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Analysis Of Fences And Heart Of Darkness - 964 Words

August Wilson was a famous and influential playwright who wrote about the African American experience and conflicts with the White world. Although he may be argued as one of the greatest playwrights in America, I myself have only heard of his work once when my seventh grade English class read Fences, a play about a man and his son dealing with dealing with racism while also dealing with their own conflict when the son wants to follow in the steps of his father and become a professional athlete. I had honestly forgotten all about that one play I read eight years ago. Wilson’s name was barely among the many playwrights studied in my latter years. This could be because of the content of his plays. Much of Wilson’s work examines the negative aspects of being African American in America such as racism and poverty. When we read about African American literature in school, we read about empowerment and pride. It is ironic how students study White writers who tell stories like The Adventures of Huckleberry Finn and Heart of Darkness with mistreated African American characters, but barely study those same stories written by Black authors, poets, and playwrights. Because African American literature was not glorified in the past, specifically speaking of a time before the Harlem Renaissance, it may take time for certain works of African descendants to be glorified at the same level as those of White writers, especially if their peak wasn’t during the Renaissance. Wilson’s CenturyShow MoreRelatedThe Mending Wall By Robert Frost Essay1695 Words   |  7 Pagesin spite the differences. I will argue, however, that Frost has created a wall that shows the epitome of his own bound heart which continuously yearning to set free himself from all the attachments of old rituals, which have stuck in his mind. 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Icici Bank

