Google Strategic Analysis

Strategic Audit of Google Google Abstract Google was founded by two Stanford PhD students, Larry Page and Sergey Brin, in 1998. The two recognized a need within the internet services industry for a search engine that would provide accurate results. The two opened Google, Inc. as an online company that provided a superior search engine, a platform for extremely targeted advertisements, and intranet solutions to internet users across the world. The company obtained the majority of its revenues by selling advertising space within the search results. Google employed an innovative system for selling this space to companies; companies would only have to pay Google for the advertising space if a customer â€Å"clicked† on their advertisement. As Google became the most-used search engine in the world due to its greater accuracy of producing relevant results, advertising revenues increased at a phenomenal rate. Google faced competition from others in the internet search services industry; specifically AOL, MSN, and Yahoo. Each competitor recognized the importance of a quality search engine to customers – as well as the opportunity to gain advertising revenues – and was attempting to develop an innovative search engine that would top Google’s. Competition from Microsoft was also a possibility. Microsoft indicated that they might attempt to add a search engine to their new operating system that was set for release in 2006. While Microsoft was not an established player in the internet search services industry, they had the technical expertise and massive resources to present a major competitive threat. The importance of the search engine to Google’s competitors as a stand-alone service was great but the development of a search engine rivaling or bettering Google’s would also attract customers to their other services. Google’s competitors offered many other services, in addition to their search services, such as email, online dating, and fantasy sports networks and were successful in doing so. Google’s success as a company hinged almost completely on the success of their search engine. Google, Inc. egan to diversify into other segments of the internet services industry in order to lessen the risk of having only one truly successful product and to build up both their customer base and customer loyalty. Google began to offer internet users the ability to search within a directory of 425,000 still images. Their collection of images tied with Yahoo’s as internet users’ first choice for image-searches. Google also began offering a directory of 50 0 million discussion topics that dated back to 1981 called Google Groups. Customers, in addition to being able to examine discussion topics within Google Groups, could add postings to a new group. Also, in 2004, Google began offering its users access to a compilation of 4,500 news sources located all over the world. Google then developed a service that would allow cell phone and handheld device customers to use Google’s search and other services on their wireless devices. In addition to these services and others, Google developed Google Catalog, a service that would allow users to search print mail order catalogs, and offered email accounts to select clients. In order to remain ahead of the competition and an industry leader in providing internet services, Google had to now make some strategic decisions. To assure the future of the company, Google’s management team knew that they would have to differentiate Google’s products from those offered by competing companies, such as Yahoo, MSN, and AOL. Google could either continue to expand the amounts of services it offered (i. e. include text messaging services, large email accounts, and others), it could work to improve the services it offered across the board, or it could focus on improving its most successful creation: the Google search engine. Each option had its merits and the company had plenty of resources to use in pursuing any of these three (or other) strategies. The difficult issue was choosing the most appropriate strategy for the company. I. Current Situation A. Performance ? Most-used website in the world ? Possesses global brand; one-half of internet users outside the United States ? High degree of user loyalty and brand identity ? Employs interface for over 88 languages ? Generally considered to possess the most accurate internet search engine ? Google network is utilized by 80% of internet users; used by 165 million people in the United States and United Kingdom per month ? Google’s 2008 revenues were $21,795,550,000, a 31. 34% increase since last year[1] ? Google’s 2007 revenues were $16,592,986,000, a 56. 47% increase over 2006’s revenues[2] ? Google’s cash increased 42. 34% from $6,081,593,000 in 2007 to $8,656,672,000[3] ? Google’s debt to equity ratio was 10. 44% in 2007 and 11. 1% in 2008. Yahoo’s debt to equity ratio was 22. 05% in 2007 and 17. 81% in 2008. Microsoft’s debt to equity ratio 50. 15% in 2007 and was 50. 7% in 2008[4] ? Google’s current ratio was 8. 49 in 2007 and 8. 77 in 2008. Yahoo’s current ratio was 2. 41 in 2007 and 2. 78 in 2008. Microsoft’s current ratio was 1. 44 in 2007 and 1. 69 in 2008[5] ? Google’s income from operations was 30. 64% of sales revenues in 2007 and was 30. 43% of sales revenues in 2008. Yahoo’s operating income was 9. 98% of sales revenues in 2007 and 0. 18% of revenues in 2008. Microsoft’s operating income was 36. 23% of revenues in 2007 and 37. 19% of sales revenues in 2008[6] ? Return on Assets (ROA) = 16. 6% in 2007 and 13. 3% in 2008. Yahoo’s ROA = 5. 4% for 2007 and 3. 1% in 2008. Microsoft’s ROA = 19. 3% in 2007 and 19. 9% in 2008. [7] ? Return On Equity (ROE) = 18. 5% in 2007 and 15. 0% in 2008. Yahoo’s ROE was 7. 2% in 2007 and 4. 5% in 2008. Microsoft’s ROE was 38. 8% in 2007 and 57. 4% in 2008[8]. B. Strategic Posture ? Mission Statement: â€Å"To organize the world's information and make it universally accessible and useful. †[9] ? Objectives: ? Remain the industry-leading website in terms of internet traffic market share ? Remain the industry leader in providing the most accurate search engines ? Capture market share in the online advertising market and become the industry leader in providing directed, online advertising services ? Reduce risk by increasing market share in non-search internet services: Google catalog, Google Business Solutions, Google News, etc ? Begin licensing patented wireless technology and intellectual property to other companies ? Further diversify company from competitors C. Corporate-level strategies ? Pursue a strategy of concentric diversification by entering into other areas of the internet services market D. Business-level strategies ? Differentiate Google’s products from those offered by competitors ? Competitive rather than cooperative E. Functional-level strategies ? Google’s R strategy is to be a technological leader ? Google’s marketing strategy is to simultaneously pursue a market development strategy to gain market share for its search engine and pursue a product development strategy to increase the diversity of its product portfolio. In both cases, Google primarily uses a pull strategy to entice consumers to utilize its products. For example, Google uses Google Business Solutions to advertise the ways Google can help various businesses through the use of their products. This advertising results in businesses â€Å"pulling† Google’s products through the channels. ? Google’s financial strategy includes maintaining a low debt to equity ratio. Their debt to equity ratio was only 11% in 2008, which is much lower than that of the competition ? Google’s operations strategy includes increasing and maintaining global operations. They have offices and thousands of services in many different countries on several continents. This is more fully discussed in a later section. ? Human resources – Google’s HR strategy entails maintaining and further developing an extremely diverse work force. Its strategy is also focused on attracting employees with advanced technical skills and paying them well both monetarily and with many fringe benefits. This is more fully discussed in a later section. II. Corporate Governance A. Board of Directors[10] ? Eric Schmidt has served as our Chief Executive Officer since July 2001 and as a member of our board of directors since March 2001, where he served as Chairman of the Board from March 2001 to April 2004. In April 2004, Eric was named Chairman of the Executive Committee of our board of directors. Prior to joining us, from April 1997 to November 2001, Eric served as Chairman of the board of directors of Novell, Inc. , a computer networking company, and, from April 1997 to July 2001, as the Chief Executive Officer of Novell. Eric was a director of Siebel Systems until January 2006. Eric holds a Bachelor of Science degree in electrical engineering from Princeton University and a Master's degree and Ph. D. in computer science from the University of California at Berkeley. Sergey Brin, one of our founders, has served as a member of our board of directors since our inception in September 1998 and as our President of Technology since July 2001. From September 1998 to July 2001, Sergey served as our President and Chairman of the Board. Sergey holds a Master's degree in computer science from Stanford University and a Bachelor of Science degree with high honors in mathematics and computer scien ce from the University of Maryland at College Park and is currently on leave from the Ph. D. program in computer science at Stanford University. Larry Page, one of our founders, has served as a member of our board of directors since our inception in September 1998 and as our President of Products since July 2001. From September 1998 to July 2001, Larry served as our Chief Executive Officer and from September 1998 to July 2002 as our Chief Financial Officer. Larry holds a Master's degree in computer science from Stanford University and a Bachelor of Science degree with high honors in engineering, with a concentration in computer engineering, from the University of Michigan and is currently on leave from the Ph. D. program in computer science at Stanford University. ? L. John Doerr has served as a member of our board of directors since May 1999. John has been a General Partner of Kleiner Perkins Caufield & Byers, a venture capital firm, since August 1980. John is also a director of Amazon. com, Inc. , an Internet retail company, Homestore, Inc. , a provider of real estate media and technology solutions, Intuit, Inc. , a provider of business and financial management software, and Sun Microsystems, Inc. , a supplier of networking computing solutions. John holds a Masters of Business Administration degree from Harvard Business School and a Masters of Science degree in electrical engineering and computer science nd a Bachelor of Science degree in electrical engineering from Rice University. ? John L. Hennessy has served as a member of our board of directors since April 2004. Since September 2000, John has served as the President of Stanford University. From 1994 to August 2000, John held various positions at Stanford, including Dean of the Stanford Unive rsity School of Engineering and Chair of the Stanford University Department of Computer Science. John has been a member of the board of directors of Cisco Systems, Inc. , a networking equipment company, since January 2002 and chairman of the board of directors of Atheros Communications, Inc. a wireless semiconductor company, since May 1998. John holds a Master's degree and Doctoral degree in computer science from the State University of New York, Stony Brook and a Bachelor of Science degree in electrical engineering from Villanova University. ? Arthur D. Levinson has served as a member of our board of directors since April 2004. Since July 1995, Art has served as a member of the board of directors of Genentech, Inc. , a biotechnology company, and has served as its Chairman and Chief Executive Officer since September 1999. Prior to 1999, Art held various executive positions at Genentech, including Senior Vice President of R. Art has been a member of the board of directors of Apple Computer, Inc. , a computer hardware and software company, since 2000. Art was a Postdoctoral Fellow in the Department of Microbiology at the University of California, San Francisco. Art holds a Ph. D. in biochemistry from Princeton University and a Bachelor of Science degree in molecular biology from the University of Washington. ? Ann Mather has served as a member of our board of directors since November 2005. Since April 2004, Ann has been a director of Central European Media Enterprises Group and serves on its Audit and Compensation Committees. She served as a director of Shopping. com from May 2004 until it was acquired by eBay in 2005 and was Chair of the Audit Committee and a member of the Corporate Governance and Nominating Committee. From 1999 to 2004, Ann was Executive Vice President and Chief Financial Officer of Pixar. Prior to Pixar she was Executive Vice President and Chief Financial Officer at Village Roadshow Pictures. From 1993 to 1999 she held various executive positions at The Walt Disney Company, including Senior Vice President of Finance and Administration for its Buena Vista International Theatrical Division. Ann holds a Master's degree from Cambridge University. ? Paul S. Otellini has served as a member of our board of directors since April 2004. Paul became the Chief Executive Officer and President of Intel Corporation, a semiconductor manufacturing company, in May 2005. Paul has been a member of the board of directors of Intel since 2002. He also served as Intel's Chief Operating Officer from 2002 to May 2005. From 1974 to 2002, Paul held various positions at Intel, including Executive Vice President and General Manager of the Intel Architecture Group and Executive Vice President and General Manager of the Sales and Marketing Group. Paul holds a Master's degree from the University of California at Berkeley and a Bachelor's degree in economics from the University of San Francisco. ? K. Ram Shriram has served as a member of our board of directors since September 1998. Since January 2000, Ram has served as managing partner of Sherpalo, an angel venture investment company. Prior to that, from August 1998 to September 1999, Ram served as Vice President of Business Development at Amazon. com, Inc. , an Internet retail company. Prior to that, Ram served as President at Junglee Corporation, a provider of database technology, acquired by Amazon. om in 1998. Ram was an early member of the executive team at Netscape Communications Corporation. Ram holds a Bachelor of Science degree from the University of Madras, India. ? Shirley M. Tilghman has served as a member of our board of directors since October 2005. Since June 2001, Shirley has served as the President of Princeton University. From August 1986 to June 2001, she ser ved as a Professor at Princeton University and from August 1988 to June 2001 as an Investigator at Howard Hughes Medical Institute. Shirley holds a Ph. D. n biochemistry from Temple University and an Honorary Bachelor of Science degree in chemistry from Queen's University. ? Three members are inside board members and seven are outside board members; two are female ? Committees include: audit, leadership development and compensation, nominating and corporate governance, executive, acquisition, and real estate[11] B. Top Management ? Eric Schmidt , Chairman of the Board and Chief Executive Officer ? Larry Page , Co-Founder & President, Products ? Sergey Brin , Co-Founder & President, Technology Nikesh Arora , President, Global