Demand And Supply Of Houses And Apartments Economics Essay

Demand And Supply Of Houses And Apartments Economics Essay By considering the factors that affect the demand and supply of houses and apartments explain what has led to the changes in the prices of houses and apartments in the UK over the last three years. What would affect the sizes of different elasticities of demand for houses? Introduction The past couple of years have seen dramatic fluctuations in the demand and supply of houses. It has been observed that movement in house prices is a balance of the quantity demanded and supplied. In this essay, we first look into the factors that affected the prices of houses in UK in the past three years. Then, we will discuss factors that affect the sizes of elasticities of demand of houses. Factors affecting demand of houses The table below shows the various factors that affect demand of houses. Table 1: Factors affecting demand of houses. S. no. Factor Trend Reason Change in the demand curve 1. Affordability As affordability of houses increases, demand for houses increases and vice versa. Because when the price of houses goes down more people can afford to buy houses. Movement along the demand curve. FIG. 1 2. Disposable Income As the disposable income of the people increase the demand for houses increases and vice versa. People tend to buy houses when they have sufficient disposable income with them so that their weekly budget is not affected significantly. Shift in the demand curve. FIG. 2 3. Economic Trends If the economy is booming, then there is a net increase in demand for houses. Similarly, in case of a recession, the demand for houses decreases. A booming economy means a good overall health of the economy which translates into greater demand of all goods. Shift in the demand curve. FIG. 2 4. Supply of substitutes If the supply of substitutes such as rented accommodation decreases, then there is a net increase in demand for houses and vice versa. If the supply of rented accommodation is less, then there is an increase in the price of rented apartments. Therefore, in the long run people find that it is cheaper to buy houses than to live in a rented accommodation. Hence, then they will tend to purchase a house. Thereby, increasing the net demand for houses. Shift in the demand curve. FIG. 2 5. Availability of mortgage finance If the mortgage finance is easily available then this results in a net increase in demand and vice versa. This is because it is easier for people to arrange for money to finance their houses. Shift in the demand curve. FIG. 2 6. Interest rates If the interest rates are high, then there is a net decrease in demand and vice versa. This is because at higher interests rates people will have to shell out more money to repay their loan. As people have a fixed monthly income, a higher interest rate would mean that the loan instalment would form a higher portion of their monthly income. Thereby, decreasing the demand for houses. Shift in the demand curve. FIG. 2 7. Consumer confidence As consumer confidence in the housing market increases, the demand for houses increases and vice versa. If prices of houses are expected to rises then consumers think it is profitable to enter the market. However, if the prices fall or remain static then consumers find no urgency to enter the market. Shift in the demand curve. FIG. 2 8. Demographic factors As increase in immigration, number of divorces, life expectancy, results in an increase in demand for houses. An increase in immigration, number of divorces, life expectancy will result in more people needing independent houses. Shift in the demand curve. FIG. 2 9. Inherited wealth An increase in number of people inheriting a huge wealth would result in an increase in demand of houses. Because these people have more money to spend on luxury products, such as houses. Shift in the demand curve. FIG. 2 10. Tax benefits If people receive greater tax benefits by buying houses, then this would result in a net increase in demand for houses. This is because people prefer to use their hard earned money on themselves rather than paying it to the government. Shift in the demand curve. FIG. 2 Source: Nationwide, Besanko et. al 2007 FIG. 2: Shifting of the demand curve. D D Price P1 Q2 Q1 D D Quantity FIG. 1: Movement along the demand curve. Price P1 P2 Q2 Q1 D D Quantity Factors affecting the supply of houses The table below shows the various factors that affect the supply of houses. Table 2: Factors affecting supply of houses S no. Factors Trend Reason Change in supply curve 1. Price If the price of houses increases then there is an increase in supply of houses and vice versa. Because sellers can then sell houses at higher rates thus making more profit. Movement along the supply curve. 2. Cost of building a house If the cost of building a house increases then there is a net decrease in supply of houses and vice versa. As this would mean a larger initial investment for the builder. Shift in the supply curve. 3. Government regulations If government regulations are inclined towards building/selling of houses then there is a net increase in supply of houses and vice versa. This would mean lower costs from the perspective of a builder/seller, which would result in more building/selling of houses. Shift in the supply curve. Source: Nationwide, Besanko et. al 2007 FIG. 1: Movement along the Supply curve. Price P1 P2 Q2 Q1 S S Quantity FIG. 2: Showing shifting of the supply curve. S S Price P1 Q2 Q1 S S Quantity Factors that have led to changes in the prices of house in UK over the last 3 years Source: Nationwide FIG. 5: Average house rates in UK from 2008 to 2010 During the first half of 2008 there was a 5.1% drop in house prices. With the financial crisis and a looming economic recession this price fall was expected. This was evident from the clear change in the consumers housing market sentiments, with people being more reluctant to buy houses. It should be noted that there is a direct relationship between the demand of houses and the confidence consumers have in the market (See table 1). In addition, factors such as high mortgage rates, tighter lending criteria, and higher interest rates affected the house prices in early 2008. The fall in demand from the buyers was also due to the rise in unemployment and associated job insecurity. Further, the problems in the credit market led to tighter lending conditions which made it difficult to obtain loans at higher loan-to-value ratios. However, these strict rules were predicted to lead to a more stable housing market. FIG. 6: Consumer House Price Expectations and House Purchase Approvals An anomaly in this trend was the slight increase in the prices in June and July 2008. This was probably because the suppliers had responded to price decline by reducing the supply of property. The reduced supply combined with an increased demand from potential buyers, who had been priced out previously, translated into a slight price rise of houses. In addition, the slight increase in prices was because of latent demand for houses. Earlier, due to the banking crisis there was reluctance among buyers to purchase houses. However, once the buyers saw that the government was taking corrective actions to stabilize the banking system, they re-entered the market along with the added assistance of low interest rates. (Nationwide, 2008) However, this was a mere aberration and between August 2008 and March 2009 the house prices fell by 10.1% due to the overall lack of consumer confidence in the economic and market conditions. In addition, there was an additional supply of houses from homeowners, whose financial positions were impacted by higher unemployment and lower income levels. FIG. 7: UK GDP and House Price Growth between 1985 and 2007 With UK slipping into recession, even drastic cuts in interest rates didnt help in increasing the