Company

Ford Motor Company is one of the world’s largest producers of cars and trucks and one of the largest providers of automotive financial services marketing vehicles under the eight brands shown below. The Company is a publicly traded company listed on the New York Stock Exchange. During 2002, the company made 6.7 million vehicles and employed 328,000 people worldwide. Business partners include 25,000 dealers and more than 10,000 suppliers.

Ford motor company offers a wealth of variety to the automotive consumer. As they start their second century of business, they are now in a position to appeal to the widest range of potential customers. Each of their automotive brands has a unique personality and holds a distinct place in the ford motor company family.

The marketing orientation has become common in companies that make things for individual customers. It remains rare in heavy industry that produces steel, coal, oil, and paper, where the immediate consumers are other businesses. The transition from the production orientation to the marketing orientation is still going on. It is the most important but least understood revolution in human history, marking a decisive power-shift from institutions to individuals. In the production orientation, human enterprise asked first what we could make, and second whether anyone will want it.

In the marketing orientation, we ask first what we want, and second how we can invent the means to fill that want. Production made people technology’s servants. Marketing makes us technology’s masters. The marketing revolution promises a golden age when social institutions and markets are systematically organized to maximize human happiness. One of marketing’s strongest features is its empiricism. What science did for perception, marketing does for production. It tests intuition and insight against empirical fact. Henry Ford thought he knew what people wanted from a car: cheap, reliable, and black.

Ford sold millions of model-Ts in the 1920s with this mass marketing strategy. Then General Motors came along, segmenting the market into many strata according to income, age, and tastes, attracting buyers by fulfilling their needs more precisely. Now all car companies work very hard to find out what people really want from cars, and they try to build cars to fit the preferences. Market research uses all the same empirical tools as experimental psychology, but with larger research budgets, better-defined questions, more representative samples of people, and more impact.

Ideally, marketing’s empiricism works like Rogerian psychotherapy: it holds up a mirror to ourselves, reflecting our beliefs and desires so we can recognize, remember, evaluate, and transform them. Ford Motor Company is undergoing a transformation that is putting their customers at the center of everything they do. Their vision is to be the world’s leading consumer company for automotive products and services. That requires a much different headset than that of a traditional automobile manufacturerone that concentrates intensely on the people who buy and use their products.

Obviously, they had had a pretty good idea of what their customers wanted in the past, or we wouldn’t be approaching our 100th anniversary. For nearly a century, Ford Motor Company has worked to improve people’s lives and be a responsible and valuable member of the community. In recent years, they have expanded and accelerated their corporate citizenship efforts, and worked to integrate them into their overall business strategy. But today’s customerand today’s competitionrequires a deeper level of understanding. Traditional market research is fine, but it’s only the start.

To transform the company, require all employees to interact directly with consumers. At the Consumer Insight Center, customers bring their vehicles in and discuss them face-to-face with Ford employees. The emphasis is on the individual’s interaction with her or his vehicle. The most well known consumer connection programs is the effort to provide home computers and Internet access to all of employees around the world . Being a leader in corporate citizenship is not only the right thing to do, but also is fully aligned with ultimate goal of providing superior shareholder returns over time.

The purpose of this report is to analyse the problems of employee motivation at Ilanco Inc. , a relatively small manufacturing company located in Montreal. For many years, this company operates in sweater production, and belongs to the section of clothing manufacturing industry. Currently, approximately 70 employees are working for the company. As many manufacturing organizations, Ilanco has been experiencing a lot of problems with effectively motivating its employees.

Such problems have been reflected both in the Motivating Potential Score Survey that we have conducted among the employees and in our interviews with some senior workers at the company. First, this report gives a brief overall description of the manufacturing industry and the company, Ilanco. The major parts of the report outline and analyses the main motivation problems that Ilanco is experiencing. According to these specific problems, several very useful and practical recommendations have been made to help improve the employee motivation at Ilance.

Also, in order to make this paper more insightful, some relevant motivation theories have been applied to both the analysis and recommendation sections to help analyse the problems more deeply Industry Description Manufacturing is a key activity in any economy because of its far-reaching effects. Manufacturing firms represent 20% of Canadian GDP. There are around 40 000 manufacturing firms in Canada, employing almost 2 million people. Production value comes to $135 419 millions.

Manufacturing firms with less than 200 employees represent 96% of total number of manufacturing firms in Canada, employing 47% of Canadian labor force involved in processing industry. In Quebec, the manufacturing sector generates over 20% of province’s GDP. Close to 11000 firms are operating, employing some 548 400 people. In Quebec, firms employing fewer than 200 people represent also 96% of the total number of manufacturing establishments. That is, employing 49% of province’s men-power. In Montreal, experienced labor force (1996 Census) represents 1 609 820 in all industries including manufacturing sector that employs 283 370 people.

Despite the importance of manufacturing industry, employment has been decreasing in recent years. Description of Company As an example of manufacturing firm we’ll take a look at “Ilanco Inc. “, relatively small company that falls under clothing industry sector. Company is located in Montreal’s Chabannel area and can be seen as a classical example of clothing manufactory. The firm was established in 19XX and is equally owned by two partners with considerable experience in clothing industry. Both partners do administrative work in the firm that produces ladies’ and men’s sweaters.

Because company does not have large variety of products, their workers are well trained, skillful and fully functional. Skilled labor is required for almost every part of production line. Products are tightly controlled and work is examined at every step of production process. For example, in the case of defective garments, they are being returned for reparation and later for final inspection. The average number of sweaters being produced in one working day is 1000 to 1200 sweaters. Ilanco Inc. employs 50-80 production workers depending on a season. There is approximately 40% of male and 60 % of female workers.

Preparation of fabrics and other materials that include work on steaming press and cutting, are positions held by male workers, while pattern making and sawing positions are positions held by female workers. Other positions such as thread cutting and packaging are positions equally held by male and female workers. All age groups can be seen in this company varying from workers that are in their 20’s up to the oldest worker that is 62. Concerning race, we found that production workers belong to all races. But what is very interesting is their ethnic background.

Big majority of workers are recent immigrants. There are only few of native English or French Canadians. Majority of production workers poses high school education with exception of some that have higher education. Work starts at 8am and finishes at 4pm. There is possibility to start at 7:30am and to finish at 5pm. That is workers’ choice. Working on Saturdays is required only during high season. Production workers are poorly paid. The average salary is $7/hour. There are examples of workers that work for company for 7 years and get paid $7. 75 per hour. There is no regular salary increase.

Workers have to ask for one, and the chance they will not get it. Everyone is paid by an hourly rate. No one in the company is paid by piece rate because of the type of work that is done here. There are no promotions, bonuses or similar benefits at Ilanco Inc. Description and Analysis of the problems Survey conducted with the employees of Ilanco Inc. resulted in reported lack of job satisfaction. To reach as more employees as possible, we conducted the survey in both French and English. Results of questionnaires on calculating motivational potential score varied form 70 to 110.

For the question on how much variety is there on their job, most employees answered – very little’. Other results gave a clear picture that employees have very little freedom decision wise, there is a lot of uncertainty, little control in setting their work pace and most of them find their jobs not challenging at all. This is a clear indicator that there is an existing motivational problem and that management ought to do something in order to motivate their employees because they are very valuable asset to company’s good performance.

Gillette is leading worldwide home applicants, such as razor, battery, electronic and manual toothbrush, manufacturing company. On April 14, 1998, the company introduced the worlds first triple blades razor and begun to sell July 1, 1998 in the United States and September in the Western Europe. Since Gillette launched new razor in 1998, the company expected high returns in short-term; however, the result of the new product has been defined yet.

SWOT ANALYSIS – Key Learning The areas of the internal factors are Finance, Management, Manufacturing, Market position, Personnel, and Research & Development. All these factors can be defined as either strengths or weakness or both. First of all, the company as a whole gained net sales amount of 10. 1 billion dollars and net income of 1. 4 billion dollars for the 1997 due to acquire leading battery company Duracel in 1996 and grow of Sensor Excel razor. As a result, company could spend 1 billion dollars to invent Mach 3 which is triple blades razor.

Even though Gillette had sufficient fund to invent the new product, the company took high risk of financial side that if the new products sale does not reach to companys expectation, the company will face shortage of capital esources and can be lead to bankruptcy. But if Mach3 turn out to be a New Coke or McDonalds Arch Deluxe much-hyped new products that were mostly duds and fizzle- the gloom will be heavy from Gillettes corporate headquarters in Bostons Back Bay to the South Boston factory that Gillette has overhauled to produce 600 million Mach3 blade cartridges per year, or about half of Gillettes annual target of 1. billion Mach3 blades. (Boston Globe, 4/15/98)

Since Gillette introduced “Mach3” in April, the company changed its manufacturing tools to produce Mach3 South Boston’s factory. Gillette already spent 300 illion dollars for advertising and promotion worldwide for the year that company introduced new product. The amount is twice as much as the company put for advertising “Sensor Excel” in 1989. Gillette released the new product to retail stores on July 1, 1998, and starts to advertise on TV and the other media six weeks later; however, many people went to the company’s web site to look at the new product.

Even though company spent tremendous amount of fund for the advertising, some people from Asia did not recognize the product according to our group’s survey. For customers, there are satisfaction and complaints for Mach3. People, who satisfied with Mach3 according to our survey, said there are less irritation and faster shaving time. Customers who complaint about Mach3 argue that they do not want to spend more money on better outlook. According to our survey, one hundred percent of surveyees, who does not satisfy with Mach3, say the price is too high for the product.

Price is relatively higher than other products including “Sensor Excel” which was the most expensive one before “Mach3” came out. Its price is 6. 99 dollars per razor with one blade included – currently, the company is selling for 7. 29 dollars per Mach3. It is 4 percents increased from original price, and 40 percents higher price than other products. This may lead to decrease in sales and the companys total revenue. The company is trying to reach customers several different ways. Gillette offers Mach3 package product, which included Mach3 itself and couple of extra razors, Shaving cream and deodorant.

This package product makes each items unit price lower than sell separately. Also, the company offers sweepstakes on the company’s web site, and there is no obligation. This is the one of the finest ways to reach and get involve the customers. The company give chance to people to win prize without any obligation; however, people will recognize the product automatically. Also, Gillette can acquire the Since Gillette is well-known global company, many retail stores are not offended to carry the company’s product even though the product’s price is high.

Retail stores are assume that Mach3 will bring more customers. On the other hand, even more customers come to store, it is unpredictable for increasing stores sales revenue because price is too high so that consumers would not buy. External factors are Competitive, Economic, and Social. Gillettes major rival in the market is Shick. Since Gillette is the first company produce triple blades razor, the company will lead the market; however, rival company such as Shick will develop the same product with higher quality or lower price.

Then the result will be unforeseen unless Gillette improve Mach3s weakness – high price. For long time in the United States, peoples income has been growing. As a result, customers purchasing power also increased. However, the companys market is not only the United States but also overseas, in fact, over sixty percents of sales are made from overseas. Consequently, the company has to consider the facts that poor countries consumers are willing to use cheaper product; especially the countries in economic crisis. Recommendation There are 3 target groups in the market.

The first group is disposal razor users that it’s approximately more than half of the market. The advantages of this group are cleaner, cheaper and easy to use. On the other hand, it is less quality than other two razors. The second group is regular razor such as Mach3 about 40 percents. The last group is electronic shaver users which it takes remaining market share. The customers who use the electronic shaver satisfied with high technology, easy to use, saving time and safety compare to the other two products.

The disadvantages of this product are high price and less cleanness when one shaves. The goal of Gillette is trying to acquire customers who use disposal and electronic shaver to Mach3. In order to persuade the customers to change to Mach3, the company should beat other product’s weaknesses and add the improved the weakness of the other product to Mach3 and decreases of its weakness. Mach3 has several strengths; the first impression is fancy utlook that makes customers feel differentiated from other products.

Second of all, men are challengers, always pursue new trend; especially on the tangible items with high technology. Although Mach3 has several strengths, it also has weaknesses. High price makes people think twice to purchase Mach3; the older generation of the Gillette razor is cheaper than Mach3, that makes people wonder if it is necessary to spend more money on the Mach3. The key purpose for Mach3 is to shave beard, but the older generation is also doing same job as Mach3; that makes no different between older and newer product. The next weakness is the advertisement.

Gillette has spent 300 million dollars on the advertisement, but we did the survey with at least thirty people; 22 out of 30 surveyees know the brand from Television and magazine, but they have never uses it. This means the advertisement has preached the good news, but it has not reach people’s life. The majority of men do not know why they should spend more money to buy same result. The marketing strategy did not fail the sale of the Mach3, it is price controller. The main point of the marketing is to opening a market for product.

Since 3% of the men from the survey know the product, this mean the marketing strategy succeed its intention. The biggest mistake we found is the price. As I mentioned, “the majority of men do not know why they should spend more money to buy same result”. I would recommend to the company, to lower the price and match the same price as older generation. Let public buys Mach3 as the same price as older generation, allow public to try out differences between Mach3 and older generation. After when market demand of the Mach3 is higher than older generation, then increases its price.

The Coca-Cola company started out as an insignificant one man business and over the last one hundred and ten years it has grown into one of the largest companies in the world. The first operator of the company was Dr. John Pemberton and the current operator is Roberto Goizueta. Without societies help, Coca-Cola could not have become over a 50 billion dollar business. Coca-Cola was invented by Dr. John Pemberton, an Atlanta pharmacist. He concocted the formula in a three legged brass kettle in his backyard on May 8, 1886. He mixed a combination of lime, cinnamon, coca leaves, and the seeds of a Brazilian shrub to make the fabulous beverage.

Coca-Cola debuted in Atlanta’s largest pharmacy, Jacob’s Pharmacy, as a five cent non-carbonated beverage. Later on, the carbonated water was added to the syrup to make the beverage that we know today as Coca-Cola. Coca-Cola was originally used as a nerve and brain tonic and a medical elixir. Coca-Cola was named by Frank Robinson, one of Pemberton’s close friends, he also penned the famous Coca-Cola logo in unique script. Dr. John Pemberton sold a portion of the Coca-Cola company to Asa Candler, after Pemberton’s death the remainder was sold to Candler.

Pemberton was forced to sell because he was in a state of poor health and was in debt. He had paid $76. 96 for advertising, but he only made $50. 00 in profits. Candler acquired the whole company for $2,300. Candler achieved a lot during his time as owner of the company. On January 31, 1893, the famous Coca-Cola formula was patented. He also opened the first syrup manufacturing plant in 1884. His great achievement was large scale bottling of Coca-Cola in 1899. In 1915, The Root Glass Company made the contour bottle for the Coca-Cola company. Candler aggressively advertised Coca-Cola in newspapers and on billboards.

In the newspapers, he would give away coupons for a free Coke at any fountain. Coca-Cola was sold after the Prohibition Era to Ernest Woodruff for 25 million dollars. He gave Coca-Cola to his son, Robert Woodruff, who would be president for six decades. Robert Woodruff was an influential man in Atlanta because of his contributions to area colleges, universities, businesses and organizations. When he made a contribution, he would never leave his name, this is how he became to be known as “Mr. Anonymous. ” Woodruff introduced the six bottle carton in 1923.

He also made Coca-Cola available through vending machine in 1929, that same year, the Coca- Cola bell glass was made available. He started advertising on the radio in the 1930s and on the television in 1950. Currently Coca-Cola is advertised on over five hundred TV channels around the world. In 1931, he introduced the Coke Santa as a Christmas promotion and it caught on. Candler also introduced the twelve ounce Coke can in 1960. The Coca-Cola contour bottle was patented in 1977. The two liter bottle was introduced in 1978, the same year the company also introduced plastic bottles.

Woodruff did have one dubious distinction, he raised the syrup prices for distributors. But he improved efficiency at every step of the manufacturing process. Woodruff also increased productivity by improving the sales department, emphasizing quality control, and beginning large-scale advertising and promotional campaigns. Woodruff made Coke available in every state of the Union through the soda fountain. For all of these achievements he earned the name, “The Boss”. In 1985, the Coca-Cola Company made what has been known as one of the biggest marketing blunder.

The Coca-Cola company stumbled onto the new formula in efforts to produce diet Coke. They put forth 4 million dollars of research to come up with the new formula. The decision to change their formula and pull the old Coke off the market came about because taste tests showed a distinct preference for the new formula. The new formula was a sweeter variation with less tang, it was also slightly smoother. Robert Woodruff’s death was a large contributor to the change because he stated that he would never change Coca-Cola’s formula.

Another factor that influenced the change was that Coke’s market share fell 2. ercent in four years. Each percentage point lost or gain meant 200 million dollars. A financial analyst said, “Coke’s market share fell from 24. 3 percent in 1980 to 21. 8 percent in 1984”. This was the first flavor change since the existence of the Coca-Cola company. The change was announced April 23, 1985 at the Vivian Beaumont Theater at the Lincoln Center. Some two hundred TV and newspaper reporters attended this very glitzy announcement. It included a question and answer session, a history of Coca-Cola, and many other elements(Oliver 131).

The debut was accompanied by an advertising campaign that revived the Coca-Cola theme song of the early 1970s, “I’d Like to Buy the World a Coke”. The Jingle read like this: I’d like to teach the world to sing In perfect harmony. I’d like to buy the world a Coke And keep it company. The change to the world’s best selling soft drink was heard by 81 percent of the United States population within twenty-four hours of the announcement. Within a week of the change, one thousand calls a day were flooding the company’s eight hundred number (1-800-GET-COKE).

Most of the callers were shocked and/or outraged, many said that they were considering switching to Pepsi. Within six weeks, the eight hundred number was being jammed by six thousand calls a day. The company also fielded over forty thousand letters, which were all answered and each person got a coupon for the new Coke. A retired Air Force officer, explained in a letter to the Coca-Cola company that he wanted to be cremated and interred in a Coke can, but now that this change had come about he was reconsidering. Sharlotte Donneally, a thirty-six year old anthropologist said, “I hate the new stuff”.

Wendy Koskela, a thirty-five year old vice president of an insurance company said, “It’s too sweet. It tastes like Pepsi. ” She also stated, “Real Coke had punch. This taste almost like it’s flat”. Many American consumers of Coca-Cola asked if they would have the final say. When Pepsi heard that the Coca-Cola company was changing its secret formula they said that it was a decision that Pepsi tastes better. Roger Enrico, the president and CEO of Pepsi-Cola wrote a letter to every major newspaper in the U. S. to declare the victory, the letter read like this:

It gives me great pleasure to offer each of you my heartiest congratulations. After eighty-seven years of going at it eyeball to eyeball, the other guy just blinked. Coca-Cola is withdrawing their product from the marketplace, and is reformulating brand Coke to be more like Pepsi… There is no question the long-term market success of Pepsi has forced this move… Maybe they finally realized what most of us have known for years, Pepsi tastes better than Coke. Well, people in trouble tend to do desperate things… and we’ll have to keep our eye on them. But for now, I say, victory is sweet, and we have earned a celebration.

We’re going to declare a holiday on Friday. Enjoy! Best Regards, Roger Enrico President, CEO Pepsi-Cola USA Coca-Cola officials said, “The new formula will boost Coke’s share by 1 percent. That is worth 200 million dollars a year. ” Coca-Cola management had to decide: Do nothing or “buy the world a new Coke”. They decided to develop the new formula. Roberto Goizueta, the president of the Coca-Cola Company stated, “The old Coke formula, with its secret flavoring ingredient, called Merchandise 7X, will stay locked in the Trust Company of Georgia bank vault in Atlanta, never to be used again”.

This is what many Coke officials said, “This is the most significant soft drink development in the company’s history”. The change back to the old Coke was known as the Second Coming. Roberto Goizueta said, “Today, we have two messages to deliver to the American consumer, first, to those of you who are drinking Coca-Cola with its great new taste, our thanks… But there is a second group of consumers to whom we want to speak to today and our message to this group is simple: We have heard you”. On July 10, 1985, eighty-seven days after the new Coke was introduced, the old Coke was brought back in addition to the new one.

This was greatly due to dropping market share and consumer protest. The market share fell from a high of 15 percent to a low of 1. 4 percent. Roberto Goizueta and Donald Keough took full blame for this failed product launch. Don Keough, Coca-Cola president, said in response to the comeback, “The truth is we are not dumb and we are not that smart”. Roberto Goizueta’s response when the change about, “We have heard you”. This was said to be a classic marketing retreat. Coca-Cola executives admitted that they had goofed by taking the old Coke off the market.

One old Coke loyalist said, “The company had spoiled the taste of its ninety nine year old soft drink and betrayed a national trust”. Ike Herbert, a Coke marketer said, “You would have thought we had invented a cure for cancer”. The Coca-Cola company’s eight hundred number received eighteen thousand calls of gratitude. One caller said they felt like a lost friend had returned home. The comeback of old Coke drove stock prices to the highest level in twelve years. This was said to be the only way to regain the lead on the cola wars.

In 1979, fifteen hundred employees moved to the new corporate headquarters in Atlanta located on North Avenue. The new corporate headquarters came to be known as “The Tower. ” During the time when the research for the new formula was taking place, it was known as “The Bunker”. The known ingredients in present day Coca-Cola are water. caffeine, phosphoric acid, vanilla, various oils and essences and extracts of the coca leaf and the kola nut. The one in four hundred part of cocaine was removed from Coca-Cola in 1903. Five years after the infamous Coke fiasco, the Coca-Cola company tried to bring back the reformulated Coke.

The effort to bring Coke II into the soda market was quite unsuccessful. During the Woodruff era, Mr. Woodruff made a promise to the armed forces of the United States to supply Coca-Cola to every serviceperson. He said that costs and location did not matter, he supplied 5 billion bottles to the service. In the mid-1970’s, more than half Coca-Cola sold was outside of the U. S. Coca-Cola products outsell closest competitor by more than two to one. One in every two colas and one in every three soft drinks is a Coca-Cola product.

The best known trademark in the world is sold in about one hundred and forty countries to 5. 8 billion people in eighty different languages. This is why Coca-Cola is the largest soft drink company in the world. Coca-Cola is worth more than 58 billion dollars on the stock market. For more than 65 years, Coca-Cola has been a sponsor of the Olympics. The 1996 Summer Olympics were held in Atlanta, Georgia, the home of Coca-Cola. One great thing that the Coca-Cola company has is helping the people of Atlanta. They accomplish this through scholarships, hotlines, donations and contributions, etc.

Another large accomplishment that the Coca-Cola has, is being the first company to make and use recycled plastic bottles. One way to see all of the achievements of the Coca-Cola company is to visit the World of Coke in Atlanta. It houses a collection of memorabilia, samples of the products, exhibits, and many other exciting items. All of what has been said is the basis of what Coca-Cola was built on. Without societies help, Coca-Cola could not have become over a 50 billion dollar business. Keep on consuming the world’s favorite soft drink, Coca-Cola.

