Friday, September 20, 2019

Foreign Exchange Risk Management In Multinational Corporations Finance Essay

Foreign Exchange Risk Management In Multinational Corporations Finance Essay Corporations (MNCs) Introduction: Globalisation has had economic, cultural, technological and political effects. Over the last few decades the increase in globalisation has led to rapid growth in several industries around the world and it has also had a strong influence on the flexibility of firms. Hundreds of new MNCs have emerged globally due to the liberalisation of trade and capital markets. MNCs are not limited to the big firms with huge investments like Coca Cola, Nike and Shell, due to advances in technology and liberal markets many small firms operate internationally to maximise their profits. This growth has highlighted the various risks faced by MNCs operating in different countries. One such risk is the financial risk involved with the foreign currency exchange markets. Most of the time MNCs deal in more than one national currency and hence the changes in the foreign exchange rates can have an adverse effect on the firms profits. This paper discusses the various foreign exchange risks faced by multinationa ls around the globe and the necessary steps taken to manage these risks. A study on the Malaysian MNCs has also been covered in the paper. Foreign Exchange Risks: Foreign Exchange risks also known as exposures can be termed as an agreed, projected or contingent cash flow whose scale is not certain at the moment. The magnitude depends on the value of the changes in the foreign exchange rates which in turn depends on various variables such as the interest rate parity, purchasing power parity, speculations and government policies on exchange rates. According to G.Shoup (1998), a company has exposure if there is a currency mismatch in some aspect of the business such that a shift in foreign exchange rates, nominal or real, affect its performance either positively or negatively. These exposures may be classified into three different categories: Translation exposure Transaction exposure Economic exposure Translation Exposure; this is the net asset/liability exposure in the home currency of the MNC. In other words, it is the profit gained or loss incurred in translating foreign currency financial statements of foreign subsidiaries of the MNC into a single currency which it uses in its final reports (Yazid Muda, 2006). In essence, translation risk can be defined as the effect of exchange rates on the figures shown on the parent companys consolidated balance sheet. Although this exposure does not affect the shareholders equity, it does influence the investors due to the changing values of the assets or liabilities. (Shoup, 1998) Transaction Exposure; it is a risk associated with a transaction that has already been contracted. It is as a result of unexpected changes in foreign exchange rates affecting future cash flows which the MNC has already committed itself to. Usually MNCs enter an international contractual obligation, the payment or receipt of which is expected on a future date, hence any change in the foreign exchange rate during that period will expose the MNC to transaction risks. Transaction risks can be easily identified and thus get more attention from the financial managers. (Eiteman, Stonehill, Moffett, 2007) Economic Exposure; this is the most complex risk as it not only involves the known cash flows but also future unknown cash flows, hence also termed as a hidden risk. It is a comprehensive measure of a companys foreign exchange exposure and therefore sometimes termed as a combination of translation and transaction exposure. Identifying economic risks involves measuring the change in the present value of the company resulting from any changes in the future operating cash flows of the firm caused either by adverse or desirable change in the exchange rate. (Eiteman, Stonehill, Moffett, 2007). As Dhanani (2000) noted, economic risk can be viewed as the consequence of long-term exchange rate fluctuations on a firms predicted cash flows and as the cash flows linked to the risk are not certain to materialize, the risk is hard to identify. Economic exposure to a MNC may last for a long duration making it difficult to be quantified and hence limiting the use of possible management techniques. (Shoup, 1998) Foreign Exchange Risk Management Foreign exchange risk management is a process which involves identifying areas in the operations of the MNC which may be subject to foreign exchange exposure, studying and analysing the exposure and finally selecting the most appropriate technique to eliminate the affects of these exposures to the final performance of the company. (Shoup, 1998) Risks involving short term transactions can be dealt with using financial instruments but long term risks often require changes in the operations of the company. As in the case of translation exposure the MNC can have an equal amount of exposed foreign currency assets and liabilities. By doing so the company will be able to offset any gain or loss it may have due to changes in the exchange rates of that currency, also known as balance sheet hedging. (Eiteman, Stonehill, Moffett, 2007) In dealing with economic exposures efficiently, a MNC may have to diversify either its finance or its operations. It can diversify its operations by either moving to locations where the cost of production is low, or having a flexible supplier policy, or changing the target market for its products and the types of products it deals in. As it can be illustrated from the 1994 example of Toyota, when a strong Yen made Japanese exports to US more expensive, it decided to shift its production from Japan to US, where it achieved comparatively lower costs of production, enabling it to compete in the US car market. (Eun Resnick, 2007) The management of transaction exposures may either involve hedging using special techniques or applying pro-active policies. The pro-active policies commonly used include (Eiteman, Stonehill, Moffett, 2007): Matching currency cash flow Risk sharing agreements Back to back loans Currency swaps Lead and Lag payments Use of re-invoicing centres Hedging is the act of protecting a pre-existing position in the spot market by trading in derivative securities; that is guarding of existing assets from future losses. According to Eiteman et al (2007), hedging is the taking of a position, acquiring a cash flow, an asset or a contract that will rise or fall in value and hence offset a fall or rise in value of an existing