Automobile Industry Essay

Strong demand growth due to rising incomes, growing middle class, and a young population is likely to propel India among the world’s top five auto-producers by 2015 Growth in export demand is also set to accelerate. Tata Nano and the upcoming Pixel have opened up the potentially large ultra low cost car segment Innovation is likely to intensify among engine technology and alternative fuels. Advantage India Rising investments Policy support India has significant cost advantages; auto firms save 10-25 per cent on operations in India compared to Europe and Latin America A large pool of skilled manpower and a growing technology base will induce greater investments. The government aims to develop India as a global manufacturing as well as R&D hub There has been a wide array of policy support in the form of sops, taxes and FDI encouragement. FY10 Market size: USD57.7 billion    Notes: R&D – Research and development, FDI – Foreign direct investment; FY – Indian financial year (April – March); FY16E – estimated figure for financial year 2016; estimates are from the government’s Automotive Mission Plan (2006 – 2016) ADVANTAGE INDIA. For updated information, please visit www.ibef.org. 3. Automotives AUGUST 2012 Contents ï  ¶ Advantage India ï  ¶ Market overview and trends ï  ¶ Growth drivers ï  ¶ Success stories: Maruti, Tata Motors ï  ¶ Opportunities ï  ¶ Useful information For updated information, please visit www.ibef.org 4 Automotives AUGUST 2012 Evolution of the Indian automotives sector 20.4 million units (2012) 11 million units (2007) 2008 onwards 0.6 million units (1992) 1983 – 1992 0.4 million units (1982) Before 1982 †¢ Closed market †¢ Only 5 players †¢ Joint venture (JV) Indian government and Suzuki to form Maruti Udyog; started production in 1983 †¢ Component manufacturers also entered via JV route †¢ Buyer’s market 1993 -2007 †¢ Sector de-licensed in 1993 †¢ Major original equipment manufacturers (OEMs) started assembly in India †¢ Imports allowed from April 2001 †¢ Introduction of value added tax in 2005 †¢ More than 35 players in the market †¢ Removal of most import controls †¢ Indian companies gaining global identity †¢ Long waiting periods and outdated models †¢ Seller’s market Source: Tata Motors, Society of Indian Automobile Manufacturers (SIAM), Aranca Research, Notes: JV – Joint Venture MARKET OVERVIEW AND TRENDS For updated information, please visit www.ibef.org 5 Automotives AUGUST 2012 The automotives market is split into four segments Automobiles Two-wheelers Passenger vehicles Commercial vehicles Three-wheelers Mopeds Passenger cars Light commercial vehicles Passenger carriers Scooters Utility vehicles Motorcycles Multi-purpose vehicles Medium and heavy commercial vehicles Goods carriers Electric twowheelers For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 6 Automotives AUGUST 2012 Revenues have been growing at a strong pace → Gross turnover of automobile manufacturers in India expanded at a CAGR of 17.7per cent over FY07-1 1 Excluding three wheelers, cars account for the largest share of revenues (66.2 percent in 2010) Revenue trends over the past few years in USD million 70.0 60.0 50.0 40.0 30.5 30.0 20.0 10.0 0.0 FY07 FY08 FY09 FY10 FY11 66.2% 36.6 33.3 21.5% Trucks Cars 58.6 CAGR: 17.7% 43.3 → Market* break-up by revenues (2010) 12.3% Two Wheelers Source: SIAM, Datamonitor, Aranca Research Note: *does not include three wheelers For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 7 Automotives AUGUST 2012 Sector’s growing strength evident from rise in total production figures Total production of automobiles in India (million units) 16.0 → → 12.0 7.6 8 8.4 10.0 8.0 6.0 1.3 0.4 0.4 1.2 0.4 0.4 1.6 0.6 0.5 1.3 0.5 0.6 1.8 2.4 4.0 6.5 8.5 Notes: CAGR – Compound annual growth rate 10.5 Passenger vehicles was the fastest growing segment during that period with a CAGR of 14.5 per cent 14.0 13.4 0.8 0.8 3.0 2.0 0.0 FY05 FY06 FY07 FY08 FY09 0.4 0.5 FY10 0.6 0.6 FY11 FY12 Passenger Vehicle Three Wheelers Commercial Vehicle Two Wheelers Source: SIAM, Aranca Research For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 0.8 0.8 3.1 15.5 Automobiles production increased at a CAGR of 13.2 per cent over FY05-12 18.0 8 Automotives AUGUST 2012 Market break-up by production volume → Two wheelers dominate production volumes; in FY12, the segment accounted for more than three quarters of total automotives production in the country Market share by volume (FY12) → In fact, India is the world’s second largest two wheeler producer; the country is also the fourth largest commercial vehicle producer 4% 4% 16% Two Wheelers Passenger Vehicle Commercial Vehicle Three Wheelers 76% Source: SIAM, Aranca Research For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 9 Automotives AUGUST 2012 Market break-up of individual segments by production volumes †¦ (1/2) Shares in production of passenger vehicles (FY11) Shares in production of commercial vehicles (FY11) 11.5% Passenger cars 8.1% 36.0% MCV & HCV Passenger Carriers MCV & HCV Goods Carriers LCV Passenger Carriers 49.7% 6.1% LCV Goods Carriers Utility vehicles/multipurpose vehicles 88.5% Source: SIAM, Aranca Research Notes: LCV – Light commercial vehicle; MCV – Medium commercial vehicle; HCV – Heavy commercial vehicle For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 10 Automotives AUGUST 2012 Market break-up of individual segments by production volumes †¦ (2/2) Shares in production of three wheelers (FY12) Shares in production of two wheelers (FY12) 15.8% Goods carriers 15.6% 5.3% Mopeds Motorcycles Passenger carriers Scooters 84.2% 79.1% Source: SIAM, Aranca Research For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 11 Automotives AUGUST 2012 Exports have also grown strongly †¦ (1/2) → Automobiles export volumes increased at a CAGR of 22.4 per cent over FY05–FY12 Over this period, the fastest growth was in the two wheeler segment (25.8 per cent) followed by three wheelers (21.9 per cent) Exports of automobiles from India (million units) 