In early August of 1997 the United Parcel Service (UPS) had a predicament on its hands, a teamsters strike. UPS, the worlds largest package distribution company was coming off a year [1996] in which they reported sales of $22. 4 billion. UPS Employed 75,000 management and non-union employees compared with 185,000 teamsters who are part of the AFL-CIO that were going on strike. The teamsters rejected a contract extension offer from the company leaving the fate of millions of packages carrying everything from lobsters to laser printers up in the air (Johnson).

Tensions between union supporters and management began mounting in the years preceding the strike. In April of 1994, the International Union led a three-week strike against major tracking companies in the freight hauling industry in attempts to stop management from creating $9 per hour part-time positions. This would only foreshadow battles to come between management and union. Later, in 1995, teamsters mounted an unprecedented national union campaign in attempts to defeat the labor-management cooperation scheme that UPS management tried to establish in order to weaken the union before contract talks (Witt, Wilson).

This strike was distinguished from other strikes of recent years in that it was an offensive strike, not a defensive one. It was a struggle in which the union was prepared, fought over issues which it defined, and one which relied overwhelmingly on the efforts of the members themselves (http://www. igc. org/dbacon/Strikes/07ups. htm). The teamsters campaign at UPS was unique in that there were many special circumstances surrounding it. UPS controlled 80% of the ground package delivery business, which ensured them that a strike would have a significant impact on the economy and pressure the company to settle.

The company was not a conglomerate that could withstand the walkout since it did not have other lines of business. Also, UPS delivers to every address in the U. S. , adding a hometown story in most cities and towns. The last circumstance was the fight was taking place during August when Congress is out of session, making it easier to gain national attention (Witt, Wilson). This strike was a battle over several issues. One factor that escalated the strike intensity was the pensions battle. Billons of dollars in pensions were on the line.

The Teamsters were reluctant to allow UPS to withdraw from the multi-employer teamsters-controlled pensions plans. UPS proposed a plan that would increase the monthly pension benefits for full and part-time employees an average of 50 percent. The current pension plan benefited thousands of teamsters retirees that never even worked for UPS . Basically, UPS wanted UPS dollars to go to UPS people (UPS vs Teamsters). Before the strike, in many regions UPS participated in multi-employer benefit plans in which several shipping employers jointly pay for employee benefits.

If one employer goes out of business or gets behind on payments, the other employers must compensate for the loss. This explains why it is said that UPS pays for the retirement and benefits of people that never worked for them (Business News New Jersey). Another issue in negotiations was full-time versus part-time positions. UPS employees argued that too many workers were working 35-45 hours a week, often at two different jobs, for part-time pay. Having about two-thirds of all teamsters being part-time this was a central issue.

They wanted these part-time positions to be converted into full-time positions. UPS claimed that it did not want to guarantee full-time positions because of fluctuations in work and wants flexibility for competitive reasons (UPS vs Teamsters). Along with full-time positions and the pension arguments, strikers wanted limits on giving work to subcontractors, and health and safety improvements. John Cortez, a warehouseman for UPS has been surviving for five years on the same part-time job he got when he was young and single.

Working 26-28 hours a week and no having a wife and kids Cortez claimed it is not enough hours to pay the bills. With a waiting line for a full-time job so long that it will be another five years before Cortez would achieve full-time status. Teamsters union strategists and the UPS bargaining committee took a look at the problem of part-timers like Cortez. Knowing that his future was up in the air, Cortez and others sharing his interests would unite and keep the union members on the picket line as long as necessary (http://www. c. org/dbacon/Strikes/07ups. htm). During the 15-day strike many businesses suffered. One business, Mail Boxes Etc. , saw its shipping volume drop by 75%. Commenting on the situation, they stated that they diverted as much as they can of their shipping to other carries but it is difficult for other carriers to absorb 80% of the shipping for the entire state [New Jersey]. All over New Jersey companies ranging from pharmaceutical giants to small bakery shops faced the impact of the strike.

With speculation surrounding government intervention in resolving the strike, UPS kept a skeleton operation going with management behind the wheels of the companys famous brown trucks. One company normally running with 150 local drivers moving 40,000 packages a day continued running with 80 drivers from the management staff (Business News New Jersey). Another industry affected by the strike was the movie business. One firm, Technicolor Entertainment Services, handles distribution for several major studios promised to hand carry film canisters on commercial airlines if necessary.

A distributor for studios such as Disney, MGM, Universal, and Miramax Technicolor used UPS for materials such as promotional displays for theater lobbies. Companies such as Technicolor typically already work against tight deadlines, with the strike it only made things worse (http://channel2000. com/news/stories/news-970805-191537. html). While customers attempted to find alternative ways of distribution other than UPS, the many competitors, the U. S. Postal Service, FedEx, Emery Worldwide, ETA Express, DHL Worldwide Express, and RPS Inc. were not nearly capable of handling the near 12 million packages that UPS shipped daily. FedEx was and remains the strongest and most competitive competitor. If nothing else, this strike alerted competitors to the profit opportunities in fight UPS for market share. (http://www. igc. org/dbacon/Strikes/07ups. htm). After a fifteen-day strike, Teamsters and UPS management came to an agreement on a tentative contract.

At the start of the strike the company offered to advance 10,000 part-time workers to full-time jobs as other full-timers retired or quit, while only agreeing to create 1,000 new full-time jobs. In the final agreement, 10,000 new full-time jobs are to be created over the next five years. Another incentive to the deal was that five out of every six full-time openings would be filled by part-time UPS workers. UPS originally wanted to subcontract out the jobs of feeder drivers, the people that drive big-rigs between terminals.

However, knowing that those jobs are promotions and typically held by the most senior drivers. Union officials fought against and defeated this. Existing full-time employees received wage increases totaling $3. 10 over five years and full-time, high-seniority workers won substantial increases in contributions to pension plans (http://www. igc. org/dbacon/Strikes/07ups. htm). The union got full-time work while management got their workers back to work. In determining who got the better end of the deal it could go either way.

The union did get the full-time jobs they wanted, however the union members not seeking full-time work lost out in the deal. Both management and union were hurt in regards to lost business resulting from the strike. While it appears the union did get most of the things they asked for, they were negotiating quickly knowing that any time a back-to-work order by President Bill Clinton was possible. I believe that this strike was clearly avoidable, however the union decided they wanted to make a statement and I feel they were for the majority successful in getting what they wanted.

UPS did not appear to gain a lot from the deal, along with losing market share in the process a feel it was a slight loss on their part. There did not have to be a strike, but in striking I feel that the union got their point across. Management should have examined the full-time/part-time issues more closely in attempts to satisfy more employees. If employees felt they were safe and secure with their work status I feel they probably would not have went on strike.

The significance of this confrontation is that it gives Teamsters hope that management can be overcome if the union power is strong enough and the cause is a viable one. In the days following the strike UPS stepped up efforts to maintain its current customer base without losing a significant market share. UPS officials stated that they felt they could gain back nearly all small customers lost while possibly losing a few corporate clients.

In efforts to reassure its customers in the days subsequent to the strike, UPS telephoned nearly 1. illion customers to reassure them along with promising not to raise rates for the remainder of the 1997 year (Frank). Who exactly won the strike? I feel that the Teamsters were the winners in this case. They got the majority of their requests while giving little ground to management. The teamsters gave a little ground when they agreed to a five-year contract instead of the two or three year deal they were looking for. The union got UPS to create 10,000 full-time jobs from existing part-time positions compared to 1,000 which was originally proposed by UPS.

Along with getting a slight increase in pay, the Teamsters got to keep their existing multi-employer pension plan UPS attempted to do away with, clearly another Teamster victory. While UPS may have suffered some from pressure brought on by President Clinton, they got the Teamsters back to work. All in all, the union got almost everything they wanted with a little longer contract than they were looking for, clearly a union victory. The following table, with information from Alan Dodds Frank, summarizes what the Teamsters won, and what they conceded.

A Company like Procter and Gamble can attract the attention of any one in the whole world. It made and still makes the life of any individual much easier by providing him with reliable products that he appreciates for their superiority and their safety. Today, in Egypt, the products of Procter and Gamble have conquered the Egyptian market. In every house, one or more products are found. As a result, the Egyptian local products could not compete with this outstanding quality that P & G offers. The public is interested in gathering more information about the company.

That is why, knowing more about the earlier foundation of the firm, its purposes and core values, the process of innovation of its products, its annual report and the link between it and its branch in Egypt could satisfy the people’s curiosity. Procter & Gamble refers to William Procter, who “established himself as a candle-maker”, and James Gamble who “apprenticed himself as a soapmaker” (P&G History 1). Procter and Gamble first started in 1837 in Cincinnati. At that time, the marketplace in that country was not encouraging to run businesses because of many financial problems.

Despite that, P & G ran their company. More specifically, on 12 April 1837, William Procter and James Gamble started to produce and to offer these products to customers. They both started with two main products, which were soap and candles. At the same year, and precisely on 31 October 1837, Procter and Gamble signed up the contract of their partnership and started their business together. Twenty years after signing the contract, P & G sales reached $1million and at that time the company had about eighty employees.

In 1862, and during the civil war, P & G Company was ordered to produce a big quantity of soap and candles to fulfill the Union armies’ needs. Seventeen years later, a new type of soap called “Ivory” was invented. By 1890, the types of soap that P & G was producing were about thirty taking into account the “Ivory”. In the same year, the demand for soaps was increasing. Thus, to be able to meet the customers’ increasing demand of their products, P & G company decided to expand the business to go outside Cincinnati to reach overseas and this “increased capacity and improved distribution of products to customers” (P&G History 2).

Later on, P & G started to develop more products and this happened in 1911 when P & G Company introduced for the first time “Crisco”, which is a type of vegetable equals to the butter, but was more economical. One century after the establishment of the P & G, “sales reached $230million” (P&G History 2). Throughout years, P & G continued developing new products. In 1987, the company was chosen to be “the second oldest company among the 50 largest fortune 500 companies” (P&G History 3).

Five years later, “P&G received the World Environment Center Gold Medal for international Corporate Environmental Achievement” (P&G History 4). One year after this recognition, P&G Company’s sales reached $30 million and even more. In 1995, P&G was given another medal, which is the National Medal of Technology, which is considered “the highest award the United States bestows for achievement in technology” (P&G History4). Generally speaking, P&G is one of the factors that led to the economic growth and the welfare of the world because it gave the chance to more than 110,00 people to work.

Like any other company in the globe, Procter and Gamble Corporation, set their own objectives and goals in order to achieve their main purpose. Their purpose is to provide products of superior quality and value that improve the lives of the world’s consumers. By achieving their purpose, they will be rewarded by their consumers with ” leadership sales and profit growth” (P&G Goals 2), which will, in turn, affect their communities, their people and their share and stock holders to live and work in welfare.

Moreover, P & G identify their core values such as “leadership, ownership, integrity, passion for winning and trust” as priorities (P&G Goals 2). By implementing a plan based on these core values, they will be able to achieve their aim. They believe that building their organization from within, by promoting and rewarding P&G’s people, whom they value and consider them as their most important asset because of their faithful work and excellent performance, is the best way to succeed.

Procter and Gamble then respect all individuals; consumers and their human resources, and offer them their trust, on condition that they treat them similarly. Furthermore, P & G’s main target is to focus on work in order to be the best seller in this global market. Leadership, which is applied in the areas of responsibility and commitment, is a factor that enables Procter and Gamble to accomplish their target. In case of ownership, they let the employees behave “as the owners” of the company, because such policy allows everyone to be contribute more to the success of the firm as if it’s his own business.

Another core value that we put to use is integrity. Procter and Gamble follow their code of ethics by always trying to do the right thing, abiding the law, being honest and devoted to work, to each other and to the well being of the organization as well. Their strategically plans have proved to be working efficiently because they are professionally recognized by the whole world. Many institutions and magazines awarded P & G. Examples of awards are “The World Most Admired Company” which was sponsored by the Fortune Magazine in 1998 (P&G Awards 1).

As to the Environmental Awards, their awards are “Sustained Leadership in Waste Protection” given by U. S. Environmental Protection Agency, as well as, the Thomas Addison Award for the “Global Leadership in Environmental Quality Management” (P&G Awards 2). Procter and gamble company is a complex organization which produces different types of products especially that it distributes its products in 140 different countries, and its aim is to reach the taste of the consumer in every possible way. P&G began in the 1911 when they first produced vegetable shortening.

However, it is always in the state of innovation by producing new products every day. The way to reach success was not easy at all, because it is easy to produce anything, on the other hand, it is difficult to understand the consumers’ taste in order to make them have a better life. Therefore, the company was enrolled in a learning process to improve its products every year, so as to be more efficient than the previous years. The learning process was done in many steps. First, the company attempted to know the new consumers’ needs especially in those far regions such as China and Eastern Europe.

Second, the company compares between the different ideas and experiences, which they take from customers of different countries. For example, laundry and hair care needs differ from one country to another. Third, the company continues in establishing new products and implements the useful ideas that they attain. For example, the company benefits from producing various kinds of food by using their wastes in manufacturing soap and candle. By this way, our company develops its goods to be one of the extremely strongest companies in our globe.

In addition, the company followed some steps, which with their aids it became more successful. The first step was to make new needed products, and this was achieved by using high technological machinery. The second one was to continue in producing the successful products with suitable quantities, so as not to be negatively affected by its competitors of the same market. For instance, in laundry and cleaning products ‘Tide’, a strong product which the company is concerned with selling certain amounts of it daily, must be produced with the limited quantities it was planned for.

Besides that, the third step is to have more capital investments to enlarge the company in the future. This step would not be accomplished perfectly, if the company did not depend on making useful research, as well as, the laboratory testing, which consequently leads to beneficial results. Actually, these three strategies enabled our organization to be outstanding in the global market and to preserve its success. Procter and Gamble is a multinational corporation with 156 branches distributed in more than 70 countries.

Osama Abdel Rahman, sales manager of Procter and Gamble in Egypt believes that it should be called a “location” instead of a branch. This ‘location’ in Egypt gets technical and managerial assistance from the Mother Company. As for the assistance that Procter and Gamble in Egypt gets from the Mother Company, Mr. Abdel Rahman says that “we get support regarding product development and market research from the head quarters in the U. S and Europe. Very little research and development is done here, in Egypt, because it needs high investments and manpower”(Personal Interview).

There are three main development centers for Procter and Gamble. The first center is in Germany and it is responsible for developing paper products like ‘Always’ and ‘Pampers’. The second development center, which is in Brussels, is responsible for detergents. The last center is located in the United Kingdom and it is responsible for soap and shampoo. Those three centers do all the market research for international companies, like the one in Egypt. They study the needs of the market and make the formulas for the products. Then the formulas are sent to Egypt where the products are produced.

Another form of assistance, that the location in Egypt gets from the mother company, is that some of the staff members who work at the location in Egypt, travel to the U. K to get training in order to improve their performance. Moreover, the quality standards are set by the head quarters in the U. K, then sent to the location in Egypt to be follow. As to prices, in Egypt, they are higher when compared to the prices of Procter and Gamble products in the U. S and Europe. This is because that “85% of the raw materials are imported” as Mr. Abdel Rahman points out (Personal Interview).

Therefore, the location of Procter and Gamble in Egypt has to pay tariffs and other custom taxes, which make the costs of production as well as operations higher, as a result the prices have to be, in turn, higher. Concerning the profit made by the location in Egypt, Mr. Abdel Rahman notes that “no percentage of the profit we make goes to the Mother Company, we keep all the profit. ” (Personal Interview). Procter and Gamble environmental science department plays a unique role in making excessive tests on their products to ensure that they are safe for the consumer and for the environment.

Environmental safety is an integrated parts of the quality that P&G builds into each of its products throughout the world. P&G environmental quality policies are considered to be very important as they been using detergents with less amounts of water and energy i. e. , the amounts of raw materials used in the manufacturing process and thus saving the environment resources. And according to some statistics made in 1992, it was revealed that the detergents used in Tide, Ariel, Era, Cheer, Gain, Dreft and Ivory shows that water used by less by twenty percent of all pervious years. Also, P&G were keen to save the paper industry.

For instance, in 1992 products like Bounty, Folgers, Zest and Hawaiian Punch have reduced their packaging process from ten to twenty percent compared to 1994 (Environmental Initiatives And Program). Procter and Gamble company is committed to producing superior quality of goods and to producing products to refine the world’s consumers. Some of the obligations that P&G is committed to, is to ensure that the products, packaging and operations are safe for both the employees and the environment. Also, ensuring that the products can be disposed easily in an appreciate manner(Enviromental Quality).

Also, they are committed to meeting or exceeding the requirements of all environmental laws and regulations. P&G is a well known leader for implementing the environmental safety, refilling packages and recycle plastic in order to have a clean environment. Sadly, the P&G company is not following the rules, as it should be. Despite Procter and Gamble promises and reputable name, each year thousands of animals are the victims of the painful products tests, due to the massive doses of compounds and the irritating substances they experiment on their shaved abraded skin.

Also, they force animals to inhale and swallow enormous amounts of compounds. And to make the things worse, the industry of toxicologists had stated that, their results could not be reliable since there are huge physiological differences. The stressful laboratory conditions impair the immune function and alter heart and pulse rates of animals. The company’s actual performance could be deduced by looking at its 1998 Annual Report.

Its worldwide net earnings for the year 1998 were 3. 8 billion dollar, which is 11% increase over the prior year and $37. illion net sales accounting for a 4% increase over the prior year. It has total assets of $30. 9 billion and liabilities of $5. 7 billion. It’s obviously clear that the company is taking good care of its products because its expenses in advertising and the research and development of the goods are $2. 6 and $1. 56 billion respectively. This is an evidence of how much consumers demand our products and how this initiates the company to develop 300 brands to satisfy five billion consumers all over the world.

It’s not news that Sony is a global company or that (25%) of all Play Station profits’ for the past seven years came from Sony to Japan. After all that’s what international marketing and the global economy are all about, companies like Sega, Nintendo, Microsoft, X-Box doing business around the world. The global economy now reaches every corner of the United States. Current interest in international marketing can be explained by changing competitive structures coupled with shifts in demand characteristics in markets throughout the world.

With the increasing globalization of markets, companies find they are unavoidably enmeshed with foreign customers, competitors and suppliers. A significant portion of all products made in the United States is foreign made. Japan’s economy is based on a strong work ethic and being a leader of technology, in which has helped Japan advance to the second most powerful economy in the world. One notable characteristic of the economy is the working together of manufacturers, suppliers, and distributors in closely-knit groups called keiretsu.

The keiretsu, which means “order” or “system,” is a unique form of business that links companies together in industrial groups that provide Japanese business with a substantial competitive edge over non-keiretsu organizations. Keiretsus are collections of dozens of major companies spanning several industries and held together by cross-shareholding, old-boy networks, interlocking directorates, long-term business relationships, and social and historical links. There are six major Japanese industrial keiretsu groups and eleven lesser ones.

Together, the sales in these groups are responsible for about 25 percent of the activities of all Japan, and keiretsus account for 78 percent of the value of all shares on the Tokyo Stock Exchange. Japan’s industry, which is the most important sector of the economy, is heavily dependent on imported raw materials and fuels. For three decades overall real economic growth had been one of the highest, 10% in the 1960s, 5% in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in 1992-95 largely because of the aftereffects of over investment during the late 1980s. Growth picked up to 3. in 1996, largely a reflection of low rates of inflation.

But in 1997-98 Japan experienced a recession, centered about financial difficulties in the banking system and real estate markets. In early 1999 output has started to stabilize as emergency government spending begins to take hold. Here of some of Japan’s statistics for 2000. Japan is the home to of the top companies in the world. One of the companies, which has helped Japan’s economy to be one of the top, is Sony. Modern day Sony is a high profit high output company, which is manly due to its marketing strategies and decision to its customers.

What is marketing? Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy both individual and organizational goals. Marketing also include being able to get the goods from the producer to the consumer. The producer is responsible for the design and manufacture of goods. Marketing also includes market research and product development, design, and testing. Marketing concentrates primarily on the buyers, or consumers and determining their needs and desires.

Companies then need to stress the availability of products and the important product features. You then need to develop strategies to persuade them to buy and keep their satisfaction with the product. Marketing management includes planning, organizing, directing, and controlling decision making regarding product lines, pricing, promotion, and servicing. In addition, the marketing department of a business firm is responsible for the distribution of the products, determining the means of distribution that will be used and supervising the profitable flow of goods from the factory or warehouse

Sony has a complete grasp of this. Sony, which is based out of Japan has expanded to almost every country including a tremendous market in the US, is considered by many to be a marketing marvel. Sony has a dedicated consumer backing, due to its ability’s to market it’s products and keep it’s consumers happy. The company name “Sony” was created by combining two words. One is ‘sonus’ in Latin, which is the root of such words as ‘sound’ and ‘sonic’. The other is ‘sonny’ meaning little son. The words were used to show that ” Sony” is a very small group of young people who have the energy and passion toward unlimited creation

Though Sony is perhaps best known as a consumer electronics giant, the company is a major provider of technology and services to business, as well. On both consumer and business fronts, Sony is rapidly reinventing its business model for a networked world. For example, Sony successfully arranged a deal with Cablevision for a new generation of set-top boxes. And the lure of content from Sony Pictures, Sony Music, and other entertainment assets has helped Sony build valuable relationships with companies such as Microsoft, Palm, Microsystems, and TiVo.

With a library of more than 4,400 films and more than 40,000 hours of television programming, along with the work of more than 1,000 recording artists on various Sony Music labels. One of Sony’s best and most successful marketing strategies was aimed at their debut of Playstation in 1994. Sony’s idea to enter the very profitable video gaming world was a very profitable move. In 1994 when Sony decided to enter the gaming world unknown to them at the time they rewrote gaming history. Sony’s playstation soon reached the top of the market and then in 200 they did it again with playstation 2.

Sony’s entry into the video gaming world was a shock to both Nintendo and Sega. Nintendo, for once had been outdone. Sony, which had once been its ally, now became their number one competitor. The battle between Sony and Nintendo got really vicious. After Nintendo’s nasty little surprise at a Japanese show, Sony sat down and planned ahead. Sony’s marketing was bigger than either of its competitors could have dreamed of. Then they bought a major software company, Psygnosis. They employed some of the greatest programmers and hardware designers ever heard of.

