Film Production Descriptive Essay

The development stage is one of the most crucial stages for a producer, it is where you get the chance to plan every aspect of your production before you begin pre-production and production. The chance to get the ball rolling right. During the discovery stage of the film it is the producers role to obtained rights or an option to a film that he thinks is promising, if the rights owner is worried that their novel might be tainted by a film maker the producer must come to a legal agreement to maintain a certain set of standards concerning film director, cast and art department. Pre-production Producers role is to meet with all other heads of department to discuss direction of film, intent, budget and other relevant items needed before any production is to start. Legal documentation, planning, hiring, actors, art department. It is the producers role to helm all the creative people involved in the production as well as give some creative input. Financially it is the producers role to organise financing for the film whether that be through loans, offsets, co production, investors. The producer must discuss with all heads of department information gathered during development phases. Production The producers role during production is to organise all departments into a functioning crew. The producer may often not be on set personally whilst much of the principal photography is going on, thus they will appoint executive producers, line producers and associate producers to oversee their interests during production. Post production The producer has final say in the edit and sound used for the film, what scenes are shown and ultimately whether or not more footage will need to be shot after principal photography. For example, they might want an alternate ending. Distribution Distribution is the second of the most important stages of the production process. Distribution is where you get to create an audience for your film! As a producer your goal is to obviously have people watch your production and the distribution phase is where the producer gets to plan marketing objectives and then distribution objectives. This is the most rewarding stage of the process but also the most difficult for many considering our media overloaded world. What is meant by Genre, Auteur and Mise-En-Scene†. Give examples of three different feature film genres and the major elements that define each particular genre, as well as some specific examples of the genre. Also give an example of an auteur, including examples of his/her films. Give an example of two completely different mise-en-scenes for a simple dialogue scene between two people having an argument about their relationship. The basics for the genre is drama, or the type of it. In feature films there are many types of genre, for example action, horror, romance, sci-fi, comedy. Essentially drama is telling you what the film will be loosely based around. Action – Action scenes where there is intense action!! Guns, Cars, Stunts, Explosions Romance – Often a story about a romantic encounter, relationships, sex Comedy- Often a story with comedic elements – intended for the audience to enjoy themselves and laugh An autuer is a filmmaker who’s pieces of work are distinctive in terms of the cast, locale, theme and visual style and is therefore considered an author of their work. One of my favourite authors is Baz Lurhmann who’s first three productions are said to be the red curtain trilogy in which each of the three films has similarities. Each film establishes their story through a established thematic device, Dancing from Strictly Ballroom, poetry from Romeo and Juliet and music in Moulin Rogue. Each film also has a plot which is based off a well known story or myth. And there is a theatre motif which appears throughout all the films. What are the various contracts and other documents a Producer is responsible for when producing a feature film? There is quite a lot of documentation and contracts that go along with a film production, all of which a producer is responsible for. Contracts and agreements range from; assignment of copyright, production and investment agreements, film producers indemnity, multi-risks insurance, safety reports, Production agreement, non-disclosure agreements, post production deals, facilities deals. Chain of Title Assignment of Copyright The assignments of rights from the original artist to the producer, therefore the producer is now able to reproduce the work. Chain of Title The chain of title in film is a set of documentation that establishes the producers right to create and market the film. Typically includes, scriptwriters agreements, development agreements option agreements and rights assignments. Buyout A re-assignment to the producer from a development investor acting on behalf of the copyright owner in a project on repayment of the development investment plus interest. Option A purchase of time for a film to develop the work. Producers typically take out options on a work for a specific time and fee. This gives them the exclusive right to develop and finance the film.m Producers indemnity Insurance which provides financial compensation for the films budget in case of the production going over budget because of death, injury or illness. Multi-risks insurance Insurance that provides compensation if any production equipment is damaged during principal photography What are the various financial sources for an Australian Film? Explain what each one is Screen Australia Screen Queensland Producer Offset This is a grant given by the government to the production after completion of the film – some films use this money for the budget as they can rely on it after completion or it helps to achieve a film that will do better in distribution. Broadcasting Company grant/funding Co-Productions Grants Money that is donated to the production that does not need to be paid back

Pup 301

Parul Singh PUP 301 5th February 2013 Putting Greenways in My life The article â€Å"Putting Greenways First† talks about how cities in America are trying to â€Å"Go Green† by investing in more parks, the planting of trees, and creating overall green neighborhoods and streets. These will encourage citizens to spend more time exercising outside rather than being cooped up inside in front of their television. In the 21st century, a lot of land is cut down and built on to serve as neighborhoods, shopping malls, government buildings and grocery stores as urbanization occurs due to high pressure of immigrants and population increase every year.These cities, such as Mumbai, often have little trees due to large population and no land to support the population. Though urban planners and locals alike have become more aware of the environmental issues affecting global warming, there has been a steady rise in different approaches to make cities beautiful, healthy and better place s to live in. The term â€Å"Greenway† comes to mind, as it is one of the first steps to making a city more environmentally friendly. Greenways are pedestrian streets like sidewalks, but instead of it being only concrete there is a high emphasis on vegetation.This creates both a visually attractive and comfortable setting for people to enjoy taking walks in contrast to taking the car. As the article suggests, low-density suburban sprawl may directly influence obesity rates in cities. Encouraging citizens to walk to school or use their bike by creating an attractive and pleasant environment may be one of the many solutions to lower obesity rates. As we see more development in our life, we can argue that the environment becomes more contaminated.There are around 20 billion tons of CO2 and other poisonous gases, like methane gas, that are absorbed by the atmosphere every year. This poisonous environment kills around 14 thousand people all over the world, for example if exposed t o methane gas, it causes dizziness, headache and nausea. This confirms that to achieve a healthy lifestyle at which people are not only wealthy but also healthy and safe, we need to find ways to protect our environment. Building a green city is thus a very sustainable strategy. I was born in India (Pune) and lived in Thailand (Bangkok) for all my life.These are developing equatorial countries where a lot of people live in the cities. So living in the cities of India and Thailand, I have always felt like there is not much greenery and the pollution in these cities is high. And every year whenever I go back to Pune, I always see there are more and more buildings; the land that is in the processes of being cleared. These cities are not growing sustainably or in a â€Å"green† way because India for example, has to put money in education, health care, and other thing in order to decrease the increasing population.America, on other hand prioritizes green way because they have alrea dy put a lot of effort and money on building schools and hospitals for its citizens. The issue in Phoenix and in Bangkok is that both places are hot. There are less outdoor events because of the heat. For example, people prefer playing tennis indoors than outdoors during summers, because they need to take extra precautions like putting sunscreen on their body to protect themselves from sun burns or carry extra water to keep themselves from getting dehydrated.In Bangkok, it is so humid that when you go outside for five minutes, people always take a shower. It is very time consuming to live in a place as hot as Bangkok or Phoenix because as it is really hot, people waste their time taking a shower twice or even three times a day, and this in turn wastes a lot of water. I went to Beijing, China in 2010, and I was shocked to see how well planned the city was despite the fact that it was still a developing city, with high population and very bad pollution. Approximately, Beijing city has around 40,000 trees.The trees are planted along the road and there is a pedestrian road, beside which goes into small green parks. The trees that are planted are all the same size, and during winter, the polythene sheets are wrapped around and thick ropes around the sheet protect the bark of the trees. I thought that it was a great way of making a city green, given the thought that it is not technically green because of the pollution. After reading the article, I thought that the ideas and examples given by Arendt in the article are solely based on America.Most American cities, compared to cities in developing countries, have a lower population per mile. People here like to settle in the suburbs of the city because they have bigger houses, more space where they can have their own gardens, which is a good idea considering the downtown of the city is noisier, polluted and has little vegetation. The article gave out a lot of examples of American cities where the planners are making ar eas of green parks, so people can spend quality time outdoors.They are also making public transports better, so people walk to the nearest train station or bus station. They have a lot of parks with walkways, where people can spend some time walking or jogging. This will make them fit and healthy. There are ideas like car-pooling, which is when two or more people share the same car to arrive at the same destination, so more than one person can travel in a car. It is seen as a sustainable way to travel, reducing carbon emissions and hence reducing people’s carbon footprint.In conclusion, I realized that the whole concept of greenways might be able to work in some cities, which are in Colorado or Florida, because of the climatic conditions, space to build parks and less population. But it would not work in developing countries because there is a lot of population ratio to little space. But measures can still be taken to create a more environmentally friendly atmosphere, for exa mple – some companies in London are making their building’s roof top green by planting trees in order to have a green and sustainable environment, in order to decrease the carbon footprint.In some countries, the government does not think of environment as their number one priority, mainly because they do not have enough money to reinforce ideas such as greenways. On the other hand, in cities like Phoenix, we are able to plant more trees and build parks which can provide a lot of shade and have a little sprinkling water which can make people come out of their houses more often. Greenways give sustainable solutions to various cities with climatic traits.