Icici Bank- Strategy Analysis Essay ICICI Bank : Strategy Analysis Table of Contents ICICI Bank : Strategy Analysis1 ICICI Bank4 Brief History: Evolution of the Entity with respect to Time4 Inception4 Establishing Synergy: Consolidation5 ICICI Bank in the Retail sector6 How it all began6 ICICI’s perspective of the retail market and the elements of strategy7 Corporate relationships7 Technology8 Operational excellence8 ICICI and International Business9 International remittance key corridors for India9 Business Model10 ICICI Bank Approach10 Agri and Microfinance sector12 Rural, Micro-Banking Agribusiness Group (RMAG)13 Mapping the Possibilities14 The Distribution Network15 ICICI and Corporate Division16 Leveraging Technology17 Focussed Group Approach17 Leveraging relationships18 E- Finance In ICICI Bank19 The Way Ahead19 Corporate Social Responsibility: ICICI Bank19 The Core Social Values of ICICI and The Strategic Approach to Achieve them20 Alignment of the Firm’s Objective with its CSR21 Tools for Firm Analysis21 Value Chain25 Generic Competitive Strategies26 BCG Matrix:27 Resource Based View(RBV)28 Porter’s 5 Force Model:32 ICICI Bank Brief History: Evolution of the Entity with respect to Time Inception ICICI Bank traces back its origin to 1955 when, at the initiative of World Bank, the Government of India and representatives of Indian industry, The Industrial Credit and Investment Corporation of India Limited (ICICI) was incorporated with the objective of providing long-term and medium-term project financing to Indian businesses (Exhibit 1). In 1955 ICICI acted as a primary source of foreign currency in the Indian Market. Funding from World Bank, GOI, and other multilateral sources not withstanding ICICI was also one of the first Indian companies to raise funds from international markets. In 1956 itself the company declared its first dividend of 3. 5%. Spreading Wings: Developing a Diverse Product and Market Portfolio In 1967 ICICI made its first debenture issue for Rs. 6 crore, which was oversubscribed and in 1969 the first two regional offices were set up in Calcutta and Madras. In 1972 the company set up merchant banking services and became one of the first two Indian entities to do so. In 1977 the formation of Housing Development Finance Corporation was sponsored by ICICI, and the company also managed its first equity public issue. In 1982 the bank raised European Currency Units, the first Indian borrower to do so, and also commenced leasing business. In 1986 ICICI received ADB Loans, again the first Indian institution to do so. In the same year, ICICI, along with UTI, set up Credit Rating Information Services of India Limited. In the same year ICICI promoted Shipping Credit and Investment Company of India Limited. The year 1987 saw ICICI making a public issue of Swiss Franc 75 million in Switzerland, marking the entry of an Indian entity in the Swiss capital market. In 1993 it Promoted TDICI, Indias first venture capital company. ICICI Bank Established It was in 1994 that ICICI Bank started as a wholly owned banking subsidiary of ICICI Limited. And in 1996 when K. V. Kamath took over ICICI Bank, ICICI, and its other group companies had largely complementary services, and though legally not a single entity, operated as a â€Å"virtual universal bank† in unison. Establishing Synergy: Consolidation The process of achieving synergy across the different areas of operation began formally with the year 1998 when the name The Industrial Credit and Investment Corporation of India Ltd was also changed to ICICI Ltd and subsequently in 1999 a new logo symbolizing a common corporate identity for the ICICI Group was introduced. The Merger: It was in 2001the Boards of Directors of ICICI and ICICI Bank sanctioned the amalgamation of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. In the following year, the merger was approved by its shareholders, the High Court of Gujarat at Ahmadabad as well as the High Court of Judicature at Mumbai and the Reserve Bank of India. In the merger process one fully paid up equity share of ICICI Bank stood for two fully paid up equity shares of ICICI. The share exchange ratio was determined by two separate financial advisors and an independent accounting firm, on the basis of the valuation process carried out by them. The shares held by ICICI in ICICI Bank were not cancelled. They were delivered to a trust to be divested in future, the benefits of the divestments accruing to the merged entity. (Exhibit2) Why: The growing competition in the industry, and the structural changes, happening very fast with changing regulations, initiated such a decision. The merger of ICICI Bank and ICICI, and two subsidiaries formalized the potential synergy that existed between them because of complementary services, products, and similar operational processes and ideology. The merger resulted in a winning combination of the deposit raising capability of the ICICI Bank with the large capital base of ICICI. It made the corporate relations built by ICICI easily accessible to ICICI Bank. It also integrated the retail operations of ICICI, and its two subsidiaries, with ICICI Bank. Thus the merger helped in creating a seamless line of services to both the corporate and the retail sectors. Present Situation: An Overview ICICI Bank presently is one of the most reputed financial companies in India. The second largest bank in India, it is also the largest private sector bank in terms of market capitalization. It is also the largest issuer of credit cards in India. With more than 24 million customers, about 5,219 ATMs and a network of 2,016 branches and 17 subsidiary companies (domestic and international included, Ref. Exhibit. 3,as on 31 March 2009), ICCI is not only one of the four major players in the Indian market, but also boasts of presence in 19 different countries ( Ref. Exhibit. 4) , including India. Its shares are listed in stock exchanges of Kolkata, Vadodora, The BSE, The NSE and its ADRs trade on the New York Stock Exchange. Its main competitors are State Bank of India,  Axis Bank  and  HDFC Bank, the other three of the four major players in the sector The bank caters to a wide range of both corporate and retail customers with its various banking and financial instruments in the areas of investment banking, life and non-life insurance, venture capital and asset management. The bank is one of the firsts among the Indian banking companies to expand overseas, keeping in mind particularly the NRI population, and presently operates in its different markets through wholly-owned subsidiaries (for e. g. n Canada, Russia and the UK), branches (for e. g. in Belgium, Hong Kong and Sri Lanka) and representatives offices (for e. g. in Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates and USA). This case will be dealing with the banking sector of the ICICI Bank. ICICI Bank in the Retail sector The retail banking business is often regarded as the bread and butter of the ICIC I bank among all its other portfolios of businesses. ICICI is the largest provider of retail credit in India. As of March 31, 2008, its total retail portfolio was Rs. 316. 63 billion. And even more astonishingly, retail business single-handedly accounted for 58% of its total loans in the same year of 2008(for reference see Exhibit 5). Its current and savings account (CASA) deposits as a percentage of total deposits increased from 22% at March 31, 2007 to 26% at March 31, 2008, with savings account deposits increasing by 36% during fiscal 2008. Also its CASA ratio took a dip in 2009 when savings increased after the downturn but soon underwent a recovery in 2010(see Exhibit 6). How it all began Deputy MD Chanda Kochhar says â€Å"When we rolled out the retail strategy in a big way that was again a huge change and therefore a hugely enriching experience because at that time, the entire consumer finance business was very nascent for the country as a whole. So, we really had to create a vision of what this business is going to be like for the country and of course it was absolutely new for ICICI. One was really moving in uncharted territories and taking decisions, taking a call as one moved along and learning alongside. In 1996 when K. V Kamath joined ICICI bank as the new MD and CEO, he immediately initiated strategic initiatives and structural changes across the ICICI Group that helped redraw its boundaries and take it to the next level. Retail financing in the mid-1990s was an open field, with no major players and Kamath recruited a young bunch of strikers who would score winners for him. In 1997, ICICI became the first Indian financial institution to go online. At a time when word was experiencing the dotcom boom, Kamath was quick to sense the shift in customer demands. Whereas the opportunity was the vast untapped potential, he achieved this by adding a new weapon to his armoury technology. It is worth mentioning here that ICICI has been investing in technology since many years, even much before other banks had started thinking this way. So ICICI bank leveraged on this technology resource to a lot of extent to emerge as a leader in this space. It was K. V Kamath’s idea that introduced ATMs across the country using current technology as an enabler. ICICI Bank had experienced a growth rate of more than 180% in its very first year and a separate majority owned company called ICICI Infotech supported the IT operations of the banking section. But it was the innovative idea of introducing ATMs, which gave them the special headstart. The competitors present in the then retail banking sector were the State Bank of India and other foreign banks who had an excellent presence in the retail sector. What ICICI lacked then was a resource that these banks had in plenty. SBI in particular had huge number of branches that helped it reach out to its customers. ICICI back then had only 50 branches across the country. It compensated for this lack of resource by setting up ATM’s all over the country. ICICI’s perspective of the retail market and the elements of strategy In exhibit 8, the year wise comparison of mortgage loans to that of other retail loans for three consecutive years of 2000- 2002 is shown where the loan units are in billions of rupees. Despite the fast growth, the Indian retail market continued to be under-penetrated in comparison to its peers. This was the perspective that ICICI took in looking at the retail market. Corporate relationships ICICI bank’s strategy to capture the untapped market potential can be said to revolve around four elements, they being strong corporate relationships, brand, technology and operational excellence. Coming to the first element of strong corporate relationships, ICICI has undergone a series of mergers to enhance its capital base. For example, In May 2002, the merger of ICICI, ICICI PFS and ICICI Capital with ICICI Bank was realized, creating what is now referred to simply as ICICI. According to the ICICI’s 2001-2002 Annual Report, the merger of ICICI and its subsidiaries with ICICI Bank created a combined entity with complementary strengths and products and similar processes and operating architecture. The merger has combined the large capital base of ICICI with the strong deposit raising capability of ICICI Bank, giving ICICI Bank improved ability to increase its market share in banking fees and commissions, while lowering the overall cost of funding through access to lower-cost retail deposits. ICICI Bank is now able to fully leverage the strong corporate relationships that ICICI has built, seamlessly providing the whole range of financial products and services to corporate clients. Then delving into the second decider of strategy for ICICI’s growth, ICICI has built up its brand and has been able to position it in the minds of the retail consumer in such a way that it helps drive its business. After 2002 ICICI has more consciously started its brand and has been successful to a great extent. Technology Technology has always been the key driver in most of the growth strategies of ICICI bank. Technology is a very important aspect of ICICIs innovations, as the firm has taken advantage of the affordability of technology to enhance its business. The financial services company has allied itself with a number of other companies in order to offer innovative services. They have partnered with Orange and Airtel to provide WAP-based m-commerce (mobile/telephone banking), with Compaq to develop a payment gateway, with Yahoo! to provide on-line financial information, and with Satyam Infoway to offer retail financial products over the Internet. ICICI and its subsidiaries have portals that allow its customers to access accounts and products on-line, offering cutting-edge web-based tools. ICICI was the first of the Indian financial services firms to aggressively pursue an e-commerce strategy and has established a reputation as the leader in this area. The firm has invested in the development of its e-commerce group and has dedicated resources to using their technological advantage to great better customer service and increased internal efficiencies. ICICI bank has been able to successfully go for technology that has immense utility in its industry context yet quite affordable also thereby enabling it to attain scale economies (see exhibit 9). Operational excellence ICICI bank has also built its strategies around operational excellence. They have applied innovation very well to develop competencies in reaching the customer. For example, they have developed a successful third party distribution model with a growing market share in distribution of mutual funds, Reserve Bank of India relief bonds and insurance products. This allows them to meet all customer needs through products that are complementary to those that they offer directly, while leveraging their distribution capability to earn fee income from third parties. They also provide online trading facilities through www. ICICIdirect. com. ICICIdirect provides complete end-to-end integration for seamless electronic trading on the stock exchanges and has been rated â€Å"TxA1† by CRISIL, indicating highest ability to service broking transactions. ICICIdirect has also launched India’s first Digitally Signed Contract Notes (DSCN), which allows a customer to view and print their contract notes online. ICICI Bank has pioneered a multi-channel distribution strategy in India, giving its customers 247 access to banking services. The enhanced convenience that this offers the customer has supported its customer acquisition efforts and migration of customer transactions from branches to lower-cost technology-enabled channels. During the year, ICICI Bank continued to expand its non-branch channels aggressively and successfully migrated customer transaction volumes to these channels. Only 35% of customer induced transactions now take place at branches. ICICI Bank set up over 500 new ATMs during fiscal 2002, taking the ATM network to over 1,000 ATMs. Another very innovative and important feature here worth mentioning under operational excellence is the concept of cross-selling that ICICI has implemented to acquire as well as to retain its customer base in retail banking where it has offered different products to the same clients or made one product popular among different kinds of clients. See exhibit 10 for the share of various channels ICICI bank has made use of to reach the end customer. ICICI and International Business Flushed with its success in the retail sector, ICICI decided to foray into the international market in 2001. But it needed a well planned strategy to venture into this new sector. One of the top executives -Lalit Gupte was chosen to head over the international business. But it still had greater issues to resolve like- Which countries to enter into? Who will be the target customers? What products and services would ICICI offer? Which technology to use to automate the process? International remittance key corridors for India International remittance from migrant workers to their home countries have been a significant source of income for many developing countries (Exhibit 11). Unlike FDI and developing aids, remittance tends to be a more stable source of income for these countries. Based on the remittance flow pattern top 10 remittance corridors have been identified (Exhibit 12) and India is one of the major recipients of these remittances. The figures exceeded a little over 22 billion USD in 2004. (Exhibit 13). What drives the huge remittance flow to India? Maybe it is the huge Indian Diaspora spread across the world (Exhibit 14). Before the IT revolution in 1999 much of the India bound remittance used to flow from the Gulf countries – Middle East, Saudi Arabia, Kuwait, Dubai, Bahrain etc. These migrant workers received little political rights in these countries and their sole motive was to earn as much as possible and return home. They were then replaced with a fresh set of migrant workers. The money remitted home was used for a variety of purpose like meeting day to day needs, vehicle purchase, real estate etc. With the IT business emergence the blue collared workers in US, UK, Europe also began to remit on a regular basis. While the white collared workers used to remit small amounts at a time, were under-banked in their source countries and preferred traditional transfer methods; the blue collared workers remitted large amounts, were highly banked in the source countries and preferred online methods. ICICI made note of these patterns and decided to develop its products accordingly to cater to the varied customer base. Business Model The remittance business was initially dominated by Money transfer Operators (MTOs). The major source of revenue in this business comes from three sources- * Transactions Fees-Depends on the transactions amount and the destination place * Exchange rate-Applicable when the remitter’s currency is not the same as destination currency. * Float revenue- revenue earned from lending or transmitting overnight When banks saw the opportunity in this business they ventured into the sector offering services at a much cheaper rate (Exhibit 15). By providing remittance as a value-added service banks were able to gain market share and customer loyalty. ICICI Bank Approach ICICI saw an opportunity to focus on inwards remittances towards India from anywhere in the world. But to become a serious player in this field it needed to focus on the following issues- * Understanding regulatory compliance –‘Know your Customer’, ‘Fraud Detection’ and ‘Anti-Money Laundering’ rules in different countries; * Establish correspondent network in the source and recipient countries; * Cater to customer requirements- ease of transfer, transparency in fee structure, in –time and safe delivery of remittance. Also ICICI studied that the major players in this sector –viz SBI, HDFC, Citigroup had strong international presence in the form of branch network. Hence it adopted the following strategies to capture the money transfer market. Product Innovation: ICICI formulated different products and service delivery mechanism for different customer segments. In order to cater to the blue collared workers is used traditional approach viz partner bank based products and bank branch based products. For the white collared workers is adopted the innovative model-Online web based products and alliance with partners offering both online offline services (Exhibit 16). Its direct banking facility through Hi-Save accounts offers attractive interest rates Exhibit17 compared to other banks Partnership Strategy: ICICI had a huge customer base and extensive distribution network in India. But it also needed its presence in the source countries. Hence ICICI went on to establish presence in key geographies through partnership with banks in the source countries. The partners enjoyed high business volume through their alliance with ICICI and hence readily contributed to the partnership. Some of the key alliances formed by ICICI are as follows: * UK- partnered with Lloyd TSB Bank. ICICI customers can open current and saving account through 2,200 Lloyd’s branches in UK. * US-alliance with Wells Fargo Bank. Customers get the facility to initiate transactions from their remittance accounts with Wells Fargo using both online and offline (branches and ATMs) method. Gulf- ICICI follows multiple methods here. It has its own branches in the region, also it has tied up with Emirates Bank, Commercial bank of Qatar and some exchange houses. * Singapore – ICICI has alliance with DBS bank Technology Strategy: ICICI has used technology to provide dedicated infrastructure and improved customer service levels. Also technology provided it with alternate transaction and payment channel, provided scalability and reduced cost. The transaction flow h appening in the remittance process is given in Exhibit 18 and 19. ICICI offers international remittance services through two accounts-Vostro account and Nostro account. Nostro account is an account one bank holds with a bank in the foreign country usually in the foreign country currency. Vostro account on the other hand is held by a bank as a correspondent account of an overseas bank. ICICI uses a channel middleware (SMART software) as a customer interface . The commission charges are between 0. 125% and 2. 