Saturday, August 24, 2019
Genetics and Crisis Intervention - Research Paper Example The nurse spoke to Kim kindly and provided information pertaining to various types of aneuploidies, their clinical presentation and complications. The nuchal test was suspicious of aneuploidy and maternal serum markers hinted at the presence of some aneuploidy. Kim was 14 weeks pregnant now and the obstetrician advised amniocentesis to confirm the diagnosis. Kim underwent the procedure and the nurse told her that she had to wait for a week for the report to come. One week later, the obstetrician confirmed that the amniocentesis report was suggestive of Huntington's disease. Kim felt disastrous. She was referred to a genetic counselor. The genetic nurse took a detailed history and went through the medical reports and noted them down. Kim enquired the nurse about implications of Huntington's disease and whether she should opt for abortion. Discussion The profession of nursing has labored continuously to document a wide and yet full range of nursing diagnoses, various nursing interventi ons and patient outcomes. This has been possible because of a steady knowledge base of the profession and continuous assimilation of new knowledge by means of nursing research. One such new area in which the profession of nursing has begun to get involved deeply is genetics (Carroll-Johnson, 2000). When nurses work in genetic diseases detection and management units, they are likely to come across patients and parents who will ask them about genetic disorders related questions especially in relation to a particular disease like Aneuploidy and Hungtinton's disease. In case of fetal diagnosis one question that plaques the nurses is "Is the diagnosis right? How sure are you that the diagnosis is correct?" This is more so because there is no particular symptomatology in this case and the diagnosis is often made after getting clues from routine screening. Also, in several genetic related conditions, the advice is to terminate the much awaited pregnancy, shattering the dreams of the young couple. It thus becomes difficult on the part of the nurse to convince the parents that such a decision must be taken in the best interests of both the parents and the child. Nurses, because of their proximity of the patients and easy approachability are likely to be hovered with more questions and doubts from the patients and it is obliging on the nurses to answer the question in the most understanding manner. Thus, even nurses must have appropriate knowledge about various genetic disorders that may be encountered in their clinical practice (Kirk, 2006). According to the Genetics White Paper (DOH, 2003) advances in the knowledge and also the understanding of various genetic problems, disabilities and diseases have contributed towards more accurate diagnosis with better personalized prediction of risk, better preventive strategies, improved treatment modalities and newer drugs and therapies. Such an enhanced improvement in diagnosis and prediction has already made a great impact in the clinical practice of genetics. Advances in genetics have made it possible to provide more insight into the genetic component of the disease and also various environmental triggers of the condition (Kirk, 2006). With reference to nursing in the field of genetics, seven-point competence standards have been outlined. The nurses must be able to identify patients who might benefit from various genetic
Friday, August 23, 2019
An audit on the appropriate completion of the venous thromboembolism (VTE) risk assessment and adequate thromboprophylaxis durin - Dissertation Example Certain patient subsets display VTE pathologies of idiopathic causes, with no apparent identifiable risk factors. Therapeutic anticoagulation is the cornerstone of management in all patients with VTE, in many cases, standard anticoagulants such as heparin are included as therapeutic options in normal practice. (Schulman et al 2009) Adjunctive treatments, such as thrombolysis and the use of vena cava filters, are prescribed in certain cases. Pregnancy is among several risk factors for deep venous thrombosis, in addition to minor injuries and surgery. (Van Stralen et al. 2008) But those with a familial history of thrombophilia-related blood conditions are at an increased risk. (American College of Obstetricians 2000) Most physicians do not recommend general screening for the patient population at large, and several studies attest to the need for a regimen of targeted testing for VTE conditions only when a battery of predisposing factors is extant. ( Robertson et al. 2006) (Osinbowale e t al. 2010) Of particular instance in this case is the degree to which proper screening is conducted for pregnant women, both upon admittance to Maternity, and postpartum. SCREENING Diagnostic testing for inherited or acquired thrombophilic conditions is advisable in the presence of personal or family history indicating heightened risk factors. The Factor V Leiden and prothrombin G20210A mutations are the most common genetic thrombophilic disorders, and antiphospholipid antibody syndrome is the most clinically significant acquired defect. Venous thromboembolism often results from the interplay between a series of risk factors. 50% of pregnant women with also exhibit thrombophilia. (Nelson-Piercey 2004) (Zotz et al. 2003) Understanding these VTE risks increases the probability of timely prevention and diagnosis. VirchowÃ¢â¬â¢s triad refers to 3 abnormalities that promote thrombogenesis: hypercoagulability, stasis, and endothelial dysfunction or injury. (Van Stralen et al. 2008) (Os inbowale et al. 2010) Several predisposing factors alter ? 1 components of VirchowÃ¢â¬â¢s triad. In a systematic analysis of 1231 consecutive patients treated for VTE, 96% exhibited > 1 recognized risk factor. Venous thromboembolism risk factors as may be hereditary or acquired. (Osinbowale et al. 2010) (Dresang et al. 2008) Osinbowale et al. 2010 Provides a ranking of predisposing risks from to lowest to highest in terms of probability: 1.) Obesity LOW 2.) Elderly 3.) Varicose veins (Varicosity) 4.) Laparoscopy 5.) Stasis (Immobility, due to long-term bed rest) 6.) CV catheterization 7.) Any other medical condition requiring hospitalization 8.) Previous VTE states 9.) Paralytic stroke 10.) Hormone Replacement Therapy 11.) Oral contraceptives, and pregnancy itself 12.) Arthroscopic knee surgery 13.) Malignancy and chemotherapy 14.) Spinal Cord injury 15.) Multiple traumas 16.) Major general surgery 17.) Major orthopedic surgery 18.) Long bone fractures, or fractures of hips and pe lvis. HIGH Clinical examinations may prove unreliable, therefore decisions in terms of treatment and/or screening tests must be based upon signs, symptoms, and preexisting risk factors. In this manner, patients are grouped into low, moderate, or high clinical probability of risk. (Sandler et al. 1984) Clinical symptoms of VTE disorders may be subtle and difficult to distinguish from gestational edema, though pain, warmth,
Thursday, August 22, 2019
Compare and contrast the financial systems of two different countries. Use an institutional approach to describe the system. Comment on the impact on, and response to the GFC in each country Essay Example for Free
Compare and contrast the financial systems of two different countries. Use an institutional approach to describe the system. Comment on the impact on, and response to the GFC in each country Essay 1.0 Introduction A financial system inquires for efficient allocation of resources among the surplus and deficit units (Viney 2009) as such it encourages more savings where funds are provided for investor to invest and also ease the transactions for goods and services (Viney 2009). There are three main components in the financial systems which are the financial institutions, financial instruments and financial markets. All three types of financial system each carry different function, roles and regulations. However, financial institutions will be mainly focus in this research essay. Global Financial Crisis (GFC), also known as the Ã¢â¬Ëgreat recessionÃ¢â¬â¢ occurs in the year of approximately 2007-08. GFC has caused a several impact on the economy which leads to a several collapse of the financial institutions. For instance, the collapse of Lehman Brothers, one of the major investment banks in US (Australia Bureau of Statistics 2010). Thus, the objective of this essay is to examine both financial system of the chosen countries which are United States and Australia, also the impacts and responses on the GFC in both of the chosen countries. 