position. Several studies on this issue have emphasized that MNCs have a higher probability of facing exchange rate volatility in their operations as they expand their involvement throughout the world. Therefore, the extensive use of various hedging techniques by most companies has been widely recognized to ensure the companys overall interests, cash flows and equity are safeguarded. Some of the most commonly used hedging techniques include: Forward market hedge Money market hedge Options market hedge Forward market hedge; this is the case where the MNC in the forward contract has a legal obligation to buy or sell a given amount of foreign currency at a specific future date which is known as the contract maturity date at a price agreed upon at present. (Nitzche Cuthbertson, 2001) Money market hedge; under this hedging technique, the transaction exposure can be hedged by lending and borrowing in the local and foreign markets. For instance a MNC may borrow in a foreign currency to hedge the amount it expects to receive in that currency at a later date and similarly it could lend to hedge payables in a foreign currency. By doing so, the MNC will be matching its assets and liabilities in the same currency. (Eun Resnick, 2007) Options market hedge; this is a technique used by a MNC which gives it the right but not the obligation to buy or sell a specific amount of foreign currency at a specific price, by or on a specific date. Although not a widely used tool, it can be useful when a MNC is uncertain about the future receipt or payments of foreign currency. (Nitzche Cuthbertson, 2001) Hedging helps in reducing the risks involved in international transactions and also improves planning capability. By hedging a MNC can ensure its cash flow does not fall below a necessary minimum, particularly in cases where there is a tendency of a company to run out of cash for necessary investments (Eiteman, Stonehill, Moffett, 2007). A very good example would be that of Merck, a pharmaceutical company. Kearney and Lewent (1993) identified that Merck was one of the pioneers to have used hedging to ensure that its key investment plans could always be financed, which in their case was the research and development aspect of their business. Mathur (1982) came to the conclusion that, to decrease the negative outcomes caused by fluctuations of foreign exchange rate on earnings and cash flows, most companies employ a hedging program. He also noted that a formal foreign exchange management policy is more common among larger firms. According to Bartov et al (1996), if MNCs do not institut e a hedging program, they are more likely to be exposed to risks which may result in substantial losses. Despite its advantages, hedging does not increase the companys expected cash flows, on the other hand it uses up the company resources in the process (Eiteman, Stonehill, Moffett, 2007). According to G.Shoup (1998), unless there are clear defined objectives, safeguards in place and clear communication at every level of management, a hedging program may turn into a disaster. As the chairman of Zenith Electronic Corporations, Jerry K Pearlman once said, It is a, damned if you do and damned if you dont situation. (Shoup, 1998, p15.) In 1984, Lufthansa a German airline company placed a major purchase order for airlines from an American firm. The financial managers at Lufthansa had forecasted a stronger dollar in the days to come and therefore locked up the German Duetsche mark against the American dollar. Due to an unfavourable effect, a weak dollar, in one year Lufthansa lost around US$150 million and half of the financial managers team lost their jobs (Shoup, 1998). In another instance, two years later in 1986, the chairman of Porche found himself unemployed as he had engineered the company into a dependence on the US market for 61% of its revenue without hedging against a downturn in US$, as a result forcing Porche to suffer major financial losses. (Shoup, 1998) According to a study by Marshall (2000), the trend in the objectives of managing foreign exchange risks was quite similar between the UK and US multinationals who gave significant importance to certainty of cash flow as well as minimising fluctuations in earnings. On the other hand, a higher number of Asian multinationals managed these risks to minimise fluctuations in their earnings. The trend observed is summarised in Figure 1 below. Figure 1: Foreign exchange risk management in UK, USA and Asia Pacific multinational companies by Andrew P Marshall, Journal of Multinational Financial Management, 2000. Belk and Glaum (1990) undertook a study which involved investigating several UK MNCs. The study revealed that although majority of the companies considered translation exposure to be important, not all were prepared to hedge this risk actively. On the other hand transaction exposure was given most importance in the management of foreign exchange risks. The level of hedging the transaction exposure varied between the companies investigated, some hedged totally while others did so partially. The study also seemed to show that the size if the MNC influenced its involvement in foreign exchange risk management, the larger the company the higher the propensity. In another study carried out by Makar and Huffmann (1997), it was found that there is a linear relationship between the amount of foreign exchange derivatives employed and the degree of foreign currency exposure in US MNCs. Foreign Exchange Risk Management in Malaysian Multinational Corporations (MNCs) During the financial crisis of 1997, most Malaysian MNCs suffered foreign exchange losses due to currency fluctuations, thus leading to the increased involvement of Malaysian MNCs in foreign exchange risk management (Yazid Muda, 2006). It can be seen that before the financial crisis fewer MNCs considered hedging their foreign exchange risks to be vital, as the General Manager of the Malaysian Monetary Exchange Bhd indicated that local MNCs were very passive and reactive in managing their financial risks (New Strait Times, 30 May 1998: 11). A similar statement was given by the then Minister for International Trade and Industry, Rafidah Aziz, which implied that MNCs should manage their foreign exchange risks well (New Strait Times, 3 July 1998). A very good example of the losses suffered would be that by Malaysian Airline System (MAS), MAS lost around M$400 million in the first half of 1998 because of its foreign debt of about M$3.16 billion. Yazid and Muda (2006) studied 90 out of th e then 113 MNCs listed under the Bursa Malaysia. The