demand for houses. The reduced access to credit resulting from the financial crises catalysed the fall in prices. Then, a combination of initial fall in prices, widespread news of financial turbulence, and slowdown in the real economy prompted consumers to expect further price falls. As consumers expectations turned negative, the incentive to enter the market reduced and this led to a sharp price fall. (Nationwide 2008, 2009) Then in June 2009, the low interest rates and extension of stamp duty holidays were welcomed by borrowers as they reduced the costs of already high priced housing market. Further, notwithstanding the economic downturn, there was a notable shift in house price expectation from negative to positive. These two factors resulted in increasing the demand for houses and thus increasing the price of houses. (Guardian 2009, Nationwide 2009) The second half of 2009 was marked by rebound in house prices. This was contributed by the better than expected performance of the labour market. Even though workers were forced from full-time to part-time work resulting in a reduction in income, the impact was less severe than if they had lost their jobs completely. In addition, reduction in mortgage rates meant that fewer borrowers had fallen into arrears than expected. This led to lesser number of second-hand properties being on sale and thus stabilizing the housing markets. (Nationwide 2009) The first half of 2010 also saw a 4.1% rise in prices of houses. An important factor of price rise during this period was the low level of stock for sale as many homeowners and buy-to-let landlords preferred to wait for prices to rise. And this approach was supported by the very low levels of interest rates. As a result, many potential sellers could easily afford to wait for prices to recover further before they decided to sell. Between July and October, there was a fall in the prices of houses. The impact of increasing capital gains tax from 18% to 28% was seen in the housing market, with many second homeowners choosing to sell them in response to the tax increase. Further, the spending cuts by the new government had clearly put a pressure on the disposable incomes of households. As a result there was a decrease in the prices of houses during this period. (Nationwide 2010) Factors that affect the sizes of different elasticities of demand for houses The responsiveness of the quantity of houses demanded to the change in prices, income, price of other goods, etc. is measured by the corresponding elasticities, i.e., Price elasticity of demand of houses, Income elasticity of demand of houses, or Cross prices elasticity of demand of houses. Factors that affect the sizes of different elasticities are as follows: Availability of substitutes: It is observed that more the number of substitutes, more elastic the demand will be. If the availability of rented accommodations is high, then a slight price rise will result in a large change in demand for houses because people will prefer to live in a rented apartment than to buy a house. Therefore, making the demand for houses elastic. On the other hand, if availability of rented accommodations is low, then even a large change in price would not affect the demand because everyone needs a place to live. Therefore, the demand for houses will be inelastic. Importance of the good in the consumers budget: Expenditure on housing, according to R.K. Wilkinson (1973), is an outcome of three sets of influences on the consumer, i.e., their needs, their aspirations, and their ability to realize their needs and aspirations. The latter is measured by the consumers income and the two former qualify the way in which income and changes in income affects housing expenditure. If there is a need for a house and consumers have the ability to realize that need, then the demand of houses would be inelastic. In contrast, if there is no real need and an aspiration to buy a (bigger) house combined with no real income to realize that aspiration, then the demand for houses will be highly elastic. Time: It was observed by Hanushek and Quigley (1980) that the demand for houses is elastic in the short-run. However, in the long-run the demand tended to be inelastic. This was because higher prices dissuade buyers to buy houses in the short-run. However, in the long-run he may realize that the price of houses will rise and thus he finds it better to buy a house. Conclusion In this essay we determined the factors that affected the prices of houses in UK during the last three years and the various factors that affect the elasticities of demand of houses. Based on the above discussion, I think consumer expectation of house prices is one of the most important drivers of prices in the short-run. As for the long-run, the drivers of house prices are the economic conditions, the fiscal policies, and supply of houses.

Highlighting mitchells and butlers strategic

Highlighting mitchells and butlers strategic Executive Summary This report is aimed at highlighting Mitchells and Butlers strategic choices through the analysis of its internal and external environment. A number of measurement tools were used in order to express this. The report firstly looks into the external environment in which the organisation is involved with. The external analysis was split into two different sections: The macro environment and the microenvironment. A PESTLE analysis was used for the macro environment as this captures all the factors that affect Mitchells and Butlers, of which none of them they can control. To analyse the microenvironment Porters five forces model was used as this highlights all the factors that can have a direct effect on an organisation. Following the Internal Analysis the report then looks at the internal logistics of the business. Looking internally into Mitchells and Butler identified many aspects of the business such as its resources and capabilities, competitive advantage, core competencies and the stage the company is at with regards to the life cycle. All these differing aspects will then help to identify the strategic choices available to Mitchells and Butler. The report then looks at the financial side of the organisation using three financial statements: Cash Flow, Balance Sheet and 5 year income statement. These are analysed to review sales trends and profit trends. A SWOT Analysis has been drawn out which helped in the completion of the TOWS matrix. The TOWS matrix combined with the SFA model identify areas where Mitchells and Butler can grow. To conclude the report, all the data was collected and analysed to suggest short, medium and long term plans for Mitchells and Butler. Introduction. This report is the second part of a two part report which will analyse both the internal and external factors that influence the Mitchells and Butlers organisation. A strategic analysis of the company has already been carried, which can be seen in Appendix 1. It involved carrying out analysis on the vision, mission, values and objectives of M+B. This report will focus on the strategies that Mitchells and Butler implement in order to grow. The report will firstly look at the Micro and Macro external environment using tools such as PESTLE, SWOT, Porters five forces model and competitor gap analysis which will combine to give a competitor analysis. Once the external analysis is complete the report will then focus its attention on the internal analysis. This will involve analysing Mitchells and Butlers core competencies by conducting a portfolio analysis. Based upon these analysis the report will then finish with recommendations of the future strategic choice and direction of the company followed by a short, medium and long term plan for Mitchells and Butlers. The business report will use David F (1988) comprehensive strategic management model as a guideline in order to cover all aspects of the strategic report. As mentioned above Vision and mission statements have already been analysed, th erefore this report will start on performing both internal and external audits. 