5 Coke vs Pepsi 21st Century Case Study

In a â€Å"carefully waged competitive struggle,† from 1975 to 1995 both Coke and Pepsi achieved average annual growth of around 10% as both U. S. nd worldwide CSD consumption consistently rose. According to Roger Enrico, former CEO of Pepsi-Cola: No The warfare must be perceived as a continuing battle without blood. Without Coke, Pepsi would have a tough time being an original and lively competitor. The more successful they are, the sharper we have to be. If the Coca-Cola company didn’t exist, we’d pray for someone to invent them. And on the other side of the fence, I’m sure the folks at Coke would say that nothing contributes as much to the present-day success of the Coca-Cola company than . . . Pepsi. 1 This cozy relationship was threatened in the late 1990s, however, when U. S. CSD consumption dropped for two consecutive years and worldwide shipments slowed for both Coke and Pepsi. In response, both firms began to modify their bottling, pricing, and brand strategies. They also looked to emerging international markets to fuel growth and broadened their brand portfolios to include non-carbonated beverages like tea, juice, sports drinks, and bottled water. Do As the cola wars continued into the twenty-first century, the cola giants faced new challenges: Could they boost flagging domestic cola sales? Where could they find new revenue streams? Was their era of sustained growth and profitability coming to a close, or was this apparent slowdown just another blip in the course of Coke’s and Pepsi’s enviable performance? 1Roger Enrico, The Other Guy Blinked and Other Dispatches from the Cola Wars (New York: Bantam Books, 1988). ________________________________________________________________________________________________________________ Research Associate Yusi Wang prepared this case from published sources under the supervision of Professor David B. Yoffie. Parts of this case borrow from previous cases prepared by Professors David Yoffie and Michael Porter. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright  © 2002 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www. hbsp. harvard. edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 Economics of the U. S. CSD Industry Americans consumed 23 gallons of CSD annually in 1970 and consumption grew by an average of 3% per year over the next 30 years (see Exhibit 1). This growth was fueled by increasing availability as well as by the introduction and popularity of diet and flavored CSDs. Through the mid-1990s, the real price of CSDs fell, and consumer demand appeared responsive to declining prices. 2 Many alternatives to CSDs existed, including beer, milk, coffee, bottled water, juices, tea, powdered drinks, wine, sports drinks, distilled spirits, and tap water. Yet Americans drank more soda than any other beverage. At 60%-70% market share, the cola segment of the CSD industry maintained its dominance throughout the 1990s, followed by lemon/lime, citrus, pepper, root beer, orange, and other flavors. C CSD consisted of a flavor base, a sweetener, and carbonated water. Four major participants were involved in the production and distribution of CSDs: 1) concentrate producers; 2) bottlers; 3) retail channels; and 4) suppliers. 3 Concentrate Producers The concentrate producer blended raw material ingredients (excluding sugar or high fructose corn syru p), packaged it in plastic canisters, and shipped the blended ingredients to the bottler. The concentrate producer added artificial sweetener to make diet soda concentrate, while bottlers added sugar or high fructose corn syrup themselves. The process involved little capital investment in machinery, overhead, or labor. A typical concentrate manufacturing plant cost approximately $25 million to $50 million to build, and one plant could serve the entire United States. No A concentrate producer’s most significant costs were for advertising, promotion, market research, and bottler relations. Marketing programs were jointly implemented and financed by concentrate producers and bottlers. Concentrate producers usually took the lead in developing the programs, particularly in product planning, market research, and advertising. They invested heavily in their trademarks over time, with innovative and sophisticated marketing campaigns (see Exhibit 2). Bottlers assumed a larger role in developing trade and consumer promotions, and paid an agreed percentage—typically 50% or more—of promotional and advertising costs. Concentrate producers employed extensive sales and marketing support staff to work with and help improve the performance of their bottlers, setting standards and suggesting operating procedures. Concentrate producers also negotiated directly with the bottlers’ major suppliers—particularly sweetener and packaging suppliers—to encourage reliable supply, faster delivery, and lower prices. Do Once a fragmented business with hundreds of local manufacturers, the landscape of the U. S. soft drink industry had changed dramatically over time. Among national concentrate producers, CocaCola and Pepsi-Cola, the soft drink unit of PepsiCo, claimed a combined 76% of the U. S. CSD market in sales volume in 2000, followed by Cadbury Schweppes and Cott Corporation (see Exhibit 3). There were also private label brand manufacturers and several dozen other national and regional producers. Exhibit 4 gives financial data for Coke and Pepsi and their top affiliated bottlers. 2 Robert Tollison et al. , Competition and Concentration (Lexington Books, 1991), p. 11. 3 The production and distribution of non-carbonated soft drinks and bottled water will be discussed in a later section. 2 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century Bottlers Bottlers purchased concentrate, added carbonated water and high fructose corn syrup, bottled or canned the CSD, and delivered it to customer accounts. Coke and Pepsi bottlers offered â€Å"direct store door† (DSD) delivery, which involved route delivery sales people physically placing and managing the CSD brand in the store. Smaller national brands, such as Shasta and Faygo, distributed through food store warehouses. DSD entailed managing the shelf space by stacking the product, positioning the trademarked label, cleaning the packages and shelves, and setting up point-of-purchase displays and end-of-aisle displays. The importance of the bottler’s relationship with the retail trade was crucial to continual brand availability and maintenance. Cooperative merchandising agreements between retailers and bottlers were used to promote soft drink sales. Retailers agreed to specified promotional activity and discount levels in exchange for a payment from the bottler. tC The bottling process was capital-intensive and involved specialized, high-speed lines. Lines were interchangeable only for packages of similar size and construction. Bottling and canning lines cost from $4 million to $10 million each, depending on volume and package type. The minimum cost to build a small bottling plant, with warehouse and office space, was $25million to $35 million. The cost of an efficient large plant, with four lines, automated warehousing, and a capacity of 40 million cases, was $75 million in 1998. 4 Roughly 80-85 plants were required for full distribution across the United States. Among top bottlers in 1998, packaging accounted for approximately half of bottlers’ cost of goods sold, concentrate for one-third, and nutritive sweeteners for one-tenth. Labor accounted for most of the remaining variable costs. Bottlers also invested capital in trucks and distribution networks. Bottlers’ gross profits often exceeded 40%, but operating margins were razor thin. See Exhibit 5 for the cost structures of a typical concentrate producer and bottler. Do No The number of U. S. soft drink bottlers had fallen, from over 2,000 in 1970 to less than 300 in 2000. 6 Historically, Coca-Cola was the first concentrate producer to build nation-wide franchised bottling networks, a move that Pepsi and Cadbury Schweppes followed. The typical franchised bottler owned a manufacturing and sales operation in an exclusive geographic territory, with rights granted in perpetuity by the franchiser. In the case of Coca-Cola, territorial rights did not extend to fountain accounts—Coke delivered to its fountain accounts directly, not through its bottlers. The rights granted to the bottlers were subject to termination only in the event of default by the bottler. The original Coca-Cola franchise contract, written in 1899, was a fixed-price contract that did not provide for contract renegotiation even if ingredient costs changed. With considerable effort, often involving bitter legal disputes, Coca-Cola amended the contract in 1921, 1978, and 1987 to adjust concentrate price. By 1999, over 81% of Coke’s U. S. volume was covered by the 1987 Master Bottler Contract, which granted Coke the right to determine concentrate price and other terms of sale. Under the terms of this contract, Coke was not obligated to share advertising and marketing expenditures with the bottlers; however, the company often did in order to ensure quality and proper distribution of marketing. In 2000, Coke contributed $766 million in marketing support and $223 million in infrastructure support to its top bottler alone. The 1987 contract did not give complete pricing control to Coke, but rather used a pricing formula that adjusted quarterly for changes in sweetener prices and stated a maximum price. This contract differed from Pepsi’s Master Bottling Agreement with its top bottler, which granted the bottler 4 â€Å"Louisiana Coca-Cola Reveals Crown Jewel,† Beverage Industry, January 1999. 5 Calculated from M. Dolan et al. , â€Å"Coca-Cola Beverages,† Merrill Lynch Capital Markets, July 6, 1998. Timothy Muris et al. , Strategy, Structure, and Antitrust in the Carbonated Soft-Drink Industry, (Quorum Books, 1993), p. 63; John C. Maxwell, ed. Beverage Digest Fact Book 2001. 3 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 perpet ual rights to distribute Pepsi cola products while at the same time required it to purchase its raw materials from Pepsi at prices, and on terms and conditions, determined by Pepsi. Pepsi negotiated concentrate prices with its bottling association, and normally based price increases on the CPI. Coke and Pepsi both raised concentrate prices throughout the 1980s and early 1990s, even as the real (inflation-adjusted) retail prices for CSD were down (see Exhibit 6). tC Coca-Cola and Pepsi franchise agreements allowed bottlers to handle the non-cola brands of other concentrate producers. Franchise agreements also allowed bottlers to choose whether or not to market new beverages introduced by the concentrate producer. Some restrictions applied, however, as bottlers could not carry directly competitive brands. For example, a Coca-Cola bottler could not sell Royal Crown Cola, but it could distribute Seven-Up, if it decided not to carry Sprite. Franchised bottlers had the freedom to participate in or reject new package introductions, local advertising campaigns and promotions, and test marketing. The bottlers also had the final say in decisions concerning retail pricing, new packaging, selling, advertising, and promotions in its territory, though they could only use packages authorized by the franchiser. In 1971, the Federal Trade Commission initiated action against eight major CPs, charging that exclusive territories granted to franchised bottlers prevented intrabrand competition (two or more bottlers competing in the same area with the same beverage). The CPs argued that interbrand competition was sufficiently strong to warrant continuation of the existing territorial agreements. After nine years of litigation, Congress enacted the â€Å"Soft Drink Interbrand Competition Act† in 1980, preserving the right of CPs to grant exclusive territories. Retail Channels No In 2000, the distribution of CSDs in the United States took place through food stores (35%), fountain outlets7 (23%), vending machines (14%), convenience stores (9%), and other outlets (20%). Mass merchandisers, warehouse clubs, and drug stores made up most of the last category. Bottlers’ profitability by type of retail outlet is shown in Exhibit 7. Costs were affected by delivery method and frequency, drop size, advertising, and marketing. The main distribution channel for soft drinks was the supermarket. CSDs were among the five largest selling product lines sold by supermarkets, raditionally yielding a 15%-20% gross margin (about average for food products) and accounting for 3%-4% of food store revenues. 8 CSDs represented a large percentage of a supermarket’s business, and were also a big traffic draw. Bottlers fought for retail shelf space to ensure visibility and accessibility for their products, and looked for new locations to increase impulse purchases, such as placing coolers at checkout counters. The proliferation of products and packaging types created intense shelf space pressures. Do Discount retailers, warehouse clubs, and drug stores accounted about 15% of CSD sales in the late 1990s. These firms often had their own private label CSD, or they sold a generic label such as President’s Choice. Private label CSDs were usually delivered to a retailer’s warehouse, while branded CSDs were delivered directly to the store. With the warehouse delivery method, the retailer was responsible for storage, transportation, merchandising, and stocking the shelves, thus incurring additional costs. The word â€Å"fountain outlets† traditionally referred to soda fountains, but was later used also for restaurants, cafeterias, and other establishments that served soft drinks by the glass using fountain dispensers. 8 Progressive Grocer 1998 Sales Manual Databook, July 1998, p. 68. 4 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century tC Hi storically, Pepsi had focused on sales through retail outlets, while Coke had dominated fountain sales. Coca-Cola had a 65% share of the fountain market in 2000, while Pepsi had 21%. Competition for fountain sales was intense. National fountain accounts were essentially â€Å"paid sampling,† with CSD companies earning pretax operating margins of around 2%. For restaurants, by contrast, fountain sales were extremely profitable—about 80 cents out of every dollar spent stayed with the restaurant retailers. In 1999, for example, Burger King franchisees were believed to pay about $6. 20 per gallon for Coke syrup, but they received a substantial rebate on each gallon in the form of a check; one large Midwestern Burger King franchisee said his annual rebate ran $1. 45 per gallon, or about 23%. Coke and Pepsi also invested in the development of fountain equipment, such as service dispensers, and provided their fountain customers with cups, point-of-sale material, advertising, and in-store promotions to increase brand presence. After Pepsi entered the fast-food restaurant business with the acquisitions of Pizza Hut (1978), Taco Bell (1986), and Kentucky Frie d Chicken (1986), Coca-Cola persuaded other chains such as Wendy’s and Burger King to switch to Coke. PepsiCo spun its restaurant business off to the public in 1997 under the name Tricon, while retaining the Frito-Lay snack food business. In 2000, fountain â€Å"pouring rights† remained split along pre-Tricon lines, as Pepsi supplied all of Taco Bell’s and KFC’s, and the overwhelming majority of Pizza Hut restaurants. Coke retained exclusivity deals with McDonald’s and Burger King. No Coke and Cadbury Schweppes handled fountain accounts from their national franchisor companies. Employees of the franchisee companies negotiated and signed pouring rights contracts which, in the case of big restaurant chains, could cover the entire United States or even the world. The accounts were actually serviced by employees of the franchisors’ fountain divisions, local bottlers, or both. Local bottlers, when they were used, were paid service fees for delivering syrup and fixing and placing machines. Historically, PepsiCo could only sell directly to end-user national accounts. By 1999, Pepsi had persuaded most of its bottlers to modify their franchise agreements to allow Pepsi to sell fountain syrup via restaurant commissary companies, which sell a range of supplies to restaurants. Concentrate producers offered bottlers rebates to encourage them to purchase and install vending machines. The owners of the property on which vending equipment was located usually received a sales commission. Coke and Pepsi were the largest suppliers of CSDs to the vending channel. Juice, tea, sports drinks, lemonade, and water were also available through vending machines. Suppliers to Concentrate Producers and Bottlers Do Concentrate producers required few inputs: the concentrate for most regular colas consisted of caramel coloring, phosphoric and/or citric acid, natural flavors, and caffeine. 10 Bottlers purchased two major inputs: packaging, which included $3. 4 billion in cans, $1. 3 billion in plastic bottles, and $0. 6 billion in glass; and sweeteners, which included $1. 1 billion in sugar and high fructose corn syrup, and $1. billion in artificial sweetener (predominantly aspartame). The majority of U. S. CSDs were packaged in metal cans (60%), then plastic bottles (38%), and glass bottles (2%). Cans were an attractive packaging material because they were easily handled, stocked, and displayed, weighed little, and were durable and recyclable. Plastic bottles, introduced in 1978, bo osted home consumption of CSDs because of their larger 1-liter, 2-liter, and 3-liter sizes. Single-serve 20-oz. PET bottles quickly gained popularity and represented 35% of vended drinks and 3% of grocery drinks in 2000. Nikhil Deogun and Richard Gibson, â€Å"Coke Beats Out Pepsi for Contracts With Burger King, Domino’s,† The Wall Street Journal, April 15, 1999. 10 Based on ingredients lists, Coke Classic and Pepsi-Cola, 2001. 5 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 The concentrate producers’ strategy towards can manufacturers was typical of their supplier relationships. Coke and Pepsi negotiated on behalf of their bottling networks, and were among the metal can industry’s largest customers. Since the can constituted about 40% of the total cost of a packaged beverage, bottlers and concentrate producers often maintained relationships with more than one supplier. In the 1960s and 1970s, Coke and Pepsi backward integrated to make some of their own cans, but largely exited the business by 1990. In 1994, Coke and Pepsi instead sought to establish stable long-term relationships with their suppliers. Major can producers included American National Can, Crown Cork Seal, and Reynolds Metals. Metal cans were viewed as commodities, and there was chronic excess supply in the industry. Often two or three can manufacturers competed for a single contract. Early History11 tC The Evolution of the U. S. Soft Drink Industry Coca-Cola was formulated in 1886 by John Pemberton, a pharmacist in Atlanta, Georgia, who sold it at drug store soda fountains as a â€Å"potion for mental and physical disorders. † A few years later, Asa Candler acquired the formula, established a sales force, and began brand advertising of Coca-Cola. Tightly guarded in an Atlanta bank vault, the formula for Coca-Cola syrup, known as â€Å"Merchandise 7X,† remained a well-protected secret. Candler granted Coca-Cola’s first bottling franchise in 1899 for a nominal one dollar, believing that the future of the drink rested with soda fountains. The company’s bottling network grew quickly, however, reaching 370 franchisees by 1910. No In its early years, Coke was constantly plagued by imitations and counterfeits, which the company aggressively fought in court. In 1916 alone, courts barred 153 imitations of Coca-Cola, including the brands Coca-Kola, Koca-Nola, Cold-Cola, and the like. Coke introduced and patented a unique 6. 