5%. The details of the commission charges by ICICI are given in Exhibit 20. For every transaction a SWIFT code is generated. New Jersey Vs. T.L.O. EssayThe emphasis lies not only in providing financial support, but also on an active involvement to research into the needs of such underprivileged children, to design a suitable curriculum for them. It also takes interest in providing proper training to the teachers, and 45000 teachers have received training so far through its partnership with the state governments of Bihar, Madhya Pradesh, Rajasthan, Chhattisgarh, and  Gujarat. Sustainability: To address this concern the bank has entered into a partnership with Environmentally Sustainable Project Finance (ESPF) at the Centre for Development Finance at IFMR. The aim is to develop environmentally sustainable goods and services through improved infrastructure. It carries out a mentoring role to CSO Partners that is engaged with various organizations such as Gram Panchayats and other self help groups to bring about social change in terms of organizational governance, resource usage, fund raining, voluntary activities etc. Alignment of the Firm’s Objective with its CSR ICICI is one of the few companies that have attempted to align their CSR activities with their business objectives. Reaching out to the Bottom of the Pyramid: The inclusive growth philosophy, guiding its CSR activities, provides the scope to expand the customer segment of the company by reaching out to the bottom of the pyramid, establishing an immediate and effective symbiotic relationship between the business objectives and CSR objectives. Developing a Talent Pool: The alignment of this business objective with the CSR objective of developing human capital is not as immediate as the one mentioned before. And yet, it does have a bearing give the movement towards the knowledge base economy that India is experiencing. Addressing Stake Holders Concern: This business objective is directly aligned with the CSR objective of achieving sustainable growth I a world that is increasingly becoming aware of the negative repercussions of today’s growth on future generations. This is especially significant keeping in mind the steady inroads made by ICICI into overseas customer base. Tools for Firm Analysis With a range of banking and financial services to its customer, ICICI bank has diversified into various fields within the domain of financial services. Having seen the various sectors of ICICI Bank, the following section presents a holistic view of what is the current status of the bank and how is it formulating strategies to match the environment. In order to analyze the external environment, it is very necessary to scan the internal and the external environment and thus formulate your strategy. VISION STATEMENT To be the preferred bank for total financial and banking solutions for both corporate and individuals. MISSION STATEMENT * Be the banker of first choice for our customers by delivering high quality, world class products and services * Expand the frontier of our bank globally Play a proactive role in full realization of India’s potential * Maintain a healthy financial profile and diversify our earnings across businesses and geographies * Maintain high standards of governance and ethics * Contribute positively to the various countries and markets in which we operate * Create value for our shareholders SWOT ANALYSIS Thi s is the first stage of any analysis and helps to focus on the organization’s key issues. Strength (S), Weakness (W), Opportunity (O) and Threat (T) analysis tool is thus used for auditing the organization’s internal and external environment. Strengths: Brand Name: With the merger of ICICI along with the other ICICI group of companies have led to the creation of a massive brand. This merger has combined the large capital base with the strong deposit raising capability of ICICI Bank. This has infact helped it to raise its market share while lowering the overall cost. This has provided ICICI Bank to leverage upon the strong corporate relationship and to offer a portfolio of financial products and services. This merger has resulted in the integration of many subsidiaries into one entity thus creating huge growth opportunities for its range of products. Technology Integration: Early mover’s advantage to bring in technology into the banking sector. All the while ICIC I has laid stress upon product innovation and technology integration. After having adopted this strategy it was able to set a new industry bench mark which later on went on to become industry standards. The FINO smart cards have been a successful endeavor to reach out to millions of under-served masses. The state of the art infrastructure is one of its biggest strength. * Online Transaction: Its online banking facilities have not just improved its response time but also been able to cater to a huge audience. The need for real time online processing transaction would require very high performance and responsiveness. The use of Veritas i3 software has helped in a catering to this need of the people. This not ensures 99. 9 percent application availability but also 99. 99 percent uptime of the server infrastructure. Data protection is yet another offering of this technology. * Rural Expansion: An underlining emphasis on providing financial services to the bottom of the pyramid has not just created good will for the company but also helped it venture into an untapped domain. In an attempt to facilitate universal access to the basic financial services, the bank has included many initiatives like micro credit and business correspondence model which acted as a medium to reach to the poor, micro insurance and micro systematic investment plan, farmer financing and finally the icici foundation that was an endeavor to improve the social, economic, and human development outcomes at a much broader scale. * Human Resource Capitalization: ICICI views its human resources as a key source in drawing its competitive advantage. It focuses on the smooth integration of its employees with its human resource management system. With a robust ability testing and competency profiling tool, it has been able to attract a huge mass of talented individual with whom the customers find pleasant to interact with. They provide faster service along with bonding and personal relationship. Weaknesses: * Expensive Service Charges: Equipped with state of the art technology, the cost of service provided is automatically high and this in turn is reflected on the price that the customers are asked to pay. Due to this fact it is capable of reaching to only a particular section of the society. The increased service charges per transaction have been acting against the ICICI intention of reaching to the general masses. * Cash Crunch: In terms of scale up both the self help group bank linkage model and the micro finance institution intermediation model have been soaring high in terms of scale up. Lack of incentive alignment have been a set back for the SHG Bank Linkage model. Also in case of MFI intermediation, there has been serious cases of cash crunch and eventually there was ‘no capital’ on the balance sheet of MFI to lend on. Non Performing Assets Going Forward: The large portfolio of products may breed the non performing assets going forward. Since ICICI bank has a range of products, it becomes very difficult for the bank to manage it. They have been increasingly dependent upon each product but it becomes hard to let go off any such non performing asset that have been de faulting for the past 3 months. This plethora of products may thus encourage the non performing asset to be taken forward. Less Credit Period: ICICI has a very big weakness of allowing credit facilities for a very short period. This has been the practice of the bank to avoid defaulters. And after the period is over it charges huge penalty for default. This usually annoys the customers. They also get annoyed when the bank sends them reminder letters to the customers even before the credit period is over. Opportunities: * Huge Rural Set Up: With growing advances towards the bottom of the pyramid and with the increase in the disposable income of this section the bank can have a huge market share. All it need to is to capitalize on its core competency and innovate product offerings specially tailored for this segment of the society. * Diversified Product Portfolio: With the increase in the disposable income of the masses they are demanding for more and more products that are specially designed to suit their needs. ICICI Bank can capitalize on the increasing demand and diversify into many such products which can be helpful in increasing the market share. * Reduced Cost of Services: The bank should also target to reduce its cost of services. This is possible only when the product offering are reduced. Resources available can be bought in bulk and this bulk purchase may again help in reducing the price offerings * Corporate Social Responsibility: The establishment of the ICICI foundation may be helpful in creating good will amongst the customers. It was established to promote inclusive growth amongst the low- income section of the society. This aims at creating a ‘just’ society in which everyone has the equal right to develop and grow. Threats: Credit, Market and Operational Risk: ICICI Bank is exposed to specific risks that are particular to its business and environment within which it runs and that includes credit risk, market risk and operational risk. The risk that a borrower is unable to meet its financial obligations to the ICICI is credit risk. Also it is exposed to the losses resulting from changes in interest rates, currency fluctuation, commodity pricing, etc. This is market risk. While the risk res ulting from failure of hardware like security procedures, computer system, documents etc is the operational risk. Such external threats are to be looked upon very meticulously. * Increasing Competition: Bank has been facing competition from local as well as international banks like Citi Bank, HDFC, Standard Chartered, etc. These banks provide equivalent facilities like ICICI do at a much lower rate. They have consistency in both national and international operations. * Cyber Crime: These days with the increase in the amount of net transactions, there have also been increase in the amount of Cyber crime. Lots of data and information are available over the internet with almost no supervision. This has inturn magnified the seriousness of the crime. Customer information and their profile is easily available and can be exploited by the competitors as well. * Decentralized Management: With extensive liberty given to the branch managers, the strategy may even back fire due to lack of coherence among the operation of the various branches. Any wrong decision taken by a manager may lead to heavy losses. Value Chain As bankers work to build winning strategies they often call the value chain model to be one of the most important breakthroughs in management. The value chain concept was first introduced about 20 years ago, and most recently it is embellished by Michael Porter, a professor at Harvard. The value chain was originally designed for, and is best suited to, manufacturing businesses. But it is a widely used concept, and has some appeal to bankers as well. The purpose of a value chain is to break a business down into its individual steps, ascribe a value to each, and determine how well the company performs each of the steps. There exists a problem with using the manufacturing value chain on banking. This is because it assumes that productive operations are performed on some physical goods and financial services do not feature such goods. The raw materials which are used in financial services money, information, transactions are not as concrete. Moreover, the definition of supplier is a little more amorphous in banking for instance, when a customer has both a checking account and a credit card, he acts as a customer and a supplier simultaneously. Financial services and banking sector need a radically different kind of value chain. The following is what that chain for ICICI bank should look like: Infrastructure: General Management, planning management, Legal, Finance, accounting| Human Resource Management| Recruitment, Retention| Training and RD| Technological development| * Design new services * Program service routines| * reconfigure branch office infrastructure * expand communication network * set standards| Procurement| | | Generic Competitive Strategies A firm’s positioning determines whether a firm’s profitability is above or below industry average. Even though a firm may have myriad strength and weaknesses, there are basically 2 types of competitive advantage that is low cost or differentiation. These 2 basic types of competitive advantage combined with scope of activities lead to 3 generic strategy. Following are the generic strategies followed by ICICI Bank in order to achieve the market share it is enjoying today: 1. Cost Leadership: Though ICICI Bank is not focused on this strategy for the upper segment of the society, but when it comes to the bottom of the pyramid it is known for it low cost products. It provides help to the farmer at almost throw away price. With this strategy it intends to broaden its market reach. ICICI Bank in order to focus on this majority section has have create several product portfolios that would complement the need of these people and also direct its corporate social responsibility towards these people. 2. Differentiation: ICICI Bank is known for its product innovation and application of technology in this regard. Though the differentiation in a bit restricted in the bottom of the pyramid but when it comes to the higher segment of the society, they design product that specially tailored to suit the needs of these individuals. With the increase in the disposable income of these individuals their demands have changed. ICICI has been a bank that has quickly identified this need and have been working to cater to such needs. 3. Focus: Now this focus strategy has 2 variants as shown in the above figure. They are cost focus and differentiation focus. They aim at cost advantage in the narrow segment. For ICICI it has been extensively differentiation focus where it seeks differentiation in its target segment. They try to exploit the differences in the special need in the target segment. With numerous product offering at a relatively higher price they have been able to gain competitive advantage from their broadly targeted competitors. BCG Matrix: Power Transfer (Wire Transfer) Branch – based remittance Net Express (Direct Debit), ACH Transfer, Personal Loans and Credit Cards (After recession) Money2India. com, HiSave Accounts, Wells Fargo Express Send Service, Mortgages Boston Consulting Group matrix focuses on the product life cycle. The above figure shows a graph between market share and market growth. Marketers are supposed to study this curve and arrive as conclusion that which are the products that are star performers and should be held upon and which are the dogs that should let gone. Keeping into mind the product portfolio of ICICI Bank the following matrix has been designed. It is good for the company to liquidate the product that falls under the dog category. Few products falling in the question mark area can be selected for investment and the rest are supposed to be divested. Resource Based View(RBV) Customer Insight Smart Card Credit KissanCredit Cards Money2India. com Innovative Products Multiple channels-Branch, ATM, POS Networking ability HiSave Account Corporate InternetBanking M A advisory Credit/Debit/ATM Cards DirectConnect. com End Product End Unit Resource Competence Technological expertise Partnership with international banks State-of-art network architecture In-house technical team Retail Automobile/ Personal Loans Corporate Partnership with vendors leasing network lines International Micro-Finance AgriCredit Line The resource based view (RBV) is management tool to identify the core competencies and resources available with a firm. The tool is based on the principle of competitive advantage where the core competencies of a firm help it to develop a pool of resources. These resources can be deployed by the firm to develop a variety of end products which are not easily imitable. Consequently the firm is able to enjoy sustained competitive advantage. ICICI Bank has core competencies such as technical expertise, networking ability and ability to gain customer insights. Each of these competencies help ICICI to develop a huge resource pool some of which are- In-house technical team- ICICI had realised as early as 1998 the need to maintain a strong technical team in order to provide services to its customers at low cost. ICICI Infotech (company promoted by Infotech) helped the bank transform its standalone legacy systems to integrated application network. There was a lot of additional cost being incurred due to the duplication of the backend procedures at the branch offices, Manoj Kunkalienkar, Joint President ICICI Infotech Services Limited The technical team enables the bank to maintain its extensive network of branches, ATMs and data centres (Exhibit 1). The network is upgraded and maintained on a regular basis in order to provide 24*7 services to all its customers. State-of-art network architecture- The ICICI network is a spoke and hub architecture. It uses a mix of 600 VSATs , 800 ISDN , radio links and 800 leased lines to connect the ICICI banks, branches and around 1000 ATMs(Exhibit 2). There is a primary site and a secondary site for disaster recovery. Connected to the primary site are 8 hubs that are in turn linked to the regional branches (Exhibit 3). High end Cisco switches and routers are deployed; the network is maintained by HPOpenView and CISCO; no. f security features, firewalls are installed. Most of the hardware have UNIX as the operating system whereas most of the databases are supported by Oracle while some of them are Sybase and MS SQL. There are over 200 databases doing 24 * 7 processing. The security system is monitored by KPMG. This state-of-art architecture has enabled ICICI to transform itself into a virtual ba nk providing modern banking services to its customers. Partnership with international banks In order to have a global presence ICICI has formed alliances with a number of international banks. While the international banks gain from high volumes of transactions ICICI can cater to its customers without having actual physical presence in all geographies. Some of these alliances are Lloyd TSB Bank (UK), Wells Fargo Bank(US), Emirates Bank, Commercial bank of Qatar and DBS bank (Singapore). Partnership with VSAT, ISDN vendors ICICI has a huge network of branches, offices, ATMs and databases all connected by VSATs , ISDN lines and leased lines. ICICI has formed alliance with these vendors in order to provide uninterrupted service to its customers. By incorporating vendors in the its value chain it is able to provide better service levels compared to its competitors. Multiple channels to cater to customers The customers want easy accessibility to their accounts. To cater to the customers’ needs ICICI delivers its services through a variety of channels. It has a network of 1367 branches, more than 1000 ATMs and POS terminals. Since its impossible to have physical presence everywhere it has online facilities that handles the requests of more than 1. 4 million customers everyday. This network enables ICICI have both physical and virtual presence as its asset. Innovative products The primary activity for any service industry is to understand the customers’ needs. ICICI has developed its product lines to cater to the various customer segments. It has designed products for each of its sectors viz –retail, corporate, international, microfinance keeping in mind their specific needs. While the NRIs finds its convenient to transfer remittances on its portal Money2India. com ; the bank also has products like KissanCredit card and Agri Credit Line for the farmers. Thus it able to service both HNI clients and well as the bottom of pyramid clients in the process. The same resources can be reused in whatever sector ICICI operated to develop end products and services. The reusability makes it cost efficient in the service delivery process. Porter’s 5 Force Model: Threat of New Entrants (LOW) With increase in the competition, the customers bargaining power has increased. They have become extremely price sensitive and demand more variety tailored to suit their choice. Increase in the bargaining power of the various service providers like technology, software, equipment, etc. Lesser suppliers and more buyers gives them the edge. Threat of Substitutes (MODERALY LOW) Bargaining Power of buyers (MODERATELY HIGH) Bargaining Power of suppliers (MODERATELY LOW) Existing private banking sectors like Citi Bank, HDFC, HSBC, etc. pose a serious threat to ICICI Bank. They have a range of product offerings at a relatively low price. Rivalry among existing competitor (HIGH) Potential new entrants could be foreign player or new player with a competitive advantage much better than that of ICICI. But high entry barrier and stringent government policies might act against it. With the increase in technology and advances in the financial products this threat has also been increasing. One such th