2.0 Compare and Contrast both Financial Systems 2.1 Central Bank The central bank of the United States (U.S.) is known as Federal Reserve System (FED) whereas the central bank of Australia is known as the Reserve Bank of Australia (RBA). The Federal Reserve SystemÃ¢â¬â¢s structure consist of the Board of Governors which are duly appointed by the president, the Federal Open Market Committee (FOMC), and 12 regional Federal Reserve Banks located throughout the major states in the country (The Federal Reserve Board 2003). Banking in U.S. is regulated at both federal and state level. Unlike U.S., Australia has only one central bank which is the Reserve Bank of Australia. However, both central banks are independent within their government (Reserve Bank of Australia 2001) whereby for FED, the monetary policies decisions do not have to go through the PresidentÃ¢â¬â¢s authorization, and for RBA, they have statutory authority established by an act of parliament which grants themÃ specific powers and obligations to carry out necessary policies (Reserve Bank of Australia 2001). On the other hand, RBA has two board, which are the reserve bank board and payment systems board (Reserve Bank of Australia 2001). The reserve bank board is responsible for monetary and banking policy whereas the payment systems board is responsible for controlling risk in the financial system, promoting the efficiency of the payments system, and promoting competition in the market for payment services, consistent with the overall stability of the financial system (Reserve Bank of Australia 2001). The role of FED is to conduct the countryÃ¢â¬â¢s monetary policy, which includes full employment, stable prices and moderate long term interest rates as stated in the Federal Reserve Act (Board of Governors of the Federal Reserve System 2008). Furthermore, they maintain the stability of the financial system, supervise and regulate banking institutions, provide financial services to depository institutions, and foreign official institutions. FOMC will determine the cost and availability of money and credit in the countryÃ¢â¬â¢s economy by affecting the discount rate, reserve requirements and controlling the open market operations (Board of Governors of the Federal Reserve System 2012). Likewise, the role of RBA is to conduct monetary policy as well, which includes the maintenance of price stability, full employment and the economic prosperity and welfare of the Australian citizens (Reserve Bank of Australia 2001). Besides that, they also set the cash rate to meet a medium term inflation target (Reserve Bank of Australia 2001). Moreover, RBA must maintain a strong financial system and efficient payments system and the issuing of the nationÃ¢â¬â¢s bank notes. Selected banking services are provided to the Australian government, agencies, official institutions, and a number of overseas central banks (Reserve Bank of Australia 2001). 2.2 Commercial Bank Commercial banks in the U.S. are quite similar to those of Australia whereby their main role is to act as a financial intermediary by channeling funds from agents who deposit money and lenders who needs fund and wants to borrow. These agents and lenders include households, businesses, governments and foreigners. Australia offer products and services which include balance sheet transactions and off-balance-sheet transactions (Viney 2009). For balance sheet transaction, the first purpose is to loan activity to match the available amount of deposits that they received from customers. This activity is known as assets management (Viney 2009). The second purpose is to manage their sources of funds in order to ensure that they have sufficient amount of funds available to meet the loan demand or any other form of commitments. This activity is known as liabilities management (Viney 2009). For off-balance-sheet transactions, it includes a substantial volume of business that is not recorded either an asset or liability on their balance sheet. In comparison, U.S. obtains their funds (liabilities) by issuing deposits, checking deposits, time deposits, saving deposits (Samolyk 2004). For their use of funds (assets), it includes making commercial, consumer, and mortgage loans, and by buying U.S. government and municipal bonds (Samolyk 2004). Therefore, commercial banks play an important role in funding business borrowers. The percentage of non-financial business borrowing that commercial banks fund on their balance sheets has not declined remarkably in the past five decades or so. The commercial banks in U.S. provide trade financing, foreign exchange, corporate finances and miscellaneous banking services which include currency specified credit cards, corporate checking accounts and lock boxes (Ireland n.d.). Moreover, the existence of commercial banks made reliable transfer of funds between different countries all over the world possible. Furthermore, the distribution of valuable economic and business information among clients around the world is made possible as well (Samolyk 2004). Similarly, there are basically two functions of a commercial bank in Australia. The primary functions are obviously to accept deposits from individuals, and grant loans and advances for personal or corporate purposes. The secondary functions consists of collecting and supplying business information, providing reports on the credit worthiness of customers, standing guarantee on behalf of its customers for making payments for the purchase of goods, vehicles, machinery, and so on. Besides that, they also provide customers with foreign exchange facilities; and they also provide safe deposits vaults or lockers for valuables, important documents and securities. In a nutshell, for both countries, there are several similarities in the roles of commercial banks. Commercial banks promote capital formation whereby they accept deposits from individuals and businesses, whereby these deposits are then made available to the businesses which will make use of them for industrious purposes in the country (Ireland n.d.). Moreover, they also provide short and medium term loans for entrepreneurs to invest in new enterprises or businesses. Furthermore, they also promote trade and industry since they offer the use of bank draft, bill of exchange, check, credit cards and letters of credit. In one way or another, they also influence the level of economic activity by influencing the rate of interest and the availability of credit in the market. Most importantly, they implement the monetary policy proposed by FED or RBA to bring about price stability, full employment and promote economic growth within the country. There are several sources of funds for these commercial banks. The main source would of course be from the current account deposits. However, they do have other sources as well such as demand deposits, term deposits, negotiable certificates of deposits, bills acceptance liabilities, foreign currency liabilities, loan capital and shareholdersÃ¢â¬â¢ equity. 2.3 Non-bank Financial Institutions 2.3.1 Depository Financial Institution Depository institutions (DPI) act as a financial intermediary similar to a commercial bank, whereby its main task is to accept deposits from surplus units and then issue loans to the deficit units in the financial system (Viney 2009). The main regulator for Australia is Australia Prudential Regulation Authority (APRA) whereas for U.S. is the Federal Deposit Insurance Corporation (FDIC). As for U.S., there are about 9, 000 functional depository financial institutions in the U.S. They operate through 92, 000 branch offices located in different states (Finance Maps of World 2011). Their role is to set a benchmark for DPI in the ground ofÃ commercial banking. The funds that are collected is used to meet the credit need of others (Finance Maps of World 2011). On the other hand, AustraliaÃ¢â¬â¢s DPI consists of three main institutions which are banks, building societies and credit unions (Reserve Bank of Australia 2001). There are a total of 171 institutions of which 55 are banks, 11 are building societies and 105 are credit unions (Reserve Bank of Australia 2001). 2.3.2 Investment banks and Merchant banks Investment banks and merchant banks primary objective is to collect funds and invest them in the market to achieve specific goals set for different types of investments (Viney 2009). There are generally two types of investment companies which are open-end or closed-end mutual funds. Open-end funds will accept new investment and trade in old ones, whereas for closed-end funds they only accept funds once and then do not take in any additional new funds. Investment companies have recently become more popular among U.S. and Australia, and have managed trillions of dollars. As for U.S. investment banks specialize in facilitating financial transactions rather than just providing finance. They have a good reputation as a financial innovator since their responsibilities includes the improvement of new financial products and services which must meet the ever changing needs of clients (Kumar, Chuppe Perttunen 1997). In contrast, investment banks and merchant banks in Australia are not considered an authorized bank but often referred to as money market corporations (Viney 2009). They do not have a depositor base to include in their assets. Therefore, they raise funds through the issues of securities from the international money and capital markets (Viney 2009). 