5ounce â€Å"skirt† bottle to be used by its franchisees that subsequently became an American icon. Robert Woodruff, who became CEO in 1923, began working with franchised bottlers to make Coke available wherever and whenever a consumer might want it. He pushed the bottlers to place the beverage â€Å"in arm’s reach of desire,† and argued that if Coke were not conveniently available when the consumer was thirsty, the sale would be lost forever. During the 1920s and 1930s, Coke pioneered open-top coolers to storekeepers, developed automatic fountain dispensers, and introduced vending machines. Woodruff also initiated â€Å"lifestyle† advertising for Coca-Cola, emphasizing the role of Coke in a consumer’s life. Do Woodruff also developed Coke’s international business. In the onset of World War II, at the request of General Eisenhower, he promised that â€Å"every man in uniform gets a bottle of Coca-Cola for five cents wherever he is and whatever it costs the company. † Beginning in 1942, Coke was exempted from wartime sugar rationing whenever the product was destined for the military or retailers serving soldiers. Coca-Cola bottling plants followed the movements of American troops; 64 bottling plants were set up during the war—largely at government expense. This contributed to Coke’s dominant market shares in most European and Asian countries. Pepsi-Cola was invented in 1893 in New Bern, North Carolina by pharmacist Caleb Bradham. Like Coke, Pepsi adopted a franchise bottling system, and by 1910 it had built a network of 270 11 See J. C. Louis and Harvey Yazijian, The Cola Wars (Everest House, 1980); Mark Pendergrast, For God, Country, and Coca-Cola (Charles Scribner’s, 1993); David Greising, I’d Like the World to Buy a Coke (John Wiley Sons, 1997). 6 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. du or 617-783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century franchised bottlers. Pepsi struggled, however, declaring bankruptcy in 1923 and again in 1932. Business began to pick up in the midst of the Great Depression, when Pepsi lowered the price for its 12-ounce bottle to a nickel, the same price Coke charged for its 6. 5-ounce bottle. When Pepsi tried to expand its bottling network in the late 1930s, its choices were small local bottlers striving to compete with wealthy Coke franchisees. 12 Pepsi nevertheless began to gain market share. In 1938, Coke filed suit against Pepsi, claiming that Pepsi-Cola was an infringement on the CocaCola trademark. The court ruled in favor of Pepsi in 1941, ending a series of suits and countersuits between the two companies. With its famous radio jingle, â€Å"Twice as Much, for Nickel Too,† Pepsi’s U. S. sales surpassed those of Royal Crown and Dr Pepper in the 1940s, trailing only Coca-Cola. In 1950, Coke’s share of the U. S. CSD market was 47% and Pepsi’s was 10%; hundreds of regional CSD companies continued to produce a wide assortment of flavors. tC The Cola Wars Begin In 1950, Alfred Steele, a former Coca-Cola marketing executive, became Pepsi’s CEO. Steele made â€Å"Beat Coke† his theme and encouraged bottlers to focus on take-home sales through supermarkets. The company introduced the first 26-ounce bottles to the market, targeting family consumption, while Coke stayed with its 6. 5-ounce bottle. Pepsi’s growth soon began tracking the growth of supermarkets and convenience stores in the United States: There were about 10,000 supermarkets in 1945, 15,000 in 1955, and 32,000 at the peak in 1962. No In 1963, under the leadership of new CEO Donald Kendall, Pepsi launched its â€Å"Pepsi Generation† campaign that targeted the young and â€Å"young at heart. † Pepsi’s ad agency created an intense commercial using sports cars, motorcycles, helicopters, and a catchy slogan. The campaign helped Pepsi narrow Coke’s lead to a 2-to-1 margin. At the same time, Pepsi worked with its bottlers to modernize plants and improve store delivery services. By 1970, Pepsi’s franchise bottlers were generally larger compared to Coke bottlers. Coke’s bottling network remained fragmented, with more than 800 independent franchised bottlers that focused mostly on U. S. cities of 50,000 or less. 13 Throughout this period, Pepsi sold concentrate to its bottlers at a price approximately 20% lower than Coke. In the early 1970s, Pepsi increased the concentrate price to equal that of Coke. To overcome bottlers’ opposition, Pepsi promised to use the extra margin to increase advertising and promotion. Do Coca-Cola and Pepsi-Cola began to experiment with new cola and non-cola flavors and a variety of packaging options in the 1960s. Before then, the two companies had adopted a single product strategy, selling only their flagship brand. Coke introduced Fanta (1960), Sprite (1961), and lowcalorie Tab (1963). Pepsi countered with Teem (1960), Mountain Dew (1964), and Diet Pepsi (1964). Each introduced non-returnable glass bottles and 12-ounce metal cans in various packages. Coke and Pepsi also diversified into non-soft-drink industries. Coke purchased Minute Maid (fruit juice), Duncan Foods (coffee, tea, hot chocolate), and Belmont Springs Water. Pepsi merged with snackfood giant Frito-Lay in 1965 to become PepsiCo, claiming synergies based on shared customer targets, store-door delivery systems, and marketing orientations. In the late 1950s, Coca-Cola, still under Robert Woodruff’s leadership, began using advertising that finally recognized the existence of competitors, such as â€Å"American’s Preferred Taste† (1955) and â€Å"No Wonder Coke Refreshes Best† (1960). In meetings with Coca-Cola bottlers, however, executives only discussed the growth of their own brand and never referred to its closest competitor by name. 2 Louis and Yazijian, p,. 23. 13 Pendergrast, p. 310. 7 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 During the 1960s, Coke primarily focused on overseas markets, apparently believing that domestic soft drink consumption had neared saturation at 22. 7 ga llons per capita in 1970. 14 Pepsi meanwhile battled aggressively in the United States, doubling its share between 1950 and 1970. The Pepsi Challenge In 1974, Pepsi launched the â€Å"Pepsi Challenge† in Dallas, Texas. Coke was the dominant brand in the city and Pepsi ran a distant third behind Dr Pepper. In blind taste tests hosted by Pepsi’s small local bottler, the company tried to demonstrate that consumers in fact preferred Pepsi to Coke. After its sales shot up in Dallas, Pepsi started to roll out the campaign nationwide, although many of its franchise bottlers were initially reluctant to join. tC Coke countered with rebates, rival claims, retail price cuts, and a series of advertisements questioning the tests’ validity. In particular, Coke used retail price discounts selectively in markets where the Coke bottler was company owned and the Pepsi bottler was an independent franchisee. Nonetheless, the Pepsi Challenge successfully eroded Coke’s market share. In 1979, Pepsi passed Coke in food store sales for the first time with a 1. 4 share point lead. Breaking precedent, Brian Dyson, president of Coca-Cola, inadvertently uttered the name â€Å"Pepsi† in front of Coke’s bottlers at the 1979 bottlers conference. No During the same period, Coke was renegotiating its franchise bottling contract to obtain greater flexibility in pricing concentrate and syrups. Bottlers approved the new contract in 1978 only after Coke conceded to link concentrate price changes to the CPI, adjust the price to reflect any cost savings associated with a modification of ingredients, and supply unsweetened concentrate to bottlers who preferred to purchase their own sweetener on the open market. 15 This brought Coke’s policies in line with Pepsi, which traditionally sold its concentrate unsweetened to its bottlers. Immediately after securing bottler approval, Coke announced a significant concentrate price hike. Pepsi followed with a 15% price increase of its own. Cola Wars Heat Up In 1980, Cuban-born Roberto Goizueta was named CEO and Don Keough president of Coca-Cola. In the same year, Coke switched from sugar to the lower-priced high fructose corn syrup, a move Pepsi emulated three years later. Coke also intensified its marketing effort, increasing advertising spending from $74 million to $181 million between 1981 and 1984. Pepsi elevated its advertising expenditure from $66 million to $125 million over the same period. Goizueta sold off most of the non-CSD businesses he had inherited, including wine, coffee, tea, and industrial water treatment, while keeping Minute Maid. Do Diet Coke was introduced in 1982 as the first extension of the â€Å"Coke† brand name. Much of CocaCola management referred to its brand as â€Å"Mother Coke,† and considered it too sacred to be extended to other products. Despite internal opposition from company lawyers over copyright issues, Diet Coke was a phenomenal success. Praised as the â€Å"most successful consumer product launch of the Eighties,† it became within a few years not only the nation’s most popular diet soft drink, but also the third-largest selling soft drink in the United States. 14 Maxwell. 15 Pendergrast, p. 323. 8 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century In April 1985, Coke announced the change of its 99-year-old Coca-Cola formula. Explaining this radical break with tradition, Goizueta saw a sharp depreciation in the value of the Coca-Cola trademark as â€Å"the product had a declining share in a shrinking segment of the market. †16 On the day of Coke’s announcement, Pepsi declared a holiday for its employees, claiming that the new Coke tasted more like Pepsi. The reformulation prompted an outcry from Coke’s most loyal customers. Bottlers joined the clamor. Three months later, the company brought back the original formula under the name Coca-Cola Classic, while retaining the new formula as the flagship brand under the name New Coke. Six months later, Coke announced that Coca-Cola Classic (the original formula) would henceforth be considered its flagship brand. tC New CSD brands proliferated in the 1980s. Coke introduced 11 new products, including Cherry Coke, Caffeine-Free Coke, and Minute-Maid Orange. Pepsi introduced 13 products, including Caffeine-Free Pepsi-Cola, Lemon-Lime Slice, and Cherry Pepsi. The number of packaging types and sizes also increased dramatically, and the battle for shelf space in supermarkets and other food stores grew fierce. By the late 1980s, both Coke and Pepsi offered more than ten major brands, using at least seventeen containers and numerous packaging options. 17 The struggle for market share intensified and the level of retail price discounting increased sharply. Consumers were constantly exposed to cents-off promotions and a host of other supermarket discounts. No Throughout the 1980s, the smaller concentrate producers were increasingly squeezed by Coke and Pepsi. As their shelf-space declined, small brands were shuffled from one owner to another. Over five years, Dr Pepper was sold (all and in part) several times, Canada Dry twice, Sunkist once, Shasta once, and AW Brands once. Some of the deals were made by food companies, but several were leveraged buyouts by investment firms. Philip Morris acquired Seven-Up in 1978 for a big premium, but despite superior brand rankings and established distribution channels, racked up huge losses in the early 1980s and exited in 1985. (Exhibit 8a shows the brand performance of top companies, as ranked by retailers. ) In the 1990s, through a series of strategic acquisitions, Cadbury Schweppes emerged as the clear (albeit distant) third-largest concentrate producer, snapping up the Dr Pepper/Seven-Up Companies (1995) and Snapple Beverage Group (2000). (Appendix A describes Cadbury Schweppes’ operations and financial performance. ) Bottler Consolidation and Spin-Off Do Relations between Coke and its franchised bottlers had been strained since the contract renegotiation of 1978. Coke struggled to persuade bottlers to cooperate in marketing and promotion programs, upgrade plant and equipment, and support new product launches. 8 The cola wars had particularly weakened small independent franchised bottlers. High advertising spending, product and packaging proliferation, and widespread retail price discounting raised capital requirements for bottlers, while lowering their margins. Many bottlers that had been owned by one family for several generations no longer had the resources or the commitment to be competitive. At a July 1980 dinner with Coke’s fifteen largest domestic bottlers, Goizueta announced a plan to refranchise bottling operations. Coke began buying up poorly managed bottlers, infusing capital, 6 The Wall Street Journal, April 24, 1986. 17 Timothy Muris, David Scheffman, and Pablo Spiller, Strategy, Structure, and Antitrust in the Carbonated Soft Drink Industry. (Quorum Books, 1993), p. 73. 18 Greising, p. 88. 9 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 and quickly reselling them to better-performing bottlers. Refranchising allowed Coke’s larger bottlers to expand outside their traditionally exclusive geographic territories. When two of its largest bottling companies came up for sale in 1985, Coke moved swiftly to buy them for $2. 4 billion, preempting outside financial bidders. Together with other bottlers that Coke had recently bought, these acquisitions placed one-third of Coca-Cola’s volume in company-owned bottlers. In 1986, Coke began to replace its 1978 franchise agreement with the Master Bottler Contract that afforded Coke much greater freedom to change concentrate price. tC Coke’s bottler acquisitions had increased its long-term debt to approximately $1 billion. In 1986, on the initiative of Doug Ivester, who later became CEO, the company created an independent bottling subsidiary, Coca-Cola Enterprises (CCE), and sold 51% of its shares to the public, while retaining the rest. The minority equity position enabled Coke to separate its financial statements from CCE. As Coke’s first so-called â€Å"anchor bottler,† CCE consolidated small territories into larger regions, renegotiated with suppliers and retailers, merged redundant distribution and material purchasing, and cut its work force by 20%. CCE moved towards mega-facilities, investing in 50 million-case production lines with high levels of automation. Coke continued to acquire independent franchised bottlers and sell them to CCE. 19 â€Å"We became an investment banking firm specializing in bottler deals,† reflected Don Keough. In 1997 alone, Coke put together more than $7 billion in deals involving bottlers. 20 By 2000, CCE was Coke’s largest bottler with annual sales of more than $14. 7 billion, handling 70% of Coke’s North American volume. Some industry observers questioned Coke’s accounting practice, as Coke retained substantial managerial influence in its arguably independent anchor bottler. 21 No In the late 1980s, Pepsi also acquired MEI Bottling for $591 million, Grand Metropolitan’s bottling operations for $705 million, and General Cinema’s bottling operations for $1. 8 billion. The number of Pepsi bottlers decreased from more than 400 in the mid-1980s to less than 200 in the mid-1990s. Pepsi owned about half of these bottling operations outright and held equity positions in most of the rest. Experience in the snack food and restaurant businesses boosted Pepsi’s confidence in its ability to manage the bottling business. In the late 1990s, Pepsi changed course and also adopted the anchor bottler model. In April 1999, the Pepsi Bottling Group (PBG) went public, with Pepsi retaining a 35% equity stake. By 2000, PBG produced 55% of PepsiCo beverages in North America and 32% worldwide. As Craig Weatherup, PBG’s chairman/CEO, explained, â€Å"Our success is interdependent, with PepsiCo the keeper of the brands and PBG the keeper of the marketplace. In that regard, we’re joined at the hip. †22 Do The bottler consolidation of the 1990s made smaller concentrate producers increasingly dependent on the Pepsi and Coke bottling network to distribute their products. In response, Cadbury Schweppes in 1998 bought and merged two large U. S. bottlers to form its own bottler. In 2000, Coke’s bottling system was the most consolidated, with its top 10 bottlers producing 94% of domestic volume. Pepsi’s and Cadbury Schweppes’ top 10 bottlers produced 85% and 71% of the domestic volume of their respective franchisors. 19 Greising, p. 292. 20 Beverage Industry, January 1999, p. 17. 21 Albert Meyer and Dwight Owsen, â€Å"Coca-Cola’s Accounting,† Accounting Today, September 28, 1998 22 Kent Steinriede, â€Å"PBG Charts Its Own Course,† Beverage Industry, May 1, 1999. 10 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Adapting to the Times 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century In the late 1990s, a variety of problems began to emerge for the soft drink industry as a whole. Although Americans still drank more CSDs than any other beverage, U. S. sales volume registered only a 0. 2% increase in 2000, to just under 10 billion cases (a case was equivalent to 24 eight-ounce containers, or 192 ounces). This slow growth was in contrast to the 5%-7% annual growth in the United States during the 1980s. Concurrently, financial crisis in various parts of the world left Coke and Pepsi bottlers over-invested and under-utilized. tC Coca-Cola was also impacted by difficulties in leadership transition. After the death of the popular CEO Roberto Goizueta in 1997, his successor Douglas Ivestor had two rocky years at the helm, during which Coke faced a high-profile race discrimination suit and a European public relations scandal after hundreds of people became ill from contaminated soft drinks. Douglas Daft assumed leadership in April 2000; one of his first moves was to lay off 5,200 employees, or 20% of worldwide staff. While expressing â€Å"enthusiastic support for the current strategic course of the Company under Doug Daft’s leadership,† Coke’s Board voted against Daft’s eleventh-hour negotiations to acquire Quaker Oats in November 2000. As they had numerous times over the last century, analysts predicted the end of Coke and Pepsi’s stellar growth and profitability. Meanwhile, Coke and Pepsi turned their attention to bolstering domestic markets, diversifying into non-carbonated beverages (non-carbs), and cultivating international markets. Balancing Market Growth, Market Share, and Profitability in the United States No During the early 1990s, Coca-Cola and PepsiCo bottlers employed a low-price strategy in the supermarket channel in order to compete more effectively with high-quality, low-price store brands. As the threat of the low-priced brands lessened, CCE responded in March 1999 with its first major price increase at the retail level after 20 years of flat take-home pricing. Its strategy was to reposition Coke Classic as a premium brand. PBG followed that price increase shortly after. Price wars had driven soda prices down to the point where bottlers couldn’t get a decent return on supermarket sales,† explained a Pepsi executive. 23 Observed one industry analyst, â€Å"Coke’s growth is coming internationally, and Pepsi’s is coming from Frito-Lay. It is in the companies’ mutual best interest not to destroy the domestic market and eat up each other’s share. † 24 Consume rs’ initial reaction to price increases was a reduction in supermarket purchases. When CCE raised prices in supermarkets by 6. 0%-8. 0% in both 1999 and 2000, comparable volumes in North America declined each year (1. % in 1999 and 0. 