main objectives cited by MNCs in this study relating to the foreign exchange risk management were to minimise the following; Losses on operational cash flow Cash flow fluctuations Losses on consolidated balance sheet Losses on shareholders equity Business uncertainty Foreign exchange risk to a comfortable level According to Yazid and Muda (2006), Malaysian MNCs became very proactive in managing their foreign exchange risks during the financial crisis and once the crisis was over, the priority attributed to foreign exchange risk management decreased slightly but not to the point it was before the crisis. This has been illustrated as a summarised result of the survey shown in table 1. Objectives Before During Current Minimise Losses on operational cash flow 3.59 4.62 4.09 Minimise Cash flow fluctuations 3.29 4.41 3.88 Minimise Losses on consolidated balance sheet 3.26 3.91 3.82 Minimise Losses on shareholders equity 3.24 3.56 3.50 Minimise Business uncertainty 3.21 3.50 3.41 Minimise Foreign exchange risk to a comfortable level 2.91 3.53 3.29 Table 1 (Yazid and Muda, 2006) Note: The results are based on five-point progressive Likert scale (1 is the least important; 5 is the most important) Large MNCs in Malaysia are more likely to get involved in foreign exchange risk management compared to smaller firms or firms with relatively lesser operations outside Malaysia. This trend seems to be consistent with other MNCs around the globe (Yazid et al, 2008). Majority of the Malaysian MNCs centralise their foreign exchange risk management and it can be said that foreign exchange risk management in Malaysia is still at its infant stage in comparison to other MNCs in the west. Their management practices are very informal and no proper documented policies can be found in regard to foreign exchange risks. Although the use of hedging tools is on a steady rise amongst the Malaysian MNCs, the objectives behind their involvement remain uncertain (Yazid and Muda, 2006). The past decade has seen rapid growth of a new segment in the global finance industry, the Islamic finance sector. To qualify for Islamic foreign exchange hedging, transactions must involve tangible assets. Malaysia, which is pre-dominantly an islamic country has highlighted the need of hedging tools which are compliant with Islam. Hence CIMB, a leading Malaysian bank among others, have introduced an Islamic foreign exchange hedging instrument, which would assist their clients to manage their risks. (Reuters, 2008) Astro, which is a leading services provider in the Asian entertainment indutry is based in Malaysia. Being a MNC, foreign transactions are dealt in different foreign currencies other than the Malaysian Ringgit. Consequently, there is an exposure to foreign currency exchange risk. Astro uses foreign currency derivatives such as forward contracts and interest rate swap contracts to hedge currency exchange risks. Forward contracts are commonly used to limit exposure to currency fluctuations on foreign currency receivables and payables as well as on cash flows generated from anticipated transactions denominated in foreign currencies. In 2007 Astro made a loss of RM 137,000 due to foreign exchange fluctuations and henceforth decided to emphasize the use of hedging techniques. This can be proven by Astros estimated principal amounts of outstanding forward contracts which as at 31st January 2009 was RM188,083,636, whereas at the same time a year before it was at RM 5,109,000. The emphasis o n risk management resulted in a substantial gain of RM 7,680,000 for Astro in the year ended 2008. In addition, as Ringgit Malaysia is Astros functional currency; all the financial statements have to be consolidated into this currency. Hence Astro is exposed to translation risk due to the fluctuating exchange rates. According to Table 2.0, the significance of the foreign currency risk management is noticeable as Astro experienced a huge gain in 2008 relative to the loss they suffered in 2007. Table 2.0: ASTRO; Result of Foreign Exchange Risk Management Cash Flow due to Operating Activities 2008 RM000 2007 RM 000 Net Effect of Currency Translation on Cash and Cash Equivalents 4854 (1529) Gain on Realisation of Foreign Forward Contracts 7680 (137) However, hedging of foreign exchange does not always yield a positive result, as illustrated in the case of AirAsia, one of the leading budget airlines in Asia. AirAsia like many international airlines used a technique refered to as fuel hedging, this allows the airline to purchase fuel at a price fixed at an earlier date despite an increase in the fuel price. During the fuel crisis of 2007-2008 when prices rose to over US$150/barrel, AirAsia made a significant loss as it had hedged for fuel prices not to exceed US$90/barrel and as a result AirAsia recorded its first ever full year loss of RM471.7 million for the year ended 31st December 2008, despite achieving a growth of 36.6% in revenue. This led to the removal of all hedges on fuel prices and AirAisa declared itself as completely unghedged. Although AirAsia intends to re-introduce fuel hedging in 2011, for now it deals in spot prices for its fuel. (Leong, 2009) (Ooi, 2008) Conclusion Multinationals are exposed to various kinds of risks, which includes the foreign exchange risk. This risk which is as a result of exchange rate volatility is said to have a pervasive impact on the profitability and certainty of a MNC. Globally, multinationals face translation, transaction and economic risks due to the frenzied system of floating exchange rates. To avoid the adverse effects of these risks, multinationals often take measures which although do not entirely eliminate the losses; they do enable the firms to minimize the losses. Hedging is very common risk management tool used by multinationals and has often resulted in positive results when used after a correct analysis of the exposure is made. Despite its advantages, not all multinationals around the globe decide to manage their risks in this way. The objectives behind foreign exchange risk management and the techniques used to manage are seen to differ across regions. In the case of Malaysian multinationals, foreign exchange risk management is deemed to be at a lower level relative to their counterparts globally. Until recently, majority of the Malaysian multinationals were not actively managing these risks. The Asian financial crisis in the late 1990s had a significant effect on their stance and the level of foreign exchange risk management amongst Malaysian multinationals has since increased considerably.