And then to top it all off, Sony made a rather large deal with Namco, the second biggest arcade machine maker in the business. The Playstation became the most powerful console on the market. Sony researched using its unlimited cash to find out what type of game console that a consumer was looking for and came up with almost the perfect machine. Using some of the existing technology from the fabled SNES CDROM, Sony decided that the best bet was to market this wonder machine under its own label, thus making it another Sony product and convincing the purchaser that they can’t go wrong. And so far they’ve been the favorite in the war.

It was Sony PlayStation that single-handedly made gaming cool. But that was not good enough for Sony. It 2000 Sony introduced the Play Station 2 console. The Playstation to 2 become the hottest new toy before it was even on the market. The play station 2 was sold out long before it ever reached the shelves. Sony once again rewrote gaming history with playstation 2. Part of the magic and popularity behind playstaion 2, besides the Sony name, was is it’s ability to play back DVD videodiscs, and support for all types of sound hardware, including Dolby Digital and DTS, which is, used for home theater systems.

These added options plus it’s ability to play back the original playstation games made it appealing to every one regardless of age. For the Kids you had the hottest new system that could also play the original play station games even faster, for the parents you had a new DVD Player. Sony’s ability to market and tailor the playstation to a wide range of consumer young and old is what but it on top of the charts.

Even with the introduction of Microsoft’s XBOX and Nintendo’s game Cube this October Sony is still topping the charts this Christmas season. Sony’s has proved it’s self in the gaming world and has its consumers behind them. The strategies that Sony uses is marketing it’s playstation is not complex, Sony just uses it’s assets to find out what the consumer wants and need and then gives it them. Sony produces high quality products tailored to the need of its consumers. A simple concept that has left Sony and Playstation on top of the charts.

Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow. The following six guiding principles will help us measure the appropriateness of our decisions. Provide a great work environment and treat each other with respect and dignity. Embrace diversity as an essential component in the way we do business. Apply the highest standards of excellence to the purchasing, roasting, and fresh delivery of our coffee. Develop enthusiastically satisfied customers all of the time.

Contribute positively to our communities and our environment. Recognize that profitability is essential to our future success. III. Company’s goals and objectives Starbucks had some very good and professional goals for their company in the future. Not all goals were about dominating the market, but some were to earn the respect of customers and stockholders. Shultz wanted the company to become the most respected brand name in coffee and for the company to be admired for its corporate responsibility. He spoke of having a keystone value in the effort “to build a company with soul”.

That keystone value was that the company would never stop pursuing the perfect cup of coffee. Shultz wanted Starbucks to be known as the best place to buy specialty coffee that did not add any artificial flavoring polluting their product. Along with earning the respect of customers, Shultz also wanted to keep the respect and treat his employees with care. He wanted to offer Health benefits and stock options to all employees who worked 20 or more hours per week. Starbucks wanted to become a national company with values and guiding principles that employees could be proud of.

Earning the respect of customers and employees were not the only goals of Starbucks, but like any other company, growth was also on the mind. One of the first goals and dreams of Shultz was to setup Espresso bars in all the stores like he had experienced in Italy. He felt that the friendly and pleasurable environment would help the company grow and make customers feel that coming to a Starbucks was a good time. Shultz also had a plan to open 125 new stores outside the Pacific Northwest and outside the United States in the next five years. He wanted to open 15 stores the first year and five more each additional year.

To keep the quality of coffee that Starbucks sold, Shultz felt that the store should only be company-owned and not franchised out. -Strengths and weakness, opportunities and threats Starbucks, like many other companies had some strengths and weaknesses. One of the best strengths that a company can have is a CEO who is not afraid to take a chance and try knew things. Before Shultz came over to Starbucks the company did not have any plans of major growth or product expansion. Companies should always have knowledge of what they are selling and that is what Starbucks did.

They knew everything that there was to know about coffee and if they didn’t they would find out. Starbucks always prepared all of their managers and employees by sending them to training seminars and classes to learn how to roast the perfect bean, brew the perfect cup and how to serve each customer correctly. Starbucks believed in quality of its products and the character and location of its stores. Companies all have strengths, but they also have weaknesses to. Weaknesses were very easy to see when the company was first put together. Baldwin and Bowker were very narrow-minded and had no desire to expand the company very far.

The two were also afraid to try knew things such as starting an Espresso bar and a sit in area where people can sit around, talk and make new friends. Though after Shultz took over the company, it seemed as though the weaknesses started to dissolve and the opportunities began to grow. Shultz took advantage of the opportunity to expand the company into new areas and markets. Entering new markets brought forward the idea of creating new product lines. They started by selling bakery goods at the espresso bars and along with selling their beans, they began to sell their Starbucks Barista home espresso machine.

Opening the Espresso bar also enabled them to sell the CD’s that the company played while customers sat and drank. Partnering with Dreyer’s and Pepsi enabled Starbucks to put their name on ice cream products and the cold beverage market by creating Frappuccino. This all enables the company to earn an additional profit. Expanding too fast is one of the most important threats that Starbucks may encounter. Opening all these new stores at such a drastic rate can cause the company to endure major debt.

Debt can cause a series of chain reactions leading to lower wages, cutting benefits, closing stores and laying off workers. These are not major threats now, but at an uncontrollable rate, this is one of the main threats that can really affect the future of Starbucks Coffee. Comparing Starbucks financial ratios to that of the Industry can give us a general perspective of Starbucks financial strength. This could also give some indication of stock price performance. Most of Starbucks ratios are in line with the industry average, but there are a few that could explain the poor stock performance recently experienced.

Starbucks price to earnings ratio is well above the industry average, but this could be due to its relative high growth it has experienced. Return on equity is well below the average for the industry, and this could be an area of concern. This suggests that the investment made by shareholders in the firm has not produced a decent return when compared to the industry average. Starbucks gross margin is also below the average for the industry, suggesting that it is not able to cover its operating expenses as well as other firms in the industry.

Limon Dance Company is the nations oldest modern-dance company. Jose Limon established Limon in 1946. In the beginning the company only survived by word of mouth but eventually grew to be one of the Nations best and well-known Modern Dance Companys. The Limon Dance Company survived with many of its original dances intact, these dances preserve the legacy of mid-century choreographers and showed the Companys talent. The three pieces that the Limon Company performed were Champion, The Winged, and The Moors Pavane.

The first piece performed was Sophie Maslows Champion. (First performed in 1948. ) Champion was based on a short story by Ring Lander, and showed how violent the fighter life was in the ring and at home. The dance was done in rounds. The first round the boxer beat up his mother, the second round he beat up his girlfriend. This story was told through strong masculine movements by the male dances. At one point the male dancers were in a gym working out. Each dancer imitated different methods of training.

Push-ups, sit-ups, sparring, and punching drills were all used in setting the scene of that part of the dance. Dancers used straight strong, but gracefully movements to convey the meaning of what was happening on stage. Limon did a good job of choreographing the fight scenes in Champion. All the fight scenes had energy and really made it look like they were in a boxing match. The Champion seemed to show an overall theme of violence in the piece. The Winged was the next piece in the program performed by the Limon Company.

This piece was different from all the rest it seemed to turn the dancers into birds or some sort of animals and was difficult in my view to understand. Many of the dances used fast repetitive hand motions to simulate flying and seemed to move across the stage in sharp flowing motions like that of birds. The Moors Pavane was apiece based loosely on William Shakespeares Othello. Using 16th century music by Henry Purcell, and costumes that resembled period clothing Pavane looked like a dance that would be performed in a kings court.

This ballet used strong, stark movements that showed the emotions of the actors. The males all used forcefully straight movements to show meaning and emotion in their dancing, while women displayed smooth delicate movements. All actors used push and pull, and equal weight in there dancing and this technique made the dance more interesting to observe. I also especially liked the use of a square to show unity between the actors and I liked the way the piece ended and began in a similar way it gave the piece closure.

In 1984 Ken Lay became chairman and Chief Operator of Houston Natural Gas. It quickly doubled when it bought Florida Pipeline Company. The next year in 1985 Houston Natural Gas merged Internorth Incorporation. With the merger they both combined to own around 40,000 miles of pipeline and shortly after they changed their name to Enron. Around that time Washington was being lobbied by energy corporations to deregulate business and let companies set their own prices.

Energy companies said this would not only lead to the end of monopolies but the extra competition would benefit companies and consumers. Over the next several years Washington began to lift controls on who could produce energy and how it was sold. With an influx of new suppliers energy prices were very unstable. With these deregulations Enron was allowed to sell natural gas on an open market such as oranges and wheat. With this new way of business Enron was able to grow into the seventh largest company in the United States with over 25,000 employees in over thirty countries.

It became an innovator in gas trading and technological advances in the energy field. In 1990 Enron hired Jeffery Skilling as the company Energys Trading Operation Consultant. At age thirty-six Skilling was able to create the Gas Bank. The Gas Bank is when a company buys large volumes of gas from producers and resells it to industrial customers at long term contracts. This helped stabilize the gas market which was very volatile at the time. It also helped expand gas production nationwide and helped Enron grow to a major player in the energy industry.

As Skilling went up in rank he started to get the company involved in risky investments to make more profit. In an interview with the University of Virginia he said We like risk because you make money by taking risk, This was one of the many reasons which got Enron into financial debt, Skilling also persuaded regulators to allow Enron to use market-to-market accounting. A technique used by brokerage companies for securities trading. It allowed Enron to count long-term contracts as immediate profit although most of the money wouldnt be coming in for several years.

For example if a pipeline in Europe was projected to produce $89 million of profit it would be posted, but there was one problem the pipeline hadnt been built yet. With the high tech boom Enron moved its gas and electricity online, hoping to cash in on the high stock prices of the dot-coms. Enron sold Wall Street and as a result the stock tripled in value from 1998 to 2000. This was not the only reason it tripled but a definite factor. Within this time Lay and Skilling cashed out around $475 million worth of stock.

Around this time the company was involved in horrible investments. They were buying ridiculous amounts of power plants, pipelines and other ventures which were over priced and not even going to be profitable. With Jay and Skilling wanting to continue this trend of growth Enron turned itself into a factory for financial deeds that would pump its profit, protect its credit rating and drive up its stock price. So Enron turned to its Financial Chief Officer Andrew Fastow who set up several partnerships. The very first one to note was called LJM1 which hedged risky stock investments.

Enron set up these partnerships using stock as funding which did not appear on the companys balance sheet. These partnerships were set up as an SPE or a Special Purpose Entity, which agrees to pay Enron if it investments decline in value. As the investments decline payments were made to Enron and posted as profit. But in reality Enron was paying it self with its own money. At the end of 1999 LMJ1 gave Enron a paper profit of $300 million. With the success of LMJ1 Fastow created LMJ2 with Skilling’s support. LMJ2 was started with $300 million of bank loans and investors money.

This partnership was about twenty times greater than LMJ1. As a result of these paper partnerships, Enrons stock price rose to new levels. LMJ2 was doing great it provided most of the profit in 2000 and was invisible to outside investors. Over the next year questions began to arise about the LMJ partnerships. The stock began to rollercoaster from $80 to just below $50. But on November 1, 2001 Enron announced that J. P. Morgan Chase and Citi Group would provide them $1 billion in additional loans. This announcement again shot the stock in an upward spiral and almost doubled it at around $85.

But in reality Enron was not being successful. They were only making one cent for every dollar they accounted for which is not profitable for any company. In the month of November Enron began to restate their profits from 1997 to 2000. In 1997 they reported $105 million in profit while in reality it was only $77 million. In 1998 they reported $733 million while in reality it was only $600 million. In 1999, $893 million was reported but in reality only $645 million was in profit. In 2000 they reported $979 million in profit when they only produced $880 million.

They were in true debt for more than $628 million by the end 2000. More than $630 million came from improper accounting and another $296 million in profit came from hidden tax cutting transactions. This sent the stock plummeting from $70 to 60 cents and produced losses of more than $60 billion on paper. With this fall in stock price, Enron filed for bankruptcy on December 2, 2001. Since the fall of Enron and other major corporations, Senate and Congress are now trying to configure a major reform bill which would protect workers and their pensions.

President Bush also signed off on a new accounting-reform legislature which creates an oversight board that would investigate and punish accounting violations. Now the last step by the government is putting everyone involved behind bars. Skilling is set to testify before a house committee and has chosen not to invoke the Fifth Amendment as many of the other board members have chosen to do. Fastow has to also testify before congress but will plead the fifth to avoid self incrimination. Kropper, Enrons director of global market pleaded guilty last weak to the demise of the company.

Introductions of new ideas into different cultures happens all the time. Some examples are in Africa people trying to introduce new technologies to the people there to improve the lives of the people there. Another example is how the McDonalds company is sprouting new franchises in countries all over the world. The idea of new technologies being introduced to people who need them is a wonderful idea, although the idea of a new restaurants may not be.

In this paper I will discuss how the introduction of new ideas into other parts of the world is not for the good of all. This new “thing” can change the cultures of the people who live there, the way they lived may be drastically altered or disrupted. What ultimately should be done, is a vote for majority to determine whether the people in these areas being affected by the new ideas, want them. Using the Frye model, Angell proposes in her essay, and using it to determine how and whether new ideas should enter existing cultures.

If the situation arises where cultures are being changed by new ideas, such as fast food restaurants in foreign countries and biotechnology where organic farmers live, there should be a certain amount of respect to the existing ways of live. The way people lived before the new technology or new cultures was there first, so there is a level of respect to the way it used to be. Although, the new ways may help or improve the old ones. These new ideas should be agreed upon by the people effected by the new ideas. This is where Angell and her Frye model fit in.

The idea of a consensus upon the idea presented is the better way to go for determining an idea that will affect a large group of people. In Schlosser, McDonalds’ are popping up everywhere on the planet, a consensus should be taken to determine whether or not the people in the area where McDonalds is thinking of locating, wants them. Also in Pollan’s essay biotechnology is the big culprit, the Monsanto company is producing and taking over the potato growing industry and people who buy the potatoes are not given a choice of if they want organic or enhanced.

The people in the problem areas are not given a choice of what they want, because they are forced to take what is given, we must find ways to determine the fate or these people. Angell brings forth two models for which to help solve problems; the Daubert and Frye models. The Daubert model says the decision is the given by one person with supreme power. Angell discusses these people as “gatekeepers” who decide upon a solution. This person holds sole responsibility for the entire population under his power.

This idea can not work with the problems demonstrated, the rights or opinions of all can not be relied upon by just one person. This one person could not possibly make a worthy decision for all the people he speaks for, everyone would have a different view, opinion, idea or criticism. Although the Frye model suggested does make more sense in the cases of Pollan and Schlosser. The Frye model proposes a consensus of all being affected. An excerpt from Angell “the court refused to admit it, on the grounds that there was not yet a scientific consensus” about it, helps demonstrate the effect a consensus can have.

This example talks of a jury in a court case not allowing a lie detector test to be admitted because it was not well known yet, so the majority voted on the idea to not allow it to enter the court. This is the better model to use for both Schlosser and Pollan’s problems. Schlosser announces a problem with McDonald restaurants effecting local cultures. He says McDonalds restaurants are stationing themselves all over the globe. So much so that he states “Ernst Doerfter, a prominent member of the doomed East Germen parliament, who called for an official ban on McDonalds and similar abnormal garbage-makers'” (Schlosser 480).

The quote shows just how much McDonalds is trying to associate themselves with every country. East Germany was bothered so much by fast food places that they called for a ban on them. Schlosser allows the reader to understand this more by his statement of “the traditional German restaurant serving schnitzel, bratwurst, knockwurst, sauerbraten, and large quantities of beer is rapidly disappearing in Germany” (Schlosser 483). Schlosser depicts the new McDonalds idea has put the traditional ideas of Germany out the window by this quote.

This is where the Frye model can be used to help the community. The people in the areas being “taken over” by McDonalds could meet in a common place and vote on the decision to allow them to build or not. In doing this, everyone is heard and has a chance to voice their opinion, no one is left in the dark and has their very own chance to stop or allow what they wish. The Daubert model would not work as well because one individual would be the determingin factor of whether or not McDonalds was allowed to build. How could one single person speak for the whole and give equal representation?

Also, influences from the outside may help the “gatekeeper” to make his decisions more easily, example could be the McDonalds or another restaurant paying the “gatekeeper” to allow them to do what they want. Why should an American idea such as McDonalds be forced upon groups of people in other countries who might not want them? I know if I were from another country I would rather eat my native food than eating the food of another country. One answer man be the owners of the McDonalds are trying to set new buildings all over to increase their flow of money much greater.

They do not care about the people they harm or the cultures changed by their ways, this is evident because it is still happening all over the world. Schlosser is saying that McDonalds and other restaurants like it are intruding onto foreign grounds trying to make a foot hold in countries which they are non-existent. By intruding onto these foreign grounds, McDonalds is altering the cultures that existed before it. When new ways are forced upon people, they should be able to determine themselves whether or not they it to survive. People should not have things forced upon them if they do not want them.

Pollan is affected by the influence of new ways by biotechnology creating new crops for farmers to grow. For example he cites the toxin produced by the New Leafs and the potential effect of the new crops to help insects become resistant, in return removing one of the farmers most crucial tools. Pollan states “the widespread use of Bt in biotech crops is likely to lead to insect resistance, thus robbing organic growers of one of their most critical tools”(Pollan 511). The biotech companies are introducing so much of the insecticide that evolution will take control and help the insects to survive what is killing them.

A solution to this is to allow the farmers of both crops, organic and biotech, to meet and vote on whether biotechnology should be used, and if so how can it maintain or improve the situation under the gun. A common consensus is really the only real solution to the problem, if a panel of people were to vote on the topic they would be farmers who do not like the members of the panel and would disagree with them. The same problem would arise if a single person were to decide the fate of biotech, people would not agree with his decision, and would probably do what they believed was better behind the laws back.

The same problems and solutions would be in this example as the McDonalds in Germany example; people would be unhappy with a decision they felt they did not take part in. If I were an organic farmer, and understood the problem that could arise I would like to put my two cents in and show others what may happen with resistance in insects. That is why the Frye model works better, everyone is allowed to make their own decision and take part in saving or improving their way of living. Another problems that arises from biotechnology is the failure to indicate on labels of the foods we eat.

We as a consumer, have the right to know what we put into our bodies. As Pollan points out: The label on a bag of biotech potatoes in the supermarket will tell a consumer all about the nutrients they contain, even the trace amounts of copper. Yet it is silent about the fact that those potatoes are the products of genetics engineering but also about their containing an insecticide (Pollan 516) This just goes to show how the consumer is left in the dark about what they eat. This is a major problem, not knowing exactly what you are eating.

Again, why should people be forced to adjust to something they might not wish to take part in. If I personally had a choice of eating a biotech product or an organic one, I would most defiantly go with the organic one. No public information has been emitted from the biotech companies to prove they are safe or what is exactly inside them. No consensus has been determined of whether people want to eat biotech plants or not, it is implied by the companies producing them, that everyone will want it.

A common solution to this is show what is in the foods we eat, let people know exactly what they are eating. Don’t let people be in a locked closet, all can be solved if some simple reasoning were put to use. All three examples shown show how people are forced to come to terms with what is influencing their lives. Using a common consensus or the Frye model proposed by Angell can help save cultures or ways of living. People shouldn’t be forced to subdue to what is overpowering them, voice and opinion is needed for the success of all.

When people think of animated cartoons, one name immediately comes to mind “Walt Disney. ” He is the most popular and known animator in the world. He wasn’t successful at the beginning of his career but he was a taskmaker and entrepreneur. Walt’s hard work and entrepreneurship made the world’s best popular cartoon character “Mickey Mouse. ” As an animator and an owner of Disney Corporation, he made a lot of influences in past and present days. Hereby the importance of his life and influences will be discussed, in a age order.

First of all, Walter Elias Disney was born in Chicago, Illinois, on December 5th, 1901, the fourth kid of five children of Elias and Flora Disney. The family often moved from place to place because of Walt’s father Elias. He tried his hand successively as a farmer, a businessman, an orange grower, a carpenter and But he expected all members of his family, no matter how young, to spend most of their waking hours working for him without any compensation. During Walt’s childhood and adolescence, Elias operated a farm in Marceline, Missouri. It was there that Walt spent his early years and developed his interest in drawing.

In 1910 the family moved again, this time to Kansas City. There he enrolled in art classes at the Kansas City Art Institute. In 1917 the family moved again, this time back to Chicago. In Chicago, Walt joined Red Cross unit and spent nine months as a ambulance driver in France at the end of World War I. After Walt Disney returned from France in 1919, he decided to make art his career. He soon joined the staff of the Kansas City Film Advertising Company, which was producing a simple type of animation. He and a colleague, Ubbe Iwerks, learned enough about animation to try doing some of their own.

They formed a company called Laugh-O-Gram Films. The company made fun of local problem and scandals in cartoon form. They sold well enough to give Walt and Iwerks the courage to go into business for themselves. But the Laugh-O-Grams didn’t hold Walt’s interest very long. He had a new idea to try, which was illustrating updated fairy tales in series of cartoons. The cartoons he and Iwerks produced were not bad, but Walt never got paid for hid films. Walt then started on a new fresh project, a series of funny story featuring a girl actress and animated characters. He called it “Alice’s Wonderland. Money was so scarce that he couldn’t even pay for the rent.

With such meager fund all he could produce was a pilot film for the Alice series. He thought Kansas City was not the place that earns much money, so he decided to move to California. In 1923, Walt Disney moved to California, and began Walt Disney Production with his brother Roy Disney and a colleague, Ubbe Iwerks. After five year of making silent cartoons, he produced ‘SteamBoat Willie,” the first cartoon to use synchronized sound1. In 1928 Walt Disney created a cartoon “Mickey Mouse” by using his own voice.

Disney’s success in “Mickey Mouse” led to the film series called “Silly Symphonies,” which was introduced n 1929 and first used color in 1932. Soon full color Disney cartoons was produced, such as “Three Little Pigs” and “The Tortoise and the Hare. ” These two films even won academy awards. 1930s brought fame and successes to Walt Disney as a creator of Mickey Mouse, Donald Duck, Pluto, Minnie Mouse, and Goofy. These characters not only appeared in cartoons but also on merchandise items licensed by Disney Production.

In 1937 the Walt Disney Production Studio produced the world’s first animated feature film “Snow White and Seven Dwarfs. Then came “Pinocchio and Fantasia” in 1940, “Dumbo” in 1941, and “Bambie” in 1942. Song of the South” in 1946, used cartoon characters with live actors. All of these films were successful. During World War II the Walt Disney Production Studio designed military insignias and made training films for the United States armed forces. After the war Walt Disney continued to make animated films, such as “Alice in Wonderland” in 1951, “Peter Pan” in 1953, and “The Jungle Book” in 1967. He also turned to live-action films such as “Treasure Island” in 1950 and “20,000 Leagues Under the Sea” in 1954.