8% in 2000). In 2001, however, the bottling companies effected more moderate price increases and consumer demand appeared to be on the upswing. Do Both Coke and Pepsi also set about to boost the flagging cola market in other ways, including exclusive marketing agreements with Britney Spears (Pepsi) and Harry Potter (Coke). Pepsi reintroduced the highly effective â€Å"Pepsi Challenge,† which was designed to boost overall cola sales and draw consumers away from private labels as much as it was to plug Pepsi over Coke. In contrast to the supermarket channel, Coke and Pepsi’s rivalry in the fountain channel intensified in the late 1990s. To penetrate Coke’s stronghold, Pepsi aggressively pursued national 23 Lauren R. Rublin, â€Å"Chipping Away: Coca-Cola Could Learn a Thing or Two from the Renaissance at PepsiCo,† Barron’s, June 12, 2000. 24 Rublin. 11 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 accounts, forcing Coke to make costly concessions to retain its biggest customers. Pepsi broke Coke’s stronghold at Disney with a 1998 contract to supply soft drinks at the new DisneyQuest, Club Disney and ESPN Zone chains. After a heated bidding war in 1999 over the 10,000-store chain of Burger King Corporation, Coke again won the fountain contract involving $220 million per year for 40 million gallons of syrup soda, but only after agreeing to double its $25 million in rebates to the food chain. Pepsi also sued Coke over access to the fountain market, charging Coke with â€Å"attempting to monopolize the market for fountain-dispensed soft drinks through independent foodservice distributors throughout the United States. Coke persuaded a Federal court to dismiss the suit in 2000. Despite Pepsi’s efforts, at the end of 2000, Coke still dominated the fountain market with 65% share of national â€Å"pouring rights† to Pepsi’s 21% and Dr Pepper/Seven Up’s 14%. tC The Rise of Non-Cola Beverages As consumer trends shifted from diet soda , to lemon-lime, to tea-based drinks, to other popular non-carbs, Coke and Pepsi vigorously expanded their brand portfolios. Each new product was accompanied by debate on how much each company should stray from its core product: regular cola. On one hand, cola sales consistently dwarfed alternative beverages sales, and cola-defenders expressed concern that over-enthusiastic expansion would distract the company from its flagship product. Also, history had shown that explosions in demand for alternative drinks were regularly followed by slow or negative growth. On the other hand, as domestic cola demand appeared to plateau, alternative beverages could provide a growth engine for the firms. No By the late 1990s, the soft drink industry had seen various alternative beverage categories come and go. From double-digit expansion in the late 1980s, diet CSDs peaked in 1991 at 29. 8% of the CSD segment and then declined to their 1988-level share of 24. 4% in 1999. PepsiCo’s introduction of Pepsi One in late 1998 was partially responsible for the minor recovery of the diet drink segment. Flavored soft drinks such as citrus, lemon-lime, pepper, and root beer were also popular. In 1999, Mountain Dew grew faster than any other CSD brand for the third year in a row, posting 6. 0% volume growth, but in 2000, its growth slowed to 1. 5% due to competing â€Å"new-age† non-carbs. Do At the turn of this century, CSDs accounted for 41. 3% of total non-alcoholic beverage consumption, bottled water accounted for 10. 3%, and other non-carbs accounted for the remainder. 25 When measured in gallons, sales of non-carbs rose by 18% in 1995 and 5% in 2000, compared to 3% and 0. 2% respectively for CSDs. The drinks with high growth and high hype were non-carbs such as juices/juice drinks, sports drinks, tea-based drinks, dairy-based drinks—and especially bottled water. In the 1990s, the bottled water industry grew on average 8. 3% per year, and volume reached more than 5 billion gallons in 2000. Revenue growth outpaced volume growth, with a 9. 3% increase to approximately $5. 6 billion, and per capita consumption gained 5. 1 gallons to 13. 2 gallons per person. Pepsi’s Aquafina went national in 1998. Coke followed in 1999 with Dasani. Though Pepsi and Coke sold reverse-osmosis purified water instead of spring water, they had a distribution advantage over competing water brands. 26 Coke and Pepsi launched other new drinks throughout the 1990s. They also aggressively acquired brands that rounded out their portfolios, including Tropicana (Pepsi, 1998), Gatorade (Pepsi, 5 Maxwell. Does not include â€Å"tap water / hybrids / all others† category. 26 Reverse osmosis is a method of producing pure water by forcing saline or impure water through a semi-permeable membrane across which salts or impurities cannot pass. 12 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in t he Twenty-First Century 2000), and SoBe (Pepsi, 2000). Both companies predicted that future increases in market share would come from beverages other than CSDs. Pepsi pronounced itself a â€Å"total beverage company,† and Coca-Cola appeared to be moving in the same direction, recasting its performance metric from share of the soda market to â€Å"share of stomach. † â€Å"If Americans want to drink tap water, we want it to be Pepsi tap water,† said Pepsi’s vice-president for new business, describing the philosophy behind the new strategy. 27 Coke’s Goizueta had echoed the same view: â€Å"Sometimes I think we even compete with soup. †28 Though cola remained the clear leader in terms of both companies’ volume sales, both Coke and Pepsi relied heavily on non-carbs to stimulate their overall growth in the late 1990s. In 1999, non-carbs accounted for 80% of Pepsi’s and more than 100% of Coke’s growth. 29 tC At the turn of the century, Pepsi had the lion’s share of non-CSD sales. Pepsi led Coke by a wide margin in 2000 volume sales in three key segments: Gatorade (76%) led PowerAde (15%) in the $2. 6billion sports drinks segment, Lipton (38%) led Nestea (27%) in the $3. 5-billion tea-based drinks segment, and Aquafina (13%) led Dasani (8%) in the $6. 0-billion bottled water segment. 30 Including multi-serve juices, Tropicana held an approximate 44% share of the $3-billion chilled orange juice market, more than twice that of Minute Maid. 1 With the acquisition of Quaker and South Beach Beverages, Pepsi raised its non-carb market share to 31%, to Coke’s 19% (see Exhibit 8b). No Non-CSD beverages complicated Coke’s and Pepsi’s traditional production and distribution processes. While bottlers could easily manage some types of alternative beverages (e. g. , cold -filled Lipton Brisk), other types required costly new equipment and changes in production, warehousing, and distribution practices (e. g. , hot-filled Lipton Iced Tea). In many cases, Coke and Pepsi paid more than half the cost of these investments. The few bottlers that invested in these capabilities either purchased concentrate or other additives from Coke and Pepsi (e. g. , Dasani’s mineral packet) or compensated the franchiser through per-unit royalty fees (e. g. , Aquafina). Most bottlers, however, did not invest in hot-fill (for some iced tea), reverse-osmosis (for some bottled water), or other specialized equipment, and instead bought their finished product from a central regional plant or one owned directly by Coca-Cola or PepsiCo. They would then distribute these alongside their own bottled products at a percentage mark-up. More split pallets32 led to slightly higher labor costs, but otherwise did not significantly affect distribution practices. Despite these complicated and evolving arrangements, higher retail prices for alternative beverages meant that margins for the franchiser, bottler, and distributor were consistently higher than on CSDs. Internationalizing the Cola Wars Do As domestic demand appeared to plateau, Coke and Pepsi increasingly looked overseas for new growth. Throughout the 1990s, new access to markets in China, India, and Eastern Europe stimulated some of the most intense battles of the cola wars. In many international markets, per capita consumption levels remained a fraction of those in the United States. For example, while the 27 Marcy Magiera, â€Å"Pepsi Moving Fast To Get Beyond Colas,† Advertising Age, July 5, 1993. 28 Greising, p. 233. 29 Bonnie Herzog, â€Å"PepsiCo, Inc. : The Joy of Growth,† Credit Suisse First Boston Corporation, September 8, 2000. 30 Maxwell, p. 152-3. 31 Betsy McKay, â€Å"Juiced Up: Pepsi Edges Past Coke, and It has Nothing to Do With Cola,† The Wall Street Journal, November 6, 2000. 32 Pallets are hard beds, usually of wood, used to organize, store, and transport products. A split pallet carries more than one product type. 13 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century op y 702-442 average American drank 874 eight-ounce cans of CSDs in 1999, the average Chinese drank 22. In 1999, Coke held a world market share of 53%, compared to Pepsi’s 21% and Cadbury Schweppes’ 6%. Among major overseas markets, Coke dominated in Western Europe and much of Latin America, while Pepsi had marked presence in the Middle East and Southeast Asia (see Exhibit 9). C By the end of World War II, Coca-Cola was the largest international producer of soft drinks. Coke steadily expanded its overseas operations in the 1950s, and the name Coca-Cola soon became a synonym for American culture. Coke built brand presence in developing markets where soft drink consumption was low but potential was large, such as Indonesia: With 200 million inhabitants, a med ian age of 18, and per capita consumption of 9 eight-ounce cans of soda a year, one Coke executive noted that â€Å"they sit squarely on the equator and everybody’s young. It’s soft drink heaven. 33 By the early 1990s, Coke’s CEO Roberto Goizueta said, â€Å"Coca-Cola used to be an American company with a large international business. Now we are a large international company with a sizable American business. †34 No Following Coke, Pepsi entered Europe soon after World War II, and—benefiting from Arab and Soviet exclusion of Coke—into the Middle East and Soviet bloc in the early 1970s. However, Pepsi put less emphasis on its international operations during the subsequent decade. In 1980, international sales accounted for 62% of Coke’s soft drink volume, versus 20% for Pepsi. Pepsi rejoined the international battles in the late 1980s, realizing that many of its foreign bottling operations were inefficiently run and â€Å"woefully uncompetitive. †35 In the early 1990s, Pepsi utilized a niche strategy which targeted geographic areas where per capitas were relatively established and the markets presented high volume and profit opportunities. These were often â€Å"Coke fortresses,† and Pepsi put its guerilla tactics to work, noting that â€Å"as big as Coca-Cola is, you certainly don’t want a shootout at high noon,† said Wayne Calloway, then CEO of PepsiCo. 6 Coke struck back; in one high-profile coup in 1996, Pepsi’s longtime bottler in Venezuela defected to Coke, temporarily reducing Pepsi’s 80% share of the cola market to nearly nothing overnight. In the late 1990s, Pepsi moved even further away from head-to-head competition and instead concentrated on emerging markets that were still up for grabs. â€Å"We kept beating our heads in markets that Coke won 20 years ago,† explained Calloway’s successor, Roger Enrico. â€Å"That is a very difficult proposition. 37 In 1999, PepsiCo’s bottler sales were up 5% internationally and its operating profit from overseas was up 37%. Market share gains were reported in most of Pepsi-Cola International’s top 25 markets, including increases of 10% in India, 16% in China, and more than 100% in Russia. By 2000, international sales accounted for 62% of Coke’s and 9% of Pepsi’s revenues. Do Concentrate producers encountered various obstacles in international operations, including cultural differences, political instability, regulations, price controls, advertising restrictions, foreign exchange controls, and lack of infrastructure. When Coke attempted to acquire Cadbury Schweppes’ international practice, for example, it ran into regulatory roadblocks in Europe and in Mexico and Australia, where Coke’s market shares exceed 50%. On the other hand, Japanese domestic-protection price controls in the 1950s greased the skids for Coke’s high concentrate prices and high profitability, and in India, mandatory certification for bottled drinking water caused several local brands to fold. 33 John Huey, â€Å"The World’s Best Brand,† Fortune, May 31, 1993. 34John Huey, â€Å"The World’s Best Brand,† Fortune, May 31, 1993. 5 Larry Jabbonsky, â€Å"Room to Run,† Beverage World, August 1993. 36The Wall Street Journal, June 13, 1991. 37 John Byrne, â€Å"PepsiCo’s New Formula: How Roger Enrico is Remaking the Company†¦ and Himself,† BusinessWeek, April 10, 2000. 14 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617- 783-7860. 702-442 op y Cola Wars Continue: Coke and Pepsi in the Twenty-First Century To cope with immature distribution networks, Coke and Pepsi created their own ground-up, and often novel, systems. Coke introduced vending machines to Japan, a channel that eventually accounted for more than half of Coke’s Japanese sales. 38 In India, Pepsi found the most prominent businessman in town and gave him exclusive distribution rights, tapping his connections to drive growth. Significantly, both Coke and Pepsi recognized local-market demands for non-cola products. In 2000, Coke carried more than 200 brands in Japan alone, most of which were teas, coffees, juices, and flavored water. In Brazil, Coke offered two brands of guarana, a popular caffeinated carbonated berry drink accounting for one-quarter of that country’s CSD sales, despite rivals’ TV ads ridiculing â€Å"gringo guarana. † tC When the economy foundered in certain parts of the world during the late 1990s, annual consumption declined in many regions. Major financial quakes in East Asia in 1997, Russia in 1998 and Brazil in 1999 shook the cola giants, who had invested heavily in bottler infrastructure. From 1995 to 2000, Coke’s top line slowed to an average annual growth of less than 3%. Profits actually fell from $3. 0 billion in 1995 to $2. 2 billion in 2000. In Russia, where Coke invested more than $700 million from 1991 to 1999, the collapse of the economy caused sales to drop by as much as 60% and left Coke’s seven bottling plants operating at 50% capacity. In Brazil, its third-largest market, Coke lost more than 10% of its 54% market share to low-cost local drinks produced by family-owned bottlers exempt from that country’s punitive soft-drink taxes. In 1998, Coke estimated that a strong dollar cut into net sales by 9%. Pepsi, with its relatively lower overseas presence, was less affected by the crises. Nonetheless, Pepsi also subsidized its bottlers while experiencing a drop in sales. No Despite these financial setbacks, both Coke and Pepsi expressed confidence in the future growth of international consumption and used the downturn as an opportunity to snatch up bottlers, distribution, and even rival brands. To increase sales, they tried to make their products more affordable through measures such as refundable glass packaging (instead of plastic) and cheaper 6. ounce bottles. The End of an Era? At the turn of the century, growth of cola sales in the United States appeared to have plateaued. Coke and Pepsi were investing hundreds of millions of dollars to shore up international bottlers operating at low capacity. The companies’ overall growth in soft drink sales were falling short of precedent and of investors’ expectations. Was the fundamental nature of the cola wars changing? Would the parameters of this new rivalry include reduced profitability and stagnant growth— inconceivable under the old form of rivalry? Do Or, were the troubles of the late 1990s just another step in the evolution of two of America’s most successful companies? In 2001, non-cola, non-carbs, and even convenience foods offered diversification and growth potential. Low international per capita soft drink consumption figures hinted at tremendous opportunity in the competition for worldwide â€Å"throat share. † Noted a Coke executive in 2000, â€Å"the cola wars are going to be played now across a lot of different battlefields. †39 38 June Preston, â€Å"Things May Go Better for Coke amid Asia Crisis, Singapore Bottler Says,† Journal of Commerce, June 29, 1998, . A3. 39 Betsy McKay, â€Å"Juiced Up: Pepsi Edges Past Coke, and It has Nothing to Do With Cola,† The Wall Street Journal, November 6, 2000. 15 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. Do Exhibit 1 702-442 Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617-783-7860. No U. S. Industry Consumption Statistics 1970 1975 1981 1985 1990 1992 1994 1995 1996 1998 1999 2000 Historical Carbonated Soft Drink Consumption Cases (millions) Gallons/capita As a % of total beverage consumption 3,090 22. 7 2. 4 3,780 26. 3 14. 4 5,180 34. 2 18. 7 6,500 40. 3 22. 4 7,914 46. 9 26. 1 8,160 47. 2 26. 3 8,608 50. 0 27. 2 8,952 50. 9 28. 1 9,489 52. 0 28. 8 9,880 54. 0 30. 0 9,930 53. 6 29. 4 9,950 53. 0 29. 0 22. 7 22. 8 18. 5 35. 7 6. 5 5. 2 1. 3 1. 8 26. 3 21. 8 21. 6 33 1. 2 6. 8 7. 3 4. 8 1. 7 2 34. 2 20. 6 24. 3 27. 2 2. 7 6. 9 7. 3 6 2. 1 2 40. 3 24. 0 25. 0 26. 9 4. 5 7. 8 7. 3 6. 2 2. 4 1. 8 46. 9 24. 3 24. 2 26. 2 8. 1 8. 8 7. 0 5. 4 2. 0 1. 5 47. 2 23. 3 23. 8 26. 5 8. 2 9. 1 6. 8 5. 4 2. 0 0. 6 1. 4 50. 0 22. 8 23. 2 23. 3 9. 6 9. 4 7. 1 4. 8 1. 7 0. 9 1. 3 50. 9 22. 3 22. 8 1. 3 10. 1 9. 5 6. 8 4. 9 1. 8 1. 1 1. 2 52. 0 22. 3 22. 7 20. 2 11. 0 9. 7 6. 9 4. 8 1. 8 1. 1 1. 2 54. 0 22. 1 22. 0 18. 0 11. 8 10. 0 6. 9 4. 7 2. 0 1. 3 1. 3 53. 6 22. 2 21. 9 17. 2 12. 6 10. 2 7. 0 4. 6 2. 0 1. 4 1. 3 53. 0 22. 2 21. 7 16. 8 13. 2 10. 4 7. 0 4. 6 2. 0 1. 5 1. 2 114. 5 126. 5 133. 3 146. 2 154. 4 154. 3 154. 0 152. 6 153. 6 154. 1 153. 8 153. 6 68 56 49. 2 36. 3 28. 1 28. 2 28. 5 29. 9 28. 9 28. 4 28. 7 28. 9 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 182. 5 U. S. Liquid Consumption Trends (gallons/capita) Carbonated soft drinks Beer Milk Coffeea Bottled Waterb Juices Teaa Powdered drinks Wine Sports Drinksc Distilled spirits Subtotal Tap water/hybrids/all others Totald tC opy Source: John C. Maxwell, Beverage Digest Fact Book 2001, and The Maxwell Consumer Report, Feb. 3, 1994; Adams Liquor Handbook, casewriter estimates. aFrom 1985, coffee and tea data are based on a three-year moving average to counter-balance inventory swings, thereby portraying consumption more realistically. bBottled water includes all packages, single-serve, and bulk. cSports drinks included in â€Å"Tap water/hybids/all others† pre-1992. This analysis assumes that each person consumes on average one-half gallon of liquid per day. -16- Cola Wars Continue: Coke and Pepsi in the Twenty-First Century Advertisement Spending for the Top 10 CSD Brands ($ millions) op y Exhibit 2 Share of market 2000 Total market 20. 4 13. 6 8. 7 7. 2 6. 6 6. 3 5. 3 2. 0 1. 7 1. 1 1999 20. 3 13. 8 8. 5 7. 1 6. 8 3. 6 5. 1 2. 1 1. 8 1. 1 Advertisement Spendinga per 2000 2000 1999 share point 207. 3 130. 0 1. 2 50. 5 84. 0 83. 6 0. 5 44. 5 NA 2. 7 148. 9 91. 1 25. 5 37. 1 68. 4 71. 3 0. 8 39. 2 NA 2. 9 tC Coke Classic Pepsi-Cola Diet Coke Mountain Dew Sprite Dr Pepper Diet Pepsi 7UP Caffeine Free Diet Coke Barq’s root beer Total top 10 702-442 72. 9 72. 9 10. 2 9. 6 0. 1 7. 0 12. 7 13. 3 0. 1 22. 3 NA 2. 4 604. 2 485. 2 8. 3 707. 6 650. 0 NA Source: â€Å"Top 10 Soft-Drink Brands,† Advertising Age, September 24, 2001; casewriter estimates. aAdvertisement spending measured in 11 media channels from CMR. Brands and total market in 192-oz cases from Do No Beverage Digest/Maxwell. Case volume from all channels. 17 Copying or posting is an infringement of copyright. Permissions@hbsp. arvard. edu or 617-783-7860. 702-442 Cola Wars Continue: Coke and Pepsi in the Twenty-First Century U. S. Soft Drink Market Share by Case Volume (percent) 1966 op y Exhibit 3 1970 1975 1980 1985 1990 1995 1998 2000E 27. 7 1. 5 1. 4 2. 8 33. 4 28. 4 1. 8 1. 3 3. 2 34. 7 26. 2 2. 6 2. 6 3. 9 35. 3 2

