proprietorships to multinational corporations, can expand their business to reach new customers in new markets, some even achieving a notable level of efficiency. The sole proprietor is able to broaden the scope of his/her business to a mass market approach, while the multinational corporation can now focus on niche markets heretofore considered too costly to access using the traditional mechanisms for market penetration. (Austin, 1999) Further study discloses some specific downsides to the Internet business paradigm. What you basically have is computers (presumably being operated by humans) trading responsive financial data by means of a widely-available communications infrastructure. Unexpectedly the matters of accountability (being able to attribute a deal to the actual instigator) and accountability (attributing responsibility to each participant for their part of the deal) become more vital than ever. A lot of propaganda has been generated over the initial incursions into electronic commerce. It seems ubiquitously we turn someone is singing the praises of electronic catalogues, online shopping, electronic check writing, web-based advertising and customer prospecting, and on and on. The truly brave can even purchase a car over the Internet. But these consumer-oriented business activities taking place on the Internet today are just the tip of the iceberg. From the perspective of true international commerce, we have not yet begun to do business electronically. Infrastructure of Ecommerce The main issue that requires to be dealt with before electronic commerce can convey on its assurance is the development of an international infrastructure that all of the main players can be in agreement upon. In most circles this infrastructure is called the International Information Infrastructure (GII). This electronic infrastructure must make available all of the compensations needed for a healthy e-commerce strategy: Â § Security-enabled. This is essential to permit development of convenient solutions which provide accountabilityknowing the real who in a deal. Beyond that, the ability to impute liability to any and all parties concerned in completing a deal is a must for business. For suppliers, e-commerce will be about establishing the identity of the individuals who represent the parties concerned. It means that all participants have a confident reliance on users identity, while holding each party liable to perform their role in the deal. (Jacobsen, 2000) Â § Ultra-reliable. In electronic commerce, transactions take place without those worried ever meeting in person, and that implies the need for a technology presentation and dependability factor of 99.99%, especially for mission-vital applications. An infrastructure must be reliable and trusted on a continuous basis. Any weak connection in its safety measures will deliver the whole impracticable for serious electronic commerce. Â § International. Electronic business cannot be restricted to the country of origin. As we progress into the future, e-commerce must transcend national boundaries. We need an absolute e-commerce infrastructure. To be really effectual, e-commerce providers will need an infrastructure which is international in its nature, or recognise that electronic business is closed by national boundaries. Distinct from the international mass user and point solutions-based Internet market of today, large organisations are becoming critically attentive that they will need to manage accountability and liability in providing any significant level of customer security, especially with end-user customers, but especially in business between themselves in their interactions with employees, partners and suppliers. (Jacobsen, 2000) After two decades of declining economic performance, Angola is currently staging a promising revival. Over the past several years, average real economic expansion in the region has increased vitally while, in a growing number of countries, real gross domestic product (GDP) per capita has been positive. In 1998, despite financial turmoil in Asia and Latin America, Angola enjoyed its fourth consecutive year of positive GDP expansion. Nevertheless, Angolas current economic revival remains fragile. Up to date expansion has not yet reached the sustained levels that are essential to alleviate widespread poverty endemic to the region. A number of hurdles still need to be effectively addressed and overcome if the transform process and current revival are to lead to broad-based and sustainable development for Angola. Furthermore, conditions vary widely among the forty-eight states of Angola and this diversity must be taken into account in assessing the countrys prospects. Fortunately, as this article seeks to demonstrate, there are reasons to be optimistic that many Angolan states can overcome the remaining hurdles to sustained expansion. A new generation of Angolan leaders and entrepreneurs and current developments in the areas of private sector expansion, debt relief, regional economic integration, and telecommunications have the potential to economic expansion in means not heretofore anticipated. Regional Transformation And Economic Revival Angolas up to date economic performance has indeed been encouraging. Between 1990 and 1997, the number of Angolan states registering annual expansion rates of three to six percent nearly doubled, from fourteen in the beginning of the decade to twenty-six in 1997, while seven Angolan states had expansion rates of six to eight percent. According to the International Finance Corporation (IFC), after almost two decades of stagnation and decline, real GDP in Angola was growing at an average rate in 1997 of four to five percent a year. The World Bank reported that over eighty percent of countries (thirty-eight out of forty-eight) registered increased per capita incomes in 1997, as their rates of economic expansion exceeded their population expansion rate. (World Bank Group, 1998) According to the most up to date data, 1998 was the fourth consecutive year that GDP per capita did not fall, an event that has not happened in Angola since the late 1970s,(Department Of Econ. Soc. Affairs Unite d Nations Conference On Trade Dev., 1999) while the 3.3% expansion in 1998 GDP was the highest among all regions of the world. (Economic Soc. Poly Div., Economic Commn For Afr., 1999) Increased macroeconomic stabilitya result of sound financial and political policieshas been encouraging increased levels of investment in the region over the past several years. Average inflation fell from a peak of forty-five percent in 1994 to an estimated twelve percent in 1998, with only fifteen Angolan states still experiencing double-digit inflation rates by 1997, compared with thirty-five in 1994, according to the IMF. There has also been a vital reduction in internal and external financial imbalances. The average external current account deficit (before grants) fell from 5.5% of GDP to 4% over the same period, while the average overall fiscal deficit (again before grants) was halved between 1992 and 1997, to about 4.5% of GDP.