The purchase decision of automobiles in Malaysia

Literature reappraisal is description of the literature relevant to a peculiar subject or field. Literature reappraisal seeks to depict, measure, sum up and clear up the content of the relevant subject. It is done in order to give a clearer image and information in the current research survey. In this chapter, the literature reappraisal will capture the past findings like information, thoughts, informations, and grounds that written from a peculiar point of view to carry through certain purpose or express certain positions to back up the current survey.

Sellers need to understand more in deepness on the factors that may pull and act upon consumer when they have a desire to buy a merchandise so they can construct strong and long relationship with client. When it comes to buy a auto, there are many factors and component that might act upon and impact buying determination. In this chapter there are some findings and statements from the research workers.

2.1 Transportation system

Basically transit is any device used to travel points and riders from one location to another. The procedure of traveling and transporting points or peoples from point A to point B. Common transit can be found include planes, trains, cars and two-wheel devices such as bikes or bikes. Manners of conveyance include route, H2O, air, rail, overseas telegram, grapevine and infinite. Conveyance may be public and private determine by the use. Private conveyance is merely capable to the proprietor of the vehicle, who operates the vehicles themselves and public conveyance operations is done through private endeavor or by authorities.

In the facet of economic, conveyance is a necessity for specialisation. Throughout the history, conveyance has been a goad to enlargement. It allows more trade and wider spread of people. Economic growing has ever been dependent on increasing the capacity and reason of conveyance ( Stopford, 1997 ) . Transportation system helps do civilisation possible and without it, there could be no trade, without trade there could be no metropoliss and towns.

2.2 Car

An car or auto is a wheeled vehicle that carries its ain motor and conveyance riders. The car was non invented in a individual twenty-four hours by a individual discoverer. The history of the car reflects an development that took topographic point worldwide. History of car get downing with the first steam, electrical and gasoline-engine autos. In 1780s in Russia, Ivan Kulibin started working on human-pedaled passenger car with a steam engine. He finished working on it in 1791 with its characteristics included flywheel, brake, gear box, and bearing which are besides the characteristics of a modern car. His design had three wheels and the Czarist authorities unable to see the possible market and there was small private development, therefore the vehicle was non developed farther.

The steam powered vehicles in the early phase were so heavy that they were merely practical on a absolutely level surface every bit strong as Fe. The ulterior steam vehicle got bigger and heavier and they finally capable of drawing a train of many autos filled with cargo and riders. The first car patent in the United provinces was granted to Oliver Evans in 1798 and Evans demonstrated his first successful automotive vehicle. His steam-powered vehicles was able to go on wheels on land.

The first passenger car sized car was invented in 1871 powered by steam in the United States. The car was invented by Dr.J.W. Car Hart, a curate of the Methodist Episcopal Church, in Racine, Wisconsin. They stipulated that the vehicle would able to keep an mean velocity of more than five stat mis per hr over a 200mile class. Steam engines powered by firing fuel that heated H2O in a boiler, making steam that expanded and pushed Pistons that turned the crankshaft, which turned the wheels. At at that place, Steam auto development continued, taking to important progresss by the early 1900s.

In 1928, a Magyar name Anyos Jedlik who invented an early type of electric motor, created a little theoretical account auto powered by his new motor. In 1834, Vermont blacksmith Thomas Davenport, the discoverer of the first American DC electrical motor, installed his motor in a little theoretical account auto. A German name Karl Benz built his first car in 1885 with gasoline-powered internal burning engines. Benz was granted a patent for his car on 29 January 1886 and began the first production car in 1888. By 1900, it was possible to speak about a national automotive industry in many states. Throughout the veteran auto epoch, cars were seen as more of a freshness than a genuinely utile device. Breakdowns were frequent, fuel was hard to obtain, route suited for going were limited and rapid invention caused a year-old auto about worthless ( www.wikipedia.com )

By the 1930, most od the mechanical engineering used in today ‘s car had been invented and somethings were subsequently re-invented and credited to person else. The modern epoch is usually defined as the 25years preceeding the current twelvemonth. However, there are some proficient and design aspect that differentiate modern autos from old-timers. Without sing the hereafter of the auto, the modern epoch has been one of increasing standardisation, platform sharing, and computer-aided design.

The universe car market has been dominated by makers from developed states. Develop state maker foremost served their ain local market and so sought to exports and expand market to foreign states. In 2010, appraisal of 1billion autos and light trucks are on the route around the universe. There are about 250million vehicles in operation in the United States. In 2009, China was the biggest tendency in car gross revenues and China has become the universe ‘s largest auto market presently. All major auto makers sharply forcing their smaller, high efficiency vehicle in 2011 because of the high gasolene costs ( Phukett Research 2008, Retrieved 2010-09-09 )

Car has become the biggest transit that can be found around the Earth right now and the Numberss keep increasing. In the past decennaries, the universe auto industry has become a taking fabrication sector. The automotive market now is strongly dominated by advanced state like Western Europe, Japan, United State and South Korea. This state contributed to more than 90 % of the universe production and exports. The trade of auto exceeds 1000billion dollars with Germany, Japan, Canada entirely contribute to half of the universe exports ( United Nations, 2007 ) .Smaller emerging states besides shuting the spread with dramatic production growing rates and Malaysia is one of the state included. Many emerging states know that they can develop their ain auto, export in the universe market and vie straight with the three.

Malaysia has transformed from an agriculture-based state two decennaries ago to industrialisation. The find of gas and oil in Malaysia had further spurred the growing. The use of auto in Malaysia can be categorized into 2 groups, personal usage and concern usage. For personal usage, consumers purchase the auto for their ain usage and intent besides called terminal user. Consumers in Malaysia besides purchase auto for concern usage for illustration cab and company auto, they use auto to gain and bring forth gross in day-to-day working footing.

In 1926, the car industry began in Malaysia when Ford Motor Co of Malaya incorporated in Singapore. Then subsequently came the separation from Singapore, which upset the programs as the expected domestic market was well reduced. The authorities began treating applications for car assembly and constituents industry in the late sixtiess. The thought for a made in Malaysia auto was mooted as far back as 1980 when Dr Mahathir Mohamad ordered the Malayan Industrial Development Authority to transport out a feasibleness survey of the undertaking. Japan car manufacturer Mitsubishi works together to help Malaysia and Proton Saga was the first Malaysia auto in the market followed by Proton Wira, Iswara, Waja, Perdana, etc.

2.3 Buying determination of car

The experience having a auto is comparatively infrequent happening that constitutes one of the of import outgo. Car is lasting merchandise and when developing it, insight into what facet of the merchandise are most of import to consumer is utile. This guaranting the merchandise design fits to and communicates the facets that are of import to consumers. Of class focal point on one facet does n’t intend that other facets can be neglected. The importance of certain merchandise facets in purchasing lasting merchandise differs with demographic features, such as age, gender and societal category.

In old research, dealingss between the importance of functional and expressive merchandise facet and variables such as age, gender, societal category have been indicated ( Henry, 2002 ; Holt, 1998 ; Williams, 2002 ) . Family members may play different functions in doing determination within the household. They may lend information and they may make up one’s mind where to purchase, clip to purchase, which trade name and how to utilize the merchandise. For past research, found that household members functions played differ with respect to the merchandise being purchased, the phase in the decision-making procedure and features of households and partners ( Blech and Ceresino, 1985 ; Davis, 1976 ; Piron, 2002 ; Webster, 1995 ) . These functions may alter from clip to clip due to alterations in the environment, such as economic development, which lead to adjustment in the function construction of the decision-making procedure.

Some research worker have questioned the nature of reason in doing buying determination, emphasizing the underpinning and societal building of corporate reason. The cultural and political influences at work, and stand foring human reason in the behavioural footings ( Wensley, 1997 ; Patton, 1996 ) . One of the demographic variable is refering the influence of gender on certain merchandise facets. Henry ( 2002 ) concluded that females use less functional purchase critea than males.

Williams ( 2002 ) , who respondents indicate the importance or several standards for nine types of merchandises, found that public presentation, lastingness, dependability, manner, quality, visual aspect and etc were of import to females. Research shows that males more indicate functional point that are valued for their instrumental value as their favourite ownerships. Dittmar et Al. ( 1995 ) found that work forces tend to purchase instrumental points, while adult females tend to purchase symbolic emotional facets of ego. Females more sensitive to the colour of an electronic scanner than males, which points to the more attending to aesthetic facets. ( Smith, 1995 )

The relation of age besides an of import facet and Henry ( 2002 ) found that younger consumer usage more expressive purchase standards. Wallendorf and Arnould ( 1988 ) found that younger people focused more on hedonistic pleasances in taking their favourite objects. Older people are more sensitive to useful trade name image facets ( Hsieh et al. 2004 ) . In the other manus, Wallendorf and Arnould ( 1988 ) found older people less likely to take functional as opposed to expose points as favourite ownerships. Based on these happening conducted by research workers, they found that younger peoples are likely to pay more attending to aesthetic and symbolic merchandises than elder people. They expect older people to more toward useful facets in purchasing lasting merchandises, and will measure whether this applies to functionalities every bit good as quality and easiness of usage.

In selling and consumer scientific discipline, there is a long history of analyzing purchase determination procedure and a considerable sum of conceptual and empirical work exists associating to how consumers make determinations ( Lehto, 1997 ) . However, Moreau and Dahl ( 2005 ) stated that bulk of it has focused on understanding the ways in which consumers learn about, concept penchant for, and take among bing standard merchandise or services designed to run into their old identified demands. Branding has been capable to considerable research and argument by many research workers. Despite this involvement, there are some countries where research is limited, dated, or contradictory ( Glynn et al. , 2007 )

In the past decennaries, economic system of China has grown at an highly gait ensuing in a flourishing figure of flush and in-between category consumers. Despite the world-wide economic downswing in 2008, China ‘s appetency for high-end merchandise has shown a strong upward impulse. Germany luxury car manufacturer BMW saw gross revenues in China leap by 44 per centum in June of 2009, while United States gross revenues fell by more than 20 per centum ( Knowledge @ Wharton, 2009 ) . Consumers ‘ ingestion demands have been mostly influenced by the cultural, economical, societal and environmental factors. A lifestyle analysis position could function such a intent, as lifestyle construct provides an attack to understand consumers ‘ mundane demands and wants ( Michman and Mazze, 2009 ) .

When semen to buy a auto, consumer ever face legion determinations related to merchandise itself, its purchase and intended use. Research workers have extended considerable attempt to hold better understanding on how such determinations are framed. Among the myriad parametric quantities that influence the buying determination and ingestion of a merchandise are its state of beginning. Marketer and research workers by and large agreed that a merchandise ‘s state of beginning is really of import in consumer determination devising.

The function of consumer behavior in bettering and protecting environmental quality is of import to sustainable communities. Surveies based on study research suggest that there is a positive relationship between attitudes of the environmental concern and environmentally friendly consumer behavior ( Minton and Rose, 1997 ; Robert and Bacon 1997 ; Robert, 1996 ; Gatersleben and Steg, 2002 ) . With regard to consumer behavior, car emanations are the individual largest subscribers with about 50 per centum of personal pollution to several pollutants including C dioxide and azotic oxide.

2.2 Factors act uponing the purchase determination of car

2.2.1 Brand image

Fierce competition forces houses to follow schemes that create competitory advantage for the house. A good established trade name name is one manner of accomplishing this purpose. Firms invest to a great extent in developing a trade name and it is a really costly procedure but has high returns one time win is achieved. Brand image can be recognized as one of the nucleus country of the selling research field and many research workers have done researches based on this component.

Brand image maintain altering as the environment alterations for illustration many trade name get down up unknown and easy construct a positive trade name image through phases. Some trade name will quickly construct with their name while some may die-off and vanish in a short period of clip. A good illustration of trade name still survive and compete strongly in the market is Nike athletics wears. Research workers found that market is more of import than mills because mills may corrode off, packages become disused, merchandise will lose relevancy, but a good trade name name can last everlastingly. Brand image is established when consumers develop thoughts, outlook and feeling towards certain trade names as they learn, memorize and go accustomed to them.

Many houses do non ever invest to a great extent making a new trade name name each clip they develop a new merchandise, nevertheless a more economical scheme being used to present a new merchandise. Alternatively of giving a new trade name name to a new merchandise, an bing good known and established trade name name is extended into the new merchandise class which in other words, trade name extension is used. It is a fact that developing a new trade name requires more fund to put comparison to make a trade name extension which is what motivates houses prefer trade name extensions more than making a new trade name. The trade name is one of the most of import plus that a steadfast owns. A house with a high trade name equity achieves high perceptual experiences of the trade name by the clients, greater trueness from client, high net income border, less threaten by rivals ‘ selling actions, less monetary value medium by client, higher support of jobber, higher selling publicity effectivity, increasing licensing and trade name extension chances ( Keller, 2008, p.49 ) .

There are legion definition of the term trade name image found in the literature. The American Marketing Association ( cf.Kotler, 2000, p. 404 ) defines a trade name as a name, mark, symbol, design, or combination of them. A trade name has been seen as basically being a marketer ‘s promise to present a specific set of characteristics, benefits, and services systematically to the purchasers ( Kotler, 2000 ) . Therefore the trade name is non merely merely a name, the of import is to develop a deep set of positive associations for the trade name image. Consumer chooses trade names to have emotional benefit they believe such as prestigiousness and position.

Brand name is a name, term, design or all the above used by a house to differ themselves from their rivals. Brand image can be said as the set of association elaborated in inventive capacity of the consumer, who allows the trade name to make higher volume of gross revenues than merchandise without a trade name name ( The Marketing Science Institute ) . A good trade name image brought up by publicities and advertizements and by pass oning a well defined trade name image allows consumers to place demand satisfied by the trade name.

Thakor and Katsanis ( 1997 ) claimed that a positive trade name image can do up for a state of beginning ‘s inferior image and a merchandise holds a celebrated trade name, it can cancel consumers ‘ negative perceptual experience of that peculiar state. Brand image is of import because consumer believed and perceived that the quality and trade name name are interrelated. More research has discovers that the degree of consumer trueness, trust and purpose to buy hold relation with a good trade name image. Therefore, trade name is a manner to demo an single position and individuality and rank among their societal group. Doyle ( 1998 ) stated that successful trade names have created wealth by pulling and retaining clients as a consequence of uniting an effectual merchandise, typical individuality, and added values in the head of the consumer.

The quality of the merchandise is an of import facet when organizing a perceptual experience about the trade name. The client evaluates the trade name harmonizing to his or her perceptual experiences of quality which is sometimes more hard than really presenting high quality ( Aaker, 1990, p. 48 ) . Consumer who has strong attitudes about the quality of the trade name tend to reassign positive attitude to the merchandise. Car quality is frequently difficult to measure anterior to buy and purchasers may hold to trust on auto makers ‘ reputes and consumers ‘ reactions to autos are frequently emotional and unconscious ( Seidel et al. , 2005 ) . The reassurance, disctinctiveness, and image of an established trade name promote the sensed value of a auto. Therefore, a prestigiousness trade name is able to follow premium pricing schemes. The commercial importance of trade names is undoubtedly apparent and benefits of a great trade name include short-run addition on acknowledgment to long-run competitory advantage which translated into grosss and net incomes.

Valuing trade names is non a straightforward undertaking because there is no formal market for purchasing and selling trade names. Simon and Sullivan ( 1993 ) who extract trade name equity from the house ‘s intangible assets. Using market value of the house, this technique focuses on a advanced position and takes into history new information. Several research workers have attempted to quantify trade name equity by concentrating on the consumer position. Srivinivasan ( 1979 ) steps trade name equity by proving penchants for different primary wellness attention doctors.

Kim et Al. ( 2003 ) value trade name equity on different dimensions, which include trade name trueness, trade name consciousness, perceived quality and trade name image. The house seeks to pass on the message about a trade name is known as trade name individuality ( Aaker, 1991, 1996 ) . This communicating is undertaken via the merchandise, the trade name name, symbols, logo, historical roots, trade name ‘s Godhead and advestising ( Kapferer, 1998 ) . However, the message that a steadfast seeks can be different to what consumer perceives, which referred to as the trade name image. Buyer may presume or anticipate a thing about a house without any nonsubjective grounds and they will keep an sentiment ( Hague and Jackson, 1994 ) .

A trade name that is established and has the backing of consumers is said to possess trade name trueness. Brand trueness can be defined as a strongly motivated and long standing determination to purhase a merchandise or service to the extent that purchasers become loyal to a specific trade name ( Dibb et al. , 2001, p. 271 ) . It can be highly advantageous to the marketer because they require much cheaper cost to retain clients than attract new 1s.

Buying a new auto is considered a large investing and concluding determination is normally made after careful consideration. The car market consists of several car-type section, for illustration mini auto, saloon autos, and athletics auto. This market construction allows auto shapers to function better to their clients, as different auto types match with different client demands. Brands names convey informations about assorted facet of a merchandise that are hard to quantify such as repute, position and heritage. This is peculiarly so in the auto market where trade name names play a traditionally of import function in purchase determination for assorted grounds.

2.2.2 Lifestyle

A successful concern operation usually dependent upon an equal cognition of consumer behavior and lifestyle market cleavage schemes has become more important and of import. Lifestyle of possible consumer is viewed as one facet of an overall selling scheme which allow company to develop a more graphic portrayal of client. Lifestyle analysis enhances mark selling and makes niche selling executable. Consumer life styles change from clip to clip. Adjustment to altering consumer life styles are of import in order for selling to come on swimmingly ( Ronald D. Michman, Edward M. Mazze, Alan James Greco, 2003 ) .

Well and Tigert ( 1977 ) stated that lifestyle cleavage has been a utile construct for selling and advertisement planning intents. Lifestyle has been defined as how one lives but in selling, lifestyle describes the behavior of persons, a little group of interacting people and big group of people moving as possible consumers. The construct represent a set of thoughts rather distinct from that of personality. The lifestyle relates to economic degree at which people live, how they spend the money, and how they allocate their clip ( Anderson and Golden, 1984 ) .

Lifestyle cleavage research measures people ‘s activities in term of:

How they spend their clip

What involvements they have and what importance they place on their immediate milieus

Their positions of themselves and the universe around them and some basic demographic features.