International marketing plan guide Essay Example | Topics and Well Written Essays - 500 words - 2

International marketing plan guide - Essay Example However, understanding of the market conditions in Qatar for efficient service delivery and success of the marketing channels for use by the university is mandatory. This study aims at analyzing the international pricing that will fit the Qatar market to be adopted by Marywood University for success in accessing international students from Qatar. The different aspects of price will be used to analyze the qualities of the Qatar market to provide insight to effective pricing mechanism for the Qatar market. The high demand in Qatar results in low price sensitivity for established university institutions. However, for a new entrant in the market the prices have to conform to the levels of pricing to the Qatar market, owing to sensitivity to new universities in the region and the need for quality education (Ibp, 209). After some time, the prices can be adjusted upwards when Marywood University has established a high acceptance in Qatar and has convinced the public and the regulatory authorities of the quality of its programs both graduate and undergraduate. There are many substitutes for education in Qatar from both international and local universities and the pricing have to reflect the rates offered by the competition, if not better to allow for augmented market share (Ibp, 203). The most notable competition in Qatar is Qatar University offering both graduate and undergraduate programs. Therefore, using the prices offered at Qatar University, Marywood University should develop prices to meet these needs at a region of QAR 176,191. A high and continuously increasing demand for university education exists in Qatar owing to the few Qataris having attained high education levels to allow them to access jobs requiring high skills and understanding (Abougomaah, 67). There has been an increased need by the Qatar government to reverse the use of highly skilled expatriates resulting in high demand for education in Qatar. The current and expected future demand for