2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2 0.5 0.6 0.8 1 0.5 1.1 0.5 1.5 0.4 0.5 0.3 0.2 0.03 0.1 → 0.2 0.04 0.1 0.2 0.05 0.1 0.2 0.06 0.1 0.04 0.2 0.04 0.2 0.08 0.3 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Passenger Vehicle Commercial Vehicle Three Wheelers Two Wheelers Source: SIAM, Aranca Research For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 0.1 0.4 12 Automotives AUGUST 2012 Exports have also grown strongly †¦ (2/2) → Two wheelers accounted for the largest share in exports (by volume) at 67 per cent in FY12 Passenger vehicles account for a sizeable 18 per cent of overall exports Exports shares by volume (FY12) → 18% Passenger Vehicle 3% 12% 67% Commercial Vehicle Three Wheelers Two Wheelers Source: SIAM, Aranca Research For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 13 Automotives AUGUST 2012 Presence of a clear leader in each segment of the market → The automotives industry is concentrated with market leaders in each segment commanding a share of over 40 per cent Market Leader Passenger Vehicles MCVs & HCVs LCVs Three Wheelers 45% 16% Others 15% 7% 63% 23% 7% 59% 30% 4% 4% 41% 40% 10% Motorcycles Scooters 59% 24% 7% 6% 51% 21% 14% Source: SIAM, Aranca Research Notes: Data is for FY10 10% For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 14 Automotives AUGUST 2012 Notable trends in the Indian automotives sector †¢ Large number of products available to consumers across various segments; this New product launches has gathered pace with the entry of a number of foreign players †¢ Reduced overall product lifecycle have forced players to employ quick product launches Improving productdevelopment capabilities †¢ Increasing R&D investments from both the government and the private sector †¢ Private sector innovation has been a key determinant of growth in the sector; two good examples are Tata Nano and Tata Pixel – while the former has been a success in India, the latter is intended for foreign markets †¢ In FY11, the CNG market was worth more than USD330 million and CNG cars Alternative fuels and taxis are expected to register a CAGR of 28 per cent over FY11-FY14 †¢ The CNG distribution network in India is expected to increase to 250 cities by 2018 from 30 cities in 2009 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS 15 Automotives AUGUST 2012 Contents ï  ¶ Advantage India ï  ¶ Market overview and trends ï  ¶ Growth drivers ï  ¶ Success stories: Maruti, Tata Motors ï  ¶ Opportunities ï  ¶ Useful information For updated information, please visit www.ibef.org 16 Automotives AUGUST 2012 Sector has been benefitting from strong demand and product innovation Growing demand Growing demand Policy support Strong government support Increasing investments Rising incomes, young population Inviting Greater availability of credit and financing options Goal of establishing India as an automanufacturing hub R&D focus; GOI has set up technology modernisation fund Large domestic market Policy sops, FDI encouragement Resulting in Rising investments from domestic and foreign players Greater innovation in products; market segmentation Strong growth in exports as well Strong projected demand making returns attractive Notes: GOI – Government of India; For updated information, please visit www.ibef.org GROWTH DRIVERS 17 Automotives AUGUST 2012 Rising incomes and a growing middle class driving domestic demand growth Rising incomes; growing middle class †¢ Changing income dynamics of India’s population 70 million households Aspirers: annual income INR90,000200,000 Seekers: annual income INR200,000500,000 Strivers: annual income INR500,0001,000,000 Globals: annual income >INR1,000,000 Personal (nominal) disposable income is expected to rise annually at 8.5 per cent over FY11-15 Rising middle class – size of the middle class expected to touch 550 million by 2025 from 50 million in 2010 Favourable demographics – a young population is also driving up the demand for cars Demand for commercial vehicles have got a boost due to development of roadways and greater market access 60 50 40 30 20 10 0 2005 Strivers 2010 Seekers 2015 Deprived    Deprived annual income

Comparison of strategy of Nike and Adidas Essay

1.0 Introduction: Johnson, Scholes and Whittington (2005, p.9) defines strategy as the way in which an organisation plans to use its resources effectively in order to gain a competitive advantage over the long term. In other words the carefully planned guidelines that organisation’s follow, which differentiates them from other organisations. Mirow (2005,p.10) suggests that strategy of Amazon.com,Inc., a multinational electronic commerce company headquartered in Seattle, focused on providing customers with low price, convenience and a wide selection of merchandise. They focused on this strategy and started their website in 1995 as an online book retailer. They slowly expanded their products and are currently an online shopping website with the largest product supplies online earning revenues in billions. Hence we can see how important strategy is for the success of an organisation. There are three levels of strategy, which are corporate level, business  level and functional level strategy. Strickland and Thompson (2003, pp.50, 55 and 56) suggests that the corporate level strategy is the strategy which is determines the overall purpose and prospect of an organisation and reflects on how to add value to different parts of the organisation. The business level strategy provides guidelines on how to excel competitors or survive in a particular market and the functional strategy is the contribution made by the resources, people and processes to the business and corporate level strategies. Companies strive with their strategies in order to become the leader in their specific industry or market. Nike and Adidas are the top two competitors in the footwear, apparel and accessories segment of the textile industry. The focus of the latter part of this report is on how these competitors compete with each other using their strategies. 