1. External Analysis â€Å"A companys marketing environment consists of the actors and forces outside marketing that affect marketing managements ability to develop and maintain successful relationships with its target customers. Successful companies know the vital importance of constantly watching and adapting to the companies environment†. (Kotler, P et al. 2008) 1.1 Macro Environment Carrying out external analysis allows firms to adapt quickly to the changing environment. The macro environment is the â€Å"complete social context in which the organisation resides†. Carrol, A + Buchholtz, A (2008) Kotler, P et al. (2008) also includes that it is the larger societal forces that affect the whole microenvironment. He states that there are six major forces in a companys macro environment: Political Economic Social Technological Legal Environmental 1.2 PESTLE Analysis PESTEL analysis categorises the factors that effect an organisation externally. Johnson, Scholes and Whittington (2005) note that many of these factors are linked. When one factor changes it can have a knock on effect on other factors. As these factors change they affect the competitive environment in which the organisation operates in, as a result it is crucial that organisations are aware of the changes in the external environment. Political Licensing Laws- Mitchells and Butlers have a minimum requirement to follow all licensing laws lay down by the government. If at any time they come in breach of these licenses they place themselves in serious jeopardy with the federal agencies. Smoking Ban- The smoking ban, introduced in July 2007, had a serious effect on all of Mitchells and Butlers managed pubs and restaurants. The ban meant that no establishment was to allow smoking in any of its premises. Economic Unemployment- With the UK, along with the rest of the world, going further and further into a recession, companies look to try and cut costs by lowering the number of staff, therefore unemployment rises. A report written in the TimesOnline website by Grà ¡inne Gilmore in February 2009 highlights some facts and figures which can affect consumers disposable income. In it he states that unemployment rose close to two million and predictions have been made that the figure could rise to three million by next year, the highest level since 1986. Tax Increase- With taxes expected to rise in January 2010, consumer spending will slow down. Inflation The rise of inflation makes it harder for people to borrow as the banks Social Social Responsibility As the leading operator of managed pubs and pub restaurants in the UK, Mitchells and Butlers has a commitment to give the responsible retailing of alcohol. Mitchells and Butlers established a policy for retailing alcohol in a responsible manner. This ensures that all of their licensed premises are operated responsibly. Under age Drinking Mitchells and Butlers launched the â€Å"Challenge 21† campaign, which was aimed at stopping/ reducing the number of under aged drinkers in their managed premises a. Healthy Eating Due to the increased awareness of healthy eating through government ad campaigns, celebrity chefs etc Mitchells and Butlers has to be aware of the varying attitudes towards healthy eating. As a result they offer a wide variety of dishes on there menus across all their differing brands. They look to offer a good choice of healthy options at the same time as offering more indulgent dishes. Mitchells and Butlers are continually creating fresh dishes with an emphasis on nutritional value. Legal Minimum Wage The National Minimum wage was introduced 10 years ago and has increased 5.5% year. Mitchells and Butler must comply with the minimum pay levels for each age group to comply with the law. Health and Safety at Work act 1974 The Act is the primary piece of legislation covering occupational health and safety in the United Kingdom. (hse.gov.uk, 2009) Mitchells and Butlers must ensure that they enforce the health and safety of both there workforce and their customers. Environmental Weather Due to the varying weather conditions throughout the whole year, Mitchells and Butlers should be constantly aware of the effects good and bad weather can have on there outlets. Recycling Due to raised awareness of pollution in the environment and the effects of waste Mitchells and Butlers have to show there commitment in creating as little waste as possible, and where possible recycle as much of their waste as possible. They also have a commitment to reducing there carbon footprint which can be done by the recycling of used cooking oil which is then converted into bio-diesel. 1.3 Microenvironment â€Å"The microenvironment consists of the actors close to the company that affect its ability to serve its customers: the company, suppliers, marketing intermediaries,rs and publics†. Kotler, P et al. (2008) It is the environment with components that have specific and immediate implications for managing the organisation. Decisions made involving the microenvironment have a direct effect on the organisation. It can be controlled by the company and analysis at this level is firm specific. Xu, J.(2005) There are many models that can help firms to measure the position they are in within their environment. 1.4 Porters Five Forces The Objective of performing industry analysis is to develop an organisations competitive advantage in order to be more successful than its competitors. The way in which this can be done is by using Porters Five Forces Model. ( Lynch, 2003) In it he identifies the five basic forces that can have an effect on an organisation. Bargaining power Threat of Of suppliers new entrants The report will now go into further detail of each threat, identifying the different aspects of each factor and the affect they could have on Mitchells and Butler. Threat of Entry With Mitchells and Butlers being the leading operator of managed pubs and pub restaurants, they must be aware of any potential threats that may arise from new entries in the market. The industry in which Mitchells and Butlers operates is one where barriers to entry are very low and therefore easy for new organisations to enter the market. However due to the sheer size of the organisation they have an automatic advantage over any new entries. Economies of Scale Mitchells and Butlers are in the position to gain economies of scale due to the number of managed outlets they have. With around 2,000 businesses they have the ability to lower the costs of products because of the amount they will be ordering at one time. Experience Mitchells and Butlers has been operating as an independent division since 2003 but it history dates back to 1898. This unparalleled experience of the pub industry accounts for invaluable knowledge and experience which can help in the development and growth of the organisation. Customer Loyalty With over 2000 outlets built mainly in residential areas Mitchells and Butlers will have built up a high level of customer loyalty. This makes it increasingly difficult for new competitors to establish a loyal customer base for themselves. It is evident however that not everyone is within close proximity to a Mitchells and Butlers unit and therefore consumers will be loyal to a different business. Product Differentiation Mitchells and Butlers understand the importance of product differentiation and aim to deliver products of the highest quality at the lowest possible prices. It also prides itself on customer service, displaying just how important they feel it is. Mitchells and Butlers also drive to promote its own brands in order to create product differentiation. Bargaining Power of Buyers Concentration of buyers With Mitchells and Butlers being in a market with a huge amount of potential