Challenges women face moving up to executive positions Research Paper

Challenges women face moving up to executive positions - Research Paper Example ansparent barrier that [keeps] women from rising above a certain level in organizations† (Sools, van Engen and Baerveldt, 2003) the glass ceiling is often blamed for the phenomenon. The purpose of this study is to explore the careers of Midwestern women who hold prominent positions in their respective industries to understand the progression of their careers and the obstacles they faced during. This study attempts to research and answer two questions: a) What challenges have women faced in the past 30 years? b) What opportunities for women have developed in the past 30 years? This research paper is limited to the information gained by interviewing two Midwestern female executives; the secondary data collected is based around that information. The time-frame allotted for the research also restricted a more extensive study. This research has allowed me to study this topic in great detail. However, it is based on my own understanding of the research materials and is subject to my inexperience. The conclusions drawn are intended to be my opinion and in no way expected to be the final word on this evolving subject matter. Furthermore, the topic is very sensitive and susceptible to bias and there may be unintentional proclivity towards one way of thinking. That said, this paper should be taken in the educational purpose intended and should be used as basis for further research. For the primary research, raw data was collected by way of conducting two interviews. The candidates were selected based on their years of experience, career progression and expertise. Each of these women, belonging to two very different fields, started from the very rudimentary department and progressed through the ranks to reach the level they are at today. I initially got in touch with them via email, sharing my purpose and questions of study and scheduled interview time and location. I preferred meeting them face-to-face for a more thorough interview and to have a better understanding.

A forest of symbols. How appropriate is this phrase as a description Essay

A forest of symbols. How appropriate is this phrase as a description of Joseph Conrad's Heart of Darkness - Essay Example Instead, he finds meaning in the outside nature of things, what can be seen and touched and therefore proved. This emphasizes the importance of symbolism in bringing out the meaning of the story as Marlowe, concentrating on the outside, will make finding true meaning difficult at best. However, Marlow’s experience in the Congo has changed him to a man who cannot ignore the deeper meanings of the symbols around him. Like the rest of the story, in which everything seems to be reversed with its opposite or at best misunderstood in its entirety, the opening of the novel depends largely upon symbols as a means of conveying this sense of inner conflict between the nature of a thing and itself. The concepts of inward and outward, civilized and savage and light and dark are recurrent themes throughout the novel, introduced at the novel’s beginning and illustrating how each of these words are actually defined by cultural rather than actual standards. The bulk of the book concentrates on Marlowe’s telling of his adventures on the Congo River as a steamboat captain sent in to find a station master who has gone missing. As he struggles to make his way up the river to the interior where this man is supposed to be waiting for him, Marlowe begins to gain a deeper understanding of what is actually occurring in the forest outside the realm of what he’s been told by the Company. The trip on the Congo serves as a frame for a variety of adventures Marlow experienced as a younger man including encountering abject poverty, the frightening sight of ‘black men’ (never humans) working, chain gangs, uncomfortable station managers and broken down steamer ships. He is exposed to the most self-centered and greed-oriented individuals who appear to view the jungle as their personal treasure chest, to be exploited in any way they see fit, rather

Human resources FSLA Case Study Example | Topics and Well Written Essays - 500 words

Human resources FSLA - Case Study Example There are exemptions of compensation of the extra hours by the Act, meaning that not all employees are appropriate for compensation by the Act. The worker in this case is eligible for compensation of the overtime hours by the employer under the Act. From the scenario, there was denial for the employee’s appeal for compensation by the department. The department claims to have a policy where they do not consider overtime where an employee is on duty during his off duty hours (Calvasina et al, 2010). Conversely, the worker works for extra hours so that he is able to keep to the standards of his job description of top physical conditioning. The extra hours by the worker, area benefits the company too, because during the overtime hours the employee works for the good of the employee, and not for his own bosom (Calvasina et al, 2010) There are no legal exemptions by the Act against the employee in this scenario, so the department should compensate him (Costa, 2000). The Act vividly expounds overtime hours as time that one works when there are no authoritative directions from the employer to do so. The employee in this case toils for not certified operational extra hours; therefore, the employee should get his compensation from the employer. (Scott, 2010) Employers can shun FLSA claims by guaranteeing that they consult with the human resource team to ensure that they comply with the requirements by the Act (Calvasina et al, 2010). This entails making sure that there is the proper classification of all employees, to know whether the law excludes the worker. The employee does this by asking some questions relevant to the Act and carrying out tests where there is no clarification about the exemption status (Costa, 2000). The human resource department should ensure that they explain to the employees about the Act so that they avoid scenarios where the employees state to have claims, whereas there is none (Scott, 2010). Employers do

Bulling in NYC School Research Paper Example | Topics and Well Written Essays - 2500 words

Bulling in NYC School - Research Paper Example This essay approves that researchers have not agreed on the actual definition of bullying. There are definitions which have been in use and are worthy of quote here. Bullying is defined in a number of ways. Experts believe that there has been no clear definition of the term bullying. Bullying is also known as peer victimization and peer harassment. It is an intentional act of harming somebody by means of verbal, physical, sexual assault, or other forms of harassment. Bullying at school is believed a universal social malady. In many instances, bullies are stronger and more powerful than their victims, and the situation has the tendency to be repetitive. The study of bullying involves studies of children’s temperament. Bullying is peer abuse because it involves people in the same setting, students in the same school, or people who should have considered themselves companions with the same purpose and that is learning. This report makes a conclusion that that bullying is a â€Å"social sickness† that needs to be cured. And it is getting serious every day. It’s time authorities and the many stakeholders concerned with the welfare of the young to bond together and find effective means to heal this social malady. The young are victimized. Parents feel that their children are not anymore secured inside the school, a place where they ought to experience positive and moral values and learn good things in life. But it seems, schools are not anymore safe for the young.