Moving into totally new area, Walt Disney opened Disneyland in Anaheim, California, in 1955. He had wanted to design an amusement park where families could have fun together. Disneyland had exciting rides and attractions but was also spotlessly clean and run by smiling, friendly employees. The park eventually came to be one of the most popular tourist attractions in the United States and may be in the world, too. During the next ten years, Disney added new attractions to Disneyland while continuing to make the films the whole family could enjoy. “Marry Poppins,” in 1964, is considered by many to be the pinnacle of his filmmaking career.

Disney won a record 32 Academy Awards for his echnical innovations ideas in film. Walt Disney also pioneered the production of feature films for television. Some of these appeared on his weekly series “The Mickey Mouse Club (1955-59)” and on ” Walt Disney’s Wonderful World of Color,” which aired, under several titles for 29 seasons. Shows prepared for New York World’s Fair in 1964 enabled Disney to show off his Audio-Animatronics figures in such attractions as “It’s a Small World” and ” Great Moments with Mr. Lincoln. ” The life like figure of Abraham Lincoln, which recited passages from his speeches, never ceased to amaze fairgoers.

Walt Disney never rested. Even as he died, on December 15th, 1966, he was planning for a whole new Walt Disney World vacation kingdome in Florida, and EPCOT. It is an experimental prototype community of tomorrow. It is a fun area consists of a showcase, a recreation of foreign cities, spread like fan around lagoon. On the other side of water, the world of future is dominated by a 180-foot geodesic sphere, and Spaceship Earth. The sphere is is surrounded by a number of pavilions housing entertaining displays of future possibilities in the fields of energy, transportation, agriculture, ariculture2, and technology.

Spaceship Earth is devoted to information and communications from dinosaur time to the 21st century. In conclusion, Walter Elias Disney was a great taskmaster full of innovative ideas. In his lifetime he made so many movies and cartoons that play important role in children’s life. Also he played important role in the development of animation and film. Even now most people remembers him, because animation computer designers of Walt Disney Production are keeps remaking Walt old films and cartoons. Even-though he died, he still plays important role in our society, today.

General Nutrition Companies Inc., was founded 65 years ago in Pittsburgh, Pennsylvania on the premise that Americans wanted to maintain control over their health. David Shakirian founded the company. In 1935 he launched a dream of his by establishing a little health food store in Pittsburgh, Pennsylvania. He called it Lackzoom. The products that were offered at his store included yogurt and healthy foods such as honey, grains and healthy sandwiches. The concept of being a health store and serving health food was thought to be a fad that would soon pass over back then.

To the surprise of many of Shakarian’s critics, many people embraced Lackzoom. David and his store came a long way from its first days receipts of 35 dollars to open a second store six months later. Since those first two stores, Lackzoom, which is now GNC, has grown to be the largest manufacturer of vitamins and mineral supplements in the United States (1998 Annual Report). General Nutrition Companies, Inc. , collectively with its subsidiaries, is the only nationwide specialty retailer of vitamin and mineral supplements, sports nutrition products and herbs, and is also a leading provider of personal care, and other health-related products.

The products were sold through 3,757 General Nutrition Centers, 2,531 of which were owned and operated by the company and the other 1,226 stores were franchised. Much of the growth of GNC has occurred in the last 7 years. Since 1992, the Company has opened or acquired in the United States 2,593 new GNC stores (SEC 10k form). The companys initial growth was through company-owned stores located primarily in regional malls. Many of the stores that were created in the past 7 years have been franchises. This franchise initiative has enabled GNC to expand into secondary locations as well as International markets.

It appears that there is no end to the growth of GNC. At a Franchising meeting on February 6,1999 GNC awarded and agreed to open an additional 323 domestic and 428 international franchise locations. All of these stores report to GNC headquarters, which is located in Pittsburgh, Pennsylvania. Pittsburgh is also home to one of General Nutritions three distribution centers. The other two distribution centers are located in Atlanta and Phoenix. The products that are distributed through these channels are manufactured in Greenville, South Carolina.

This facility is one of the largest and most modern vitamin and supplement manufacturing facilities in the United States. Within the coming months a new 600,000 sq. ft. manufacturing plant and distribution center in Anderson, SC will open which will double the capacity of the company (www. gnc. com/about/history). The company has many products that it distributes from their first-class distribution centers. These products include vitamin and mineral supplements, herbs, diet products, food products, personal care, and miscellaneous health care products.

These products are sold under the General Nutritions various proprietary brand names, including Ultra Mega, GNC, Pro Performance, Preventive Nutrition, and Harvest of Nature. In addition, the Company carries various third-party brand name products including Weider, Twin Lab, EAS, and Met-Rx. The companys product mix focuses on high-margin, GNC proprietary brand, value-added products emphasizing vitamin and mineral supplements, sports nutrition and herbal products.

This increase was driven by the success of the Companys store expansion program and increased demand for the Companys products, as reflected by increased sales, across all business segments. During 1998, the Company developed a web site, GNC. com, to sell products via the Internet. Although still in the early stages of operation, the Company expects sales to increase based on the growth of the Internet. The history of GNC shows their excellence in planning and execution of these plans. Going into the next millennium, the Company must actively scan their environment for opportunities and threats.

The General Nutrition Company is exposed to many external threats. Over the past five years there has been a trend in consumer behavior towards healthy living. This trend has caused the health product and supplement market to drastically increase. Some of the most prominent external threats that GNC faces are new competitors, competing products and services, new technologies, government regulations, increasing customer expectations, general economic conditions, and the different cultural ways of the host countries. External Threats: New Competitors

Some of GNCs new competitors include Internet and mail order companies such as discountnutrition. com and the Vitamin Shoppe have entered the vitamin and supplement market recently. They have taken some of the Companys residual sales by offering different mediums of purchase. The Internet and mail order companies tend to offer discounted prices because they buy their products in bulk. A new competitor that has appeared in small regions across the United States has been Vitamin World. These shops tend to carry a similar product line with the exception of General Nutritions exclusive products.

In addition to Vitamin World many other small chains have been started. Two of these chains are Great Earth and Vitamin Specialty of New York. These stores propose more of a threat to GNCs corporate stores rather than the franchises because of the personalized service. The franchise stores also have more leniency in determining the final price and any discounts or specials. With the addition of these new competitors and the threat that they pose the Company has maintained if not increased its market share in many markets. Competing Products and Services

GNC manufactures and sells several lines of supplements, vitamins and minerals, as well as a variety of health foods. These product lines carry many names. Some of these names include Preventative Nutrition, GNC, and Pro Performance. All of these lines are sold exclusively at GNC stores and at their online manufacturer. In addition to their own product lines, GNC stores carry a variety of products from third-party vendors. These third-party vendors include big names such as EAS (Experimental and Applied Sciences), Twinlab, Met-Rx, and Metaform.

All of these vendors are in the top 5% of sales for their flagship product. The Company must realize this and make their own products more attractive to the consumer. Competing products from the third-party vendors are also sold at other stores, so this forces the Company to not only compete within their own store but to also compete in the marketplace. New Technologies Today, many companies are facing the threat of the internet. Many companies are not used to this advanced technological system and do not have the resources to compete.

Not only is the Internet used for advertising purposes but it is also being used as an online ordering system. With the shift towards an online ordering system many things have to be taken into consideration and changed accordingly. The entire supply chain must be examined to identify any and all potential problems and differences that must be made as a result of this shift. In this case, the manufacture, supply, distribution, and information flow are critical and will inevitably be modified from the traditional way of supply the product to the retail centers.

Government Regulations Government regulations pose an enormous threat to the company. Potential government regulations will mandate FDA regulations and the testing of all products. This will dramatically increase the cost of production, which will ultimately be passed on to the end consumer. Some sport and diet supplements sold by the company today could be ruled illegal in the coming months if this occurs. This could potentially reduce the number of products available as well as the customer base. Increasing Customer Expectations

With the nations shift towards healthier living, many consumers have begun to experience unrealistic expectations of the products offered by the company. This can be witnessed by the fact that 45% of all adult Americans take some form of supplement. An attitude that many Americans exert today is that they want the pill or supplement to take the place of the work that they themselves would otherwise have to do. Customers are also looking for a company that offers exceptional customer service and sales associate knowledge. General Economic Conditions

With todays flourishing economy, the average Americans income is at an all time high. If anything would happen to cause a negative occurrence in the economy the average Americans disposable income would, as a result, probably decrease. This decrease in their disposable income would take away from their ability and/or desire to spend their money on products offered by GNC. The Different Cultural Ways of Host Countries The way that GNC handles their international business is through franchising. The franchising done internationally is done differently than is domestically.

During the international franchising process, the entire General Nutrition rights are sold to the franchisee for the entire country, not just an individual store as done domestically. The government regulations and culture differences or preferences are left to the discretion of the potential or existing franchisee. The threat is posed as a result of the lack of assistance and guidelines that would normally come from the corporation headquarters. As far as dealing with the individual host countrys government regulations and culture, it may discourage business in that country all together.

The availability of raw materials poses basically no threat to the company at this point because of their vast resources and long term contracts with their suppliers. But, in the future with the addition of many new entrants into the market a shortage of some raw materials and components may occur. General Nutrition was the pioneer of the nutrition industry and will continue to be for years to come. On of the major contributing factors to their success has been their ability to maximize their external opportunities.

Around the late 1980’s the average Americans active lifestyle had reached an all time low. With the 1990’s came the current trend of healthier living. It was at this time that consumers turned to GNC to help maintain a healthy lifestyle. GNC capitalized on this opportunity in several different ways. They began to change the typical consumers idea and preferences about the General Nutrition stores and products. They began advertising to all people and having specially trained employees with knowledge of all products that were carried.

This helped to make the store a more inviting place to everyone from a young high school athlete to a middle-aged mother of two. This also lead to new product market niches. Some of the more successful are the pro-performance line which is geared towards athletes, also the live well concept which promotes an overall healthy lifestyle which would be more suited for the average adult. With the change in customer preferences, GNC has the opportunity to increase market share by creating customer loyalty and trust through groundbreaking products.

General Nutrition has done a tremendous job on utilizing these opportunities and in order to remain atop the competition they must continue to fine tune the and analyze the business strategy. Definitely one of General Nutritions greater external opportunities is their franchising and long-term alliance with Rite Aid. This opportunity is so tremendous that along with 697 stores opened in 1998 they also signed an alliance with Rite Aid. The alliance with Rite Aid allows GNC to enter a new channel for marketing its supplements.

With a the average American only five miles away from a GNC, there still is such a demand for the stores that they plan to open an additional 250 stores in the next year alone. This combined with a total commitment to providing customer support has helped make GNC one of the most successful franchises for the past decade. To continue to capitalize on these external opportunities the company can look to actively pursue their franchising capabilities while avoiding cannibalization of existing stores to allow them to remain the pinnacle of the health food industry.

The main reason that GNC has been and will remain the world leader in the nutrition industry is due to their ability to use technology to receive great benefits. Their greatest areas of technology that set them apart from the rest are their manufacturing and distribution. This past year the company took a tremendous leap into the 21 century with the completion of a 630,000 square foot state of the art manufacturing facility in South Carolina. Along with the new manufacturing facility, the Company was involved in a recent merger with the Dutch pharmaceutical company Royal Numico.

This merger makes the Company the worlds largest manufacturer of vitamins and supplements. This merger presents the company with a great opportunity to take advantage of the world class research facilities available to them. The Company should streamline their supply chain to fully take advantage of the new manufacturing and distribution facilities. This will increase the Companys overall efficiency. The Company should look for a strategic alliance with an established online drugstore to broaden the Companys market share. This would also allow the Company to gain entry into the world of e-commerce.

Internal Strengths Internal strengths of the company include quality products emphasizing vitamins and minerals along with sports nutrition. This product mix focuses on high margin value added products, which are sold under the GNC proprietary brand. Along with vitamins, herbal, and sports supplements the Company also offers customers the opportunity the Gold Card program. This program enables stores to add to their product line. The basis for this program charges a $15 annual fee that entitles each member to a 20% discount on all products one time each month.

Sales of proprietary brands represented over 50% of total sales in 1998. Company reputation is another strength for the company. The Company is the only nationwide specialty retailer of vitamin, mineral supplement, sports nutrition products, and herbs. Along with these products the Company is also the leading provider of personal healthcare products. The companys reputation was built on two basic principles. The first of these is strong customer service. The Company has a strong competitive advantage over competitors because of well-trained and informed employees who have knowledge of the entire product line.

The Companys employees are knowledgeable and efficient because of the strong employee-training program. The second principal that has built their reputation is a superior product line. The proprietary brands along with other strong brand names enable them to have a product line better than the competitor. Production capabilities at the Company have enabled them to become the world leader in the their industry. The Company will be able to maintain their position as a leader because of their capacity to not only meet company inventory requirements, but also enough to sell to third parties in the wholesale market.

The Company is able to maintain strong production capabilities because of their emphasis on quality control. Each product is tested from the beginning to the end until the final product meets their standard. The Company has experienced a strong sense of executive leadership. The current president has 25 years of experience within the company and the CEO has 18 years. The executive vice president has 19 years of experience and the head of logistics has 22 years under his belt. Along with this experience it is evident to see that there is an extremely low employee turnover ratio within management.

Turnover within this company as with any retail organization occurs with retail store management and part time sales positions. To keep this factor at a low level the Company started the franchise program. The Company wanted to bring strategic partners into their system that would personally invest in the Companys program. Along with strong management leadership the Company maintains a strong employee base through orientation and hiring kits that enable the new employee to adjust quickly and become an efficient employee.

The company gives their employees the opportunity for tuition reimbursement, profit sharing, good medical and health benefits, and 401k and stock options. All of these factors allow a GNC employee to be part of a team. The Company uses patents to its advantage. By having patents on their proprietary formulas, vitamins, sports nutrition, and herbal supplements, the Company creates barriers between themselves and competitors. Along with their patents the Company conducts research with other companies. One such company is Proctor and Gamble.

Recently the Company has held the patent with Proctor and Gamble on calcium (calcium citrate malate). This product was found to be more absorbent than any other type of calcium. The Company achieves economies of scale throughout the entire organization and network of 5,000 retail stores by a close arrangement of entities. These include arrangements with product suppliers, raw materials, packaging material, store supplies, retail advertising, third party advertising, insurance coverage, and credit card processing.

The close surveillance and agreement of these entities allows the company to achieve greater economies of scale. The mission of the Company is to maintain quality over quantity in its products. The company typically introduces 25 to 30 new products each year and reformulates existing products on an annual basis. An annual reset is done for the stores to introduce new vendor third party products, and new company products through expansion and deletion of retail shelf space. Weaknesses General Nutrition Companies Incorporated is the leader in health products but the company is not adverse to risk.

These risks that we can find within the company are considered to be the weaknesses of the company. The first risk is that Royal Numico has acquired GNC, now being a part of a larger company they must now try to fit into the larger system and integrate themselves. With the integration of the Company into Royal Numico there will be a significant amount of cash spent, some potentially dilutive issuances of equity securities, incurrence of debt or amortization expenses, related to goodwill and other intangible assets. Any of these can adversely affect the company; its operating results and financial conditions.

In addition to the financial and operating factors we could find difficulties in the assimilation of the technologies, products and personnel of the integrated company. Another weakness that the company has is their leverage problem. This means that the company has raised much of its capital through debt financing, including loans. Based on the current level of operations and anticipated level of growth, the companys available cash flow, together with other sources of liquidity, will be adequate to meet to future needs of capital.

Although it looks to be enough, there can be no assurance that the company will generate enough cash flow. Along with that uncertainty our leverage could also have these important consequences: 1. Our ability to obtain additional financing for working capital, general corporate purposes could be impaired in the future. 2. A substantial portion of the companys cash flow from operations will be dedicated to the payment of interest. 3. Certain number of the companys borrowings will be at variable rates of interest, which will expose us to the risk of increased interest rates.

The companys leveraged financial position may make them more vulnerable to general economic conditions such as a downturn or recession. Along with all of the problems associated with being highly leveraged, the Company has the weakness that they will be affected by the general economic conditions in their markets. The companys results of operations are significantly affected by the overall economic trends of the companys principal geographic markets, the level of consumer spending and consumer confidence in future spending.

In periods of economic slowdown, the company could experience negative pressures on sales volume and declining margins for certain number of the companys products. A weakness that is faced by the company is that they could face product liability claims. Due to the nature of the products, it is possible that the company could be subject to individual or class action lawsuits based upon product liability laws. GNC, like other manufacturers or distributors of nutritional foods and supplements, face an inherent risk of exposure to product liability claims in the event that the use of the companys products results in personal injury.

Associated with the nutrition industry, the company is also faced with the weakness of having their products subject to regulation. The companys industry is subject to regulation by national and local governmental agencies. These regulations and laws govern such matters as production requirements, quality, trade and pricing practices, labeling, packaging and advertising. Although the company believes itself to be in compliance with current legislation, there are certain areas in the future in which they could have breaches. To maintain compliance the company will incur additional costs.

The biggest weakness facing GNC in the coming years is that the company faces the challenge of protecting their workers intellectual property. In the present to protect the companys intellectual property they rely on a combination of patent, trade secret, copyright and trademark laws. However, the company cannot guarantee that these measures will be adequate to prevent the companys competitors from copying or reverse-engineering the companys products. If this would happen the company is set-up to lose millions of dollars as well as the all important market share.

The Mattel Company, best known for its Barbie dolls, is the world’s largest toy maker. In March 1997, it acquired Tyco toys the third largest U. S. -based toy maker. Its product lines include Fisher-Price and Sesame Street preschool items, Disney-related products and Hot Wheel miniature vehicles. They type of industry Mattel is located under, is dolls and stuffed toys, although they have other types of products such as Hot Wheels. This company is under monopolistic competition. They sell their products in many stores, such as Toys R Us, KB Toys, K-Mart, Walmart, and others.

Some of Mattel’s competitors include Marvel Enterprises Inc. and Hasbro Inc. Marvel Enterprises (formerly Toy Biz) publishes comics based on more than 3,500 characters including Spider-Man, The Incredible Hulk, and the X-Men. The company, North America’s top comic publisher through its Marvel Entertainment subsidiary, also makes action figures, games, and puzzles based primarily on its Marvel characters. Hasbro is a worldwide leader in the design, manufacture and marketing of toys, games, interactive software, puzzles and infant products.

Included in its offerings are games, traditional board and card, hand-held electronic and interactive CD-ROM, and puzzles, preschool, boys’ action and girls’ toys, dolls, plush products and infant products. The company’s business activities include many things. The standards address a wide spectrum of issues, ranging from on-the-job concerns, such as factory lighting, air quality and health care facilities, to acceptable parameters for dormitories and recommendations for recreational programs. They serve as the principles by which Mattel’s internal and independent monitoring programs are measured around the world.

While the development of a code of conduct/manufacturing principles is essential to success, enforcement of the code is equally as important. Mattel has initiated an extensive three-stage auditing process, which is overseen by an independent monitoring council, to thoroughly inspect both the company’s owned-and-operated facilities around the world, as well as those of all core contractors. If a contractor facility is either unable or unwilling to work with Mattel in order to meet and maintain its standards, however, Mattel will discontinue the working relationship.

I think that the stock price rose due to the company flourishing. Mattel has many extraordinary products that have been around for years, and many more to come. This company seems very stable. They keep their customers happy and keep them coming back for more. Now that the holidays are coming near, I predict that the company will do very well and the stock will go up once again. The article “Mattel Appoints Two New Members of Senior Management Team” introduces the two new members, Bryan G. Stockton and Thomas A. Debrowski. Stockton has been named executive vice president of business planning and development.

Robert A. Eckert, chairman and chief executive officer of Mattel, Inc. believes that Stockton will, “provide Mattel with the clear, strategic thought required as we refocus on generating sustainable, profitable growth for Mattel” Bryan Stockton formerly served as president and chief executive officer at Basic vegetable Products. In his new position at Mattel, his primary responsibility is to identify and develop synergies throughout all cross-functional departments in order to support Mattel as a whole.

More elements of his function are the management of the company’s strategic planning, as well as supervising all merger and acquisition activity. Debrowski is appointed to executive vice president of worldwide operations. Eckert believes, “Tom will utilize his proficiencies in operations and manufacturing to ensure better management of the all-important supply chain. ” Debrowski was formerly the vice president and director of grocery operations for Kraft USA. At Mattel, Tom will be responsible for all worldwide manufacturing and distribution activities and eventually, he will be responsible for the entire supply chain.

GreenPages, Inc. hereinafter referred to as GP is a dynamic organization that most closely fits the sociotechnical model put forth by Trist (1963) and Rice (1963) of the Tavis Institute. GP was created by Kurt Blieken in 1992 to be as he put it the most elegant company in existence today. Starting with a blank piece of paper Kurt Blieken crafted a mission statement (attachment A) that served as the underpinnings and catalyst to create an organizational structure that balanced the complex technical systems with a social and economic system which serves as a model to the computer industry today.

GP is currently under going tremendous growth of over 100% annually which creates a turbulent environment and tests the organization structure GP was founded on. It is the belief of Kurt Blieken as well as those of us whom work at GP that this unique corporate structure can not only be retained but thrive as the organization scales to new heights. In order to understand the goals and challenges facing GP it is useful to utilize Weisbord’s Six-Box Model to analyse the organizational structure. GP was formed with two purposes in mind. The first was to create the best place to work in the country.

The cornerstone of this purpose is a value system which is the very heart of our corporate culture. This value system is as follows: The company’s most valuable asset is its corporate culture. The basis of the culture is cheering at another’s success, helping out when a teammate needs a hand and being generous with praise. GP culture is so important that people who cannot or will not embrace it fully will not be allowed to stay. GP was designed from the ground up to meet the needs of our customers. We continuosly change and improve ourselves and our systems to meet new needs. Every job in the company is critically important.

We hire good people, then give the tools and the training to be outstanding. We are always striving for perfect execution of everything we do. It’s OK to make a mistake. Since we hire good people, a mistake is just that, a mistake. If many mistakes occur it is the system which needs to be corrected. Following this policy can be difficult but it leads to a wonderful lack of finger pointing and back covering. GP culture encourages new ideas and risk taking. Policies are initiated with the participation and input of the people doing the work. Everyone has to “buy in” to these policies.

Once policy is set, violation of that policy is unacceptable. The team structure provides the depth and flexibility to adapt quickly to change. This gives GP a huge advantage over their competitors which is demonstrated by the sales per employee of over 2. 5 million dollars annually. This amount is over 3 times that of the industry average and is a demonstration of efficiency throughout the organization. The team structure makes this possible by allowing the “flattest” possible corporate structure. Employees, vendors and customers are treated with honesty, respect and fairness. Every employee is responsible for living up to this standard.