Thursday, September 19, 2019

Free King Lear Essays: Comic Relief :: King Lear essays

Comic Relief in King Lear Combining the antics of a circus with the pomp of a royal court is a difficult task indeed. William Shakespeare's genius came from how closely he intertwined the two seemingly mutually exclusive realms to appeal to all socioeconomic groups in his audience. In King Lear, Edgar's appearance as Tom of Bedlam, Lear's insanity, and Lear's Fool provide the comic relief which slices the dramatic tension. Among these, Lear's Fool provides the closest intercourse of the two realms of royalty and tomfoolery while still maintaining their separation. Fools, as I understand them, were kept by kings as entertainment devices prior to the advent of television. Lear's Fool, how-ever, transcends the role as entertainer to assume the role of both Ann Landers and Jim Davis. Particularly intriguing to me are his witticisms and humorous tidbits which interweave foreshadowing, practical advice, humor, and characterization into a succinct, meterical saying. The Fool begins by offering his jester's cap to Kent, saying that if Kent is to follow Lear, he had better have a coxcomb, insinuating the folly of following Lear. He goes on to say that "if I gave my daughters all my property," I'd have to keep a coxcomb. The Fool is quick to juxtapose his comment against his statement that he does not have a "monopoly" on foolishness. The Fool further points out the presence of a "wise man and a fool" without saying who is who, and he criticizes Lear for "going the fools among," implying that Lear is usurping the Fool's position as one prone to lapses of judgment and sheer stupidity. He tacitly insinuates through his actions and statements that he is among the company of fools, which provides the hint of foreshadowing the audience needs to know that Lear is losing his wits. The Fool also uses argument by analogy several times. He first relates Lear to a hedge sparrow which feeds cuckoo babies, which then bit the sparrow's head off. The Fool also relates empty egg shells to Lear and his crown. Shakespeare's unique touch comes in the double meaning of the egg shells. The Fool says that Lear is left with two empty egg shells for a crown, but he also implies that Lear's head is like an empty egg, related most clearly in the comparison of the color of Lear's head to the color of an egg. Free King Lear Essays: Comic Relief :: King Lear essays Comic Relief in King Lear Combining the antics of a circus with the pomp of a royal court is a difficult task indeed. William Shakespeare's genius came from how closely he intertwined the two seemingly mutually exclusive realms to appeal to all socioeconomic groups in his audience. In King Lear, Edgar's appearance as Tom of Bedlam, Lear's insanity, and Lear's Fool provide the comic relief which slices the dramatic tension. Among these, Lear's Fool provides the closest intercourse of the two realms of royalty and tomfoolery while still maintaining their separation. Fools, as I understand them, were kept by kings as entertainment devices prior to the advent of television. Lear's Fool, how-ever, transcends the role as entertainer to assume the role of both Ann Landers and Jim Davis. Particularly intriguing to me are his witticisms and humorous tidbits which interweave foreshadowing, practical advice, humor, and characterization into a succinct, meterical saying. The Fool begins by offering his jester's cap to Kent, saying that if Kent is to follow Lear, he had better have a coxcomb, insinuating the folly of following Lear. He goes on to say that "if I gave my daughters all my property," I'd have to keep a coxcomb. The Fool is quick to juxtapose his comment against his statement that he does not have a "monopoly" on foolishness. The Fool further points out the presence of a "wise man and a fool" without saying who is who, and he criticizes Lear for "going the fools among," implying that Lear is usurping the Fool's position as one prone to lapses of judgment and sheer stupidity. He tacitly insinuates through his actions and statements that he is among the company of fools, which provides the hint of foreshadowing the audience needs to know that Lear is losing his wits. The Fool also uses argument by analogy several times. He first relates Lear to a hedge sparrow which feeds cuckoo babies, which then bit the sparrow's head off. The Fool also relates empty egg shells to Lear and his crown. Shakespeare's unique touch comes in the double meaning of the egg shells. The Fool says that Lear is left with two empty egg shells for a crown, but he also implies that Lear's head is like an empty egg, related most clearly in the comparison of the color of Lear's head to the color of an egg.

Wednesday, September 18, 2019

Global Warming Essays -- Environment Global Warming Climate Change

Global Warming Climate change is neither new nor unusual. Throughout the history of the earth, the average surface temperature, climate and greenhouse gas concentrations have changed, sometimes gradually other times quite sharply. During the past 10,000 years the earth has been in an interglacial period with a fairly stable climate, surface temperature, and greenhouse gas concentration1. The problem that has arisen in recent times is when scientists analyze the past 150 years, especially the last 50. Scientists have found an increased greenhouse gas concentration, making the 20th century the hottest in the last 10,000 years. Although the earth has undergone periodic changes known as global cooling and global warming, today’s global warming is unique, due to human influences. The greenhouse effect is essentially gasses in the atmosphere trapping heat, rather like a car window does in the summer. The major heat trapping gasses found in the atmosphere are; CO2 and water vapor- which are found in large quantity, 03(ozone), ch4(methane), and N2O(nitrous oxide)-which are better heat trappers but found in smaller quantity, CFC’s and PFC’s- which are very potent and destroy ozone. The rapid elevation of these gasses in the past fifty years have been the cause for concern of scientists calling it a global warming problem. Global warming is a natural process as well as a human assisted process. Solar flares and sunspots along with natural elevation of greenhouse gasses due to volcanic activety are the natural causes for global warming. Dr. Judy Lean, a leading astrophysicist, looked at global warming trends from 1860 to the present day. Her research has found from 1860 to 1970, global warming was largely due to natural sources. But from 1970 to the present natural sources accounted for only one-third the increase while human influence accounted for the remaining two-thirds of the increased greenhouse effect. The increase in greenhouse gasses from human sources comes from a variety of things. Elevated Co2 levels, which have been increasing at a rate of 0.5% per year, largely come from the burning of fossil fuels(70-75%), especially coal. Deforestation and plant burning account for the remainder. Increased Methane and Nitrous oxide in the atmosphere are mostly due to agriculture; rice patties, cattle, termites and decomposition of dead... ...ns in order to stop the increase. In order to slow the increase, the efficient use of fossil fuels must be adapted. Natural gas gives off very little co2 and methane if burned properly. Deforestation must also be stopped in order to give natural co2 scrubbers, plants, a chance to aid in the process. Governmental programs have also been implemented. A carbon tax has been considered along with the passing of the 1990 Clean Air Act, aimed at lowering emissions and cleaning air pollution. On a world wide scale, the Kyoto Accord in 1997, in which 159 nations agreed to work together to decrease Co2 emissions by 5.5% by 2012. The United States agreed, since it accounts for 25% of the worlds total emissions by 1990 figures, to cut its emissions by 7%. Global warming is still a major issue in world and U.S. politics. Conservatives argue for more market-orientated solutions, resulting in the imposition of taxes, resulting in higher prices for environment polluting goods. Liberals on the other hand advocate stiffer industry regulation and more direct controls. Any action taken, whatever the ideology, can only help to solve an increasing problem but at what cost to the consumer?