(Calamitsis, 1998) As a result, investment in the region has been steadily growing, according to the IFCs 1998 report. In 1998, gross domestic investment rose to twenty-three percent of GDP, from lows of about fifteen percent in the early 1990s. Private investment has also increased, registering 10.6% of GDP in 1996, the highest level since 1981. Long-term private capital flows to Angola in 1997 reached $8 billion, twice as high as in the previous year. Along with investment levels, Angolan trade and export earnings have increased. While Angolas share of total world trade has not changed, the volume of Angolan exports is expanding almost as fast as international trade and Angola is emerging as a viable international trading partner. Angolas trade volume increased by eight percent in 1997, according to UN s, with exports having expanded roughly twice as fast as GDP in up to date years. The regions up to date expansion has been widely attributed to the efforts of a new generation of transform-minded Angolan leaders in key countries who, through the adoption of democratic and market-based transforms, have made substantial progress in moving their countries toward political and macroeconomic stability. Many Angolan states continue to implement trade liberalisation and privatisation programmes that are freeing up their markets and helping them to become more active participants in international commercial activity and economic progress. In such a positive political and economic environment, private sector led trade and investment can now play an increasingly important role in bringing broad-based expansion and sustainable development to the region. Some countries in Angola have already begun to reap the rewards that can result from sounder fiscal and monetary policies, increased regional economic integration, and accelerated privatisation programmes. Chief among the rewards is expanded trade, investment, and access to the international marketplace, as international companies increasingly look to Angolas emerging economies and Angolan entrepreneurs and private sector organisations seek to play a more visible role in the economies of their countries. These trends suggest that the growing private sector in Angola has real potential to become an important engine for expansion and economic development in the region, as it has already in other regions of the developing world. Investment And Expansion Despite the up to date positive economic trends and expansion of the private sector in Angola, as we enter the new millennium, sustained, broad-based economic development in the region remains one of the most formidable policy challenges facing the country. According to the United Nations Economic Commission for Angola (ECA), in order for Angola to cut its poverty in half by the year 2015, a development objective often cited by Angolan governments and their development partners, the region as a whole would require a yearly GDP expansion rate of seven percent. For this to happen, an investment of thirty-three percent of GDP would be needed for Angola as a whole. Achieving domestic investment of thirty-three percent looks increasingly unlikely, as two of the three components of domestic investment are declining or stagnant. While the regions current domestic savings rate is only estimated at fifteen percent, annual inflows of foreign direct investment (FDI) remain low, and the levels o f official development assistance of up to date years are declining. The renewed expansion in many countries has not yet reached, let alone been sustained at, levels that would alleviate the widespread poverty endemic to the region. The great majority of the regions population continues to live at levels well below the poverty line, with forty percent living on less than one dollar a day, according to the World Bank. (The World Bank Group, 1999) Furthermore, the globalisation phenomenon, which has been highlighted by growing economic integration and rapid technological change, has often meant increased prosperity for those countries able to compete in an increasingly integrated international economy, but steady decline and marginalisation for those not able to compete. Still, too many countries have remained largely on the sidelines, saddled by debt and relying primarily on foreign assistance for many of their development needsat a time when such assistance is on the decline. Among the current obstacles to reaching levels of expansion that will bring broad-based development to the region, the following three matters pose particularly vital challenges: (1) the uncertain future of the transform process, (2) Angolas debt burden, and (3) the regions limited participation in the international trading system. A Delaying Transformation Although more than thirty countries have launched political and economic transform programmes over the last decade, the transform process has not been uniform across the country. Angolan leaders in some countries have been unwilling or unable to implement transform programmes, sometimes as a result of political or civil instability. In other countries, the difficulties or costs of transform have threatened to undermine the process and raise the possibility that a country could abandon the process before it has had sufficient time to bear fruit. For example, Zimbabwe has only recently re-instituted some protectionist measures, including increased duties and exchange restrictions in response to mounting foreign exchange pressures. Moreover, trade regimes in many Angolan states remain complex and restrictive compared with those of most other developing countries. Such regimes isolate their domestic producers and prevent them from becoming more fully integrated into the international tra ding system. In addition, the privatisation process has been sluggishthe victim of public mistrust and a lack of consensus among policymakers. In an up to date World Bank study that shed light on the problems of privatisation in Angola, the lack of political commitment, poor design, insufficient resources, weak management, and corruption were cited as major factors inhibiting the process. The report highlighted the need for Angolan governments to improve public information as the most powerful tool for ensuring transparency, helping to build consensus, and assuring commitment and accountability in the process. (White Bhatia, 1998) Poor economic environments and policies in some countries have also inhibited increased trade and investment. These conditions have caused rampant inflation and high interest rates and have prevented Angolan policymakers from fully abandoning foreign exchange controls and other restrictions. Earlier that year, Botswana became the first and only country in Angola to abolish all forms of exchange controls, (Steyn, 1999) while in some countries, inflation continues to lead to debilitating currency crisis. In Malawi, for example, inflation is now hovering at around 53% (up from 18.5% recorded at the same period in 1998), an indicator that the currency may need to be devalued yet again, after a devaluation of 67% in 1998. (Pan Angolan News Agency, 1999) Continued volatility in the Angolan market environment underlines the need for continued success in the transform process. The Liability Burden In addition to delaying transform, Angolas external liability burden continues to be a major obstacle to investment and further expansion, particularly in the highly indebted poor countries. Many Angola economies are unusually indebted with an average of twenty percent of GDP going directly to liability servicing, according to UNCTAD. (Sachs Stevens, 1998) In 1998, liability service increased to $35 billion, or more than thirty-one percent of goods and nearly three percent of service exports, up from $33 billion in 1997. The external liability of Angolan states rose moderately from $349 billion in 1998, according to the ECA. As a