What do you expect will be the character of the 21st century Peaceful Essay

What do you expect will be the character of the 21st century Peaceful War-prone Chaotic - Essay Example In any case, several challenges continue to face humanity in the aspect of human relations and this creates the need for measures to address the fundamental concerns affecting humanity. In any case, the century is still young and anything is certainly possible. In the face of the growing challenges facing the world in terms of unpredictable future relations between certain countries in the world, several realities emerge. In a way, the character of the 21st century is very much unpredictable and it basically calls for a keen analysis of the whole situation in order to make sound and valid predictions in relation to the issue. In the context of peace and war, it is safer to confirm that the 21st century seems to promise much hope for the future. In a way, it certainly appears that humanity has understood the extent to which a modern war can have devastating effects on the lives of humanity. As such, most countries across the world are pushing for measures that can enhance peaceful coe xistence across the world. Peace, in the context of international relations is the catalyst that can steer the course of life and drive the true sense of civilization. The experience of the two World Wars confirmed to the world that peace is the only option in a world were technology and civilization has advanced to the levels it is currently realized. The 21st century presents humanity with myriad challenges that seem to shift the priorities of humanity from the issues of war to the more fundamental concerns of this age. Such issues as climate change, poverty and other aspects continue to confront humanity day by day. In any case, the challenges that would otherwise be addressed through wars in the past are no longer addressed the same way. The United States is very careful in its operations across the world and the search for peace seems to be the most pressing preoccupation. In a way, challenges seem to emerge in this regard. The growth of the Chinese economy seems to present muc h headache to the Americans and it appears that the political world order might soon shift positions (Walt 45). There is a sense of growing awareness on the devastating effects of the wars that have always affected humanity. Through media and other avenues, people across the world are able to evidence the effects of the chaos that seem to be realized in certain parts of the world (Steele 25). More importantly, one of the most critical issues in the present world order has become the economic preoccupation of countries across the world. Unfortunately, economic realizations will never go in tandem with a turbulent political environment (Falk 6). It therefore goes without doubt that the 21st century promises much of peaceful coexistence in the world more than it promises a sense of chaos. However, amid the sense of peace that can be envisioned deep into the century, several challenges seem to emerge. In any case, it appears that in certain respects, war become the only option. The 21st century is inundated with a lot of challenges that seem to present a dim future for the future. The problem of terrorism is a real fact that cannot be overlooked (Scholte 250). The United States is basically at the forefront in dealing with the challenge of terrorism in the world (Jackson 15). Well, this is certainly a very delicate process where war can always be an option. In fighting terrorism across the world, it does appear that the 21st century is much gloomy in terms of dealing with the aspects of human security in relation to the challenges posed by terror (Mearsheimer 14). The notion that certain miscreants are out to terrorize the world and make life seem like mere luck is certainly not the best situation to be. In this context, to address the critical aspects of safety of its citizens, the United States has to brace up for any eventuality and this translates

The Clash of Civilizations and the Remaking of World. Clash of Ignorance Essay Example for Free

The Clash of Civilizations and the Remaking of World. Clash of Ignorance Essay This article by Edward Said is a follow up to an earlier article by Samuel Huntington titled â€Å"The Clash of Civilization† that was themed around civilization being a source of conflict in the modern world. The focus of Huntington’s article is the prediction of ideological differences between the different cultures say religions Christianity and Islam being a source of conflict in the world. Summary of the article This article â€Å"Clash of Ignorance† by Edward Said aims at faulting the earlier assumption in the â€Å"Clash of civilization† where it is only assumed that the major cultures say the West and Islamism are in conflict. The high level of ignorance in the theory and generalization of the West and Islam as cultures is the main thematic concern by Said in this article. The article faults the general ascribed ideology of the West versus the rest as in the cold war period to a now new modern ideology of Islamism versus the West. Critical Discussion Said makes an argument against some of the popular entities in global politics in modern day. The entities are Islamism and the â€Å"West†. Reference is made of Huntington’s article that foresaw the cause of conflict in future politics as being driven by the differences between nations and the different groups of civilization. The general assumption from this is the fact that conflicts will thus be cultural. In the â€Å"Clash of Ignorance† the author is against this classification of groups in conflict. Said is in contention of Huntington’s theory on the use of the 9/11 terrorist attack on America as an affirmation to the existence of the two sides in global conflict across the globe CITATION Sai01 l 1033 (Said, 2001). According to Said, the involvement of the terrorists in the 9/11 attacks was just a representation of a small fraction. This thus cannot be construed to be a representation of Islam’s across the world. This argument is strengthened by Said through his allusion to a stand by a practicing Muslim who contends that Islamic extremists are not by any form a representation of the religion in itself but people who are out to distort the face of the religion CITATION Sai01 l 1033 (Said, 2001). Said also argues against the idea that Muslims across the globe have an assumption of being a superior culture. This is indeed not a properly sampled and proved theory with empirical evidence of the billions of Muslims across the globe. The assertion by the Italian Prime Minister of Islam being adamant to being part of modernity is also wrong according to Said. This can be proved through the embracing of different â€Å"western† technologies and the use of the said technologies in the 9/11 attacks on America. Further evidence points at the embracing of western style clothing by some Muslims even the women. The above stated evidence by Said points to the heightened ignorance in factual evidence as regards to calls of existence of conflicts between Islam and the â€Å"West† CITATION Sai01 l 1033 (Said, 2001). In this article, Said makes numerous efforts as a result of lack of evidence to show the divide being asserted between the â€Å"West† and â€Å"Islam†. He points out the different societies across the world where both sides in this alleged divide live in harmony. The increased level of anti-Islamic perspectives s portrayed in the media in the â€Å"West† is enough evidence of the level of hate speech directed towards Muslims who stay in the â€Å"West†. Said contents that the genesis of such anti Islamism begun in Europe in the wake of the destruction of Roman Empire by the Arab conquest. This led to the destruction of Christian unity at that time and now the resentment against Muslims has now been reignited. Positive aspects of the past relationship between the two cultures have been overshadowed by this loathe towards Islam. For instance the west embraced science, sociology and philosophy of Islam yet now they seen to cast negative aspersions about the religion in general based on a few activities of terrorists in the name of religion CITATION Sai01 l 1033 (Said, 2001). In most parts of the article, Said revisits the similarities between the two sides of the alleged divide and accuses the West of having selective memory and double standards. This is based on some of the atrocities committed by the West that are similar to the September 11 attacks in the name of religion. Examples of such atrocities include the Branch Davidians and the supporters of Jim Jones the reverend. Said further attacks the use of powerful idioms in print media in the â€Å"West† since most of these articles do not appreciate the complicated histories between the two sides. He argues that this instead fuel the infatuation of being a Westerner CITATION Sai01 l 1033 (Said, 2001). Said insists on the fact that Islamic extremists misrepresent the religion. This thus can be seen as an effective way to deal with Huntington who uses terrorism to cement the rift between the â€Å"West â€Å"and â€Å"Islam†. The evidence by Said proves his claim of Muslim representation. His demonstration of the lack of distinction between the two sides and the successful integration of the two cultures in clothing, adoption of technology and co-existence in some societies show the lack of conflict between the two cultures. However, his subjective statements across the article taint his argument. His critic of Huntington’s book â€Å"The Root of Muslim Rage† was personal as he says Huntington did confuse himself by showing he is such a clumsy thinker. Generally, this article â€Å"The Clash of Ignorance† is quite a persuasive piece of work and convincing. It makes it easy to understand the complex nature of the theme â€Å"Islamism† and the â€Å"West† CITATION Kar12 l 1033 (Karim Eid, 2012). Conclusion From the analysis explored in this article, the different stakeholders must unite to fight the increasing divide between the two sides of the divide. A closer detailed look at the evidence linking terrorism and Islam raise more speculation about the connection between the two. Terrorism will continue to provide the terrorists a continuous stream of income to finance their activities. Terrorism should thus not be blamed on ideological conflict between the different cultures of the world. Said emphasis is on ignorance and lack of facts on Islam being the reason it is blamed for the increased level of radicalism hence global conflict CITATION Sai01 l 1033 (Said, 2001). References   Huntington, S. P. (2007). The Clash of Civilizations and the Remaking of World. New York: Simon and Schuster. Karim, K. H., Eid, M. (2012). Clash of Ignorance. Global Media Journal Canadian Edition Volume 5, Issue 1, 7-27. Said, E. W. (2001, February 14). Clash of Ignorance. Retrieved from The Nation: www.thenation.com Source document