Sales Operations and Business Development ? Laszlo Bock , Vice President, People Operations ? Shona Brown , Senior Vice President, Business Operations ? W. M. Coughran, Jr. , Senior Vice President, Engineering ? David C. Drummond , Senior Vice President, Corpora te Development and Chief Legal Officer ? Alan Eustace , Senior Vice President, Engineering & Research ? Urs Holzle , Senior Vice President, Operations & Google Fellow ? Jeff Huber , Senior Vice President, Engineering Omid Kordestani , Senior Advisor, Office of the CEO and Founders ? Patrick Pichette , Senior Vice President & Chief Financial Officer ? Jonathan Rosenberg , Senior Vice President, Product Management ? Rachel Whetstone , Vice President, Public Policy and Communications ? Susan Wojcicki , Vice President, Product Management III. External Environment Analysis (EFAS, see Exhibit 1) A. General Environment[12] 1. Natural Environment ? Solar or geomagnetic storms in space could destroy or damage Global Positioning System (GPS) satellites as well as cause electric power outages on earth. In 1989, a geomagnetic storm caused a nine-hour power outage in Eastern Canada that affected millions of people[13]. The GPS satellites are used by Google to provide their Google Earth service. The power outages could affect internet traffic which would reduce Google’s advertising revenues. The power outages may also prevent Google from offering services due to a lack of power to run their equipment. Another possibility is that Google may have to use back-up power – such as generators – or purchase it temporarily at a higher rate from another source; thereby increasing their operating costs (T) ? Climate change is expected to result in an increase in the intensity and the frequency of severe storms. Weather issues that are expected to increase in both intensity and frequency are: windstorms such as tornados and hurricanes, heat waves and droughts, storms with extreme rains or snow, and dust storms. Floods and landslides are expected to increase as well[14]. This could affect Google by causing damage to the communications infrastructure – i. e. cable cuts – which would cause the internet connections to become intermittent or nonexistent until the cable cut or related issue is repaired. In the case of wireless connections, â€Å"wireless nodes† like cell phone towers may be knocked over. Other communications items such as switching networks may be damaged by extreme weather as well[15]. The extreme weather could prevent Google from delivering services to customers and could damage other businesses and industries as well; resulting in reduced revenues for Google and a slump in the overall economy (T) ? As mentioned above, storms with extreme winds are expected to increase which will likely increase the tumultuousness of the ocean. 5% of cable cuts in undersea cables are caused by ships’ fishing nets and 18% are caused by ships’ anchors. Extreme weather may increase the frequency of undersea cable cuts from ships; resulting in internet disruptions[16] (T) 2. Sociocultural Forces ? An estimated 577 million people worldwide access the internet using mobile devices. The number of people accessing the internet via mobile phones is expected to increase to 1. 7 billion by 2013. By 2014, mobile internet users are expected to make up around 50% of all internet users (O)[17] ? The pace of life is increasing for the average consumer. Due to advances in technology – like the cell phone, wireless laptop computer and email – each person with access to these technologies is pressured to complete more tasks. This increases reliance on the newest technologies to meet the demands of increasing expectations put upon consumers[18] (O) ? Consumers are worried about identity theft and privacy; especially how their information can be accessed and used by other companies and individuals online. [19] (O) ? The average American respondent spent 19 hours per week surfing the internet[20] (O) ? Email remains the most popular online activity. This is even more true with users 64 years and older. 73% of teenage users reported using email more than anything else on the internet and 74% of internet users aged 64 and older reported using email more than anything else on the internet[21] (O) ? The largest increase in internet usage can be found within the 70-75 year-old age group. Previously, 26% reported using the internet; this number has increased to 45%[22] (O) ? Internet users aged 18-34 are the largest group of internet users who use the internet for entertainment purposes. For this group, entertainment includes watching videos, playing online games, engaging in virtual worlds, and downloading music[23] (O) ? Internet users aged 12-34 are the largest group of users to read and write blogs and are also the largest group of users to engage in social networking via the computer[24](O) 3. Technological ? Internet speed is increasing[25] (O) ? Storage capacity on the internet is increasing (O) ? Internet software capabilities are increasing (O) ? Consumers are expecting a greater level of personalization in their web searches, frequently-visited websites, and internet services than in prior years[26] (O) ? Emergence of a new technology called The Internet of Things. This technology is designed to run hardware appliances – such as a refrigerator – as optimally as possible. Also, it runs sensors within appliances that can report back to the user via the internet. For example, in the case of a refrigerator, this technology would report what foods you are running low on and which foods may no longer be safe to eat[27]. e. g. , Google may want to examine providing an internet service designed to connect users with the hardware and software in use – especially via mobile device. )(O) ? 66% of internet users report using search engines when making complex decisions. (O) ? Respondents in the survey listed in the bullet above report only 25% of searches produce needed results the first time. Of these same responde nts, 30% report giving up on the search after failing to receive the desired result[28] (T) 4. Economic ? Period of American and global economic recession[29] (T) ? Fed. Chairman has declared that America’s recession is likely over and expects moderate growth for the next two years. [30] Around half of Google’s users are in the United States (see above). (O) ? An end to the recession in the European Union is expected during the third quarter of this year[31]. Around half of Google’s users are outside the United States (O) ? Federal interest rates are between 0-0. 25%, making capital more affordable for advertising customers and for Google[32] (O) ? Real GDP is expected to be -2. 6 this year but is expected to increase to 2. in the end of next year[33] (O) ? Consumer spending is expected to increase from -0. 9 this year to 1. 1 next year[34] (O) 5. Political – Legal ? Internet crimes (a component of these is copyright infringement), in one year, are estimated to have resulted in losses of $240 million dollars; as opposed to an estimated loss of $198 million dollars as a result of these crimes in the previous year. The increased amount of these crimes is likely to result in increasingly stringent regulations regarding crimes – including intellectual property-related crimes – perpetrated over the internet. The impact to Google is this: Google stores images and written works in their directory – exposing them to potential future legal liability for intellectual property related violations. Google has already been sued for this; Google was forced to remove 100,000 clips of copyrighted material from YouTube and paid out $90 million dollars to one party for a related issue[35] (T) ? Character defamation by anonymous bloggers has resulted in courts forcing companies like Google to reveal the identity of the anonymous blogger to the courts[36] (T). India is issuing subpoenas (or their equivalent) to â€Å"platform† companies like Google, Yahoo, and Microsoft for content displayed on their â€Å"platforms. † The companies have court cases pending against them for content displayed on their sites including: copyright infringement, character defamation, hate messages, and gender selection advertisements[37] (T) B. Task Environment 1. Threat of New Entrants ? Threat of new e ntrants is medium ? Switching costs are virtually non-existent; customers can use search engines for free and can use them apart from other services offered by the company furnishing the search engine. Customers will likely try another search engine if the results they require cannot be obtained quickly and easily from the engine they are using. Google’s advertising customers are not required to sign a long-term contract; nor do they have to make a sizable investment up-front in order to place an ad with Google. Advertisers pay Google for space on their search engine results pages only when customers â€Å"click† on their ads and can therefore switch to another company without large sunk costs. ? Barriers to entry do exist, however, due to the amount of computer equipment necessary to be competitive with the likes of Google and Yahoo. Also, the large competitors within this arena have servers strategically placed all over the world. This may be difficult for a new company to this industry to replicate in a fashion that would make them competitive. Also, the large companies in this industry have vast amounts of information about their customers and online advertisers that would be difficult for a new entrant to amass. [38] 2. Rivalry Among Competitors ? Rivalry among competitors is high ? Google’s competitors (at this time) are all larger companies with large amounts of resources ? Google’s competitors offer other internet services as well as search services. The search engine attracts customers to their other services (for example, dating services, email, and fantasy sports league platforms); which raises the importance of possessing a superior search engine past its importance of a stand-alone service for Google’s competition ? Competition with Microsoft is expected to increase. Microsoft is attempting to integrate a search engine into its operating system and other products [39] ? Google considers Microsoft and Yahoo their greatest competition. These companies have greater cash resources and ability to make acquisitions, a longer operating history, and more established customer and end user relationships. They also operate internet portals and offer more products and services than Google does. In the case of Microsoft, they also have more employees [40] ? Google’s market share in the U. S. internet search market is 31%; Yahoo’s market share is 26% and MSN’s is 20%. This is very close. ? The industry is attractive and margins are high. Google’s success has increased the intensity of competition since these other companies want to share in the financial success ? Microsoft is working to develop a search engine to rival Google’s. This may be in lieu of the MSN search engine mentioned above[41]. This will definitely increase competition dramatically (in the short run at least) as Microsoft throws its resources in promoting their new product and attempting to steal market share from Google. Microsoft has a longer history of marketing than Google does, which may increase rivalry. 3. Bargaining Power of Suppliers ? Bargaining power among suppliers is low ? Google, as an internet-based service firm, requires few raw materials from outside sources. The supplies required, with the exception of electricity, are available from multiple sources ? Potential employees have some power over Google due to the short supply of qualified applicants. According to Google’s CEO, Google was having problems finding applicants that were either not technically proficient enough to complete the task at hand or of â€Å"insufficient quality. † 4. Bargaining Power of Buyers ? Bargaining power among buyers is medium ? Google has 31% of the internet search traffic market share, compared to 26% for Yahoo and 20% for MSN. This strengthens Google’s position with buyers since Google is the industry leader and is therefore more attractive than competitors to advertisers who would like to place ads on search engine results pages ? No buyer of Google’s services is responsible for larger than 3% of Google’s revenues. Because Google’s buyers are fragmented and none are responsible for a large amount of revenues, Google’s buyers do not have much power over Google[42] 5. Threat of Substitutes ? Threat of substitutes is high ? Although there aren’t any true substitutes for a search engine, there are different ways to organize information. In this case, a different method of searching might produce a substitute to the current method that may produce better results ? Yahoo, MSN, AOL, and Microsoft are working to develop search engines that will either equal or exceed the functionality of Google’s search engine and have the resources to allocate to a massive research and development effort. Time will tell whether they are, in fact, viewed as a substitute by search users. ? Google’s search-engine customers value accuracy of search results. Google’s competitors already offer search engines. Google’s competitors may be able to create a comparable search engine over time . Bargaining Power of Other Stakeholders ? Bargaining power of other stakeholders is medium ? Special interest groups, like the American Association of Publishers and the Authors Guild, have sued Google and won for copyright infringement for content used by Google on their Google Print and Google Books applications. These groups a nd other groups are constantly monitoring Google’s actions for incidents of actual or perceived copyright infringement on their applications. [43] ? Google has been forced, as a result of a lawsuit, to reveal the identity of a blogger who wrote offensive comments about a Canadian model. Google may be required to release the identity of other users upon request in the future because of this precedent which may reduce their customer base. [44]This example is meant to illustrate that individuals, as well as organized groups, may have the power to influence Google’s business operations ? Google’s employees have little power to exert when negotiating with Google. Labor within Google is not organized[45] IV. Internal Environment Analysis (IFAS, see Exhibit 2) A. Corporate Structure (See Exhibit 3 for organization chart) ? Google’s corporate structure is primarily functional. 