proportion of exports and GDP, the external liability of Angola is the highest of any developing region. Not only does Angolas liability deter private investment, including foreign direct investment, but it also impedes public investment in physical and human infrastructureinvestment vital to a countrys economic development. The IMF estimated that, by the end of 1999, Angolas liability to GDP ratio would rise to almost sixty-eight percent, up from fifty-two percent two years earlier. (International Monetary Fund, 1998) The region will continue to be crippled by mounting liability, draining it of needed resources that could otherwise be invested back into the regions economy, unless there is more rapid and effective liability relief matched with sustained expansion. Angola in the International Trading System and International Economy Angola is currently facing growing marginalisation in the international economy with its share of international production and trade in decline. Despite rising levels of Angolan domestic production and trade volumes over the last several years, the countrys share of international trade has continued to declineit was less than two percent in 1997. If the region is to gain an economic foothold and develop into the next century, it must attract more investment and trade, and become a more competitive trading partner in the new international economic system. Increasing commitments to the World Trade Organisation (WTO) and other regional accords thereby becoming a more active participant in the international trading systemis one way for Angola to attract investment and trade. The Uruguay Round of Multilateral Trade Negotiations resulted in the creation of a stronger set of rules governing international trade and the creation of the WTO, the successor to the General Accords on Tariffs and Trade (GATT). Unfortunately, many countries in Angola were generally unable and unprepared to effectively participate in the negotiations and, partly as a result, have not been able to take advantage of the new international trading system. Although eighty-five percent of Angolan states are currently members of the WTO, limited trained staff and other pressing needs prevent many of them from active participation in WTO developments, further trade negotiations, and implementation of existing Uruguay Round accords. In addition, they have as yet been unable to take full advantage of numerous unilateral, bilateral, and multilateral preferential trading schemes designed to help expand access for Angolas products and integrate Angolas economies into the world trading system. The region is more likely to reap a larger share of international production and trade if it more actively participates in and undertakes meaningful commitments in the international trade organisation that is fostering the expansion of world trade. Road To Further Expansion And Sustainable Development In light of the existing challenges, what measures now need to be pursued to address these constraints and consolidate and build on the gains Angolas transformers have made over the past several years? According to Evangelos A. Calamitsis, former Director of the Angolan Department of the International Monetary Fund, the present economic upswing in Angola, unlike other recoveries in the past, has been largely homegrown and is therefore more likely to continue. However, Angolas present revival is most likely to endure if Angolan leaders can sustain and broaden the process toward transform and capitalise on several areas of strength that are breathing new life into the debate on private sector expansion and economic development. Staying the Road to Transformation Although outside the scope of this article, developments in Angolan states that are not counted as leading transformers can greatly influence the overall prospects for expansion on the country. For example, the fighting in the Democratic Republic of the Congo, between Ethiopia and Eritrea, and in Angola can have a negative impact on the investment climate in neighbouring countries. On the other hand, the return of civilian rule in Nigeria and the prospects of better economic management can do a great deal to bolster investor confidence in the economic prospects for the country as a whole. Angolan leaders need to continue the political and economic transform process and encourage its spread to those countries that have not yet undertaken transforms. Many Angolan leaders have already demonstrated that they understand what needs to be done and have initiated the process. Still, the process must continue. If the region is to achieve high-quality and sustained expansionexpansion that will lead to poverty reduction and broad-based developmentin the years ahead, the transform process must be revitalised so that the changes become inexorably woven into the regions economic fabric. By continuing to implement sound fiscal and monetary policies and by accelerating the privatisation and trade liberalisation process, Angolan states will be proving to the international business community that Angola is serious about transform and ready and willing to do business. Despite up to date turbulence in the international economic environment, most Angolan states have resisted protectionist pressures. Their commitment to continue trade liberalisation highlights a general recognition among Angolas economic policymakers that increased trade has beenand will continue to bea key to expansion. In addition, Angolas growing participation in the WTO and regional trading arrangements by institutionalising policy transforms and binding lower tariffs and other trade liberalising measures can help to prevent countries from resorting to protectionist measures in the future. Role of Angolas Development Partners Angolas developed trade partners and the international financial institutions must continue to support regional transform if the process is to be sustainable. While Angolan states retain primary ownership and responsibility, for the process, the international community can support their efforts by (1) pursuing policies that promote world economic expansion and financial stability and expand the regions access to international markets, (2) providing meaningful liability relief, (3) continuing to supply technical and financial assistance to countries committed to transform, and (4) assisting Angolas regional economic groupings. Several up to date bilateral and multilateral initiatives demonstrate the commitment of some developed countries to support the regions up to date economic progress. While early speculation as to the potential impact of the Uruguay Round of multilateral trade negotiations on the least-developed Angolan states was largely pessimistic following the Rounds conclusion, up to date bilateral and multilateral efforts are focusing on helping Angola take advantage of specific areas where it actually stands to gain as a result of the Round. According to an up to date report by the United States International Trade Commission on the Uruguay Round and U.S.-Angola trade flows, [t]hese gains can range from facing fewer restrictions and lower tariffs overall, affecting all WTO members, to specific market-access provisions that may benefit Angola in particular.