The most widely used attack to lifestyle measuring has been activities, involvements and sentiments evaluation statement ( Wells and Tigert, 1977 ) . The sellers and consumer research workers by and large focus on placing the wide tendencies that influence how consumers live, work, and drama. It allows a population to be viewed as distinguishable persons with feeling and inclinations, addressed in compatible sections or groups to do more efficient usage of mass media.

Research workers tend to compare psychographic with the survey of life styles. Market Researchers used Psychographic research to depict a consumer section so as to assist an organisation better range and understand its clients. Lifestyle pattern provide broader positions of consumers so that sellers can believe more intelligently. The basic premiss of lifestyle research is that the more sellers know and understand about their clients, the more efficaciously they can pass on with and function them better ( Kaynak and Kara, 1996 ) . Majority of lifestyle surveies have been carried out in the western states, lifestyle analysis in some states like Turkey is certainly missing.

Prior research has shown that employed consumer life style to foretell and profile natural sections of users for a figure of merchandises and services ( Fournier et al. , 1992 ) . Researchs on intoxicant in peculiar trussed life style to degrees of ingestion for beer, vino and liquors ( Lesch et al. , 1991 ) . Considerable practical relevancy is added through the fact that insight into lifestyle activities of consumers with specific trade name penchants and benefit orientation support managerial determinations on selecting, uniting and planing media.

2.2.3 State of beginning

Building strong trade names has become a selling top priorty for many organisations today because it yield a figure of advantages and strong trade names help tauten set up an individuality in the market topographic point. In purchasing procedure, consumers are non merely concern about the quality and monetary value of a merchandise but they besides concern other factors such as the trade name ‘s country-of-origin. Many consumers use country-of-origin stereotypes to find merchandises for illustration, “ Nipponese electronics are dependable ” , “ German autos are first-class ” ,

Many consumers believe that a “ Made in. . . ” label means a merchandise is “ superior ” or “ inferior ” depending on their perceptual experience of the state. States with a favourable image by and large find that their trade names are readily accepted than those from states with less favourable image.

State of origin consequence refers to how consumers perceive merchandises made in a peculiar state. In developing a corporate imagination for a merchandise, the importance of assorted marketing mix variable such as merchandise visual aspect, trade name image and name are steadfastly established, every bit good as that of the imagination elicited by a merchandise ‘s state of beginning. Nagashima ( 1970 ) defined imagination of the state of beginning as the image, repute, stereotype that business communities and consumers attach to merchandise of a specific state. This image is created by such variables as representative merchandises, national features, economic and political background, history and traditions.

Roth and Romeo ( 1992 ) defined state image as the overall perceptual experience consumers signifiers of merchandises from a peculiar state, based on their anterior perceptual experience of the state ‘s production, strengths and failings. Research has identified ways with which state of beginning is credited to impact consumers ‘ rating of merchandise, for illustration consumers ‘ cognitive procedures may include self-perception, expressed as a desire to fit ego and merchandise image ( Sirgy et al. , 1991 ) . The state of beginning may straight impacting consumers ‘ attitude towards the trade name of a state alternatively of through merchandise property evaluations ( Wright, 1975 ) .

In globalized competition, many transnational companies have moved or outsourced their production to low-priced locations or states. Although developing states can help corporations in heightening cost advantages but corporations besides face the hazard of possible loss due to negative state of origin consequence ( Cho and Kang, 2001 ; Trent and Monczka, 2005 ) . It has been apparent that where a merchandise is made can hold an impact on consumer merchandise rating and purchase determination ( Bilkey and Nes, 1982 ; Gaedeke, 1973 ; Han and Terpstra, 1988 ; Okechuku, 1994 ) . Consumers ‘ sensitiveness degree to state of beginning has become an of import issue for sellers, many research workers focused their attending on the comparative importance of state of origin information and other merchandise cues such as monetary value and shop name.

Several accounts have been proposed to construe how consumer react to state of origin information. “ Halo consequence ” and “ Drumhead consequence ” are two of the most common 1s. Halo consequence theoretical account service as a cognitive cue for consumers to deduce their beliefs sing other properties of a merchandise and therefore overall merchandise rating ( Erikson et al. , 1984 ) . Drumhead consequence theoretical account in the other manus suggested that consumers recode and abstract their cognition about a state ‘s merchandises into their image of the state ‘s image serves as intimation to deduce quality of merchandise from that state. Among many determiners of a state image, phase of economic development of a state has been the most common cited one and clients typically hold unfavorable feeling and hold lower quality perceptual experiences toward merchandise made in less developed states ( Cordell, 1993 ; Kaynak and Cavusgil, 1983 ) .

Car makers are quickly viing to carry consumers to buy their trade names. A cognition of the different rating standard for choosing autos further improves the house ‘s capableness to act upon a purchase. M.Sadiq Sohail ( 2004 ) carried out a survey on Malayan consumers ‘ perceptual experience towards merchandise originated from Germany. The survey reveal that Malayan consumers take note of merchandise arising from Germany and they are able to critically assess merchandises from different dimensions. Malayan consumers evaluate merchandise dimensions otherwise based on the state of beginning and besides have different penchants for merchandise based on state of beginning ( Sohail 2004a ; Sohail 2004b ) . On the pick of merchandises made from Germany, Malayan consumers have shown a high penchant for car.

Srikatanyoo and Gnoth ( 2002 ) defined that consumer are by and large known to develop stereotyped beliefs about merchandises from peculiar states and the properties of those merchandises. Therefore the state of origin image has power to elicit importers ‘ and consumers ‘ belief about merchandise properties, and to act upon rating of merchandise and trade names. Since consumers ‘ perceptual experience of a peculiar state of origin influence their rating of merchandises from that state, this will act upon their purchase purpose, penchant and pick of a peculiar trade name name.

2.2.4 Environmentally friendly

Environmentally friendly merchandise or green merchandises are designed to minimise the environmental impact when they are being used or consumed. Green merchandises are interesting to houses because green issues and societal duty are going of import to consumers. Brown and Dacin ( 1997 ) found that a companys ‘ attempts toward societal duty, including environmental sustainability, will take consumers to give their merchandise better rating than merchandise from less responsible organisations.

The car industry has made singular positive parts to the universe economic system and people ‘s mobility throughout the Earth, but its merchandises and procedures are a important beginning of environmental impact. There is still a deficiency of literature look intoing high engagement purchases of green merchandises. ( Goldstein et al. , 2008 ; Hage et al. , 2009 ; Thogersen, 1996 ) . Better apprehension of green consumer is of import for concern and environmental ground. Harmonizing to some research workers, Western societies and Asiatic societies differ in their perceptual experience of environmental values. Peoples in the West tend to tie in environmental values with selflessness, whereas environmental concerns are typically correlated with traditional values by their Asiatic opposite numbers.

Research workers have made few parts refering the importance of environmental attitudes and behaviour, but these related surveies have been limited to behavior or to merchandises that typically garner lower consumer engagement. The green ingestion behaviour has to be done across merchandise classs that are more expensive which is auto and this able to reflect more on the consumers ‘ image, have higher societal hazard or necessitate more research prior to buy. The purpose to buy intercrossed autos have addition and that become a variable that related to purpose to buy a high engagement environmentally merchandise. The ground intercrossed autos demand increased was due to the lifting gas monetary values and protagonism for planetary sustainability have increased the accent on environmentally vehicles ( Hybrid Cars.com, 2008 ) .

The car industry cause serious impact on environment and the usage of vehicle consumer a important of fossil fuel, and hence is an of import beginning of pollution. During auto production, the chief negative environmental impacts result from solid waste coevals, emanation of volatic organic compounds and high degree of energy ingestion. In order to utilize eco-friendly portion in production, Toyota as one of the biggest auto maker is measuring new stuffs from renewable resources such as eco-plactics, natural fiber and recycled plastics. In order to cut down the environmental impact from its production sites and procedures, Toyota has adopted enterprises such buying of green power, forces developing on green issues and recycling enterprises.

In Malaysia, the ISO 14001 criterion has thrown down a challenge to concerns, particularly in environmentally sensitive industries such as heavy fabrication, chemical, excavation and agribusiness. Many companies in Malaysia are still dubious as to whether or non acquiring enfranchisement really brings with it the legion advantages as claimed but public force per unit area, statute law, possible cost decrease and improved company image may sufficient motive to better environmental public presentation ( Hall, 2000 ) .

Human resource development and knowledge management in NTPC

The Human Resource in NTPC plays a really of import function in consolidation of the organisation. Its major part is through

Competence edifice

Committedness edifice

System edifice

Culture edifice

NTPC ‘s systems approach to HRD is fundamentally focused on how preparation can be integrated to other organisational subsystems such as

Quality system

Performance rating system

Technical system

This is to accomplish overall aims and ends of the organisation and to leave soft system believing for the uninterrupted betterment through larning instead than through any engineered solutions. Other factors which are based on are based on soft system believing are Process betterment, betterment measuring, inventions, organisation development and Benchmarking etc.

Training is an knowing act of making a acquisition environment in NTPC, after which people may use their acquisition in the work field. It is no more a reactive function in organisational life, but it has become an built-in portion of concern and line directors of the organisation, where it forms a transformational function in decision-making, strategic development, policy preparation and concern direction. National Thermal Power Corporation is providing to preparation demands in the power organisation.

NTPC ‘s HR policies recommend a Periodic Training Need Analysis ( say one time in two old ages ) for germinating an one-year demand based developing intercession docket embracing the undermentioned countries:

Technical preparation and skill up step

Personality Development

Organization Development Issues

Information Technology and Computer Skills

Management Development Programs

At least one long term preparation opportunity/ plan in a calling should be planned for center and senior degree officers. The NTPC while being a technically intensive sector dependant on chiefly technology work force needs competent directors particularly in the altering environment of reforms and travel towards competitory market environment. While the Power Sector has a big figure of extremely qualified applied scientists in senior functions, there has been unequal focal point on constructing managerial competences. So it needs at least one long term Management Development Program should be planned for center and senior degree officers while they make the passage from chiefly technology functions to managerial determination devising functions.

On the Job Training

Field Training

Rotational

on the occupation

preparation

Sellers

Undertaking

work

Field Training

Power Plant exposure

Behavioural Inputs

Technical Inputs

Power Plant exposure

Class room Training

Initiation

52 hebdomads preparation

On the Job TrainingET TRAINING MODULE

Training for screen behavioral & A ; attitudinal alterations

NTPC HR policies include developing intercessions, instruction up step programs and direction development plans designed for forces should guarantee holistic all-around development of the forces. One of the comprehensive theoretical accounts for preparation, the 360° Training Model, provides a platform non merely for functional accomplishment development but integrating behavioural and attitudinal orientation while making an grasp of the commercial facets of concern. While companies are by and large able to offer core functional preparation, behavioural and attitudinal preparation expertness is missing in a bulk of the houses. Hence, companies should seek to guarantee that the preparation is non limited to narrow functional function positions but overall organisational and societal positions every bit good.

Knowledge Management in NTPC: –

Three critical facets NTPC ‘s cognition direction system is focused on three critical facets:

External cognition:

-Subscription/membership to domain specific industry studies

-Subscription/membership to domain specific engineering diaries

-Capturing tendencies in the external environment ( international and national )

Internal cognition:

-Capturing and absorbing explicit and tacit cognition shacking within NTPC

-Making the captured cognition available to employees for re-use

-Updating internal cognition

( 3 ) Collaborative tools

-Chat

-Message boards

-Polls

Beginning: – Knowledge direction execution in NTPC: an Indian PSU, Emrald Website

The Key Goals of Human Resource Development in NTPC are: –

aˆ? To heighten organisational public presentation by commiting an a presence in hydro power section aim and unfastened public presentation direction system.

aˆ? To aline single and organisational demands and develop conventional and non-conventional beginnings of energy to concern leaders by implementing a calling development guarantee long tally fight and extenuate fuel hazards

aˆ? To heighten committedness of employees by acknowledging and sing backward and forward integrating into countries honoring high public presentation.

aˆ? To construct and prolong a learning organisation excavation, coal mineral extraction, etc. of competent world-class professionals.

aˆ? To commit nucleus values and make a civilization of teambuilding, authorization, equity, invention and openness

aˆ? To set up a strong services trade name in the domestic and which would actuate employees and enable accomplishment of international markets and to run into the company ‘s strategic aims.

The Involvement Of Employees: –

MANPOWER PLANNING AND DEPLOYMENT

TRANSPARENT PERFORMANCE MANAGEMENT SYSTEM

Training AND DEVELOPMENT

KNOWLEDGE Sharing

EMPLOYEE WELFARE MEASURES

Team Building, MOTIVATION

EMPLOYEE PARTICIPATION

SATISFACTION SURVEY SHOWED

ENCOURAGING Consequence

NTPC: INTELLECTUAL CAPITAL

Reorientation Plan: Upgrading proficient efficiency and accomplishment degrees

To do the NTPC power sector genuinely efficient and competitory in the changing scenario, stairss have already been taken to leave greater push to research and development, preparation of the human resources in the power sector and acceptance of progressive direction patterns and tools, ( including IT ) . Forces are besides being educated about their changed functions in the power reform scenario. Emphasis on commercialisation of the Power sector is besides being imparted to the employees. NTPC has already formed a Committee on Research and Development which has been constituted to pull up a Perspective Research and Development Plan to guarantee optimal use of the substructure and supply a standing forum for R & A ; D activities in the power sector.

Another Committee has been set up to explicate a ‘National Training Policy for Power Sector ‘ and to develop a national degree action program for preparation of the power professionals to aline their accomplishments and mentality to the changing demands.

NTPC ‘s Human Resource Value

HRA non merely involves measuring of all the costs/investments associated with the enlisting, arrangement, preparation and development of employees, but besides the quantification of the economic value of the people in an organisation, which is termed as Human Resource Value.

Category No. of employees Per Capita Total Value

( Rs. hundred thousand ) ( Rs Crores )

Executives 6841 17.76 1215

Supervisors 3010 15.11 455

Workmans 12445 13.71 1705

Entire 22296 15.14 3375

Beginning: Annual Report. ’94-95 ( price reduction factor of 0.12 )

Key Challenges faced by NTPC: –

Attracting Fresh Endowment: –

With the possible pool of recruits is sufficiently big, the challenge is in pulling the immature alumnuss to the power sector and supplying them equal preparation and satisfactory work environment. With a big figure of other turning industries and manpower intensive sectors like IT going the preferable pick for the best endowment, the Power Sector needs to happen ways of pulling good qualified work force. Today, the Power Sector is non a preferable pick for immature endowment which prefers the life style offered by the urban service sector to working in undertakings and workss which are remotely located. The industry besides suffers from a negative image of being to a great extent bureaucratic with limited chances for growing due to its strong association with state-owned public-service corporations most of which fare ill in footings of work environment. Apart from pulling new endowment, the critical constriction in investing work force in to the sector is unequal preparation substructure.

Training and development substructure: –

The preparation and development substructure in the Power Sector in India includes the followers

Sixty eight developing institutes recognized by CEA for leaving statutory initiation preparation in Thermal, Hydro, T & A ; D and Power Management. The estimated preparation burden and substructure handiness as per the CEA ‘s Manpower Projections ( Nov 2009 ) are illustrated in the undermentioned chart.

Beginning: CEA Manpower Projections, Nov 2009

Clearly we are in a great shortage of preparation substructure ; the preparation substructure for power sector in the state is grossly unequal and caters to hardly 23 % of the optimum preparation substructure required. At a clip when the sector faces monolithic capacity add-on challenges, deficiency of sufficient preparation substructure would impede optimum use of the bing endowment base every bit good investing new endowment.

Development of Existing Resources

It is of import for an organisations to non merely update the proficient accomplishments of the work force but guarantee all unit of ammunition development to guarantee that the employees posses the right accomplishments, competences and attitudes to execute efficaciously in their organisational functions. While proficient preparation is seen as indispensable in NTPC, personality and soft accomplishment development are neglected in a most here which leads to hapless work civilization.

High Attrition rate, taking to low ROI

The house invests a batch of resources in developing the employees for their several occupations. However, before the investing has paid back to the house, many cardinal employees leave the company due to assorted grounds.

Power and cognition transportation to other MNC ‘s

It has been seen that people join BPCL to get down their calling as this company is known for supplying first-class preparation. Peoples join to cognize the nitty-gritty of the oil universe and to acquire the proficiency in their work. In their initial stage of calling they commit tonss of errors and learn from them. When they become competent plenty to make the occupation so they resign and join the MNC rivals taking to outflow of valuable and confidential information.

Competition

When the cardinal forces leave the organisation, they take along with them the concern secrets, tactics, silent cognition, apprehension of the concern built up over a period of clip to the rivals. Therefore, doing it harder for NTPC to vie.

Creativity & A ; Innovativeness is caged due to rigorous hierarchy degrees

Work civilization at Government companies is rather different from the private 1s. In bulk of the instances people who has higher authorization ever seek to set their bomber ordinates down. Cipher calls his/her foreman with first name and discourse what he thinks is of import for the organisation.

Low Morale & A ; Motivation

Relatively to the private participants and MNC ‘s, wage bundles of BPCL are really low which makes their employees feel low. Due to take down salary/compensation bundles than the MNC ‘s, they tend to experience low, which could incite the feeling of discontinuing their occupation. Even among their equal groups they might experience low to accept the fact that they are working in a PSU when the whole universe is running after the MNC ‘s.

Refrences:

Journal: Knowledge direction execution in NTPC: an Indian PSUhttpwww.emeraldinsight.com/0025-1747.htm

hypertext transfer protocol: //ftp.informatik.rwth-aachen.de/Publications/CEUR-WS/Vol-72/100 % 20Upadhyay % 20HRD.pdf

hypertext transfer protocol: //www.iemr.in/images/pdf/Human_Capital_Challenges_in_the_Indian_Power_Sector-1267772828.pdf

-Human Capital Challenge in Power Sector

4. hypertext transfer protocol: //www.ignou.ac.in/edusat/mba/MS-23/Block-4/pdf/Unit-18.pdf- HRA

5. Systematic attack to HRD: Survey of Qualitative methods, By S. Upadhyay

Nishat Group One Of The Leading Industries In South Asia Business Essay

Executive Summary

The market for vesture, place fabric and accoutrements has ever been huge and full to the lip with possible. More and more people are leaping on to the bandwagon and coming up with their ain trade names of cloth & A ; dress with tall claims of high quality and singularity. In the thick of so much competition, Nishat Linen came to the surface with exclusivity as its claim to fame. This study discusses in the undermentioned subdivisions, the current market place of Nishat Linen relation to its rivals, its concern portfolio, its strengths and chances, channels of distribution, selling schemes and eventually, the overall budget and action plans.