Relocation Centers Of Japanese-Americans Essays -

Relocation Centers of Japanese-Americans (1942-1943) Throughout the spring and summer of 1942, the United States Government planned and carried out without serious incident, one of the largest controlled migrations in history. This was the migration of almost 110,000 men, women, and children of Japanese decent from their homes on the Pacific coast into ten wartime communities constructed in remote areas between the Sierra-Nevada Mountains and the Mississippi River. According to the United States Government, relocation centers were never intended to be internment camps or places of confinement. Under United States law at that time, Aliens of enemy nationality who are found guilty of acts or intentions against the security of the Nation are to be confined in internment camps. Internment camps were administered by the Department of Justice unlike relocation centers which were administered by the War Relocation Authority. The physical standards of the relocation centers were never much above the bare subsistence level. For a small portion of the Japanese evacuees, these standards were an improvement to their normal quality of living. But for the majority of the evacuated people, the relocation centers, despite all efforts to make them livable, remained subnormal. Evacuees had few leave privileges and had to meet certain criteria to do so. The movement of residing evacuees was somewhat restricted and the feeling of isolation was inevitable. The tarpaper covered barracks of simple frame construction served as housing in the relocation centers. None of the barracks had plumbing or cooking facilities of any kind. A normal family of five or six received a single room about 25 by 20 feet. Unattached evacuees, for example, bachelors lived in large, one room dormitories. Army blankets, cots, and small heating stoves were the only furnishings provided by the government. One bath, laundry, and toilet room was provided for each block of barracks housing 250 plus people. Food was provided by the government for the evacuee residents. Meals were provided for evacuees costing no more than 45 cents per resident per day (the actual cost averaged at about 40 cents). Food was prepared by evacuee cooks and served in mess halls large enough to accomodate atleast 300 people. Evacuees worked on farms which were government-owned or -leased farmlands. Resident farm workers produced most of the food consumed in the relocation centers. Most centers included farm program which included poultry, eggs, and pork. Medical care was also provided by the government free of charge to all residents. This was thought to help prevent serious epidemics from spreading. Hospitals were built at all relocation centers. Simple dental and optical services were also provided. Any special medical services which were not available were to be paid for by the evacuees. Able-bodied evacuees were to work in jobs essential to community operations. Residents worked in mess halls, in hospitals, on farms, internal police, and in construction, and road maintenance work. Most residents who work were paid on average 14-16 dollars for a 44 hour week. Franklin D. Roosevelt signed Executive Order No. 9066 on February 19, 1942. His order called for the eviction and internment of all Japanese-Americans. It is horrifying to recall that through the Japanese recollection program, a tragic event that brought heartbreak to many, was justified on the ground that the Japanese were potentially disloyal, the record does not disclose a single case of Japanese disloyalty or sabotage during the whole war.