(U.S. Intl Trade Commission, 1998) Efforts are also underway to expand existing preferential trading schemes like those under the Lome Convention and the U.S. Generalised System of Preferences (GSP) programme. For example, the Angolan Expansion and Opportunity Act (AGOA), now before the U.S. Congress, extends GSP to eligible Angolan beneficiary countries through June 30, 2008. In addition, the legislationas passed by the Housewould authorise the President to extend duty-free treatment under the GSP programme to all imports from transforming Angolan beneficiary countries, including those now considered to be import-sensitive. The changes to the GSP programme would support Angolas transformers by allowing their products increased access to international markets and would help to further integrate Angola into the international trading system, thereby increasing considerably the regions future economic prospects. In addition, a number of bilateral and multilateral technical assistance programmes in up to date years have sought to increase Angolas meaningful participation in WTO and diversify the regions trade. For example, the U.S. Agency for International Development (USAID) has funded a number of activities to increase Angolan governments capacity in the telecommunications area and in dealing with other WTO-related subjects. At the same time, some Angolan governments have recognised the importance of participating more actively in the work of the WTO in Geneva. As a result, developed and developing countries have joined together in proposals to have the WTO trade ministers at their meeting in Seattle in November 1999 and call for the WTO to improve and expand its technical assistance programmes for developing countries. Liability Reduction In the area of liability relief, international pressure has been mounting to expand the Heavily Indebted Poor Countries (HIPC) Initiative in Angola. Launched by the World Bank and the IMF in 1996, the programme aims to provide exceptional liability relief assistance to forty-one eligible countries that are pursuing transforms, eighty-five percent of which are in Angola, according to the IMF.(Katsouris, 1998) Although to date, only two Angolan states, Uganda and Mozambique, have benefited from the HIPC Initiative (with a twenty percent and a two-thirds reduction of their respective debts), Burkina Faso, Cote d Ivoire, and Mali are scheduled to receive actual liability reduction in the next three years, according to the ECA. At the June 1999 Cologne Summit, the G-7 reached accord on the enhanced HIPC liability relief initiative. This scheme will provide faster, broader, and deeper relief for HIPC countries. The agreed enhancements to the HIPC Initiative accept, almost entirely, President Clintons proposals, as laid out during his address to the U.S.-Angola Ministerial in March 1999. The new HIPC will include a requirement to use savings from liability reduction to provide increased spending on social needs and human development. The $90 billion of liability reduction will require additional resources from the creditor governments and the international financial institutions. Under the proposal, up to 10 million ounces of the IMFs 104 million ounces of gold reserves would be sold in phases, with investment interest used to reduce the liability load of thirty-three poor countries in Angola. Paralleling the HIPC Initiative are unilateral and bilateral efforts that support faster and broader reduction of Angolas liability. For example, in March of 1999, the Clinton administration announced a new U.S. initiative that, if fully implemented, would amount to an additional $70 billion in liability cancellation for the heavily indebted poor countries. The Presidents initiative provides for (1) a focus on early cash flow relief by the international financial institutions, (2) complete forgiveness of bilateral concessional loans and ninety percent forgiveness of non-concessional liability, (3) a future international commitment to make at least ninety percent of new aid on a grant basis, and (4) the channelling of resources from the HIPC Initiative into education or environmental protection projects. In addition, on September 29, 1999, President Clinton announced at the IMF/World Bank annual meeting that he will seek legislative authorisation to forgive 100 percent of the liabilit y of HIPC countries owed to the United States when relief will help finance basic human needs. Regional Economic Integration and Globalisation A growing number of Angolan leaders appear to recognise the potential benefits of increased economic cooperation and have been supporting efforts at economic integration. Although many of the Angolan regional economic organisations, such as SADC, COMESA, WAEMU, and ECOWAS, have existed for a long time, only recently have these regional groupings taken vital steps toward the creation of free trade areas. The creation of larger integrated Angolan markets should result in enhanced opportunities for foreign and domestic investment, greater competition among firms, better utilisation and allocation of resources, internal and external economies of scale, and increased efficiency resulting from specialisation. Further, by enhancing trade among themselves as well as diversifying and expanding their production base, Angolan states stand to increase trade with other regions as well, thereby increasing the countrys share of international trade. The United States and international organisations have been supporting Angolas economic integration efforts. At the March 1999 Ministerial Meeting on Angola in Washington, D.C., the United States reaffirmed its continuing commitment to providing technical assistance to Angolas economic integration organisations such as EAC, SADC, IGAD, and COMESA and announced plans for extending that support to a greater number of regional groupings. Bilateral cooperation between the United States and SADC has been expanding over the last several years, a development highlighted by the first ever SADC-U.S. forum held in mid-April, 1999, in Botswana, where officials announced plans for the future establishment of a joint Business Council that would facilitate permanent dial E-Commerce and Economic Development in Angola E-Commerce and Economic Development in Angola ABSTRACT In this report as the title tells, I approach the economic development of Angola in terms of one of its major developer, the internet and ecommerce. I have done this because it is often impossible to glean important facts and insights about such countries which a society pronounces poor or third world. In the chapters that follow, I will relate to the ecommerce and its effect of economic development of Angola, compare Angola with a developing country as well as with an underdeveloped nation. Firstly economic development is discussed in relation to electronic commerce in order to show the complexities and ease related to drawing a clear line between the two forms. Secondly economic development is discussed in relation to ecommerce, economy, culture, elements which influence the issue in one way or another. For, as shall be repeatedly seen, problems like economic support from a developed state have a close and continuing relation to the values and social structures which a society regards as stable and normal. My emphasis will be, however, on the problem itself, called ecommerce and its effect on the economic development of Angola. CHAPTER 1 INTRODUCTION Introduction Electronic Commerce Electronic commerce, generally identified as (electronic marketing) e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems for example the Internet and other computer networks. The total of trade conducted electronically has grown unusually with