Tuesday, September 17, 2019

Outline Three Problems to Plato’s Theory of the Forms Essay

Aristotle thought that Plato’s theory of forms with its two separate realms failed to explain what it was meant to. That is, it failed to explain how there could be permanence and order in this world and how we could have objective knowledge of this world. By separating the realm of forms so radically from the material realm, Plato made it impossible to explain how the realm of forms made objectivity and permanence possible in the material realm. The objectivity and permanence of the realm of forms does not help to explain the material world because the connection between the two worlds is so hard to understand. The theory of forms, therefore, is an unnecessary proposal. There is no need to split the world up into two separate realms in order to explain objectivity and permanence in our experience. Aristotle elaborated this general criticism into two more particular objections: First, according to Plato material objects participate in or imitate the forms. It is in virtue of this relation to the realm of forms that material objects are knowable and have order. Yet, Aristotle argues it is nearly impossible to explain what exactly this participation or imitation is. The properties that the forms have are all incompatible with material objects. How, for example, can a red object be said to participate in or copy the form of redness? Is the form of redness red itself? How can there be red without anything that is red? It seems that the metaphor of imitation or participation seems to break down in these cases because of the special properties that Plato ascribes to the forms. The only link between the realm of forms and the material world, then, breaks down. The forms cannot explain anything in the material world. The second argument was first given by Plato himself in his later dialogues. It is related to the first objection, but is a more technical way of getting at the main problem with the theory of forms. Plato explains the resemblance between any two material objects in terms of their joint participation in a common form. A red book and a red flower, for example, resemble each other in virtue of being copies of the form of redness. Since they are copies of this form, they also resemble the form. But this resemblance between the red object and the form of redness must also be explained in terms of another form. What form does a red object and the form of redness both copy to account for their similarity? One can see that this will lead to an infinite regress. Whenever someone proposes another form that two similar things copy, you can always ask them to explain the similarity between the form and the objects. This will always require another form. The notion of imitation or copying used in the theory of forms, then, runs into logical difficulties. The theory of forms really explains nothing about the similarity of objects; another form is always needed beyond the one proposed. Thus to explain the similarity between a man and the form of man, one needs a third form of man, and this always requires another form. The explanation of the original similarity is never given; it is only put off to the next level. Wittgenstein also criticised Plato’s theory with his language games. He argued that for meaning in language it must define the concepts. Concepts therefore do not gain meaning from the objects to which they refer but from the way we use them in language. This is governed by a series of formal and informal rules that control the games. Wittgenstein observed from games that it is impossible to offer a simple explanation of the word game because not all the uses of it include the same concepts. The games have a family resemblance but no defining set feature. The use of the word game gains its meaning from the way in which it is used. Therefore those who understand how to use it will understand what it means. This is a problem for Plato because he has already told us that the Forms are simple, yet Wittgenstein suggests that some concepts are so complex that there cannot be a simple blueprint or pattern that ties them all together.

Monday, September 16, 2019

Anlysing of Tv Commercial

The Selected TV Commercial We have selected a television advertisment of bKash, a Brack bank company, for our given assignment. bKash is a service providing company newly launched in Bangladesh which mission is to provide financial services allowing people of Bangladesh to safely send and receive money via mobile devices that are convenient, affordable and reliable. The TV commercial in details: Here on the add Sokhina is the main actress who is a garments worker and uses bKash regularly to send money home to her family.She narrates how bKash has made her life so much easier, and how it is transforming the lives of everyone around her too. How the other people are being benefitted by bKash according to this advertisement are describing below. Her neighbor Milon is a driver who used to receive his salary in cash. Milon is happy because bKash is a better means to keep his money safe as he does not have a bank account. He does not need to cash out the whole amount at a time. Ronnie is t he son of the Chairman of Sokhina’s village who is a university student and lives on campus away from home.He needs to pay his tuition fee urgently and calls his father to send him the money through bKash. He also assured his father not to be worried to lose the money as only he knows the pin code to make the money cash. Soo it is secure even the cell phone is lost. Again her madam Nina buys some groceries from a nearby superstore and happily pays with bKash at the store. Nina likes paying with bKash as it is simple, convenient and she no longer needs to carry cash. According to the TV commercial at present sending or receiving money using bKash is only possible under Grameen Phone and Robi network throughout the country.WEB link: http://www. bkash. com/video/something-everyone If facing any problem please visit http://www. facebook. com/Zelius. Miraz? fref=ts TARGET MARKET ANLYSIS Consumer markets can be segmented on the following customer characteristics. * Geographic * Dem ographic * Psychographic Geographic Target Market: If we consider about the geographical target market for bKash on the basis of the advertisement then it would be the whole Bangladesh where the network of GP and Robi is available as it talks about sending and receiving money from one end to another.Demographic Target Market: Age: People of ages 18 to 50. On the add we have seen that Ronnie, a university student, needs to use bKash for the payment of his tuition fees again on the other hand Sokhina sends money to her parents through bKash. So all of them are the target market of bkash. Gender: Both male and female. Income: People who earn money and do not both are the target market of bkash as it is providing one type of banking service. Occupation: Service Holder, Driver, Students, Housewife, Farmers, Businessman etc. ccording to the advertisement only. Psychographic Target Market: Social Class: Lower, middle and upper. Attitude and beliefs: Security conscious. Behavioral Target Ma rket: Benefits sought: Sokhina the garment worker describes about the benefits of bKash. User status: Potential and regular. OBJECTIVE OF THE ADVERTISEMENT The main objective of the advertisement is to attract the people of all sectors especially including garments workers, other lower earning people, students and housewives to use the financial service of bKash. CONSUMER BEHAVIOR