2.3.3 Contractual savings institutions Contractual saving institutions offer contract that specify, in return for periodic payments to the institutions, and the institutions will make payments to the contract holders if any specified event occurs (Viney 2009). They include general insurance companies and superannuation funds. As for U.S., their insurance companies raise money mainly from the issuance of insurance policies and collecting annual premiums. Some might also borrow from the dept capital markets as an alternative source of funds. For superannuation funds, or more popularly known as pension funds in the U.S., they are funded by the deductions from employeesÃ¢â¬â¢ monthly salary in addition with certain contribution by the employers (Cohen Schubert 2010). On the contrary, Australia have make it compulsory for their employees to contribute to the superannuation system (Cohen Schubert 2010) whereby for U.S., an estimated 78 million working Americans which include the sole traders, employees who work for small employers or even part timers, do not have access to a retirement fund (Cohen Schubert 2010). For U.S., it has firstly introduced as a beneficial payment of employment whereas for Australia, it was created as a comprehensive system from the start (McLennan 2000). 2.3.4 Finance companies Finance companies and general financiers are basically institutions who provide loans and charter finance to clients by borrowing funds directly from the financial market (Viney 2009). As for U.S., these institutions raise funds in the debt market by issuing securities. Therefore, they raise funds solely by issuing debt or borrowing from other institutions but not taking deposits directly (Samolyk 2004). Similarly for Australia, they raise funds by issuing commercial paper, bonds and medium-term notes (Reserve Bank of Australia 2001). 2.3.5 Unit trusts Unit trusts is formed under a trust deed, and is controlled and managed by trustee by selling units to the public as a means to raise funds whereby investors purchase units in the trust (Viney 2009). As for U.S., there are generally two types of unit trusts, one that falls under private management and another that falls under direct state authority. Their role mainly involves traditional banking activities that are related to issuance of loans and deposits. The major difference between private and state authority trust is state authority institutions obtain funds from deposits and through the sale of shares, whereas private institutions operate as an intermediaries by generating finance through providing investment opportunities to clients (Samolyk 2004). Likewise, Australia too has two different types which are public unit trusts and cash management trustsÃ (Viney 2009). Public unit trusts focus more on gathering investorsÃ¢â¬â¢ funds and investing it into specific types of assets (Viney 2009). However, for cash management trusts, they focus more on trust deed which are open to the public by confining their investment to financial securities which are accessible through the short-term money market (Viney 2009). 3.0 The impact of GFC 3.1 United States The birth of the global financial crisis begin somewhere in 2008. It all started in early 2006 when the subprime mortgage market in the United States (U.S.) began to reveal an increasing rate of mortgage defaults due to the bursting of the housing bubble (Mishkin 2011). Subsequently, in late 2006, these defaults caused a decline in the U.S. housing prices after about a decade of extremely high growth statistics. Later on, the prime mortgage markets were affected as well and were showing a higher default rates by the end of 2007. Therefore, when the mortgages backing the securities began to fall in value, the value of the securities fell as well (Nielsen 2010). Looking at the fall in price of their assets, investors quickly attempt to liquidate their assets in around late 2007. Consequently, in 2008, a major financial crisis hit U.S. which led to the most severe recession since World War II. The financial crisis in the U.S. economy eventually spread to many foreign nations, affecting the global financial system, resulting in a global financial crisis (Shah 2010). The degree of the global financial crisis was so severe that some of the worldÃ¢â¬â¢s largest financial institutions have collapsed. U.S. was no exception. History was made when one of the largest investment banks in the world, Lehman Brothers, collapsed in September 2008. Some other institutions have been vehemently bought out by their competitors at a low price, and in some cases, the governments of the richest countries in the world had no choice but to sought an expensive bail out and rescue plan to save some of the remaining large banks and financial institutions (Shah 2010). These were all done at the expense of the US taxpayers. Approximately $9.7 trillion of US taxpayersÃ¢â¬â¢ money alone have been spent for bailout packages and plans (Dhameja 2010). According to Bloomberg, $14.5 trillion, or about 33%, of theÃ value of the worldÃ¢â¬â¢s companies have been wiped out by the crisis. Therefore, as credit became scarce and seeing an increase in the lack of confidence in the U.S. financial institutions, international banks started to increase the interest rate for inter-bank borrowing, known as the LIBOR (Mishkin 2011). Subsequently, a crash in the US stock market was observed, liquidity drying up, and employees were being laid off which cause an increase in the unemployment line (Dhameja 2010). U.S. was in a state of limbo even after eleven months since the fall of Lehman Brothers. Banks virtually stopped lending to each other. Although several proposals for stimulus packages and some bailout plans have provided some relief, it seems that there was nothing more that could be done to ease the situation (Mishkin 2011). At the same time, smaller businesses hardly had any chances for a bail out or rescue plan and more people went into bankruptcy. Additionally, there was a decline in the US imports from its major trading partners such as the European Union, Mexico and China, due to the slowdown in economic activity (Nanto 2009). Private sectors practically stopped borrowing, trade credit was also hard to obtain, and with continuous falling demand, especially investment goods and manufacturing durables like cars, export volume decreases, foreign GDP fell as well, trade volumes eventually collapsed (Dhameja 2010). Moreover, the risk premium on inter-bank borrowing which used to be close to zero, rose steeply to five per cent. Besides, the risk premium on corporate bonds rose to over six per cent. Although the US government tried to inject liquidity into the financial markets, the damage was already done (Chambers 2010). 3.2 Australia GFC has less effect on Australia as compared to other countries such as US, UK and etc. Most developed countries had suffered recessions where Australia experienced a down turn in the economy (Stevens 2009). However, there is no governmentÃ¢â¬â¢s support required by the financial institutions in such situations like capital injections or the acquisition of distressed loan portfolios (Australia Bureau of Statistics 2010). The major impact of the GFC has resulted on the loss of confidence in the household sector (Stevens 2009). This is due of the decline in the equity price causes a reduced of the household wealth (The Parliament of the Commonwealth of Australia 2009). Thus, this leads to an effect of low consumption and investment which resulted to a decline growth of household as they felt insecure about the capacity to spend and borrow (Australian Government n.d.). GFC has also impacted on the unemployment rate which result shown an increase of number that lead to a decrease in the economic growth (Australian WorkersÃ¢â¬â¢ Union 2009). The part-time employment has increased which balance to a loss of full time jobs where this also effect on the working hours such as the decrease hours in work (Chesters n.d.). Certain demographic groups have been affected by the job loss. For instance, the generation Y (18-24 years) has been affected (Tanton et al. 2010). However, they remain optimistic and relied heavily on the government benefit (Tanton et al. 2010). Moreover, competition in the banking system has also been affected by the GFC (Australian Super Investment Conference 2010) which resulted on harm towards the smaller banks and non-bank intermediaries as compared to the large banks where it leads to an increase in the cost of funds (The Senate 2011). Thus, this has impact on a greater gap between the major banks and other financial institutions (Australian Super Investment Conference 2010). The collapse of the Lehman Brothers, has led to a loss of confidence towards the banks which caused a decrease on the demand for credit (Australian Super Investment Conference 2010). 