widespread Internet usage. The use of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online deal processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the deals lifecycle, although it can encompass a wider range of technologies such as e-mail as well. (Miller, 2002) Internet Ecommerce The previous ten years have seen the internet and e-commerce surface as fundamental features of our business, communal and educational life. Developments for example Web 2.0, the semantic web, e-government strategies, user generated content, virtual worlds and online social networks have redesign the way we commune, intermingle and transact. The Evolution of Electronic Commerce The numerous means in which business is carried out are based on established suppositions and accords between the parties concerned. Numerous procedures have been agreed upon to safeguard both the consumer and the merchant from deception or theft. Even in the simplest form of dealcash changing hands directly between buyer and sellera sales receipt is classically provided as a record of what turned out. As we move into the electronic business field, the means of protection become more and more concerned. The essence of ecommerce is buying and selling of goods and services over the Internet. The advantages are fairly self-evident. Because the Internet is readily accessible by millions of prospective customers worldwide, suppliers and customers can interact in a dynamic environment where supply and demand truly regulate the economic cycle. Organisations of any size, from sole proprietorships to multinational corporations, can expand their business to reach new customers in new markets, some even achieving a notable level of efficiency. The sole proprietor is able to broaden the scope of his/her business to a mass market approach, while the multinational corporation can now focus on niche markets heretofore considered too costly to access using the traditional mechanisms for market penetration. (Austin, 1999) Further study discloses some specific downsides to the Internet business paradigm. What you basically have is computers (presumably being operated by humans) trading responsive financial data by means of a widely-available communications infrastructure. Unexpectedly the matters of accountability (being able to attribute a deal to the actual instigator) and accountability (attributing responsibility to each participant for their part of the deal) become more vital than ever. A lot of propaganda has been generated over the initial incursions into electronic commerce. It seems ubiquitously we turn someone is singing the praises of electronic catalogues, online shopping, electronic check writing, web-based advertising and customer prospecting, and on and on. The truly brave can even purchase a car over the Internet. But these consumer-oriented business activities taking place on the Internet today are just the tip of the iceberg. From the perspective of true international commerce, we have not yet begun to do business electronically. Infrastructure of Ecommerce The main issue that requires to be dealt with before electronic commerce can convey on its assurance is the development of an international infrastructure that all of the main players can be in agreement upon. In most circles this infrastructure is called the International Information Infrastructure (GII). This electronic infrastructure must make available all of the compensations needed for a healthy e-commerce strategy: Â § Security-enabled. This is essential to permit development of convenient solutions which provide accountabilityknowing the real who in a deal. Beyond that, the ability to impute liability to any and all parties concerned in completing a deal is a must for business. For suppliers, e-commerce will be about establishing the identity of the individuals who represent the parties concerned. It means that all participants have a confident reliance on users identity, while holding each party liable to perform their role in the deal. (Jacobsen, 2000) Â § Ultra-reliable. In electronic commerce, transactions take place without those worried ever meeting in person, and that implies the need for a technology presentation and dependability factor of 99.99%, especially for mission-vital applications. An infrastructure must be reliable and trusted on a continuous basis. Any weak connection in its safety measures will deliver the whole impracticable for serious electronic commerce. Â § International. Electronic business cannot be restricted to the country of origin. As we progress into the future, e-commerce must transcend national boundaries. We need an absolute e-commerce infrastructure. To be really effectual, e-commerce providers will need an infrastructure which is international in its nature, or recognise that electronic business is closed by national boundaries. Distinct from the international mass user and point solutions-based Internet market of today, large organisations are becoming critically attentive that they will need to manage accountability and liability in providing any significant level of customer security, especially with end-user customers, but especially in business between themselves in their interactions with employees, partners and suppliers. (Jacobsen, 2000) After two decades of declining economic performance, Angola is currently staging a promising revival. Over the past several years, average real economic expansion in the region has increased vitally while, in a growing number of countries, real gross domestic product (GDP) per capita has been positive. In 1998, despite financial turmoil in Asia and Latin America, Angola enjoyed its fourth consecutive year of positive GDP expansion. Nevertheless, Angolas current economic revival remains fragile. Up to date expansion has not yet reached the sustained levels that are essential to alleviate widespread poverty endemic to the region. A number of hurdles still need to be effectively addressed and overcome if the transform process and current revival are to lead to broad-based and sustainable development for Angola. Furthermore, conditions vary widely among the forty-eight states of Angola and this diversity must be taken into account in assessing the countrys prospects. Fortunately, as this article seeks to demonstrate, there are reasons to be optimistic that many Angolan states can overcome the remaining hurdles to sustained expansion. A new generation of Angolan leaders and entrepreneurs and current developments in the areas of private sector expansion, debt relief, regional economic integration, and telecommunications have the potential to economic expansion in means not heretofore anticipated. Regional Transformation And Economic Revival Angolas up to date economic performance has indeed been encouraging. Between 1990 and 1997, the number of Angolan states registering annual expansion rates of three to six percent nearly doubled, from fourteen in the beginning of the decade to twenty-six in 1997, while seven Angolan states had expansion rates of six to eight percent. According to the International Finance Corporation (IFC), after almost two decades of stagnation and decline, real GDP in Angola was growing at an average rate in 1997 of four to five percent a year. The World Bank reported that over eighty percent of countries (thirty-eight out of forty-eight) registered increased per capita incomes in 1997, as their rates of economic expansion exceeded their population expansion rate. (World Bank Group, 