46] ? Google is broken down into five functions: Engineering, Sales, Products, Marketing, Legal, and Finance ? Underneath the overarching functional structure, Google is further broken down into product markets or geographical areas, which technically makes Google’s structure a hybrid of functional, geographic, and product structures. ? Each product market or geographical a rea element under the functional areas is treated as a small business unit. The small business unit element of Google’s structure provides flexibility. B. Corporate Culture ? Corporate culture values innovation and ambidexterity. Employees (including corporate level managers) are encouraged to devote 70% of their time on core business activities, 20% of their time to core-business related projects, and 10% of their time to unrelated new business activities. According to Marissa Mayer (see top management section for job title), around half of Google’s new products are a direct result of actions taken by employees during their free time (S)[47] ? Culture seems to have high degree of intensity and integration ? Culture values include â€Å"an obsessive commitment to creating search perfection and having a great time doing it (S)†[48] ? Other priorities for Google members are innovation and keeping costs low ? Google values ability over experience and encourages everyone to share ideas. Also, Google created an informal atmosphere where anyone can ask the CEO or top management a question and be answered. [49] (S) ? Google’s corporate culture puts emphasis on not exploiting the user of their products. [50] ? Being quirky and having fun are also emphasized. Google’s work area has foosball tables, ping pong tables, volleyball nets, and several other games present (S)[51] C. Corporate Resources 1. Marketing ? Google promotes advertising packages through Google Business Solutions. Information is available to prospective clients on how Google can improve clients’ profitability through their advertising packages (S) ? Services – Google’s advertising customers often see Google’s service team as arrogant and find it time consuming and difficult to do business with Google because Google often switches the team assigned to handling the clients’ business before the clients’ advertising submission is complete (W) ? Google is second to Yahoo in being able to finalize agreements with advertisers (W) ? Television advertising is currently not being utilized by Google. In comparison, Microsoft is showing Television advertisements for their products. TV advertisements may reach a good portion of the older audience and inform â€Å"non-tech-savvy† about their products and services[52] (W) ? Google doesn’t advertise on their home page which is attractive to search customers (S) ? Extremely strong brand. Google has been added to the Oxford dictionary as a verb (S) ? Average sales per click per month were a little under 54. 5. However, Yahoo’s average sales per click were only 53 during the same month. Yahoo is currently Google’s biggest competitor[53] (S) ? â€Å"Adwords† system employed by Google to deliver advertisements is user-friendly for advertisers. Google’s system is also easy for advertising customers to use for changing the advertisement shown on Google’s results pages. (S) ? Product – Google’s search engine is most accurate in the world (O) 2. Finance ? Google’s revenues in 2004 were $3,189,223,000. This is 117. 56% greater than their revenues in 2003, which are $1,465,934,000 (S) ? Google’s cash balance in 2004 was $426,873,000; 186. 5% greater than their cash balance of $148,995,000 in 2003 (S) ? Google’s profit margin was 12. 52% in 2004. Yahoo’s, in 2004 was 23. 49. [54]Microsoft’s profit margin was 22. 17[55](W) ? Google’s quick ratio (acid test) was 7. 18[56] in 2004. Yahoo’s quick ratio in 2004 was 3. 38. Microsoft’s quick ratio in 2004 was 4. 44(S) ? Google’s Return on Assets (ROA)[57] was 21. 05% in 2004. Yahoo’s ROA in 2004 was 11. 83% and Microsoft’s ROA in 2004 was 9. 38%(S) ? Google’s Return on Equity (ROE)[58] was 25. 97% in 2004, as compared to Yahoo’s ROE in 2004 of 14. 65% and Microsoft’s ROE in 2004 of 11. 69%(S) ? Google’s debt to equity ratio was 13. 12% in 2004. Yahoo’s was 29. 24% in 2004 and Microsoft’s was 23. 47% in 2004[59](S) ? Net income was positive in 2002-2004. Net income was $399,119,000 in 2004; an increase of 277. 79% over 2003’s net income of $105,648 (S) 3. Research and Development ? In 2004, Google spent 7. 7% of sales revenues on R&D. This is very low for a tech firm (W) ? R&D is one of Google’s strengths. They have more market share in the search engine market because of the creation of their innovative search engine (S) ? Research and Development efforts have led to the creation of the most-used search engine in the world. Another notable innovation that relates to this is their creati on of a learning search engine. The more a customer uses their search engine, the more it learns and responds to the user’s individual preferences. Due to Google having the largest market share, their engine can learn faster than those offered by the competition which reduces its imitability[60]. (S) ? Google owns 13 registered trademarks and 7 unregistered trademarks as a result of R and D efforts[61](S) 4. Operations and Logistics ? One of Google’s biggest strengths is getting a large volume of users to their websites which makes them very attractive to advertisers (S)[62] ? Google has servers and locations all over the world to improve distribution of services[63] (S) ? Google has the ability to translate their information into over 88 different languages. This improves operations and logistics control when activities are taking place in a non-English- speaking country (S) ? Google’s Adwords system is self-managing; meaning that an advertising customer can change their campaign as their budget changes. This results in quick, efficient adjustments (S) 5. Human Resources Management ? Google employed 2,700 employees in 2005; 900 were â€Å"techies† ? Employees receive many fringe benefits in an effort to make them feel they are a priority. This strengthens corporate culture to a degree. Google has been listed as the top company to work for for two years in a row by Fortune Magazine. Employees have access to free high-end on-site dining facilities, snack stations, gyms, laundry rooms, barbers, massage rooms, dry cleaning, and several other employee fringe benefits[64] (S) ? Google’s CEO, Eric Schmidt, stated that the company was having problems recruiting employees who were both of acceptable caliber and technically proficient (W) ? Google maintains a diverse workforce and hires locals to work in its geographically dispersed locations (S) ? Google has a long hiring process that takes several months to complete. This would be a strength, except the company reported having problems finding people that were both quality employees and technically proficient (W) ? Employees are skilled at multitasking. For example, the individual who created Google’s holiday logo also was responsible for translating Google’s website into Hangul (Korean language) (S) ? Google’s technical employees work 70% of the time on regular business, 20% of the time on new but related business, and 10% of their time on completely new and unrelated projects. This makes Google more adaptable and builds â€Å"ambidexterity† into the organization (S) 6. Information System (IS) ? Google utilizes a system called â€Å"Live Out Loud† to promote communication between employees, to create a searchable database of related projects employees are working on to promote economies of scope and transfer of knowledge, and as a control system. How it works: Google employees weekly send an email to a central source concerning the specifics of the project they are working on and their progress. Google has used the same search engine it employs on its website Google. com to search through the emails to find the relevant ones. Managers simply have to search, using the Google search engine, for the employee’s progress they wish to evaluate. The system is user-friendly for both the employees and managers and it is simple. An employee working on a project can search the system for other relevant projects and obtain useful information they can incorporate when completing their specific task[65]. S) ? Google uses a triple redundancy system to ensure errors don’t disrupt the flow of timely information. If one computer doesn’t respond to an employee’s request for information within a few milliseconds, two others provide the information to the employee. All information is stored in three places. This makes their system very reliable and efficient in delivering timely information (S)[66] ? Google uses a database system called BigTable as part of their manag ement information system. Due to the volume of information Google must manage, Google has developed this software to break apart large files that are too big for any one server into smaller pieces so they can be stored on multiple servers. This ensures that capacity is available for their information[67] (S) ? Many of Google’s basic activities are automated (S) V. Strategic Alternatives and Selected Strategy A. Growth Strategies 1. Enter market providing legal music and video downloading services (S&O) a. Pros: ? Google has the intellectual capital to successfully develop the software to provide this service. Google has already proven that they can provide the search capabilities to link users with their desired songs or videos; their search engine is the most accurate in the world and the popularity of their product YouTube suggests they possess the capabilities to develop a desirable music/video downloading service ? With a large cash balance and the capabilities to obtain financing due to an extremely low debt to equity ratio, Google definitely possesses the financial resources to develop these services and bring them to market ? By providing different but related services, Google will be reducing their â€Å"diversifiable risk†, if you will, by increasing their product portfolio from one successful revenue generating product to several ? There is a large market for these services already in place; this market is likely to grow as digital media becomes more prevalent in society and obsolete technologies such as tapes, CDs, and records further decline ? Google’s brand strength would be beneficial in this market since the music and movie downloading industry is related to Google’s area of expertise (i. . it is equivalent to an industry leader in the manufacture of small power tools diversifying into producing concrete mixers and pumps, rather than the power tool company diversifying into diapers and other baby products. A DeWalt brand logo on a pair of diapers likely won’t transmit the same message of quality and expertise that it would on another type of tool) b. Cons ? Apple iTunes owns 82% of legal music downloading market. [68] Competing with a company that owns this much of the market share and has more experience in this industry will be very difficult ? Increases the probability of copyright infringement lawsuits ? Shifts emphasis away from Google’s core product – the search engine. If the search engine is imitated or surpassed by a better product before Google establishes a dominant position and greater profits and revenues from its new endeavor, Google may lose a large part of its almost sole source of revenues ? Regulation and trends concerning royalties paid to artists and music production companies may reduce the profitability of this industry ? Illegal downloading may increase; thereby reducing the size of the legal downloading market ? Requires maintaining existing advertising business model and creating and maintaining a new switchboard model (connecting multiple buying downloaders with multiple selling digital music and video suppliers 2. Develop new search engine designed for seniors markets – â€Å"Google Golden Life†. New search engine has an option for adjusting the size of the font used on the search pages based on the capabilities of the user’s vision and allows seniors to type in a question instead of just key words. In addition, it will contain a function that completes words for the typist if he or she so chooses (like an internet browser address box does) – concentric diversification (S&O) a. Pros ? First mover advantage could be gained by focusing on this market segment. Seniors have been ignored – for the most part – in the development of online products and services. No company currently caters to the needs of older internet users ? Seniors represent the largest growing demographic of internet users and represent a large segment of all societies ? The baby boomers are aging and will want/demand products focused on their needs soon ? Google possesses the financial resources to make this happen ? Google also possesses the brand strength and awareness to appeal to older users; older individuals tend to like larger, stable, established, well-known companies as opposed to small, new, relatively unknown startups ? Creating products geared toward older users may increase their interest in Google’s existing products ? Utilizes existing advertising business model to obtain revenues from pay-as-you-click advertisements b. Cons ? Today’s older internet user’s wants and needs are poorly understood by the online industry; this makes developing products/services focused at them a risky undertaking in the short-term. Younger baby boomers are familiar with current computer software but current seniors are less familiar and use computers more infrequently and for less activities (i. e. they may email but not shop extensively online) ? Once Google enters this market and proves the market is attractive, competition will increase and profits will likely go down as the market matures ? The idea of marketing online products and services geared toward older users is a newer one but an imitable one; other companies may have a greater understanding of the older consumer than Google since it has focused on products/services for a primarily younger audience with different needs. This means that other companies may prove to be more successful with this market segment than Google because of a greater knowledge of the older consumer ? Older users may only be interested in emailing and may have little interest in clicking on advertisements; thereby lowering the desirability of placing advertisements on Google’s new products ? May be hard to reach market segment to inform them of new product 3. Develop Social Networking System –â€Å"Google Linkage†Ã¢â‚¬â€œ Concentric diversification (S&O) a. Pros ? Facebook and MySpace are both very popular. Today, internet users 12-34 are largest demographic to engage in social networking. As this age group ages, they will likely continue to use social networking sites and younger individuals entering this age group will likely also engage in social networking via the computer; growth in the social networking industry is virtually assured. Why the growth in this industry is important for Google: advertising revenues will likely increase as ads are placed on social networking pages ? Creates the potential for another profitable advertising platform; reduces the reliance on advertising revenues created from one product – the search engine ? May increase interest in Google’s other products (i. e. a social networker uses Google Images to send a picture of a desert rose to another gardener via Google’s networking service) ? Could compliment Google’s existing mission of organizing the world’s information with a new addition to the mission: â€Å"Organizing the world’s information – and people – to make it and them universally accessible. † ? Google’s strong brand and reputation will likely spark interest from social networkers in Google’s new networking platform ? Google has the financial resources to create and advertise a social networking site either alone or through a joint venture ? Utilizes existing advertising business model to obtain revenues from advertisers through Google’s AdWords and AdSense ? Likely inexpensive to maintain once it is â€Å"rolled out† b. Cons ? Social networking market may be saturated. Customers may have all their needs met through Facebook and Myspace. These companies already dominate the industry and have more knowledge and experience in this market ? Google may not be able to provide any new innovations in social networking ? Doesn’t utilize their distinctive search competency ? May not prove profitable after a cost/benefit analysis is conducted since advertisements will be less focused on self-identified market segments. For example, if one conducts an internet search for Echeveria Subrigida seeds – a succulent plant – advertisements related to plants may be of interest to the searcher. However, an ad related to purchasing succulent plants online may not be of much interest to the