Nishat Linen – An Introduction

High in diverseness, Nishat Group has been one of the taking and dynamic industries in South Asia where it has paved its way in the Fieldss of fabric, cement and fiscal services. Nishat Linen is a portion of the company which has given a whole new dimension and mentality to the fabric industry. Nishat Linen is known for its quality and recognized for its designs and low-cost monetary values and has been functioning the industry for the last 14 old ages and is now recognized as a trade name of its ain. The positive image it has created in the heads of its clients in unbeatable which can non be tarnished by large rivals in the fabric industry.

Current Marketing Situation

In Pakistani fabric market the construct of a one-stop store is non new as there are many shops like Ideas, ChenOne and Habitt which are endeavoring hard to supply their clients with the easiness and comfort of one-stop it. These shops are strong with their trade name names and acknowledgment where they provide their clients with high quality and design fluctuations so as to do the component of uniqueness distinct in the consumer ‘s head. As a consequence strong competition has surfaced among these fabric giants which are contending difficult and fast to retain and turn their client portion in the market

Nishat Linen emerged, in the thick of such consistent and tough competition, as a prodigy of Nishat Group ; one of the taking and most diversified concern groups in South Asia. Throughout the old ages, Nishat has made its topographic point as one of the market leaders in carry throughing the place and personal demands of consumers. Currently Nishat is basking a castle within the heads of its mark market that support it keep a typical castle among its rivals. Nishat is the market leader in its class due to its superior quality, a well-developed trade name name, selling attempts that hit its mark section justly and continuously altering the merchandise designs and characteristics to run into the demands and demands of its valuable dynamic clients. This all has helped Nishat to derive a differentiated image in the market that has it a prestige symbol.

Market Description

Today ‘s consumer has evolved with a certain set of demands and demands which are clearly defined in their heads and are more than capable in doing buying determinations where they evaluate each merchandise characteristic to their mental graduated table and purchase merely if it rates higher in their perceptual experience. Nishat is now merely non a shop any longer, instead the mercantile establishments are something to which the client can associate to and would experience comfy in revisiting it if need be. Their trade names reflect a certain image and category to the consumers who buy the merchandises to heighten their already groomed personality.

Endeavoring difficult on these lines Nishat Linen has made its grade in the market where it particularly targets those spoting clients who seek singularity, quality, design, manner and manner in the merchandises they buy without holding to compromise on pricing.

Without any uncertainty the mark market of Nishat Linen comprises of clients who have a distinguishable set of demands where they focus on merchandise singularity, quality and design which would put them apart from other females. From homemakers seeking to affect others through impressive kitchen and bed linen to socialites and professionals with a sophisticated and sole sense of dressing, Nishat is really successful as it caters to a privileged market section that can pay for high quality and manner.

Product Review

Nishat ‘s merchandise line is extremely diversified where it sells bed linen to kitchen co-ordinates, upholstery to dress supplying it important placement and incursion in the market to provide to the clients who want a one-stop store experience

Nishat ‘s complete merchandise line is as follows:

Nisha – Clothing Line for adult females

Naqsh – Clothing Line for work forces

Bed & A ; Kitchen Linen and Accessories

Bed sheets

Quilts

Bed spreads ( regular/ bridal sets )

Kitchen ( table linen, mats, table smugglers, staff of life boxes, aprons )

Shock absorbers ( ( Zari, 6 piece sets, matched with bed sheets )

Fillings

Jai Namaz

Manner Accessories

Laces

Bracelets

Shawls & A ; Stoles

Handbags

Clasps

SEGMENT NEEDS AND CORRESPONDING BENEFITS OF NISHAT ‘S PRODUCT LINE

Target

Section

Customer

Need

CORRESPONDING Benefit

Multifaceted, manner witting adult females

( consumer market )

To be at the zenith of high manner.

To be sole and reflect the position of success and power.

Matching benefit is in the signifier of Nisha – the vesture line for adult females that was launched in 2004.

Based on a broad assortment of cloths including lawn, chiffon, voile, karandi, linen, khadi, satin etc ; it caters to every manner caprice of adult females.

Distinguished work forces

( consumer market )

Apparels that reflect sheer maleness and elegance yet can be worn with easiness and comfort any clip of the twenty-four hours.

Matching benefit is in the signifier of Naqsh – the vesture line for work forces.

Loose fabric every bit good as ready to have on shalwar kurtaz for all occasions that are insouciant yet alone.

Housewifes, childs, brides-to-be

( consumer market )

To be able to show manner and individualism while adorning houses.

To stylise kitchen, sleeping rooms, populating suites etc ; to be able titivate up any room.

Matching benefit is in the signifier of a broad assortment of Bed and Kitchen linen and accoutrements with a new aggregation every season.

Caters non merely housewives seeking comfy bedclothes and kitchen accoutrements, Nishat has a linen scope entirely for childs and brides-to-be, therefore supplying a complete place attention solution for every life rhythm phase.

Trendy teenage misss

( consumer market )

To be recognized as a manner goddess, a prima donna.

Matching benefit is in the signifier of manner accoutrements runing from bags, clasps, bracelets etc for teens on the spell.

Competitive Review

Manner industry of Pakistan is germinating on day-to-day footing as it faces a series of uninterrupted alterations in the market tendencies. Following the way of the manner industry, females besides have been preparing aboard where the long ago held construct of a female belonging in kitchen has been changed to a stylish and modern person who takes attention of her training, her dressing and her visual aspects. The clients are now focused on designs and how each would stand for and put off their image in the heads of their friends and relations. These are the chief countries of concerns the client face while taking something to have on for themselves or even for their households. With the endorsing of famous persons the competition in the market have increased manifolds as the clients are bombarded with commercials in which the major famous persons have been backing their merchandises doing confusions in the analysis of the merchandise by the clients.

Nishat Linen Rivals:

*Al-Karam Textile Mills

One of the largest manufacturers of Fashion and Basic Beddings, Al-Karam has been successful in its ability in hold oning the biggest market portion. They offer a diversified set of merchandises which are high in quality and designs which includes Apron, Egyptian cotton, bed linen, Hand Towel e.t.c. They are besides engaged with in house design solutions as good. Al-karam is proud to hold a proved record of supplying service quality on clip.

*Chenone Pakistan

It is one of Pakistan ‘s taking fabric group and one of the largest exporters of place fabric merchandises from Pakistan. Chenab ‘s processing unit is considered one of the best in the state with a complete processing scope. Its chief merchandises that it offers include Home Textile, Garments, Foot Wear and Furniture. Its fabric merchandises non merely carry through local demand but are besides exported to several other states.

*Ideas

Ideas is one of the other large rival of Nishat in the market where it offers a similar scope of merchandise offering including bedclothes, kitchen, bath furniture e.t.c. They are besides offering specific scope of cotton and lawn with fresh and vivacious colourss. Their forte is their alone design apparels with a vivacious pallet of colourss and embellishment.

*Habitt

Habitt provides with a broad assortment which includes broad scope of drapes, bed sheets, sofa sets, comforters, book shelves ; dining tabular arraies and normally really common house hold points are available here. Habitt is pulling market by supplying attractive offers and comparatively low monetary value.

*VLawn

VLawn is once more in competition with Nishat Linen in vesture industry. VLawn is a trade name of Vaneeza Ahmed which is a popular figure in manner industry. Initially she started with different Lawn designs and now she is offering shiffon, rawsilk and khaddar wear.

Trade name

Product Category

Monetary value Scope

Intensity

Habbit

Furniture

Moderate High-High

Red

Interwood

Furniture

Moderate High-High

Black

Cross Roads

Casual Clothing

Moderate High-High

Red

Outfitters

Casual Clothing

Moderate High-High

Red

Fifth Avenue

Casual Clothing

Moderate High-High

Blue

Shirt & A ; Tie

Formal Clothing

Moderate High-High

Red

Dinners

Formal Clothing

Moderate High-High

Blue

Work force ‘s Shop

Formal Clothing

High

Red

Stone Age

Casual Clothing

Moderate High-High

Red

Cotton & A ; Cotton

Formal Clothing

Moderate High-High

Red

Cambridge

Formal Clothing

Moderate High-High

Blue

Bonanza

Formal Clothing

Moderate High-High

Blue

Oxford

Formal Clothing

Moderate High-High

Blue

Ideas

Clothing

Moderate High-High

Red

Bareeze

Fabric

Moderate High-High

Red

V9

Fabric

Moderate High-High

Red

Funk Asia

Womans Dressing

Moderate High-High

Blue

Stylo

Foot Wear

Low-Moderate High

Black

Soul

Foot Wear

Moderate High-High

Red

Borjan

Foot Wear

Low-Moderate High

Blue

Red: Head to Head Competition Black: Moderate Competition Blue: Partial Competition

Channelss and Logistics Review

The channels and Logisticss are integrated such that merchandise handiness is insured across Pakistan at its assorted mercantile establishments which are located at all the major metropoliss. However the major focal point of mercantile establishments is in Punjab because of easy and inexpensive logistics since their production installation is near Lahore. There is one mercantile establishment in Islamabad and Karachi has three mercantile establishments out of which twosome of them is located in Clifton and one in PECHS. This goes to demo that Nishat has n’t identified other possible or turning markets within Karachi that is traveling to ensue in one of the menaces from their rivals in deriving market portion.

SWOT Analysis

SWOT Analysis is a utile tool for analysing and understanding concern state of affairss every bit good as transporting out the determination devising procedure within an organisation. SWOT is an abbreviation for strength, failing, chance and menaces. Organizations use SWOT analysis for:

Business planning

Strategic planning

Competitor rating

Selling

Business development

Merchandise development

SWOT analysis for Nishat:

Strength

One of the first few trade names to establish bed linen in Pakistan.

Strong merchandise variegation.

Mercantile establishments in about every metropolis of Punjab and three mercantile establishments in Karachi which is besides the concern capital.

Providing all market sections except kids.

Strong merchandise development and most significantly harmonizing to all the seasons.

Affiliation with a professional interior decorator Mahin Khan.

Organized records of client database.

Valuable services to all its loyal and first clip clients by offering price reduction cards and rank cards.

Limited designs for both cloths and linen are sold in the market for every season that creates distinction of their merchandise.

Failing

Nishat linen is non providing the center and the lower income group that can be seen by looking at the monetary value scope of their merchandises:

Unstitched cloth: Rs. 2138 to 3150

Stitched cloth: Rs. 1400 to 5000

Bed Sheets: Rs. 1150 to 2950

Quilt Screens: Rs. 1800 to 5500

Nishat linen does non transport out exhibitions therefore clients have small cognition about their merchandises with regard to their rivals.

Nishat linen has non been able to spread out its market in Karachi due to high logistics cost since their factory is in Faisalabad Punjab.

All the promotional schemes are focused on cloths as it is their star product.bed linen gets small promotional run.

Opportunity

Nishat linen can look to acquire attached with more diversified interior decorators who are into accoutrements as good.

Print their ain catalogues for bed linen and cloth and set them at different book shops so that clients have easy entree to their designs.

Nishat can acquire into western vesture line which will give them an border over their rivals.

Their Lahore unit is fabricating denim cloth for Levi ‘s which is of superior quality. This gives an chance to Nishat to establish their ain jean trade name in the market.

They should look to open an mercantile establishment in an country like North Nazimabad where the market has a batch of possible and people have the buying power as good.

Menace

Strong promotional runs of rivals bring forthing cloths through exhibitions.

Fabric designs of their rivals are available at other retail shops every bit good where as their cloths are available at their mercantile establishments merely.

Most of their bed linens is exported therefore the local market tend to endure where as their rivals like thoughts and ChenOne are more focussed on the local market deriving competitory advantage.

BCG Matrix for Nishat

Star:

Nishat ‘s Star unit, doubtless, is Nisha, their vesture line for adult females. It is a unit that sells throughout the twelvemonth and as quoted by the Manager of their Clifton mercantile establishment, “ Nisha sells at the same rate even during times of recession ” . Harmonizing to him, Nishat has experienced more net income during recession because of continued high gross revenues of their vesture line for adult females. Launched in 2004, Nisha grew by springs and bounds and now stands alongside trade names like Gul Ahmed, Lakhani and Al-Karam. It has been categorized as a Star merchandise line of Nishat as the market for adult females fabric and dress is immense, of all time turning and nowadayss rather a batch of possible. It has a high market portion due to its exclusivity and quality that distinguishes it from its competition. As a effect, it requires heavy investing to back up its image as a trade name with an attitude.

Cash Cattles:

Nishat ‘s bed & A ; kitchen linen and accoutrements can be categorized as the hard currency cattles with which it earns a healthy and steady hard currency flow throughout the twelvemonth. The market demand for bed and kitchen linen, though non dynamic, has ever been there with a sustained and limited potency for growing. Nishat, with its unique and spoting image, has managed to capture a important portion of this slow-growing market, comparative to its rivals like Ideas by Gul Ahmed, Identity by Al-Karam and ofcourse, ChenOne. Its bed linen is non merely in high demand locally but is besides one of its major imports.

Question Mark:

Naqsh, the vesture line of Nishat for work forces, can be categorized as its Problem Child or Question Mark. It ‘s a unit that has n’t shown much potency and as a consequence has n’t managed to derive as much market portion or bring forth as much hard currency as was expected and required of it. The market for eastern wear for work forces has seen a rapid growing since the past few old ages and nowadayss so much of undiscovered potency. With every interior decorator coming up with an sole vesture line for work forces, Naqsh faces serious competition from non merely Gul Ahmed and Al-Karam but other market leaders such as Amir Adnan, Junaid Jamshed and Rizwan Beyg etc. To last in such a ferociously competitory and aggressive market, Naqsh requires heavy investings to keep its land but has n’t managed to win in deriving adequate market portions as yet.

Dog:

Finally, manner accoutrements of Nishat can be termed as Dog ; unit with a low market portion in a reasonably turning industry of accoutrements. The demand for manner accoutrements like manus bags, clasps etc, though has ever been at that place, but it does non hold that much of a growing potency. With much of the investing being done in the other three units, Nishat has n’t paid attentiveness to this peculiar market offering. Known by the multitudes as a trade name for vesture and bed linen, merely a niche section of the market is cognizant of Nishat ‘s accoutrements even when inventiveness and manner is maintained here every bit good. Hence, this unit generates merely adequate hard currency to keep its market portion.

Objective & A ; Issues

First twelvemonth Aim

We have planned to increase the gross revenues volume up to 150 per centum of current gross revenues by spread outing the market portion along with superior client value.

Second twelvemonth Aim

We aim to establish the western wears of finest quality and sole category and accomplish a distinguishable place in western wear as good.

Issues

Due to the impregnation of market with immense rivals like Al-Karam, Gul-Ahmed and thoughts it is rather hard to capture a big portion of market by supplying superior value comparable with our rivals. Their distribution webs and big figure of mercantile establishments could be a hurdle in doing our merchandise their first precedence. Political issues are besides affair of concern as there might be a political influence in set uping our trade name in Karachi. Religious issues are besides one of the hurdlings in advertisement via hoardings. Financial state of affairs of clients may besides be a affair of concern as our all merchandises are sole and have high monetary values.

Selling Scheme

Nishat ‘s market scheme is based on market enlargement and merchandise development. Currently their mark section is sole and formal wear for formal now they target professional females including fashionable and convenient outfits holding a assortment of designs but superior quality. Bed linen besides needs to be emphasized more regarding fluctuations in manners and designs. Nishat besides plans to aim enterprisers and concern proprietors who wish to plan their offices with their merchandises in an sole mode by non merely supplying them their elect merchandises but besides particular services would besides be provided by their representative who would propose them sing interior ornament. Gents wear would besides be focused affecting a broad scope of formal and informal salwar suits under the supervising of a top category interior decorator Hassan Shaharyar.

Positioning

Nishat aims to place its merchandise as an sole and classical trade name for both upper and in-between category clients. Additionally they provide client support services specifically to adult females to assist them plan their vesture by Nishat ‘s experient interior decorators. That is their differentiating point from their rivals.

Merchandise Scheme

Nishat will establish sole designs of wear created by a assortment of new interior decorators. This invention would be affectional as approaching interior decorators work with more energy and creativeness that would hike their gross revenues. Free samples are delivered to clients to demo how best our merchandises are. Free sample is a utile technique in winning the trueness of clients. This scheme is widely used to better the market.

Pricing Scheme

Before puting monetary values of merchandises, assorted elements are kept into head.

Customer is of extreme importance. If client is old, his path record is good and enjoys a favourable reputation so profit border may be reduced. Monetary values country determined on cost footing by adding certain per centum of net income. This is extremely sensitive country.

Current pricing for their merchandises are:

Unstitched cloth is 2100-3100 it would be revised with more assortment holding scope 1500-3500

Stitched cloth is 1500-5000 it would be revised with economic and alone facet holding scope 1200-10000

Bed linen is 1200-3000 it would be revised from regular and sole scope of bed linen from 1000-5000

Bridal wear will be launched holding introductory monetary values 20000-40000

Distribution Scheme

Nishat has their ain mercantile establishments in Punjab and Sindh, and the merchandise will be delivered merely to registered mercantile establishments. As the director of one mercantile establishment has enlightened the point why do n’t sell their merchandise other so Nishat mercantile establishment as their rival is making that he replied “ we ne’er want to come in in a market because every bit shortly as we entered in it so our bogus merchandise will take birth as it happened with other rivals. ” Our sole designs and merchandises would still be sold at our authorised mercantile establishments.Furthermore to ease the clients, online shopping installation and door measure bringing of order will besides be started by the debut of BUY ONLINE option on our web site for that intent we have acquired services of T.C.S for order bringing.

Marketing Research Strategy

Following are some research and development techniques:

Through Internet

Nishat has recognized the importance of information engineering in concern field and really speedy to capitalise this chance. It has launched its web site which tells purchasers about Nishat merchandises and besides takes their valuable feedback and suggestions.

APTAMA purchaser ‘s dictionary

All Pakistan fabric Millss association publishes a directory, which includes prospective purchasers. This dictionary is published on a regular basis. Marketing section carefully analyses it and happen purchasers for its quality merchandises.