1998) According to the most up to date data, 1998 was the fourth consecutive year that GDP per capita did not fall, an event that has not happened in Angola since the late 1970s,(Department Of Econ. Soc. Affairs Unite d Nations Conference On Trade Dev., 1999) while the 3.3% expansion in 1998 GDP was the highest among all regions of the world. (Economic Soc. Poly Div., Economic Commn For Afr., 1999) Increased macroeconomic stabilitya result of sound financial and political policieshas been encouraging increased levels of investment in the region over the past several years. Average inflation fell from a peak of forty-five percent in 1994 to an estimated twelve percent in 1998, with only fifteen Angolan states still experiencing double-digit inflation rates by 1997, compared with thirty-five in 1994, according to the IMF. There has also been a vital reduction in internal and external financial imbalances. The average external current account deficit (before grants) fell from 5.5% of GDP to 4% over the same period, while the average overall fiscal deficit (again before grants) was halved between 1992 and 1997, to about 4.5% of GDP.(Calamitsis, 1998) As a result, investment in the region has been steadily growing, according to the IFCs 1998 report. In 1998, gross domestic investment rose to twenty-three percent of GDP, from lows of about fifteen percent in the early 1990s. Private investment has also increased, registering 10.6% of GDP in 1996, the highest level since 1981. Long-term private capital flows to Angola in 1997 reached $8 billion, twice as high as in the previous year. Along with investment levels, Angolan trade and export earnings have increased. While Angolas share of total world trade has not changed, the volume of Angolan exports is expanding almost as fast as international trade and Angola is emerging as a viable international trading partner. Angolas trade volume increased by eight percent in 1997, according to UN s, with exports having expanded roughly twice as fast as GDP in up to date years. The regions up to date expansion has been widely attributed to the efforts of a new generation of transform-minded Angolan leaders in key countries who, through the adoption of democratic and market-based transforms, have made substantial progress in moving their countries toward political and macroeconomic stability. Many Angolan states continue to implement trade liberalisation and privatisation programmes that are freeing up their markets and helping them to become more active participants in international commercial activity and economic progress. In such a positive political and economic environment, private sector led trade and investment can now play an increasingly important role in bringing broad-based expansion and sustainable development to the region. Some countries in Angola have already begun to reap the rewards that can result from sounder fiscal and monetary policies, increased regional economic integration, and accelerated privatisation programmes. Chief among the rewards is expanded trade, investment, and access to the international marketplace, as international companies increasingly look to Angolas emerging economies and Angolan entrepreneurs and private sector organisations seek to play a more visible role in the economies of their countries. These trends suggest that the growing private sector in Angola has real potential to become an important engine for expansion and economic development in the region, as it has already in other regions of the developing world. Investment And Expansion Despite the up to date positive economic trends and expansion of the private sector in Angola, as we enter the new millennium, sustained, broad-based economic development in the region remains one of the most formidable policy challenges facing the country. According to the United Nations Economic Commission for Angola (ECA), in order for Angola to cut its poverty in half by the year 2015, a development objective often cited by Angolan governments and their development partners, the region as a whole would require a yearly GDP expansion rate of seven percent. For this to happen, an investment of thirty-three percent of GDP would be needed for Angola as a whole. Achieving domestic investment of thirty-three percent looks increasingly unlikely, as two of the three components of domestic investment are declining or stagnant. While the regions current domestic savings rate is only estimated at fifteen percent, annual inflows of foreign direct investment (FDI) remain low, and the levels o f official development assistance of up to date years are declining. The renewed expansion in many countries has not yet reached, let alone been sustained at, levels that would alleviate the widespread poverty endemic to the region. The great majority of the regions population continues to live at levels well below the poverty line, with forty percent living on less than one dollar a day, according to the World Bank. (The World Bank Group, 1999) Furthermore, the globalisation phenomenon, which has been highlighted by growing economic integration and rapid technological change, has often meant increased prosperity for those countries able to compete in an increasingly integrated international economy, but steady decline and marginalisation for those not able to compete. Still, too many countries have remained largely on the sidelines, saddled by debt and relying primarily on foreign assistance for many of their development needsat a time when such assistance is on the decline. Among the current obstacles to reaching levels of expansion that will bring broad-based development to the region, the following three matters pose particularly vital challenges: (1) the uncertain future of the transform process, (2) Angolas debt burden, and (3) the regions limited participation in the international trading system. A Delaying Transformation Although more than thirty countries have launched political and economic transform programmes over the last decade, the transform process has not been uniform across the country. Angolan leaders in some countries have been unwilling or unable to implement transform programmes, sometimes as a result of political or civil instability. In other countries, the difficulties or costs of transform have threatened to undermine the process and raise the possibility that a country could abandon the process before it has had sufficient time to bear fruit. For example, Zimbabwe has only recently re-instituted some protectionist measures, including increased duties and exchange restrictions in response to mounting foreign exchange pressures. Moreover, trade regimes in many Angolan states remain complex and restrictive compared with those of most other developing countries. Such regimes isolate their domestic producers and prevent them from becoming more fully integrated into the international tra ding system. In addition, the privatisation process has been sluggishthe victim of public mistrust and a lack of consensus among policymakers. In an up to date World Bank study that shed light on the problems of privatisation in Angola, the lack of political commitment, poor design, insufficient resources, weak management, and corruption were cited as major factors inhibiting the process. The report highlighted the need for Angolan governments to improve public information as the most powerful tool for ensuring transparency, helping to build consensus, and assuring commitment and accountability in the process. (White