Sunday, September 15, 2019

Population Problems: A Worldwide Dilemma Essay

Population, specifically in terms of size, is considerably more of an issue today than it has ever been. In fact, some of the most significant problems worldwide are being attributed to the continuous rise of the human global population as mainly contributed by less economically established nations (Sociology Online). However, there is significantly more to these problems regarding population than commonly perceived. In fact, there are already several population problems that have brought about significant detrimental effects to several nations throughout the world, hence evidently causing alarm at a global scale. On of the most identifiable population problem is of course international migration (Sociology Online). From the standpoint of the common individual, migration might seem harmless as it only pertains to the transfer of people from country to country in terms of those who seek a different environment in which to live in. However, considering an immense growth in population, especially from impoverished countries, the migration of individuals from such countries towards countries which are more economically stable may result in various detrimental effects including diminished resources, social barriers, and further increase in population growth (Sociology Online). Given this, there have been methods in which migration may be controlled. In the United States for example, not everyone is allowed to migrate as there are set criteria in choosing the individuals to be allowed to stay in the country (Sociology Online). Another significant population problem is actually very much related to the first one, the continuous reduction of available resources. This problem is rather expected as the more individuals are born, the more people are in need of food. Since, food production cannot always be on par with the demand, problems will obviously arise. In fact, in extreme cases, famine may even break out as a result of the prolonged lack of available food in numerous locations, which evidently causes not only simple cases of malnutrition but in fact can cause numerous deaths for a particular locality (Sociology Online). The methods in which this is addressed is understandably not only through better rate of production of goods but also through a better consideration in terms of how much is consumed. Unlike the other two issues discussed, the third one to be mentioned is more on politics and international relations rather than simply the direct physical effects of the overgrowth of populations. The advanced countries have often showed concern regarding the increasing populations of the less developed countries, and have often expressed their eagerness in coercing the governments of these countries to promote or impose methods of population control (Sociology Online). Even though such suggestions are frowned upon in certain countries, some have in fact initiated population control methods regardless of the suggestions. In fact, the government imposed policies on having children in China have had various positive effects especially in terms of economic status (Sociology Online). As discussed, population problems today are generally associated with immense population growth, and it is evident that most global impacts are from this source. However, it must also be considered that the opposite of overpopulation is also potentially a source of negative implications (Sociology Online). Therefore, in order to truly limit or eliminate population problems, from apparent ones to more specific cases, a focus must be placed upon determining and maintaining an optimal population for each and every country worldwide. Work Cited Sociology Online. â€Å"Population Patterns and Trends. † Sociology Online Chapters and Texts. n. d. 20 May 2009