Action Plans

We have selected action programs as per different seasons and occasions:

February ( on winter aggregation )

In this month the figure of walk-in client is high for winter vesture demand. Some visit for the bed linen, shock absorbers, babe fingerstalls.Whereas chief accent would be on winter aggregation.

July

Most of the purchasers are people traveling back from holidaies ; they prefer to purchase local material instead than passing more for the same material offered by international trade names.

Reason: A complete bed sheet set including pillow screens at Nishat is priced at Rs. 3000 whereas any international trade name would bear down $ 140 for the same bed sheet and that excessively excepting pillow screens.

August ( on summer aggregation )

In this aggregation largely in Karachi client inflow additions with twenty-four hours in and twenty-four hours out and these yearss chiefly adult females actively do shopping stressing on formal outfits for nuptialss and misss with their summer aggregations.

Eid ( on kitchen accoutrements )

We besides produce the merchandises on the particular occasions particularly on Eid season affecting an increased demand for kitchen accoutrements.

In such occasions demand for Traditional outfit holding eastern expression is besides increased in both male and female

Budgets

We have allocated budget for our merchandises as per their market value and demand. Following is the distribution of outgo for our merchandise mix sing the market standing and market growing in order to better our current state of affairs.

Nisha aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦50 per centum

Bed linen aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦ … 15 per centum

Naqshaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..27 per centum

Manner accessoriesaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦ . 8 per centum

Controls

There are at least three basic demands for Nishat to keep its position as a successful trade name:

It must supply a merchandise ( good or service ) that suits best to its capablenesss and for which there is a sufficient market.

It must supply the merchandise with consistent quality at a degree that entreaties to intended clients and fulfill their demands.

It must supply a merchandise at a cost that ever a satisfactory net income and a rational sale monetary value.

Net income will be controlled by following necessary steps:

Quality control

Design control

Customer Data Control

Product Identification and Traceability

Corrective and Preventing Measures

Internal Audit

— — — — — — — — — — — — — — — — — — — — — — — — — –

Report on Lilliput Kids Wear Ltd.

Report on Lilliput kids wear ltd. About the company: Lilliput could well be a misnomer, for there is nothing small about this USD 160 million kids wear behemoth which currently spans 700,000 sq. ft of retail area across the country and has inched overseas across the Middle East and Gulf, China, Africa and South East Asia. Lilliput’s long journey has been a series of baby steps that began 20 years ago. In 1991, Sanjeev Narula, a young graduate set up a small unit with 25 sewing machines in Delhi’s Govindpuri area. He employed four people and hired tailors on contract to take up fabrication work for exporters.

It required an investment of USD 2,300 which came from his own savings and as a loan from his father. He closed 1990-91 with a turnover of USD 18,300 and it proved to be a turning point. It was around this time that India also liberalized its export policy and Narula moved to make the most of the booming industry. As most orders had been from companies retailing in kidswear, it had by default, become Narula’s expertise. And upon surveying the Indian market he realized that there was a vacuum in branded garments for kids and the ones which were available were either expensive or tacky.

He zeroed in on Delhi’s Greater Kailash market for his first store, which opened in April 2003. Brand Lilliput was finally born. Product’s of Lilliput : They provide large variety of kids wear and also kids accessories. Their manufacture their products keeping mind the children of following age group Infant-(0-2years) Toddlers-(2-4years) Juniors –(4-10 years) Stores 256 Stores in INDIA and 50 stores in abroad. Store’s name are as follows Lilliput Lilliput World LILLIPUT BAZAAR Warehouse Warehouse is the place where company store its goods.

As a big company Lilliput has many warehouses in India. The process of warehouse is as follows EBO-(Exclusive brand outlet)- It is the department in which they use to store their own company production dresses, there is also a section in which they use to store the production according to season wise like winter and summer MBO(Multi brand outlets)- In this section company stores the dresses which they supply to retail outlets like pantaloons, lifestyle, Bigbazzar, shopper’s stop, ebony, mocha etc.

DMBO (Distributed multi brand outlets)- In this section company store the clothes which they supply to local distributors in market. International- In this section company stores the dresses which they export to the other countries like Ukraine, South Africa, Nigeria, and china, Germany, France, and UK etc. Transportation: Company uses the TCI Express for transportation process.

The transportation process is as follows. As the diagram shows Raw material sent to production unit through transport then after this the products sent to the Lilliput’s warehouse. Then the product sent to the Store, retailer, and export through air, sea and road transport. Thank you Submitted to : Ruchi nayyar Submitted by : Naresh Gaur (Sec. D) Ravindra kumar (Sec. E) Ripudaman Bhardwaj (Sec. E) Shriprakash (Sec. E)

Chem History

1. Prehistoric Times – Beginning of the Christian Era (Black Magic) Existence of Fire Arguably the first chemical reaction used in a controlled manner was fire. However, for millennia fire was simply a mystical force that could transform one substance into another while producing heat and light. Fire affected many aspects of early societies. These ranged from the simplest facets of everyday life, such as cooking and habitat lighting, to more advanced technologies, such as pottery, bricks, and melting of metals to make tools. a. 2600 BC – The Rise of Metallurgy

It was fire that led to the discovery of glass and the purification of metals which in turn gave way to the rise of metallurgy. During the early stages of metallurgy, methods of purification of metals were sought, and gold, known in ancient Egypt as early as 2600 BC, became a precious metal. The discovery of alloys heralded the Bronze Age. After the Bronze Age, the history of metallurgy was marked by which army had better weaponry. Countries in Eurasia had their heyday when they made the superior alloys, which, in turn, made better armour and better weapons.

This often determined the outcomes of battles. Significant progress in metallurgy and alchemy was made in ancient India. b. 1700 BC – King Hammurabi’s reign over Babylon Known metals were recorded and listed in conjunction with heavenly bodies. c. 430 BC – Democritus of ancient Greece Democritus proclaims the atom to be the simplest unit of matter. All matter was composed of atoms. d. 300 BC Aristotle of ancient Greece Aristotle declares the existence of only four elements: fire, air, water and earth. All matter is made up of these four elements and matter had four properties: hot, cold, dry and wet. . Beginning of the Christian Era – End of 17th Century (Alchemy) a. 300 BC – 300 AD The Advent of the Alchemists Influenced greatly by Aristotle’s ideas, alchemists attempted to transmute cheap metals to gold. The substance used for this conversion was called the Philosopher’s Stone. b. 1520 – Elixir of Life Alchemists not only wanted to convert metals to gold, but they also wanted to find a chemical concoction that would enable people to live longer and cure all ailments. This elixir of life never happened either. c. End of 17th Century – Death of Alchemy

The disproving of Aristotle’s four-elements theory and the publishing of the book, The Skeptical Chemist (by Robert Boyle), combined to destroy this early form of chemistry. 3. End of 17th Century – Mid 19th Century (Traditional Chemistry) a. 1700’s – Phlogiston Theory Johann J. Beecher believed in a substance called phlogiston. When a substance is burned, phlogiston was supposedly added from the air to the flame of the burning object. In some substances, a product is produced. For example, calx of mercury plus phlogiston gives the product of mercury. Coulomb’s Law

Charles Coulomb discovered that given two particles separated by a certain distance, the force of attraction or repulsion is directly proportional to the product of the two charges and is inversely proportional to the distance between the two charges. b. 1774-1794 – Disproving of the Phlogiston Theory Joseph Priestley heated calx of mercury, collected the colorless gas and burned different substances in this colorless gas. Priestley called the gas “dephlogisticated air”, but it was actually oxygen. It was Antoine Lavoisier who disproved the Phlogiston Theory.

He renamed the “dephlogisticated air” oxygen when he realized that the oxygen was the part of air that combines with substances as they burn. Because of Lavoisier’s work, Lavoisier is now called the “Father of Modern Chemistry”. c. 1803 – Dalton’s Atomic Theory John Dalton publishes his Atomic Theory which states that all matter is composed of atoms, which are small and indivisible. 4. Mid 19th Century – Present (Modern Chemistry or 20th Century Chemistry)  a. Organic Chemistry Scientists were able to synthesize hundreds of organic compounds. . 1854 – Vacuum Tube Heinrich Geissler creates the first vacuum tube. c. 1879 – Cathode Rays William Crookes made headway in modern atomic theory when he used the vacuum tube made by Heinrich Geissler to discover cathode rays. Crookes created a glass vacuum tube which had a zinc sulfide coating on the inside of one end, a metal cathode imbedded in the other end and a metal anode in the shape of a cross in the middle of the tube. When electricity was run through the apparatus, an image of the cross appeared and the zinc sulfide glowed.

Crookes hypothesized that there must have been rays coming from the cathode which caused the zinc sulfide to fluoresce and the cross to create a shadow and these rays were called cathode rays. d. 1885 – The Proton Eugene Goldstein discovered positive particles by using a tube filled with hydrogen gas. e. 1895 – X-rays Wilhelm Roentgen accidentally discovered x-rays while researching the glow produced by cathode rays. Roentgen performed his research on cathode rays within a dark room and during his research, he noticed that a bottle of barium platinocyanide was glowing on a shelf.

He discovered that the rays that were causing the fluorescence could also pass through glass, cardboard and walls. The rays were called x-rays. f. 1896 – Pitchblend Henri Becquerel was studying the fluorescence of pitchblend when he discovered a property of the pitchblend compound. Pitchblend gave a fluorescent light with or without the aid of sunlight. g. 1897 – The Electron and Its Properties J. J. Thomson placed the Crookes’ tube within a magnetic field. He found that the cathode rays were negatively charged and that each charge had a mass ratio of 1. 59E8 coulombs per gram. He concluded that all atoms have this negative charge (through more experiments) and he renamed the cathode rays electrons. His model of the atom showed a sphere of positively charged material with negative electrons stuck in it. Thomson received the 1906 Nobel Prize in physics. Radioactive Elements Marie Curie discovered uranium and thorium within pitchblend. She then continued to discover two previously unknown elements: radium and polonium. These two new elements were also found in pitchblend.

She received two nobel prizes for her discovery; one was in chemistry while the other was in physics. h. 1909 – Mass of the Electron Robert Millikan discovered the mass of an electron by introducing charged oil droplets into an electrically charged field. The charge of the electron was found to be 1. 602E-19 coulombs. Using Thomson’s mass ration, Millikan found the mass of one electron to be 9. 11E-28 grams. Millikan received the 1932 Nobel Prize in Physics for this discovery. i. 1911 – Three Types of Radioactivity Ernest Rutherford sent a radioactive source through a magnetic field.

Some of the radioactivity was deflected to the positive plate; some of it was deflected to the negative plate; and the rest went through the magnetic field without deflection. Thus, there were three types of radioactivity: alpha particles (+), beta particles (-) and gamma rays (neutral). By performing other experiments and using this information, Rutherford created an atomic model different from Thomson’s. Rutherford believed that the atom was mostly empty space. It contains an extremely tiny, dense positively charged nucleus (full of protons) and the nucleus is surrounded by electrons traveling at extremely high speeds.

The Thomson model was thrown out after the introduction of the Rutherford model. j. 1914 – Protons within a Nucleus Henry Moseley attempts to use x-rays to determine the number of protons in the nucleus of each atom. He was unsuccessful because the neutron had not been discovered yet. k. 1932 – The Neutron Neutron Bombardment and Nuclear Fission James Chadwick discovers the neutron. Enrico Fermi bombards elements with neutrons and produces elements of the next highest atomic number. Nuclear fission occurred when Fermi bombarded uranium with neutrons.

He received the 1938 Nobel Prize in physics. l. 1934 – Artificial Radioactive Elements Irene Curie and Frederic Joliot-Curie discovered that radioactive elements could be created artificially in the lab with the bombardment of alpha particles on certain elements. They were given the 1935 Nobel Prize. m. 1940’s – Manhattan Project Albert Einstein and Enrico Fermi both warned the United States about Germany’s extensive research on atomic fission reaction. Below the football field at the University of Chicago, the United States developed the very first working nuclear fission reactor.

The Manhattan Project was in process. HISTORY OF INORGANIC CHEMISTRY Ancient Egyptians pioneered the art of synthetic “wet” chemistry up to 4,000 years ago. By 1000 BC ancient civilizations were using technologies that formed the basis of the various branches of chemistry such as; extracting metal from their ores, making pottery and glazes, fermenting beer and wine, making pigments for cosmetics and painting, extracting chemicals from plants for medicine and perfume, making cheese, dying cloth, tanning leather, rendering fat into soap, making glass, and making alloys like bronze.

Democritus’ atomist philosophy was later adopted by Epicurus (341–270 BCE). The genesis of chemistry can be traced to the widely observed phenomenon of burning that led to metallurgy—the art and science of processing ores to get metals (e. g. metallurgy in ancient India). The greed for gold led to the discovery of the process for its purification, even though the underlying principles were not well understood—it was thought to be a transformation rather than purification.

Many scholars in those days thought it reasonable to believe that there exist means for transforming cheaper (base) metals into gold. This gave way to alchemy and the search for the Philosopher’s Stone which was believed to bring about such a transformation by mere touch. Greek atomism dates back to 440 BC, as what might be indicated by the book “De Rerum Natura” written by the Roman Lucretius in 50 BC. Much of the early development of purification methods is described by Pliny the Elder in his Naturalis Historia. A tentative outline is as follows: 1.

Egyptian alchemy [3,000 BCE – 400 BCE], formulate early “element” theories such as the Ogdoad. 2. Greek alchemy [332 BCE – 642 CE], the Greek king Alexander the Great conquers Egypt and founds Alexandria, having the world’s largest library, where scholars and wise men gather to study. 3. Arab alchemy [642 CE – 1200], the Muslim conquest of Egypt (primarily Alexandria); development of the Scientific Method by Alhazen and Jabir ibn Hayyan revolutionize the field of Chemistry. Jabir accepted many of the ideas of Aristotle but also modified Aristotle’s ideas. 4.

The House of Wisdom, Al-Andalus and Alexandria become the world leading institutions where scientists of all religious and ethnic backgrounds worked together in harmony expanding the reaches of Chemistry in a time known as the Islamic Golden Age. 5. Arabs and Persians continue to dominate the field of Chemistry, mastering it and expanding the boundaries of knowledge and experimentation. Besides technical advances in processes and apparatus, the Arabs had developed and improved the purity of substances such as alcohols, acids, and gunpowder, which were not available to the Europeans. 6.

European alchemy [1300 – present], Pseudo-Geber builds on Arabic chemistry. [citation needed] From the 12th century, major advances in the chemical arts shifted from Arab lands to western Europe. 7. Chemistry [1661], Boyle writes his classic chemistry text The Sceptical Chymist. 8. Chemistry [1787], Lavoisier writes his classic Elements of Chemistry. 9. Chemistry [1803], Dalton publishes his Atomic Theory. 10. Chemistry [1869], Dmitry Mendeleev presented his Periodic Table being the framework of the modern chemistry The earliest pioneers of Chemistry, and inventors of the modern scientific method, were medieval Arab and Persian scholars.

They introduced precise observation and controlled experimentation into the field and discovered numerous Chemical substances. “Chemistry as a science was almost created by the Muslims; for in this field, where the Greeks were confined to industrial experience and vague hypothesis, the Saracens introduced precise observation, controlled experiment, and careful records. They invented and named the alembic (al-anbiq), chemically analyzed innumerable substances, composed lapidaries, distinguished alkalis and acids, investigated their affinities, studied and manufactured hundreds of drugs.

Alchemy, which the Muslims inherited from Egypt, contributed to chemistry by a thousand incidental discoveries, and by its method, which was the most scientific of all medieval operations. ” “Chemistry as a science was almost created by the Muslims; for in this field, where the Greeks were confined to industrial experience and vague hypothesis, the Saracens introduced precise observation, controlled experiment, and careful records. They invented and named the alembic (al-anbiq), chemically analyzed innumerable substances, composed lapidaries, distinguished alkalis and acids, investigated their affinities, studied and anufactured hundreds of drugs. Alchemy, which the Muslims inherited from Egypt, contributed to chemistry by a thousand incidental discoveries, and by its method, which was the most scientific of all medieval operations. ” The most influential Muslim chemists were Jabir ibn Hayyan (Geber, d. 815), al-Kindi (d. 873), al-Razi (d. 925), al-Biruni (d. 1048) and Alhazen (d. 1039). The works of Jabir became more widely known in Europe through Latin translations by a pseudo-Geber in 14th century Spain, who also wrote some of his own books under the pen name “Geber”.

The contribution of Indian alchemists and metallurgists in the development of chemistry was also quite significant. The emergence of chemistry in Europe was primarily due to the recurrent incidence of the plague and blights there during the so called Dark Ages. This gave rise to a need for medicines. It was thought that there exists a universal medicine called the Elixir of Life that can cure all diseases but like the Philosopher’s Stone, it was never found. Antoine-Laurent de Lavoisier is considered the “Father of Modern Chemistry”.

For some practitioners, alchemy was an intellectual pursuit, over time, they got better at it. Paracelsus (1493–1541), for example, rejected the 4-elemental theory and with only a vague understanding of his chemicals and medicines, formed a hybrid of alchemy and science in what was to be called iatrochemistry. Similarly, the influences of philosophers such as Sir Francis Bacon (1561–1626) and Rene Descartes (1596–1650), who demanded more rigors in mathematics and in removing bias from scientific observations, led to a scientific revolution.

In chemistry, this began with Robert Boyle (1627–1691), who came up with an equation known as Boyle’s Law about the characteristics of gaseous state. Chemistry indeed came of age when Antoine Lavoisier (1743–1794), developed the theory of Conservation of mass in 1783; and the development of the Atomic Theory by John Dalton around 1800. The Law of Conservation of Mass resulted in the reformulation of chemistry based on this law [citation needed] and the oxygen theory of combustion, which was largely based on the work of Lavoisier.

Lavoisier’s fundamental contributions to chemistry were a result of a conscious effort [citation needed] to fit all experiments into the framework of a single theory. He established the consistent use of the chemical balance, used oxygen to overthrow the phlogiston theory, and developed a new system of chemical nomenclature and made contribution to the modern metric system. Lavoisier also worked to translate the archaic and technical language of chemistry into something that could be easily understood by the largely uneducated masses, leading to an increased public interest in chemistry.