random individual attempting to contact another individual whose interests and needs are also unknown ? Requires a different set of competencies than Google already possesses. Email is the most basic social networking method and Google did not perform well in creating a popular email system 4. Create open source network for the development of applications for mobile devices – Google Architects – concentric diversification (S & O) a. Pros ? Market is supposed to almost triple in size in the next five years ? Google already has knowledge of how to make internet applications compatible with mobile devices – i. e. connecting Google search engine to mobile devices ? It is forecasted that half of internet users will be mobile internet users ? Google has the financial resources to undertake both the product development and advertising ? Google has experience and ability when it comes to developing internet apps. ? Could be set up to accommodate Google’s existing business model – obtain advertising revenues through offering free products ? Takes advantage of innovative technical staff b. Cons ? Stiff competition – Apple already has a large market share for mobile applications that are used on the iPhone and others. Microsoft, as operating systems become more commoditized, will likely enter the mobile internet applications market ? May not generate much revenue if customers have a finite number of minutes on their mobile plan. Customers in this situation are not likely to engage in gratuitous searching for curiosity’s sake. ? While Google has proven adept at creating applications, their distinctive competency resides in search engine excellence. Developing apps for mobile users requires a different skill set and core competency. Google may not be able to gain competitive advantage in this market since generating applications may not be one their distinctive competencies 5. Create a search service designed to locate music in a superior manner – â€Å"Google Music. † The search system would allow a user to enter in any part of a song, a band name, a song name, or a CD name and the search will provide results that include not only what the searcher is specifically looking for, but also links to the band’s website, links to listening to or downloading a particular song or multiple songs from the artist, and links to other related sites (i. . sites that offer guitar tablature for the artist or song mentioned in the search) a. Pros ? Will attract more users to the Google search engine, which increases the desirability of advertising on Google’s web pages ? Google music will increase brand loyalty and strength as it meets more of Google’s customers’ needs ? Will strengthen the desirability of the search engine for existing customers ? Will capitalize on Google’s distinctive competency of creating a search engine that produces more accurate results than other search engines offered by competitors ? Will address the needs of the large segment of internet users that use the internet for obtaining and enjoying music ? May provide an additional source of revenues from bands that would like to advertise their products on Google Music’s results pages b. Cons ? Users can already find all of these items using the traditional Google search engine ? Will likely add little to Google’s revenue stream ? Doesn’t address the problem of Google only possessing one profitable product ? Doesn’t truly meet the needs of internet music users since it doesn’t allow users to download music directly from Google ? Most of the results will likely be advertisements. Users may not want to search through advertisements B. Stability Strategies 1. Pause/Proceed with Caution – Use resources to improve existing search engine until threat from Microsoft’s new search engine can be determined and countered. Then grow (S & T) a. Pros ? 99% of revenues are generated from ads placed on search engine pages – Google already dominates market for search services – this must be protected in the short term to protect the sustainability of Google as a company ? Google is currently doing well and doesn’t need to grow to stay in business in the short term ? Financial resources may be needed to counter Microsoft’s efforts to gain position in the search market ? Reinforces Google’s distinctive competencies ? Also allows for the economy to improve before expanding; advertisers may need to rest as well before further investing in ads in non-search related areas b. Cons ? Market dominance in the mobile applications market is being determined now. The opportunity to be the first to focus products toward seniors is open right now. The other opportunities presented above also are available now but may not be in the future ? Doesn’t address the problem and risk of having only one major income-producing product ? Google has the financial resources and ability to obtain further resources if necessary; there are no critical reasons not to grow ? Is only a short-term fix and may cause growth to be put off too long C. Retrenchment Strategies – Google, at this time, has no reason to retrench and should therefore stay away from adopting a retrenchment strategy. It is in good financial condition, its products are still desirable, and it has little to no chance of failing in the short term. D. Adopted strategy – Concentric diversification into mobile applications (Google Architect), music search services (Google Music), and products focused on older internet users (Google Golden Life), combined with investment in maintaining the superiority of the search engine. ? Rationale – both diversifying into mobile applications and products focused on older users deals with seizing opportunities by using organizational strengths (R&D, financial resources ,etc). Both areas represent growing markets and several opportunities to fill emerging or existing needs. Older users are the largest growing segment of internet users and mobile users are expected almost triple in the next five years to finally make up almost half of all internet users. Both allow focused advertising based on known customer needs and interests (the type of application utilized points out the interest – i. e. a customer uses an app to learn a new guitar chord; obviously the user has an interest in the guitar. Also, advertising can be focused on the users of the open forum. Both hardware and software tech companies can advertise on the forum. Elderly people have several universal needs and likely popular interests) and the use of the existing business model. By developing Google Music, Google will further strengthen their best product – the search engine – as well as utilize their distinctive competencies in search engine creation. This strategy diversifies the risk of having one profitable product, which eliminates a major organizational weakness, and is financially feasible given existing resources. The strategy doesn’t face a major threat of being derailed due to organizational weaknesses and outside threats don’t directly threaten the diversification efforts. Google would face virtually no competition by entering the market to deliver online products and services to older users and has the rare opportunity to obtain first mover advantage on a large scale (there are numerous elderly people in the world). Diversifying into these areas has a higher probability of success and is less risky than entering the social networking and downloading markets. Neither of these two areas of diversification would require major shifts in technological knowledge and would utilize the intellectual capital present in Google’s existing staff. This strategy does require an allocation of financial resources toward maintaining the superiority of the search engine because Google must rely on it for success in the short term and will aid in Google’s success over the long term. It represents their distinctive competencies and must be protected at all costs. Adding capital and effort to improving the search engine would not be mutually exclusive with the diversification strategy since Google possesses a large cash balance and a low debt ratio. Given Google’s situation, both parts – the concentric diversification and the concentration on the search engine should be focused on simultaneously. ? This corporate strategy requires a business level strategy of differentiation and functional level strategies of technology pioneer/leader in R&D and a product development strategy within Marketing E. Implementation 1. Product One (Google Golden Life -search engine designed for seniors markets. New search engine has an option for adjusting the size of the font used on the search pages based on the capabilities of the user’s vision and allows seniors to type in a question instead of just key words. In addition, it will contain a function that completes words for the typist if he or she so chooses (like an internet browser address box does) ? Product R&D should be allocated 2% of 2004 sales revenues for two years ($63,784,460/year) ? Organizational members must be chosen to head the new program and participate on R&D teams ? Required new activities must be evaluated for conflict with existing operating activities. ? At least two deadlines must be given to the teams: the first, a working beta version of the product must be created by the end of the project’s first year of existence. Second, a final product that is ready for use on the internet must be in place at the end of a year and a half. After the beta version is released, a team should be given a $1 million budget to obtain and forward on suggestions provided by older users on how to fit the program to their needs. Duration of team: 1 year. ? ROI after year two must be 6% or more and must be at least 10% by the end of year 5 ? Market share (of the existing older internet users) must be 5% at the end of year two and 20% or over after year 5 ? An updated version must be made available by the end of year two ? A flexible budget must be created for year o ne and year two. Pro forma income statements and balance sheets should be created for at least year two and five ? New product must make up at least 2% of total revenues by year two and at least 5% by the end of year five. ? Access to intranet databases must be given to staff working on both diversification products so that a. The wheel isn’t reinvented and, b. Learning can be transferred throughout the organization if relevant pieces of information are discovered during the creation of the new products ? Product must be available in at least three languages by the end of year 2 and 15 languages by the end of year 5 ? Economic value added should be positive at the end of year three 2. Product 2 (Google Architect – open source network for the development of applications for mobile devices) ? Product R&D should be allocated 1% of 2004 sales revenues for 2 years ($31,892,230/yr) ? Organizational members must be chosen to head the new program and participate on R&D teams ? Required new activities must be evaluated for conflict with existing operating activities. At least two deadlines must be given to the teams: the first, a working beta version of the product must be created by the end of the project’s first year of existence. Second, a complete product must be in place at the end of a year and a half ? ROI after year two must be 7% or more and must be at least 10% by the end of year 5 ? A flexible budget must be created for year one and year two. Pro forma income statement s and balance sheets should be created for at least year two and five ? New product must make up at least 3% of total revenues by year two and at least 6% by the end of year five. Access to intranet databases must be given to staff working on both diversification products so that cross pollination of ideas between projects can occur ? Product must be available in at least five languages by the end of year 2 and 20 languages by the end of year 5 ? After the beta version is released, a team should be given a $1 million budget to obtain and forward on suggestions provided by older users on how to fit the program to their needs. Duration of team: 1 year. ? Economic value added should be positive after year three 3. Product 3 (Google Music – The search system would allow a user to enter in any part of a song, a band name, a song name, or a CD name and the search will provide results that include not only what the searcher is specifically looking for, but also links to the band’s website, links to listening to or downloading a particular song or multiple songs from the artist, and links to other related sites (i. e. sites that offer guitar tablature for the artist or song mentioned in the search) ? Product R&D should be allocated 1% of 2004 sales revenues for 2 years ($31,892,230/yr) ? Organizational members must be chosen to head the new program and participate on R&D teams ? Required new activities must be evaluated for conflict with existing operating activities. ? At least two deadlines must be given to the teams: the first, a working beta version of the product must be created by the end of the project’s first year of existence. Second, a complete product must be in place at the end of a year and a half ? ROI after year two must be 7% or more and must be at least 10% by the end of year 5 ? A flexible budget must be created for year one and year two. Pro forma income statements and balance sheets should be created for at least year two and five ? New product must make up at least 1% of total revenues by year two and at least 2% by the end of year five. ? Access to intranet databases must be given to staff working on both diversification products so that cross pollination of ideas between projects can occur ? Product must be available in at least five languages by the end of year two and ten languages by the end of year five ? Economic value added should be positive after the year following the release date VI. Evaluation and Control A. Product 1 (Google Golden Life) ? Management should ensure a beta version is complete by the end of year one and a complete version is ready to be released on the internet by one and a half years ? Dupont Return on Investment (ROI) calculation (net profit margin x total asset turnover) should be used to verify whether or not ROI in year two meets or exceeds 6% in year two and 10% in year five. Management should audit the expenditures of the customer satisfaction team quarterly to determine if the team in charge of obtaining feedback by customers is staying within the budget and whether the budgeted amount of $1 million is adequate ? Management should determine whether or not market share (of the existing older internet users) is 5% at the end of year two and 20% or over after year 5 ? Management should ensure that a new version is available at the end of year two ? Management should evaluate product to verify whether or not it is earning 2% of revenues at the end of year two and 5% of revenues after year five. ? Product should be evaluated at the end of year two to ensure it has been translated into at least three languages and 15 or more languages after year five is complete ? Success of site should also be determined by whether or not it gets at least 10 million hits per month (eyeballs) after year two and 40 million hits per month by the end of year five ? Economic Value Added (EVA) should be positive at the end of year three B. Product 2 – Google architect ? Management should check to make sure that deadlines have been reached concerning the beta version of the product after year one and the first, complete version is completed by one and a half years after the start of the project ? Dupont Return on Investment (ROI) calculation (net profit