Saturday, September 14, 2019

Boost Juice Essay

Background Boost Juice Bars (Boost, 2014) is an Australian food and beverage brand, which was formed in 2000 with the first store located in the capital city in the South part of Australia- Adelaide. This food and beverage business has been done well since the business has been expanded globally in Asia, Europe, and Russia and even in Middle East. Unfortunately, Boost Juice Bars stopped part of business in New Zealand in 2006 after the franchiser due to liquidation. The stores in New Zealand are sold to Tank Juice. After a year reflection, Boost Juice Bars signed an agreement to re-start the brand in the UK. Nestlà © began a range of fruit smoothies in co-operating with Boost Juice Bars since 2008 as so to expand internationally. From this time onward until July 2009, there have been stores operating in Australia, and some places in Asia. The Franchising contracts have been confirmed in Asia and Europe as part of a global expansion plan. Following by the next  four years, Boost Juice got into a franchise agreement for providing the major supply to the whole India. By the end of 2013, the company had expanded into South America and some places in Asia. Literature Review The marketing strategy (Lusch, 1987) is collected from market research and product mix, in order to maximize the largest profit and maintain the stability of the business. The marketing strategy is basic cornerstone of a marketing plan. The marketing plan (Lusch, 1987) focuses on the idea of innovation by using brand new marketing mix to target the potential customers in the market. Most competitors are vending alike products. Between Competitors have strong competitions. One of the key competences is the innovative idea about new juice. The image of Boost Juice is the design of creating fresh, juvenile and healthy theme, so as to tempt more young people. Competitor may duplicate Boost Juice Bar’s goods and plan; however, the royalty of brand is important. Even if Boost Juice Bar is glad with its present marketing campaign to hold its customers for instance the Vibe club program which the purchaser could obtain a cup of free of charge drink on their birthday. It is intelligent to make sure if customers have less interest in Boost Juice or their awareness regarding to the weak brand image. The life cycle in different stage or timeline is necessary to estimate the correct marketing mix to strengthen some customer’s insight. It is necessary to ensure to stay in customer’s mind. Boost Juice Bar has a youthful and health picture, the market segment set on the young generation. Unfortunately, it is prudent to go back over its market segments. Inspecting the possibility on attraction from people age 18 until 25 is the most significant, as this group of people far more concerned their health and nutrition, in order to have a longer life expectancy. Young people sometimes are fascinated because of Boost cup’s design and even Vibe club Program (Boost Juice, 2014). Yet, fully grown customers tend to consider more on royalty of products whether benefits can be gained. Fresh and nutrition can offer vital benefit for body. Executive Summary The advertising and promotion are fundamental with product differentiation. Modernization is a key strategy that Boost Juice should across into its cup’s design and marketing promotion. Boost utilized a brand new method to connect fresh squeezed juice and nutrition together for the young generation. For the young people, they prefer to try new and special product; boost Juice has done excellence. Luckily until now, Boost has been using the same type of marketing tools more than five years, including publicity, media coverage and interactive website to represent the brand. One of the potential troubles of Boost Juice Bar may be facing is its old marketing message to its target audience or customers. This is the main issue if customers still have strong tackiness to stick the old message to Boost Juice Bar’s brand. Hence, Boost Juice Bar re-think about its goal customers. Boost also re-plans its marketing tools to the objective customers. However now, Boost is necessary to pay more attentions by using a popular marketing method, known as E- Marketing, such as Facebook and Twitters. The social media have been acting a considerable function in many companies, including small and large firms. The marketing mix is now very useful for understanding Boost Juice’s target customer, young generations. Product Range According to the survey I collected in a store at Macquarie Shopping Centre, the products of Boost Juice Bar mainly focus on health and nutrition. The following categories are the product range. 1. Smooth – Low fat smoothies. 2. Juice – squeeze from fresh fruit. 3. Complementary Product – healthy snacks (Fresh yoghurt and muesli bar). 4. Product in supermarket – juice, frozen yoghurt, and ready- to- eat snack (such as Low fat crunchy) Situation Analysis International Environment Analysis The main purpose of Boost doing this analysis is to figure out the flaw and and strength. Boost Juice Bar has established a questionnaire on its website to find out the acumen and insight factors, in order to maximise the profit. Marketing Situation When started the investment of Boost Juice Bar (Boost Juice, 2014), the founder and Managing Director Janine Allis targets an innovative way of offering juice in the Australian market. The new kind of juice bars have to be unlike from the long-established grocery store style juice, as well as the idea of juice bars in the US existed for more than 15 years. Earlier than Boost Juice existed, there were over 2000 juice bars in the US. Janine had an insight to believe that Boost Juice would have the capacity to have more than 500 branches. According to an interview with one of the store managers of Macquarie Shopping, since 2000, Boost Juice Bar was the only one brand that had the most and biggest expansion in Australia. Boost has had around 90 stores in 2004. At the same year they qualified the number 2 leading brand VIV A Juice, which means keeping the fresh and good quality fruits. After the combination in 2000, Boost had total about 124 stores. Nowadays, Boost Juice Bar has further 300 stores worldwide. Boost Juice Bar is successful on its inventive concepts with healthy and good taste. The fruits are squeezed into juice and smoothie for being a particular product. The original and normal styles of red and green colour give customer the thought of the product which is good for health. This is very strong brand recognition. Positive and energetic staffs serve the juice with bright smile; even speak out customer’s name loudly. These can force Boost to be particular with the other competitors. The product and sales are vastly generated to form a young and create active mood to attract younger. Aside from the customer’s royalty program (Boost Juice, 2104), Vibe Club card can keep hold as many as customers Boost can, for instance the members of Vibe club card could get a cup of unpaid drink on their birthdays. Management Situation Before the development of Boost Juice, Janine Allis was a Journalist; the work experience offered precious acquaintance on business practice, in particular management. Moreover, her husband, Jeff Allis worked in a radio station that a platform enables Janine to have better understanding on Boost’s target audiences. The background of Jeff has in radio industry enables them to use marketing tools for promotion (WR,1956). Boost Juice acquired VIV A Juice Bar in 2004, they employed VIVA Juice Bar’s creator Simon McNamarra being CEO, from another juice industry (Boost Juice, 2014). An extra factor could not be uncared is franchise system for expanding its stores. The franchising system allowed Boost to enlarge at a relative small cost whereas franchisees had to invest for installation for each shop. Actually, this helped Boost with the economic stress; meanwhile the joint fee of each shop has to shell out to the head office each year so that Boost has earnings by supply the material and charge shops from administration fees. This is a steady capital from the head office that could pay out on the promotion and advertising. Branding Branding position The theme of Boost Juice Bar was healthy and nutrition food (Boost Juice, 2014), provided to customers. Boost has to deliver this message to people that health is very important now. The mainly focus is not only taste and healthy drink, but also forms an active and fresh image. By various campaign, included off-lines or even online through the entire year, Boost Juice received strong attentiveness in the public such as Poster and advertisement on TV. External Environment Analysis In fact, the old juice industry has been at the maturity stage, since many juice shops had to convent into grocery stores for stay alive. Even though Boost created innovative idea of healthy juice drinks, happened from its first shop in south side of Australia- Adelaide, the smoothies juice bar are about to arrive at the stage of maturity. The external situation analysis concerned the external opportunity and threats that might influence the juice business. The threats included changing in society, demography and culture, change in economy and technology, competitor’s activities, and rule and regulatory. For the time being, the direct competitors of Boost have less action against to its market share. Actually, competitors could duplicate any of Boost’s products, but they are not enough to handle Boost Juice’s branding positioning. The problems may be arisen from the main location in the business areas that the district of Boost Juice’s retail shop could not attain. This provides an opportunity for the small competitors. For the change influence in cultural and society, people are far more anxiety on their health, they care about the amount of nutrition. SWOT Analysis Strengths: 1. Product’s development. 