All these advances in chemistry led to what is usually called the chemical revolution. The contributions of Lavoisier led to what is now called modern chemistry—the chemistry that is studied in educational institutions all over the world. It is because of these and other contributions that Antoine Lavoisier is often celebrated as the “Father of Modern Chemistry”. [21] The later discovery of Friedrich Wohler that many natural substances, organic compounds, can indeed be synthesized in a chemistry laboratory also helped the modern chemistry to mature from its infancy. [22]

The discovery of the chemical elements has a long history from the days of alchemy and culminating in the discovery of the periodic table of the chemical elements by Dmitri Mendeleev (1834–1907) and later discoveries of some synthetic elements Reference: http://www. columbia. edu/itc/chemistry/chem-c2507/navbar/chemhist. html http://en. wikipedia. org/wiki/History_of_chemistry http://news-showbuzz. blogspot. com/2010/11/history-of-inorganic-chemistry. html http://www. 3rd1000. com/history/inorg. htm 1. Inorganic Chemistry Inorganic chemistry is the study of the synthesis and behavior of norganic and organometallic compounds 2. Organic Chemistry Organic chemistry is that branch of chemistry that deals with the structure, properties, and reactions of compounds that contain carbon. It is a highly creative science. Organic molecules contain both carbon and hydrogen. Though many organic chemicals also contain other elements, it is the carbon-hydrogen bond that defines them as organic. 3. Biochemistry Biochemistry, sometimes called biological chemistry, is the study of chemical processes in living organisms, including, but not limited to, living matter.

Biochemistry governs all living organisms and living processes. Biochemistry is the study of the structure, composition, and chemical reactions of substances in living systems. Biochemistry emerged as a separate discipline when scientists combined biology with organic, inorganic, or physical chemistry and began to study such topics as how living things obtain energy from food, the chemical basis of heredity, and what fundamental changes occur in disease. Biochemistry includes the sciences of molecular biology; immunochemistry; neurochemistry; and bioinorganic, bioorganic, and biophysical chemistry. 4.

Nuclear Chemistry Nuclear chemistry is the subfield of chemistry dealing with radioactivity, nuclear processes and nuclear properties. It is the chemistry of radioactive elements such as the actinides, radium and radon together with the chemistry associated with equipment (such as nuclear reactors) which are designed to perform nuclear processes. This includes the corrosion of surfaces and the behavior under conditions of both normal and abnormal operation (such as during an accident). An important area is the behavior of objects and materials after being placed into a nuclear waste storage or disposal site.

Nuclear chemistry deals with the nuclei of atoms breaking apart. Atoms are continually undergoing decay. When studying nuclear chemistry, there is a typical format used to represent specific isotopes. It is the division of chemistry dealing with changes in or transformations of the atomic nucleus. It includes spontaneous and induced radioactivity, the fission or splitting of nuclei, and their fusion, or union; also the properties and behaviors of the reaction products and their separation and analysis.

The reactions involving nuclei are usually accompanied by large energy changes, far greater than those of chemical reactions; that are carried out in nuclear reactors for electric power production and manufacture of radioactive isotopes for medical use, also (in research work) in cyclotrons. 5. Radiochemistry Radiochemistry is the chemistry of radioactive materials, where radioactive isotopes of elements are used to study the properties and chemical reactions of non-radioactive isotopes (often within radiochemistry the absence of radioactivity leads to a substance being described as being inactive as the isotopes are stable).

Much of radiochemistry deals with the use of radioactivity to study ordinary chemical reactions. 6. Qualitative Chemistry It is a branch of chemistry that deals with the identification of elements or grouping of elements present in a sample. 7. Quantitative Chemistry It is a branch of chemistry that deals with the determination of the amount or percentage of one or more constituents of a sample. A variety of methods is employed for quantitative analyses, which for convenience may be broadly classified as chemical or physical, depending upon which properties are utilized. 8.

Analytical Chemistry Analytical chemistry is the science of obtaining, processing, and communicating information about the composition and structure of matter. In other words, it is the art and science of determining what matter is and how much of it exists. Analytical chemistry is the study of the separation, identification, and quantification of the chemical components of natural and artificial materials. Qualitative analysis gives an indication of the identity of the chemical species in the sample and quantitative analysis determines the amount of one or more of these components.

The separation of components is often performed prior to analysis. 9. Physical Chemistry Physical chemistry is the study of macroscopic, atomic, subatomic, and particulate phenomena in chemical systems in terms of physical laws and concepts. It applies the principles, practices and concepts of physics such as motion, energy, force, time, thermodynamics, quantum chemistry, statistical mechanics and dynamics. Physical chemistry is an empirical science. A science is a set of constructs, called theories, that link fragments of experience into a consistent description of natural phenomena.

The adjective “empirical” refers to the common experiences from which the theories grow, that is, to experiments. Simple working hypotheses are guessed by imaginative insight or intuition or luck, usually from a study of experiments. This repetitive interplay in time leads to the formulation of theories that correlate the accumulated experimental information and that can predict new phenomena with accuracy. Reference: http://portal. acs. org/portal/acs/corg/content? _nfpb=true&_pageLabel=PP_ARTICLEMAIN&node_id=1188&content_id=CTP_003397&use_sec=true&sec_u l_var=region1&__uuid=65fca760-e9b5-4031-886b-9036b161a060 http://www. visionlearning. com/library/module_viewer. php? mid=60 http://portal. acs. org/portal/acs/corg/content? _nfpb=true&_pageLabel=PP_ARTICLEMAIN&node_id=1188&content_id=CTP_003393&use_sec=true&sec_url_var=region1&__uuid=194ff76a-3140-4a99-b16c-c9c4d7e1e888 http://portal. acs. org/portal/acs/corg/content? _nfpb=true&_pageLabel=PP_ARTICLEMAIN&node_id=1188&content_id=CTP_003379&use_sec=true&sec_url_var=region1&__uuid=100490ef-ca12-4adb-aa1f-6969e3b35c7b http://en. wikipedia. org/wiki/Biochemistry http://www. shodor. org/unchem/advanced/nuc/ ttp://www. chemistry. co. nz/nuclear_chemistry. htm http://en. wikipedia. org/wiki/Radiochemistry http://www. britannica. com/EBchecked/topic/486045/qualitative-chemical-analysis http://www. britannica. com/EBchecked/topic/486122/quantitative-chemical-analysis http://portal. acs. org/portal/acs/corg/content? _nfpb=true&_pageLabel=PP_ARTICLEMAIN&node_id=1188&content_id=CTP_003375&use_sec=true&sec_url_var=region1&__uuid=a7c17ec2-e670-476a-a71e-7c6f9585c93a http://en. wikipedia. org/wiki/Analytical_chemistry http://www. depauw. edu/acad/chemistry/bgourley/Reseach/what_is_physical_chemistry. htm

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Hydroxyl compounds A. Classification: 1. alkanol: primary alcohol (1( alkanol)butan-1-ol secondary alcohol (2( alkanol) butan-2-ol tertiary alcohol (3( alkanol)2-methylbutan-2-ol 2. phenol Classify by number of hydoxyl groups per molecule: 1. monohydric alkanol ethanol 2. polyhydric alkanolethane-1,2-diol B. IUPAC name: [pic][pic][pic] pent-4-en-2-ol3-bromocyclohexanol but-3-yn-1-ol [pic][pic][pic] hex-2-ene-1,6-diol 2-methylphenol1,4-dihydroxybenzene o-methylphenol p-dihydroxybenzene C. Preparation: Industrial process: 1. Fermentation of carbohydrates: [pic] 2.

Hydration of alkene: [pic] 3. Formation of methanol: [pic] Laboratory method: 1. Nucleophilic substitution: [pic] 2. Reduction of carbonyl compounds a. By lithium tetrahydrioaluminate LiAlH4: Li AlH4 in ether is a strong reducing agent which can reduce acid, ester, carbonyl group (containing O atom) but not alkene and alkyne. [pic] b. By hydrogenation: Hydrogenation can also be used to convert alkene and alkyne to alkane. [pic] 3. Oxidation of alkenes: Oxidize alkene by strong oxidizing agent, acidified potassium permanganate. [pic] Phenol: 1. Sulphonation [pic][pic] 2. Diazo salt pic] 3. Physical properties of alkanol: a. Intermolecular H-bond b. High boiling point, melting point and solubility in water 4. Chemical properties of alkanol: Principle of reaction: R(O(H Breakage of C(O bond to form C+ ion Breakage of O(H bond to form R(O( ion Favour stable carbonium ion favor 1((alkanol or R with electron withdrawing group a. Intramolecular dehydration (Elimination, alkene formation) By dehrating agent: Condition: high temperature 180(C, Conc. sulphuric acid, mole ratio of alkanol:acid = 1:1 [pic] By catalyst:

Condition: Aluminium oxide as catalyst, 350(C [pic] b. Intermolecular dehydration Condition: high temperature 140(C, Conc. sulphuric acid, mole ratio of alkanol:acid = 2:1 [pic] c. Halogenation Lucas Test: [pic] Reagent: zinc chloride + Conc. HCl Procedure: Mix the Lucas reagent with alkanol; observe the rate of the appearance of the turbidity. (Chloroalkane oil droplets are insoluble in aqueous phase. ) Result: Turbidity forms immediately. 3( alkanol Turbidity forms slowly (5 minutes). 2( alkanol Turbidity does not form. ( alkanol Other reagents for halogenation: PX3, PX5, SOCl2 [pic] [pic] white fumes [pic] d. React with sodium [pic] sodium methoxide, a strong organic alkali Application of sodium alkoxide: Formation of ether: [pic] Formation of alkene: [pic] e. Esterification (Condensation) [pic] ethyl ethanoate f. Oxidation Oxidizing agents: KMnO4/H+/neutral/OH( Mild oxidizing agent: CuO [pic] aldehyde Strong oxidizing agent: KMnO4/H+ [pic] acid Different alkanols are refluxed with acidified potassium permanganate: Primary alkanol: [pic] Secondary alkanol: pic] ketone Tertiary alkanol: [pic] g. Haloform reaction (Iodoform test) [pic] iodoform, yellow solid 5. Physical properties of phenol: Colouless solid (slightly pink) at room temperature, high vapour pressure at room temperature, slightly soluble in water, highly toxic, high melting point and boiling point due to intermolecular hydrogen bonding 6. Chemical properties of phenol: a. Acidic [pic] phenoxide ion Reasons: O in phenol becomes slightly electron deficient [pic] Phenoxide ion is stabilized by resonance effect [pic]

React with NaOH: [pic] [pic] b. Act as nucleophile in nucleophilic substitution [pic] [pic] [pic] c. Electrophilic substitution Phenol is an activating group, o,p-directing, explain by resonance effect Nitration: [pic] major [pic] 2,4,6-trinitrophenol (a kind of explosive) Halogenation: [pic] a product in the experiment involving rate order Sulphonation: [pic] benzenesulphonic acid d. Complex formation React with iron (III) ion to form a blue/violet coloration. [pic]

The Evolution of the Constitution

The Evolution of The Constitution U. S. Constitution has been the basis of our government for more than 200 years. (Schmidt 35) Since the Ratification of the Constitution in 1787 we have continued to evolve the Constitution to meet our governmental needs. There are many milestones that have led us to our present condition however, one event in particular led to the creation of what we are today in society. May 14, 1787 the Constitutional Convention was held.

Its main purpose was to restore relationships between states and the central government, determine the powers of national legislature, the need for executive leadership and establish policies for economic stability. (Schmidt 43) According to The Virginia Plan, there was a call for two chambers and a legislature which would give each state a different number of representatives based on the state’s population; this was unfavorable to the smaller states.

Next up for consideration was the New Jersey Plan which was an alteration of the Articles of Confederation. One state, one vote, Congress would regulate trade, a large executive body would be elected which would act as the Supreme Court. Since neither the larger nor the smaller states could agree with either plan, they made a compromise. The “Great Compromise” consisted of two chambers, the upper consisting of two members from each state elected by the state legislation, the lower chamber, population based.

There was, however an issue as how slaves should be counted. The northerners thought that slaves should not be counted at all for state population whereas the southerners wanted slaves counted the same as whites. Out of fear that they would loose the southern states, they made a compromise known as the three-fifths compromise. All slaves would be considered three-fifths of the population, benefitting the south as slavery was more concentrated.

The next issue at hand was how the judiciary and executive branches were to separate powers, which is where the Madisonian Model came into play. This model gave each of the three branches independence from each other while each having the same amount of power. (ex: Checks and Balances) The U. S. Constitution was a groundbreaking document in so many ways, it established a new government like no one had seen before. This document gained a relationship with its national government, the people and the states.

A significant accomplishment was how “we the people” created a federal system with a supreme national government, separating the powers of government into three branches that check and balance each other so that no one area has more power than the other. Its flexibility allows for the Constitution to grow as we grow, as a nation, thus creating a republican form of government. I couldn’t think of a better way to have our government run. Although the system isn’t always favorable to everyone, it is the best system to provide for the majority of the people.

Financial Performance Evaluation of Tesco.

Oxford Brookes University RESEARCH AND ANALYSIS REPORT TOPIC 8 AN ANALYSIS OF THE BUSINESS AND FINANCIAL PERFORMANCE OF TESCO PLC [pic] (6444 words) MARCH 2008 1. INTRODUCTION 1. 1 TOPIC CHOSEN This research analyses the financial situation of Tesco Plc; topic number 8. The analysis is carried from an investor’s point of view and will be achieved by evaluating key financial ratios, past trends and other key aspects with an aim to serve the current and prospective future investors in making investment decision.

As the financial aspect is just a quantitative measure and cannot always give the true picture, so it is important to look at the qualitative aspect as well. Thus, this research will also look at the qualitative side of the story. In this report, the financial situation of Tesco Plc has been compared with one of its close competitor J Sainsbury Plc and looks at the last 3 years of both the companies. 1. 2 REASON FOR CHOOSING THE TOPIC Tesco is currently market leader in the field of supermarket retail industry with group profit of ? 803 million for the year ending 2008 and with maximum market share of around 31% in UK, so it was a natural choice for me to choose Tesco and this topic as I had always had an interest in retail sector and a keen interest on this business and wish to develop my career in this field. And also to add to the fact that, as an ACCA student, analysing the business and financial performance of a company will provide me with the opportunity to enhance my ability and increase my knowledge in accounting and financial field and the situation and strategy a company needs to adopt to be successful.

J Sainsbury Plc was chosen as Tesco’s comparator because of the fact that it has always traditionally been the Tesco’s competitor and is also the third largest retail store in UK with market share of 16%. Tesco is not just a food retail store anymore and truly defines the meaning of shopping under one roof, offering various product such as furniture and DIY, electrical, mobile, financial service etc.

Tesco was also the topic for my research as it has always been in the news and the talking point with it being involved in 13 countries throughout the world (UK, Ireland, Czech Republic, Poland, Slovakia, Hungary, Turkey, China, Japan, South Korea, Malaysia, Thailand and United States). Its continuous expansion plan has always attracted the news and its debut in US on 7th November, 2007 was a major development in Tesco’s history.

US has always proved to be a challenging ground for UK companies and the fact that even Sainsbury had to pull out from US makes its even more interesting, as to whether Tesco’s venture is going to be successful or not. Tesco opened its store in California, US with the name, “Fresh & Easy”. “Tesco is breaking with tradition by moving into the hard-discount market in an effort to build a substantial US convenience chain that could hit 1000 stores with the next five years”, www. ft. com , published on December 2, 2007. But for Tesco, plans have not been going according to the plan. According to the recent article on www. imesonline. co. uk , Tesco has 113 outlets and plans to open even more but has been put out back due to recession by atleast 6 months. But in a recent article(February 22, 2009) on “The Sunday Times”, Tesco admitted that it had gone wrong in US which read as “The head of Tesco’s US operation, Fresh & Easy, has said its early market research was mistaken and it may make big changes to the stores” with the heading “Tesco admits: We got it wrong in US. ” Tesco is also trying to enter new market again, with India being the highlight of all. According to the www. telegrapgh. co. uk , Tesco is trying to enter the ? 50 billion a year store sector in India with possible talks of joint venture with Tata Sons, a part of the Tata group. After all this, I was even more interested in Tesco Plc as my topic for this research. 1. 3 AIM AND OBJECTIVE OF THE REPORT For any investor, the key to their decision will always be risk and the return. Any investor will always look for the risk and the return he expects from his investment and for this one cannot just concentrate on the financial data but also has to look at the industry as a whole, the company’s strategic plans, the trend, the market in which it operates and the economy.

Therefore, the aim of this report is to analyse the company’s past financial performance, current financial situation and its prospective for the future from investor’s perspective. Hence the main objective of this report will primarily be: ? To identify Tesco’s current market situation. ? To identify Tesco’s result over the past 3 years and the contributing factor to it. ? To compare the findings with one of its closest rival, J Sainsbury Plc. ? To see if Tesco is a good future investment or not from investor’s point of view. ? To analyse the non-financial factors contributing to the results of Tesco Plc.

For these aims and objectives to be achieved, a detailed ratio analysis, trend analysis, SWOT analysis and strategy analysis has been performed. RATIO ANALYSIS Ratio analysis of the following key ratios has been performed: Growth ratio: ? Sales revenue growth Profitability and asset activity ratio: ? Gross profit margin ? Net profit margin ? Return on capital employed ? Net asset turn over Risk ratio: ? Current ratio ? Quick ratio ? Gearing ? Interest cover Investors Ratio: ? Earning per share ? Dividend per share ? Price / Earning Ratio

Past three year’s annual accounts: year ending 28/02/06, year ending 28/02/07 and year ending 29/02/08 has been used to show the trend analysis. Along with these, share price comparison has also been performed. This research also assesses the SWOT (strength, weakness, opportunity, threat) analysis and the strategic evaluation to analyse the Tesco’s current and future prospect and growth. 2. INFORMATION GATHERING 2. 1 SOURCES USED AND REASONS Annual accounts of Tesco: The annual account of Tesco provided detailed annual results year upon year upon which the ratios are based.

These figures were vital in analysing the company’s financial performance for the period 2005 to 2008 and evaluate the trend in the accounts (Trend Analysis). This also helped in predicting potential future risk and return for the investor. Annual accounts were used as the main source for figures used in the ratio calculation for the Tesco PLC. Annual accounts of Sainsbury: The annual report of Sainsbury also provided the detailed figure upon which ratios were based. It allowed to carry out comparison with Tesco for the same time period which was useful in assessing the performance of Tesco compared to Sainsbury.