Globalisation And The Impact Of The Internet Marketing Essay

Globalisation And The Impact Of The Internet Marketing Essay Globalization is the system of interaction among the countries of the world in order to develop the global economy. Globalization refers to the integration of economics and societies all over the world. Globalization involves technological, economic, political, and cultural exchanges made possible largely by advances in communication, transportation, and infrastructure. Internet is a global network connecting millions of computers. More than 10 countries are linked into exchanges of data, news and opinions. Unlike online services, which are centrally controlled, the Internet is decentralized by design. Each Internet computerhttp://kona.kontera.com/javascript/lib/imgs/grey_loader.gif , called a host, is independent. Its operators can choose which Internet services http://kona.kontera.com/javascript/lib/imgs/grey_loader.gif to use and which local services to make available to the global Internet community. Remarkably, this anarchy by design works exceedingly well.   http://a.stanzapub.com/delivery/lg.php?bannerid=599campaignid=535zoneid=934source=acf=loc=1referer=http%3A%2F%2Fsocyberty.com%2Fissues%2Fthe-internet-and-globalization%2Fcb=48e48290e7 The internet has changed the way business is conducted . Through various web business applications, it has given great opportunities for business to increase their revenues, cut their cost and manage their daily operations in a more efficient and effective manners. Communication is the key of globalization.    Businesses large and small needed a way to advertise, sell, purchase, and enhance their product worldwide. What better way to accomplish this than through the use of the Internet.    The Internet provides a cheaper, faster and easier method of communication, an alternative that has created a global audience', as mentioned by Renato Ruggiero, Director General of the World Trade Organization. There has been a great deal of discussion in recent years about globalization, which can be defined as the intensification of economic, political, social and cultural relations across borders. Evidence of globalization is seen in our daily lives. We are being influenced by the on rush of economic and ecological forces that demand integration and uniformity and that mesmerize the world with fast music, fast computers and fast food with MTV, Macintosh and McDonalds, pressing nations into one commercially homogeneous global network: one Mc world tied together by technology, ecology, communication, and commerce. Technology is perhaps the most visible aspect of globalization and in many ways its driving force. Communication technology has revolutionized our information systems. Globalization tends to be most perceptible and observable in almost every facet of life mainly due to the emergence of internet technology. The internet technology is globally integrating and amalgamating the people of the world. The advent of the Internet in its unquantifiable shape and form has over the past decade provided a common platform upon which countries from all corners of the Earth are able to communicate and share information. Despite of the widespread usage and availability of new technology, the issue been brought to the forefront of the debate between advocates on both sides of the globalization aisle. According to economists, there are a lot of global events connected with globalization and integration. It is easy to identify the changes brought by globalization. 1.  Ã‚   Improvement of International Trade. Because of globalization, the number of countries where products can be sold or purchased has increased dramatically. 2.   Technological Progress. Because of the need to compete and be competitive globally, governments have upgraded their level of technology. 3.   Increasing Influence of Multinational Companies. A company that has subsidiaries in various countries is called a multinational. Often, the head office is found in the country where the company was established. An example is a car company whose head office is based in Japan. This company has branches in different countries. While the head office controls the subsidiaries, the subsidiaries decide on production. The subsidiaries are tasked to increase the production and profits. They are able to do it because they have already penetrated the local markets. The rise of multinational corporations began after World War II. Large companies refer to the countries where their subsidiaries reside as host countries. Globalization has a lot to do with the rise of multinational corporations. 4.  Ã‚   Power of the WTO, IMF, and WB. According to experts, another effect of globalization is the strengthening power and influence of international institutions such as the World Trade Organization (WTO), International Monetary Fund (IMF), and World Bank (WB). 5.  Ã‚   Greater Mobility of Human Resources across Countries. Globalization allows countries to source their manpower in countries with cheap labor. For instance, the manpower shortages in Taiwan, South Korea, and Malaysia provide opportunities for labor exporting countries such as the Philippines to bring their human resources to those countries for employment. 6.  Ã‚   Greater Outsourcing of Business Processes to Other Countries. China, India, and the Philippines are tremendously benefiting from this trend of global business outsourcing. Global companies in the US and Europe take advantage of the cheaper labor and highly-skilled workers that countries like India and the Philippines can offer 7. Civil Society. An important trend in globalization is the increasing influence and broadening scope of the global civil society. Civil society often refers to NGOs (nongovernment organizations). There are institutions in a country that are established and run by citizens. The family, being an institution, is part of the society. In globalization, global civil society refers to organizations that advocate certain issue or cause. There are NGOs that support womens rights and there are those that promote environment preservation. These organizations dont work to counter government policies, but rather to establish policies that are beneficial to all. Both the government and NGOs have the same goal of serving the people. The spread of globalization led to greater influence of NGOs especially in areas of great concern like human rights, the environment, children, and workers. Together with the growing influence of NGOs is the increasing power of multinational corporations. If the trend continues, globalization will pave the way for the realization of the full potential of these two important global actors. The globalization that we intuitively know call centers in India, toy factories in China is just one piece of an increasingly competitive landscape. As manual work becomes more automated and trade barriers fall, companies chase knowledge workers and efficiency just as much as they do cheap labor and access to new markets. In this new calculus, it is often surprising who comes out ahead. According to the Business Competitive Index, the Global Competitive Indexs sibling measure developed by Harvard economist Michael Porter, the countries with the lowest wages relative to competitiveness that is, the best values as investment locations are Taiwan, Hong Kong and India, followed by Chile, Singapore, the Czech Republic and the US. And so we are left with a world that even just five years ago would have seemed topsy turvy: an Indian software firm that employs 500 people in Puerto Rico, a Chinese auto-parts maker with RD centers in Detroit and Ontario, Calif. If youre a region trying to hang on to business, geography offers little protection anymore, especially as free-trade zones proliferate in countries from Dubai to Mauritius, and burgeoning heavyweights like Turkey take out full-page ads in US magazines boasting about their university graduates and gains in GDP. Your competitors are in your backyard now in a way they never were before, says Alec Hansen, president of the Economic Competitiveness Group, an outfit that advises governments, companies and development organizations. The world has gotten a lot scarier. The best way for a region to overcome those fears and win out is to figure out how its talents best fit into the global supply chain, says Eduardo Tugendhat, president and CEO of Carana Corporation, a company which designs economic development programs. In Macedonia, a land-locked country with a small domestic market, Tuhendhats firm suggested harnessing the nations long tradition of metal working and pushing into the machining and automotive parts sectors in order to take advantage of the growing auto industry in neighboring Slovakia and Romania two countries that have become a hot spot because of their inexpensive labor and access to the markets of the European Union. But with transportation costs continuing to plummet and markets becoming freer, there are many more places for companies to set up shop, and traditional advantages such as cheap labor or a lack of tariffs mean less and less in many industries. Multinationals are increasingly opening major operations in second- and third-tier cities GlaxoSmithKline in Posnan, Poland, Google in Belo Horizonte, Brazil places that plenty of people have never even heard of. Companies are adopting an all-shore strategy, says Dennis Donovan, principal of Wadley Donovan Gutshaw Consulting, which helps companies decide where to locate. Searching for an edge, many regions are applying the concept of clustering with renewed zeal. The idea of focusing a geographic area on a particular industry in order to achieve economies of scale has been kicking around since at least 1890, when the economist Alfred Marshall coined the term industrial district to refer to neighborhoods that contained both factories and all their workers. In the 1990s, Harvards Porter started using the word cluster to get at the usefulness of companies in close proximity sharing infrastructure, ideas and employees like high performance cars in Germany. Some predicted that a globalized companys ability to cherry pick regions would kill the notion of clusters, but countries are trying to establish industrial niches for themselves more than ever. Turkey established a textiles cluster to try to fend off lower-cost rivals. Jordan has positioned itself a regional center for medical services. Singapore is making a play for biotechnology. Of course, there is always a risk in spending massive amounts of focus and money on one sector since so many factors have to align for economic development to work. Is Singapore really where the top scientists in the world want to be working? asks Carana Corp.s Tugendhat. Just because you build a great campus doesnt mean theyre going to come to it. When clustering does work, though, its gold. Consider Yokkaichi, Japan, a city of 300,000 people that is the premier place to make NAND flash memory, which is used in cell phones and MP3 players. Sandisk, a Milpitas, Calif.-based company that designs, manufactures and sells memory cards, moved its manufacturing base there from Manassas, Virginia a few years ago, partly to be closer to Toshiba, a company it partners with. Yokkaichi already had the infrastructure for both manufacturing and for the large RD outfit that goes along with making memory cards. By having it all in close proximity, it reduces overhead costs, says Sandisk president and COO Sanjay Mehrotra, and thats the name of the game, to be able to produce product at the lowest possible cost. (Notice that had nothing to do with cheap labor.) Now Sandisk is building a new factory in Yokkaichi to produce 40% more wafers a month, which will significantly increase the $1 to $1.5 billion the?company already annually invests to keep its fabs on the cutting edge. And that leads to another major reason Sandisk is in Japan: the countrys?advanced capital structure and low interest rates let the company borrow money cheaply. Clustering may work well, but other aspects of a countrys competitiveness like its macroeconomic fundamentals still matter. The bottom line, says the Economic Competitiveness Groups Hansen, is you have to do everything right. In todays economy, a big part of that everything is being able to produce a desirable workforce. If were hearing a mantra today, its workforce finding the qualified people, says Rob DeRocker, executive vice president of Development Counsellors International, a firm that helps regions position themselves. The global chase for talent is just as true for manufacturing workers you have to find skilled labor if all your machines are computer-controlled as it is for PhD scientists. Microsoft knows a thing or two about the latter. The Seattle computer giant has six high-end research centers three in the US, one in the UK (abutting the Cambridge University computer science department), and two newer outposts, in Beijing and Bangalore. The strategy is partly to go where the worlds great universities are: the Beijing lab is placed squarely between Beijing and Tsinghua universities, the so-called Harvard and MIT of China. But part of it is also a recognition that as more countries move from developing to developed, with the amenities and job opportunities that used to only be found elsewhere, the talent in many cases would rather stay home. We realize that increasingly we will not be successful in recruiting the best people in the world and getting them to come to and stay in the US, says Craig Mundie, Microsofts chief research and strategy officer. Of course, the world doesnt completely change over night. Many of the classic reasons companies set up shop in far-flung locales, like gaining a foothold in a new market, are still in the mix. Nissan, for instance, is among the carmakers now building a plant in Russia, a country flush with money from the skyrocketing price of oil. In 2003, Nissan sold 8,000 cars in Russia, a number that jumped to 24,000 in 2004, and to 50,000 in 2005. We started thinking, if this isnt a fluke, we need to think about localization, says Dominique Thormann, Nissans senior vice president for administration and finance in North America both because of how expensive cars are to ship and because of the 25% tariff charged at the border. Thats a very traditional way for a company to think about reaching overseas. But even the auto industry isnt immune from the evolution of globalization. These days, its not uncommon to source auto parts for a particular car from around the world: cast iron from India, seat fabric from Tunisia. The competition continues to deepen. The computerization of business and telecommunications has led to much talk about the new economy and, possibly, a related surge in productivity. A less recognized development is that information technology, particularly the Internet, is changing the labor market and labor organizations in important ways. internet has been largely felt by the business fraternity. In fact, with the introduction of internet, the definition of business development has gone for a permanent changeover. Unlike the past, today quality and quantity are not the only benchmarks for the growth and development of a business. Today visibility in the market is a bigger factor. Your brand should reach the global market. Your products should be visible everywhere. People across the world should recognize your brand. Today product promotion and campaigning are the most important criteria for achieving success in a business. And for successful prpoduct promotion and campaigning you need to improve your communication and interaction with people. With its modern tools, internet helps you to do that. The days of publishing advertisements in newspapers are over. You need to reach people faster and you can do that through online marketing. People can get to know about you, your company and every detail about it just with a click on the mouse at any time and from any place. Regular communication between all entities of the business, such as manufacturer, supplier, buyer, seller, wholesalers and dealers is very important. The modern interactive tools like chats, emails, SMSes helps a business organization to create a supply chain management that keeps all entities of the business closely linked with each other For one thing, the increased demand for those working with the Internet, and computers more broadly, has boosted both their wages and the hours they work, NBER Research Associate Richard Freeman finds. Further, the low cost of transmitting information over the Internet is shifting job search and recruitment activities to the Web, he adds. Third, the ease of communicating and interacting over the Internet has led unions to experiment with web-based modes of servicing members, perhaps thereby improving union democracy and reversing the long-run decline in membership, and carrying their message to the wider public. The new technologies, together with other important changes, such as the continued increase in the educational attainment of the work force, shift of employment to service sectors, and increased employment of women, are producing a labor market that differs greatly from the industrial labor market that characterized the 20th century, Freeman writes in The Labor Market in the New Information Economy Companies can use the Internet and Internet technologies to improve the efficiency and effectiveness of particular value chain activities: a powerful tool for better supply chain management improving internal operations, e.g.: just-in-time inventory gear production schedules and production quantities to buyer orders more accurate monitoring of buyer preferences and shifts in demand introducing collaborative data sharing with distribution channel partners: online systems reduce transaction costs The impact of internet on globalization has both positive and negative aspects. The positive impact of the internet technology on globalization include the modernization and improvement in the business sector on a world wide basis. Businesses improve their global competitiveness and productivity with more efficient electronic transaction processing and instant access to information. New information and communication technologies (ICT) as well as radically changing international political and regulatory environments reshaped the nature of management consulting. It was during this period that ICT took center stage for global management consulting firms. The market is now more competitive with consumers having greater choices. With the advent of the internet technology work in the foreign countries is more available and accessible because the domestic laws are not as rigorous as they once were, thus assisting in the global nature of the business and allowing new consulting firms to establish a presence in countries that was once restricted. The services of the IT Professionals have been dramatically impacted by the explosive growth in Internet use and related technologies. In the 21st century, venerable trends in ITPS such as centralization and globalization are accelerating, and this is overturning and reversing the leverage ratios and thus introducing completely new capabilities. The Internet is impacting the way that services are bought, sold, and delivered, altering relationships among clients, firms, and employees and speeding the globalization of the consulting industry. There can be seen a better relationship between the clients and the firms through internet which is globally seen all over the world. Instead of face to face meetings the clients can easily deal with the big firms and industries via internet and thus developing a firm client relationship. With the use of the internet technology there can be seen a great positive force on globalization as it tends to increase the communication processes between people living in different parts of the world and also helps to promote the political, social, economic, and cultural aspects of a country. As there is a positive impact of internet on globalization there can be seen a negative impact of internet on globalization as well. While the interdependence and the internet technological advancement have increased in some parts of the world. The globalization of internet technology in the less developed countries typically is a one way proposition: the people do not control any of the information; they only receive it. It is also true that worldwide the ability to control or generate broadcasts rests in the hands of the tiny minority. This shows that in these countries the internet technology generally does not have a neutral application. The placement of the internet technology in developing countries often causes social costs, as well as costs in the form of urbanization, employment displacement, and the digital divide. There can be seen specific and particular risks in the global environment because the gain in power from the techno-economic progress is rapidly being overshadowed. Risks in this sense can be viewed as the probability of harm arising from technological and economic change. Hazards linked to industrial production, for example, can quickly spread beyond the immediate context in which they are generated. Although the current globalization system has different attributes, rules, incentives, and characteristics, but the system is as pervasive as the Cold War system. In order to create a balance in the application of the internet technology it must adhere to the specific standards. The internet technology no matter where it is applied, can only be understood and valued in relation to the social group that creates or uses it, because every model of society and development conceives of and uses a different kind of technology, which should neither give priority to community action nor to the local necessities. Thus the internet both has positive as well as negative effects on globalization and they play equally an important part in the financial and economic status of a specific country. The negative impact on the globalization can be reduced if an equilibrium and balance is created and developmental techniques and schemes of information technology are introduced in the less developing countries so that they may progress and pace forward in the 21st century. This current wave of globalization has been driven by policies that have opened economies domestically and internationally. In the years since the Second World War, and especially during the past two decades, many governments have adopted free-market economic systems, vastly increasing their own productive potential and creating myriad new opportunities for international trade and investment. Governments  also have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods, services, and investment. Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. A defining feature of globalization, therefore, is an international industrial and financial business structure. Technology has been the other principal driver of globalization. Advances in information technology, in particular, have dramatically transformed economic life. Information technologies have given all sorts of individual economic actors-consumers, investors, businesses-valuable new tools for identifying and pursuing economic opportunities, including faster and more informed analyses of economic trends around the world, easy transfers of assets, and collaboration with far-flung partners. Globalization is deeply controversial, however. Proponents of globalization argue that it allows poor countries and their citizens to develop economically and raise their standards of living, while opponents of globalization claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world at the expense of local enterprises, local cultures, and common people. Resistance to globalization has therefore taken shape both at a popular and at a governmental level as people and governments try to manage the flow of capital, labor, goods, and ideas that constitute the current wave of globalization. So in a nutshell, the importance of internet in business development is immense. In fact, without this wonderful gift of technology, prosperity of business in todays world would have been a great challenge. For the business fraternity, internet has been the greatest support and will surely keep on serving it better in the future too. Importance of internet, business development, technology to mankind, online marketing The Internet has significantly affected globalization. The needs of the globalized world are the accelerator of Internet-related technologies.