It starts with how employees treat one another inside GP and extends to everyone GP comes in contact with. Violation of these standards by an employee or customer is not tolerated. If a customer promises “the check is in the mail” for instance and it never arrives on multiple occurances then GP will walk away and not do business with that customer even if it is profitable to do so. By having the highest level of integrity and demanding the same from GP customers and employees will allow the company to continue to grow at its current rate uninpeeded. Every GP employee is a stakeholder owning stock in the company.

Every employee at GP wants it to be the best place to work in the country. For this to be possible in each succeeding year GP must become more innovative, more profitable, more flexible and more energetic. While at the same time Gp must hold tight to its core values. The second purpose which provides the capital and revenue growth to achieve the first purpose is to facilitate the acquisition of technology on behalf of GP customers. GP does this by utilizing a large technical infrastructure with direct WAN (wide area network) links to every large computer distributor and manufacturer in the United States and Canada.

GP customers can make one call to their sales broker (a GP employee) and have instantaneous access to over 100,000 computer software and hardware products. Moreover, as a result of being on-line and in real-time with the major distributors and manufacturers GP can provide pricing and availability on the spot. Additionally GP can ship from over 400 warehouses throughout North America to insure the most expediant delivery of the product ordered. In order to understand the unique organizational structure please refer to the attached org chart.

Physically the building that GP ocuppies has four floors. Each floor has two sales teams. Additionally support teams including purchasing, credit, training, technical support & MIS (information systems) are dispersed among the four floors. There are some virtual teams or teams that don’t physically exist on any one floor but are comprised of various members of other teams who meet for a specific function. Some examples of virtual teams include the SST or senior support team that has the responsibility to strategically manage GP.

Task forces are the policy setting teams at GP and are comprised of employees who would like to participate or who are affected by the proposed policy. Every employee of GP is required to participate in at least one task force a year. Some examples of recent task forces include, compensation task force, new building and relocation task force, competitive task force, maternity task force, credit task force, as well as many others. Each team has a team leader whose responsibilities include housekeeping chores like keeping track of sick and vacation time or facilitating dispute resolution within the team.

Each floor has a coach who has more authority than the team leader and reports directly to the SST. Coaches review individual performance of each team member periodically and help facilitate resolution of interdepartmental disputes. Maintaining healthy positive relationships is paramount in making GP a great place to work. GP culture frowns heavily on gossip and/or derogatory statements made by one employee to or about another both internally or externally. GP has gone to great lengths to provide the proper context for healthy communication to occur.

 

Therefore everybody in the company is either a sales person with direct customer contact or supports the sales person and who’s success is directly related to the revenue produced in servicing the customers needs. All sales people are on 100% commission so they are highly motivated to work hard and generate sales. The support personel earn 75% of their pay in the form of a salary and the balance is tied directly to the success of the sales team the employee supports.

The company recognizes monthly the top sales people in each of several categories including highest revenue, most new customers, etc. Each sales team votes to recognize one support person per team that they felt performed above and beyond. Additionally, the company sets an annual threshold for Presidents Club which is typically the top 10% of all sales people in the company. As a Presidents Club member the employee is recognized for an entire year and a special week retreat with pay is provided to those top employees.

20th Century Insurance was established in 1958 and was the first company of its kind to sell automobile insurance without a middleman, known in the industry as a broker or agent. This direct sales approach allowed 20th to offer insurance at a much lower premium than its competitors. To date, 20th Century Insurance is still recognized as one of the most economical full service automobile insurers in the California market. Position In terms of market share, 20th Century is the fifth-largest car insurer in the state.

The company’s credit rating was recently upgraded from a B- to BBB+ and its stock is being traded around $21. 50. 20th Century is also among the Valley’s (headquarters office location) largest firms in both market capitalization and employees. The company currently employs in over 2,000 people. Targeted market For the first 30 years of the company’s existence it enjoyed huge profits from selling only automobile insurance. These large profits were achieved, due in part, to its targeted market which are generally people in the age range of 30-60 who are classified as a low risk “good drivers”.

The company’s structure of selling insurance directly to the customer while providing excellent customer service is also a driving force to its success. In 1982 the company began offering homeowner’s insurance and this venture also proved to be financially successful for the company. The vast majority of the homes insured by 20th Century are located in the Valley cites and at one time the homeowner’s insurance made up about 10% of the company’s business, however, to date it only constitutes about 2%. Goals In 1994, 20th Century Insurance was a company on the rise.

It was a financially healthy company, reporting a total net of $734. 8 million in the preceding 35 years of operation. They were exploring plans to expand their business by selling insurance in other states such as, Arizona, Nevada and Oregon. The company was also looking at the idea of possibly changing the company’s name, in light of the newly approaching 21st Century. However, all its plans for growth were immediately put on hold due to the January 17, 1994, magnitude-6. 7, Northridge Earthquake that cost the company over $1,065 billion. The Northridge Earthquake

The Northridge Earthquake was recently characterized as one of this nations’ most costly disasters ever, as it has been 20th Century’s most costly and devastating in terms of its finances, reputation and survival. In the past five years since this catastrophic occurrence, 20th has encountered near financial ruin, class action lawsuits filed by homeowners, name smearing and accusations of illegal business dealings made to the press by their disgruntled claim’s manager and a near take-over of the company by their financial savior Automobile Insurance Group (AIG).

This series of events could have been described by many as a Public Relations nightmare for the company, instead, 20th chose to look at it as their biggest opportunity to do PR. Crisis Physically violent acts of God, such as an earthquake are often times both hard to predict and prepare for. 20th’s, Corporate Relations, Senior Vice President, Ric Hill, stated “The only way to see if your crisis plan works is to have a crisis. ” The mere concept of insurance is in some ways a form of personal crisis management for the individual insured. One must set things/plans in place to be prepared for all types of crisis.

Therefore, it stands to reason that an insurance company would have had a crisis plan for this type of occurrence. Though 20th did have a crisis management plan, there were many things that they had either overlooked or underestimated, such as the possibility that in a catastrophe their computer system might be in-operable thus rendering them incapable of verifying whether or not a claimant was actual covered for the loss, or that the previous estimation of the cost of an earthquake might be underestimated, causing the company to be underinsured.

Despite these perils, the company was able to make an almost full recovery in two years, which was three years less than the anticipated 5-year recovery plan. Their speedy recovery can be partly attributed to Chief Executive Officer, Neal Ashley and his team work philosophy. Ashley states that “During a crisis is when you need people the most, because you need action (s) to be taken”. 20th’s focus throughout this ordeal was customer service.

During this period there were few customer complaints. Corporate Relations VP, Ric Hill stated that, “I’ve seen many companies survive all types of calamities, but very few companies survive poor service”. Comeback Kid-PR Campaign Five years later the company has made a full recovery and is now known as the Comeback Kid. Therefore their new PR strategy should be to focus on the future. That concept can begin with the re-visiting of the company’s name change.

It would be important to conduct some cross-section test marketing to assure that the name change will not be perceived by the company’s publics as an effort to hide from what has occurred. It is in the company’s best interest to legitimately put the past behind it and then move forward. Another PR tactic is to remain focused on the positive, by producing a continuum of information about the company’s profit margin, increased credit rating and stock dividends paid to stock holders.

This obviously will show the strength of the company, therefore enticing more people to invest. With more investments the company can push forward with its previous plans to expand its business in the states of Nevada, Arizona and Oregon. Regular marketing and advertisement can now be resume. Through a demographics study, it has been proven that many people from California have re-located to these targeted states and therefore 20th’s advertisement should be increased to provide name recognition for those individuals who are or will be re-locating.

20th Century Insurance was established in 1958 and was the first company of its kind to sell automobile insurance without a middleman, known in the industry as a broker or agent. This direct sales approach allowed 20th to offer insurance at a much lower premium than its competitors. To date, 20th Century Insurance is still recognized as one of the most economical full service automobile insurers in the California market. Position In terms of market share, 20th Century is the fifth-largest car insurer in the state.

The company’s credit rating was recently upgraded from a B- to BBB+ and its stock is being traded around $21. 50. 20th Century is also among the Valley’s (headquarters office location) largest firms in both market capitalization and employees. The company currently employs in over 2,000 people. Targeted market For the first 30 years of the company’s existence it enjoyed huge profits from selling only automobile insurance. These large profits were achieved, due in part, to its targeted market which are generally people in the age range of 30-60 who are classified as a low risk “good drivers”.

The company’s structure of selling insurance directly to the customer while providing excellent customer service is also a driving force to its success. In 1982 the company began offering homeowner’s insurance and this venture also proved to be financially successful for the company. The vast majority of the homes insured by 20th Century are located in the Valley cites and at one time the homeowner’s insurance made up about 10% of the company’s business, however, to date it only constitutes about 2%. Goals In 1994, 20th Century Insurance was a company on the rise.

It was a financially healthy company, reporting a total net of $734. 8 million in the preceding 35 years of operation. They were exploring plans to expand their business by selling insurance in other states such as, Arizona, Nevada and Oregon. The company was also looking at the idea of possibly changing the company’s name, in light of the newly approaching 21st Century. However, all its plans for growth were immediately put on hold due to the January 17, 1994, magnitude-6. 7, Northridge Earthquake that cost the company over $1,065 billion.

The Northridge Earthquake was recently characterized as one of this nations’ most costly disasters ever, as it has been 20th Century’s most costly and devastating in terms of its finances, reputation and survival. In the past five years since this catastrophic occurrence, 20th has encountered near financial ruin, class action lawsuits filed by homeowners, name smearing and accusations of illegal business dealings made to the press by their disgruntled claim’s manager and a near take-over of the company by their financial savior Automobile Insurance Group (AIG).

This series of events could have been described by many as a Public Relations nightmare for the company, instead, 20th chose to look at it as their biggest opportunity to do PR. Crisis Physically violent acts of God, such as an earthquake are often times both hard to predict and prepare for. 20th’s, Corporate Relations, Senior Vice President, Ric Hill, stated “The only way to see if your crisis plan works is to have a crisis. ” The mere concept of insurance is in some ways a form of personal crisis management for the individual insured. One must set things/plans in place to be prepared for all types of crisis.

Therefore, it stands to reason that an insurance company would have had a crisis plan for this type of occurrence. Though 20th did have a crisis management plan, there were many things that they had either overlooked or underestimated, such as the possibility that in a catastrophe their computer system might be in-operable thus rendering them incapable of verifying whether or not a claimant was actual covered for the loss, or that the previous estimation of the cost of an earthquake might be underestimated, causing the company to be underinsured.

Despite these perils, the company was able to make an almost full recovery in two years, which was three years less than the anticipated 5-year recovery plan. Their speedy recovery can be partly attributed to Chief Executive Officer, Neal Ashley and his team work philosophy. Ashley states that “During a crisis is when you need people the most, because you need action (s) to be taken”. 20th’s focus throughout this ordeal was customer service.

During this period there were few customer complaints. Corporate Relations VP, Ric Hill stated that, “I’ve seen many companies survive all types of calamities, but very few companies survive poor service”. Comeback Kid-PR Campaign Five years later the company has made a full recovery and is now known as the Comeback Kid. Therefore their new PR strategy should be to focus on the future. That concept can begin with the re-visiting of the company’s name change.

It would be important to conduct some cross-section test marketing to assure that the name change will not be perceived by the company’s publics as an effort to hide from what has occurred. It is in the company’s best interest to legitimately put the past behind it and then move forward. Another PR tactic is to remain focused on the positive, by producing a continuum of information about the company’s profit margin, increased credit rating and stock dividends paid to stock holders.

This obviously will show the strength of the company, therefore enticing more people to invest. With more investments the company can push forward with its previous plans to expand its business in the states of Nevada, Arizona and Oregon. Regular marketing and advertisement can now be resume. Through a demographics study, it has been proven that many people from California have re-located to these targeted states and therefore 20th’s advertisement should be increased to provide name recognition for those individuals who are or will be re-locating.

Imagine sitting at a trendy and relaxing cafe in the middle of a dynamic and energetic town square, in Latin America, enjoying a cup of fine coffee with a slice of delicious American style cheesecake. You have just entered the world of Rica Cheesecake and Coffee Company. Our team was tasked with developing a concept or service in a foreign country and delivering a research project. The key to this project was selecting the country and a product that would have the greatest chance of success.

We focused on the Central American region of the world. We evaluated the seven countries that comprise Central America and chose one country with the most potential to deliver our product. The countries that were evaluated were; Guatemala, Belize, El Salvador, Honduras, Nicaragua, Panama and Costa Rica. As you can gather from our name of our concept, we have selected Costa Rica. Each country was evaluated by the geographic, cultural, political, infrastructure, economic and overall risk to determine the optimum country.

The countries in Central America had similar characteristics, from their religious beliefs to their “Metizo” population. They also depend on agriculture and tourism for their economies. Central America is plagued with political corruption, economic challenges and a continued drug trafficking problem. One thing that these countries do have is the abundance of natural resources, fertile land, water and wonderful weather.

This is what drives thousands of tourists to this part of the world. We found that a large number of U. S. itizens vacation in Central America, especially in Costa Rica, in fact, they like it so much, they retire there. We have developed our concept with these and may other demographics in mind. In an effort to attract customers and create a competitive advantage, we will commit ourselves to a differentiated product/service strategy and will differentiate ourselves based on customer service, product quality and product uniqueness. Our start-up strategy is to establish a joint venture with the well regarded coffee company, Aventura Ltd.

This will help reduce our initial capital investment and help minimize risks associated with Greenfield operations. By establishing a joint venture we are able to recognize synergistic transfers of product knowledge, this adds more value to our company and our product which ultimately can be passed on to our consumers. Now it is time to imagine the “American” style cheesecake, with a touch of local flavor in coffee. So sit back and relax and enjoy the experience.

With these assessments we are now able to introduce Costa Rica. The next section of this paper will provide a more detailed analysis of Costa Rica in order to illustrate our selection. The first section will detail the Geographic, Social, Economic, Political, and Infrastructural elements of Costa Rica. The subsequent section will then discuss the Business environment in detail. Costa Rica Geographic: Costa Rica is located in Central America between Nicaragua and Panama, bordering both the Caribbean Sea and the North Pacific Ocean, between Nicaragua and Panama.

The climate is tropical and subtropical with a dry season from December to April and a rainy season from May to November. The terrain consists of coastal plains separated by rugged mountains including several major volcanoes. Costa Rica has occasional earthquakes, hurricanes along the Atlantic coast; frequent flooding of lowlands in the rainy season and landslides and the potential for volcanic activity (CIA 2004). Social: The estimated population of Costa Rica as of July 2004 was 3. 9 million people with the largest segment of the population being 15-64 year-olds at 65 percent of the population.

The estimated population growth rate in 2003 was 1. 52 percent per year. The estimated 2003 unemployment rate was 6. 7%, with an inflation rate of 9. 4%. This is based on a labor force of approximately 1. 758 million (CIA, 2004). In Costa Rica a person is considered literate if they can read and write by the age of 15. The official literacy rate for the total population ages 15 and over is 96 percent, proportioned equally between males and females (CIA 2004). The major ethnic group in Costa Rica is white, including “mestizo,” the mixture of Europeans (Spanish) and Indian ancestry (Amerindians), totaling 94 percent of the population.

The other ethnic groups represented are three percent black, one percent Amerindian, one percent Chinese and one percent other. The official language of the Costa Rican people is Spanish with some English spoken. The Roman Catholic religion is the strongest at 76. 3 percent of the population with Evangelical at 13. 7 (CIA 2004). Costa Ricans are profoundly self-conscious of their self-image, which drives their behaviors of the individuals, as well as the nation. The behavior is focused on humility. Costa Ricans are unique because of their “whiteness” and the lack of an indigenous culture.

Identity, 2004) These cultural characteristics offer a unique differentiation that should be taken into account when determining product or service needs of the Costa Rican people. Issues of pride and self-esteem can affect the types and quality of products people are willing to use or purchase. The culture is traditional and conservative. Women are playing an increasing role in business and government. This transition could affect the way one markets to this group. Costa Rica is steeped in religious celebrations. These celebrations are focused around families.

Costa Rica celebrates Easter Week or Semana Santa, Christmas Week and August second, which is the celebration of the Virgin of the Angels. “Costa Rica is also different from other Latin American countries, because it practices a “lukewarm” Catholicism that causes a strange mixture of partying and religious celebration during these holidays” (Culture, 2004). POLITICAL: The Costa Rican government is considered a democratic republic. There are seven provinces, Alajuela, Cartago, Guanacaste, Heredia, Limon, Puntarenas, and San Jose. They achieved their independence from Spain on September 15, 1821, which is now their national holiday.

The Constitution of November 7, 1949 is based on the Spanish civil law system with judicial review of legislative acts in the Supreme Court. Similar to the United States, the governing parties consist of the Executive, Legislative and Judicial branches. Costa Rica maintains diplomatic representation both in the United States and has a United States diplomatic representative located in Costa Rica. Costa Rica is a member of many international organizations including the United Nations, the World Bank and the World Trade Organization.

According to the Economist Intelligence Unit, 2004, Costa Rica’s political risk is rated at a “B. ” ECONOMIC: Costa Rica’s main industries are tourism, agriculture and electronics exports. They produce agricultural products such as bananas, sugar, pineapples and coffee and manufacture medical equipment and electronic components. But by far, tourism is their main economic driver. This is derived by a significant amount of FDI into the tourism industry (Tourism, 2004).

Costa Rica’s exports in 2003 totaled $6. illion, while their imports of raw material, consumer goods, capital equipment, and petroleum totaled $7 billion (CIA, 2004). Costa Rica’s number one top trading partner in both imports and exports is the United States at over 29 percent exported to the U. S. and 35. 4 percent imported from the U. S. The other major trading partner countries include Japan, Netherlands and Mexico (CIA, 2004). Costa Rica’s economy is stable with heavy reliance on the tourism industry. They have been successful in reducing the level of poverty over the past 15 years and they have created a “strong social safety net.

Some of the issues that Costa Rica has been facing are the low prices for their agricultural products such as coffee and bananas, as well as the large deficit and internal debt. They are concerned about reducing inflation. There is also a concern because the cost of imports is rising. Costa Rica has agreed to terms with the US over the Central American Free-Trade Agreement (CAFTA) in January 2004, Costa Rica joined its Central American counterparts Guatemala, El Salvador, Honduras and Nicaragua in signing the agreement.

The US is unlikely to ratify it before November’s presidential and congressional elections (EIU, 2004). Costa Rica has had an increasing GDP, in 2003, their GDP grew 5. 6%. The sectors that account for the growth were agriculture, at 8. 5%, Industry, 29. 4% and Services at 62. 1%. The industries consist of microprocessors, food processing, textiles and clothing, construction materials, fertilizers and plastic products (CIA, 2004). INFRASTRUCTURE: Costa Rica has a significant number of airports, waterways, railways, highways and many ports and harbors.

According to the CIA World Fact Book, Costa Rica has approximately 30 paved airports and 119 unpaved airports. There is also approximately 950 kilometers in the rail system. There is a significant roadway system in Costa Rica with approximately 35,982 miles of highway of which 7,896 are paved and 227,996 are unpaved. According to the CIA World Fact Book, Costa Rica’s communication infrastructure is state-owned.

The country has a good working system in place with approximately 1. illion lines in use. There are approximately 528 thousand cell phones. The broadcast infrastructure in Costa Rica consists of 20 TV broadcast stations and 65 AM and 51 FM radio stations. Business Environment in Costa Rica Openness to Foreign Investment Costa Rica gives a lot of importance to the influx of foreign investment into the country. The UNCTAD in its 2002 World Investment Report classified Costa Rica as one of the six most successful countries in the attraction of the FDI.

The Costa Rican Government welcomes foreign direct investments in the country and consistent efforts have been made in this area by Ministry of Foreign Trade (COMEX) and the Costa Rican Coalition for Development Initiatives (CINDE), a private non-profit association originally created in 1982. Costa Rica’s cost of living is low and the quality of life is the highest among the Central American nations. Its strategic location between the America’s and its duty free access to the US has been the greatest contributing factors attracting investment in Costa Rica.

Costa Rica has an educated, motivated and productive workforce but the operating costs are very low. The country’s economic and political stability have created a stable and friendly business environment. Costa Rica has 8 free Trade Zones which offer many incentives to investors. The Foreign Trade Zones (FTZ) provides investors exemption from taxes on corporate profits, dividends, municipal taxes, import duties and sales taxes. The procedures and regulations for investment, trade and customs are fairly simplified and easy.

Thus the operating risk becomes very low. The high quality infrastructure offers Costa Rica wide connectivity with the world. These factors have facilitated foreign direct investment in Costa Rica. International Investment Agreements Costa Rica has duty free access to U. S through the Caribbean Basin Initiative and has very good relations with them. It has bilateral investment treaties with several Latin American and European countries like Mexico, Chile, Panama, Trinidad, Tobago, Venezuela, Argentina and France, Germany, Spain, Switzerland and others.

It is also negotiating with Canada and Dominican Republic. Costa Rica is currently involved in the CAFTA negotiation. Currency Conversion and Transfer Policies The Costa Rican currency is called the Colon. 100 centimos make a Colon. Smaller denomination coins are not much in use but 25 or 50 centimo coins are in circulation. The foreign currency exchange system allows free possession and conversion of foreign currency into local currency and vice versa, through banks and financial institutions. The US dollar is the best known foreign currency and is easily convertible.

The rate of exchange is Currency other than US$ can be exchanged only with difficulty. Canadian dollars and British Sterling can be exchanged at Banco Lyon, C. 2, Av. Central. Canadian dollars can also be exchanged at Banex, C. Central, Av. 1. German currency can be exchanged at the Banco Nacional inn San Jose. The black market for exchanging money does unofficially exist in San Jose, the capital city. There are no limitations or restrictions on transfer of funds associated with investments, in any available currency, at a legal market rate.

No restrictions are imposed on reinvestments or on the repatriation of earnings, royalties, or capital except when these rights are covered in contractual agreements with the government of Costa Rica. Banking and Capital Market Costa Rica’s banking system comprises of The Central Bank responsible for the monetary and foreign exchange policies, three state-owned commercial banks namely: Banco Credito Agricola de Cartago, Banco de Costa Rica, Banco Nacional de Costa Rica, twenty private banks and two service banks: BANHVI and Banco Popular.