Sainsbury annual report used were from 2006 to 2008. The figures obtained from the financial statement of Sainsbury were also used for the analysis purpose. Interim Report: These were useful in analysing trend but one has to also keep in mind, that these reports were unaudited. Newspaper, magazine and journals: These were also one of the main sources for gathering information which were of significant importance. These provided the news of the current affairs and situation of the company and any development the company entered into. These also provided the information about the market situation and acted as a neutral source of information.

Financial Times, The Independent, The Economists Magazine, etc were used as the source which included various articles including the expert’s view on the company’s results and share price movement as well. Financial analyst’s report: They act as an independent source which provided insight information of the company. These can be considered to be one of the factors that investors would look before making any decisions. These reports were particularly used while analysing the ratios and any significant changes that were seen. ACCA’s Student Accountant magazine and text books:

Monthly magazine published by ACCA also helped in gathering information and updating my knowledge on ratios analysis techniques and accounting standards. These techniques were used while analysing the financial information of Tesco and Sainsbury. These were particularly helpful as it not only provided information about the current market situation but were also useful in updating any changes made to the rules and regulation. Many of the ACCA text book were also used to analyse the key ratios and to interpret them. Some of the ACCA books used were: Financial Reporting (F7), Business Analysis (P3).

These were also useful for the SWOT analysis. Oxford Brookes University’s research and analysis project: This provided useful information on the requirement of the report including the format and the content. 2. 2 METHOD USED TO COLLECT INFORMATION Library research: British Library and City Business Library were primarily used for this purpose and were one of the main source which provided the datas and information required for the research. Frequent visits were required which involved reading different newspapers, related books and journals, magazines, etc which helped in understanding the company and their operating environment.

CDs were also used to get specific informations regarding Tesco and Sainsbury. FAME (Financial Analysis Made Easy) 1. It is a database that provided financial and other descriptive information of the companies in the UK and Ireland. It provided details of the past 10 years and also provided various facilities which were very useful for the research. Annual accounts, ownership information and key ratios of the two companies were some of the datas used from FAME. Market line and Business Information Centre (DATA MONITOR)

It provided company profiles analysed by Data monitor Plc, a premium business information company specializing in industry analysis. Internet research: Internet was one of the secondary sources of information gathering. A number of websites were visited to collect information. Only reliable websites were used for the purpose. Some of the websites visited were: www. tescocorporate. com www. j-sainsburys. co. uk www. ft. com www. timesonline. co. uk www. guardian. co. uk www. telegraph. co. uk www. londonstockexchange. com Google search engine was also an effective tool for searching for information over the internet.

In-store visit: As a part of research, Tesco store in Lewisham was visited to gather information: a chat with manager and other member of staff. It was a great source as meeting people in person gave how they perceived their business and a firsthand look of how Tesco provided its services to their customer and the variety of product they had available. 2. 3 LIMITATION OF INFORMATION ? As the figures and data were of past years i. e historic figure, they only showed the past performance of the company as the investors are always more interested towards the future of the company. As significant part of ratio analysis were based upon the figures obtained from the annual report of Tesco PLC and J Sainsbury PLC which cannot always considered to give a true picture of the inside story as companies will more often than not will try and hide their problems and maintain or improve their image at the public. ? Many of the information that were collected from secondary source could not give a detail information; only providing the surface information which was of very little importance. 3. ANALYSIS AND PRESENTATION

Tesco Plc, a truly international grocery and general merchandising retail chain is the world’s third largest retailer, only behind Wal-Mart of United States and Carefour of France and is the largest retailer in UK with group revenue of ? 47,298 million (for year ending 29/02/09) of which around 75% coming from UK alone and with a group profit of ? 2803 million. The following provides an in-depth analysis of the company’s performance over the past 3 years. 3. 1 GROWTH ANALYSIS 3. 1. 1 SALES REVENUE GROWTH [pic] TESCO ? The group’s major sales contributor was UK with sales of ? 7949 million (m) for the year to 2008, ? 35580m for the year to 2007 and ? 32657m for the year to 2006 which saw an increase of 8. 9% for the year to 2007 from 2006 and 6. 6% for the year to 2008 from 2007. ? Asia and rest of Europe saw increase in their sales, showing improving market for Tesco throughout the world. ? Asia increased its sales to ? 5998m for the year to 2008 as compared to ? 4707m of last years figure which was a significant increase of 27. 4% ? Sales in rest of the Europe grew by 23. 9%, from ? 7836m for the year to 2007 to ? 6324m for the year to 2008. Tesco’s group revenue has grown gradually over the past 3 years with an increase of 8. o8% for the year to 2oo7 (? 42641m) and a further increase of 10. 92% for the year to 2008(? 47298m) from 2007. ? Increase in sales in the year to 2008 was especially due to increase in non-food sales, another year sales increase up again by 30% on its online business and increase in the sales of healthy food. [pic] SAINSBURY ? Sainsbury’s revenue also increased gradually over the past 3 years with revenue of ? 16061m during 2006, ? 17151m during 2007 and ? 17837m during 2008. It showed an increase in revenue growth with 6. 8% during 2006 to 2007 and an increase of 4% for the year to 2008 from 2007 which was lower than that of Tesco for both of the year. ? This was due to the fall in sales because of the tough competition between other supermarkets such as Tesco, ASDA, Morrison, etc and due to the current recession. 3. 2 PROFITABILITY AND ASSET ACTIVITY RATIO 3. 2. 1 GROSS PROFIT MARGIN [pic] TESCO ? Tesco’s gross profit saw a gradual increase over 3 year period form ?3028m during year 2006 to ? 3630m during year 2008. ? However Tesco’s gross profit margin increased from 7. 7% to 8. 12% for the year to 2007 from 2006 but again decreased to 7. 67% for the year to 2008. Even though the gross profit margins were better than Sainsbury, the fall in gross profit margin to year 2008 was mainly due to the rising energy cost and raw material cost. Increase in gross profit margin in 2007 was mainly due to high sales and good productivity. SAINSBURY ? Sainsbury’s gross profit saw an increase for the year to 2007 (from ? 1067m to ? 1172m) from last year but again, for the year to 2008 it saw a decrease of ? 170m (from ? 1172m to ? 1002m) compared to last year’s figure. Sainsbury also saw an increase in gross profit margin for the year to 2007 from last year from 6. 64% to 6. 83%. This was mainly due to the increase in sales volume during the period and achievement of cost saving targets set out in the “MSGA” (Making Sainsbury Great Again). ? However Sainsbury saw a decrease in its gross profit margin for the year to 2008 compared to last year from 6. 83% to 5. 62% which was mainly due to higher cost of sales and the increasing market competition. 3. 2. 2 NET PROFIT MARGIN [pic] TESCO ? For the past 3 years, Tesco’s net profit margin is very good as compared to that of Sainsbury’s. Tesco’s net profit margin increased from 5. 66% to 6. 22% for the period 2006 to 2007. This was due to increase in sales and better management of its expenses. ? But a decrease in net profit margin for the year to 2008 to 5. 93% from 6. 22% compared to last year was seen. This was due decrease in sales growth rate as compared to last year and according to, Tesco PLC Annual Report and Financial Statements 2008, the change in sales pattern was due to unseasonal summer weather which impacted the sales growth in first half and a combination of recovering competitors and more subdued customer demand in some non-food product ategories also held back sales progress in second half and was also due to absorption of initial operating loss in Tesco Direct and establishing operations in US. SAINSBURY ? Sainsbury’s net profit margin increased from 0. 65% to 2. 78% for the year to 2007 which was mainly due to the increased finance income from the bank deposits and return from pension scheme. However, the net profit margin slightly decreased during the year 2008 to 2. 69% as compared to last year. 3. 2. 3 RETURN ON CAPTITAL EMPLOYED [pic] TESCO ? Tesco’s return on capital has been better than that of Sainsbury on all 3 years to 2008. Return on Capital of Tesco increased slightly in 2007 from 14. 86% to 15. 93% than in 2006 and saw a decrease in 2008, with return on capital employed of 14. 08% ? The decrease seen was due to the investment in new stores and market infrastructure. ? The return on capital for Tesco for the year to 2008 can still be considered good as according to, Tesco PLC Annual Report and Financial Statements 2008, as it was after absorbing the initial operating loss of around ? 90 million on Tesco Direct. SAINSBURY ? Sainsbury’s return on capital employed has increased significantly from 1. 31% to 6. 6% for the period of 2006 to 2007 which was mainly due to the increase in net profit margin. ? This can also be considered due to the increase in sales and importantly due to the effective control on cost which was set out in ‘MSGA’ (Making Sainsbury Great Again). However a slight decrease was seen from 6. 96% for the year to 2007 to 6. 38% for the year to 2008. 3. 2. 4 NET ASSET TURNOVER [pic] TESCO ? It has been in the decreasing trend with 2. 62 times in the year to 2006 and 2. 56 times in the year to 2007 and 2. 38 times in the year to 2008 which was due to the increase in total asset. For the year to 2008, increase in total asset was significantly due to the acquisition of free hold land worth ? 15,209 million. ? Decreasing trend of net asset turnover figure was due to decreasing efficiency of asset used, but before coming to conclusion one has to keep in mind that these assets acquired now will give benefits in the future and these capital expenditure were not fully operational by the year end. SAINSBURY ? Sainsbury’s net asset turn over increased for the year to 2007(2. 50 times) compared to the year to 2006 (2. 02 times) but again showed a decline for the year to 2008 with net asset turn over of 2. 8 times. ? This was due to the significant amount of capital expenditure made during the year to 2008 and also to the fact that all of the assets were not fully operational by the year end. 3. 3 RISK RATIO 3. 3. 1 CURRENT RATIO [pic] Current ratio indicates the ability of a company to meet its short term obligation and higher the current ratio, the better position the company is thought to be or say the more liquid and is considered to have a good short term financial strength. ? Tesco’s current ratio is constantly increasing from 0. 52 times in 2006 to 0. 56 times in 2007 and 0. 61 times in 2008.

This was due to the increasing stock level. ? However Sainsbury’s current ratio is on decreasing trend from 0. 80 times in 2006 to 0. 71 times in 2007 and 0. 66 times in 2008 which was mainly due to the increase in trade creditors, short term loan and overdrafts and bank overdrafts. 3. 3. 2 QUICK RATIO [pic] It is also known as the acid test ratio because of the fact that it eliminates the stock from current asset and is a measure of a company’s liquidity and ability to meet its obligation. ? Tesco’s quick ratio seems to be below the industry average but has slightly increased from 0. 3 times in 2006 to 0. 38 times in 2008 over the three years. ? Sainsbury’s quick ratio been on the decreasing trend with 0. 68 times in 2006, 0. 50 times in 2007 and 0. 40 times in 2008. 3. 3. 3 GEARING RATIO [pic] In simple terms gearing is measured as debt to equity. The higher the level of burrowing (gearing) the business has the higher the level of risk the business is thought to be in as the interest on loan must be paid regardless of the company’s financial position and high level of gearing means the reduced ability of the company to borrow. Tesco’s gearing ratio has decreased to 74. 54% to 78. 78% from year 2006 to 2007 and again increased to 87. 06% for the year to 2008. The increase was due to the increase in debt which was due to the increase in further investment and growing plans. ? Sainsbury’s gearing was at alarming rate with 169. 92% in 2006 (although debt taken here is sum of short term loan, overdraft and long term debt). This however decreased to 65. 67% in 2007 and to 54. 57% in 2008. This was due to the payment of significant amount of bank overdraft and debt. 3. 3. 4 INTEREST COVER [pic] Tesco’s interest cover seems far impressive than that of Sainsbury’s showing Tesco’s better performance. ? Tesco’s interest cover was 10. 27 times in 2006 and increased to 13. 28 in 2007. This was primarily due to the increase in profit but in 2008 Tesco’s interest cover decreased to 12. 21 which was mainly due to the increase in burrowing for further expansion resulting in interest expense. ? Sainsbury’s interest cover in 2006 was just 1. 67 times which was mainly due to high burrowing and low sales resulting in low profit. But in 2007, it in increased to 5. 6 times which was mainly due to repayment of major part of burrowing and better sales growth and profit. But interest cover again decreased slightly in the year to 2008 as compared to last year because of the increase in finance cost by ? 21m. 3. 4 INVESTOR RATIO 3. 4. 1 EARNING PER SHARE Earning per share is one of the most important investor’s ratios and is generally considered to be the single most important variable in determining a share price. Earning per share is calculated by dividing profit after tax less dividend on preferred stock by average outstanding shares.

Generally, higher the earning per share would be, higher the expectation of share holders receiving higher dividend. ? Tesco’s earning per share is in increasing trend and since 2006 it has increased from 20. 2 pence (p) per share to 23. 61p per share 2007 and 26. 95p per share in 2008. This was due to the buying back and cancellation of almost ? 470 million worth of own shares and increase in net income. ? Sainsbury showed a significant increase in its earning per share from 3. 80p per share in 2006 to 19. 20 p per share in 2007 but saw a slight decrease in 2008 to 19. 0 per share. [pic] 3. 4. 2 DIVIDEND PER SHARE [pic] ? Dividend per share for Tesco was 8. 63p for 2006, 9. 64p for 2007 and 10. 90p for 2008. This is in increasing trend and is due to the continuous increase in net profit in UK as well as in international market and increased online sales. Buying back and cancellation of almost ? 470m worth of shares has also played a major factor in it. ? Sainsbury’s dividend per share also seems to be in the increasing trend and in 208 it seems a lot better than as compared to Tesco with 12p per share. Sainsbury’s dividend per share was 9. 5p in 2007 and 8p in 2006. ? Dividend should not always be taken as a main reason for investment before considering other factors as dividend could very well be home made. 3. 4. 3 PRICE / EARNING RATIO [pic] ? Price / Earnings ratio shows how much the investors are willing to pay per pound of earnings for a share. In general, high P/E suggests investors are expecting higher earnings growth in future. ? Tesco’s P/E ratio has decreased to 14. 61 times in 2008 from 18. 30 times in 2007 which in turn had seen a slight increase from 2006 (16. 73 times) to2007. Sainsbury’s P/E ratio has also decreased over time from 2006 (31. 43 times) to 2008 (16. 84 times). 4. SHARE PRICE Share price in p [pic] Source: ft. com ? Tesco’s share price was on the increasing trend up until 2007 with share price of 33. 8p in 2006 and 43. 2p in 2007. In the year to 2008, share price has decreased to 39. 4p has also been decreasing further after that towards the 2009 and the start of 2009 due to the current economic crisis. ? For the 3 years Sainsbury’s share price has been fluctuating abnormally. It increased from 330 pence per share to 550 pence in the year 2007.

It was due to the approach from Qatar Investment Authority which made an indicative offer of 600 pence per share but has declined to 332 pence after the bid from Delta Two was abandoned. 5. NON FINANCIAL ANALYSIS 5. 1 SWOT ANALYSIS STRENGTH: ? Tesco has a strong performance in domestic market as it is the market leader in its sector in UK and hence makes very hard for the competitors to challenge it and new competitors to enter. ? Tesco being a diversified business which operates in different market sector such as food, clothing, petrol, finance, telecom, online, etc makes it a strong player with diversified risks as well. Tesco also operates in 12 different countries apart from UK making Tesco a global business and improving its reputation worldwide with strong performance and diversified business. Hence one can imply that Tesco does not depend on specific product or market for its success. ? As Tesco operates in huge quantity, economy of scale cannot be forgotten. ? Tesco has a strong brand name associated with good quality products at low price and a strong customer satisfaction. This has enabled Tesco to attract even more customers and retain its existing customer and launch new products under its name. Tesco has also been able to retain its existing customer and attract new ones through the introduction of its Club card; a loyalty scheme. This can also be seen as one of the way to lock its customers and a way to better understand its customers and their shopping habit making Tesco even stronger and customer focused. ? In 2000 Tesco became the first shopping retail to introduce ? 100 cash back offer, attracting more customers. ? Tesco has been adopting the strategy to adjust its operations according to the country it is situated making it more flexible to the local environment and as a better response to local customer. Tesco has been recording high rate of financial success in international market as well as in UK with increasing sales year per year giving them the financial stability and the ability to fund further expansion strategies. ? Tesco has also been expanding its business through online services. It has more than 1 million online active customers right now and has been a revolution since its launch. Although there is cost to providing online services, it is significantly less than providing in-store as there is no cost of running stores, warehouse and uilding physical infrastructures; crucial for the operation and ultimately achieving even better margins. ? Tesco’s success also comes from its strong and experienced and skilled team helping Tesco grow with good and innovative strategies. ? Tesco’s success also comes from its stores being located on prime locations and use of its multi format store making it more customer friendly and more accessible to people. ? Tesco’s success is also the reward of it continually being involved in the betterment of society and with the inclusion of Community as its fifth part in its previous four part strategy giving a strong signal of its commitment.

WEAKNESS: ? Tesco’s much of the revenue comes from the UK itself, around 75%, making Tesco open to risk if anything were to go wrong in UK. Tesco’s much dependent on UK market makes it vulnerable to UK’s economy, and customer behavior and spending. As UK provides tough competition for retail market with likes of ASDA, Sainsbury, Morrison, etc maintaining same share of market could be a difficult proposition in the long run as well as short, effecting the company’s revenue, profit and growth. And with current recession hitting the market hard, it could be an issue which Tesco needs to consider. Tesco entered into international market from mid 90s and could face a tough competition from its local competitors and may lack the experience that it may require in international market that some of its other experienced competitors may have, especially those who specialize in one particular type of product. ? As Tesco prides itself in providing a range of product, it might be difficult to keep the quality checks to standard which could affect its reputation and potentially create mass losses in inventory and negative media reporting. Tesco also lacks the specialization on many of its product that other industry have as they usually deal on one type of product and hence creating a name for themselves as well. Overcoming them could be a very hard job as Tesco looks after a full range of products from food, clothing, finance, insurance to telecom and the online aspect as well. And a negative report on one of its product could significantly impact the sells of other and the brand image of the company as a whole. ? Tesco has entered into many new markets with US eing the highlight of them and is planning few more with India being its top most target; which means requirement of huge investment. This has increased its debt significantly and has also resulted in huge amount of cash outflow and lack of free cash raising some concerns, particularly if these growth strategies were not to go according to the plan. OPPORTUNITY: ? As Tesco has already established itself as an international giant, there are still huge opportunities for it to grow with many of the countries providing good environment. Growth in international sector would give Tesco an opportunity to decrease it reliance on UK market which accounts for much of its profit. ? With Tesco’s entrance in US in November 2007, it provides huge opportunity to grow due to the sheer market size of US. ? With only around 8% of market share in non-food sector in UK, it has a vast amount of opportunity within UK and as well as internationally. Tesco deals in electronics, DIY, clothing, health and beauty, etc and with growing demand for these products, there is a great potential and opportunity for Tesco to capitalize on them with better strategy and increase its market share. Entering into new market or production or launch of new product cannot always results in a good result, especially when one deals in a variety of market and product as it would lack the proper knowledge and understanding of that market and business. Forming a strategic alliance could be one of the best solution to the problem. For Tesco, this could mean as an opportunity to enhance its product and increase its market share and help itself better understand the economy, law and the market in which in it operates. THREAT: ? Its biggest threat has always been its competitors.