buyers then it is in complete power with what price to set. If the buyers are not happy with the price then they simply have to go elsewhere as the market is big enough to attract more customers. However Mitchells and Butlers can not set the price at whatever they choose as the fierce competition in the market drives prices down and they have to compete with there rivals for customers. Product Differentiation With so many other options available for the buyer Mitchells and Butlers has to be able to differentiate itself from the rest of the market. They do this buy offering the highest quality at the lowest possible prices. It also prides itself on customer service, displaying just how important they feel it is. Mitchells and Butlers also drive to promote its own brands in order to create product differentiation. Bargaining Power of Suppliers Mitchells and Butlers is in a very strong position when it comes to its bargaining power with its suppliers. They are the leading operator in managed pubs and pubs restaurants with the largest market share. Suppliers will have to listen to what they are demanding or else they face loosing a huge amount of revenue. Threat of Substitutes Products or services There is a large threat of substitutes that are available from supermarkets. The off trade market that is now available to potential consumers is a huge threat to Mitchells and Butlers. With the constant promotion of alcoholic beverages from the large supermarket chains such as Tescos, Sainsburys and Morrisons means that Mitchells and Butlers have to differentiate themselves from this market and establish themselves as offering an experience and a service rather than just solely a product. The supermarkets also advertise deals such as â€Å" TWO CAN DINE IN FOR  £10†. This such advertisement was ran by MS. Being a differentiated product will entice potential consumers towards it. Threat of Rivalry In a market where growth is slow and competition very high, Mitchells and Butlers have created rivalry by becoming the leading operator in its markets and taking a lot of customers from its competitors. However it does not face rivalry from small independent outlets as they focus their attention away from the big rivals. The way in which Mitchells and Butlers create rivalry is by the pricing policy on drinks. Being the leading operator in managed pubs means that they are able to buy in bulk reducing the costs of products. With relation to food Mitchells and Butlers has a variety of brands that are in varying markets that can capture different customers with the varying levels of quality and price. For example the harvester brand is aimed at the lower end of the market, whereas the Browns brand is at the other end of the spectrum, catering for the higher end customers. 2.0 Internal Analysis The process of performing an internal analysis is similar to that of an external analysis. Representative managers and employees from throughout the firm need to be involved in determining a firms strengths and weaknesses. The internal analysis involves collecting information about the firms management, marketing, finance and operations. The gathering of this information is a great benefit to managers and employees as they get to know how their work affects other areas and activities of the organisation. Performing an internal analysis is an excellent way of improving the process of communication within an organisation. (David, 1999) 2.1Portfolio Analysis Campbell et al (2002 p. 107) defines a portfolio analysis as an â€Å"Underpinning concept that is a need for a business to spread its opportunity and risk. A broad portfolio signifies that a business has a presence in a wide range of product and market sectors. Conversely, a narrow portfolio implies that the organisation operates in only a few or even in one product or market sector. A broad portfolio offers the advantage of robustness in that a downturn in one market will not threaten the whole company† It is essential that Mitchells and Butlers carry out a portfolio analysis as they operate in many different markets resulting in a number of different cashflows from there brands. 2.2 BCG Matrix The Boston consultancy matrix identifies the relationship between market share and growth of a business. It offers a way of examining a companys portfolio of product and market interests. (Campbell et al 2002) Market Share Stars Question Marks Cash Cows Dogs Mitchells and Butler would be classed as a cash cow. Being the leading operator in managed pubs they have the largest share of the market. However the market in which they are positioned is one that is maturing. Growth for Mitchells and Butlers is slow and the condition of the market is stable. Below is a diagram which converts the BCG matrix into the product life cycle. Internet Accessed via: There are many brands associated with Mitchells and Butler which are in varying stages of their life cycle. The next stage of the report is to show an example of brands in there different stages of the life cycle. The use of this is that it allows Mitchells and Butlers to identify which of their brands are in the decline stage and come up with either new strategies/ products in order for it to grow again. 2.3 The Life Cycle Model 2.4GE-McKinsey Matrix An alternative way in which to evaluate the portfolio of an organisation is by a directional policy matrix/ GE-McKinsey matrix. This matrix categorises an organisations business units into those with good prospects and those with less good prospects. The matrix positions units according to how attractive the market is in which they operate and secondly through the competitive strength of the SBU in that market. (Johnson, Scholes and Whittington, R. 2009) 2.5 Resource Based view of Mitchells and Butler The resource based view of a firm is a model of an organisations performance that focuses solely on the resources and capabilities controlled by a firm as sources of competitive advantage. (Wernerfelt, B. 1984, cited in Barney, J Hesterley, W. 2006) Resources are defined as the tangible and intangible assets that an organisation controls whereas capabilities are a â€Å"subset of a firms resources and are defined as tangible and intangible assets that enable a firm to take full advantage of other resources it controls†.( Barney, J Hesterley, W. 2006. p.76) Barney Hesterley (2006) also state that there are four main categories in which resources and capabilities can be classified into four main sub categories: Financial resources, Physical resources, Human resources and organisational resources. M B Financial resources and Capabilities Two loans: One of  £2.3 billion which is secured against the assets and cash flow of he business. The second is an unsecured loan of  £550 million from a number of major banks. Cash generated through sales of products and services. M B Physical resources and Capabilities Property, plant and equipment. Computer Software. Leases: Both operating leases and financial leases. Reputation M B Human resources and Capabilities Operated by an experienced senior management team. Committed to training and investing in their employees to enable them to develop their skills and experience. M B Organisational resources and Capabilities Relationships between the different levels of management. Clear communication Importance of team building in each business unit. Experience of senior management. Training programmes at operational level. Mitchells and Butler use their capabilities to turn their resources into products or services. For instance it uses its reputation to increase its financial resources. 2.6 Core Competencies â€Å"Core competencies are the skills and abilities by which resources are deployed through an organisations activities and processes such as to achieve competitive advantage in ways that others cannot imitate or obtain†. (Johnson, Scholes, and Whittington, 2008. p. 97) This is no more important than in a recession, Mitchells and Butlers needs to focus on its core competencies in order to cerate competitor advantage and steal, what is, a diminishing number of, customers. 