Firefighter Employment Scenario Essay

Based on the fact that Doug and Sam earned the first and second highest test scores, is it a reasonable assumption that the city of Davis will add Doug and Sam to the certification list? Yes Why or why not? With the top scores on the exam, they should be first in line for certification and an opportunity to interview for the position in question. Can the City successfully defend itself on the basis of â€Å"disparate impact?† No Why or why not? Doug and Sam had the top scores on the certification exam. This does not automatically make them promotable, they would still have to go through the interview process just like any other candidate. The city could have easily certified additional members of minority groups in addition to Doug and Sam. Since they were the top performers they should be on the list, this could be a case of reverse discrimination. Under what circumstances may racial discrimination be proved by â€Å"disparate impact?† Disparate impact according to the book occurs when an employer discriminates against an entire protected class (Cheeseman, 2013). It would be difficult to prove disparate impact, because the city has the ability to accept multiple applicants and certify more than just two slots.

Tools for E-Businesses Research Paper Example | Topics and Well Written Essays - 1250 words

Tools for E-Businesses - Research Paper Example Since the first website appeared online, organizations, companies and institutions have gone on a rush. It is not enough to be on-line with a domain name and a simple website. A useful and well-designed website is an important factor to consider. Website statics are a major concern for the management who want to realize a return on investment for their money1. Despite the overrated chants for this new-age business concept that has suddenly become the goal of many commercial organizations, not much has changed in the traditional way of handling various business processes. E-business maintains the same principles of business operation as traditional commerce: people, both sellers and buyers, come together to exchange commodities and services over a network of computers. Ordering, buying, bidding, selling, customer services, inquiries and virtually all the business processes still uphold the underlying principles of commerce. E-commerce is a subset of the overall e-business strategy. It chiefly seeks to improve the buy-sell transaction activities in a business; as a result it increases the revenue. In a way e-commerce covers a range of on-line business activities for services and products, both businesses to customer and business to business on the Internet as a platform. E-commerce breaks the process of online business into showing the scope activities and information that is provided to the customer to conduct business and online shopping. Multiple and different functions go into the requirements of e-businesses. For instance, there are some basic functional necessities that cover the sort of specialized that perform the functions that run on the e-business mode. There are also other functions that cover the software and hardware requirements to carry out the same services. An analysis of how e-businesses verity credit, process an order and how they fulfill the order as well as how they verity shipments and all or any post sales process needs to be considered wh ile assessing the performance of an e-business. Functionality, both technical and non-technical, is fundamental for an e-business2. Technical functionality refers to the information processing capability of the e-business systems. It points to the server requirements, Internet speed requirement etc. These functional requirements are the foundations and platforms of the e-businesses. The nature that makes business processes virtual in e-business is supported by these systems. Many stakeholders control the entire system and as such an e-businesses smooth operation especially when operating online is controlled by many other people or organizations. Additionally, e-businesses need other functionality such as security, scalability and reliability to be in place. This may make or break a venture and essentially are what keeps any e-business venture in operation. Without security, performing reliable business functions will not be with trust on the end of the consumer. Consumer trust is v ital just like with a traditional store. Building consumer confidence in your system is in this case a good sign of growing business. Order processing needs the transaction processing and database information mining. Speed and efficiency are factors that are considered in evaluating the usability of a system supporting e-business. Payment methods include credit cards, electronic checking and digital cash.

Outsourcing Business Research Paper Example | Topics and Well Written Essays - 2000 words - 1

Outsourcing Business - Research Paper Example Ang and Inkpen (2008) argue that since 2002 offshoring activities have increased significantly, not restricted to only IT sector, but it has gone beyond that in the field of business process outsourcing (BPO), legal outsourcing (LO), infrastructure outsourcing (IO), knowledge process outsourcing (KPO), and many more. In 2000, total offshoring business was estimated at the US $119 billion; however, by 2008, that increased significantly to the tune of US$ 300 billion. In 2011, the US companies outsourced 2,273,392 jobs and as much as 35 percent of the companies consented that they had been outsourcing at least one of the processes. While segregating outsourcing in the services, it has been found that 43 percent of the companies in the IT sector in the US resorted to outsourcing; while in R&D and distribution services, sector outsourcing percentages are found to be 38 percent and 26 percent respectively (Statistic Brain, 2012). Lewin (2012) argues that emerging economies occupy a large pie of global offshoring business promoting overall economic development as the US companies do not mind offshoring nine or more time zones away despite the presence of near-shore delivery centers. This clearly implies that offshoring has been accepted across mid and large sized US companies for varied reasons and it is going to stay and grow in the future bringing new waves of economic development across the globe. From the above exhibit, it is quite clear that cost reduction and unavailability of IT skills were the main reasons for the companies to outsource. Freeing up internal resources and improving customer focus were two other major reasons for the outsourcing given by the companies. Global offshoring IT and BPO market is huge but its evolution has been dependent upon the three factors: Supply quality; timely delivery; and adopting the actions.

Law events Essay Example | Topics and Well Written Essays - 1000 words

Law events - Essay Example Among these factors, it is generally considered that regulations pose the most potential threat to any firm doing business. Experts call this as regulatory risks that can alter the way a firm operates, whether it adds to its costs or even imperil its existence. An example is clean air standards and higher mileage requirements in the auto industry. The oil industry has likewise adjusted and transitioned to lead-free gasoline in most nations. There are so many rules, regulations, and laws for business firms to comply with, it costs a significant amount to do business nowadays. There are regulations on environment, on workplace safety, consumer protection, employees’ health, fair competition, taxes and business practices which require substantial compliance or otherwise face stiff fines and penalties. The list is practically endless, such that a recent study indicated it costs $10,000 more per worker for a firm to comply with all federal regulations. This paper looks at one such new rule. Discussion The sub-prime housing mortgage crisis which started in late 2007 and which in turn caused the lingering effects of the so-called Great Recession even until today was due to the indiscriminate and widespread lax lending practices of banks, mortgage associations, and other financial institutions that resulted in easy access to credit even for those not qualified. It triggered the worst recession ever since the Great Depression of the 1930s and in turn caused the collapse of many venerable lending institutions, forcing the government to bail them out. A host of new laws had been passed to regulate almost all aspects of business operations in order to prevent white-collar fraud, corporate scandals, and other unsavory business practices. Among prominent laws passed at that time was the Sarbanes-Oxley Act (or SOX) in which corporate chairmen, board members, and external auditors are jointly liable for any substantial financial misstatements found on audited financial reports which investors rely upon. The fragile economic recovery has led many economists to term it as jobless growth, because few jobs were created, and many lost high-paying jobs are expected never to return. The financial crisis has spread to Europe and other parts of the world, it has become sort of a global contagion, in which economies plugged into a globalized world got adversely affected. In America, many homes fell below their original market values, putting homeowners at risk for eviction and foreclosure proceedings from the banks and other big lenders. The credit that was so plentiful suddenly dried up, putting many individuals in a credit or cash crunch. Many American individuals and households had also maximized their credit use to such an extent many of them got over-extended when they maxed out their credit cards for purchase of consumer items and durables which they soon regretted. In other words, people were deeply in debt, and in this volatile situation, the lender s and banks soon turned into a more aggressive collection techniques and strategies to recover their

Quantitative analysis Research Paper Example | Topics and Well Written Essays - 1000 words