2. Strong spotlight on promotion (advertising campaign) 3. High customer royalty 4. Innovations 5. well-built ability to link with customers Weaknesses: 1. Heavy concentrate on promotional activities lead to high marketing cost 2. Sales decline obviously in winter time 3. Lack of further development in product in recent year Opportunity: 1. Without robust competitors directly 2. Health conscious Threats: 1. Many roundabout competitors started selling smoothies products. 2. Customers may have less interest over the time changed. Marketing Segmentation According to the survey I collected from Macquarie Shopping Centre store, there are some possibilities of target customers of Boost Juice, including regular households market, young, teenager, and healthy diet eaters. Boost need to analyse and develop products to meet the stratification from various customers’s needs and wants. Housewives in regular household market purchase juice for their families weekly or monthly. The juice product is necessary to be healthy, high in vitamin and fresh for the family. For the young people with age approximately between from 18 until 25, some of them prefer good-looking packaging to meet their idea that â€Å"perfect and exciting eat†. Some of them would begin to think of relatively healthy way, which is supportive to their bodies. The cup’s design of Boost is completely fit for those two above types of people. For teenager with age between 15 and 18, they expected the juice drink not just tasty but also fun and attractive. They are likely to buy the prestige other than the actual product. The good taste smoothies drink and nice-looking package of product is the important keys to this group of customers. For healthy diet eaters, they would look  deeply to the ingredients of products. They will look at the quality of product more than the design and appearance of the product. Marketing Objectives The marketing objectives are integrating marketing communication campaign, the marketing objectives of Boost Juice Bars could are target customers with aged between 25 and 35, which has higher ability of income to consume better quality products, as well as engage with new customer and retain the current ones by the social network. Strategies The marketing schedule of Boost consisted promotion and advertising, braining new ideas regularly, and seeking new customers through interactive program to connect with customers. Marketing Mix Marketing Mix is about what to use unlike marketing tools to meet the goal (WR, 1956). Normally, Marketing Mix is the mix of 4Ps (Lee, 2009). 4Ps are about the features of products; Price is how to set up the price strategy; promotion, such as advertising and public relationship; and place such as locations which is very critical in retail business. Product differentiation was very significant (WR, 1956), so innovative needs can be frequently carried out. Those factors were fraction of a general scheme of competitiveness. Being the most accepted smoothies in the market for over 11 years, customers who love trying new things; innovation could hold customers. In order to create a centre of attention of the new age level of customers from 24-35, TV commercial is significant to make awareness to people. The alternative factor is social Network, such as Facebook. None of people deny such social media became the most popular marketing tool for companies to interact with their target audien ces. Boost Juice should post more posts on Facebook and uploading up the â€Å"Today’s specials† on Twitter account. By not only utilizing those as a stage to keep contact with customers, but Boost also update customer’s needs for improvement. Boost’s target market are chiefly young people within 15 and 25, the rate of using social media is extremely high. The cost should be demonstrated effectively by using free media source, such as Facebook’s Page and writing blog. One of  the 4Ps – place, this can also be location. As mention before, Boosts are mostly residing in the high quantity of customers in business areas. These absolutely make attention more on customers; however, the cost of problem is very high. Hence, this do not fulfill as many customer’s wishes as possible. The potential approach in the place is special designon public transport, such as mini bus and taxi, which is like concept to Munch Lunch Van. Customers have to give a call for service in advance. The mobile van can go to the place where shop is not nearby. Doing the juice business, Boost should treat each product’s price as a standard. A price cut may cause low quality for ensuring the quality of product offered. On the other hand, the cause of Boost Juice has pretty high proportion of marketing expenditure and leasing cost. Hence, Boost tried to provide more benefits to customers. For example, free drink to allocate on street for promotion. The price discount could be offered in the alterative way. Something like buy 2 gets 1 free or jumbo size can enlarge the sales for profit margin. Product Differentiation and the Product Life Cycle In a market, there are many companies are all making related products; product differentiation is a real approach to analyse (WR, 1956). Refer to an academic journal (GS, 1981), extensive reference have been made; Armstrong, Brown and Adam had pointed out references detailed points. The product life cycle illustrates the alteration of a product from development and popularity, follow by maturity and even decline (GS, 1981). Boost illustrates the outlook of its business through product life cycle, in order to keep the position in the market and maximise the profit. The 4Ps comprise (Internal Marketing, 2004) the Product to understand product’s special and exclusive features, Price is referring to pricing plan), Promotion is about how to let people know the product, such as advertising and public relation, and Place is about distribution that the quality product allocated to different branches. The branch with more customers should have more sources to produce more products. Measures of Success According to an interview with a brand manager, the marketing research company called ACNielsen, which has been working in the area of media, entertainment, finance, and hospitality, revealed Boost Juice operated  several countries and served variety of industries, adjust Boost’s needs to measure its marketing outcome. The professional research of companies provided definite view of what is going to be happened. It has a leading of role in sharing of information in TV commercial. The methods of collecting data consisted retail forecast, consumer panels, and marketing investigate. Also common work included merchandising in goods, modeling and analytics, decision marking, and merchandising goods. Recommendation Social media is now being a new marketing tool to hold with customers preferably. Boost Juice maintain innovation as the main type of competence. A qualitative study is necessary to move toward with Boost Juice that the audience is necessary to recognize the right view. Conclusion For being successful, Boost Juice can not be described as lucky. When it comes to the founder Janine Allis’ passion in providing healthy and nutritious drink to this country, she is smart to target on the brand positioning to the right target customers by using the correct marketing tools. In overall, Boost is still having large room for growing, unfortunately, over the time passed by, the external environment, such as target customers are changing. Parts of fans have already become mature. Boost Juice Bar have to be more innovative deal with the problem of market change to preserve existing customers and attract more new customers. Reference Boost Juice, 2014, < http://www.boostjuice.com.au/> GS Day, 1981, â€Å"The product life cycle: analysis and applications issues.† The Journal of Marketing, vol.45, no.4 Internal Marketing website, 2004, Lee Goi, Chai, 2009, â€Å"A Review of Marketing Mix: 4Ps or More?† International Journal of Marketing Studies, vol.1, no.1 Lusch, R.F., and V.N. Lusch, 1987, Principles of Marketing, Kent Publishing Company, Boston, Massachusetts WR Smith, 1956, â€Å"Product differentiation and market segmentation as alternative marketing strategies.† The Journal of Marketing, vol.21, no.1