2.0 Literature review: In order to fully understand about strategy, it is mandatory to know about the five generic competitive strategies. The five generic strategies according to Strickland and Thompson (2003, p.150) are low-cost provider strategy, in which the organisation provides goods or service at a low cost, broad differentiation strategy, in which the organisation differentiates its products or services making it appeal to a vast range of customers, best-cost provider strategy, in which the organisation provides goods or services of high quality making it worth the amount they are charging which is lower than their competitors, a focused strategy based on lower cost, in which the organisations focus on a narrower buyer segment and provides them their goods or services at a lower cost than its competitors and focused strategy based on differentiation, in which the organisation focuses on a narrower buyer segment and produces product customized according to their needs. 3.0 Backgrounds of Nike and Adidas: [IMAGE URL: http://digestingdesign.wordpress.com/tag/nike/] 3.1 Company overview of Nike According to (www.nikebiz.com) NIKE,Inc. was founded in 1972 by Phil Knight and Bill Bowerman. It designs, markets and distributes athletic footwear,  apparel, equipment and accessories for a vast range of sports and fitness activities and are currently the world’s leading company in the athletic footwear, apparel and accessories segment in the textile industry. It is based in Beaverton,Oregon and has subsidiaries such as Cole Haan, which designs, markets and distributes luxury items such as shoes, handbags and coats. Their subsidiaries also include Converse,Inc. and Hurley International LLC and Umbro,Ltd. The revenue of Nike,Inc. as at May 2010 is around US$ 19014 million according to (www.biz.yahoo.com). [IMAGE URL: http://www.soccercleats101.com/2009/10/07/adidas-predator-x-get-ready/] 3.2 Company overview of Adidas Group: According to (www.adidas-group.com) Adidas, founded in 1949 by Adofl Dassler, is a sports apparel manufacturing company. Starting with athletic footwear such as running shoes and soccer shoes, they currently manufacture a wide range of products such as bags, watches, shirts and accessories. They are the second largest sportswear manufacturer, behind Nike,Inc. Adidas Group is made up of three companies, Reebok, TaylorMade Adidas Golf company and Rockport. The revenue of Adidas as at May 2010 is 14878 US$ Million according to (www.biz.yahoo.com). 4.0 Critical Incidents that occurred in the past: 4.1 Critical incidents that affected Nike: Nike, Inc. had gone through various incidents which had an impact on their success. According to Dermesropian, Drage, Grigaite and Lopez (2004,p.3) in 1972, Nike persuaded marathon runners at Olympic Tracks to wear their shoes which was an innovative strategy as it resulted in strong advertising when some of the runners were the top finishers and popularity of Nike continued to grow throughout the 70s. In 1979 Nike had 50% of the US running shoe market. In 1988 Nike introduced their famous slogan ‘Just do it’ and acquired a company called Cole Haan. They sponsored many famous athletes such as Michael Jordan, a famous basketball player and Tiger Woods, an excellent young golf player. During 1992 Nike acquired Canstar sports which included the hockey equipment maker Bauer and opened its first Niketown store. In early 1995 Nike acquired a license to put its logo on NFL uniforms  which resulted in strong marketing. Air Jordan [IMAGE URL: http://www.myairshoes.com/air-jordans/air-jordan-xx3-officially-unveiled.html] They launched a new brand called Jordan, in 1997, which was influenced by the famous basketball player Michael Jordan and one of the most famous shoes of that brand were called Air Jordan. Some incidents harmed Nike during 1998 as they had to cut 1,200 jobs due to the fall of sales in Asia and the demand of athletic shoes fell in 1999. Nike wanted to diversify and in the year 2000 they shifted a little towards the technological and electronic sector and introduced athletic electronics, which included MP3 players, heart monitors, and two-way radios. Products of Nike in the BCG matrix [IMAGE URL: http://www.robmillard.com/archives/BCG%20Matrix%20Big1.html] They opened their first Nikegoddess store in California in 2001. They acquired Hurley International, a distributor of action sports apparels and lost their license to put their logos on NFL uniforms to Reebok in 2002. In 2003 they acquired one of their competitors called Converse but it continued to operate independently in order to sustain the brands popular name. 4.2 Critical incidents that affected Adidas: Adidas also faced various occurrences in order to attain the title of the second largest athletic footwear sportswear and accessories manufacturer.   Adidas Samba [IMAGE URL:http://www.bestshoesmen.com/adidas.Men.Samba.Classic.Soccer.Shoe/detail.html] According to (www.adidas-group.com) Adidas registered as a company in 1949 with the three stripes logo as their trademark. (www.footballshirtculture.com) explains that in the year 1950 they produced the â€Å"Samba† all-round soccer shoes which are even now considered to be the best classic training shoe today. One of the biggest successes of Adidas was in 1952 when it was the most common shoe brand worn at the Olympic Games  held in Helsinki. They made the first track shoes with removable spikes. Emil Zatopek, in Adidas shoes, won three gold medals in one week creating a huge impact on the image of the brand. German National Team wearing Adidas in the 1954 football world cup [IMAGE URL: http://soccernet.espn.go.com/world-cup/feature?id=696762&cc=4716&ver=global] In 1954 Adidas became famous all over the world as the German national team was victorious in the football world cup for the first time, wearing Adidas shoes with screw-in spikes. In 1955 Adidas came up a shoe with exchangeable spikes which became very popular among the high jumpers. In 1964 Billy Mills won the men’s 10,000 meters