Quantitative analysis - Research Paper Example History confound defines events that occur during the data collection process to influence the dependent variable without effects from independent variable. The events may increase effects of the independent variable or reduce them and therefore compromises validity of data. Maturation confound however defines transitions in research participants’ cognitive or physical properties towards different rationale by the same person. A longitudinal study may involve change in age that associates with improved rationale and physical characteristics that may change an individual’s perception. Other factors such as education, stress, and physical strain may also influence a person’s rationale into different perspectives during a study. Test confound is another challenge to quantitative research and defines differences in results because of a research participant’s previous experience with the test instrument and the experience influences results from values that wou ld be observed on first encounter with the same test. Interactive effect is another threat to quantitative research and defines association between two or more confounds in a study. Interaction between treatment and history is an example results in different values from actual effects of a study’s independent variables (LoBiondo & Haber, 2013). Challenges of quantitative research are evident and offer a basis for differentiating between quantitative and qualitative research. Their understanding are therefore important, not only for development and implementation of qualitative research initiatives, but also for understanding differences between the two research methods in order to ensure development of a suitable research methodology for a study (Allwood, 2012). History confound is a significant threat to quantitative research because of its potential to alter results in a study. History can occur in a study’s internal or external environment and this defines the exten t to which it may be significant to a study. In a study to investigate effects of lecturers’ appearance on effectiveness of learning process, an independent forum on learning skills that averts students’ attention from a lecturer’s appearance is an external historic factor to the study. A seminar to lecturer’s on how to improve their lecturers is however, an external historical factor and both offer significant potential to shifting the relationship between lecture’s appearance and effectiveness of lecturers. The extent of such an impact on results further depends on effectiveness of the history factor. The challenge is based on factors beyond rationale of research participants and therefore defines independence from bias, unless the history event is selective to influence a proportion of research participants and their associated data. In the absence of bias, history has uniform impacts on phenomenon of study and therefore ensures reliability of c ollected data because of a possible uniform shift in relationships. Consistency in measures will therefore be attained in a historically confounded study but validity will be compromised because of lost accuracy on the effects of independent variables on the subject dependent variable. Possible existence of reliability but not validity in a data

General Motors Corporation Essay Example | Topics and Well Written Essays - 3500 words

General Motors Corporation - Essay Example GM’s six main automaking divisions have catered to its manifesto of â€Å"a car for every purse and purpose† (Monks & Minow, 2008: 414). Statement of Purpose: This Case Study on the General Motors Corporation is for the purpose of investigating the company’s downward spiral into possible bankruptcy. Using appropriate theories and literature, investigation of the What? Why? and How? of the organization will help to determine the reasons for the auto giant’s decline 0ajjind the implications for the future of the company. The reasons for and the processes by which the United States’ auto giant General Motors Company deteriorated to a position of near-bankruptcy, can be determined by investigating various factors based on relevant theories of corporate collapse (Fig.1). These would include corporate governance, organisational culture, leadership styles, operational risk management and financial risk management pertaining to the functioning of General Motors. The underlying concepts pertaining to risk management, financial markets and products, and global perspectives on risk are important aspects. A widely encompassing approach that associates the causes of bankruptcy to the characteristics of the company and to the financial symptoms of distress, is essential, in examining the company’s financial decline (Thornhill & Amit, 2003). Besides the financial situation of the company, other crucial factors include the time dimension of failure, and the influence of key non-financial factors such as managerial error which is found to be one of the main reasons (Balcaen & Ooghe, 2006). Over the decades, from the time of GM’s inception in 1909, the company has suffered numerous set-backs which destroyed its ability to control the cost of its workforce. Roger Smith as CEO started downsizing the manufacturing units from 1985, with a commitment to revolutionizing the organization.

Slavery Essay Example | Topics and Well Written Essays - 500 words - 3

Slavery - Essay Example Even prior to the establishment of these factories, the demand for slaves was still high all over the world. In the United States, the demand for slaves increased with the growth of the industrial revolution which saw large-scale textile industries emerge. The main reason why slavery grew was the fact that in the federal government, created after the freedom of the American nation as an independent set of states, most of the representatives were large-scale farm owners from the south (Hammond 176). As such, in the presence or the absence of the textile industry, slaves would still be shipped to the country to assist with household chores and the likes. Regardless, the growth of these industries prompted the establishment of the slave trade as a lucrative business venture. Which mainly became competitive, led to the increase in violence subjected among slaves. The increase in violence subjected on the slaves was mainly a strategy that had been developed by plantation farmers to ensure that the cotton picked was more than enough and this thus led to the increase in immorality and inhumanity among the southern states. The rise in the prices of slaves equally motivated the violence subjected upon them, since the white men understood that they were their property and after being sold for such a high price, the slaves were expected to be equally productive which thus stimulated the use of violence as a way to improve productivity, which was later a power used by the southerners for their pleasure or to exert power.

Impact of Latest Advances in Technology on the Recruitment and Essay

Impact of Latest Advances in Technology on the Recruitment and Selection Process - Essay Example In this regard, the aim of the current discourse is to review how the latest advances in technology have impacted on the recruitment and selection process. Likewise, the benefits and challenges of using new technological applications would be presented and expounded based on contemporary organizational experiences. Impact of Technological Advancement on Recruitment and Selection Process In a study conducted by Piotrowski and Armstrong (2006), the authors revealed that current recruitment and selection practices, based on the national survey of 1000 firms included in Fortune’s top organizations in the United States, included â€Å"personality testing on the Internet and the use of online testing for selection purposes† (Piotrowski and Armstrong, 2006, pp. 489-490). Organizations were thereby cautioned on their effective applicability due to lack of regulations imposed on online selection firms. Likewise, the authors cited the works of Barbian (2001) and Bates (2002) whos e studies contend that â€Å"most person job-fit tests have not been standardized, lack norms, and developers have not presented predictive validity data on their selection measures† (cited in Piotrowski and Armstrong, 2006, p. 490). Parry (2010) has cited that â€Å"70% of the organizations surveyed used the Internet or Intranet to deliver HR services to employees with most respondents planning to enhance substantially their e-HR capabilities over the two years† (p. 522). On the other hand, Capelli’s (2001) research indicated that a staggering 90% of U.S. organizations have already shifted to online recruiting due to the benefits in costs and efficiency accorded by this technological advancement (p. 140). There are options open to contemporary organizations regarding the use of technological applications to service HR functions. As Cappelli (2001) averred, organizations could use HR software programs that â€Å"automate the entire hiring process: they collect applications in a standardized format, screen them, determine where they came from (such as through job boards or classifiedads), monitor the progress of applications, and calculate how long it takes to fill various jobs or to get a new employee working productively† (p. 143). Concurrently, other organizations opt to outsource the hiring function through the use of external vendors, which would be discussed under challenges that these new technology presents. The website of Global Recruiting Roundtable (2011) indicated that â€Å"80.2% of companies are using Social Media to recruit and another 8.7% of companies are planning to begin this year (results of Jobvite survey, July 2011)† (Valkenburg 2011, par. 1). The percentage was a dramatic 18% increase from the 68% of the companies that used social media in 2009 to the 80.2% in 2011. The survey results from Jobvite revealed remarkable statistics that validate the effectiveness of using social networking sites such as Link edln, Facebook and Twitter; where Linkedln topped the survey at 95% of the respondents indicating that they have successfully hired through this social networking site (Jobvite, 2011, p. 8). Benefits of Using Technonological Advancement Parry

Management case Essay Example | Topics and Well Written Essays - 500 words

Management case - Essay Example Most of its offerings already had significant margins, and those that werent at this level were close or were expected to in the near future. The challenge that Newell Company faced was trying to remain the market leader for all of its industries at the same time. 2) Newell Company has many distinctive resources due to the strong credibility the brand has built up over the years. Because the company has many different product categories, a strong management style is necessary to ensure that every sector runs smoothly. In addition, Newell Company has good relationships with its supply partners, and these relationships help the company to remain number one in all areas of its business portfolio. Finally, Newell Company has access to Electronic Data Interchange (EDI), which helps the company to organize all of its purchase orders, invoices, and payments to and from its retail partners. Because most of Newell Companys orders are placed through this system, the company is able to keep track of all of its deadlines and needs. 3) Newell Company does seem to have a successful corporate level strategy because the management and administration is interlinked, which helps to build a solid kind of corporate culture. Another area that shows Newell Company is successful in the corporate area is through acquisitions. The company buys other companies that can add value and expand the operation of Newell Company. This is a very difficult process because the new acquisitions need to be the right fit. If a new acquisition is not up to the same speed of Newell Company, then that acquisition has the potential to bring the whole company down. 4) I feel that Newell Company acquiring both Calphalon and Rubbermaid are good business decisions for a variety of reasons. First of all, Calphalon is a good fit for Newell Companys housewares division because the company has access to the high end of the market where Newell Company has not been so successful. Also, Calphalon has strong

Assignment Mulally Essay Example for Free

Assignment Mulally Essay Assignment # 3 ‘’ Alan Mulally, CEO, Ford Motor company â€Å" Leadership and organizational behavior- BUS 520 Abstract Leadership is guiding people towards productive results to achieve the goals of the organization. An effective leader has the ability to motivate and influence others. The following sources of power represent the engine of influence that they use effectively and ethically to achieve their goals, however, true leaders are supposed to make the employees work hard by giving their efforts and making sure that the goals and the mission of the organization are achieved. To be effective every leader should have the following competencies: Vision, Integrity, Honesty and Values Releasing Potential and Energy. The content of this paper is to outline the roles of leadership and how it affects organizational performance. It then discusses the role of Allan Mulally’s, CEO of Ford Motor Company, and leadership style. The paper also presents how mulally decision to set a goal has increased the company’s performance and mentioning how Allan Mulally’s openness has gained him trust and helped him to reach his goal. Alan Mulally moved to Ford in 2006. He had worked at Boeing since 1969. He had been chief engineer for development of the 777, and was later Vice President of Engineering for commercial aircraft. Mulally had no sales experience, and he wasnt a Detroit car man, â€Å"Much less a car man at all. He sold his Lexus after moving to Dearborn. Whats most impressive is Mulallys results oriented leadership style. His management is crisp and authoritative, although he defers to the firms design experts on the minutiae of the product lines. But on the big questions of the companys past mistakes and where its headed, Mulalley made key decisions that placed Ford in good stead. When mulally testified before Congress in December 2008, along with GMs Rick Wagoner and Chryslers Robert Nardelli, he announced that Ford would be able to survive the recession without a bailout. In 2006, Alan Mulally became the CEO of Ford. At the time, the company was relying heavily on their truck revenue and had several other lines that were not properly supported to earn the best revenue. Some of Mulally’s first decisions were to sell off some of their sub brands, namely Jaguar and Land Rover, and focus more on the small car lines that are becoming more popular with consumers. With a focus on the small cars, this would allow for the company to benefit from economies of scale and increase the profits from selling those cars. He also took out a $23 billion loan to help avoid needing the bailouts that would come 2 years later. Mulally threw away the politics involved in the vice president structure, forcing the weekly leadership meeting to be more about the success of the company than the squabbles of those leading it. He insisted that the vice presidents actually admit to their problems so they can be handled; having operations be labeled either green for going well, yellow for caution, and red for problems. The vice presidents were apprehensive of this at first, afraid to admit their problems and failures, but Mulally made it apparent he wanted to know these issues to resolve them, instead of to sweep them under the rug or assign blame. Finally, Mulally put forth a new mind set for the company; One Ford, involving a One Team, One Plan, One Goal setup. One Team focused on uniting the individual group in Ford into one cohesive team, each member helping out other members, no matter what project they are on or division they are in. One Plan was about restructuring to operate profitably, accelerate development to get new products that customers would want to buy out sooner, finance the plan, and work together as a team. Finally, One Goal was all about developing an exciting viable Ford with profitable growth. Mulally have a more hands on approach to leadership. He wants to know exactly where the company is and how they were going to get someplace better. This is shown with his color coded operations technique with the vice president meetings. His answers to problems weren’t just to shrug them off and go back to the status but rather how to proceed from where those problems brought them. Alan Mulally demonstrated organizational innovation; he used different methods of production and administration. Conveying his ideas and leadership, mulally exhibited his innovation that comprised the ideas from outside Ford in conjunction with those ideas from within Ford Motor Company. The message he portrays involves  planning initiation, execution, selection, and implementation of the objectives to achieve the goals set forth by his administration The success of an innovation is connected to a market forecast of customer needs and wants as well as effective management of the innovation  process. Concentrating on a fewer products to produce with a lot of improvement and service innovation involving the introduction of a new service that meet the customers’ expectations. He has high regard for executive management and maintains open communication. Mulally has an agenda to serve and satisfy not only customers, but employees as well, increase market share, increase profits, and communication is at the top. Alan Mulally has a proven effective leadership style. He is persistent with innovative  processes that address issues within the organization to ensure successful development. His management responsibilities include reducing the risk; managing the customer interface; training and managing staff performance; and engaging Ford’s executive team. Highlighting how successful his tactic can be Mulally has insured his reputation as one of industry’s great leaders; it is well worth paying attention to what he says and learn from his leadership skills. Any successful leader has to know the plan, and areas that need special attention. There are challenging times to be a leader whether it is a cultural crisis, financial crisis, or environmental crisis, but, if one can learn from the experience of a leader such as Alan Mulally, an organization will do just fine and be one of the respected models to follow and learn from.