4.0 The response of GFC 4.1 United States GFC had seriously impacted the United States (U.S.) as compared to other countries such as Australia where it leads to the collapse of one of the major investment banks, Lehman Brothers. Thus, plans had been made by the U.S. government in response to the impact to prevent the situations to worsen. In comparison to Australia, the financial institutions do not need government intervention to assist them such as injection of capital. Unlike U.S., the government intervene where the central banks has purchased the government debt and the troubled asset which cost US$2.5 trillion in order to raise funds in the financial institutions (Halmarick 2009). This has resulted in the largest liquidity injection done by the government. They tried to inject liquidity into banks by buying share of banks, and purchase of convertible bonds of banks, whereby the government will be paid certain amount interest and the government will be given an option to convert these bonds into equity (Nanto 2009). Furthermore, FED tried to reduce the interest rates by cutting the Fed Funds target from 5.0% in September 2007 to an extremely low 0-0.25% as at December 2008. Later on, in March 2009, Fed started a Ã¢â¬Å"Quantitative EasingÃ¢â¬ policy by agreeing to buy a $300 billion in Treasury bonds (Halmarick 2009). The main purpose is to lower the interest rates across the yield curve and to provide additional funds to the banks. Moreover, US tried to overcome slowdown by stimulus packages of about $10 trillion for banks and guarantees to depositors, and also enhanced public spending (Dhameja 2010). According to Bloomberg, by February 2009, the total US bailout amounted to $9.7 trillion, sufficient to pay off more than 90 per cent of AmericaÃ¢â¬â¢s home mortgage and was about 70 per cent of US GDP (Halmarick 2009). In addition, President Obama signed two packages which are the American Recovery and Reinvestment Act worth $787 billion and 5.5% of GDP. The main features include an estimated $285 billion in tax reduction for individuals and businesses, unemployment benefits, extra spending for food stamps, and also health care subsidies for workers that have been laid off (Halmarick 2009). These packages positively aim to generate at least three to four million job opportunities by the end of 2010. Additionally, US tried their best to prevent more banks from failing. The first case was Fed approves financing loans arrangement for J.P. MorganÃ Chase to buy over Bear Sterns in March 2008. The second case was government controlled mortgage giant Freddie Mac received $146 million to ease their situation. Next, AIG borrowed $85 billion from Fed to prevent them from failing (Halmarick 2009). However, Fed couldnÃ¢â¬â¢t do much to save Lehman Brothers from failing and thus they went into bankruptcy in 2008. Therefore, US government aim to strengthen the global financial institution mainly to prevent losses of capital flows due to the impact of GFC to the developing and emerging economy by agreed on the increase of funds (Australian Government n.d.). Besides, government also actively plans to purchase equity from the financial institutions to ensure there is a sufficient liquidity which enable them to conduct activities such as investment, issue loan and deposit and much more. GFC has caused a fall of confidence in the financial institutions. Thus, government had decided to guarantee all senior unsecured debt and also the non-interest bearing transaction deposit account mainly to increase the confidence losses in the financial institutions (Australian Government n.d.). 4.2 Australia Australia had prepared by implementing an effective monetary and fiscal policy in response to the economy when one of the biggest investment bank in United States (US), Lehman Brothers collapsed in September 2008. This helps to avoid the economy from slowing down and lessen the impact of Global Financial Crisis (GFC) in Australia as compared to other countries such as US, where government responded on the measurement. In order to strengthen the operation of the financial system, government has increase up to $25 billion of the issue of Commonwealth Government Securities(Britton 2008), more choices of assets provided for Australian Office of Financial Management (AOFM) to invest in, together with a better lending facility of AOFM (Australian Government n.d.). In response to the recommendations of Financial Stability Forum, legislation has been introduced to establish Financial Claims Scheme (Britton 2008)Ã where the availability of funds is given to the depositors and general insurance policyholders when the financial institutions failed to perform (Australian Government n.d.). Besides, the bank deposits and wholesale funding is guaranteed by the government for a period of 3 years (DÃ¢â¬â¢Aloisio 2010). Additionally, the $10.4 billion Economic Security Strategy has been carry on as this helps to strengthen and stabilize the economy (Australian Government n.d.). This aim to provide protection to households and other financial institutions to gain back confidence lost due to GFC (Australia Bureau of Statistics 2010). Besides, First Home Owners Boost has been introduced mainly to assist the housing sector to stimulate activity which benefits the economy (Australian Government n.d.). The competition in the market of housing finance has been supported by the government through the purchase of the Residential Mortgage Backed Securities (RMBS) (Australian Government n.d.). However, a total of $840 million has been taken out by RBA from RBMS under a repurchase agreement mainly to ensure there is sufficient liquidity in the market (Britton 2008). The naked and covered of the short sale securities has been ban for a period of 30 days by the Australian Securities and Investments Commission (ASIC) (Helmes et al. 2009). However, a clarification of the allowable covered shares has been issued by the ASIC in concern of the set requirement (Britton 2008). A draft legislation for the covered of short sales has been released by the government and it is open for the public to comment on till 21 October 2008 (Britton 2008). Government initiated the plan of Nation Building and Jobs Plan which cost around $42 billion which was mainly to support the jobs in the country where it supported an estimated of 90,000 jobs (Sherry 2009). This help to decrease the unemployment rate and then boost the economic growth where it encourages more activities and also to increase consumption in the economy (Sherry 2009). 5.0 Conclusion In conclusion, the global financial crisis (GFC) had brought so much damage not only to U.S. and Australia, but to the entire nationsÃ¢â¬â¢ financial system globally. Even some of the wealthiest nations saw the collapsed of its financial institutions while some had to undertake an extremely expensive bail-out package. As for U.S. they suffered more severely compared to Australia. This is because the Reserve Bank of Australia has taken measures in advance of the global financial crisis. Thus, they were not as heavily affected as compared to other countries. Therefore, U.S. should learn from Australia by implementing policies ahead of any unexpected crisis to minimize the impact and damage done to their financial system. Evidently, it is better for them to prevent and be prepared rather than solving an issue when the damage has already been done. The policies implemented should include healthy control of the discount rate, reserve requirement and also minimal inflation targeting such as two to three per cent. The right policy implementation will lead to full employment in the country, a healthy level of economic activity and international trades, which will eventually increase the countryÃ¢â¬â¢s GDP to an optimal and desirable level. 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Wednesday, August 21, 2019
Generally Accepted Accounting Principles Essay 11. a. Year 0 Year 1 Year 2 Year 3 Year 4 Before-tax cash flow $(500,000) $52,500 $47,500 $35,500 $530,500 Tax cost (7,875) (7,125) (5,325) (4,575) After-tax cash flow 44,625 40,375 30,175 525,925 Discount factor (7%) .935 .873 .816 .763 Present value $(500,000) $41,724 $35,247 $24,623 $401,281 NPV $2,875 Investor W should make the investment because NPV is positive. b. Year 0 Year 1 Year 2 Year 3 Year 4 Before-tax cash flow $(500,000) $52,500 $47,500 $35,500 $530,500 Tax cost (10,500) (9,500) (7,100) (6,100) After-tax cash flow 42,000 38,000 28,400 524,400 Discount factor (7%) .935 .873 .816 .763 Present value $(500,000) $39,270 $33,174 $23,174 $400,117 NPV $(4,265) Investor W should not make the investment because NPV is negative. c. Year 0 Year 1 Year 2 Year 3 Year 4 Before-tax cash flow $(500,000) $52,500 $47,500 $35,500 $530,500 Tax cost (5,250) (4,750) (8,875) (7,625) After-tax cash flow 47,250 42,750 26,625 522,875 Discount factor (7%) .935 .873 .816 .763 Present value $(500,000) $44,179 $37,321 $21,726 $398,954 NPV $2,180 Investor W should make the investment because NPV is positive. 