Over the years competitors have grown significantly and so has the competition. With competitors such as ASDA, Sainsbury, Morrison increasing their market share, a need for new strategies should always be the prime focus. ? As Tesco operates in a variety of market and a full range of product it can be said to lack specialization in many of its product and hence could lose its market share for particular product and even brand image which could hamper other products as well. ? A potential threat from more specialized competitor should never be neglected. Economy has and will always play an important role in determining the result of not only of a particular company but of a whole industry as well. Economic conditions are unpredictable and currently unstable as recession is on the rise impacting the customer’s purchasing power. So it is necessary for Tesco to tackle these conditions with better strategy especially as UK has also been hit by the recession and as UK is its main market. ? There has been a significant external cost increases such as increasing fuel prices and local business taxes but so far Tesco has been able to absorb them with increased productivity and good cost control. Change in interest rate also plays a great role in deciding the final profit figure as Tesco is a highly geared company with huge debts it obtained for the further expansions as rise in interest can easily impact the cash flow and threaten its financial position. ? Tesco’s launch in many market has forced many of the local business and market to suffer or diminish, hence creating a resistance, different social and legal claim and negative publicity. ? Changing law and not being up to date with different legislation can hamper the business as it operates in many countries round the world. Different culture and economy and to adjust to each of them can never be easy. 5. 2 FUTURE PROSPECT AND GROWTH STRATEGY Tesco’s main strategy has always been growth with an aim to strengthen core UK business and expansion in UK markets and international. “The rationale for the strategy is to broaden the scope of the business to enable it to deliver strong sustainable long term growth by following the customer into large expanding market at home – such as financial services, non-food and telecoms – and new markets abroad, initially in Central Europe and Asia, and now also in the United States. ”, www. tescocorporate. om/plc/about_us/strategy/ Tesco has also been increasing its activity in the welfare of the society and environment and according to the Chief Executive’s statement (Terry Leahy), “To make sure this work gets the right focus and priority in the business, we made an important change in 2007 by adding it to our four-part strategy for growth – so making Community the fifth element. As the first change of any kind of Tesco’s strategy in more than a decade. ”, Tesco PLC Annual Report and Financial Statements 2008. Tesco’s long term strategy has always been growth and seeks to achieve through its 5 main aims: ?

CORE UK UK is the home for Tesco with around 75% of sales and profit coming from UK. Tesco has dominated UK market with market share of 30. 3% which is nearly the double of its next close competitors ASDA and Sainsbury. Success for Tesco comes via its knowledge of local market and customer needs and customer loyalty which has increased with its introduction of loyalty card scheme; Club card. Tesco’s success and growth also comes from its new spaces, extension of existing stores and multi format approach such as EXPRESS, METRO, SUPERSTORE, EXTRA.

Core UK has also been contributed by sales of other non-food items as well. ? COMMUNITY Tesco has always taken Corporate Social Responsibility (CSR) as an essential part of its business but by adding community as the fifth element in its previous four – part strategy for growth shows Tesco’s seriousness and commitment towards the community. Tesco has been supporting local communities, buying and selling products responsibly and also have had a keen interest on environment. According to the, Tesco PLC Annual Report and Financial Statements 2008, in Chief Executive’s statement, “We have invested ? 5 m in creating a Sustainable Consumption Institute at the University of Manchester, bringing together world – leading experts from various disciplines. The Institute will help lead the way to a low – carbon economy and society. ” ? NON – FOOD Tesco’s aim in its non-food business is to be as strong in non-food as it is in food. Non-food products mainly include electrical, home entertainment, clothing, health and beauty, stationery, etc with some stores even providing opticians and pharmacies. ? RETAILING SERVICE

Tesco’s another key strategy is to follow customers into new retailing service by allowing customers to shop in more than one way with different retailing services. I. TESCO PERSONAL FINANCE (TPF) Tesco’s Personal Finance, a joint venture with Royal Bank of Scotland (RBS) has grown to be the UK’s most successful supermarket bank providing a range of services such as saving accounts, credit cards, insurance, etc. II. TESCO. COM Tesco. com has been a revolution growing from strength to strength with over 1 million active customers especially for people with busy lifestyles. III. TESCO telecoms

Tesco telecoms have been providing services such as mobile network, home phone services, internet access and an internet phone services with wider range of product in store and online. ? INTERNATIONAL Tesco has been entering international market since mid 90’s and is now operating in 12 countries outside UK (Asia, Europe and US). Tesco is currently trying to enter Indian market as a joint venture with TATA Sons, a part of TATA group. According to www. tescocorporate. com/plc/about_us/strategy/international/ Tesco’s international strategy are based on six elements: I. Be flexible II. Act local III.

Maintain focus IV. Use multi-formats V. Develop capacity VI. Build brands 6. CONCLUSION Tesco is truly an international retail chain with its operation running now in 13 countries including the UK. Tesco’s performance over the past 3 years seems impressive and far better than that of Sainsbury. Tesco is the market leader in UK and has been able to capture a market share of around 31% which is nearly the double than that of its next two competitors; ASDA and Sainsbury. Tesco’s revenue has increased to 10. 92% for the year to 2008 with noticeable increase in its sale in Asia and rest of Europe.

Tesco’s growth in international market means its better image and potential growth opportunities in many of the countries which have similar operating environment as in the countries in which it already operates and also indicating the success of growth strategies. Tesco accounted for a net profit of 2,803 million in the year 2008 with net profit margin of 5. 93% even after absorbing initial operation loss of ? 90 million on Tesco Direct and establishing operation in US; which is a very impressive figure. Tesco’s dividend per share has also increased constantly, giving its investors a reasonable return on their investment.

With further plans of investment in new countries and India being the talk of all, Tesco seems to be ruthless in its approach (growth strategy) to lead the world market as well and increase its performance even more. Tesco has planned to enter Indian market as a joint venture with TATA Sons, a part of the TATA group. However its venture in US has not gone according to plan, and needs to develop new strategies to overcome these hurdles. Tesco is now even more committed towards the environment showing its care towards the environment by adding “Community” to its previous four – part trategy. Overall Tesco has been growing over the past 3 years and is continuing to do so and its figure speak for themselves. Tesco has understood its market well and has been able to cope and adjust with the changing customer behaviour. Over the years Tesco have been able to create a strong brand name for itself and with better customer service and excellent and skilled team they have always been able to maintain a high level of performance. Hence it would be recommendable for investors to invest in Tesco and its performance can be seen to be far better than that of its rival Sainsbury.

Job Costing

METHODS OF COST ACCOUNTING INTRODUCTION The Meaning of Cost Cost is a measure of the sacrifice or forgoing of a scarce resource to achieve a specific objective. An organization sacrifices scarce resources, i. e. the purchase cost, in order to obtain other resources. A cost is usually measured in terms of money paid to acquire goods or services. One can observe that the term cost is rarely used without an adjective in front of it. The term ‘Cost’ has multiple meanings and different types of costs are used in different situations.

Therefore a preceding term must be added to clarify the assumptions that underlie a cost measurement. Examples include variable cost, average cost, total cost, fixed cost, opportunity cost and sunk cost. A few types of costs are as given below: * Total Costs and Average Costs: Total cost includes the cost of all resources acquired or used by an organization during a specified time period. In certain decisions, calculating the unit cost is imperative. A unit cost, also called the average cost, is computed by dividing the total cost of the product by the related number of units.

Units may be expressed in different ways. Unit costs are regularly used in financial reports. However, in organizations with different products and services, unit cost usually is not a meaningful number for making decisions about the uses of capacity. For example, the company may be profitable overall (i. e. unit selling price exceeds unit cost) it still may be carrying some very unprofitable products (e. g. cost of resources used exceeds sales revenues). * Manufacturing Costs: Manufacturing costs are the costs associated with the production of goods.

They include three cost categories: direct material, direct labor and manufacturing overhead. * Non-Manufacturing Costs: These costs can be defined as all the costs that are not associated with the production of goods. These costs typically include selling as well as general and administrative costs. * Direct Cost: A direct cost is a cost that can be easily and conveniently traced to a particular cost object under consideration. The term cost tracing is used to describe the assignment of direct costs to the particular cost object. Indirect Cost: This is a cost that cannot be easily and conveniently traced to the particular cost object under consideration. A particular cost may be direct or indirect depending on the cost object. While the salary of plant manager is a direct cost of the plant, it is an indirect cost of manufacturing cars. * Variable Costs: Variable costs are the costs that vary, in total, in direct proportion to changes in the level of activity. Variable costs increase or decrease in response to the increase or decrease in the level of business activity. Fixed Costs: Fixed costs are costs that do not change with changes in the level of business activity. As the activity level increases and decreases, the fixed costs remain constant in total amount unless influenced by external factors, such as price change. * Product Costs: Product costs are those costs that are involved in acquiring or making a product. In case of manufactured goods, these costs consist of direct material, direct labor, and manufacturing overhead. * Opportunity Cost: Opportunity cost is the potential benefit that is forgone when one alternative is selected over another.

Opportunity cost is not usually entered in the accounting records, but it is a cost that must be considered in every decision a manager makes since every alternative has some opportunity cost attached to it. * Sunk Cost: A sunk cost is a cost that has already been incurred and that cannot be changed by current or future action. Since sunk costs cannot be changed by any decisions, they should be ignored when making a decision. JOB COSTING AND PROCESS COSTING METHODS There are two basic types of costing systems that the companies can adopt- Job costing and Process costing systems.

Job Costing relates to a costing system that is required in organizations where each unit or batch of output of a product or service is unique. This creates a need for the cost of each unit to be calculated separately. The term ‘job’ thus relates to each unique unit or batch of output. Job costing systems are used in industries that provide customized products or services. For example, accounting firms provide customized services to the clients with each client requiring services that consume different quantities of resources. Engineering companies often make machines to meet individual customer specifications.

The contracts undertaken by construction and civil engineering companies differ greatly for each customer. In contrast, Process Costing relates to those situations where masses of identical units are produced and it is unnecessary to assign costs to individual units of output, Products are produced in the same manner and consume the same amount of direct costs and overheads. It is therefore unnecessary to assign costs to individual units of output. Instead, the average cost per unit of output is calculated by dividing the total costs assigned to a product or service for a period by the number of units of output for that period.

Industries where process costing is widely used include chemical processing, oil refining, food processing and brewing. Examples of both types of companies in the Indian context: Unique product/serviceIdentical items of product/service Job Costing| Process Costing| Balaji Telefilms| Balrampur Chini| Blue Dart Express| Tata Power Company| Vaibhav Gems| ONGC| Aptech| Deccan Gold Mine| JOB COSTING IN MANUFACTURING One of the purposes of measuring current and past product costs is to provide information for financial statements. Under generally accepted accounting principles (GAAP), product costs must be assigned to inventory.

Then, when products are sold, the cost is transferred to cost of goods sold. This practice allows inventory to be reported at cost on the balance sheet, and cost of goods sold to be matched against revenues on the income statement. Thus, job costing in a manufacturing organization assigns costs first to inventory and then to cost of goods sold when jobs are completed and sold Cost Flows in a Manufacturing Job Costing System Tracing and Allocating Product Costs to Jobs To measure the cost of individual jobs, job costing systems typically include a subsidiary ledger.

As shown in exhibit above, direct costs are traced and overhead costs are allocated to each job. Total work in process (WIP) is equal to the sum of the accumulated costs for all jobs in the subsidiary ledger. Assigning Direct Costs Accounting records are used to trace the costs of direct materials and direct labor to each job. For example, suppose that Aluminum Benders, Inc. , produces aluminum vents for heating and cooling systems. The company works with contractors on large commercial buildings. Each job requires different styles and lengths of vents and joints.

Therefore, the company uses job costing. Work is performed in two different departments: machining and assembly. Source documents are manual or electronic records created to capture and provide information about transactions or events. For example, the direct labor employees at Aluminum Benders create daily time reports that show the time they spend on individual jobs. The accounting department uses the time reports to calculate employee pay and to trace direct labor hours to individual jobs. As shown in exhibit above, each time report may include several different jobs.

Similarly, when materials such as sheet metal or metal joints are requisitioned for each job, they are tracked in the accounting system using the materials requisition form shown in exhibit above. The cost and activity information gathered from source documents is used to record costs in a subsidiary ledger for each new job. This record is called a job cost record and contains all of the costs traced and assigned to a specific job, as shown in exhibit above. At Aluminum Benders, the cost per unit of direct materials is obtained from the company’s raw materials inventory records.

The hourly rate of pay for each employee is obtained from payroll records. Other companies may use an estimated, budgeted, or standard cost for direct materials and direct labor. The sample job cost record shown in exhibit above includes the direct costs of work performed on Job 482 in Aluminum Benders’ Machining Department. The record is not yet complete; only some materials and labor have been recorded thus far, and the indirect costs have not yet been allocated. Aluminum Benders’ job costing system calculates summary costs (totals for direct materials, direct labor, and manufacturing overhead by department) on each job cost record.

The detailed information in the job cost record and the totals in work in process inventory are updated as new costs are incurred, until the job is completed. Computerized and Manual Job Costing Systems Maintaining the detailed job cost records shown in exhibit below, it can be time-consuming and prone to clerical error. Therefore, job cost records are often part of a software package. Job Cost Record for Aluminum Benders Direct labor and direct material data are entered into electronic source documents (on-line time records and material requisitions).

From there, the data are automatically posted into the job cost record and the general ledger system. This approach allows managers to immediately view job costs even before the job is completed. Specialized software packages are most likely to be used in large organizations or in businesses where jobs are complex or require many resources. In small businesses, job cost records may be tied less formally to the general ledger system. Instead of using source documents to track direct costs, organizations may use a manual job cost record to track direct costs for individual jobs.

The job sheet is physically attached to an individual job. As materials and direct labor hours are added to the job, the amounts are recorded on the sheet. An artist might use this method when producing crafts and art pieces. Carpenters and home contractors also frequently use this method to monitor direct costs. Amounts from the job cost sheet are recorded in the job cost record in the subsidiary ledger on a periodic basis, when the job is complete, or sometimes as resources are used. ALLOCATING OVERHEAD Overhead includes all production costs except direct materials and direct labor.

Allocating overhead to individual products is a two-stage process. In the first stage, a variety of overhead costs are collected in an overhead cost pool. A cost pool is a group of individual costs that are accumulated for a particular purpose. In the second stage, costs are allocated from the cost pool to individual jobs. Successful completion of the two stages requires four steps as follows. 1. Identify the relevant cost object. 2. Identify one or more overhead cost pools and allocation bases. 3. For each overhead cost pool, calculate an overhead allocation rate. 4.

For each overhead cost pool, allocate costs to the cost object. 1. Identify the relevant cost object. In a job costing system, the cost object is a job. Sometimes a job consists of an individual product, and sometimes it consists of a batch of products. For example, a job at a Bombardier completion center consists of the exterior and interior completion of one Learjet. A job at Aluminum Benders consists of a large number of aluminum vents required for a specific building. 2. Identify one or more overhead cost pools and allocation bases. Overhead costs are accumulated in one or more cost pools.

Some organizations use a single company-wide or plantwide cost pool for all fixed and variable overhead costs. Other organizations use separate cost pools for fixed and variable overhead costs. Fixed overhead includes costs such as production management salaries and space rental. Variable overhead includes any cost that varies with activity levels, such as supplies and, sometimes, electricity. If work is performed in separate departments or work areas, separate overhead cost pools may be designated for each department or activity. Accountants use judgment in choosing the number and type of verhead cost pools for a given organization. The choice of overhead cost pools depends on the organization of production, the nature of overhead costs, and the usefulness of different types of overhead information to management. For example, Bombardier’s Wichita completion center has two paint booths, two sand-and-strip areas, four preparation areas, and an interior mock-up room. Each work area might be under the supervision of a different manager who is responsible for controlling costs. The use of separate overhead cost pools for each area would help top management monitor the performance of area managers.

Alternatively, a single manager might oversee multiple work areas. If one manager is responsible for the exterior paint operation, overhead costs might be combined for the two paint booths. Organizations are also more likely to use different overhead cost pools for different types of work activities. For example, exterior painting is a different type of activity from preparation work such as installing carpeting, seating, and wiring. It is appropriate to use different cost pools when the nature or level of overhead costs differs across activities.

For each overhead cost pool, an allocation base is chosen to assign overhead costs to cost objects. If some portion of an overhead cost pool varies with a cost driver, it can be used as the allocation base. For example, the cost of some employee benefits varies with labor hours and labor costs. Indirect costs such as supplies in a paint area may vary with machine use. For cost pools that consist only of variable costs or a mixture of fixed and variable costs, accountants use allocation bases that are likely to affect at least a portion of the costs.