wearing the new Adidas shoe which was considered the lightest shoe weighing 135 grams. In 1969 Adidas produced the world’s first injection molded multi stud soles of polyurethane, which gave a one year guarantee on the soles. Adidas began production of balls in 1961 and in 1970 their football was the official ball of the football world cup. In 1971 the famous ‘Fight of the century’ where Muhammad Ali and Joe Frazier fought with each other, both of them wore special boxing shoes designed by Adidas. Products of Adidas in the BCG Matrix [IMAGE URL: http://www.robmillard.com/archives/BCG%20Matrix%20Big1.html] Adidas Copa Mundial [IMAGE URL: http://www.footballbootroom.com/Adidas-Copa-Mundial] In 1979, Adidas produced ‘Copa Mundial’, which even today is still the world’s best selling soccer shoe. In 1986 Adidas introduced Azteca, the first synthetic world cup matchball in the world. However, in 1993 Adidas took over Sports Inc., a US based sports marketing company and Adidas was loosing US$100 million a year. Robert Louis Dreyfus had become the new president of Adidas and he downsized the German staff and went subcontracting to China. Adidas once had 70% market share in the US and it fell to 2% in 1993. In 1994 Adidas made a comeback by producing the revolutionary soccer shoe called the Predator during the soccer world cup in the USA. They went public in 1995 and acquired the Salmon Group which consisted of the brands TaylorMade, Mavic  and Bonfire in 1997. The new company is named Adidas-Salmon AG. They were the first sporting goods company to chosen as the official sponsor of a soccer world cup in 1998 when they sponsored the 1998 FIFA World cup in France. Adidas Predator Mania [IMAGE URL: http://www.produktenews.ch/newsflashartikel.cfm?key=179710] In March 2002 Adidas launched ClimaCool a footwear with a ventilation system and introduced the new Predator Mania boots and jerseys with the dynamic layering concept in the 2002 FIFA world cup with their own official ball called the Fevernova. They sold over 6 million footballs and more than 1.5 million jerseys and half a million of the Predator Mania that year. In 2006 Adidas became the official partner, supplier and licensee for the FIFA world cup to be held in 2006, 2010 and 2014. They acquired Reebok International in the same year. 5.0 Comparison of the strategies of the companies: 5.1 Strategies of Nike: In order to become the world’s leading designer, marketer and distributor of athletic footwear, apparel and accessories, Nike followed many strategies. Their corporate level strategy, according to Dermesropian, Drage, Grigaite and Lopez (2004,p.15) is their focus on innovation and emphasis on their research and development department in order to be profitable in the long run and they do their best to produce footwear, apparel and athletic equipment that reduce or eliminate injury, help in athletic performance and maximize comfort. They continue to expand their operation in the USA, Asia Pacific, Europe, Middle East, Africa and the American regions trying to reach as many customers as possible. Their business level strategy is a combination of the best cost provider and broad differentiation strategy, but more emphasis is put on the best cost provider strategy. They rely heavily on strategic outsourcing and most of their products are manufactured outside the United States. One of the main reasons behind their success following the cost leadership strategy is their extensive network structure that allows them to cancel their alliance with any company that fails to maintain their standards. They work very closely with their suppliers which allow them to produce their goods at a very low price and of superior  quality with the newest technology which makes them the market leader and the rest have to try producing similar goods close to their standard in order to survive in the market. They work very hard in their marketing strategies and which one of the primary reasons behind its success. Fig.1Fig.2Fig.3 Players who wear Nike – Fig.1) Cristiano Ronaldo [IMAGE URL: http://s702.photobucket.com/albums/ww24/bleedingblue97/?action=view ¤t=Cristiano_Ronaldo_Manchester_United.jpg&newest=1 Fig.2) Michael Jordan [IMAGE URL: http://www.ionlinephilippines.com/2009/12/michael-jordan-look-alike-michael-jordan-imposter-video/] Fig.3) Tiger Woods [IMAGE URL: http://www.dailyworldbuzz.com/tiger-woods-still-has-support-of-nike-gatorade-and-gillette/4970/] Nike hired famous basketball player Michael Jordan, tennis player Serena Williams and Tiger Woods who signed a seven year contract in order to be the spokesperson of Nike. In 2003 they spent around US$ 32.4 million on Net TV commercials and another US$ 39.8 for magazine ads. In order to become the market leader one has to follow a rigid and innovative strategy but to remain as the market leader the strategy has to be sustainable. According to (www.bizjournals.com) on a report published by Nike, suggest that they have planned five major programs in order to keep their corporate level strategy sustainable. In order to sustain in the long run Nike is now emphasizing more on the concerns about global warming. They have decided to focus more on their product design process, eliminating toxics and wastes wherever possible, start a GreenXchange web marketplace to share intellectual property which have been designed to act as a catalyst in green development, establish a lean manufacturing and human resource management in order to acquire a more equitable supply chain, establish a social program which combines education and sports programs for the third world countries and establish a new group call the Business for Innovative Climate and Energy Policy. 