Bhatia, 1998) Poor economic environments and policies in some countries have also inhibited increased trade and investment. These conditions have caused rampant inflation and high interest rates and have prevented Angolan policymakers from fully abandoning foreign exchange controls and other restrictions. Earlier that year, Botswana became the first and only country in Angola to abolish all forms of exchange controls, (Steyn, 1999) while in some countries, inflation continues to lead to debilitating currency crisis. In Malawi, for example, inflation is now hovering at around 53% (up from 18.5% recorded at the same period in 1998), an indicator that the currency may need to be devalued yet again, after a devaluation of 67% in 1998. (Pan Angolan News Agency, 1999) Continued volatility in the Angolan market environment underlines the need for continued success in the transform process. The Liability Burden In addition to delaying transform, Angolas external liability burden continues to be a major obstacle to investment and further expansion, particularly in the highly indebted poor countries. Many Angola economies are unusually indebted with an average of twenty percent of GDP going directly to liability servicing, according to UNCTAD. (Sachs Stevens, 1998) In 1998, liability service increased to $35 billion, or more than thirty-one percent of goods and nearly three percent of service exports, up from $33 billion in 1997. The external liability of Angolan states rose moderately from $349 billion in 1998, according to the ECA. As a proportion of exports and GDP, the external liability of Angola is the highest of any developing region. Not only does Angolas liability deter private investment, including foreign direct investment, but it also impedes public investment in physical and human infrastructureinvestment vital to a countrys economic development. The IMF estimated that, by the end of 1999, Angolas liability to GDP ratio would rise to almost sixty-eight percent, up from fifty-two percent two years earlier. (International Monetary Fund, 1998) The region will continue to be crippled by mounting liability, draining it of needed resources that could otherwise be invested back into the regions economy, unless there is more rapid and effective liability relief matched with sustained expansion. Angola in the International Trading System and International Economy Angola is currently facing growing marginalisation in the international economy with its share of international production and trade in decline. Despite rising levels of Angolan domestic production and trade volumes over the last several years, the countrys share of international trade has continued to declineit was less than two percent in 1997. If the region is to gain an economic foothold and develop into the next century, it must attract more investment and trade, and become a more competitive trading partner in the new international economic system. Increasing commitments to the World Trade Organisation (WTO) and other regional accords thereby becoming a more active participant in the international trading systemis one way for Angola to attract investment and trade. The Uruguay Round of Multilateral Trade Negotiations resulted in the creation of a stronger set of rules governing international trade and the creation of the WTO, the successor to the General Accords on Tariffs and Trade (GATT). Unfortunately, many countries in Angola were generally unable and unprepared to effectively participate in the negotiations and, partly as a result, have not been able to take advantage of the new international trading system. Although eighty-five percent of Angolan states are currently members of the WTO, limited trained staff and other pressing needs prevent many of them from active participation in WTO developments, further trade negotiations, and implementation of existing Uruguay Round accords. In addition, they have as yet been unable to take full advantage of numerous unilateral, bilateral, and multilateral preferential trading schemes designed to help expand access for Angolas products and integrate Angolas economies into the world trading system. The region is more likely to reap a larger share of international production and trade if it more actively participates in and undertakes meaningful commitments in the international trade organisation that is fostering the expansion of world trade. Road To Further Expansion And Sustainable Development In light of the existing challenges, what measures now need to be pursued to address these constraints and consolidate and build on the gains Angolas transformers have made over the past several years? According to Evangelos A. Calamitsis, former Director of the Angolan Department of the International Monetary Fund, the present economic upswing in Angola, unlike other recoveries in the past, has been largely homegrown and is therefore more likely to continue. However, Angolas present revival is most likely to endure if Angolan leaders can sustain and broaden the process toward transform and capitalise on several areas of strength that are breathing new life into the debate on private sector expansion and economic development. Staying the Road to Transformation Although outside the scope of this article, developments in Angolan states that are not counted as leading transformers can greatly influence the overall prospects for expansion on the country. For example, the fighting in the Democratic Republic of the Congo, between Ethiopia and Eritrea, and in Angola can have a negative impact on the investment climate in neighbouring countries. On the other hand, the return of civilian rule in Nigeria and the prospects of better economic management can do a great deal to bolster investor confidence in the economic prospects for the country as a whole. Angolan leaders need to continue the political and economic transform process and encourage its spread to those countries that have not yet undertaken transforms. Many Angolan leaders have already demonstrated that they understand what needs to be done and have initiated the process. Still, the process must continue. If the region is to achieve high-quality and sustained expansionexpansion that will lead to poverty reduction and broad-based developmentin the years ahead, the transform process must be revitalised so that the changes become inexorably woven into the regions economic fabric. By continuing to implement sound fiscal and monetary policies and by accelerating the privatisation and trade liberalisation process, Angolan states will be proving to the international business community that Angola is serious about transform and ready and willing to do business. Despite up to date turbulence in the international economic environment, most Angolan states have resisted protectionist pressures. Their commitment to continue trade liberalisation highlights a general recognition among Angolas economic policymakers that increased trade has beenand will continue to bea key to expansion. In addition, Angolas growing participation in the WTO and regional trading arrangements by institutionalising policy transforms and binding lower tariffs and other trade liberalising measures can help to prevent countries from resorting to protectionist measures in the future. Role of Angolas Development Partners Angolas developed trade partners and the international financial institutions must continue to support regional transform if the process is to be sustainable. While Angolan states retain primary ownership and responsibility, for the process, the international community can support their efforts by (1) pursuing policies that promote world economic expansion and financial stability and expand the regions access to international markets, (2) providing meaningful liability relief, (3) continuing to supply technical and financial assistance to countries committed to transform, and (4) assisting Angolas regional economic groupings. Several up to date bilateral and multilateral initiatives demonstrate the commitment of some developed countries to support the regions up to date economic progress. While early speculation as to the potential impact of the Uruguay Round of multilateral trade negotiations on the least-developed Angolan states was largely pessimistic following the Rounds conclusion, up to date bilateral and multilateral efforts are focusing on helping Angola take advantage of specific areas where it actually stands to gain as a result of the Round. According to an up to date report by the United States International Trade Commission on the Uruguay Round and U.S.