Costa Rica has more than seventy financial institutions. Other international banks doing business in Costa Rica are: Citibank, Scotia Bank and other regional banks such as Bancrecen and Cuzcatlan. Current interest rates range from 12% to 15% in dollars and between 25% to 29% in colons. Financing real estate in Costa Rica is not easy. Only residents are provided loans from banks. Banks traditionally do not loan money to foreigners for the acquisition of fee-simple properties, unless they are residents.

Foreigners who have legal residency generally qualify for bank loans if they can provide evidence of a job and adequate income. The National Stock Exchange, (“Bolsa Nacional de Valores”), Costa Rica, was the first to open in Central America. It started its operations in 1976 and since then the trading activities have grown full fledged. Trading is done mainly on government securities. Insurance The National Insurance Institute is the primary insurance agency in Costa Rica and it is one of the largest insurers in Central America. The agency is state-owned and enjoys a monopoly in the region.

The National Insurance Institute offers policies covering most types of insurable interests (e. g. , fire, earthquake, automobile, crops, life, medical, occupational risk, flood, avalanche, professional liability etc. ). Insurance with foreign companies is allowed but under certain limitations. Expropriation and Compensation Article 45 of the constitution of Costa Rica, states that no property can be expropriated from a Costa Rican or foreigner by the government without full and advance payments and without any justifiable proof of public interest.

If the property is not used by the government for some public purpose, it has to be returned to the owner at the current market value. Dispute Settlement Costa Rican Courts offer a fair and adequate system of resolution of disputes which is ranked as the best in Central America. Costa Rican Constitution has recognized every person’s right to settle disputes through the use of arbitration. Costa Rican courts sometimes take years to settle disputes and hence people have access to other alternative ways. For settlement of local arbitrage people approach lawyers and arbitrators.

Majority of the disputes involve expropriations. Taxation Taxation in Costa Rica is much more simplified than that of many other countries. There are different limits of taxation depending on your income: the more you earn, the more you pay; if you earn less than the minimum amount established by Costa Rican law, you pay no taxes. In Costa Rica, the tax year begins in October 1 and ends September 30, both for individuals and corporations. Under the Costa Rica tax system, residents and corporations are taxed only income earned in Costa Rica or from Costa Rican sources.

Costa Rican Laws do not tax income derived from a foreign source. Income earned from real estate transactions, from assets, goods and rights invested or used in Costa Rica or from commercial, and industrial, agricultural and any other trade or business activities carried out within the country is subject to tax. Sales tax is 13% on the amount paid for goods and services. A municipality tax of 0. 25% is charged on real estate. A transfer tax of 1. 5% of the real value of the property or the value registered with the tax authorities, whichever is higher, is paid.

Stamp taxes are levied on legal documents and an Education and Culture statutory stamp tax is assessed on all business entities. Individuals are subject to a progressive tax schedule and nonresidents, either employed or self-employed, are subject to a flat 15% withholding tax, on all income derived from personal services performed in Costa Rica and are not required to file income tax returns in Costa Rica. Self-employed nonresidents receiving rental or business income must file an annual tax return and are subject to the Self-employment Progressive Tax Rate schedule.

Import Duties According to the Central American Customs System Book (SAC), each type of good has a number or classification for customs purposes, and the rates vary accordingly. Import duties are normally subject to a maximum of 20% and a base of 5%. Certain luxury items are charged almost 100% duties on the value of these goods. Among the highest taxed items are arms and ammunitions (75 percent), costume jewelry (50 percent), fireworks (50 percent), whiskey (50 percent) and wine and beer (40 percent).

A one percent surcharge is imposed on most imports, except medicines and raw materials for human consumption and industry. Tax Incentives Companies established in the Free Trade Zone are offered some incentives: 100% exemption from all exports and re-exports of equipment and machinery, 100% exemption from sales and consumer taxes levied on remittances abroad, 100% exemption on import duties on raw materials, components and capital goods, 100% exemption on taxes on profits for 8 years, and 50% for the following 4 years.

The government offers job bonuses and subsidized training programs for labor. Protection of Property Rights Protection of intellectual property rights is among the best in Latin America, although it is highly inefficient with regards to other nations in the world. Secured interests in both chattel and real property are recognized and enforced, and mortgage and title recording is required by law. Proper care must be taken with regards to title of property as there is always fear of squatter invasions and encroachments.

Delayed judicial proceedings and lack of efficiency on the part of judges specializing in intellectual property enforcements have caused problems in the business software industry. The government has taken steps to improve intellectual property rights (IPR) enforcement and bring its copyright laws into compliance with TRIPS. Right to Private Ownership In matters of land and property ownership, foreigners and Costa Rican citizens have equal rights under the law. Foreigners do not have to live in Costa Rica to own property.

One can own and manage a business in most areas except those that are owned and operated by the government. Foreign companies can set up branches, wholly owned subsidiaries or locally incorporated companies in Costa Rica and can fully own them without appointing Costa Ricans as shareholders. There are certain sectors that are reserved for the state and that require Costa Rican citizenship or residency like electrical power, broadcasting, beachfront property, professional services and wholesale distribution. No private ownership of beachfront property is allowed.

The Costa Rican government owns the first 200 meters of the beach front area, known as the Zona Maritimo Terrestre, or the Maritime Zone. There can be no construction on the first 50 meters of the beach property, but investors may lease the next 150 meters, provided they are a part of a special zoning district. Labor and Regulations Costa Rican labor force is well educated, skilled and motivated. It is known for its efficiency and productivity. Costa Rica has the highest United Nations’ Human Development Index among developing nations and the highest literacy rate among the Central American nations (96%).

This is mainly owing to the subsidized education offered by the government. The National Vocational Training Institute (INA) and private-sector groups provide technical and vocational training to the people of Costa Rica. Costa Rica has a vast pool of professionals probably the largest in Central America. Costa Rica has a number of registered engineers with foreign work experience. It has also many registered medical doctors, dentists, and oral surgeons. Labor related issues are governed by the 1943 Labor Code (Codigo de Trabajo).

These issues include salaries, working conditions, hours of work and overtime, labor disputes and many other such related issues. Labor Courts throughout the country must comply with the code. The National Wage Council states the minimum wage rates for private and public sectors twice a year. According to the code all workers are entitled to a two-week paid vacation and a Christmas bonus equal to one month’s salary on completion of one year of employment, every year. Women are entitled to four months of maternity leave.

The Hourly daily wage rate for non-Qualified workers including benefits is $1. 34 and for qualified workers is $1. 54. For a specialized worker it is $ 1. 85. Overtime rate is hourly rate plus 50%. Thus we can see how cheap the labor in Costa Rica is. Costa Rican Labor Laws require employment contracts between the employer and the employee. All employers must hold an insurance policy with the National Insurance Institute to cover occupational risks. The Employee Protection Act requires the employer to create a contribution of 3% on the employee’s monthly salary.

Foreign nationals without residency status or labor permits are not allowed to work in Costa Rica. According to the labor code 90% of the workers in a country must be Costa Ricans and foreigners cannot occupy jobs for which Costa Ricans are available. Certain flexibilities are provided on request. From this detailed examination of the geographic, social, economic, political, and infrastructural elements of Costa Rica as well as its business environment/climate we were able to construct our business concept, and financing so to reduce most costs associated with barriers of entry.

Costa Rica as such has no significant trade barriers affecting entry of goods and services. Costa Rica has agreed in its Uruguay Round of talks to eliminate all import quotas and reduce tariffs significantly to enhance its trade relations with the U. S as well as the Central American nations and Latin American nations. However, there are certain barriers in the investment and service sector. see exhibit 4 for a detailed examination of potential barriers of entry.

Coming to E-Dak, for me, meant leaving a comfortable “big-six” accounting position to work for a 30-person start-up. It was a tremendous gamble, but my choice came down to whether I wanted to continue performing repetitive audits or face new challenges at E-Dak Dynamics, and in the process help to change the world. Working for E-Dak places me at the epicenter of one of the world’s most dynamic industries: telecommunications/ networking.

Although I knew little about E- Dak’s domain of fiber-optics, I felt strongly that my fate rested in the renches of Silicon Valley, in an industry where only the paranoid survive, at a company with a business model in defiance of Moore’s Law. At the time the term ‘information superhighway’ hadn’t been coined yet, but it would soon become our driving focus, as data traffic over long-haul networks skyrocketed and the world’s telecommunications providers increased their investment in high-capacity fiber-optics.

With an innovative product line that provides pavement for the information highway, E-Dak quenches an unending and growing thirst for bandwidth. For me E-Dak has meant working at the fourth fastest growing company in Silicon Valley, with $500 thousand of revenue exploding to over $60 million in four short years. It has also meant playing a role in the information revolution. E-Dak gives me a broad business perspective. It’s relatively small size facilitates a close interaction with department heads.

If had I stayed in public accounting or gone to a larger corporation, I would not have earned the same breadth of experience, most likely being limited to working within a single division or with a handful of accounts. At E-Dak my scope encompasses all aspects of accounting and finance across the entire enterprise. My reports show the “big picture” and are used extensively by senior management as a map to chart company progress and plot future growth. A start-up firm gives me the opportunity to deal with a wide variety of issues.

From its infancy, I have had the chance to help shape E-Dak’s growth strategy. Once proving myself to management, I was given challenges beyond the realm of debits and credits, including managing a short-term investment portfolio, mplementing an information system, establishing a German joint venture, and financing a real estate deal. I derive much pleasure in overcoming each new challenge and cherish the knowledge and experience gained in each endeavor.

E-Dak has allowed me to develop working relationships with a premium community of finance and accounting professionals. I’ve gained insight into how accounting firm partners manage audit teams, how top-caliber investment bankers perform valuations, how banking officers approve funding requests, and how tax attorneys structure cross-border transactions. Additionally, the contacts I’ve made are invaluable to my career development. International exposure is imperative to success in today’s integrated global economy and I’ve also found it to be very enjoyable.

Enriching business travels with the CEO to Ireland, France, Germany, Japan, Hong Kong, and China have allowed me to visit museums and other places of interest, to talk with locals, and to observe other cultures. My direct supervisor, the CEO of E-Dak, fosters a set of values that reflects a confidence in, concern for, and desire for open communication with me and every ther employee. In offering us new challenges she gives her staff the opportunity to professionally evolve.

If an employee is faced with financial difficulty, she assists them with personal funds. All of this encourages a sense of nurturing and belonging. E-Dak employees share the same vision, work as a team, and care for each other like family. A common downside of family controlled companies is the tendency toward nepotism. Employees learn to become wary of an “untouchable” group of staff and feel they must continually consider the political implications in dealing with them.

I applaud the good natured intentions of a business owner to aid relatives, but at some stage in the growth of an enterprise, nepotism needs to be restricted. At E-Dak, if I were promoted to senior management position, I would have accounting launch a new measurement program which, if effectively implemented, can give managers objective feedback on employee performance and subsequently, cultivate a new management culture. In a position of greater authority I would continue to address this issue by emphasizing a clear body of employee standards and measurements.

Mehmet Zorlu, established their Group’s first company in the early 1950s, he laid the ground rules for the Zorlu Group’s subsequent growth: integrity, perseverance’ and unconditional commitment to quality. Integrity is the Group’s cornerstone value and they expect it to govern every aspect of their business. Hard work and perseverance are essential for the day-to-day success of their enterprises as they are for the undertaking) of a new venture. Quality is the key to customer loyalty, on which the long-term prosperity a f all ventures depends.

With these ground rules, the Zorlu Group has sought to develop solid and profitable businesses that contribute to the welfare of the Group; its customers, business partners and employees; as well as the larger community. Until the early 1990s, they focused their investments in home textiles, an activity the Zorlu family has been involved with for several generations and in which they have a particular expertise. In 1994, they saw the opportunity to employ their strong capital and human resources in the consumer electronics sector, through the acquisition of the Vestel electronics Group.

This was followed, in 1996 and 1997, by investments in the fast- growing energy and financial services sectors. Between 1990 and 1997, they tripled the number of their operations, increasing their total assets to just under US$ 1 billion, excluding the assets of five of their six subsidiaries incorporated abroad. They invested in state-of the-art spinning, weaving and textile technology that has made them the world’s largest; vertically-integrated polyester curtain producer and will propel them to the forefront of the international home textile industry in the years to come.

They acquired the Vestel Group of consumer electronics companies, pushed its balance sheet from an undeserved red into the black, and set it on course to become a leading contender in the international consumer electronics markets. They established a bank, a leasing company and o factoring firm and they penetrated the power generation and electricity distribution sectors with the construction of two plants and a; competitive bid for o state- owned, plant slated for privatization.

The Zorlu Group’s rapid growth since 1990 reflects the vast range of opportunities that have emerged from the unique juncture of Turkey’s Customs Union with the European Today, their operations include 32 companies in Turkey, France, Germany, Holland and South Africa in the textile, consumer electronics, finance, energy and tourism sectors. In 1997, their key operations achieved net sales of almost US$ 750 million and after tax profits of just under US$ 80 million.

That the Zorlu Group was able to choose its projects well and bring these to successful fruition during a period of significant economic and political uncertainty is a reflection of their strategic corporate vision, their sound business principles and their strong management capability. Mehmet Zorlu, a textile manufacturer with a vision of Turkey’s textile potential long before their country had made its mark on international markets, founded the Zorlu Group of companies in the early l950s.

At an early date, Mehmet Zorlu endowed the Group with o rare combination of values honesty, dedication to quality, commitment to long-term goals and the courage to take calculated risks that reward hard work. Today; these values are the foundation o f their corporate culture and constitute the basis for their key business principles unconditional customer satisfaction and mutually beneficial partnerships. The Zorlu Group is committed to constantly improving the quality and enhancing the range of its products and services.

That is why they have sought to expand their product range in the consumer goods categories where they are active and to ensure, through ceaseless research and development, that their products best reflect the demands of their consumers and the latest technological developments. Likewise, they are committed to developing strong and long-term relationships with their customers, their employees, their suppliers and their shareholders. Their aim is to provide their customers with high quality products and services, to exact specifications and on competitive terms, and they expect their suppliers to do the same for us.

They also expect their human resources to be the very best in their areas of expertise, so they have set an unlimited budget for training to help them achieve this performance. First-class human resources are essential if they are to achieve the strong financial results that their shareholders deserve and which their recent performance confirms they can attain. They are proud of their achievements over the last decade, but they are not prepared to rest with these. (Zorlu Holding Company Profile) The Goal Of The Zorlu Group

To strengthen their global reach, from the Far East to the American continents, through strategic and long-term partnerships, care fully planned investments at home and abroad and focused research and development. The Zorlu Group is always open to exploring strategic partnerships that will expand their international markets, enhance their product range and contribute to their technological know-how. Currently, they are considering several long-term partnerships in consumer electronics for research and development, technology transfer, customized production and manufacturing facility sharing in international markets.

The Zorlu Group’s investment strategy To reinforce its capacity, technological lead and vertical integration in its primary areas of activity while creating new capacity in selected high-growth sectors. In the textile sector, they hove invested more than US$ 500 million in several projects that will more than triple their polyester yarn capacity and double their curtain fabric output, These include a vertically-integrated, cotton-based home textile plant that is the world’s third largest in terms of capacity and unparalleled in its cutting-edge technology.

In South Africa, they initiated construction o f a manufacturing facility that will come on stream in 1998 and supply the fast-growing demand for curtain fabric in the region. In France, they acquired majority shareholding of Bel-Air Industries, one of the largest home textile producers in Europe. Bel-Air has three manufacturing facilities, a wide range of internationally renowned brands and a distribution network of 5,000 dealerships in France and Germany.

In the consumer electronics sector, they have expanded their television production capacity four-fold since 1995 and more than doubled their capacity for television components tuners, remote controls and satellite receivers. At ‘ the same time, they have incorporated new technologies that have enabled them to launch innovative products; such as. wide-screen televisions and information appliances, They have also initiated construction of a new manufacturing plant that will produce static and no-frost refrigerators under Sanyo license in-early 1999.

While deepening their traditional lines of business, the Zorlu Group has expanded into new areas of activity where they believe they have a competitive advantage. Their decisive entry into the financial sector reflects their conviction that they have the human resources; the international standing and the capital strength to become one of the top five mid-sized financial groups in Turkey. Their US$ 150 million investment in power generation, motivated by the Group’s large demand for high quality and economical energy, has prepared them to compete for Turkey’s large-scale energy privatization projects. The Zorlu Group is not afraid to grow because they believe they choose their projects prudently, but they also recognize that growth must be managed. That is why they are investing in their human resources, reinforcing their management capability with integrated business software and drawing heavily on external consultancy. ” They are not embarrassed to learn from others how to strengthen their business. Nor do they shy away from licensed technology.

On the contrary, they prefer to learn as much as they can from others because they can then focus on what they do best; making better products, providing higher quality services and improving the return for their shareholders. Turkey is a country, which has an incredible opportunity, though its potential has recently been clouded by economic and political instability and one of the highest inflation rates worldwide. Having confirmed what they can achieve in this difficult environment, they are confident in the Zorlu Group’s future and look forward to sharing this with the customer. (http://www. orlu. com. tr) CONSUMER ELECTRONICS DIVISION The VESTEL Group In 1994, the Zorlu Group became a leading contender in the consumer electronics market when it acquired, Vestel Electronics. Founded in 1984, the Vestel Group comprises four manufacturing and six marketing and distribution companies in the consumer electronics, white goods and information technology sectors. The Group’s products include color televisions, personal computer monitors, set-top- box satellite receivers, personal computers, television tuners, remote control units, remote control converter kits and Internet boxes.

In 1999, the Group will initiate production of no-frost and static refrigerators. The Vestel Group has been at the forefront of Turkey’s consumer electronics sector since I 984, when it established Vestel Electronics, currently one of Europe’s leading color television producers specialized in OEM. In the following years, the Group expanded vertically into television components, and horizontally into information technology and white goods. Vestelkom, the Group’s components producer, is Europe’s fourth largest manufacturer of television tuners.

In 1987, Vestel established one of Turkey’s first computer assembly operations and subsequently initiated the design and production of monochrome and color PC monitors for export. Vestel’s history in the white goods sector dates back to I 988, when the Vestel Group established a joint venture with a leading Asian durable goods manufacturer to produce microwave ovens, later expanding into production and marketing agreements for refrigerators, washing machines, dishwashers and mini electric ovens.

After nearly a decade of rapid growth, the Vestel Group suffered a brief period of decline under- its previous owner in the early I 990s. This situation was rapidly and decisively reversed by the Zorlu Group, which brought to the Vestel Group new capital resources, an experienced, and entrepreneurial management team and a new focus on quality and customer satisfaction. Between 1995 and 1997, Zorlu Group invested more than US$ 40 million in expanding and modemising the Vestel Group’s capacity and in business reorganization.

Over the same period, the Vestel Group raised its consolidated net sales and exports by respectively 148% and 190% in US$ terms and its after-tax earnings by more than 500%. The Vestel Group’s rapid recovery reflects its majority shareholder’s commitment to unconditional customer satisfaction through new and improved products, greater product features and accessible prices. It also reflects the far-sighted manufacturing strategies of its management team. (http://www. vestel. com. tr) Vestel’s manufacturing strategy “Quality, innovation, and quick response. To support this, the Group is continually investing in new technologies, new capacity and greater production flexibility. At the same time, it has pursued vertical and horizontal integration to enhance its control over the final quality of its products and to optimize scales of production. This strategy has enabled Vestel to secure its position as a first-class original equipment manufacturer. Vestel has the production flexibility to meet a wide range of specialized needs and the strict quality controls to ensure consistently high quality products.

Because it is continually investing in new technologies, Vestel is able to launch new products and product features that reflect the very latest trends in the international markets. The Vestel Group’s technological park includes state-of the-art surface mounting and plastic injection machinery, nitrogen-environment automatic soldering machines, quick proto-type machinery and automatic micro-controller software. This advanced technological base is buttressed by the Group’s engineering expertise and in particular, the technical know-how of its research and development teams.

Vestel’s research and design team was the first in Turkey to develop its own television design and the only one to develop micro- controller software for application in its production processes. Currently, it is focusing its efforts on flat panel (plasma display) televisions, line flicker and noise reduction, Dolby sound systems, digital interactive television units, digital video disk players, digital video disk broadcasting decoders, multimedia monitors, video conferencing and chip design.

Vestel Electronics The Zorlu Group’s principal operation in the electronics sector is Vestel Electronics, one of Europe’s leading manufacturers of color televisions. In 1997, Vestel Electronics produced 2,200,000 color televisions and supplied respectively 7. 5 % and 32% of the European and Turkish color television markets. In 1998, the company is increasing its capacity to 4,000,000 units. Vestel Electronics ‘is also the largest producer of personal computer monitors in Turkey, with an annual capacity of 1,000,000 units, and the only manufacturer of desktop personal computers with ISO 9002 certification. Zorlu Holding Company Profile) Vestel Electronics’ goal Become one of the world’s top three consumer electronics companies. Vestel Electronics is a publicly traded company with 33% of its shares traded on . the Istanbul Stock Exchange; The Zorlu Group owns the remaining 67% shareholding. In 1997, Vestel Electronics ranked among Turkey’s top 10 private enterprises with a turnover of US$ 516 million. Since its establishment in 1984, Vestel Electronics has pioneered the development of the Turkish electronics sector with innovative and high quality products and internationally competitive prices.

After its acquisition by the Zorlu Group, Vestel Electronics embarked on a new period of growth, raising its color television capacity from 400,000 units in 1994 to 2,200,000 units in I 997 and 4,000,000 units in 1998. This rapid expansion has enabled the company to incorporate the latest technological developments in its production processes and to reorganize its productive capacity to best meet the demands of its international clients. Vestel Electronics’ I 00,000 m2 television plant is located in the Organized Industrial Zone of Manisa, 30 kilometers from the Aegean port of Izmir.

The plant employs over 3,000 people and encompasses, all phases of the television production process: research and development; production of printed circuit boards (PCBs), chassis and cabinets; testing and mounting of the final product; production of packaging material and after-sales services. Vestel Electronics sources its chip tuners and remote control units from Vestelkom, another Vestel Electronics Group company. (http://www. vestel. com. tr) Vestel Electronics’ production lines incorporate state-of-the-art surface mounting assembly technology and fully automated testing processes.

Advanced production technology, strict production process controls and a high degree of vertical integration ensure that Vestel’s television sets are of consistently high quality that meet or exceed international standards. Vestel Electronics has a first-class manufacturer’s return rate. Vestel Electronics’ excellent product quality is complemented by an exceptionally high degree of production flexibility. Vertical integration, a strong research and development base and in-house engineering expertise enable Vestel Electronics to produce both small and large batches of customized television sets in record time.