Driving Under the Influence Essay Example for Free

Driving Under the Influence Essay 1. A. A trip to the ocean can be a relaxing escape from the everyday pressures of life. B. You should always be careful to avoid overexposure to the sun at the beach. 2. Check for correct punctuation, including capitalization. Learn to spell the words you use. Learn the spelling rules and the exceptions to those rules. Keep a list of words you’ve misspelled and looked up. Use your list as a reference when you write, edit, and proofread your work. Watch for grammatical errors. Keep an alert eye out for errors such as fragments, run-ons, faulty agreement, and incorrect comparisons. 3. A sentence or phrase usually used expressing a popular or common thought or idea, which has lost originality, ingenuity, and impact by long overuse. Opposites attract: This means that people who like different things and have different views are likely to fall in love or to become friends. 4. Brainstorming: Where you right down what you think might be a focus for your paragraph in which some will end up not being used. Webbing: A web in which it shows a relationship between some of the ideas you have. 5. C. How to make my favorite sandwich: First, lay out the bread on the preparing surface. Second, take out the sliced meat, making sure to get as much of the liquid off as possible. Third, put the meat on the sandwich until the desired thickness is reached. You can also add cheese at the point, if you want it to be soft and melted. Fourth, put the sandwich in the microwave for 40 seconds, flipping it once every 10 seconds. Fifth, let cool and enjoy. 6. The best way to stop drunk driving is to enforce stiffer penalties for anyone caught drinking and driving. The fines need to be much higher and their license should be much harder to get back. It should be made that a zero tolerance breathalyzers machine should be mandatory in every new vehicle that you buy. Make it so that the car just wont start even if you have a drink or two. There should also be designated drivers in every town and city all over the world. A designated driver is simply a person who agrees not to drink alcohol and be responsible for driving others home. The clubs should also have it in place so you cant leave and drink and drive. Then just maybe if we get this all in place, maybe we can save a lot lives each year and keep the drunk drivers off the highways.