16. a. Opportunity 1: Year 0 Year 1 Year 2 Taxable income (loss) $(8,000) $5,000 $20,000 Marginal tax rate .40 .40 .40 Tax $(3,200) $2,000 $8,000 Before-tax cash flow $(8,000) $5,000 $20,000 Tax (cost) or savings 3,200(2,000) (8,000) Net cash flow $(4,800) $3,000 $12,000 Discount factor (12%) .893 .797 Present value $(4,800) $2,679 $9,564 NPV $7,443 Opportunity 2: Year 0 Year 1 Year 2 Taxable income $5,000 $5,000 $5,000 Marginal tax rate .40 .40 .40 Tax $2,000 $2,000 $2,000 Before-tax cash flow $5,000 $5,000 $5,000 Tax (cost) or savings (2,000) (2,000) (2,000) Net cash flow $3,000 $3,000 $3,000 Discount factor (12%) .893 .797 Present value $3,050 $2,679 $2,391 NPV $8,120 Firm E should choose opportunity 2. b. Opportunity 1: Year 0 Year 1 Year 2 Taxable income (loss) $(8,000) $5,000 $20,000 Marginal tax rate .15 .15 .15 Tax $(1,200) $750 $3,000 Before-tax cash flow $(8,000) $5,000 $20,000 Tax (cost) or savings 1,200 (750) (3,000) Net cash flow $(6,800) $4,250 $17,000 Discount factor (12%) .893 .797 Present value $(6,800) $3,795 $13,549 NPV $10,544 Opportunity 2: Year 0 Year 1 Year 2 Taxable income $5,000 $5,000 $5,000 Marginal tax rate .15 .15 .15 Tax $750 $750 $750 Before-tax cash flow $5,000 $5,000 $5,000 Tax (cost) or savings (750) (750) (750) Net cash flow $4,250 $4,250 $4,250 Discount factor (12%) .893 .797 Present value $4,250 $3,795 $3,387 NPV $11,432 Firm E should choose opportunity 2. c. Opportunity 1: Year 0 Year 1 Year 2 Taxable income (loss) $(8,000) $5,000 $20,000 Marginal tax rate .40 .15 .15 Tax $(3,200) $750 $3,000 Before-tax cash flow $(8,000) $5,000 $20,000 Tax (cost) or savings 3,200 (750) (3,000) Net cash flow $(4,800) $4,250 $17,000 Discount factor (12%) .893 .797 Present value $(4,800) $3,795 $13,549 NPV $12,544 Opportunity 2: Year 0 Year 1 Year 2 Taxable income $5,000 $5,000 $5,000 Marginal tax rate .40 .15 .15 Tax $2,000 $750 $750 Before-tax cash flow $5,000 $5,000 $5,000 Tax (cost) or savings (2,000) (750) (750) Net cash flow $3,000 $4,250 $4,250 Discount factor (12%) .893 .797 Present value $3,000 $3,795 $3,387 NPV $10,182 Firm E should choose opportunity 1. 1. a. (1) Year 0 Year 1 Year 2 Before-tax salary/income $80,000 $80,000 $80,000 Marginal tax rate .25 .40 .40 Tax on income $20,000 $32,000 $32,000 After-tax cash flow $60,000 $48,000 $48,000 Discount factor (8%) .926 .857 Present value $60,000 $44,448 $41,136 NPV of salary received by Mrs. X $145,584 (2) Before-tax payment /deduction $80,000 $80,000 $80,000 Marginal tax rate .34 .34 .34 Tax savings from deduction $27,200 $27,200 $27,200 After-tax cost $(52,800) $(52,800) $(52,800) Discount factor (8%) .926 .857 Present value $(52,800) $(48,893) $(45,250) NPV of salary cost to Firm B $(146,943) b. (1) Year 0 Year 1 Year 2 Before-tax salary/income $140,000 $50,000 $50,000 Marginal tax rate .25 .40 .40 Tax on income $35,000 $20,000 $20,000 After-tax cash flow $105,000 $30,000 $30,000 Discount factor (8%) .926 .857 Present value $105,000 $27,780 $25,710 NPV of salary received by Mrs. X $158,490 (2) Before-tax payment /deduction $140,000 $50,000 $50,000 Marginal tax rate .34 .34 .34 Tax savings from deduction $47,600 $17,000 $17,000 After-tax cost $(92,400) $(33,000) $(33,000) Discount factor (8%) .926 .857 Present value $(92,400) $(30,558) $(28,281) NPV of salary cost to Firm B $(151,239) c. Year 0 Year 1 Year 2 Before-tax payment /deduction $140,000 $45,000 $45,000 Marginal tax rate .34 .34 .34 Tax savings from deduction $47,600 $15,300 $15,300 After-tax cost $(92,400) $(29,700) $(29,700) Discount factor (8%) .926 .857 Present value $(92,400) $(27,502) $(25,423) NPV of salary cost to Firm B $(145,325) This proposal is superior (has less cost) to Firm B than its original offer. d. Year 0 Year 1 Year 2 Before-tax salary/income $140,000 $45,000 $45,000 Marginal tax rate .25 .40 .40 Tax on income $35,000 $18,000 $18,000 After-tax cash flow $105,000 $27,000 $27,000 Discount factor (8%) .926 .857 Present value $105,000 $25,002 $23,139 NPV of salary received by Mrs. X $153,141 Mrs. X should accept this counterproposal because it has a greater NPV than Firm BÃ¢â¬â¢s original offer.
In depth study on IKEA The scope of this paper is to conduct in-depth study on IKEA, the global home furnishing retailer from different perspectives. The report consists of IKEA corporate and business strategies in global markets, the firm previous experience in US and business model IKEA applied in Asian countries. 1.2 Objectives The objective of this paper is to produce a comprehensive report to CEO with the aim of determine IKEA strategic position in the future. The report critically assesses IKEA current market positioning and challenges IKEA have to overcome in order to sustain the competitive advantages. SWOT analysis is used to provide clearer picture regarding the firm internal performances in term of strengths and weaknesses, as well as the external opportunities and threats. Meanwhile, macro environment issues will be evaluate by using PESTEL analysis to capture IKEA potential growth and firm competitiveness. Recommendation to promote IKEA future growth will be provide base on strategies review. 2.0 Company Background 2.1 Industry and Company Background In 1943, a Swedish entrepreneur Ingvar Kamprad established IKEA. The name of IKEA came from its founder name Ingvar Kamprad, the farm Elmtaryd and home country Agunnardy where Ingvar Kamprad grew up. IKEA has developed rapidly as a global home products retailer. The corporate structure mainly divided into two divisions which are operation and franchising. Operation covered the management of majority stores, design, purchasing, supply functions and manufacture of furniture, which manage by a private profit Dutch company, INGKA Holding. In 1982, Kamprad established Stichting Ingka Foundation, a non-profit foundation that control over INGKA Holding. Ingka Foundation chaired by Kamprad and five executive committees which included her wife. The IKEA trademark and concept is owned by separate Dutch firm, the Inter IKEA Systems based in Luxembourg. Every IKEA stores pay 3% of sales to Inter IKEA as a franchise fees. IKEA consumers are mainly distributed into four different geographic region s, Europe, America, Middle East and Asia. The vision of IKEA is to provide a better living solution which is affordable and its mission statement is to offer functional and stylish low price furniture which everyone could afford. 2.2 Company Product and Services IKEA seized retailer chain that sells flat pack furniture, kitchen and bathroom accessories across the world. The furniture designed to be self assembled in order to reduce transportation cost. Besides, the company include traditional Swedish food restaurant in their stores, which serving Swedish meatballs, smoked salmon, lingo berry tarts and cream source. Additionally, thoughtful part of IKEA is many stores have play area for children named Smaland, where parents able to drop their children to playground while shopping and pick them up at another entrance. 2.3 Corporate and Business Strategies The impressive growth of IKEA lies on the distinctive corporate and business strategies. IKEA employ marketing mix strategy to position its brand identity in the market. Armstrong et al. (2006) explains that marketing mix strategy is a business model tools that focus on product, price, place and promotion. IKEA provide wide range of product selection. Although the product functional category is same, IKEA designed it in different features. For example, IKEA laptop stand act user friendly like a small table allow customers to use their laptop while lying on sofa. In term of pricing, IKEA flat pack furniture able to reduce transportation cost which resulted in price saving. Moreover, IKEA tend to locate in suburban area. This factor helps cut operational cost and able to provide more parking spaces for customers. Besides, Armstrong et al. (2006) also mentions that promotion is a marketing communication that consists of advertising, personal selling, sales promotion and public relations . IKEA promote their products by mail order service and free distribution of catalogue which enables IKEA cut cost in furniture storage. To improve competitiveness, IKEA modified the value chain strategy. Bartol et al. (1993, p.211) explains that Porter argues a business able to improving and value adding by focus on the key internal activities in the value chain. However, the independent (1994, p.9) states that IKEA integrate the value chain by create a two directional value adding system between customers and suppliers. On the other hand, IKEA used to expand by franchising method in their globalization strategy. Currently, IKEA has further explored their globalization strategy by joint venture. Evans et al. (2000) states IKEA joint venture strategy enable the firm minimizes the financial risk, expand the expertise network and get to know local market better. 2.4 IKEA Performances According to IKEA group fiscal year 2010 report, the independent (2010) states that IKEA currently opened 280 stores in 26 countries. The total sales archived 23.1 billion euro by 2010, raise 7.7% compare to its 21.4 billion sales in 2009. The net profit increased 6.1% at 2.7 billion euro. The IKEA market share mainly distributed in Europe which is 79%, North America 15%, Asia and Australia 6%. The distribution of purchasing per region is Europe 62%, Asia 34% and North America 4%. In term of growth perspective, IKEA demonstrated sustainable sales improvement which was average 21.9 billion euro in the past three years, 21.2 billion euro in 2008, 21.4 billion euro in 2009 and 23.1 billion euro sales by year 2010. 