Utilizing pro-engineer CAD/CAM software and prototype machinery, the company can produce full-size models in three to four days and initiate full production in less than one month. Vestel Electronics’ research and development team is preparing to take the lead internationally through licensing agreements with some of the world’s foremost engineering firms and strategic collaboration with several of Turkey’s top technical universities. These partnerships have reinforced the company’s traditional leadership in Turkey and set the stage for new product launches on an international scale.

Vestel Electronics was the first producer in Turkey to produce 100 Hz televisions and the only producer of 16:9 inch, 33-inch, Dolby Surround PrologicTM and digital televisions as of end-1998. In 1998, the company is launching Turkey’s first Internet set-top-box television, Internet. TV. All of these have been designed to meet the technical specifications of Vestel’s key export markets in Europe, Asia, North and South America and Africa, CIS and Australia.

Other areas where Vestel Electronics is focusing its research and development efforts are flat panel plasma display) televisions, line flicker and noise reduction, Dolby sound systems, digital interactive television units, digital video disk players, digital video, disk broadcasting decoders, multimedia monitors, video conferencing and chip design. Vestel Electronics has established an in-house EMC laboratory for CE testing and its research and development team works, closely with authorized certification laboratories to assure that new products meet or exceed. ll required international standards. All of the company’s televisions are produced to BEAB, BS, CE, UL, FTZ, LCIE, TUV and VDE standards as well as to the individual standards of its export markets. Vestel Electronics has been operating with ISO 9001 certification since 1993. (Zorlu Holding Company Profile) Vestelkom Vestelkom is a contract manufacturer for the telecommunications industry and Turkey’s leading producer of television tuners, satellite receivers, remote control receiver/transmitter units.

Since early 1998, it is also the only producer of Internet set-top-boxes in Turkey. Vestelkom’s new 20,000 m plant in the Aegean Free Trade Zone near Izmir has the largest component surface mount assembly operation in Turkey, Moreover Vestelkom’s 2,400,000 surface mount device (SMD) chip tuner capacity, as of-end-1997, positioned the company squarely among the top four television tuner producers in Europe. Vestelkom’s leadership in the tuner segment reflects its long experience in the consumer electronics sector and in-house engineering expertise.

Founded in 1975 Vestelkom was Turkey’s first consumer electronics company to produce tuners and remote control unitsfor both monochrome and color televisions and to introduce surface mounting of components. In 1989, Vestelkom began to produce television tuners under Temic license, exporting 100% of its output to his company. Today, Vestelkom continues to export all of its tuners and is forcefully expanding its exports of satellite receivers and remote control units, the latter to countries in the Middle East and Africa where large numbers of television sets are still manually controlled.

To respond to the growing demand for its products, Vestelkom is rapidly expanding both its production capacity and its product range. Vestelkom’s production lines utilize state-of-the-art Fuji and TDK assembly machinery and the latest generation of testing and alignment equipment. Manual and automatic testing is complemented by statistical process controls to ensure that every one of Vestelkom’s chip tuners are produced in line with FTZ and CCIR standards. The company expects to reconfirm its high standards of quality with ISO9002.

As with Vestel Electronics, Vestelkom has developed its own in-house research and development capacity. The company is currently designing satellite receivers, with two analogue receivers under production and one in the development stage. Vestelkom is also on the design for a new remote control transmitter unit with chip-on-board. In the longer run, Vestelkom aims to develop and manufacture products for radio frequency and digital telecommunications. Vestel White Goods was established in 1997 following the group’s successful launch, in 1996, of the VESTEL WHITE brand to the Turkish market.

Vestel White Goods is the Group’s first manufacturing investment in the white goods sector since the Zorlu Group acquired the Vestel Group in 1994. Vestel White Goods is constructing a US$ 100 million static and no-frost refrigerator plant that will have an initial capacity of 600,000 units in early 1999 and a final capacity of 1,200,000 units on its completion at-end-2000 Sanyo of Japan is providing the technical know-how for the plant, which has been designed with a flexible production structure to facilitate customized production.

This flexibility, combined with state-of- the-art technology, will enable the plant to export roughly half of its output to Europe, the CIS, North Africa and the US. Vestel Goods plant is located in the Manisa Organized Industrial Zone Near Izmir. In line with its strategy of developing capacity in the white goods sector, Vestel White Goods is initiating two more manufacturing investments in mid 1998. The first of these is a US$ 80 million facility for producing fully-automatic washing, machines that will have a capacity of 1,000,000 units when it begins operation in the second half of 1999.

The second is a US$ 30 million split air conditioner plant that will have a capacity of 250,000units when completed in early 1999. (Zorlu Holding Company Profile) Vestel Information Technology Vestel Information Technologies provides information technologies services in Turkey as a member of Vestel Group Companies within Zorlu Holding since 1987. It provides information technologies services worldwide by establishing Vestel-USA; the first global company ever established by Turkish capital in Silicon Valley, California, USA.

North and South American operations are managed from the Silicon Valley, European, Middle Eastern and African operations are managed from Turkey and Asia-Pacific operations are managed from Taiwan. Vestel does not only follow the produced, ready made technologies. Three R&D centers were established by the company, one of which is in Silicon Valley where the technology develops rapidly in USA, second one in Taiwan and the other one in Manisa, Turkey. Vestel R&D departments play an active role in electronics and computer technologies with its new technologies and methods.

Today, the opportunity to develop technologies completely cooperation with the leading companies in the field. Therefore, Vestel was established cooperation with giant corporations such as Microsoft, Sun Microsystems, En Reach Technology, SPYGLASS and Integrated Systems in Software field and with Intel, Teralogic, Information Graphics Systems Inc. , Cyrix, GEMPLUS in hardware field and the company continues to conduct can only be possible by establishing strategic cooperation with the leading companies in the field. http://www. vestel. com. tr) Vestel Information Technologies have renewed its internal organization to reflect the technological excellence arose from this giant organization and synergy generated from the local information technologies and four giant group companies providing Internet services directly to the customer satisfaction. The new organization consists of two operational groups, one of which is Individual Systems and the other is Corporate Systems.

Vestel Information Technologies is proud to provide services to Turkish citizens as the Turkish Division of this giant organization with its information devices equipped with new technological excellence, product ranges, channel structure formed of distributors, dealership structure and widespread sales points, 40 effective service networks in 24 provinces, specialized partners, unique field knowledge and Promega product range designed for corporate market.

Vestel Information that is in the information sector since 1987 is now provides services in personal computers’ market by the launch of Vestel Asteo PCs in1996 and corporate systems’ market by the launch of PROMEGA product range. The company ensured the “plant production” concept to be used in computer production field with the product quality provided by the input, production, post-production quality control, heat, electrical and mechanical tests and advanced production technologies. The company achieved to meet the world standards in the production of every single computer and enhanced the quality standards by the special tests conducted.

The new computer plant established in Izmir will start its operations on June, 1999 and the investments will be continued to provide production of world class PCs. Vestel started to produce monitors in 1988 with the production of monitors to IBM. The company started to produce Vestel design monitors as of March 1998. It reached to a capacity of 250K monthly on 5 assembly bands at its plant in Manisa on May, 1999 and it aims to posses a local market share of 80%. Annual target of the company including the exportation is 3 millions.

Vestel electronics Monitor Plant is the new indicator of Vestel’s investments in IT field and its identification of being technology producer not consumer. VestelNet VestelNet was established in 1997. Primary vision of Vestel Net Growing at a high rate in coming years. Mission of Vestelnet Serving this Network Society and create value for the investors by satisfying the needs of the Network Society. To this end, VestelNet is investing in state-of-the-art ISDN technology to create one of Turkey’s strongest digital Telecommunication backbones.

The backbone comprises a private, frame relay wide-area network, using SDH equipment, with bandwidths up to 622 Mb per second. This type of bandwidth will enable rapid and secure transmission of data as well as high quality video and audio conferencing. VestelNet has also donated a building to the national communication company, Trk Telekom, for a new switching office. Located near VestelNet’s main systems center, the switching office will ensure that Trk Telekom can handle VestelNet’s large volume data flow.

Another objective of Vestelnet’s advanced telecommunications infrastructure is to facilitate the rapid and reliable transmission of information between all the Zorlu Group companies and external information providers. Concurrently with this objective, VestelNet is assisting individual Group companies strengthen their links with key customer accounts. Here, VestelNet is developing a technology platform that will allow Denizbank, the Zorlu Group’s bank, to offer Internet-based banking services. A similar project will link Vestel Marketing on-line to its nation-wide network of brown and white goods dialers.

In addition to developing and managing the Zorlu Group’s wide-area network, VestelNet plans to open its telecommunication backbone to large corporate clients that require efficient, fast and secure data transmission services and to provide Internet services to the general public. VestelNet has tree platforms for accessing the Internet TTNet, satellite link of the Dexar Comm. Multimedia, Global satellite links Turnet, the national fiber optic network, and direct satellite links. VestelNet has the capacity to handling over 100,000 customers, 88 MBit of Internet access bandwidth and over 10,000 access ports. http://www. vestel. com. tr) Vestel Durable Goods Marketing Vestel Durable Goods Marketing sells and distributes the goods throughout Turkey either manufactured or imported by Vestel Group of Companies. Founded in 1986, the company is one of the most common distribution channels in the business. It currently has 3000 dealers, out of which 150 are exclusive show rooms. Focused on the continuous development of product range, Vestel Durable Consumption offers the latest technological innovations to consumers.

Recently, Plasma TV, 100 Hz TV, Super black series TVs, No-Frost refrigerators, air conditioners and hi-fi products are introduced, thus the product range is widened. Vestel Durable Goods Marketing A. B. is increasing its market share thanks to innovations. In 1998, the share of Vestel Marketing A. B in TV market realized as 30%, 7% in Audio and 5% in white goods. Vestel Durable Goods Marketing’ s mission is to offer service to its customers both on pre-sale and after sale basis. Thanks to Call-Center, the information related to products and services are simply made available.

A total of 690 service centers and their experienced staffs throughout Turkey offer after sale services. As a result of the synergy created among units, the information flow is ensured, thus the company may efficiently and rapidly respond to market developments. In today’s global world, the company follows up the latest trends and implements the innovations, which are considered feasible. Vestel Marketing A. B. also pursues investments in continuous development of distribution channels. (Zorlu Holding Company Profile) Their management’s point of priority To satisfy their employees.

In this regard, they are carrying out their operations with their dynamic, experienced and qualified personnel in order to reach pre-established goals. In addition, they are offering the best service to final customers by implementing the most recent marketing methods and focusing on how to offer extra value. The reason is that the customer priorities are continuously changing in recent years. Their mission Going beyond the current expectations of their customers, they are focusing on new marketing activities, which are at the same time encouraging sales.

The main objective of Vestel Marketing To prepare for the era called “Customers Who Will Never Satisfy” Because; the customer priorities are rapidly changing in all markets. In this regard, they are offering quality products at reasonable prices and payment conditions by exceeding their expectations via their effective distribution channels. The developments in information processing and communication fields have accelerated the elimination of trade borders, despite the political ones.

As a consequence of Vestel Marketing’s dynamic structure, they have left the traditional was behind and turned into a firm which sets the market standards by forming “creative strategies” and making innovations. (http://www. vestel. com. tr) Vestel Foreign Trade Vestel Foreign Trade was established in 1986 to promote the export of Vestel group products, principally color televisions and, more recently, monitors and satellite receivers. In 1997, it as one of Turkey’s top five exporters with revenues of US$255 million and in 1998; it aims to increase these to US$ 700 million.

The professionalism of this marketing and sales organization and its Aggressive approach growth and rising market shares in major European markets. Between 1994 and 1997, the Vestel Group increased its exports by 450% to 1,600,000 units and its share of the highly competitive European television market from less than 1% to 7,5%. In 1997 alone, Vestel Foreign Trade doubled its export markets to over 80 countries in Europe, the CIS, Asia, the Middle East, Africa, and South America. In 1998, it will initiate large-scale exports to the US, Canada, China and Australia.

In addition to penetrating new markets, Vestel Foreign Trade will initiate exports of a new range of high-technology products in 1998, such as PC monitors and information technology devices. With the worldwide launch of its Internet set-top-box in early 1998. Vestel has become one of the Global pioneers of this market segment. (Vestel Company Profile) Vestel Foreign Trade’s marketing strategy To supply,” value for money” products at internationally competitive prices, payment terms and delivery times.

Vestel Foreign Trade strives to meet or exceed the specifications of its customers and to anticipate future developments in consumer preferences through close and constant observation of its key export markets and large retailing chains. Vestel’s large retailing accounts include Quelle and Schneider in Germany, Alba in the UK and Carrefour in France. These alliances offer customers just-in-time delivery of customized designs under their own label while securing for Vestel extensive distribution and after-sales services in its target markets. International Marketing

Vestel Holland BV in Rotterdam, Vestel France SA in Paris and VesegGermany GmbH in Saar rcken support Vestel Foreign Trade’s marketing and sales activities in Europe. In 1999 Vestel Group will establish marketing companies in Spain, Italy and the US. Vestel U. S. A Established in 1998, Vestel Information Appliances Division innovator and manufacturer of a complete family of Internet Information Appliances and is the only North American manufacturer to offer flexible, easy-to-use, Internet-centric hardware solutions for the home and business markets.

Vestel Information Appliances Division is based in Mountain View, California and is a wholly owned subsidiary of Vestel, Inc. with European, Middle East & Africa headquarter located in Istanbul, Turkey. Vestel Visecon Vestel Visecon founded in September 1998, with a strong management view and enthusiastic, dynamic consultant team, which has extensive experience implementing, SAP in major projects within the Zorlu Vestel Holding Group of Companies. Company’s culture is based on honesty, dedication, handwork and quality.

Vestel Visecon aim is to focus on business performance improvement through Enterprise Resource Planning, Supply Chain Management and related products & services. Company started their projects in the second half of 1997 with a core team. In four months company completed Vestel Marketing, Vestel Bilibim and Zorlu Linen projects and five SAP/R3 modules were implemented HR, FI, CO, MM, SD. In the first quarter of 1998 Vestel Electronics project was started and FI, MM, SD, CO, PP, HR modules are implemented in 8 months.

Dexar Dexar Multimedia and Telecommunications was established in early 1998 for the servicing in communication technologies and it is the first company which has signed “Turksat Digital Satellite Platform” agreement with Turk Telekom on March 5, 1999 Dexar is established to introduce digital data transfer technologies via satellite for consumer and corporate users. Dexar has came together with Hughes Network Systems, USA and Raytheon Training Inc. as a strategically alliance.

Dexar will provide the following Multimedia and Telecommunication services with DVB (Digital Video Broadcast) technologies. Direct Pc Services / Turbo Internet BARRACUDA/SPEEDWARE Package Delivery,Multimedia, Webcast, Newscast BOD (Bandwidth On Demand) ISBN-IP (Integrated Satellite Business Network) The vision of the Dexar is; depending on the bulk transponder capacity of TURKSAT 1-B satellite; To spread usage all over the country combining the content of multimedia and fast and wide spread communication technology according to the needs,

To provide communication availability in requested bandwidth and time period, To offer high quality telecommunication possibilities in Turkey by making these services available for all companies in anywhere and anytime. Some of the applications; Turbo Internet Interactive Distance Learning TeleMedicine/TeleEducation Voice, data and video transmission in close networks (point to point, point to multipoint) Inteleconference Multimedia applications Broadcasting (Webcast, Newscast) (Vestel Company Profile) Vestel Human Resources Philosophy

Following the principles embodied in their Credo ” The Human First” they are building up an environment at VESTEL where all of their employees will be working productively, where there is no discrimination of any sort and where the relations are based on mutual respect and trust. They are aware that the most important element of their continual development is the intellectual capital they possess in VESTEL. Above all, what gives VESTEL its reputation is its hard working, top quality professional cadre.

Their aim is to have a common signature, as the Vestel family, under all the great successes and to move ahead altogether successfully. Everyone in Vestel is the leader in his or her area; their flexible organization structure gives everyone the opportunity to have his or her own initiative and to have the responsibilities in their areas. Vestel Human Resources vision By empowering all the VESTEL employees, to transform them into experts in human resources field and to elevate VESTEL to a level where there will be no need for a Human Resources Department. (Zorlu Holding Company Profile) Zorlu Holding And Vestel Electronics

1. Andy Grove and his role in Intels Success When I think of Intel, I think of Andrew Grove. That may be due to my age, and the fact that I was too young in 1968 to know that Gordon Moore and Robert Noyce, pioneers in the semiconductor industry, had left Fairchild Semiconductor to form Intel Corporation. But I believe that my association of Grove with Intel is due more to the tremendous influence that he has had on the company as the official and unofficial overseer of Intels internal operations from the beginning.

Even though he did not join Intels executive committee until 1976, and did not become CEO until 1987, it is clear that he has been the leader at Intel since the beginning. He has constantly pushed the collective company envelope with big, hairy, audacious goals to produce better and faster chips that ultimately have been some of the primary drivers of the computer industry. Intels first goal was to replace magnetic-core computer memories with semiconductor memories. Their objective and early vision, initially shaped by Gordon Moore, was to dominate any market in which they participated.

They would set out to accomplish this internally by buying options, which allowed them to systematically explore various alternatives. This approach gave them flexibility but also created internal competition, which played a strong role in shaping the culture of Intel. I believe that Moore, who felt that the semiconductor business lived on the brink of disaster, also was a very strong influence on Grove. Grove seemed to carry on Moores Law that approximately every three years a new generation of chips must be developed with four times the capacity of their predecessors.

The companys first SRAM chip, the 1101, came out in 1969, but Intel was constantly driven to change the industry. Moore, Noyce and Grove were never satisfied long. They initiated a drive within the company to produce a DRAM chip with four times the capacity of the SRAM. The resulting 1K chip, introduced in 1971, was the 1103, which was universally preferred to magnetic core technology and became the industry standard. After two other big developments in 1971, Operation Crush an all-out combat plan was initiated to make the next generation 8086 chip the industry standard.

This was followed by development of the 432 project. The 8086 and 432 are examples of buying options Intels strategy whereby one product is developed with an evolutionary strategy while another is developed with a revolutionary strategy. Noyce remarked that through these R&D projects, often times Intel may not have found what they were looking for, but found something else equally important. Andy Grove could be described as a detail-oriented pragmatist, as oppossed to Gordon Moore, who was a technology driven futurist. Grove was a demanding, hard worker who worried about how to accomplish what Moore dreamed up.

This has been a critical element in Intels success. Grove noted that it led to the development of the Two-in-a-Box management philosophy. This consisted of two individuals with complimentary skillsets, much like Grove and Moore, sharing the same management position in order to stabilize a transition, start-up or reorganization. It was also used to groom successors or to get more value out of a position. Some people in the organization viewed this as inefficient, but Intel continued to succeed. According to another executive, Grove possesses aggressive brilliance.

Hes very articulate, yet with a powerful, confrontational style. I believe Groves penchant for constructive confrontation led Intel employees to think of themselves as the Marine Corps of the industry. He helped develop an organization with bright, opinionated, macho, rude, even arrogant and impatient, and very informal employees. This negative type of personality meant that Intel people often didnt care how they got results, but it probably gave them the toughness to weather the 1980s recession and the semiconductor price wars of 1986-87 that caused U. S. manufactures to lose billions.

Intel survived, not unscathed, probably in large part due to Grove. Despite his tough style, he focused on individuals and took a lot of pride in putting people where they were needed. This would be extremely important as he tore the company down and put it back together a number of times, as was done in 1986, when Intel exited both the DRAM and SRAM businesses. The open culture he helped create enabled him to move people up, down and sideways during reorganizations and allowed him to implement his 125% and 90% solutions to get more out of his people in tough times.

Grove believed that in their business there are the quick and there are the dead. He helped the company accept as the norm constant relearning, as the company changed its focus. This would be the case as he moved the company into microprocessors, as they were faced with protecting Intels intellectual property, and as they had to make the CISC vs. RISC choice in the late 1980s. He would push for more rapid product introduction and force computer makers to keep up with the pace set by Intel. He pushed for dvelopement of The Intel Inside slogan.

The process at Intel seems to closely follow the exhibit The Process of Renewing and Transforming Organizations (Kotter) that we studied as part of the Charlotte Beers case. Even though Grove believed that work time and leisure time should be separate, he did begin to soften that stance to combat burnout. He moved for a more friendly work environment and even offered sabbaticals for employees with enough service. As the 1990s began and Andy Grove oversaw a company that was significantly molded in his personality, his vision had changed only slightly:

We are currently a leader in semiconductors, and my hope and vision is that our technology is going to be the heart and spine of the entire computer industry. 2. The Culture of Intel and its Creation Intel started as a purely functional organization centered on R&D and getting done what needed to be done to crank out new and better chips. Andy Grove and Gordon Moore wanted an unconventional approach initially. They wanted to reduce barriers and promote a free flow of ideas and information throughout Intel. A physical example of this was the cubicles of one big hall that all employees, including executives, sat in.

Walls were low and executives were not clustered in one area, but spread out. Meeting rooms and parking spaces were on a first-come, first-served basis. Dress was casual. These were classic examples of role modeling by Intel executives that played a major role in shaping culture. It probably gave all employees the confidence to speak up in meetings where even high level executives were present, which they were encouraged to do. But as early as 1976 the first divisions were established in order to focus managers attention on emerging business segments.

Functional and business lines began to cross in matrix-relations. Task forces, councils and other cross-boundary devices were set up along with other more informal relationships in order to bring ideas to fruition. These new ideas often originated from small, highly motivated, and innovative teams and then were carried by product champions through the gauntlet of Intels corporate hierarchy towards approval and/or rejection. This helped create a company with a very sharp and well-defined sense of history and identity.

Great examples of secondary embedded mechanisms at Intel are the stories that evolved about how these product champions transformed dreams into amazing products. As the stories were retold over and over, the developers and champions became legendary and through the years became part of company mythology. Further evidence that the company culture was adding some more formal components ,though, could be seen in the creation of a formal Strategic Long Range Planning (SLRP) process, which Gordon Moore pushed for, and required middle managers to prepare formal strategies for their business segments.

The way we do things around here was embodied in what Gordon Moore believed: One of our unspoken rules at Intel is that if you cant measure something you dont understand it. Not surprisingly, Moore was in charge of many of the primary embedded cultural mechanisms at Intel; measurable things like profitability and other targets that helped determine employee bonuses. He was a strong believer in performance based incentives, unlike Grove who focused more on individuals.

Intel did try to remain unbureaucratic, but it was felt by one executive that in the companys zest to do that, it was undertaking too many reorganizations. This in turn led to unnecessary attrition and erosion of their knowledge base. The human side seemed to get lost in the mechanics of drawing up a new organization chart. Those that did remain thought of themselves as a special breed: Intel was not a place for those looking for a stable environment. Part of the socialization process seemed to come from this lack of stability.