5.2 Strategies of Adidas: The strategies of both these sports giants are very similar but Adidas  focuses more the broad differentiation strategy. According to (www.adidas-group.com) the corporate level strategy of Adidas also focuses on innovation, trying to produce new products, services and processes in order to cope up with the competition. In 2009 the Adidas Group strategically decided to move from a vertically integrated brand structure into a functional multi-rand structure for the Reebok and Adidas brands. This created a global sales function which were responsible for commercial activities and a global brands function which were responsible for the marketing of both brands. The global sales function was also split into two departments, wholesale and retail, which catered to the various needs of both these business models. This was done in order to sustain their corporate level strategy for the long run so that these divisions could emphasize and work hard in their respective departments in order to make the most of their efforts. This led to the elimination of regional headquarters and moved towards more direct communication between the local markets and the global functions. They implemented a multi-brand strategy by having a diverse brand portfolio which allowed them to cater all segments of the market from players to almost everyone. This helped them to keep a unique identity and concentrate on their core competencies. Adidas focused their investments in the best marketing and distribution channels in different countries by critically evaluating the consumer buying behaviors and their constant struggle to secure prime shelf space. They have also embraced e-commerce in order to become more efficient and appeal to more customers and make purchasing much more easily accessible for them. Their supply chain is closely communicated and hence it helps them to customize their products which appeal to a wide range of customers. The organizational culture of Adidas group obligates employees to be innovative. This culture forces them to produce goods which are highly innovative and with the use of the latest technology their products have a very good quality. According to (ar2001.adidas-salomon.com) using latest technologies they produce products which enhances performances of players and they focus on sports such as football, tennis, basketball and even training shoes which are used by anyone with the ability to run. Their new technologies have lead to the production of Climacool, a shoe with a ventilation system and a ­3 a shoe with an energy management system that guides and drives an athlete’s foot  through each stride. Fig.4Fig.5Fig.6 Famous players who wear Adidas – Fig.4) Zinedine Zidane [IMAGE URL: http://s670.photobucket.com/albums/vv70/tomdavies99/?action=view ¤t=09_zinedine_zidane_dpa_300.jpg&newest=1] Fig.5) Kaka [IMAGE URL: http://soccerpitch.co.za/tag/real-madrid/] Fig.6) Kobe Bryant [IMAGE URL: http://family-fitness.mattters.com/2010/7/2/couldnt-wait] Adidas Trefoil logo [IMAGE URL: http://free-extras.com/images/adidas_logo-658.htm] Adidas has world class players who wear their products such as Zinedine Zidane of France, Alessandro Del Piero of Italy and Kobe Bryant an NBA champion who is a style icon for basketball lovers. They also concentrate on their classic items, reintroduce and redesign them under their Trefoil logo. 5.3 Comparison of the strategies of Nike and Adidas: According to (http://comparisonz.com) Nike and Adidas have almost similar strategies but different implementation methods. Both the companies concentrate heavily on technology and strive to produce new and innovative products. Nike focuses on the American markets whereas Adidas focuses on the European market. Nike does not have any production plants as they only design, distribute and market their products and hence they outsource to various countries in Asia, mainly Taiwan and Korea, which outsource their production to China, Indonesia and Vietnam. Adidas on the other hand, carry out all their production in Germany and recently has adopted Nike’s outsourcing policy by outsourcing to Asian countries. Nike and Adidas both follow a premium pricing strategy which according to Kotler (2003, p.272) is a strategy where companies charge a premium price for their products. Their competition is always intense and according to Anderson (2010) during the world cup 2010 Nike launched the popular â€Å"write the future†, three minute advertisement featuring world cup stars which was a major hit on Youtube and Adidas replied with their two minute video with celebrities like Snoop Dogg  and Daft Punk into a famous scene from the movie Star Wars. Nike sponsored nine teams whereas Adidas sponsored 12 teams. World’s Largest LED by Nike [IMAGE URL: http://johannesburgbc.ning.com/profiles/blogs/nikefootball-delivers-the] Even though Adidas was the official sponsor of the World cup 2010, Nike attached an LED display to a 30 story skyscraper in Johannesburg where soccer fans could write short messages using popular social networking websites such as Twitter and Facebook and Nike put up 100 messages on the side of the walls every night. Adidas adiPURE III Nike Tiempo Elite [IMAGE URL: http://soccerlens.com/shirts/nike-vs-adidas-buying-football-shoes-in-2010/6410/] Umair (2010) compares the constant rivalry between Nike and Adidas using their products. During the world cup Nike launched an Elite series for the 2010 world cup called Nike Tiempo Legend Elite which had customized shoes worn by famous football players such as Christiano Ronaldo and Cesc Fabregas. Adidas on the other hand, launched a new collection called Adidas Adipure for the world cup 2010 which also had customized shoes worn by famous players such as Kaka and Lionel Messi. In soccer Adidas shoes are worn by famous players such as Zinedine Zidane, Kaka and Lionel Messi, whereas Nike shoes are worn by Christiano Ronaldo, Wayne Rooney and the original Ronaldo. In basketball Nike shoes have been used by Michael Jordan and Adidas shoes have been worn by Kobe Bryant. 