2.5 SWOT Analysis of IKEA 2.5.1 Strengths IKEAs distinct strategies have successfully shaped it strengths in competitive furnishing environment. The strengths comprise of strong global brand recognition that able to retain group of customers. Another strength is distinctive business strategies allow IKEA control over the products design, low pricing and global sourcing materials. Backward integration is one of the strength as well that permit IKEA enjoys economies of scale. 2.5.2. Weaknesses The weaknesses of IKEA derive into few elements. IKEA niche markets concept did not work in every country. Another potential barrier is IKEA over emphasis low price products may lead to their customers doubtful in products safety. Furthermore, IKEA has limited manufacturing capabilities by its own due to global sourcing strategy. 2.5.3 Opportunities An outstanding corporate realized that encounter weakness is the key of opportunity. The firm has foreseen the great opportunities in developing countries where IKEA may put more concentration on outsource his business in some developing Asia countries which is potential because of low cost manufacturing for example Cambodia. Meanwhile, India high population rates also one of the huge markets for IKEA expansion. IKEA may improve the existing its customers network by promote more online shopping. 2.5.4 Threats IKEA facing extreme environmental threats among competitors, some of the new entry companies adapted IKEA low cost strategy and imitated its flat pack furniture concept in the markets. On the other hand, global economy recession may reduce consumers buying power in emergent markets. Likewise, political instability may influence IKEA business performance. Chapter 3: Main Body 3.1 Assessment on IKEA Current Strategic and Distinctive Competitiveness In order to archive competitive advantages among competitors, IKEA adopted Porters generic strategy which comprise of differentiation strategy, differentiation focus, cost leader and cost focus which enable IKEA differentiate their brand identity among competitors. IKEA uphold its differentiation concept by offering high quality and low cost products to archive competitive advantages. Porter (1985) states that differentiation aims at deliver products and services that are different from the product mix of their competitors at a premium cost. The company provides functional style of self assembly furniture which material used is source globally to reduce the cost. Guardian (2005) describes that IKEA able to cut their prices at an average of 2% to 3% each year to compete in some markets segment. To sustain the differentiation strategy, IKEA may focus in adding more additional features into different products and keep the products user friendly. Adoption of differentiation focus allows IKEA to focus on particular segmentation market. Porter (1985) illustrates that differentiation focus means of differentiating its product within smaller number of target market segment. Recent years, IKEA concentrate its segmentation markets by opening trading office globally to serve customers better. Venorika (2006) states that IKEA opened 46 trading offices in 32 countries by 2006 where the suppliers need to fulfill IWAY code of conduct in supplying materials. To fulfill variety of local demands, IKEA should ensure the suppliers and designers constantly customize some of their products to provide range of choices. The advantage of being cost leader in market is able to draw attention and attract customers in long run business. Guardian (2005) illustrates that IKEA attain cost leaders by working together with its suppliers, provide technology and consultation. Likewise, cost focus can be mutual benefits for manufacturer and consumers where manufacturer save its cost of production and consumers enjoy the cost saving harvest. For example, the benefits of global sourcing where Captell (2005, newspaper) states that one of the IKEA best selling products Klippan sofas price was $354, by 2006 the price has drop to 202. To sustain cost focus, IKEA should critically examine some suppliers and further diversify its major suppliers for their materials. For example, Map of The World (2006) states that Canada, Russia and United States are top timber producing countries. 3.2 Organizational Gaps to Date Increasingly globalization is an enormous challenge for IKEA. To sustain, IKEA should further integrate their management by letting its independent business group has greater managerial decisions to effectively implement business process and boost quicker respond during crisis occur. Carrillat et al (2004) illustrates management that market driving is described to be outstanding in implementing unique business process, figuring market structure and value adding to their organization. Secondly, a company that provides professional service able to retain customer loyalty. Rowley (2005, pg 574-578) states customers loyally are company business core assets in the competitive market environment which add value to a business future. IKEA may review their service policy while dealing with customers flow during weekends. It can be archived by retraining their staffs to handle more customers efficiently. Alternately, the company can increase their manpower by hiring part time workers which is lower cost. Development of information technology has increase convenience in searching broad information. Brent (2005, pg 2) explain that a comprehensive information system allows company strategic core to be flexible, scalable and effectively operating in a high stress and limited resource environment. Hence, IKEA should utilize the information technology resource by promotes online shopping to resolve weekend customers flow issue. 3.3 Performances of Current IKEA Strategy 3.3.1 Analysis on IKEA challenges in US market. IKEA in United States In the mid of 1980s, IKEA entered United States to challenge an entirely different culture. IKEA success in United States doesnt come easily. Although the low price products always preferences of consumers but IKEA still faced difficulties at the beginning stage. Measurement standard and size of furniture were the major issues to IKEA. Nordin study (2002) illustrates one of the customer feedbacks emphasized they were drinking out of vases to refer the size obstacle. In order to delight American markets, IKEA realized the importance of modify its products design to suit local needs. By the mid 1990s, the independent (2003) states that IKEA has successfully increased the revenue from USD 600 million to USD 1.3 billion and became IKEA third largest markets after Britain and Germany by 2002. PESTEL analysis for United States I. Political Factors The research by Wayne et al. (2006, p.101) states that United States exercise constitutional republic in their political system for decision making process. The government promotes equality of laws which is fair to all everyone, therefore the policy has resulted equal opportunity to enhance trade freedom. However, governments tax policies play important role that impact business competitiveness during economy recession. For example, the independent (2009) states tax reform act enacted on 1986, the incentive has benefits individual but loaded burden to corporate. II. Economic Factors The United States gained steady growth of GDP in the past decade. Wright et al. (2007, P.185) illustrates that the capitalist mixed economy result in well developed infrastructure and high productivity that lead United States become the world largest economy. Nevertheless, the saving and loan crisis during 1980s and 1990s has great impact to United States business and financial system. Timothy et al. (2000) states from 1985 to 1995 United States insured thrift institutional deficit from 3,234 to 1,645 has resulted raise in interest rates. III. Social Factors United States is one of the largest countries with highest populations in the world. Adam et al. (2001) illustrates that United States society consists of multicultural immigrants and vary in ethnical diversification. Understand different levels of American culture are a challenge as well as opportunity to overcome barrier in order to compete with local markets. For example, IKEA strategy of niche markets has failed due to American cultural preference in bigger size products. IV. Technological Factors The science and technology advancement have shaped American success in various aspects including economic, education system, infrastructure and legal institutions. Rapid growth of technology provides job opportunities and promotes growth in business markets. In addition, the facilities and expertise available has encouraged foreign investments. Linda et