2.7 The VRIO Framework VRIO is an acronym for 4 questions that can be used in order to assess the competitive advantage that can be gained from resources and capabilities. The VRIO framework allows an organisation to assess its resources and capabilities potential to create a competitive advantage. †( Barney, J Hesterley, W. 2006. p.76) The Question of Value Mitchells and Butlers uses its resources and capabilities in order to create competitive advantage and stay the leading operator in managed pubs and restaurants. Its organisational resources and capabilities has equated to the acquiring of 239 pub restaurants from Whitbread plc in 2006. The financial capabilities plus experience of management team means that they can cope in a period of financial downturn. The Question of Rarity With Mitchells and Butler being in such a saturated market where growth is very slow and product differentiation hard to achieve then its physical resources and capabilities create very little competitive advantage. It is its organisational, human and financial resources that create it. The size, experience, knowledge, training, quality, price create competitive advantage over a long period of time. The Question of Inimitability This question aims at identifying an organisations strength against any competitors trying to imitate their products or services. For Mitchells and Butler although it may be easy to copy its tangible resources, it is certainly not easy to imitate their intangible capabilities. With over 100 years of experience in the pub trade gives them invaluable experience and knowledge of the industry. The senior management team has over 15 years of experience and the board of executive directors have worked on the strategy and development of Mitchells Butlers since 1995. (mbplc.com â€Å"our management†) [Cited 14/12/2009] The Question of Organisation Although Mitchells and Butler may have competitive advantage with its resources and capabilities, in the above three questions, it can not continually create a competitive advantage unless they are an organised company. The senior management team must work together in order to create systems, policies and procedures in which each individual unit runs at its optimum level. This is done by vertical communication between the varying different levels of operation. 2.8Value-Chain Analysis A Value chain â€Å"is the set of business activities in which a firm engages in to develop, produce, and market its product or services†. † (Barney, J Hesterley, W. 2006. p.83) 3.0 Financial Information 3.1 Cash Flow Statement The cash flow statement can be seen in appendix 3. 3.2 Balance Sheet The balance sheet is available in appendix 4. 3.3 5 year Income Statement Available in Appendix 5. From analysing the above financial information, one can draw the major trends from the financial year 2008. Sales Trend Analysing the 5 year review one can see a major difference in the sales trend. Turnover has increased to  £1,908 million over the year which is a 0.7% increase over the financial year. However Profit Trend Although there was an increase in revenue there was a significant decrease in operating profit. From the previous year there is a huge drop from  £309 million to  £131 million a gap of  £178 million. A reason for this could be due to the amount of money they had to repay on a loan they took out to cover the costs of an abandoned joint venture. Mitchells and Butler decided to reduce its level of â€Å"unsecured medium term debt†. (mbplc.com. 2009) Looking at the 5 year report one can see that the dividend pay out was  £18 million, compared to the previous 4 years ,it is on average around  £33 million less. To do this they paid an interim dividend of 4.55p per share which is represented on the income statement. This was paid on the 27th June 2009. The short-term loan of  £550m has to be paid down to  £400m by the end of 2009 and then down to  £300m by the end of 2010. Mitchells and Butler have managed to get the loan amount down to  £475 million. The organisation is aiming to bring capital expenditure down to  £120 million whilst selling some of its pubs along the way. This is a way in which they will pay back the  £550 million loan, however it will have a huge effect on the size of the business and its net profit in the next financial year. (Hall, 2009) Below is a list of further trends that were available from the corporate profile September 2009. Major Trends 2008 Turnover-  £1,908m up 0.7% EBITDA-  £477m up 1.1% Operating profit-  £343m Profit before tax-  £179m down 13.5% Earnings per share- 31.5p down 11.3% Before exceptional terms and IAS 39 movements. Source mbplc.com- corporate profile September 2009 (Appendix 6) 3.4 Balanced Scorecard Financial L4L growth turnover and profit, ROI on investment and acquisition, total capital expended, rent/lease review uplifts, assignment premiums Internal Business Processes Mitchells and Butler have both long and short hold leases. IT systems Mitchells Butlers is reliant on its IT systems to trade efficiently and to ensure that appropriate controls are in place Learning and Growth Graduate Programs are in place for two different areas: The Corporate Graduate Scheme and the Retail Graduate Scheme Training given at all operational levels. Employees must be able to work to the standards set by the Mitchells and Butler legacy. Customer Service Standards Service standards have a huge impact on Mitchells and Butlers success. Service standards are a key element in the choice of consumers pub. Employee satisfaction survey, retailer satisfaction survey, Now to Wow, mystery customer, retailer complaint levels, customer complaint levels Strengths Financial ability Market share Management Team Knowledge and Experience within the industry. Diversity of customers through differentiated markets. Training schemes. Brand name Good understanding of customers needs Weaknesses Massive amounts of cost implications. Hard to differentiate products and services. High level of debt Dire trade outlook Opportunities Smoking ban Increase in the eating out market. Cheap pubs available for acquisition. Increase customer base by going â€Å"green†. Comply with all environmental issues. Threats Smoking ban Regulations Staying in is the new going out Recession Decrease in leisure pound Increase in the off trade market New Legislations Bad press from binge drinking Competition Low barriers of entry. Current disagreements between board members. 3.5SWOT Analysis 4.0 Strategic Choice In order for MB to develop further, they must look at the different strategic options. They need to ask themselves 5 questions: What do we want in life? On WHAT basis are we to compete? WHEN do we implement these? WHICH direction? HOW? Patton, F(2009) 4.1 Porters Generic Strategies Porters two parameters: â€Å"a company can seek to compete† and the market in which a company seeks to compete can be broad or narrow, led him to construct the three generic strategies seen below. (Thomson, 2001) Patton, F (2009) Porters model of generic strategies. Adapted from Porter, M(1985) Competitive Advantage: Creating and Sustaining Superior Performance. Mitchells and Butlers uses the Differentiation strategy. It offers a range of differentiated products across a number of markets. The different brands in the organisation ensure that they appeal to the whole market. A way of expressing how MB use the differentiated strategy is to look at the different brands and the markets they operate in. Cost/ Price Focus: Crown Carveries- â€Å"Top quality carvery meals at great prices†¦..