Famous Sites, Language and Religion Practiced In Haiti

Womens Changing Roles from 1865 - 1920

Womens Changing Roles from 1865 - 1920 The role women play in our society is an ever-changing one, from mother to lawyer and doctor and everywhere in between. With increasing demands on them to be the one to keep families grounded and together in a turbulent society that thinks none to highly of them or their rights as citizens. I chose to focus on womens changing roles during the time period from 1865 through 1920. The reason I chose this period in history was because this was a very turbulent time in history, due to the changing status of minorities in the culture at this time due to the end of the Civil War and the impending revolution for womens rights with the passage of the 19th amendment.Dating as far back as the early 1800's womens roles were being challenged and questioned, it was not so much the womens rights marches of the 60's but it was the beginning of that revolution.English: Postage stamp featuring Elizabeth Stanton...During the early part of the 19th century womens character was espoused with four basic a ttributes: piety, purity, submissiveness, and domesticity. Even foreign visitors to America during this period found fault in American males attitude towards women, they thought males treated women as inferiors and subjected women to double standards. "By marriage, the husband and wife are one person in law; that is, the very being and legal existence of the woman is suspended during marriage." This is according to a 1765 law established by Sir William Blackstone an English barrister, and American law followed this principle thereby the wife "belonged" to the husband.These were the times that women lived through and the conditions they lived with during the early part of the nineteenth century. At the end of the Civil War and throughout the Reconstruction, America began to feel the beginnings of...

Experienceing MIS Assignment Example | Topics and Well Written Essays - 250 words

Experienceing MIS - Assignment Example Queries would be required in order to build the required reports as well as to extract any other one time information required by Samantha from the database. Finally, Samantha would require the implementation of an application program so as to make the database connectivity simpler and more user friendly. The application that Samantha requires would be for one user, which is Samantha in this particular instance. Two scenarios are likely, Samantha could either be performing the jobs herself or through hired hands. In both cases, information regarding the customer and the job would have to be entered and monitored in a database by a single individual managing the company, which is Samantha. Since most database functions performed by Samantha would be simple, a single user personal database management system (DBMS) would be a good choice (Kroenke, Bunker, & Wilson, 2013). In terms of the particular personal DBMS, Samantha could easily implement MySQL. This would offer a reasonable personal DBMS choice since MySQL is an open license product and provides relatively simple

The impact of climate change on logistics management Essay

The impact of climate change on logistics management - Essay Example It basically refers to the management of the activities for the collections of raw materials to the production at the factories to the distribution of these goods. The manager must coordinate with all of these pieces in a cordial manner for the effective management of the supply chain (Mentzer, 2001). Logistics Management is widely known concept in the global world. All companies rely on the logistics for the efficient flow of the goods and services. For Example: Industrial manufactures rely heavily on these logistics for the transportation of the mass-produced items. At the same time, the consumer goods manufactures want their goods to be delivered to the outlets and warehouses before the customer calls for it. Therefore, Logistics management has now evolved into one of the most important links in the supply chain process (DHL, 2010). Logistics refers to the part of the supply chain management that plans, implements and processes the flow of the goods and services from the source to the end consumer. It includes both thee forward and reverse flow as well as the storage of the goods. The vital elements of this part include all modes of transportation, inventory control and storage, packing and flow of information. Figure 1 shows the costs and investment in different sectors’ logistics departments. Climatic Change takes place over millions to thousands of years. It is a statistical shift of weather and climate that takes place, changing the environment of the earth. When analyzed over hundreds of years, the climatic conditions have patches of climate having similar qualities and properties. The shift from one climate to another climate takes place slowly and gradually in order to maintain the ecological system. The biggest climatic change that is being anticipated these days and is mostly in the news is global warming. It is a shift towards a hotter climate due to the green house gases

Ambition in Your Life Essay Example for Free

Ambition in Your Life Essay Ambition a passion that never fails you and will never let you fail it, and this is why it will ultimately cause the downfall of the individual. In the novel Frankenstein and in the Play Macbeth, ambition is the main theme in these two pieces. Both Victor and Macbeth had great dreams of accomplishing certain things that defy a higher order. Ambition drove both of them to strive for what they want and never give up on their dreams. Ambition without doubt help or even single handling brought Macbeth and Victor to their dreams. Ambition is the best quality that a person can have, it allowed Victor and Macbeth to achieve what they always wanted. Whatever can bring you to the top, also has the power to make you fall harder then you fell before, being overly ambitious can also destroy a person and people that surrounds this individual. Victor and Macbeth succeeded in accomplishing their deepest desire but this does not mean they have succeeded in achieving happiness. Everyone dreams about achieving goals and dreams in life that is nearly impossible to grasp due to certain circumstances. Why do some individuals still try in chasing their dreams even though they know that the chances of succeeding are very slim? In the novel Frankenstein and the play Macbeth, Victor and Macbeth had dreams of achieving goals that defy a high order which promises server consequences. Victor and Macbeth are examples of the individual that were driven by ambition, this ambition was so strong and relentless that it actually allowed both Victor and Macbeth achieved their impossible dreams. In Victor’s case he succeeded in creating life and Macbeth succeeded in becoming king and this was all due to being ambitious and determined. Yes Victor and Macbeth did achieved what they wanted but both paid great prices in doing so. Was it worth it? Ambition is the best quality anyone can have, until we crossed the line of chasing a dream and just being obsessed. No one is born with the ambition that makes you obsessed with your goals and dreams in life. Certain incidents must occur to push this person to let ambition make you become obsessed with the goals and dreams in life. Victor and Macbeth both experience this incident that allow their ambitious minds to take over. Victor experienced the lost of a love one, which was his mother. This shock was too great for Victor to handle, this caused victor to hate the fact of death and suffering in life. The chance and opportunity of being able to bring his mother back, and to end all suffering was to captivating. He had the knowledge and power to do so. This caused his ambitious mind to grow and start to take over. The same line of events occurred to Macbeth as well. Macbeth had no intention in betraying his king and taking the throne. Until the three witches implanted the seed of betrayal in Macbeth, he started to think of the opportunities that being the king would bring to him. Betrayal thoughts started to occur in his mind. Macbeth was never sure of what to do until he talked to his lovely wife, she convinced him in taking this opportunity in becoming king. Macbeth kept his ambitious mind under control until the actual first deed of betrayal was committed which was the killing of Duncan, the current king of Scotland. After this incident, ambition took over Macbeth and caused in to do everything in his power to secure his throne. A determined and overly ambitious mind is a blind one. You may spend your whole life striving for a dream or goal that you have. You work so hard in getting what you think you really want, but when you actually achieved and accomplished you goal or dream. You realized that you’re not happy and lost certain things that are so much more important to you then your so called dream or goal. Macbeth and Victor both experienced this in their lives. Victor tried to create life and he succeeded in doing so, but in the course of creating â€Å"The monster† he abandoned what was really important to him, which is his family, his friends, most importantly his life. His creation actually destroyed everything that Victor loved and cared for. The monster should not be blamed because victor crossed the line of trying to better human kind and playing God. He created this hideous and ugly monster that no one can possibly love and abandoned it and left it to die. The actions of victor can also justify the actions of the monster. If victor actually took the time in thinking of what he was doing, he would’ve realized the mistake he was making. He made another mistake right after making the first one. He gave this monster life and limitless power and intelligent, obviously this monster can survive and cause great harm to him and his love ones. If he actually stayed with the monster and taught him how to live and act towards other beings, things would’ve of turned out totally different. Macbeth experienced the same exact lines of events and feelings that victor did in his life. If Macbeth thought of the acts that he was committing, he would’ve of realized that the only thing he is accomplishing in killing the king, is damning himself, his only loved ones. It is obvious that if he committed this act of betrayal and defiance of a higher order, only bad can occur from this. He didn’t realize this right after this act just like victor. He continued to do wrong because of his ambitious mind, which Victor also experienced. He continued acting on his relentless ambition to secure his throne and his undying passion to seek happiness which at the time was being king for him. Which was completely wrong. Knowledge is power and power can corrupt any human being. Victor and Macbeth had the opportunity to achieve their dreams and goals. This thought corrupted both their minds. As both Victor and Macbeth succeeded in achieving their dreams, they experienced different feelings. When Victor was successful in creating life, it totally scared him that he actually create life and it caused him to flee. This ultimately caused the downfall and death of Victor. In Macbeth’s case when he became king, it made him a more determined and stronger person. It made him paranoid and trusted no one, which caused him to make more mistakes, such as killing any one that stood a threat. Victor and Macbeth both were not happy even though they achieved their dream. This is because they acted on impulse which caused them to do whatever it takes to succeed, which caused them to make mistakes that they regretted towards the end of their lives. All of this and every mistake that both Victor and Macbeth made were because they let their ambitious mind blind them of their senses and conscious of what is really important to them and what truly makes them happy. Chasing a dream is good, until the mind is obsessed and is poisoned with the ambition that will change you to a whole new person. You can also order a custom term paper, research paper, thesis, dissertation or essay on ambition from our professional custom essay writing service which provides students with high-quality custom written papers at an affordable cost.