al. (1991) describes that technological advancement is essential for economic growth. Porters Five Forces Model Analysis for IKEA I. Rivalry The competitors try to adapt IKEA strategy by offer low price and functional furniture products. In low end market, Wal-Mart tends to cut price and do promotion on their furniture products. Conversely, Ethan Allen aims for high end market by offer functional quality products with comfort shopping atmosphere. Tewary (2002) states the furniture markets in United States are highly fragmented, the top ten furniture retailers were just stand 14.2% of total markets share. However, IKEAs strength to deliver brand identity in both ends allows the company to develop in coming future. II. Substitutes Currently, IKEA effective global sourcing strategy and unique supply chain management has allows the firm leading without threats of substitute. Moreover, IKEA innovation designs at all time able to satisfy trend of consumers demand. John Leland (2002) states typical Americans shopper like new things, travel abroad, take challenges and functional technology. Thus, IKEA consistently revise the fashion design style of furniture able to tag along consumers trend. Power of Buyers Consumers have limited choice on selection by specific retailer, due to particular retailer focus in certain perspective for example, design, quality, service and pricing. IKEA stands advantage on all. Therefore, the bargaining power is little for consumers. Nordin study (2002) illustrates that customer visit to IKEA able to find good design and low pricing products. Therefore, in IKEA internal perspective, the consumers bargaining power is little. New Entrants Most of the IKEA stores are located outside the cities to avoid massive traffic and provide bigger parking space. IKEA did not expand the markets in metropolitan areas, so there is potential for another furniture retailer to offer low price products to compete IKEA markets share. Tewary study (2003) shows that United Stated furniture reported USD 67 million sales by 2002 and keep on growing. Hence, some of the retailers may seize opportunity in sharing the furniture markets. Power of Suppliers IKEA has high demand in timber for their products. The supplier needs to bids contracts for supply raw material to IKEA. Meanwhile, IKEA will provide consultation in term of technology and training to ensure the consistency of material quality. Hence, the supplier bargaining power is low. Due to green environmental issues, it can impact the timber supply. Knight study (1998) shows that more than 200 million hectares of forests vanished due to development became the barriers of supply raw materials, Green Agreement of Tariffs has signed allows corporation to seek more profitable forest. Factors to Consider in Assessing Industry Attractiveness. Factors High Impact Low Impact Description Ref 3.3.2 Growth Potential and Competitive Advantage IKEA Secure in China IKEA in China In 1998, IKEA opened its first furniture store in Beijing, China. The company core target customers are the middle class young people which are around 30 years old. IKEA realized that different strategy need to be use while entry a new market. Lee et al (1998) states that China has numerous differences in culture, political, economic and business models compare to Sweden. Among the challenges, Trompenaars et al. (2004) illustrates that as a new business entry, language is one of the main barriers for IKEA enter China market. To win Chinese customers heart, IKEA has the Chinese translation named of Yi Jia which means comfortable and family. PESTEL analysis for china PESTEL analysis critically evaluates IKEA potential growth and present arguments on its competitive advantage to secure in China. I. Political Factors China exercise communism in their political system. In China, the government controls all the resource activities. Capdevielle study (2007) states that China enacted reform and opening up policy that opened its market to attract foreign investment in 1978. The policy provided opportunity for many multinational companies to expand their business in China. However, government tax polices influence markets growth. A study of Li et al. (2007, p.26-27) illustrates that 70% of foreign investment enterprise reported loss due to the transfer pricing measure enacted by China in 1990s to control the wealth out of their nation but China has slowly loosen the trade policy to promote business growth. Presently, IKEA adapted joint venture strategy to share risk of losses as well as dealing with government policy to archive competitive advantage. II. Economic Factors The joined of China into World Trade Organization (WTO) has result the country economy growth rapidly. Phang et al. (2010) describes that China is the second largest world economy after United States by 2010 with the GDP of $1.337 trillion. The strong economy growth has raised China people purchasing power toward the housing demand which can be a huge potential for furniture industry. Wang (2003, p.121-143) states that housing investment annual rates has increased by 20% which is currently urban Chinese most important property. Nevertheless, IKEA facing competitive challenges in China local markets due to government weak control on intellectual property. Imitation of brand pattern which offer in very low price often found in China markets. Therefore, IKEA global sourcing strategy and supply chain management effectiveness which constantly offer low price products determine the company growth. III. Social Factors China has the world largest population. A study by Judith et al. (2010, p.4) illustrates that population of china has risen approximately to 1.35 billion by 2010, the world largest population and estimate to be peak during 2030 which is 1.5 billion. From the social point of view, that is a great opportunity for foreign investor to fight against the business markets share. However, the population aging issue and the one child government policy in China should be taking into consideration due to IKEA targeting young middle class people. Bloom et al. (2008, p.40) states that China population aging and low fertility rates could result impact on future economic growth. IV. Technological Factors Over the past decade, China has archive significant improvement in their science and technology development. The rapid improvement in research and development drive manufacturing industry expansion and create more jobs opportunity. Wang (2007) illustrates that china government implement policy to raise the ratio of RD to GDP, resulted sustainable growth which reported 1.4% by 1996 compare to 0.7% of GDP in RD during 1987. Nonetheless, lack of local core technology may increase foreign company cost in buying the technology license and import to China. For example, the independent (2006) states due to the lack of core technology, local company paying 20% to 40% of price for each computerized numerical control machine. Yet, IKEA stand advantage with the unique value chain management in providing technology consultation for their suppliers to maintain long term business relationships. 3.3.3 IKEA Current Strategy on Market Diversification (China) IKEA Diversification in China Globalization is the current trend for most of the companies nowadays. However, Brooks et al. (2004, P.233) illustrates that there is certain level of risk to invest in foreign country. To gain market share in new entry countries especially Asia, IKEA corporate and business strategies determine its sustainability and competitive advantage among competitors in future. For example, IKEA globalization strategy in Asia country, China, comprise of joint venture, localization and pricing strategies. Joint Venture First of all, IKEA decided to joint venture with local companies in China due to one of the macro-environmental element which was China government policy. Capdevielle et al (2007) elucidates that China practice joint venture policy to gain mutual benefits and principal of equality for their nation. Dealing with entirely different culture, IKEA adapted passed experience in globalization to analyze China market. Joint venture strategies add value to IKEA by sharing risk of losses. Bragssington et al. (2003, p.106) points out that full analysis should be conduct in order to informed the expansion decision to contribute the success in investment. Localization To continually growth IKEA business after joint venture, the firm adapted localization strategy to suit local Chinese culture. For example, the independent (2005) illustrates that IKEA localization strategy consists of offer wide range of Chinese market products that tailor customers preference as well as the design of showroom is constructed accordance to Chinese style. Despite of it, IKEA also focus on Chinese sub-culture to lure the local customers. Copeland et al. (1986) states that Chinese preference on decoration in red color during Chinese New Year which means good luck and fortune. Recent years, one of the most exclusively IKEA localization effort was during Chinese New Year. In 2006 Chinese New Year, many IKEA products designed with red rooster to welcome the Chinese year of rooster. Pricing Strategies IKEA based on its low price strategy in offering wide range of quality products to consumers. Usunier (2000) elucidates that product price is always a vital communication element between buyers and sellers. To compete with local furniture retailers, IKEA has dramatically slashed their products price and outsourced locally to reduce cost. Song (2005) points out that currently 70% of IKEA selling products are made in china and certain products has slunk 70% of its original price. For example, the tray BAGN for eating on bed purposes cost RMB 29 in 2007 compare to its price RMB 89 during 2000. Chapter 4: Recommendation To survive in the changing environment, IKEA have to constantly adapt changes and aware on customers preference trend. Several elements IKEA may focus to improve its value proposition as well as to maintain competitive advantages. 