† Differentiation Focus Harvester â€Å"Family-friendly restaurants serving freshly-prepared grills, spit-roasts and fish dishes and the famous salad cart, included with every meal†. Cost Leadership Ember Inns â€Å"Quality local pubs providing customers with a relaxed home from home and a great range of cask ales, wines and tempting, traditional pub food favourites with a modern twist†. (Internet accessed via [Cited 14/12/2009] 4.2 Strategy Clock The strategy clock was developed by Cliff Bowman. The clock is based around price and the perceived value the customer will gain from the product or service. Mitchells and Butlers can use the strategic clock to choose where they wish to position a brand or business unit. It represents different positions in a market where potential customers have different requirements in terms of value for money. (Johnson, Scholes and Whittington, 2008. p224) Mitchells and Butler are positioned between the hybrid and differentiation stage. They aim to provide products and services that are different to that of their competitors in a range of different markets however in certain brands e.g. harvester their strategy is to offer lower cost meals. For a more in depth explanation of Bowmans strategy clock please see Appendix 6. 4.3 The Ansoff matrix Johnson, Scholes and Whittington, R (2009) state that the Ansoff matrix provides a simple way of showing the four different directions of strategic development. They state that an organisation starts in the top left hand box. It then has a choice between penetrating further within its existing sphere, move to the right and develop new products for its existing markets; moving downwards bringing its existing products into new markets: or move diagonally down, which involves full diversification where the organisation enters new markets with new products. Adapted from Ansoff, H (1988) The diagram above was taken from an internet site: http://strategyiseverywhere. However the model is exactly the same across all literature. Mitchells and Butlers strategic development direction is one which uses market penetration, market development and Product Development. Market Penetration Market penetration involves the organisation taking an increased share of its existing markets with the same product range. It does not involve an organisation having to venture into unfamiliar territory. The advantage of market penetration is that it increases power over both suppliers and buyers. (Johnson, Scholes and Whittington, R 2009) Mitchells and Butlers used market penetration as a growth strategy by building, buying and acquiring more and more pubs. It is now the leader in managed pubs and pub restaurants within the industry with around 2,000 businesses. Market Development Market development involves an organisation offering existing products to new m

My Philosophy of Education Essays -- Education Reflective Writing Teac

Philosophy of Education Education provides people with the understanding and basis of life. It enables us to explore the world. Teachers are important in a child’s life because children are dependent for guidance, love and knowledge. It is up to us to provide these guidelines to the younger generations. As an educator, I am anxious to guide the pursuit of one’s goals and acquisition of knowledge. I believe in emphasizing the importance and value of an education that should carry beyond their high school years. I not only plan to teach the basic skills, but also provide students with knowledge of the world they will face outside the classroom. I lean towards the philosophy of progressivism. It enables students to relate decision making, creative thinking, and projects to their studies. Children will think that material at school is genuine if they can connect it to real life. Kids need to be engaged in higher level thinking skills. Therefore, I am a strong proponent of cooperative groups and active learning. Progressivism not only focuses of children’s academic needs but also their interests. I am a reflective teacher meaning that I take every characteristic of the class and students and plan around it. I love active learning which place children in an atmosphere where they feel safe and can participate in fun, learning activities. Children can learn from each other which also creates a positive, relaxing learning environment. If you walked into my classroom, you would very seldom see kids sitting at their desks in complete silence. It is all about maintaining control. I am not an essentialist. I understand that students need to take standardized tests, but i... ... Education reform is necessary for effective teachers and schools. The world is changing, curriculum changes and teaching strategies changes. I will not get set in one teaching style and refuse to change. I will be up for any type of constructive criticism and suggestions. All children are different and therefore every class will be different. Effective teachers can not teach the same way each year. I hope to further my education by going to graduate school. I would like to earn a master’s degree in Reading. After I get positioned in a school, I would like to become nationally certified. I also want to subscribe to journal magazines such as The Reading Teacher or organizations such as Reading Association. In accomplishing these goals, it will further my knowledge in which I can pass down to my students as well as doing it for myself. My Philosophy of Education Essays -- Education Reflective Writing Teac Philosophy of Education Education provides people with the understanding and basis of life. It enables us to explore the world. Teachers are important in a child’s life because children are dependent for guidance, love and knowledge. It is up to us to provide these guidelines to the younger generations. As an educator, I am anxious to guide the pursuit of one’s goals and acquisition of knowledge. I believe in emphasizing the importance and value of an education that should carry beyond their high school years. I not only plan to teach the basic skills, but also provide students with knowledge of the world they will face outside the classroom. I lean towards the philosophy of progressivism. It enables students to relate decision making, creative thinking, and projects to their studies. Children will think that material at school is genuine if they can connect it to real life. Kids need to be engaged in higher level thinking skills. Therefore, I am a strong proponent of cooperative groups and active learning. Progressivism not only focuses of children’s academic needs but also their interests. I am a reflective teacher meaning that I take every characteristic of the class and students and plan around it. I love active learning which place children in an atmosphere where they feel safe and can participate in fun, learning activities. Children can learn from each other which also creates a positive, relaxing learning environment. If you walked into my classroom, you would very seldom see kids sitting at their desks in complete silence. It is all about maintaining control. I am not an essentialist. I understand that students need to take standardized tests, but i... ... Education reform is necessary for effective teachers and schools. The world is changing, curriculum changes and teaching strategies changes. I will not get set in one teaching style and refuse to change. I will be up for any type of constructive criticism and suggestions. All children are different and therefore every class will be different. Effective teachers can not teach the same way each year. I hope to further my education by going to graduate school. I would like to earn a master’s degree in Reading. After I get positioned in a school, I would like to become nationally certified. I also want to subscribe to journal magazines such as The Reading Teacher or organizations such as Reading Association. In accomplishing these goals, it will further my knowledge in which I can pass down to my students as well as doing it for myself.