6.0 Future Plans of Nike and Adidas: It is easy to become the market leader or the market challenger for organisations but sustainability is the primary concern and hence organisations focus of the sustainability by coming up with strategies that will make their position sustainable in the long run. According to (www.environmentalleader.com) Nike’s future plans are to focus on the environment and production of eco friendly products. They mentioned in their 2005 and 2006 Corporate Responsibility Report that they will become carbon neutral by 2011 by reducing their Caron Dioxide emissions. They have decided  to design all Nike brand footwear in ways through which they can reduce waste production during product design and packaging. They will eliminate the use of volatile organic compounds and use more environmental friendly material in their products and be carbon neutral by 2011. Adidas on the other hand became the official sportswear partner of the London 2012 Olympic Games. The London Organising committee for the Olympic Games and Paralympic Games (LOGOC) has few regulations which all of its partners are obligated to follow. These obligations are focused towards the environment. Adidas, being a partner of LOGOC has to follow all these regulations as their future plans are to be the official sponsor of almost all major events in the world, and in order to achieve this goal their strategy is to produce environment friendly goods as well. They have to ensure that all their products are produced with environment friendly materials, which would protect the human health and the environment and their packaging should also be produced with materials that can be recycled. Hence we can see that both the future plans of Nike and Adidas are quite similar. 7.0 Conclusion: The main element that determines an organisation’s success or failure is the strategy it follows. Any industry is vast and the competition is also fierce and in order to survive in the competition organisations must devise innovative strategies. Nike and Adidas have started their journey decades ago and they have struggled but sustained their positions; Nike as the market leader and Adidas as the market challenger. Various incidents have occurred in the past to both the companies which were both good and bad, but it was the strategies that helped them survive and sustain their positions. The strategies of both these companies are quite similar and Adidas is not far behind from Nike, but any small mistake by Nike, might make them the market challenger and Adidas the market leader. Nike has to be very careful while implementing their strategies because Adidas is very close to becoming the market leader. Nike’s initial strategy of being just the product designer, distributor and marketer gave them the competitive edge against Adidas, because their investments were low compared to Adidas as they have production plants, but Nike should be very careful to sustain their market position. 8.0 List of references: Books: Johnson,G., Scholes,K. and Whittington,R.(2005) Exploring Corporate Strategy: Text and Cases. Seventh Edition. Prentice Hall. Thompson,A.A., and Strickland,A,J.(2003) Strategic Management Concept and cases. 13th edition. McGraw Hills. Kotler,P. ( 2003)Marketing Management, Eleventh Edition, Pearson Education. Websites: (2010) NIKE, Inc. Company Profile, [URL:http://biz.yahoo.com/ic/14/14254.html] (accessed: 29 August 2010) (2009) Adidas Group History, [URL:http://www.adidas-group.com/en/ourgroup/history/history.aspx] (accessed: 29 August 2010) (2010) Nikebiz: Company Overview, [URL:http://www.nikebiz.com/company_overview]/ (accessed: 29 August 2010) (2010) Adidas AG Company Profile, [URL:http://biz.yahoo.com/ic/92/92632.html] (accessed: 29 August 2010) (2010) The history of Adidas, [URL:http://www.footballshirtculture.com/2006102796/history/adidas-football-shirt-history.html] (accessed: 29 August 2010) (2010) Strategy, [URL:http://www.adidas-group.com/en/ourgroup/strategy] (accessed: 29 August 2010)/ Strategy: Adidas, [URL:http://ar2001.adidas-salomon.com/adidassalomon2001/strat_adidas/] (accessed: 29 August 2010) (2010) Nike vs. Adidas – Compare Side by Side, [URL:http://comparisonz.com/comparisons/100305/nike-vs-adidas]/ (accessed: 29 August 2010) (2009) Adidas: 2009 Sustainability review, [URL:http://ser2009.adidas-group.com/suppliers/3_4.html] (accessed: 29 August 2010) Articles: (2010) Nike plans to be Carbon neutral by 2011, [URL:http://www.environmentalleader.com/2007/05/31/nike-plans-to-be-carbon-neutral-by-2011] (accessed: 29 August 2010) Umair,A.(2010) Nike vs Adidas – Buying football shoes in 2010,

Pulmonary Effects Of Smoking Marijuana Dissertation

Pulmonary Effects Of Smoking Marijuana - Dissertation Example Research shows that many users of marijuana often inhale it as extremely hot fumes, usually to peak inspiration, and held as long as possible before being exhaled slowly. According to a study by Forrester et al (2012), this form of smoking has a greater impact on the pulmonary system because it predisposes the lung parenchyma to a greater damage than the smoking of standard tobacco cigarettes. Research concerning the impacts of smoking marijuana has been done in the past and confirmed that the risk of regular smoking of marijuana is similar to those of regular tobacco smoking (Onaivi, 2006). There are many studies on the effects of tobacco on the respiratory system as well as certain diseases have been profiled and linked to tobacco. However, few studies have focused on the effect of marijuana on the pulmonary function. Hii et al (2008) investigated the effects of smoking marijuana upon pulmonary emphysema using a series of 10 patients consisting of ages between 32 and 50, two female and eight male. The participants were those who were presented over a period of 12 months in a respiratory unit showing new respiratory symptoms and those who admitted being regular consumers of marijuana. The participants also exhibited the following symptoms on presentation including dyspnoea, pneumothorax and any kind of chest infection. In this study, high-resolution CT shows variable sized, asymmetrical emphysematous bullae in the mid and upper zones. However, CT revealed normal CXR in four patients and normal functioning of the lung was normal in five patients. This study shows that marijuana smoking predisposes individual smokers to asymmetrical bullous disease mostly in normal CXR setting and function of the lung. The study also revealed that these pathological changes take place at a younger age up to 2o years earlier compared to tobacco smokers (Hii et al, 2008).