For a fixed overhead cost pool, accountants choose an allocation base that is related to activities even though fixed costs are not expected to vary with the allocation base. Manufacturing job costing systems frequently allocate overhead using one of the following bases: * Direct labor hours * Direct labor costs * Machine hours 3. For each overhead cost pool, calculate an overhead allocation rate. The allocation rate is the dollar amount per unit of allocation base used to allocate overhead to each cost object. (In a job costing system, each job is a cost object. If we know the total amount of overhead cost and the total quantity of the allocation base, the actual overhead allocation rate is calculated as follows: Actual allocation rate = Actual Overhead Cost/Actual Quantity of allocation base Alternatively, overhead may be allocated using an estimated allocation rate. To compute an estimated rate for the next period, we estimate total overhead costs and the total quantity of the allocation base, and then calculate the rate as follows: Estimated allocation rate = Estimated Overhead cost/Estimated Quantity of allocation base

Suppose we estimate overhead costs for Bombardier’s exterior painting areas as $216,000 for the next three months and the hours paint employees will work as 5,400. If we use direct labor hours to allocate overhead costs, then the overhead allocation rate will be $216,000 /5,400 hours = $40 per direct labor hour Partial Job Cost Record Showing Overhead Allocation for Aluminum Benders 4. For each overhead cost pool, allocate costs to the cost object. We allocate overhead costs by multiplying the overhead allocation rate times the quantity of the allocation base used by each job.

In the previous example, we calculated the painting area’s overhead allocation rate to be $40 per direct labor hour. When an exterior painting job requires 64 direct labor hours, the overhead cost allocation is 64 direct labor hours * $40 per direct labor hour = $2,560 The overhead rate is also useful when completion center managers need to prepare bids for new jobs. Once the labor hours are estimated for a bid, the estimated allocation rate is used to estimate overhead cost for the job. Software packages that trace direct costs to jobs can also automatically allocate overhead.

Suppose labor cost is used to allocate overhead. As the software package records labor costs in specific job cost records, overhead is allocated to the job at the same time. However, the accounting department might need to create a source document to gather the allocation base information (such as machine hours) needed to allocate overhead costs. Data for direct labor hours and direct labor costs are automatically collected for payroll calculations, but specific details about each job’s use of labor or machine hours need to be recorded by job in a job costing system.

Appropriate data about machine hour usage might not be available unless special records are maintained. For Aluminum Benders, suppose overhead in the machining department is allocated using machine hours. The company’s accountants created an on-line system so that the machine operator records the machine hours used for each job. If three machine hours are recorded for Job 482 and the overhead is allocated based on an estimated allocation rate of $56. 00 per machine hour, then the computer automatically allocates $168. 0 in machining department overhead to Job 482, as shown in exhibit above. Actual and Normal Costing Under actual costing, overhead is allocated using the actual volume of the allocation base times the actual allocation rate. Because managers often need cost information before total actual cost and resource use information is available at the end of the period, estimates are typically used to allocate overhead. When the estimated allocation rate and actual quantity of the allocation base are used to allocate overhead, as in the preceding example, the method is called normal costing.

Information from normal costing systems is used to prepare interim income statements, manage costs, and estimate costs for bids throughout a period. Exhibit below compares actual costing and normal costing. Under both methods, actual direct materials and direct labor are traced to each job. Following is a more complete example of the normal costing method for Aluminum Benders. Similarities and Differences between Actual and Normal Costing GENERAL LEDGER ENTRIES FOR A MANUFACTURER The general ledger in a manufacturer’s job costing system typically includes separate inventory accounts for raw materials, work in process, and finished oods. These accounts are illustrated in exhibit below, which shows the entries that would be used by Aluminum Benders for Job 482. Purchases of raw materials (not illustrated) are recorded in the raw materials inventory account. As direct materials are traced to a job, the cost of the materials is transferred to T-Accounts and Journal Entries for Job 482 work in process inventory (entries 1 and 4). Some types of direct materials, such as supplies, are not traced to individual jobs when they are used; these costs are transferred into an overhead cost pool.

However, this situation is not illustrated in exhibit above. As direct labor employees report their work time, the cost of their wages is debited to the jobs they work on and wages payable is credited for the wages earned (entries 2 and 5). Many organizations use overhead cost control accounts to monitor the costs for each overhead cost pool. As actual overhead costs are incurred, they are debited to the control account. For example, the assembly department supervisor’s salary would be debited to the assembly department overhead cost control and credited to wages payable.

Overhead allocated to individual jobs is debited to work in process and credited to the control account (entries 3 and 6). When a job is complete, the work in process account includes all of the direct material, direct labor, and overhead costs that have been assigned to the job. The total cost can then be transferred to finished goods inventory (entry 7). Finally, when revenue for the job is earned, the total cost is transferred from finished goods to cost of goods sold (entry 8). Over applied and Under applied Overhead

Under normal costing, periodic adjustments need to be made to reconcile the actual overhead cost with the amount of overhead that has been allocated to jobs. When we determine the overhead allocation rate, we estimate both the cost of overhead (numerator) and the volume of the allocation base (denominator). At the end of the period, the amounts of overhead in the inventory accounts (work in process, finished goods, and cost of goods sold) are either too little or too much, and so adjustments need to be made. Overapplied overhead occurs when actual costs are less than the total amount of overhead allocated to inventory accounts.

In contrast, underapplied overhead occurs when actual costs are more than the amount of overhead allocated. To correct for overapplied or underapplied overhead, we first compare the amount of overhead allocated to actual overhead cost. Suppose it is the end of the fiscal year at Aluminum Benders. Balances in the overhead cost control accounts for the machining department and assembly department cost pools are shown in the exhibit below. Machining department overhead costs incurred totaled $1,600,000, while costs allocated to jobs totaled $1,120,000 (20,000 machine hours = $56).

Assembly department overhead costs incurred totaled $2,700,000, while costs allocated to jobs totaled $2,880,000 ($1,200,000 direct labor cost = 240%). The combined amount of overapplied (underapplied) overhead is Overapplied or (Underapplied) Overhead Machining$(480,000) Assembly 180,000 Net underapplied overhead 300,000 We then record an adjusting entry so that the total actual amount of overhead incurred is recorded as a product cost for the period. The balance of overapplied or underapplied overhead must be removed through an adjustment at the end of the accounting period.

If the amount of the adjustment is material, it is prorated among work in process, finished goods (if any), and cost of goods sold. This proration is prescribed by generally accepted accounting principles, which require inventory to be recorded at actual cost. If the amount is immaterial, however, it is simply assigned to cost of goods sold. Overhead Cost Control Accounts for Aluminum Benders Because the method of adjusting for overapplied or underapplied overhead depends on materiality, we need to decide whether the $300,000 amount for Aluminum Benders is material.

One way to evaluate materiality is to calculate the net overapplied or underapplied overhead as a percent of actual overhead costs. For Aluminum Benders, this calculation follows: $300,000 /($1,600,000 + $2,700,000) =7% Many accountants view amounts smaller than 10% to be immaterial. If we decide that the adjustment for Aluminum Benders is immaterial, we adjust the cost of goods sold total. Because overhead was under applied, cost of goods sold would be increased, as follows: Cost of goods sold 300,000 Assembly department overhead cost control 180,000

Machining department overhead cost control 480,000 If we decide that the adjustment for Aluminum Benders is material, it must be prorated among work in process, finished goods, and cost of goods sold. Suppose the balances in these accounts before the adjustment are: Ending work in process $ 100,000 Finished goods 20,000 Cost of goods sold 10,000,000 Total10,120,000 The adjustment of $300,000 would be prorated among these accounts based on each account’s proportion of the total. The adjusting journal entry would be:

Ending work in process ($100,000 / $10,120,000 * $300,000) 2964 Finished goods ($20,000 / $10,120,000 * $300,000) 593 Cost of goods sold ($10,000,000 / $10,120,000 * $300,000)296,443 Assembly department overhead cost control180,000 Machining department overhead cost control480,000 The balances before and after the adjustment would be: Before AdjustmentAdjustmentAfter adjustment Ending work in process$ 100,000$ 2,964$ 102,964 Finished goods 20,000 593 20,593 Cost of goods sold 10,000,000 296,443 10,296,443 Total 10,120,000 300,000 10,420,000

Whether the adjustment is considered material or immaterial, zero balances are left in both overhead cost control accounts after the adjustment, as shown in exhibit shown above. USES AND LIMITATIONS OF JOB COSTING Job costing systems measure the cost of products, primarily for customized goods and services. The information from a job costing system can be used for several purposes, including the following: * Reporting inventory and cost of goods sold values on financial statements and income tax returns * Developing cost estimates to assist in bidding on potential future jobs * Measuring actual costs to compare to estimated costs Developing cost estimates for short-term or long-term decisions Because a job costing system accumulates and reports costs for individual jobs, the tendency is to mistakenly believe that job costs are measured accurately and that the costs assigned to a job are incremental, that is, would not be incurred if the job were not undertaken. However, job costing systems are subject to uncertainties and require judgment. In addition, analysis is required to identify the job costs that are relevant to a given decision.

Bureaucracy as a Tool in School Administration, a Study of Max Weber’s Approach to Bureaucracy.

Bureaucracy As A Tool For Administration In Schools, A Study Of Max Weber’s Approach By Andrew Muringani. Bureaucracy is one of the rational structures that are playing in an over-increasing role in modern society. Thus bureaucracy is the key feature of an organization. In schools bureaucracy endures because of the assurance of order, rationality, accountability and stability it provides to the public. The school as a system has goals to meet. The need of mass administration makes it today completely indispensable.

Thus this write up will examine Max Weber’s theory of bureaucracy and it will explain its applicability into the education system. Bureaucracy is identified as an organization with a hierarchy of paid, full-time officials who are formed of command. This implies that bureaucracy in schools is concerned with mass leadership whereby the power and authority is decentralized to different departments. For example at schools we have music sports health departments et-cetera. All these have different leaders allocated to them.

Bureaucracy is deeply rooted in rationalization. Thus rational action involves a clear awareness of a goal. Rational action involves a clear awareness of a goal. Weber’s rational action is the methodical attainment of definably given and practical end by means of an increasingly precise calculation of means (Haralambos and Holborn 1991). Bureaucracy is a model of organization design based on legitimate and formal system of authority. Most people associate bureaucracy with “red tape”, rigidity and passing buck.

Weber viewed the bureaucratic form of organization as logical rational and efficient. Bureaucratization involves precise calculation of the means to attain the goals and systematically eliminates those factors which stand in the way of the achievement of its objectives. Haralambos and Holborn (1991) posit that Weber defined bureaucracy as a hierarchical organization designed rationally to coordinate the work of many individuals in the pursuit of large scale administrative tasks and organizational goals.

Thus it should have a clear chain of authority from top to bottom of the school system. Bureaucracy is capable of attaining the highest degree of efficiency and this sense formally the rational known means of exercising authority over human beings. In education system the incumbents productivity. Decentralization occurs when an organization shares some of its power with other groups particularly those that are either geographically disposed or are responsible for specific functions or are given jurisdiction over specific physical location (Manhood 1983: 4).

Implying that the key elements in decentralization are power, authority, and responsibility which are diffused in such a way that they flow from the center of the periphery to sections of the periphery in a manner deliberately decided upon by the center. Makumbe (1998) posits that decentralization is mere dispersal of branches of the central government ministry from the Capital to the periphery or subdividing the states’ territory into smaller units and institutions. These are given powers and administrative functions pertaining to their designated areas of specialization.

Those institutions may in turn transfer some of their power and authority to lower levels in designated areas. This implies that responsibilities are transferred from the Head to as low as pupils, thus making everyone a part of the system. Weber distinguished the ideal typical bureaucracy from the ideal typical bureaucrat. He conceived bureaucracies as structures and bureaucrats as positions in those stretches. The ideal typical bureaucracy is a type of organization with basic units which are offices organized in a hierarchical manner rules, functions, written documents and means of compulsion.

Haralambos and Holborn [1991] posit that bureaucracy is a rule through a desk or office that is a form of organization built on the preparation and dispatch of written documents. Thus each office has a specified sphere of competence. The office carries with it a set of obligations to perform various functions and the means of compulsion required to do the job. This implies that the school is a formal organization which is hierarchical in nature from old development community, Head of the station, senior teacher, staff, prefects and finally pupils.

The positions within structures are occupied by members who consciously relate to each other to achieve a set of objectives. In bureaucratic model schools are viewed as having hierarchical authority with formal chains of command between the different levels. Schools pursue those goals determined by the official leaders at the apex of the pyramid. Decision-making is still deemed to be rational, based on a careful evaluation of alternatives and a considered choice of the most appropriate option. Thus the existence of various administrative offices reduces the workload and congestion at school.

The issues can be solved at classroom level by the teacher whereas cases of indiscipline such as breaking school property can be solved by the head and the disciplinary committee. This means that the school administrators strictly controlled and disciplined activities since they have legitimate power. However the issue of hierarchy slows down the pace at which things are to be done. For example if the teacher wants to go on leave, be it a vacation or manpower development leave. The teacher is not allowed to desert the station before the permanent secretary’s approval.

The forms need to pass through various offices starting from the head’s, district offices, provincial office and finally the head office. All these offices needs to sign the forms. More so if they are corrections to be made by the teacher, the flows will then have to follow the same channel and even on their return. Teachers can be charged out to ignorance in the event that new policy has been introduced into the system, since circulars may take too long to reach the furthest school in the district from the head office.

Because of this long chain of communication that is likely with that information will reach to the last person while it has lost truthful flavour is especially on documented instructions at classroom level. The bureaucracy is founded on rational legal authority. This type of authority rests on the belief in the legality of formal rules and hierarchy and in the right of these elevated in the hierarchies and in the right of those elevated in the hierarchy to possess, authority and issue commands. Authority is given to officials based on their skills, position and authority placed formally in each position.

Rational legal authority can take a variety of structural forms but the form that most interested Weber was bureaucracy which he considered “the purest type of exercise of legal authority” that every position in the hierarchy has powers which are legitimate. Decision-making can be done in the highest positions of the pyramidal structure. From a technical point of view of bureaucracy is capable of attaining the highest degree of efficiency and is in this sense formally the most rational known means of exercising authority. It is bound by rules and regulations which govern its operation.

Thus they are clearly laid down rules which the human resources should abide. Several of its elements such as reliance on rules and employment based on expertise do, in fact, often improve efficiency. This implies that it is transparent and can be seen to be fair in school operations. In Zimbabwe in education system, teachers operate under the guidance of the statutory instruments and even schools pupils also operate as a school for rules and particularly curriculum which provides basis on how to work. All of these provide an educational ethics hence code of conduct.

Rules should be more specific to govern official’s decisions and actions. These formal rules should be relatively stable, exhaustive and easily understood. Human resources should operate knowing that they do not own offices but they occupy the offices. Personal property should be separated from official property the staff needs to understand the rules regarding corporal punishment, that teaches are not allowed to administer it to pupils. Only the school just permitted to do so or he or she may think to delegates at the members of the staff.

He or she must first explain the offense committed by the child. Number of whips must also be recorded for future reference. There must also be some members of staff to act as witnesses. However the is too much emphasis on rules which are rigid and inflexible which leads to no freedom. Members who at the bottom do not contribution to watch the formulation of rules. They are just the receiving end of everything. For example the introduction of key results area as a policy in government schools is being criticized for being laborious in paperwork.

The teacher will spend most of his time preparing the papers at the expense of teaching the children which is his or her core business. More so because of rules segregates official creativity as something distinct from the sphere of private life. The bureaucratic model results inflexibility and rigidity. Once rules are created and put into place making exceptions or changing them is often difficult. In addition the bureaucracy often result in the neglect of human and social processes within the organization. In bureaucracy is a fixed division of labor. The jurisdictional areas are learly specified and each has a set of official duties and rights that cannot be changed at the whim of the leader. The offices carry with them a set of obligations to perform various functions in the means of compulsion required to do the job. Thus in bureaucracy each member has a specific task to for the school organization to meet its objectives. According to Wikipedia. org bureaucracy is a division of labor applied to administration. It is the rules will desk or office that is a form of organization built on the preparation and dispatch of written documents.

This implies that various tasks allocated to different specialized human resources who work for the common good of the organization. The primary schools are comprised of various levels of leadership. Like the human body it is different parts but all these parts work together harmoniously for the common good of the school. Failure by one of these hierarchies to function adversely will affect the entire system since they are integrated and also playing complimentary roles. Thus at school different teachers allocated to different roles at school.

That’s when we find sports coordinator, entertainment coordinator, school health master, garden master, the headmaster, teacher in charge etc. Promotion can also be based on seniority and credentials. This division of labor should minimize arbitrary assignment of duties found in more to traditional structures in which the division of labor was not firm and regular and in which the leader could change the duties at any time. However interpersonal relations is based on positions not on personalities. Thus in primary schools the top management which happens to be the Head, deputy and senior teacher seem to associate.

They tried by all means to avoid their subordinates in order to maintain dignity as well as hegemony. In bureaucracy selection is based on qualification. Officials are recruited based in the credentials and appointed not elected to the office. People are compensated with salary. Thus should supplant more particularistic ways of staffing found where officials were often selected June to their relations to leader or social ranks. Officials are appointed on the basis of technical knowledge and expertise [Haralambos and Holborn 1991] thus in schools people fill posts according to what the studied.

The issue of credentials can be seen through the pyramid structure that is as you go higher than that of the qualifications. Thus people are promoted based on meritocracy. Too much importance is given to technical knowledge and qualification of the employees. Dedication and commitment of the employees is no longer considered. Order no one can conclude that Max Weber viewed the bureaucratic elements as the solutions to problems or defects with earlier and more traditional administrative system. He described an ideal bureaucracy as a theory of administration based on rational legal authority systems.

The bureaucratic structure wants to great extents protect employees from arbitrary killings from leaders and with potentially give a greater sense of security to the employees. He view those elements as part of a total system, which combined and instituted effectively would increase effectiveness and efficiency of administrative structure. References en. wikipedia. org/wiki/Bureaucracy http://www. oppapers. com/essays/Max-Weber-s-Contribution-To-Educational-Administration/561018 www. bustingbureaucracy. com/excerpts/weber. htm www. umanities. mq. edu. au/Ockham/y64l09. html faculty. babson. edu/krollag/org_site/org… /weber_bureau. html Griffin H (2002) Management USA, Houghton Mifflin Company Haralambos and Holborn (1991) Sociology: Themes and Perspectives, London, Harper and Collins Publishers Manhood P. (1983)Local Government in the Third World The Experiences of Tropical Africa Preedy, Gatler and Levaac (1997)Educational Management Strategy Quality and Research Bistol, Redwood Books Ritzer G. (2008)Sociological Theory New York, McGraw Hill Higher Education