Tsunamis Essay -- Tsunamis Natural Disasters Nature Essays

Tsunamis Table of Contents  Ã‚  Ã‚  Ã‚  Ã‚  1 Introduction:  Ã‚  Ã‚  Ã‚  Ã‚  2 Impact to human life:  Ã‚  Ã‚  Ã‚  Ã‚  3 Impact to Non-human life:  Ã‚  Ã‚  Ã‚  Ã‚  4 Impact to the Environment:  Ã‚  Ã‚  Ã‚  Ã‚  7 Impact to the Economy:  Ã‚  Ã‚  Ã‚  Ã‚  8 American Red Cross Assistance:  Ã‚  Ã‚  Ã‚  Ã‚  9 Conclusion:  Ã‚  Ã‚  Ã‚  Ã‚  13 Bibliography:  Ã‚  Ã‚  Ã‚  Ã‚  14 Introduction: A massive Tsunami (Japanese for â€Å"Harbor wave†) had hit southern Asia the day after Christmas 2004. The cause of the Tsunami was an offshore earthquake that results in the tectonic plates being displaced and the creation of a vertical shift in the ocean floor. This vertical shift lead to a large volume of water being uplifted and turned to create a huge wave that traveled up to 300 miles per hour, gradually slowing as it reached the shore. At that time, people in the coastal areas were not aware of the terror that they were about to endure. They received no warnings of the tsunami. Unfortunately, 10 meters of the wave caught many people by surprise, as they looked dumfounded when the ocean engulfed them whole. To date this disaster is believed to have killed over three hundred thousand people, marking itself as one of the most devastating Tsunamis ever. The waves from the Tsunami destroyed everything in their path and drowned most innocent living things with it. It has now been concluded that the earthquake, which caused this Tsunami, was probably twice as strong as originally estimated - a magnitude 9.15 instead of 9.0. Much of the slippage along the fault is believed to have taken place as much as a half an hour after the initial quake and continued up to three hours afterward. Additionally, it is feared that earthquake could continue to affect the region for many years and could trigger more large quakes (Eric P H Yap, 2005).   Ã‚  Ã‚  Ã‚  Ã‚  It is believed that some areas were harder hit, by the Tsunami’s strength, than others due to coastal commercial development. The development of coastal areas damages or totally destroys much of the surrounding coral reefs. Certain areas, such as in the Maldives, still have a network of coral reefs and intact mangroves that may have protected the island from the open sea. "Poorly planned coastal development has compounded the impact of the tsunami," said Mubariq Ahmad, Head of WWF Indonesia. "It is vital that we don't make the mistakes of the past. We need to rebuild in a sustainable and safe way (Le Tourneau Gore, 2005).† Impact to human life: Th... ... MESBAHI of Share The World s Resource s (STWR). "The tsunami and Brandt Report :[1 Edition]. " Papua - New Guinea Post - Courier 7 February 2005. ProQuest Newsstand. ProQuest. "UN: Rehabilitation of severely affected mangroves would help speed recovery from tsunami, says food and agriculture organization. " M2 Presswire 20 January 2005. ProQuest Newsstand. ProQuest. Rinne, Pasi et al. After the Tsunami: Rapid Environmental Assessment. United Nations Environment Programme. 2005. Eric Bellman in Lake Hikkaduwa, Sri Lanka, and Timothy Mapes in Banda Aceh, Indonesia. "Tsunami Aftermath: Scarred Earth: Will Nature Bounce Back?; Salt Water and Debris Alter Ecosystems Threatening Fields, Reefs and Forests. " Asian Wall Street Journal [New York, N.Y.] 17 Jan. 2005,A.5. ProQuest Newsstand. ProQuest. Animal Planet News. Slow Recovery for Seal Life. 12 Jan.2005. 30 May 2005. Animal Friends Croatia. Tsunamis killed animals, too! 30 May 2005. Animal Planet News. Tsunamis Destroy Sea Life. 3 Jan. 2005. Animal Planet News. Sri Lankan Wildlife Avoided the Tsunamis. 4 Jan 2005. 30 May 2005. Donaldson-Evans, Catherine. Tsunami Animals: A Sixth Sense? 9 Jan. 2005. 30 May 2005.