Competitors and Strategic Performance Management Essay

Competitors and Strategic Performance Management - Essay Example Competitors and Strategic Performance Management is one of the crucial strategies for the success of organizations operating in competitive environments. McDonald has built a competitive edge through robust Strategic Performance Management that aligns the performance of its employees to the corporation’s strategic objectives and organization’s vision. McDonald is without any doubt making significant strides in innovation, business expansion, and cost reduction to outmatch its competitors and increase its market share. Proactive approach in managing its business threats keeps McDonald remain valued in the market. In addition, the corporation understands that, there is a need to keep continuing monitoring its business external environment (competitors) to ensure that it formulates the most relevant strategies to promote and cope with stiff competition (Love, 1999). In order to understand its business environment, McDonald analyses its business competitors as those that co mpete with its â€Å"customers spending power.† Some of the identified competitors are; brand competitors, industry competitors and form competitors. The industry competitors are regarded as the most critical ones since they offer almost similar products and services. The corporation further analyses competitors’ characteristics as serving the same customers, having superior or same technologies in products preparation, similar distribution channels, and same target market. McDonald further recognizes the need to examine their competitors existing strategies and objectives. The corporation analyses competitors’ strengths and weaknesses in regard to its business (McDonald, 1996). By undertaking competitors’ analysis, McDonald understands that it will be able to do business forecasts on the competitors’ plans and strategies. Based on the Cohesion Case analysis of MCD, its three major strengths include; large/strong customer base covering approximately 118 countries. For example in Europe, there is an increase in the number of restaurants from 6,650 to 6,485 which reflects a considerable increase in customer base.  

Keynesian Economic Policies before and after 1970 Coursework

Keynesian Economic Policies before and after 1970 - Coursework Example Friedman suggested that governments have a central bank monetary policy whose main aim would be to sustain the equilibrium of demand and supply of money in the economy. As opposed to the Keynesian economics which mainly focused on value stability of a country’s currency and the panic resulting from insufficient supply of money that led to alternate currency and collapse, Friedman and his monetary policy focused on stability of prices as a result of the equilibrium between money supply and the demand of money (Lipsey and Chrystal, 2007). The Keynesian economic principles dominated the macroeconomic world in the 19th century in to the early 20th century, in a period characterized by the rise of capitalism. This period is referred to as the Golden Age of capitalism. The golden age of capitalism, led by The US and other Western economic powers especially after the World War II, (from 1945 to mid 1970s) saw the rise of capitalist nations in to major economic regions of the world. K eynesian Economic Policies A prevailing economic principle in the 1930s and during the Great economic depression was that the economy would recover by itself without any interventions from the government. A British Economist, Keynesian, then suggested that governments should increase their spending and cut taxes so as to revive their economies during the depression (Eatwell and Millgate, 2011). Without government intervention, he argued that the economy would be greatly affected by high unemployment rates and would never recover. In his opinion, increasing government spending during an economic downturn would help to boost demand, as well as setting off the chain of the chain of demand by suppliers and workers whose incomes would have been affected by the increased expenditure by the government. Reducing the tax burden would also enable people to have more disposable income, which would help to boost demand in the economy. He also contended that the most appropriate fiscal policy in periods of high unemployment is to run a deficit budget (Eatwell and Millgate, 2011). Keynesian’s ideas were largely ignored by both the British and the US Governments at the time, until after the World War II (Eatwell and Millgate, 2011). After the war, Keynesians principles of a fiscal policy, government involvement in spending and cutting taxes with the aim of maintaining employment rates became the center of attraction in macroeconomics, both in the debate of national economic policies as well as in research. In the US, the Employment Act (1946) helped the government to start using Keynesian’s economic principles to regulate its economy and improve the employment rate. Application of Keynesian principles saw governments regain economic stability throughout the 1950s and 1960s as they recovered from the economic depression. The Keynesian economic theory was based on the principle of a circular flow of money in the economy (Eatwell and Millgate, 2011). This implies that when one person spends money, kit results in another person earning money. This would then raises the demand of the later, leading him to also spend the money and through buying of goods and services, leading to another person earning the money and so forth. According to Keynes, it is this circular flow of money that enables economies to function well. According to the Keynesian Theory, the aggregate demand created by