The Collectivisms Versus Individualism Appeals Cultural Studies Essay

The Collectivisms Versus Individualism Appeals Cultural Studies Essay Love the Internet, love being free-spirited, love getting up late, love the late night food stands, love car-racing and T-shirts for 29RMB as well. I am not a standard-bearer, nor am I someones spokesman, I am HanHan, I just represent myself. When you read this script, do you think that it is an advert launched in the western markets? Actually, it is an advert campaign of a fashion apparel B2C company in China. It is quite interesting to launch an ad which claims I-conscious in a highly collectivistic country. In this essay, the writer will mainly analyze the cultural values behind the ad and discuss how this ad is trying to change the attitudes of the Chinese from group-oriented to self-oriented by using consumer behavior frameworks, such as Maslows hierarchy of needs, Fishbeins behavioral intention model and advertising engagement modes. Background Vancl is a B2C company who sells quality fashion clothing and accessories on-line in China (Appendix 1). It was founded in 2007, and now it has become the NO.1 Chinese fashion apparel B2C enterprise who is occupying 28.4% market share, according to the Report of e-business on fashion apparel industry in China 2009-2010 (http://en.vancl.com). As the concept of the company is to provide quality and stylish apparel at a reasonable price, it considers urban young adults from 18 to 28 years old as its target audiences (http://en.vancl.com). In order to target more consumers and enhance the influence of the brand, Vancl launched an advertising campaign (Appendix 2) in 2010, which achieved a huge success in China. This study is aim to analyze the culture behind the ad campaign based on consumer behavior area. Literature Review Collectivism versus Individualism Appeals in Chinese Adverts Hofstede (1980) developed an individualism-collectivism dimension to differentiate culture. This concept was concluded by Oyserman et al. (2002) that collectivism could be considered as the opposite of individualism, which was usually reflected in the East Asian culture. In thecollectivistic culture, concept of self is relevant to others and the society as a whole (Mooij 2004), which cannot be separated from their social context (Phillips 1976; Shweder 1984). Thus, Families, work groups, social roles, positions, or relationships should be offered as the top priority in an individuals behavior (Mooij 2004, p.96). In the communication level, Individualism-collectivism dimension divides the self-concept into independent self and interdependent self appealed by low-context and high-context communication, affecting in the communication behavior (Mooij 2004). In general, high-context communication occurs more prevalent in collectivistic culture while low-context communication reflects a communication style in individualistic culture (Hall and Hall 1987, Zandpour et al. 1992, Mooij 2004). Therefore, more copy is used in adverts developed in the individualistic countries. By contrast, collectivistic countries use more visual elements in their ads (Mooij 2004). According to Hofstedes (2001) framework of culture dimensions, China is a highly collectivistic country. Collectivism concept congests in the daily life of Chinese. For instance, people are more likely to say, I often watch basketball games with my family and friends. instead of I am a sports fan.' (Liang and Joseph 2010, p.189). Consequently, the level of collectivism may have an impact on the design of local advertising. A host of researchers (for example: Dana et al.1993; Han and Shavitt 1994) have found that collectivistic ideas appear in adverts are more prevalent in the higher collectivism countries, such as China, Japan and South Korea, etc. Similarly, Carolyn (2001) pointed out that group consensus appeals more in Chinese adverts than in American ads. And unlike the commercials in U.S., Chinese were generally we-conscious instead of I-conscious. A research, conducted by Cheng and Schweitzer (1996), identified three main cultural values, in terms of modernity, youth and family dominated in Chinese advertisements, which were much different from the results in the United States (enjoyment, modernity and individualism). Besides, the study also found that comparing with the idea of individualism and manipulation over nature, harmony of social status and oneness with nature were much more frequently discovered in the Chinese advertising (ibid.). Some researches (for example: Belk et al. 1985; Belk and Pollay 1985; Belk and Bryce 1986; Mueller 1987; Paek et al. 2004), however, revealed that the style of the advertisements in some eastern countries was tending to be Americanized and becoming more individualistic orientations. Zhang and Shavitt (2003), for instance, analyzed 463 Chinese advertisements and found that both modernity/individualism values and tradition/collectivism values existed or dominated in Chinese Ads. The former values were more prevalent in personal use products ads, while the latter were more common in the ads promoting shared products. Difference in Appearance and Fashion Advertising Appeals across Culture Mooij (2004) used three culture dimensions, in terms of uncertain avoidance, power distance, and individualism-collectivism, to explain the different needs of appearance in different countries. A map (Appendix 3) was designed to illustrate the importance of appearance in the different cultural valued countries by using individualism-collectivism and uncertain avoidance dimensions, according to the country scores calculated by Hofstede (2001). Mooij (2004) claimed that the degrees of uncertain avoidance determined the proportion of consumption spending of individuals, while the dimension of individualism-collectivism differentiated the purpose of well-dressing between suitability of occasion and earning face. Besides, the higher power distance of culture was, the more degrees people would depend on others. Moreover, Mooij (ibid.) mentioned that self-consciousness was another factor to identify the differences in appearance. Similarly, Phillips and McQuarrie (2010) reviewed numerous of researches (for example: Green and Brock 2000; Holbrook and Hirschman 1982; Petty and Cacioppo 1981) and concluded five modes of fashion advertising engagement (Appendix 4) to illustrate the current situation of fashion ads worldwide. Among these five modes, many scholars (e.g., Murray 2002; Bannister and Hogg 2004; Thompson and Haytko 1997; Richins 1991) found that the engage for identity mode was the most common and traditional model appealed in the fashion adverts, which exactly coincided with Evans (1989) conclusion of three trends in fashion industry: (1) Peoples use of fashion reflects a desire to manifest the self; (2) the desire for self-expression is growing; and (3) there is a continuing need to match female (still the main buyers of clothing and cosmetics) self-images and brand images in more congruent ways (p. 10-11). Evan (ibid.) also suggested that self-expression and branding image were more important than fashion and styling newness when promoting a fashion brand. In General, the advertising appeals in collectivistic counties were more group-identity, while self-identity adverts worked more efficiently in individualistic countries (Cheng and Schweitzer 1996). However, Vancl uses a contrary ad appeals to promote the brand. In the next part, a detailed semiotic analysis will be conducted to explore the different appeals in this advert. Semiotic Analysis According to Solomon (2008 p.103), semiotics is a study of the correspondence between signs and symbols and their roles in how we assign meanings ¼Ã…’which can be interpreted into different information based on the knowledge, culture values, personality and skills of different interpreter. Therefore, analysis of semiotic elements containing in the advert, can help the researcher understand detailed information the advert wants to deliver. There are three components in every marketing message, which should be combined when analyzing an advert, namely an object (product), a sign (symbol), and an interpretant/meaning (Schiffman and Kanuk, 2004). Vancls advertising campaign is developed to two versions divided by gender. Each version includes large amount of signs and symbols which ccn be interpreted. For example, the price of the clothing marked in the advertisement gives a rough idea of the target audiences. Then the audiences analyze this information using their knowledge, persona lity and skills based on the different culture, such as considering the average price of this kind of clothing in the market, and calculate that the price is affordable and reasonable. Another interpretation of price can be considered as high uncertain avoidance. More specifically, if consumers have known the price before they purchase, they can avoid the risk of buying inappropriate products. Thus, in this ad, marked price can be interpreted into both price-friendly and avoidance of risk (Figure 1). Adapted from Solomon, 2008. A Semiotic Relationship. Object Vancl clothing Sign Marked price Interpretant Price-friendly Risk avoidance Personality Skills Knowledge Culture Figure 1: An Example of a Semiotic Relationship in Vancl Advertising In order to understand the messages interpreted in this advertising campaign by different targets, the writer interviewed five people who spoke Mandarin by asking them to use three words to describe the personality containing in this ad. The top three personalities referred most frequently were self-conscious, lively and enjoyment in life. Here, self-conscious means that the ad is I-conscious oriented, expresses a sense of confidence, self-respect and self-fulfillment. Lively can be explained that the ad appeals are more related to daily life and realistic, while enjoyment in life means that a sense of fun, enjoyment and happiness towards life. Based on this interview result, a detailed semiotic analysis is conducted and summarized (Appendix 5). According to Maslows hierarchy of needs theory (1987), clothing can be categorized to the physiological needs, which is the most basic need of humans. However, from the results of semiotics interpretation, the writer found that Vancl focused on targeting the audiences to the forth level needs self-esteem needs (Appendix 6). As it is shown from the survey, Vancl encourages people to be confident and self-respect, clothing is no matter the basic needs of human beings. Wearing Vancl apparel can help the consumers achieve to self-esteem level. Moreover, another finding is discovered. The three personalities concluded by the respondents are much similar to the elements (excitement, fun and enjoyment in life, self-fulfillment, self-respect, etc.) of the List of Value (LOV), a value approach developed by Kahle and Timmer (1983). Surprisingly, these three personalities, which generally occur in the most western counties, are opposite to the culture value in China concluded by Hofstede (2001, Figure 2). As it is shown by the individualism index, the score (20) is lower than the average of other Asian countries (24), which means that China owns a highly collectivistic culture. Chinese consider group as their priority, focus more on their families, friends and society as a whole, than themselves (Mooij, 2004). The writer analyzes the ads in depth on the basis of the Hofstedes culture values (Appendix 7) and finds that, although collectivism deeply influences on the development of Chinese advertisements, Vancls ad campaign, howeve r, pays a lot attention to self concept. Take the script as an example. The copy of two versions keeps the format of Love à ¢Ã¢â€š ¬Ã‚ ¦, I am not à ¢Ã¢â€š ¬Ã‚ ¦, I am à ¢Ã¢â€š ¬Ã‚ ¦, which is much different from the we-conscious adverts in collectivistic countries. It emphasizes self, and gives the opinions of the individuals instead of groups, which reflects an individualistic cultural value. Individualism Masculinity Power Distance Uncertainty Avoidance Time Orientation China Low Individualism (20) Masculine (66) High (80) Low (30) Long (118) Figure 2: Hofstedes Framework for Assessing Culture China Furthermore, this campaign seems to reform the advertising layout from a traditional way to a new style. As it is shown, there are two versions exclusively designed by gender. The layout of these two versions is similar: there is an image of the spokesman in the left of the picture, while a script containing large information in the right. This is also an uncommon way of the traditional Chinese advertisements. Lastly, according to Fishbein and Ajzen (1980), brand attitude and subject norm are two components which influence the intention and finally determine the purchasing behavior. In highly collectivistic countries, subjective norm stands for an important position in this evaluation process (Lee, 1991). In this case, however, Vancl shifts consumers focuses from subjective norm to brand attitude (Figure 3). Therefore, it can be considered that Vancls ad is trying to change Chineses attitudes from collectivism to individualism. Adapted from Fishbein and Ajzen, 1980. Fishbeins Extended Model of Behavioral Intention. + + Behavioral Intention Vancl Normative Beliefs Friends recommend the brand to me, it seems suit me. Norm Evaluations When wearing Vancl, I am more acceptable among friends and feel that I am one in the group. Collectivism Subjective Norm + Brand Beliefs Just be yourself Belief Evaluations When wearing Vancl, I seem to achieve a unique and self-esteemed life like the celebrities own. Self conscious Brand Attitude Figure 3: Model of Behavioral Intention of Vancl How to Change Attitudes Undoubtedly, it is not facile for a brand to change the attitudes of consumers, especially changing an ingrained notion which has rooted for thousands of years. Harmony is a central concept of Confucian, which results in the group-oriented behaviors in Chinese. According to the appearance map (Mooij, 2004), China is categorized in the left-bottom quadrant, represents a culture of low uncertain avoidance and highly collectivistic. People in this kind of culture pay a lot attention on face, context, low-structured and conformity, who generally buy clothing based on others opinions. What is Vancl doing is to shift the appearance concept of Chinese from the left-bottom quadrant to the right-bottom quadrant, where UK and U.S. are, representing an individualistic culture. Consequently, Vancl engages the ad with self-identity concept. During this attitude changing process, the ad focuses on the elements of celebrities and scripts to evoke the ideal self of the consumers (Figure 4). Adapted from Phillps and McQuarrie, 2010. Modes of Advertising Engagement in Womens Fashion. Mode of Engagement Ad Element Focus Processing Style Conceptual Metaphor Engage to Self-identity Celebrities Scripts Attitude Changing Process Ideal Status Figure 4: Mode of Advertising Engagement of Vancl From analyzing the ad, some clues of the reason why Vancl successfully changes the attitudes of its consumers can be discovered. Firstly, the boom of Chinese economy contributes to the process of culture exchange. An Increasing number of foreign enterprises develop their business in China and bring their culture. Besides, the development of technology helps Chinese access to the culture from different countries via TV, Internet, etc. All these are unconsciously influencing the cultural values of Chinese, which provides a prerequisite for Vancl to implement this advertising campaign. Moreover, the effect of celebrity plays an important role in the attitudes changing process. As what suggested by Malhotra (1988), using a spokesperson was an essential marketing strategy to help to match the brand image with consumers self-concept. HanHan and WangLuoDan, the two spokesmen Vancl selected, own high preferences among Chinese youth, and their characters meet the image of Vancl as well. As celebrities represent a sense of credit, attractiveness and power (Kelman, 1961), consumers can be easily influenced. Especially in the collectivistic countries, consumers are eager for the acceptance from peers and society, following celebrities is a clever way to make them acceptable. Finally, the execution of the ad assists in achieving the purpose of attitude changing. The different version by gender designed on the basis of different cultural value of males and females, targets to audiences widely and accurately. The scripts express the opinions of a unique attitude towards life from the celebrities, which influence consumers powerfully. Since China ranks high score in collectivism, the scripts are designed on this special situation: claim to be I-conscious; meanwhile, meet the traditional cultural values of Chinese. More specifically, although most of the scripts advocate self-identity, at the end of the scripts, Vancl utilizes the collectivistic culture to call for in-group and offers a sense of involvement. The last sentence, I am like you; I am Vancl (common people), gives the consumers a hint that it is not difficult to achieve such life as the two celebrities own, wearing Vancl helps to be this ideal self both in the private context and social context. Thus, it can be concluded that three factors contribute to help Vancl change the attitude of Chinese consumers, namely impact of other culture, influence of celebrities, and elaborate ad execution (such as scripts and visual design, etc.). These three factors combined as the persuasion stimuli, affect on the attitude changing process from collectivism and group-oriented to individualism and self-conscious. This impact is not only influence the target audience, but also powerful to publics. Consequently, wearing Vancl is a personal choice, which helps consumers achieve their ideal self. As the attitudes of publics are changed as well, it unifies the opinion of what others think of you and what you really want to be (Figure 5). Actual Self Collectivism Group-identity Impact of other culture Elaborate execution of ad Influence of celebrities Attitude Changing Focus on self Just be yourself Self-oriented Idea Self Self-esteemed Confident Enjoyment of life Social Self Unique Confident Enjoyment of life VANCL Appeal to Individualism oriented Involvement In group Figure 5: Framework of Attitude Changing Process of Vancl Advert In conclusion, self-concept plays an important role in Vancl advert campaign. The ad delivers the message that Vancl represents who you are and what you are not' (Rune and Rosemary 2006, p.868). Thus, wearing Vancl can promote self-concept of consumers, and correspondingly bolster up their actual or ideal view of themselves (Fournier 1998). Based on this purpose, Vancl uses two spokespersons, who own high reputation among Chinese youth and also have a unique lifestyle, to help the brand promote self-concept. As Carroll (2009) referred, this is an efficient way for a brand to shift the culture from that brand to consumer. Moreover, using celebrities also helps Vancl persuade or change the attitudes towards their consumers (Kardes et al. 2010) from group-oriented to self-conscious. Just like Kelman (1961) claimed, attitudes could be changed through three processes: internalization, identification and compliance. For consumers, HanHan and WangLuoDan represent a credible, attractive and powerful image. Thus, their persuasion could help the brand reform a new attitude or behavior to attract the consumers to imitate through the referred three processes (ibid.), and finally achieve the purpose of changing the attitudes of their consumers. Limitations Admittedly, the article may not have analyzed the advert roundly, and still have some limitations as well. Firstly, as it is an ad in China, the translation of the copy may not very accurately due to different language expression, which may cause some different interpretations of signs or symbols and correspondingly influence the different understanding of this advert. Moreover, the frameworks developed in this study are exclusively suitable for Vancl. Although celebrity endorsement has become increasingly popular since 1970s (Tom et al., 1992; Agrawal Kamakura, 1995), there are not enough studies to prove that it works on most of adverts which try to change the attitudes of their consumers. Thus, Further quantitative and qualitative researches are required for determine whether the model of this study also suit for other brands or industries in China. Finally, consumer behavior across is a deep and wide topic, which can be reflect to other subjects, such as psychology, sociology and history, etc. Therefore, there may be still some factors across other subjects influencing the attitude changing process of Vancl advert. Conclusion This article begins with a rough introduction and background of the Vancl advert campaign in China. The literature review part focuses on collectivism-individualism culture dimension and cultural appeals in Chinese adverts, difference in appearance and fashion advert appeals between different cultural values. Moreover, self-concept and celebrity endorsement are also included. Semiotic analysis gives an outline of the advert and helps to understand the advert thoroughly. In order to acquire more accurate message and cultural values containing in the ad, a survey is conducted among five Chinese speakers. Consequently, three main advert personalities are determined, namely self-conscious, lively and enjoyment in life, which could be explained to the self-esteem needs by Maslows hierarchy of needs. Then Fishbeins extended model of behavioral intention help to define the influence of the Vancl ad on the purchasing behavioral intention. The next part explains the methods Vancl used in the ad to change the attitudes of consumers from group-conscious to self-conscious by using an adapted advertising engagement model. And then a framework of attitude changing process of Vancl advert is finally developed. Recommendations Based on the limitations and conclusion parts, the writer summarizes some recommendations both for further research and brand managers. For further research, more quantitative and qualitative researches should be conducted to create a model, which suits for different brands in other categories who want to develop a self-identity advert campaign in a highly collectivistic country. Besides, more subjects, such as psychology, sociology, history, economics, etc., should be related to determine other factors which affect the attitude changing process, so that the model can be modified. For managers, the collectivism level of different products is different. Thus, claiming self-identity in the ad is another way when promoting a less collectivistic product in a highly collectivistic country, such as clothing and cosmetics. In the collectivistic countries, it seems to be a unique way to promote a brand and help the advert outstanding among other ads, however, it is not omnipotent. What should managers do, is to analyze the market accurately and frame an advert campaign which precisely suit the brand.