The Labour Force And Unemployment Economics Essay

The Labour Force And Unemployment Economics Essay Every market has buyers and sellers, and the labour market is no exception: the buyers are employers, and the sellers are workers. Some of this participant may not be active at any given moment in the sense of seeking new employees or new jobs, but on any given day, thousands of firms and workers will be in the market trying to transact. The Labour Force and Unemployment The term labour force refers to all those over 16 years of age who are either employed, actively seeking work, or expecting recall from a layoff. Those in the labour force who are not employed for pay are the unemployed.  [1]   People who are not employed and are neither looking for work nor waiting to be recalled from layoff by their employers are not counted as part of the labour force. The total labour force thus consists of the employed and the unemployed. The number and identities of people in each labour market category are always changing; the flows of people from one category to another are considerable. There are four major flows between labour market states: employed workers become unemployed by quitting voluntarily or being laid off (being involuntarily separated from the firm, either temporarily or permanently), unemployed workers obtain employment by being newly hired or being recalled to a job from which they were temporarily laid off, those in the labour force, whether employed or unemployed, can leave the labour force by retiring or otherwise deciding against taking or seeking work for pay (dropping out), those who have never worked or looked for a job expand the labour force by entering it, while those who have dropped out do so by re-entering the labour force. The ratio of those unemployed to those in the labour force is the unemployment rate. While this rate is crude and has several imperfections, it is the most widely cited measure of labour market conditions. The relation among unemployment, employment, and labour force Analytically, to access the unemployment rate we can use the following equality: where , , and designate respectively the working-age population, the level of employment, the number of unemployed, and the participation rate at period t. Defining the unemployment as , we have Using this equation in logarithm terms at time t and t-1, we get: Assuming that u is a small number, this relation allows us to express the variation of unemployment rate as a function of the growth rates of working-age population, employment, and participation: This decomposition shows that the variation in the rate of unemployment come from variations in the employment rate, the size of the working-age population, and participation rate. Chapter 2 Some facts The different unemployment experience During the last 20 years, the industrialized countries have evolved in very different direction with respect to unemployment. In contradiction to Japan, or the United States, most of European countries showed a high proportion of unemployment. Table 1.1 Rates of unemployment, participation, and employment in 20 OECD countries in 2011 Country Unemployment Rate Participation Rate Employment Rate Australia 5,10 78,8 72,70 Austria 4,14 75,79 72,13 Belgium 7,14 68,88 61,93 Canada 7,45 80,25 71,98 Denmark 7,57 83,19 73,15 Finland 7,77 75,43 69,03 France 9,26 69,34 63,80 Germany 5,92 81,04 72,53 Greece 17,66 68,57 55,55 Ireland 14,39 70,96 59,20 Italy 8,40 63,01 56,98 Japan 4,57 80,61 71,20 Luxembourg 4,90 70,57 64,63 Netherlands 4,44 80,13 74,88 Norway 3,21 80,22 75,30 Portugal 12,74 77,42 64,20 Spain 21,64 75,28 57,68 Sweden 7,54 31,00 74,10 Switzerland 4,04 86,60 79,35 United Kingdom 8,01 76,75 69,48 United States 8,95 64,21 66,65 Euro area (17 countries) 10,07 26,20 64,25 EU (27 countries) 9,59 64,30 OECD Total 7,92 27,80 64,85 Source: OECD Data Table 1.1 summarises the unemployment, participation and employment rates in 20 OECD countries for 2011. We see that unemployment is a phenomenon that touches all the countries, but in different proportions. There are some countries such as Austria, Japan, Luxemburg, the Netherlands, Norway, and Switzerland, have an unemployment rate below 5 per cent. But other countries, such as Greece, Ireland, Portugal, and Spain, have an unemployment rate higher than 10 per cent. For the European Union as a whole (27 countries), the average unemployment rate is the neighbourhood of 10 per cent, 2 points greater than the overall OECD unemployment rate. The third column reports the employment rate, i.e. the ratio of the number of persons employed to the number of person in the population (working-age from 15 to 64 years old). This indicator is very important for the analysis since it can be used as a complement to the data of unemployment, given that the definition of unemployment is necessarily objective. As we can see from table 1.1 countries with high employment rate are also the ones who have low rates of unemployment. So there is a negative relationship among them. The second column also shows that participation rates are highly dispersed, since they vary from 63.01 per cent in Italy to 86.60 per cent in Switzerland. Moreover, countries that face high unemployment rate generally have relatively a weak participation rate. This rapid overview of the rates of unemployment, participation, and employment in different OECD countries suggest that certain countries face a relatively high unemployment rate because of insufficient job creation. Examination of changes over time since the beginning of 1950s in unemployment and employment rate in the United States and selected OECD countries will throw further lights on the origins of unemployment. The US unemployment experience in comparative perspective Table 1.2 summarises the unemployment experience of the United States, selected other countries, and the OECD as a whole from 1950 to 2011. The OECD unemployment rate averaged about 3 per cent during the 1950s and 1960s unemployment throughout the OECD increased sharply in the aftermath of the oil shocks of the 1970s and continued rising the worldwide recession of the early 1980s. The overall OECD unemployment rate more than doubled from 2.8 per cent in the 1960s to 7.0 per cent in the 1980s, and has remained at an even higher rate in the 1990s. Last year the overall OECD unemployment rate was 8.2 per cent. Table 1.2 Unemployment rates in selected OECD countries Country 1950 1960 1970 1980 1990 2000 2011 Australia 1,50 2,00 3,90 7,50 9,10 6,28 5,20 Canada 3,80 4,70 6,60 9,30 9,90 6,82 7,50 France 1,50 1,70 3,80 9,00 11,10 9,4 9,30 Germany 4,90 0,60 1,90 5,70 6,50 7,76 6,00 Italy 7,20 3,80 4,70 7,50 10,20 10,59 8,50 Japan 2,10 1,30 1,70 2,50 2.7 4,72 4,80 Netherlands 1,50 0,90 4,00 9,60 6,90 2,95 4,40 Norway 1,70 1,70 1,60 2,80 5,30 3,33 3,30 New Zeland 0,90 0,90 1,50 4,10 8,10 9,00 6,70 Portugal 2,20 2,40 1,60 7,30 5,80 4,04 13,40 Spain 2,10 2,30 4,20 17,50 20,30 13,92 21,80 Sweden 1,70 1,50 1,80 2,20 7,00 5,4 7,60 United Kingdom 1,70 2,00 4,40 10,10 8,70 5,58 8,00 United States 4,40 4,70 6,10 7,20 6,00 4,00 9,10 OECD 3,50 2,80 4,30 7,00 7,30 6,1   8,2 Source: OECD Data Table 1.2 indicates that major OECD nations shared a pattern of rising unemployment from the 1960s to the 1970s to the 1980s, but the magnitude of the increases vary widely across countries, with the largest increase in Spain. In the 1990s the unemployment experience diverge somewhat, with continued increases from the 1980s in most European countries and Australia, but decline in the United States, United Kingdom, and Portugal. In the 2000s there is a general decrease of unemployment rate among all the countries, except in Italy and Japan. From 2000 to 2011 unemployment is a phenomenon that touches all the countries but in different proportion, with the largest increase in Spain and Portugal. The table highlights the distinctive aspects of the evolution of US unemployment. The United States has moved from having a consistently higher unemployment rate than the OECD as a whole in the 1950s, 1960s and 1970s to having a much lower rate in the 1990s and 2000s, but again a higher unemployment in 2011. The United States is the only major OECD economy with a lower average unemployment rate in 2000s than in 1980s: 4.0 per cent in the 2000s versus 7.2 per cent in 1980s. But the current US unemployment rate of 9.1 per cent is the highest experienced since 1980. The composition of US unemployment also differs substantially from many other OECD nations. The United States has much larger month-to-month flows into and out of employment than most of OECD economies and a much lower incidence of long-term unemployment than any advanced OECD economy. Long-term unemployment (six months and less than one year) as a percentage of total unemployment in 2011 stood at 12.43 per cent in the United States as compared with 9.8 per cent in Canada, 13.48 per cent in Australia, 18.65 per cent in France, 14.71 in Germany, 15.03 in Italy, 17.68 in Greece and 18.66 in Spain. US unemployment rates for the working-age population are particularly low (and employment/population ratios are particularly high) for young workers (those aged to 15 to 24), women and older workers (those aged 55 to 64). Overall, the US labour market does a relatively good job of moving new entrants and women into employment. European labour market institutions (especially employment protect ion laws) seem geared to keeping married males in work, but appear to make it tougher for new entrants to gain steady employment. Cyclical versus Structural unemployment The analytical discussion of unemployment since Friedman (1968) and Phelps (1968) start with the hypothesis that at any given time, a national economy is characterized by a natural rate of unemployment. Aggregate demand expansions can (at least temporarily) push the economy below this rate of unemployment, but at the cost of accelerating inflation. Similarly, shocks that raise unemployment above the natural rate lead to deceleration inflation. As long as the policy-maker avoids explosive inflation or deflation, the economy cannot remain persistently above or below the natural rate of unemployment, but it may fluctuate around it. This hypothesis suggests separating changes in unemployment into cyclical fluctuation around the natural rate and structural movement in the natural rate itself. Figure 1 Unemployment in the US, Australia, Europe and OECD Figure 1 illustrates the time patterns of the unemployment rates for the United States, Australia, Europe, and OECD countries from 1970 to 2011. The figure suggests cyclical unemployment fluctuation around a relatively stable natural rate in the United States until 2008, and a possible upward drift in the natural rate in Europe and Australia. The acceleration in inflation in most European economies in late 1980s, despite much higher unemployment rate than in the 1960s and 1970s, indicates a large rise in natural rate of unemployment. The deceleration of inflation in the 1990s and early 2000s suggests that some cyclical component has played a role in recent high European unemployment. 2 Data and Descriptive statistics I next explore in a more depth, the extent to which a relatively stable natural rate of unemployment since 1970 or so is consistent with the experience of the flexible US labour market. The data for this analysis are taken from Bureau of Labour Statistics from 1970 to 2012 (monthly data). 3 Empirical Methodology and Results For estimating the natural rate of unemployment (un) I am going to use the expectations-augmented (or accelerationist) Phillips Curve (EAPC) in which the rate of growth of price inflation (or more generally the difference between current inflation and expected inflation) depends on the deviation of the unemployment rate from the natural rate: where p is the log of the price level, u is the unemployment rate, is a positive coefficient, equals, and is an error term. Expected inflation is assumed to equal the lagged inflation rate (). A regression of the change in the inflation rate on the unemployment rate yields estimates of the natural rate of unemployment ( = -. The basic idea behind this equation is that price inflation increases when unemployment is below the natural rate and decreases when it is above. Table 2.1 Price inflation and unemployment in the United States, Europe and OECD countries United States Europe OECD (1) (2) (3) (4) (5) Constant 0.397562 0.519119 0.142052 11.87027 12.00131 [6.163198] [8.568430] [1.910330] [7.503319] [5.137325] D80 -0.348037 [0.929960] D90 -0.355382 [0.950040] D00 -0.369512 [0.986341] Unemployment rate (u) -0.006995 -0.026207 0.032498 -0.596646 -0.906432 [0.669781] [2.835975] [2.918381] [3.129660] [2.544017] Observations (n) 511 511 511 41 41 Durbin-Watson Statistic 0.798394 0.828986 0.833514 0.233627 0.304103 R2 0.006191 0.015555 0.016457 0.200734 0.142330 Notes: The US regressions cover 1970 to 2012. The dependent variable in all regressions is the inflation rate (Dp).The numbers in parenthesis are standard errors. p=100*log(CPI), using the Consumer Price Index for the United States and Europe; u is the unemployment rate measured in percentage, D80=1 for the 1980- and 0 otherwise; D90=1 for the 1990- and 0 otherwise; D00=1 for the 2000- and 0 otherwise. Estimation for US unemployment Dependent Variable: P Method: Least Squares Date: 10/04/12 Time: 17:04 Sample (adjusted): 1970M02 2012M08 Included observations: 511 after adjustments Variable Coefficient Std. Error t-Statistic Prob.  Ã‚   C 0.397562 0.064506 6.163198 0.0000 UNEMP -0.006995 0.010444 -0.669781 0.5033 D80 -0.348037 0.374250 -0.929960 0.3528 D90 -0.355382 0.374071 -0.950040 0.3425 D00 -0.369512 0.374629 -0.986341 0.3244 R-squared 0.006191   Ã‚  Ã‚  Ã‚  Mean dependent var 0.353720 Adjusted R-squared -0.001665   Ã‚  Ã‚  Ã‚  S.D. dependent var 0.373392 S.E. of regression 0.373702   Ã‚  Ã‚  Ã‚  Akaike info criterion 0.879023 Sum squared resid 70.66469   Ã‚  Ã‚  Ã‚  Schwarz criterion 0.920475 Log likelihood -219.5904   Ã‚  Ã‚  Ã‚  F-statistic 0.788056 Durbin-Watson stat 0.798394   Ã‚  Ã‚  Ã‚  Prob(F-statistic) 0.533265 Estimation for US male unemployment Dependent Variable: P Method: Least Squares Date: 10/04/12 Time: 17:05 Sample (adjusted): 1970M02 2012M08 Included observations: 511 after adjustments Variable Coefficient Std. Error t-Statistic Prob.  Ã‚   C 0.519119 0.060585 8.568430 0.0000 UNEMPMALE -0.026207 0.009241 -2.835975 0.0048 R-squared 0.015555   Ã‚  Ã‚  Ã‚  Mean dependent var 0.353720 Adjusted R-squared 0.013621   Ã‚  Ã‚  Ã‚  S.D. dependent var 0.373392 S.E. of regression 0.370840   Ã‚  Ã‚  Ã‚  Akaike info criterion 0.857814 Sum squared resid 69.99885   Ã‚  Ã‚  Ã‚  Schwarz criterion 0.874395 Log likelihood -217.1715   Ã‚  Ã‚  Ã‚  F-statistic 8.042753 Durbin-Watson stat 0.828986   Ã‚  Ã‚  Ã‚  Prob(F-statistic) 0.004751 Estimation for US female unemployment Dependent Variable: P Method: Least Squares Date: 10/04/12 Time: 17:07 Sample (adjusted): 1970M02 2012M08 Included observations: 511 after adjustments Variable Coefficient Std. Error t-Statistic Prob.  Ã‚   C 0.142052 0.074360 1.910330 0.0567 UNEMPFEMALE 0.032498 0.011136 2.918381 0.0037 R-squared 0.016457   Ã‚  Ã‚  Ã‚  Mean dependent var 0.353720 Adjusted R-squared 0.014525   Ã‚  Ã‚  Ã‚  S.D. dependent var 0.373392 S.E. of regression 0.370670   Ã‚  Ã‚  Ã‚  Akaike info criterion 0.856897 Sum squared resid 69.93471   Ã‚  Ã‚  Ã‚  Schwarz criterion 0.873478 Log likelihood -216.9373   Ã‚  Ã‚  Ã‚  F-statistic 8.516946 Durbin-Watson stat 0.833514   Ã‚  Ã‚  Ã‚  Prob(F-statistic) 0.003674 Estimation for Europe unemployment Dependent Variable: P2 Method: Least Squares Date: 10/04/12 Time: 17:08 Sample (adjusted): 1970M02 1973M06 Included observations: 41 after adjustments Variable Coefficient Std. Error t-Statistic Prob.  Ã‚   C 11.87027 1.582002 7.503319 0.0000 UNEMPEURO -0.596646 0.190642 -3.129660 0.0033 R-squared 0.200734   Ã‚  Ã‚  Ã‚  Mean dependent var 7.164938 Adjusted R-squared 0.180240   Ã‚  Ã‚  Ã‚  S.D. dependent var 3.481375 S.E. of regression 3.152057   Ã‚  Ã‚  Ã‚  Akaike info criterion 5.181538 Sum squared resid 387.4831   Ã‚  Ã‚  Ã‚  Schwarz criterion 5.265127 Log likelihood -104.2215   Ã‚  Ã‚  Ã‚  F-statistic 9.794774 Durbin-Watson stat 0.233627   Ã‚  Ã‚  Ã‚  Prob(F-statistic) 0.003308 Estimation for Europe unemployment Dependent Variable: P3 Method: Least Squares Date: 10/04/12 Time: 17:09 Sample (adjusted): 1970M02 1973M06 Included observations: 41 after adjustments Variable Coefficient Std. Error t-Statistic Prob.  Ã‚   C 12.00131 2.336102 5.137325 0.0000 UNEMPOECD -0.906432 0.356299 -2.544017 0.0150 R-squared 0.142330   Ã‚  Ã‚  Ã‚  Mean dependent var 6.186970 Adjusted R-squared 0.120338   Ã‚  Ã‚  Ã‚  S.D. dependent var 3.301618 S.E. of regression 3.096597   Ã‚  Ã‚  Ã‚  Akaike info criterion 5.146035 Sum squared resid 373.9676   Ã‚  Ã‚  Ã‚  Schwarz criterion 5.229624 Log likelihood -103.4937   Ã‚  Ã‚  Ã‚  F-statistic 6.472025 Durbin-Watson stat 0.304103   Ã‚  Ã‚  Ã‚  Prob(F-statistic) 0.015033 Conclusion References Literature Ronald G. Ehrenberg, Robert S. Smith Modern Labour Economics. Theory and Public Policy Pearson International Edition, 2009, Tenth Edition Internet Sources http://www.tradingeconomics.com http://www.indexmundi.com/ http://www.statcan.gc.ca/daily-quotidien/120907/dq120907a-eng.htm Eurostat Website: http://ec.europa.eu/eurostat I have a problem with the regression of this model: I have monthly data. But when I estimate it on Eviews, the results I get are not that expected: R-squared is very small (near to zero), the standard errors are all smaller than 1. In order to estimate the model first I have done this: P=100*log(CPI), but Im not sure if is right or not. I can send the data after if this description is not enough.