-Angola trade flows, [t]hese gains can range from facing fewer restrictions and lower tariffs overall, affecting all WTO members, to specific market-access provisions that may benefit Angola in particular.(U.S. Intl Trade Commission, 1998) Efforts are also underway to expand existing preferential trading schemes like those under the Lome Convention and the U.S. Generalised System of Preferences (GSP) programme. For example, the Angolan Expansion and Opportunity Act (AGOA), now before the U.S. Congress, extends GSP to eligible Angolan beneficiary countries through June 30, 2008. In addition, the legislationas passed by the Housewould authorise the President to extend duty-free treatment under the GSP programme to all imports from transforming Angolan beneficiary countries, including those now considered to be import-sensitive. The changes to the GSP programme would support Angolas transformers by allowing their products increased access to international markets and would help to further integrate Angola into the international trading system, thereby increasing considerably the regions future economic prospects. In addition, a number of bilateral and multilateral technical assistance programmes in up to date years have sought to increase Angolas meaningful participation in WTO and diversify the regions trade. For example, the U.S. Agency for International Development (USAID) has funded a number of activities to increase Angolan governments capacity in the telecommunications area and in dealing with other WTO-related subjects. At the same time, some Angolan governments have recognised the importance of participating more actively in the work of the WTO in Geneva. As a result, developed and developing countries have joined together in proposals to have the WTO trade ministers at their meeting in Seattle in November 1999 and call for the WTO to improve and expand its technical assistance programmes for developing countries. Liability Reduction In the area of liability relief, international pressure has been mounting to expand the Heavily Indebted Poor Countries (HIPC) Initiative in Angola. Launched by the World Bank and the IMF in 1996, the programme aims to provide exceptional liability relief assistance to forty-one eligible countries that are pursuing transforms, eighty-five percent of which are in Angola, according to the IMF.(Katsouris, 1998) Although to date, only two Angolan states, Uganda and Mozambique, have benefited from the HIPC Initiative (with a twenty percent and a two-thirds reduction of their respective debts), Burkina Faso, Cote d Ivoire, and Mali are scheduled to receive actual liability reduction in the next three years, according to the ECA. At the June 1999 Cologne Summit, the G-7 reached accord on the enhanced HIPC liability relief initiative. This scheme will provide faster, broader, and deeper relief for HIPC countries. The agreed enhancements to the HIPC Initiative accept, almost entirely, President Clintons proposals, as laid out during his address to the U.S.-Angola Ministerial in March 1999. The new HIPC will include a requirement to use savings from liability reduction to provide increased spending on social needs and human development. The $90 billion of liability reduction will require additional resources from the creditor governments and the international financial institutions. Under the proposal, up to 10 million ounces of the IMFs 104 million ounces of gold reserves would be sold in phases, with investment interest used to reduce the liability load of thirty-three poor countries in Angola. Paralleling the HIPC Initiative are unilateral and bilateral efforts that support faster and broader reduction of Angolas liability. For example, in March of 1999, the Clinton administration announced a new U.S. initiative that, if fully implemented, would amount to an additional $70 billion in liability cancellation for the heavily indebted poor countries. The Presidents initiative provides for (1) a focus on early cash flow relief by the international financial institutions, (2) complete forgiveness of bilateral concessional loans and ninety percent forgiveness of non-concessional liability, (3) a future international commitment to make at least ninety percent of new aid on a grant basis, and (4) the channelling of resources from the HIPC Initiative into education or environmental protection projects. In addition, on September 29, 1999, President Clinton announced at the IMF/World Bank annual meeting that he will seek legislative authorisation to forgive 100 percent of the liabilit y of HIPC countries owed to the United States when relief will help finance basic human needs. Regional Economic Integration and Globalisation A growing number of Angolan leaders appear to recognise the potential benefits of increased economic cooperation and have been supporting efforts at economic integration. Although many of the Angolan regional economic organisations, such as SADC, COMESA, WAEMU, and ECOWAS, have existed for a long time, only recently have these regional groupings taken vital steps toward the creation of free trade areas. The creation of larger integrated Angolan markets should result in enhanced opportunities for foreign and domestic investment, greater competition among firms, better utilisation and allocation of resources, internal and external economies of scale, and increased efficiency resulting from specialisation. Further, by enhancing trade among themselves as well as diversifying and expanding their production base, Angolan states stand to increase trade with other regions as well, thereby increasing the countrys share of international trade. The United States and international organisations have been supporting Angolas economic integration efforts. At the March 1999 Ministerial Meeting on Angola in Washington, D.C., the United States reaffirmed its continuing commitment to providing technical assistance to Angolas economic integration organisations such as EAC, SADC, IGAD, and COMESA and announced plans for extending that support to a greater number of regional groupings. Bilateral cooperation between the United States and SADC has been expanding over the last several years, a development highlighted by the first ever SADC-U.S. forum held in mid-April, 1999, in Botswana, where officials announced plans for the future establishment of a joint Business Council that would facilitate permanent dial