4.1 Justification on IKEA diversify strategy in China Joint venture strategy in China has improved IKEA operational network and culture understanding. Jonsson (2008) states that IKEA react more responsive to the local Chinese demands due to the sharing knowledge of Chinese culture with joint venture partners. Recent years, Capdevielle (2007) points out that IKEA has currently offer typical Chinese furniture such as Chinese kitchen wares. IKEA pricing strategies in China have significant progress throughout the years. Wei (2007) illustrates that by 2002 IKEA overall products price drop 12% and sales increase by 35% in 2003 compare to year 2002. Despite of it, IKEA move further to improve their customers service. Wei (2007) also mentions that IKEA started to provide delivery service with a little charge and even free of charge for deliver their products for those area are near. 4.2 IKEA Diversification on New Asia Country As the global business operational costs increase for example labor cost. IKEA may look for alternative opportunity to source its business from developing country. Cambodia can be IKEA potential business expansion due to the broad agriculture activity and strong GDP growth in recent years. Mohan (2005, p.10) points out that there is potential growth in future for Cambodia as an agriculture dependent country due to the labor cost advantage. Furthermore, Purcell et al. (2010, p.9) states the opened policy of Cambodia government in joining the ASEAN and WTO has increased the GDP 9.6% by 2007. The political and economic factors are vital elements IKEA should consider while entering into a new market. 4.3 Continue Focus on Innovation Innovation is a key in adding value to development of organization. Drucker (2002, p.95-103) states that capability to be innovative in an organization is the key to endure business grow. IKEA has a very different innovation perspective compare to others organization. Victoria et al. (2007, p.46) illustrate that IKEA posses unique forms of innovation in introducing new technology, widening the low cost products design range to maintain long term suppliers and consumers relationship. Victoria et al. (2007, p.46) also mentions IKEA focused on technological innovation by online products provision and supply chain management which contributed to the growth of its business. The critical factors to continue IKEA success in innovations are all level of consumer centric innovation, further analyzes the segmentation markets by research and innovative marketing campaign to match local preference. 4.4 Reviews on Strategy Competitiveness For IKEA to lead furniture industry as a market driver, the firm should periodically review and enhance the existing strategies. Adaption of blue ocean strategy enables IKEA to seek the value of innovation by cost reduction and differentiate it products to meet customer needs. Kim (2005, p.4) explains that blue ocean strategy enable corporate to create new customer value and provide lasting core competitiveness. Moreover, blue ocean strategy challenges the traditional business concept in breaking market competition and growing organization brand identity. Continually review the business strategy provides bigger picture and direction for an organization to attain growth in future.
Tuesday, August 20, 2019
Alcohol Abuse and the State Ã In our country today there is a serious problem plaguing families and people everywhere. This problem is alcohol abuse and alcohol addiction, and it is not something that will go away. According to many sources this problem can cause many implications and can casue severe harm to those it touches(Venturrelli 222). And one of the main problems with the disease of alcoholism, is that it does not effect just the drinkers, but everyone who cares about them. It is seen as impossible to ever cure all situations of alcohol abuse, but is possible to help those who have a problem and to try and prevent others from becoming addicted. Most poeple do not realize what they are getting themselves into when they drink, and some who do drink never engage in aproblem. But there are also people who have a disorder in their genes, and those are the ones who have the most serious problems. Alcohol abuse can skip generations in families and show up only in one or two family members every couple of genera tions(Martin 676). What this means is that Jane's(fictious name) great- grandfather may ahve been an alcoholic and no one else in the family will have a problem, and then Jane begins to have a problem. It is impossible to predict who this disease will strike, but when it does it strikes very hard and very deadly. Many times alcohol abuse begins as just ahving a good time, throughout high school I drank a lot and I enjoyed it. I don't think a week went by that I didn't drink at least four times a week, but I never let it get out of control and I knew my limits and when to quit for the night. When I got in to college things cahnged, I still drink but my priorities became more clear and I know when to draw the line. There are a lot of people that never got to experiment in high school and they got to college and really screwed up. Many people can not react well with alcohol in their bodies and that is where a problem starts with them. A main area of alcohol abuse is in 'greek' organiza tions, I'm not saying that they are bad because there are amny non- 'greek' that drink, but these organizations help many to have access to alcohol.
Monday, August 19, 2019
Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Japan Slide Program Report Japan is a very small country, approximately 144,000 square miles (smaller than California), and is inhabited by a considerably large population of over 120 million people (half the United States!) This makes Japan the seventh most populous nation in the world. Japan is located at the far west side of the north pacific ocean, and consists of more than 4,000 islands! However, the Japanese people live on less than 10 percent of this land mass due to rough, mountainous, volcanic terrain, which make up a substantial 70 percent. One of the most famous and symbolic volcanoÃ¢â¬â¢s is Mt. Fuji. Among these many islands, only four are commonly known, including Hakkaido (northern-most, considered to be JapanÃ¢â¬â¢s Ã¢â¬Å"frontierÃ¢â¬ ), Shikoku (the smallest of the four), Kyushu (most southern), and Honshu ( the largest and most populated.) JapanÃ¢â¬â¢s capital city is Tokyo, which is also one of the worldÃ¢â¬â¢s largest cities. It consists of 12 million people! Tokyo became the imperial capital in 1868, with the downfall of the Tokugawa Shogunate and the end of the feudal period. And of course, it is home to the Imperial palace. The chrysanthemum flower is the symbol of the imperial family. Japan is an extremely modern civilization. After World War 2, much of Japan was destroyed, so in the rebuilding process of the nation, they were able to impose the very latest in technology, making them an Ã¢â¬Å"economic superpowerÃ¢â¬ today. Their Gross National Product is so successful in fact, that it has nearly surpassed ours here in the United States! And is ranked second in the world. One of my favorite things in their very technologically-advanced society are the Ã¢â¬Å"bullet trainsÃ¢â¬ , which are able to carry many people at speeds of up to 130 mph! They are safe, reliable, immaculately clean, and on time to the very second...How efficient! Another is their very modern system of parking in the thriving city of Sapporo, in which cars are lifted and rearranged in order to take full advantage of every last inch of precious space in crowded Japan. Despite this modernization, Japan is also very determined to maintain itÃ¢â¬â¢s highly distinctive (and lovely) tradition. In an attempt to keep the country culturally isolated from the surrounding world, like it is physically, the ancient Japanese invented their very own unique culture including beautiful (and very expensive) kimonoÃ¢â¬â¢s for the women, and sumo- wrestling for the men, just to name a few.