The History of Intel

THE HISTORY OF INTEL The microprocessor has changed our lives in so many ways that it is difficult to recall how different things were before its invention. During the 1960’s, computers filled many rooms. Their expensive processing power was available only to a few government labs, research universities, and large corporations. Intel was founded on July 18,1968 by engineers, Gordon Moore, Robert Noyce, Andrew Grove, and Arthur Rock. Rock became Chairman, Moore was President, Noyce was Executive Vice President in charge of product development and worked with Moore on long range planning, and Grove headed manufacturing.The purpose of the new company was to design and manufacture very complex silicon chips using large-scale integration (LSI) technology. Moore and Grove’s vision was to make Intel the leader in developing even more powerful microprocessors and to make Intel-designed chips the industry standard in powering personal computers. Moore and Noyce wanted to seek In tel because they wanted to regain the satisfaction of research and development in a small growing company.Although the production of memory chips was starting to become a commodity business in the late 1960’s, Moore and Noyce believed they could produce chip versions of their own design that would perform more functions at less cost for the customer and thus offer a premium price. Intel’s unique challenge was to make semiconductor memory functional. Semiconductor memory is smaller in size, provides great performance, and reduces energy consumption. This first started when Japanese manufacturer Busicom asked Intel to design a set of chips for a family of high-performance programming calculators.Intel’s engineer, Ted Hoff, rejected the proposal and instead designed a   Single-chip, a logic device that retrieved its application instruction from semiconductor memory. Buying Back the Cash There was a problem with this new chip Busicom owned it. Intel was convinced to repurchase the rights to the product. Intel then offered to return Busicon’s $60,000 investment in exchange for the rights of the product. The Japanese agreed after struggling with the financial troubles. The Microprocessor Hits the Market Intel’s first microprocessor, the 4004, was introduced in 1971.This $200 chip delivered as much computing power as the first electronic computer, the ENIAC. After the 4004, Intel introduced the 8008 microcomputer, which processed eight bits of information at a time. The 4004 and 8008 began to open new markets for Intel products. Today, affordable computing power is available to designers of all types of products, producing creativity and innovation. Turning Point: IBM PC In 1981, Intel microprocessor family had grown to include the 16-bit 8086 and the 8-bit 8088 processors. These two chips created 2,500 winning designs in the year.A product from IBM was one of those designs, which became the first PC. Intel was convinced IBM to ch oose the 8088 as the brains of its first PC. Because of IBM’s intelligent decision, the PC business grew to tens of millions of units every year. In 1982, Intel introduced the 286 chip. It contained 134,000 transistors and provided 3 times the performance of other 16-bit processors during the time. The 286 were the first microprocessor that offered software compatibility with its predecessors. The Microprocessor Machine In 1985, the Intel 386 hit the market.The 386 could perform more than five million instructions every second. Compaq’s DESKPRO 386 was the first PC based on the new microprocessor. In 1989, Intel 486 processor was ready to hit the market. This new chip resulted in 1. 2 million transistors and the first built-in math coprocessor. This chip was faster than the original 4004. In 1993, Intel introduced the Pentium processor, which set new performance standards with up to five times the performance of the Intel 486 processor. The Pentium processor uses 3. 1 million transistors to perform up to 90 MIPS, about 1,500 times the speed of the original 4004.In 1995, Intel’s first processor in the P6 family, the Pentium Pro processor, was introduced. It included 5. 5 million transistors and contained a high-speed memory cache to accelerate performance. The Pentium Pro processor was a popular choice for multiprocessor sewers and high performance workstations. Intel introduced the Pentium II processor in May 1997. It contains 7. 5 million transistors packed into a unique Single Edge Contact Cartridge and delivers high performance. Intel offers Pentium II processors for Mobil PC, carrying new levels of performance and computer capabilities. In April 1998,Intel introduced the Celeron processor. This is the latest Intel processor created to meet the computing needs of Basic PC users. Intel’s recent introduction is the Pentium II Xeon processor. This is the newest addition to Intel’s Pentium II brand. It is Intel’s first microprocessor designed for mid and higher server workstation platforms. The company’s success in memory chips was built from the resources involved in working on projects to design and develop the world’s best microprocessor. INTEL’S STRATEGY Intel's primary business into the mid 1980s was memory chips, which accounted for 70 percent of revenues.In 1985 and 1986, Intel closed eight memory chip plants. They were fighting a never winning battle with the Japanese produces of memory chips. Gordon Moore and Andrew Grove refocused the company on advancing the technology of microprocessors. Intel decided to create a new vision and strategy for the company. Their vision was to make Intel-designed chips the industry standard in powering personal computers. Intel supplies the computing industry with chips, boards, systems, and software. Intel's products are used as â€Å"building blocks† to create advanced computing systems for PC users.Intel's mission is to be th e preeminent building block supplier to the new computing industry worldwide. Intel has several objectives in order to pursue their vision. The objectives include PC and server management advances through new Intel hardware and software products, alliances with other industry leaders, education and development programs, and industry standards efforts. Most importantly, Intel's greatest objective was making the PC an indispensable and persuasive appliance, which would ultimately compete with the TV, VCR, and telephone.Andy Grove crafted a series of strategies in order to reach Intel's objectives: 1. Introduce innovative products quickly. Andy Grove's vision of making the PC tomorrow's information appliance required the company to do more than be a leader in advancing microprocessors. Intel tries to bring innovative products to the market as quickly as possible. In 1995, Intel introduced the new high-end Pentium Pro processor. This came less than three years after the introduction of the Pentium processor, which is now the processor of choice in the mainstream PC market.Together, these products provide computer buyers with a wide spectrum of computing choices. Due to the growing popularity of the Internet, Intel programmers developed a software product called Streaming Media Viewer that software developers could incorporate into their products and allow users to view video as it arrived from the World Wide Web. Also, Intel developed hardware based cryptographic technology that provided increased levels of security for data communicated over the Internet. Intel's strategy of bringing innovative products to the market quickly has proven to be costly.In 1996, Intel spent $500 million on R&D projects to develop products (other than microprocessors). Even though other producers were using joint ventures to build the extremely expensive fabrication plants, Intel chose to go alone. Beyond their primary task of making microprocessors, Intel invests in a range of computi ng and communications applications that support their core business. Intel's supercomputer and network server efforts take advantage of the flexibility and power of Intel architecture, while their flash memory business supports booming communications applications, such as, cellular phones.Intel executives saw the future PCs equipped with new features, such as, digital video, stereo sound, 3-D graphics, fax, and data communications. Intel decided to add these features into its next generation microprocessors. Intel decided to compete with the Taiwanese computer industry. They felt that the Taiwanese were too slow to adapt their products to the latest Intel innovations. By producing motherboards, it would enable Intel engineers to integrate new functions. 2. Promote the Intel brand. Intel invests in education and marketing programs that describe the benefits of genuine Intel technology.In 1990, Intel initiated a marketing program to build the Intel brand and make PC users aware of the benefits of genuine technology and products. Intel asked PC makers to put the Intel logo on their machines. The company also sponsored television and print advertising campaigns stressing that by choosing an Intel-based PC, users got the ultimate in quality, reliability, software computability, and value. The marketing program was a success and had become a prominent element in Intel's strategy ever since.Not only did Intel continue to sustain its dominant market share, but also customer feedback revealed that PC buyers, not just computer techies, really cared about their computer's chip and performance capabilities. Instead of assigning its two new chip generations numbers like 286, 386, and 486 chip generations, Intel named them Pentium and Pentium Pro. This helped Intel build their brand name by allowing PC buyers to become familiarized with their products. Experts believed that Intel was spending over $100 million annually on promoting their name among consumers. . Alliances wi th other industry leaders. The breakup of the old computer industry is what gave Intel its chance and made the mass-produced computer possible. The old computer industry was vertically aligned. Industries used to build their computers from bottom up. Now, these companies purchase products from other industries to build their computers. Because PCs contained components from so many different vendors, Grove believed industry participants in different horizontal specialties had to develop new products in parallel.Intel works with other industry leaders to develop new PC technologies, such as the PCI â€Å"bus†, which has been widely adopted. This technology removes bottlenecks to provide greatly enhanced capabilities. They incorporate their chips into PC building blocks, such as, PC motherboards, to help computer manufacturers bring their products to the market faster. Intel also works closely with software developers to create rich applications, such as, PC video conferencing a nd animated 3D Web sites, that make the most of the power of Intel processors. Also, Intel is working with the U. S.Department of Energy to build the world's fastest computer supercomputers. As Intel introduced new generations of microprocessors, it was beneficial for Microsoft and other developers of operating systems and software to be ready to go to market with new software systems and products that capitalized on the speed of Intel's new processors. Andy Grove and Bill Gates began meeting in the 1980s to explore how their organizations can share information. Intel believes that if computers work better, do more, and are easier to use, more PCs will be sold and more Intel processors will be needed.As with any other strategy, it is necessary to evaluate performance and initiate adjustments in vision, long term direction, objectives, strategy, or implementation in the occurrence of changing conditions, new ideas, and new opportunities. For example, in 1994, a mathematics professor found a flaw in how Intel's new Pentium chip did division in certain situations. The media got a hold of this and there was negative publicity about Intel floating around. Intel explained to its consumers that the chances of this happening were minute. Intel admitted the flaw, but Andy Grove felt that it shouldn't concern nyone except the most demanding scientists. Intel wanted to stand behind there â€Å"Intel Inside† campaign, so they had to reevaluate their strategy. Within days of the incident, Intel offered all owners of Pentium based computers a free replacement of their Pentium chip and took a $475 million write off to cover the costs. Even though it was considered a disaster, only a few owners took a replacement chip. Intel focuses on being a best-cost provider. Their strategic target is the value conscious buyer. They want to give customers more value for their money.Intel's product line carries good-to-excellent attributes, several to many upscale features at low co st to the PC buyer. Overall, their focused strategies have kept them on the right track. However, Intel continues to attract competition, both from makers of software-compatible microprocessors and from makers of alternative-architecture chips. SWOT ANALYSIS To provide a good overview of Intel’s business position and whether it is healthy or unhealthy, a SWOT analysis was conducted. This analysis will show if there is a good fit between Intel’s resource capability and its external situation.STRENGTHS Intel is one of the most profitable companies in the world. It is a leader in its industry with over 80 percent of the world’s 250 million personal computers powered by Intel microprocessors and over 90 percent of all new PCs currently being assembled with â€Å"Intel Inside†. Intel is a recognized market leader with an attractive customer base and a good reputation of creating an advanced quality product. Some of Intel’s strengths are its financial co ndition, brand-name image, good management skills and technical expertise. Financial ConditionOne of Intel’s major strengths is the ability to fund for research & development. The company has a high degree of profitability, cash flows from depreciation, and low dividend payout. Therefore, Intel can provide the financial resources and use their financial strength to fund the capital requirements associated with refurbishing existing plants and building new ones. Intel’s strategy to maintain a leader status in the industry and to accommodate expected demand is necessary for them to stay ahead of competitors by producing more advanced products and building new plants or refurbishing existing plants.In recent years, Intel has built a new fabrication plant about every 9 months and announced that its goal is to reduce that to every 6 months. Also, for the past 6 years, it has led the semiconductor industry in new capital investments. Brand Name Image In 1990, Intel initiated a marketing program to build the Intel brand and show PC users the benefits of Intel technology and products. The reason for the program was to increase sales of the Intel brand and lower sales of AMD’s cloned microprocessors. Their marketing strategy was to ask PC makers to put a distinctive â€Å"Intel Inside† sticker on their machines.They also sponsored television and print advertising campaigns promoting that an Intel-based PC provided customers with ultimate quality, reliability, software compatibility, and value. This was a major success and created a good brand name image for Intel. Management Skills and Technical Expertise Talented and skilled individuals from the beginning managed Intel. They had the expertise to manage Intel by choosing the right individuals that had the technological know-how to bring it to the top. Intel’s skill and expertise proved to be a strength back in 1985 when Intel’s primary business was the memory chip.Japanese comp etitors started producing and marketing their memory chips at lower costs than Intel. However, Intel had the skills and expertise to abandon the memory chip business and put their full energies into a secondary microprocessor business. They wanted to become leaders of the industry and they proved that they knew what needed to be done to accomplish their vision. WEAKNESSES Diversity Intel is one of the most successful companies and it is hard to find a weakness in such an established firm. Intel is known for its strengths, competencies, and capabilities. However, one of Intel’s weaknesses is the focus on primarily microprocessors.The diversification of companies into other industries allows them to be less risky in case a rival developed a better product. For example, Microsoft is expanding into the Internet business to become more diversified. America Online and Netscape are merging to enhance their core business. Intel could become even more successful if it were to diversif y into other industries. The company can be in grave danger if another firm was to rise to the top with the manufacturing of microprocessors or if technology promoted a more efficient product than the microprocessor. Leadership After GrovesAndrew Groves has been the backbone of Intel for many years. Under Grove, Intel was very aggressive in protecting its technology. He is a hands-on manager whose high level of involvement and attention to detail inspired and intimidated subordinates. A big part of Intel’s success is Groves’ leadership style, competitive ability, and innovative mind set. Eventually, Groves will retire and the question will be what will happen to Intel? Will Groves’ successor lead Intel to remain on top. Andrew Groves has proved to be an excellent leader, but the leadership after him is questionable. OPPORTUNITIESMarket opportunity is a big factor for shaping Intel’s strategy. Intel is equipped with the right resources and has the capabili ty to pursue many opportunities that exist. The company’s innovation has helped build alliances to expand the firm’s market coverage and competitive capability. Intel also has the ability to grow rapidly because of strong increases in market demand. Innovation Andrew Groves has a vision of the PC as tomorrow’s information appliance. He wants to have televisions, VCRs, game players, cable boxes, and telephones to be pushed to the background and bring PCs to be in the spotlight.Groves does not want to just lead in advancing the microprocessor, he wants to fully utilize the capability of the microprocessor and introduce a number of PC-based communications products to meet the broad range of consumer needs. Some of the products that Intel has available are chip products used for keyboards, printers, copiers, and fax machines. These chip products are used to enhance cellular phones, pagers, digital cameras, and personal digital assistants. Intel is also manufacturing universal Serial Bus- single type of connector to attach printers, modems, CD-ROM drives, and other peripherals.Other innovative products include Intercast plug-in cards, a ProShare line of conferencing products,   And an I960 RP processor. Intel has a software lab in Shanghai developing multimedia and 3-D content in Chinese. They have created software to help popularize long-distance telephone calls on the Internet and a hardware-based cryptographic technology that provides levels of security for data communicated over the Internet. Intel is introducing new products and technologies on a weekly, sometimes daily, basis. They are gradually increasing their R&D budget to look for valuable ways to broaden their product line.Their reputation for innovation is among the best in the U. S. In fact, Intel was ranked third for its innovation in 1997. Strategic Alliances Alliances expand the firm’s market coverage and competitive capabilities. It is essential that Intel develop a cl ose relationship with other PC component producers, manufacturers, software developers, cable TV companies, media and telecommunications companies, and entertainment companies. Before the mid-1980s the structure of the old computer industry was aligned vertically, in which each company sold their products based on their own proprietary technology.They designed and built their computers themselves. Buyers had to commit to the whole package of one manufacturer. Since then, the computer industry is growing horizontally. Each product depends on another product. This is why it is important to collaborate with others. Products within each horizontal specialty should be compatible with other specialty products to make a powerful PC or other PC-based product. Growth Intel has the ability to grow rapidly because of strong increases in market demand. The process of making PCs has changed with that of the past. Only a few PC makers produced the components inside of the PCs.Therefore, the deman d for Intel’s products increased. Intel had the ability to grow rapidly because it responded quickly to market demand and had the capital and expertise to develop advanced powerful products faster than competitors. THREATS Looking at Intel’s external environment, there are some factors that create a threat to the company. Some of the threats Intel is facing are competition, slowdowns in market growth, and the bargaining power of consumers. Competition In 1997, Advanced Micro Devices (AMD) and Cyrix were the two major competitors that challenged Intel by cloning Intel’s microprocessors and marketing them at lower prices.This created a major threat to Intel’s market share. A third competitor was developed by the partnership among Motorola, IBM, and Apple Computer. They were producing and marketing Power PC chips for Apple’s line of PCs and certain IBM PCs. For example, the Power PC offered a reduced instruction-set computing (RISC) processor which ha d a simpler instruction set and higher computing speeds than Intel’s chips. This was an attractive feature for the end user, which also threatened Intel’s market share. The competitors mentioned above are just three of the major companies that are a threat to Intel.There is also the possibility of other companies making a technological breakthrough by developing a more powerful and cheaper product that will outlive Intel. For such reasons, Intel has to be innovative and ready for any possible external threat. Slowdown in Market Growth Intel is always planning ahead of things. They refurbish or build plants two years before the new product ever is produced. This could be considered an advantage or disadvantage. It is an advantage to Intel because they are constantly developing technologically advanced and more powerful products, which allows them to compete and be a leader of the industry.However, the major disadvantage is the possibility of the PC market slowing down. Intel could be hurt tremendously if the market growth slows down because they have already planned ahead and invested a lot of capital into the plants. Bargaining Power of the Consumer Cost pressures are also a threat to Intel. Consumers are demanding lower prices on products or higher quality for the prices they are paying. If a consumer can get the same product at a lower price from competitors, it can be a major threat to the company.Intel can influence bargaining power of the consumer by making sure the prices are low based on cost efficiency and the quality is maintained. The SWOT analysis provided the opportunity to view the company’s overall position. An evaluation of Intel’s strengths, weaknesses, opportunities, and threats support the fact that above all Intel has established a healthy position in the industry. TESTS OF A WINNING STRATEGY Test 1: Goodness of Fit The goodness of fit test determines if a company’s strategy is suitable for its internal and external situation in order to obtain market success.Intel is a member of the technology sector and in the semiconductor industry. Firms involved with technology must deal with the quick obsolescence that is inherent when dealing with computers. An example of this is Moore’s Law coined after Gordon Moore, Intel’s founder, who truthfully stated that â€Å"the power and complexity of silicon chips would double every year with proportionate decreases in cost†. This external environmental situation causes two problems for companies in the industry. One problem is that a company must constantly innovate to stay on top and secondly, the company will need capital in order to create new technology.Does Intel’s strategy adequately deal with the constant change that is prevalent in its business environment? The Intel’s strategy is to cannibalize its own products. In other words Intel strives to make its own products obsolete. A Company’s profits and market position can be severely undermined if another company offers a faster chip with more capabilities. Intel is able to do this because of its internal situation. Intel has vast amounts of capital, â€Å"†¦a ‘war chest’ of about $10 billion†. This is useful when the average plant costs will be about $2. 