Modelling of optical parameters for optimum collection of concentrated Dissertation

Modelling of optical parameters for optimum collection of concentrated solar radiation for photovoltaic devices - Dissertation Example Much has been utilized from our important ecosystems such as the forests, fisheries, wetland, fresh water resources, and that we have to move fast and change our course of actions to save the environment and the planet as a whole. The world’s program of action has not improved these past decades because we still depend on fossil fuel; specifically eighty per cent of energy comes from fossil fuels. The threat posed by climate change and global warming is pushing mother Earth to its near end. Industrialisation, consumerism in America and globalisation, among other drivers of change, have pushed and motivated scientists to find ways to address environmental problems which have continued to plague humanity. Constructions of buildings, new inventions and new technologies, have become a race for supremacy among big international organisations. Environmental problems of the world today have been worsened by technology. But we can use technology to save the environment. Fossil fuels a nd coal can be depleted. There will come a time that we’ll lack resources for these forms of energy source. In other words, there must be a way to produce a substitute for fossil fuels and coal, something that is not harmful to the ozone layers and the environment as a whole. Solar energy and other forms of environmentally friendly energy using the wind, the tidal waves, hydro, and other similar forms, must be tapped. The DESERTEC website says that a few hours the earth receives power from the sun is equivalent to a year it can use for its requirements to run factories, industries, businesses, homes, and offices. The deserts of Africa and Arabia can absorb much heat from the sun using mirrors to heat water to produce steam and convert this into energy. With this technology, solar energy is convertible into High Voltage DC current; the technology uses AC current converted into Direct Current using gargantuan transformers and components that store electric currents like capacit ors. (Desertec Foundation, 2009) This paper aims to provide studies and research on solar radiation and how to ‘catch’ the rays of the sun to provide electricity. With this, we focus on what seems to be an emerging, but is quite becoming popular, technology – photovoltaic concentrator

Political Economy of Oil Essay Example | Topics and Well Written Essays - 2500 words

Political Economy of Oil - Essay Example The crises that started with the oil crisis in 1970s extended to Gulf War in the 90s. There are different terrorist threats today that affect oil resources such as oil refineries in Saudi Arabia. The deteriorating law and order situation in Iraq also resulted in fear of disruption of oil supply. There are threats of war with Iran that bring greater fears of volatility in the oil-producing region. These & other such factors have kept oil prices very high and they affect current market scenario. The hope for stability in oil prices is dependent on both political & economic stability. Transportation, heating, power generation, the plastics, pharmaceuticals and synthetic fibre industries are the main ways in which oil is consumed. Demand for oil is greater in the developed nations compared to the developing economies. United States of America solely generates a quarter of world oil demand. Asia comes next with Japan having the highest consumption of oil. In Europe no one country can be considered highest oil consuming country instead the demand is evenly generated by all European nations, The demand for oil diminished considerably in Soviet Union after its collapse.US demand for energy is greater and its dependence on oil producing countries is also increasing. The oil supply is mainly provided by large companies operating in countries with large reserves of oil. Countries like UAE, Saudi Arabia, Venezuela, Norway and Kuwait are some of the oil rich countries and are main suppliers of oil to the world. Since supply side of equation plays a crucial role in stabilty of oil markets, the countries producing oil have been trying to stabilize the price of crude oil through production policy. However, the interest of world economy does not lie in bringing stability by production manipulation. Since oil is a resource that depletes with time so its value increases with time as well. A country cannot let go of its future worth or value by increasing its production at the current market price. It is not in the economic interests of such oil producing countries to pursue a production policy incompatible with their own economic interests. Countries like Saudi Arabia have been contributing to the world economy in general and other Western and developed economies like Japan in particular by supplying more oil than it should. For instance Saudi Arabia, of the largest oil producers, increased its production of oil after the oil crises of 1979, resulting in a downward crude-oil price trend in world markets. This manipulation by any country or cartel cannot reap economic benefits in the long run. The market factors should be allowed to play their due role instead of manipulation. There is an increasing trend in demand for crude oil because consumption is greater than the supply. Market economy is the best way to allocate resources. The concept of oil peak suggests that once we reach the stage of peak the economy will be greatly affected. Similarly experts say that world oil reserves will also reach its peak in not so distant future resulting in price hikes and economic recession along with geopolitical repercussions. Oil Situation in USA If we consider the oil peak theory according to which there will be a sharp decline in supply because demand is constantly increasing whereas the speed of finding or exploring new oil sources is not matching that then we come to know that the oil