A.P.J. Abdul Kalam Essay

Dr. avul Pakir Jainulabdeen abdul kalam was born on 15th october , 1931 at Dhanushkodi in Rameshwaram district of Tamilnadu. He did his secondary education at schwartz high school in Ramanathapuram ,B. Sc. at St . Josephs college ,Tiruchi and DMIT in Aeronautical Enginerring at the MIT^,Madras (chennai) during 1954 – 57. After passing out as a graduate aeronautical engineer Kalam joined ( Hindustan Aeronautics Limited) Banglore as a trainee , and later joined as a Techincal assistant in the directorate of Technical Development and Production of the Ministry of defence. In1960’s kalam joined the Vikram Sarabhai Space Research center at Thumba in Kerala . he played a major role in developing the first indigenous satellite – launched vehicle . in 1982,he rejoined DRDO as director and conceived the integrated Guided MIssile Development programme (IGMDP) for five indigenous missiles : Nag Prithvi ,Akash, Trishul ,AGNI. Dr. APJ. Abdul kalam has established an advance technology research center called ‘Research Center Imarat’ to undertake development in futuristic missile technology areas . t was perhaps the most satisfying achivenent for Kalam during the missile years. Dr. Kalam has also servd as Principal Scientific Advisdor to the government of india during 25th novenber 1999-10 November 2001. Later , hequit the job and took over the job as distinguished professor at Anna University . on july 25,2002 , Dr . A. P. J Abdul Kalam was sw2orn in as the 12th president of india by chif Justice of India Shri B. N.  Kirpal in central hall of parliment at an impressive function telecaste live across the parliment at an impressive function telecaste live across the country Dr . Kalam took the oath in the name of God as a 21 -gun salute boomed in the background. Dr. Kalam a bachelor is connoisseur of classicalcarnatic music . he plays veena in his leisure. He write poetry in tamil , his mother -tongue . seventeen of him poems were translated into English and published in 1994 as a book entitled â€Å"My journey†. He reads the quran and the Bhagavad Gita with equal devotion . he is also New Millenium , wings of Fire ; An Autobiography and ignited Minds . Dr. kalam is by no means a miracle man . His advice to the youngster of the nation is to â€Å"dream’ dream and convert these into thoughts and later into actions†. people Also to â€Å"think big. we are a nation of a billiuon people and we must thik like a nation of a billion people . only then can we become big. â€Å"

Sonnet 129

The poem Sonnet 129 focuses on human lust and its inevitable stages of shame. Shakespeare promotes the theme that as a result of lust there is only corruptness, whether it be while one is â€Å"in pursuit† (9) (in the future tense), â€Å"in possession† (in the present tense), or after the fact (in the past tense) when it proves â€Å"a very woe† (11). The negativity of lust is extremely reinforced in only the third line of the poem with a chain of adjectives to describe lust: â€Å"Is perjured, murderous, bloody, full of blame, / Savage, extreme, rude, cruel, not to trust† (3-4).This word choice exemplifies strong and ruthless voice that one would not usually categorize with lust. A simile is used to expound the consequence of lust by comparing it to when a fish is tricked by â€Å"a swallowed bait† (7). When a fish takes the bait with the hidden hook, the barb on the hook encases itself inside the fish’s flesh. This is an accurate compariso n to lust because the energy the fish exerts directly correlates with how deep the hook is buried. Correspondingly, just like when one is lustful, he or she is unavoidably doomed; that is, trying to escape the shame worsens the situation.Also, Shakespeare touches on the deceptiveness of lust: at first one is convinced lust is not a problem, merely â€Å"A bliss in proof† (11); however once realized and â€Å"proved† (11), the struggle with lust ends up being problematic. Moreover, Shakespeare expresses the shamefulness of viewing lust from â€Å"behind a dream† (12), the consequently terrible feeling one feels after lusting. The organization of Sonnet 129 helps convey Shakespeare’s idea about the tangles created by lust. The rhyme scheme is ABAB CDCD EFEF GG.This organization of rhyme forms a sense of always searching for a conclusion to the rhyme, as one reads one line and then the next in search for an end rhyme. There are no periods for the first 12 li nes creating a lack of pause, which forces one to read the entire poem through in a hastily manner. This all exemplifies the theme of lust because the poem reveals how once one lusts, they are never satisfied whether it be before, during, or after the lusting just like how as the reader is always propelled into the next word or phrase.The last couplet of the poem â€Å"All this the world well knows; yet none knows well / To Shun the heaven that leads men to this hell† (13-4) finally breaks the hurried 14 lines. In this couplet, Shakespeare explains that everyone knows lusting is a sin and it is always visible to God. This is an appropriate conclusion for this poem because it is reiterating the seriousness of lust and the Christian stance that lusting, in the end, will place you in hell.

Mission Statement of Nokia Essay

Nokia Corporation defines its mission to connect people through mobile phone technology and quotes its mission statement as follows; â€Å"Our strategic intent is to build great mobile products our job is to enable billions of people everywhere to get connected.† Operations Management Mission of Nokia: Nokia Goals and objectives in the market are as follows: To build great mobile products. To help people feel near to what matters to them. To enable billions of people to get more of life’s opportunities through mobiles. To capture volume and value growth to connect the next billion people to the Internet in developing growth markets. OM Department Mission of Nokia: Product design: Nokia cares about developing products that meet specific need of its customers. Thus for example, all the products of Business Solution mode are tailored to the requirement of specific entrepreneur seeking the  optimal solution for him. While in mobile phone section, the lifestyle of the target group is also analyzed. Quality Management: As the customer is the driving force in Nokia, so managing the quality is started with familiar with customer requirements and then processes are continuously improved according to the feedback received from the customers. Process Design: Nokia has design the capacity to ensure meeting all the demand (capacity built in view of demand supports the credibility of Nokia). Location: As a global company, Nokia operates in over 130 countries with the headquartered in Espoo in Finland, in the origins of Nokia. To create cutting edge technologies, it carries out researches in technologically advanced countries. Moreover, according to its diversity and location policy, Nokia wants to cooperate with companies form different locations as gaining new markets is one of the company’s goals. Layout Design: Nokia as an international company also uses global manufacturing network that gives them the ability to respond quickly to changes in demand and technology. They have suppliers in all parts of the world so that they can easily introduce changes to their processes and the utilization of resources is optimal. Human Resources: One of the Nokia strength is the employees. That’s why it aims to create them the best working environment and growth opportunities. It conducts several programs to encourage them to submit their own ideas and contribute to the company’s growth such as  ´Listening to You ´ annual survey or conducted by intranet â€Å"Ask HR† that gives a quick and openly published response for all queries. Supply Chain Management: Nokia’s supply chain includes direct sourcing (material supply for Nokia products, such as components, parts, packaging, contract manufacturing, software development, and research and development) and indirect sourcing (office equipment, services etc.) Inventory: Thanks to joint ventures and close cooperation with their supplier, Nokia can optimize their inventory levels. The suppliers as Nokia partners also participate in product development process, what helps better assess the needs of the future production. Efficient management of the inventory is also supported by the diversification of the location of suppliers. Moreover Nokia builds its inventory in view of demand, minimum levels of the inventory has to be maintained. Scheduling: Average life cycle of a mobile phone is about 2 years and during one year many new models are introduced. That’s why production of one line of products is done simultaneously with the research and design process of new products. Scheduling and taking measures in anticipation of new ventures is in this case a critical issue. Maintenance: Providing training and development for their employees is one of the Nokia’s promises. They pay much attention to be in touch with all new technologies and maintained the high level of well trained staff.