5 billion dollars around the year 2000.Test 2: Competitive Advantage Test The competitive advantage test ascertains if a company’s strategy leads it to have a sustainable competitive advantage over its rivals. The competitive advantages that Intel has are its brand image and research prowess. Intel’s brand name is a competitive advantage because it helps keep the sale of silicon chip clones from rivals down so that these companies do not erode Intel’s profitability and market share. If a company had a clone of equal performance, it would be easier for consumers to switch over if not for the power of brand name and awareness that keeps customers loyal.The strategy that Intel has is to increase the awareness and preference for its products. Research prowess is a competitive advantage for Intel. It has large amounts of capital compared to its competitors. For example, next year Intel will spend $3 billion on research and development, â€Å"which is more than AMD generated in sales in 1998†. Intel continues to produce innovative products faster than its rivals do in order to receive the lion’s share of profits so as to keep itself able to acquire the capital to produce these innovations. Test 3: Performance TestThe performance test ascertains if the company’s strategy is helping the company become profitable and help obtain long-term market position. Located in the Appendix are several profitability ratios for Intel from 1983 until 1998. In Appendix A-E are graphs representing this data? In Appendix F are the actual numerical data. After 1986 is when Intel changed its strategy to what it is pres ently. The data used to compute these ratios was from the Intel case in Strickland and Thompson’s Strategic Management 10th Edition. The 1997 and 1998 were compiled from data obtained from Intel’s homepage located at http://www. ntel. com. Appendix A shows the gross profit margin. The gross profit margin has, since 1986, been steadily increasing and since 1990, has remained above fifty percent. This profitability ratio shows the amount of money that remains after making a product that is available for the company to utilize. This shows that the company is strong in this aspect. Operating profit margin is shown in Appendix B. This shows the profit of the company prior to interest payments and taxes taken out. The ratio was negative for the years 1985 and 1986. After 1986, the operating profit margin has been strong reaching a peak of 39. 4% in 1997. Appendix C displays the net profit margin, which is the profit the company realizes. After posting a loss in 1986, the net profit margin of Intel has steadily improved and strengthened. Since 1990, Intel has been positing profits higher than fifteen percent. It reached a profit peak in 1997 with a net profit margin of 27. 7%. Intel has at the present time has a dominant 75. 7 % market share. This is a dominant position since its next closest rival, Advanced Micro Devices (AMD), has merely fifteen and one-half percent of the market share. Its other competitor Cyrix has only 5. 6%.This data is represented in pie chart form in Appendix G. The data has shown that Intel’s strategy has successfully completed all of the tests and is thus a winning strategy. Its present strategy is allowing it to respond to the business environment and maintain its competitive advantages while raking in profits. Andy Grove’s Performance as CEO It is imperative to acknowledge Gordon Moore, his mentor, before discussing the performance of Andy Grove. Gordon helped to set the Intel culture as being one of low bureau cracy and set the standard of holding one-on-one meetings with his subordinates in order to help the flow of information.Moore has is own ‘law’ which stated that the power and complexity of the chip would double every eighteen months with proportional decreases in costs. This helped Intel from the onset set its sights on innovation and being a leader. Appendix F shows the numerical numbers for the return on stockholders’ equity (ROE) and return on assets (ROA). Appendix D and E show their values graphically. These ratios are used to gauge how effective management is. Andy Grove became President in 1979 and was given more total control in 1987 when Gordon Moore served only as chairman.To adequately ascertain how well Andy Grove has been as CEO, an examination of the following these ratios are necessary. The ROE since 1987 has been strong with most years above twenty-percent as displayed in Appendix D. The highest value being in 1997 with 35. 99%. This ratio is put into perspective when one compares the ROE with that of the industry. The ROE-to-Industry ratio taken from Daily Stocks website which is 131. 4%. The ROA since 1987 has also been steadily increasing into the teens and lower twenty’s. The ROA-to-Industry for Intel is large 140. 4% from Daily Stocks website.This analysis shows that Andy Grove has done a superb job at Intel. Other factors concerning Andy Grove speak well of his performance as the CEO of Intel. His views have permeated into the corporate culture of Intel and have helped it become the dominant force in its industry. The strategy-making style that Grove uses is that of a master strategist. The master strategist exerts strong influence over the strategy of the company. Andy Grove’s own view, which is his ‘law’, of â€Å"only the paranoid survive† has helped keep Intel on its toes and looking ahead to what is happening.This is shown by the fact that Intel builds factories years before they are needed in order to stay on top of the market. Andy Grove’s leadership has helped Intel not fall into the pitfall of becoming stagnated by its own success. The shortcoming that Andy Grove has in being a manager is he is too good. As stated in the SWOT analysis, Andy Grove’s permanent retirement from Intel could set the company floundering unless the company finds someone as well qualified and with an analogous approach to management style. INDUSTRY ANALYSIS The U. S. icroprocessor industry comprises of more than 100 companies that design, manufacture, and market semiconductors to original equipment manufacturers and personal computer end users. The following information is a profile of the dominant economic characteristics of the microprocessor industry. Market Size: $300-$350 billion worldwide consumption. Scope of Competitive Rivalry: Global. Market Growth Rate: 15-20 percent annually. Stage in Life Cycle: Rapid growth and takeoff. Number of Companies in Industry : About 174 companies. Customers: 80 million microprocessors for use in PCs and network servers.Degree of Vertical Integration: Mixed; forward and backward integration. Ease of Entry/Exit: High entry barriers in the form of capital requirements. Technology/Innovation: Rapid technological changes microprocessor production. Product Characteristics: Highly standardized. Scale Economies: Companies can realize economies of scale. Learning and Experience Effects: Strong. Capacity Utilization: Manufacturing efficiency is higher when capacity is increased. Industry Profitability: Above par. 1995 Industry Usage 1997 Industry Usage Error! Not a valid embedded object.The two pie charts above display the industry usage in 1995 and 1997. As shown, the computer sector is the main user of the microprocessor. Within two years, the computer sector increased its usage by 11% and is expected to continue increasing over the next several years. Computers are the main focus in the microprocessor industry , which is why many rivals are competing for market share in that sector. THE FIVE FORCES MODEL OF COMPETITION Rivalry among competing manufacturers in this industry is a strong force of competition. It is focused on such factors as performance features, new product innovation, quality, and brand image.New product innovation plays a major role in the microprocessor industry because it determines the intensity of rivalry among competing firms. Companies are trying to gain better market position and competitive advantage. Threat of potential entry is a weak force due to the fact that it is hard for a newcomer to break into the market. Moreover, economic factors put a potential entrant at a great disadvantage because of the learning and experience curve effects. The existing microprocessor companies have advantageous positions in the industry from the experience they have gained from being in the industry longer than new entrants have.Leaders of the industry, like Intel, have verticall y integrated their manufacturing to make products at low efficient costs that entrants would not be able to compete and be exposed to fierce competition. Other entry barriers are economies of scale, brand preferences and resource requirements. Competition from substitutes is a weak force because there are no substitutes in the industry. The microprocessor is needed to manufacture many types of equipment, such as, TV sets, VCR’s, cameras, wristwatches, kitchen appliances, mobile phones, and stereo equipment.There is no other product that can be used in place of the microprocessor. Power of suppliers is moderate. Some companies rely on suppliers to supply a component more cheaply than industry members can make themselves. This can increase their leveraging power. However, suppliers also tend to have less leverage to bargain over price and other terms of a sale because the industry they are supplying is a major customer. A microprocessor company usually orders in large quantitie s, which in turn decreases suppliers leverage. Also, major companies are integrating backwards to self-manufacture the component.Backward integration allows companies to negotiate favorable terms with suppliers. Power of customers is a strong force in the industry primarily because buyers are large and purchase much of the industry’s output. Purchasing in large quantities gives a buyer enough leverage to obtain price concessions and other favorable terms. For instance, PC makers have a substantial bargaining leverage when deciding to use Intel’s chips in their computers. International Competitiveness Due to fierce international competition, the microelectronics industry has become highly globalized. To compete effectively, U. S. icroelectronics suppliers must sell to all domestic and foreign markets. The profit margins for certain products are so slim that only through international sales can a supplier generate profits adequate to remain in business. Survival in this highly international industry requires microelectronics manufacturers to be first to market with leading-edge products that focus on high-end technology. Only those suppliers who introduce the breakthrough products can maintain profit margins that will support research, development, and the purchase of new equipment for manufacturing the next generation product. COMPETITOR ANALYSISIntel's rivals: Advanced Micro Devices, Cyrix Corporation, Motorola, IBM, Apple Computer, and the Power PC are favorably positioned, but not in the same leading position as Intel. Intel dominates the computer industry. Intel works closely with alliances to introduce many innovative products that give them a leading edge over their rivals. Intel’s products are distinguished from their competitors, which make it difficult to clone. In 1997, Intel's two biggest competitors were Advanced Micro Devices (AMD) and Cyrix, both of which made â€Å"Intel-clone† microprocessors and marketed them at pric es below those charged by Intel.A partnership among Motorola, IBM, and Apple Computer to produce and market Power PC chips for Apple's line of PCs and for certain IBM PCs represented a third competitor. Sun Microsystems was a fourth competitor, producing and marketing a microprocessor line that competed against Intel chips in a limited number of computing applications. These competitors can possibly take some of the market share away from Intel. Therefore, Intel needs to maintain market dominance by continuing to make a high quality microprocessor with process technology improvements.These factors will help Intel stay ahead of their competitors. Advanced Micro Devices (AMD) had carved out a niche providing less expensive microprocessors than Intel's mainstream offerings. AMD, confident that NexGen had strong technology despite its low sales, promptly scrapped its own design for a chip to compete with Intel's Pentium Pro in favor of a design (subsequently named K6) that NexGen had un der development. Whereas previous generations of AMD chips had been clones of Intel's designs, AMD and NexGen engineers had designed the K5 and K6 from scratch.AMD hoped that its K6 chip would be an attractive alternative to Intel's higher-priced Pentium Pro chip. AMD was planning to introduce 180, 200and 233 MHz versions of its K6 chip during 1997 and a 300 MHz version was the plans for 1998. AMD expected that 5 of the top 10 PC manufacturers would be using the K6 in some of their models during 1997; analysts projected that AMD could sell up to 5 million K6 chips in 1997. The K6 was expected to sell for about 25% less than Intel's Pentium   Pro chips. IBM and Compaq announced in 1997 that they would use AMD's K6 processors in their low-end machines.During the first three weeks of September, nearly half of all the desktop computers sold through retailers used the AMD K6 microprocessor, according to market researcher PC Data Inc. That is a dramatic improvement from last year when 9 2% of those same machines had Intel chips inside. Today, only 43% of retail PCs sold use Intel. Industry analysts expected Cyrix to be more successful in marketing its M2 against Intel's MMX Pentium in the price-sensitive home computer and notebook segments. The stigma of a non-Intel chip posed a high barrier for Cyrix to hurdle in, penetrating the high-end desktop and notebook segments.Motorola, Apple, and IBM initiated a partnership in 1991 to develop the Power PC chip as an alternative to Intel chips. After production delays and disagreements over design, IBM and Apple finally agreed to a common design in 1995. The Power PC along with Sun Microsystems' UltraSPARC chip was a reduced instruction-set computing (RISC) processor, whereas, Intel, AMD, and Cyrix chips were complex instruction-set computing (CISC) processors. Chips incorporating RISC designs used simpler instruction sets to achieve higher computing speeds than CISC processors. Also, RISC designs had better floating-point performance.KEY SUCCESS FACTORS Technology-Related KSFs Intel has many key success factors that helped it prosper in the market place. Intel has product innovation capability and the funds available to invest in research and development. Intel's reputation for innovation was among the best of any U. S. company, it ranked third on innovation among all U. S. companies. Besides investing in R&D, Intel had to gut and refurbish its existing fabrication plants every three years to produce the new chips and sometimes build a new plant to accommodate the expected   demand.Year after year, building new plants became very expensive because they used exotic tools and equipment to etch finer and finer lines on a silicon chip. Finer etching also required more labor and production time. Intel estimated that each succeeding generation of microprocessors required more than twice the capital and manufacturing capacity for production. Intel intended to be among the handful of chip producers that c ould afford to build top-of-the-line chip fabrication plants. Manufacturing-Related KSFs Intel has the flexibility to manufacture a range of models and sizes.Besides the products already in the market, it has additional products in various stages of development. For instance, Intel has a segmented brand including the Celeron, Pentium II, and Merced chip which is expected to be available in 2000. Distribution-Related KSFs Intel works closely and distributes to PC component producers, PC manufacturers, software developers, cable TV companies, media and telecommunications companies, entertainment companies, and information-communications appliance for both the home and the workplace.Intel is involved with Microsoft, Pointcast, America Online, IBM, Cisco Systems, and others to develop and promote Internet software. Marketing-Related KSFs To diminish the sales of clones of Intel microprocessors marketed by AMD, Cyrix, and others, Intel initiated a marketing program in 1990 to build the I ntel brand and make PC users aware of the benefits of genuine Intel technology and products. Intel asked PC makers to put a distinctive â€Å"Intel Inside† sticker on their machines. Manufacturers who used Intel microprocessors in their PCs also used the logo on their packaging and in their ads and brochures.The company also sponsored many television and print advertising campaigns to promote the Intel’s brand name image. Skills-Related KSFs Intel has the ability to develop innovative products and product improvements. Also, it has the ability to get newly conceived products past the R&D phase and out into the market very quickly. They are always ahead of their competitors and always find new ways to improve their product. Intel’s team consists of many experienced employees using top of the line technologies. Organizational CapabilityIntel has the ability to respond quickly to shifting market conditions and customer needs because of its many years of experience and the ability to invest in R&D. Andy Grove’s management style also plays a major role in organizational capability. His concern for the flow of information helped instill Intel’s corporate culture and allows every employee to contribute to the company. INDUSTRY PROSPECTS AND OVERALL ATTRACTIVENESS The factors that make the industry attractive are the large use of computers at home, work, libraries, coffee shops, and bookstores. Computers allow easy access to Internet, e-mail, and research.PC’s use up-to-date technology, which makes life easier and daily tasks simpler. The fastest growth was expected to occur in Asia outside Japan, where use of PCs was still relatively limited and where the market potential was largely untapped. The Chinese market was the largest in the Asia-Pacific region (with projected growth of 25-35 percent annually over the next several years), followed in order by Korea and Japan. Also, PC sales in Europe were expected to grow 8% annuall y. The profit outlook seems favorable because a computer at home or work will be a necessity.The factors’ making the industry unattractive was that Intel was producing new products too quick for the market to catch up. New developments were occurring at such a fast and furious pace that the end result was unpredictable. There was a lot of competition going on. The Internet was central to most of the forthcoming developments in information technology. This is the reason why Intel is mainly focused on the computer sector. As Andy Grove put it, â€Å"The Internet is like a 20-foot tidal wave coming thousands of miles across the Pacific, and we are in kayaks. It’s†¦ gaining momentum, and its going to lift you and drop you.It affects everybody†¦the computer industry, telecommunications, the media, chipmakers, and the software world. † FUTURE PROSPECTS Their commitment to R&D creates future generations of products and the manufacturing processes they use to make them, while their capital expenditures ensure the availability of state-of-the-art factories that allow them to deliver high-volume, high-performance microprocessors efficiently. Looking into the future, they will continue to manufacture quality microprocessors that will live up to the Intel name and strive towards perfecting their existing ones.