The constant action led to many internal meetings, during which employees were encouraged to debate the pros and cons of issues. This led to a sort of trial by fire, but taught people to stand their ground. A survey was conducted in 1988 on employees understanding of Intels culture. The senior officers hoped to get a handle on the human relations side of things in order to try to balance the entrepreneurial spirit of the company, which often led to instability, with the people side of things. There was a faction of long-time managers who didnt seem concerned about that though.

They felt that things had worked fine so far so why change. This survey did lead to a formalized document clarifying Intels values. I believe that the espoused values contained in the document very closely match the actual values of the company. Of the six categories risk taking, quality, discipline, customer orientation, results orientation, and a great place to work only the last one really reflects a major concern for people, and Intel was not first and foremost about people. What Grove was all about is contained in these values.

Intels culture has been partly defined by the fact that they have so often in their history been at a strategic crossroads, but have been able to transform themselves through constant strategic renewal and revitalization. This culture will continue to exist, as long as Intel pushes to stay out in front. The October 16, 2000 Chicago Tribune points out that Intel wont have the Pentium 4 ready for a planned pre-Halloween launch, which will cost them holiday sales in the consumer channel. They better keep pushing.

Group’s subsequent growth: integrity, perseverance and unconditional commitment to quality. Integrity is the Group’s cornerstone value and they expect it to govern every aspect of their business. Hard work and perseverance are essential for the day-to-day success of their enterprises as they are for the undertaking) of a new venture. Quality is the key to customer loyalty, on which the long-term prosperity a f all ventures depends.

With these ground rules, the Zorlu Group has sought to develop solid and profitable businesses that contribute to the welfare of the Group; its customers, usiness partners and employees; as well as the larger community. Until the early 1990s, they focused their investments in home textiles, an activity the Zorlu family has been involved with for several generations and in which they have a particular expertise. In 1994, they saw the opportunity to employ their strong capital and human resources in the consumer electronics sector, through the acquisition of the Vestel electronics Group.

This was followed, in 1996 and 1997, by investments in the fast- growing energy and financial services sectors. Between 1990 and 1997, they tripled the umber of their operations, increasing their total assets to just under US$ 1 billion, excluding the assets of five of their six subsidiaries incorporated abroad. They invested in state-of the-art spinning, weaving and textile technology that has made them the worlds largest; vertically-integrated polyester curtain producer and will propel them to the forefront of the international home textile industry in the years to come.

They acquired the Vestel Group of consumer electronics companies, pushed its balance sheet from an undeserved red into the black, and set it on course to become leading contender in the international consumer electronics markets. They established a bank, a leasing company and o factoring firm and they penetrated the power generation and electricity distribution sectors with the construction of two plants and a; competitive bid for o state- owned, plant slated for privatization.

The Zorlu Group’s rapid growth since 1990 reflects the vast range of opportunities that have emerged from the unique juncture of Turkey’s Customs Union with the European Today, their operations include 32 companies in Turkey, France, Germany, Holland and South Africa in the textile, consumer lectronics, finance, energy and tourism sectors. In 1997, their key operations achieved net sales of almost US$ 750 million and after tax profits of just under US$ 80 million.

That the Zorlu Group was able to choose its projects well and bring these to successful fruition during a period of significant economic and political uncertainty is a reflection of their strategic corporate vision, their sound business principles and their strong management capability. Mehmet Zorlu, a textile manufacturer with a vision of Turkeys textile potential long before their country had made ts mark on international markets, founded the Zorlu Group of companies in the early l950s.

At an early date, Mehmet Zorlu endowed the Group with o rare combination of values honesty, dedication to quality, commitment to long-term goals and the courage to take calculated risks that reward hard work. Today; these values are the foundation o f their corporate culture and constitute the basis for their key business principles unconditional customer satisfaction and mutually beneficial partnerships. The Zorlu Group is committed to constantly improving the quality and enhancing the range of its products and services.

That is why they have sought to expand their product range in the consumer goods categories where they are active and to ensure, through ceaseless research and development, that their products best reflect the demands of their consumers and the latest technological developments. Likewise, they are committed to developing strong and long-term relationships with their customers, their employees, their suppliers and their shareholders.

Their aim is to provide their customers with high quality products and services, to exact specifications and on competitive terms, and they expect heir suppliers to do the same for us. They also expect their human resources to be the very best in their areas of expertise, so they have set an unlimited budget for training to help them achieve this performance. First-class human resources are essential if they are to achieve the strong financial results that their shareholders deserve and which their recent performance confirms they can attain.

They are proud of their achievements over the last decade, but they are not prepared to rest with these. (Zorlu Holding Company Profile) The Goal Of The Zorlu Group To strengthen their global reach, from he Far East to the American continents, through strategic and long-term partnerships, care fully planned investments at home and abroad and focused research and development. The Zorlu Group is always open to exploring strategic partnerships that will expand their international markets, enhance their product range and contribute to their technological know-how.

Currently, they are considering several long-term partnerships in consumer electronics for research and development, technology transfer, customized production and manufacturing facility sharing in international markets. The Zorlu Group’s investment strategy To reinforce its capacity, technological lead and vertical integration in its primary areas of activity while creating new capacity in selected high-growth sectors.

In the textile sector, they hove invested more than US$ 500 million in several projects that will more than triple their polyester yarn capacity and double their curtain fabric output, These include a vertically-integrated, cotton-based home textile plant that is the world’s third largest in terms of capacity and unparalleled in its cutting-edge technology. In South Africa, they initiated construction f a manufacturing facility that will come on stream in 1998 and supply the fast-growing demand for curtain fabric in the region.

In France, they acquired majority shareholding of Bel-Air Industries, one of the largest home textile producers in Europe. Bel-Air has three manufacturing facilities, a wide range of internationally renowned brands and a distribution network of 5,000 dealerships in France and Germany. In the consumer electronics sector, they have expanded their television production capacity four-fold since 1995 and more than doubled their capacity for television components uners, remote controls and satellite receivers. At ‘ the same time, they have incorporated new technologies that have enabled them to launch innovative products; such as. ide-screen televisions and information appliances, They have also initiated construction of a new manufacturing plant that will produce static and no-frost refrigerators under Sanyo license in-early 1999. While deepening their traditional lines of business, the Zorlu Group has expanded into new areas of activity where they believe they have a competitive advantage. Their decisive entry into the financial sector reflects their conviction that they have the human esources; the international standing and the capital strength to become one of the top five mid-sized financial groups in Turkey.

Their US$ 150 million investment in power generation, motivated by the Group’s large demand for high quality and economical energy, has prepared them to compete for Turkey’s large-scale energy privatization projects. “The Zorlu Group is not afraid to grow because they believe they choose their projects prudently, but they also recognize that growth must be managed. That is why they are investing in their human resources, reinforcing their management capability with integrated usiness software and drawing heavily on external consultancy. ” They are not embarrassed to learn from others how to strengthen their business.

Nor do they shy away from licensed technology. On the contrary, they prefer to learn as much as they can from others because they can then focus on what they do best; making better products, providing higher quality services and improving the return for their shareholders. Turkey is a country, which has an incredible opportunity, though its potential has recently been clouded by economic and political instability and one of the highest inflation rates worldwide. Having confirmed what they can achieve in this difficult environment, they are confident in the Zorlu Group’s future and look forward to sharing this with the customer. http://www. zorlu. com. tr) CONSUMER ELECTRONICS DIVISION The VESTEL Group In 1994, the Zorlu Group became a leading contender in the consumer electronics market when it acquired, Vestel Electronics. Founded in 1984, the Vestel Group comprises four manufacturing and six marketing and distribution companies in the consumer electronics, white goods and information technology sectors. The Group’s products include olor televisions, personal computer monitors, set-top- box satellite receivers, personal computers, television tuners, remote control units, remote control converter kits and Internet boxes.

In 1999, the Group will initiate production of no-frost and static refrigerators. The Vestel Group has been at the forefront of Turkey’s consumer electronics sector since I 984, when it established Vestel Electronics, currently one of Europe’s leading color television producers specialized in OEM. In the following years, the Group expanded vertically into television components, and horizontally into information technology and white goods. Vestelkom, the Group’s components producer, is Europe’s fourth largest manufacturer of television tuners.

In 1987, Vestel established one of Turkey’s first computer assembly operations and subsequently initiated the design and production of monochrome and color PC monitors for export. Vestel’s history in the white goods sector dates back to I 988, when the Vestel Group established a joint venture with a leading Asian durable goods manufacturer to produce microwave ovens, later expanding into production and marketing agreements for refrigerators, washing machines, dishwashers and mini electric ovens.

After nearly a decade of rapid growth, the Vestel Group suffered a brief period of decline under- its previous owner in the early I 990s. This situation was rapidly and decisively reversed by the Zorlu Group, which brought to the Vestel Group new capital resources, an experienced, and entrepreneurial management team and a new focus on quality and customer satisfaction. Between 1995 and 1997, Zorlu Group invested more than US$ 40 million in expanding and modemising the Vestel Group’s capacity and in business reorganization.

Over the same period, the Vestel Group raised its consolidated net sales and exports by espectively 148% and 190% in US$ terms and its after-tax earnings by more than 500%. The Vestel Group’s rapid recovery reflects its majority shareholder’s commitment to unconditional customer satisfaction through new and improved products, greater product features and accessible prices. It also reflects the far-sighted manufacturing strategies of its management team. (http://www. vestel. com. tr) Vestel’s manufacturing strategy “Quality, innovation, and quick response. To support this, the Group is continually investing in new technologies, new capacity and greater production flexibility. At the same time, it has pursued vertical and horizontal integration to enhance its control over the final quality of its products and to optimize scales of production. This strategy has enabled Vestel to secure its position as a first-class original equipment manufacturer. Vestel has the production flexibility to meet a wide range of specialized needs and the strict quality controls to ensure consistently high quality products.

Because it is continually investing in new technologies, Vestel is able to launch new products and product features that reflect the very latest trends in the international arkets. The Vestel Group’s technological park includes state-of the-art surface mounting and plastic injection machinery, nitrogen-environment automatic soldering machines, quick proto-type machinery and automatic micro-controller software. This advanced technological base is buttressed by the Group’s engineering expertise and in particular, the technical know-how of its research and development teams.

Vestel’s research and design team was the first in Turkey to develop its own television design and the only one to develop micro- controller software for application in its production processes. Currently, it is focusing its efforts on flat panel (plasma display) televisions, line flicker and noise reduction, Dolby sound systems, digital interactive television units, digital video disk players, digital video disk broadcasting decoders, multimedia monitors, video conferencing and chip design.

Vestel Electronics The Zorlu Group’s principal operation in the electronics sector is Vestel Electronics, one of Europe’s leading manufacturers of color televisions. In 1997, Vestel Electronics produced 2,200,000 color televisions and supplied respectively 7. 5 % and 32% of the European and Turkish color television markets. In 1998, the company is increasing its capacity to 4,000,000 units. Vestel Electronics ‘is also the largest producer of personal computer monitors in Turkey, with an annual capacity of 1,000,000 units, and the only manufacturer of desktop personal computers with ISO 9002 certification. Zorlu Holding Company Profile) Vestel Electronics’ goal Become one of the world’s top three consumer electronics companies. Vestel Electronics is a publicly traded company with 33% of its shares traded on . the Istanbul Stock Exchange; The Zorlu Group owns the remaining 67% shareholding. In 1997, Vestel Electronics anked among Turkey’s top 10 private enterprises with a turnover of US$ 516 million. Since its establishment in 1984, Vestel Electronics has pioneered the development of the Turkish electronics sector with innovative and high quality products and internationally competitive prices.

After its acquisition by the Zorlu Group, Vestel Electronics embarked on a new period of growth, raising its color television capacity from 400,000 units in 1994 to 2,200,000 units in I 997 and 4,000,000 units in 1998. This rapid expansion has enabled the company to incorporate the latest technological developments in its production processes and to reorganize ts productive capacity to best meet the demands of its international clients. Vestel Electronics’ I 00,000 m2 television plant is located in the Organized Industrial Zone of Manisa, 30 kilometers from the Aegean port of Izmir.

The plant employs over 3,000 people and encompasses, all phases of the television production process: research and development; production of printed circuit boards (PCBs), chassis and cabinets; testing and mounting of the final product; production of packaging material and after-sales services. Vestel Electronics sources its chip tuners and remote control nits from Vestelkom, another Vestel Electronics Group company. (http://www. vestel. com. tr) Vestel Electronics’ production lines incorporate state-of-the-art surface mounting assembly technology and fully automated testing processes.

Advanced production technology, strict production process controls and a high degree of vertical integration ensure that Vestel’s television sets are of consistently high quality that meet or exceed international standards. Vestel Electronics has a first-class manufacturer’s return rate. Vestel Electronics’ excellent product quality is complemented by an exceptionally high degree of production flexibility. Vertical integration, a strong research and development base and in-house engineering expertise enable Vestel Electronics to produce both small and large batches of customized television sets in record time.

Utilizing pro-engineer CAD/CAM software and prototype machinery, the company can produce full-size models in three to four days and initiate full production in less than one month. Vestel Electronics’ research and development team is preparing to take the lead internationally through licensing agreements with some of the world’s foremost engineering firms and strategic collaboration ith several of Turkey’s top technical universities. These partnerships have reinforced the company’s traditional leadership in Turkey and set the stage for new product launches on an international scale.

Vestel Electronics was the first producer in Turkey to produce 100 Hz televisions and the only producer of 16:9 inch, 33-inch, Dolby Surround PrologicTM and digital televisions as of end-1998. In 1998, the company is launching Turkey’s first Internet set-top-box television, Internet. TV. All of these have been designed to meet the technical specifications of Vestel’s key export arkets in Europe, Asia, North and South America and Africa, CIS and Australia.

Other areas where Vestel Electronics is focusing its research and development efforts are flat panel plasma display) televisions, line flicker and noise reduction, Dolby sound systems, digital interactive television units, digital video disk players, digital video, disk broadcasting decoders, multimedia monitors, video conferencing and chip design. Vestel Electronics has established an in-house EMC laboratory for CE testing and its research and development team works, closely with authorized certification laboratories to assure that new products meet r exceed. ll required international standards. All of the company’s televisions are produced to BEAB, BS, CE, UL, FTZ, LCIE, TÜV and VDE standards as well as to the individual standards of its export markets. Vestel Electronics has been operating with ISO 9001 certification since 1993. (Zorlu Holding Company Profile) Vestelkom Vestelkom is a contract manufacturer for the telecommunications industry and Turkey’s leading producer of television tuners, satellite receivers, remote control receiver/transmitter units.

Since early 1998, it is also the only producer of Internet set-top-boxes in Turkey. Vestelkom’s new 20,000 m² plant in the Aegean Free Trade Zone near Izmir has the largest component surface mount assembly operation in Turkey, Moreover Vestelkom’s 2,400,000 surface mount device (SMD) chip tuner capacity, as of-end-1997, positioned the company squarely among the top four television tuner producers in Europe. Vestelkom’s leadership in the tuner segment reflects its long experience in the consumer electronics sector and in-house engineering expertise.

Founded in 1975 Vestelkom was Turkey’s first consumer electronics company to produce tuners and remote control unitsfor both onochrome and color televisions and to introduce surface mounting of components. In 1989, Vestelkom began to produce television tuners under Temic license, exporting 100% of its output to his company. Today, Vestelkom continues to export all of its tuners and is forcefully expanding its exports of satellite receivers and remote control units, the latter to countries in the Middle East and Africa where large numbers of television sets are still manually controlled.

To respond to the growing demand for its products, Vestelkom is rapidly expanding both its production capacity and its product range. Vestelkom’s production lines utilize state-of-the-art Fuji and TDK assembly machinery and the latest generation of testing and alignment equipment. Manual and automatic testing is complemented by statistical process controls to ensure that every one of Vestelkom’s chip tuners are produced in line with FTZ and CCIR standards. The company expects to reconfirm its high standards of quality with ISO9002.

As with Vestel Electronics, Vestelkom has developed its own in-house research and development capacity. The company is currently designing satellite receivers, with two analogue receivers under production and one in the development stage. Vestelkom is also on the design for a new remote control transmitter unit with chip-on-board. In the longer run, Vestelkom aims to develop and manufacture products for radio frequency and digital telecommunications. Vestel White Goods was established in 1997 following the group’s successful launch, in 1996, of the VESTEL WHITE brand to the Turkish market.

Vestel White Goods is the Group’s first manufacturing investment in the white goods sector since the Zorlu Group acquired the Vestel Group in 1994. Vestel White Goods is constructing a US$ 100 million static and no-frost refrigerator plant that will have an initial apacity of 600,000 units in early 1999 and a final capacity of 1,200,000 units on its completion at-end-2000 Sanyo of Japan is providing the technical know-how for the plant, which has been designed with a flexible production structure to facilitate customized production.

This flexibility, combined with state-of- the-art technology, will enable the plant to export roughly half of its output to Europe, the CIS, North Africa and the US. Vestel Goods plant is located in the Manisa Organized Industrial Zone Near Izmir. In line with its strategy of developing capacity in the white goods sector, Vestel White Goods is initiating two ore manufacturing investments in mid 1998. The first of these is a US$ 80 million facility for producing fully-automatic washing, machines that will have a capacity of 1,000,000 units when it begins operation in the second half of 1999.

The second is a US$ 30 million split air conditioner plant that will have a capacity of 250,000units when completed in early 1999. (Zorlu Holding Company Profile) Vestel Information Technology Vestel Information Technologies provides information technologies services in Turkey as a member of Vestel Group Companies within Zorlu Holding since 1987. It provides information technologies ervices worldwide by establishing Vestel-USA; the first global company ever established by Turkish capital in Silicon Valley, California, USA.

North and South American operations are managed from the Silicon Valley, European, Middle Eastern and African operations are managed from Turkey and Asia-Pacific operations are managed from Taiwan. Vestel does not only follow the produced, ready made technologies. Three R&D centers were established by the company, one of which is in Silicon Valley where the technology develops rapidly in USA, second one in Taiwan and the other one in Manisa, Turkey. Vestel R&D departments play an active role in electronics and computer technologies with its new technologies and methods.

Today, the opportunity to develop technologies completely cooperation with the leading companies in the field. Therefore, Vestel was established cooperation with giant corporations such as Microsoft, Sun Microsystems, En Reach Technology, SPYGLASS and Integrated Systems in Software field and with Intel, Teralogic, Information Graphics Systems Inc. , Cyrix, GEMPLUS in hardware field and the company continues to conduct can only be possible by establishing strategic cooperation with the leading ompanies in the field. http://www. vestel. com. tr) Vestel Information Technologies have renewed its internal organization to reflect the technological excellence arose from this giant organization and synergy generated from the local information technologies and four giant group companies providing Internet services directly to the customer satisfaction. The new organization consists of two operational groups, one of which is Individual Systems and the other is Corporate Systems.

Vestel Information Technologies is proud to provide services to Turkish citizens as the Turkish Division of his giant organization with its information devices equipped with new technological excellence, product ranges, channel structure formed of distributors, dealership structure and widespread sales points, 40 effective service networks in 24 provinces, specialized partners, unique field knowledge and Promega product range designed for corporate market.

Vestel Information that is in the information sector since 1987 is now provides services in personal computers market by the launch of Vestel Asteo PCs in1996 and corporate systems market by the launch of PROMEGA product range. The company nsured the “plant production” concept to be used in computer production field with the product quality provided by the input, production, post-production quality control, heat, electrical and mechanical tests and advanced production technologies. The company achieved to meet the world standards in the production of every single computer and enhanced the quality standards by the special tests conducted.

The new computer plant established in Izmir will start its operations on June, 1999 and the investments will be continued to provide production of world class PCs. Vestel started to produce monitors in 1988 ith the production of monitors to IBM. The company started to produce Vestel design monitors as of March 1998. It reached to a capacity of 250K monthly on 5 assembly bands at its plant in Manisa on May, 1999 and it aims to posses a local market share of 80%. Annual target of the company including the exportation is 3 millions.

Vestel electronics Monitor Plant is the new indicator of Vestels investments in IT field and its identification of being technology producer not consumer. VestelNet VestelNet was established in 1997. · Primary vision of Vestel Net Growing at a high rate in coming years. · Mission of Vestelnet Serving this Network Society and create value for the investors by satisfying the needs of the Network Society. To this end, VestelNet is investing in state-of-the-art ISDN technology to create one of Turkey’s strongest digital Telecommunication backbones.

The backbone comprises a private, frame relay wide-area network, using SDH equipment, with bandwidths up to 622 Mb per second. This type of bandwidth will enable rapid and secure transmission of data as well as high quality video and audio conferencing. VestelNet has also donated a building to the national communication company, Türk Telekom, for a new switching office. Located near VestelNet’s main systems center, the switching office will ensure that Türk Telekom can handle VestelNet’s large volume data flow.

Another objective of Vestelnet’s advanced telecommunications infrastructure is to facilitate the rapid and reliable transmission of information between all the Zorlu Group companies and external information providers. Concurrently with this objective, VestelNet is assisting individual Group companies strengthen their links with key customer accounts. Here, VestelNet is developing a technology platform that will allow Denizbank, the Zorlu Group’s bank, to offer Internet-based anking services. A similar project will link Vestel Marketing on-line to its nation-wide network of brown and white goods dialers.

In addition to developing and managing the Zorlu Group’s wide-area network, VestelNet plans to open its telecommunication backbone to large corporate clients that require efficient, fast and secure data transmission services and to provide Internet services to the general public. VestelNet has tree platforms for accessing the Internet TTNet, satellite link of the Dexar Comm. Multimedia, Global satellite links Turnet, the national fiber optic network, and direct satellite links. VestelNet has the capacity to handling over 100,000 customers, 88 MBit of Internet access bandwidth and over 10,000 access ports. http://www. vestel. com. tr) Vestel Durable Goods Marketing Vestel Durable Goods Marketing sells and distributes the goods throughout Turkey either manufactured or imported by Vestel Group of Companies. Founded in 1986, the company is one of the most common distribution channels in the business. It currently has 3000 dealers, out of which 150 are exclusive show rooms. Focused on the continuous development of product range, Vestel Durable Consumption offers the latest technological nnovations to consumers.

Recently, Plasma TV, 100 Hz TV, Super black series TVs, No-Frost refrigerators, air conditioners and hi-fi products are introduced, thus the product range is widened. Vestel Durable Goods Marketing A. Þ. is increasing its market share thanks to innovations. In 1998, the share of Vestel Marketing A. Þ in TV market realized as 30%, 7% in Audio and 5% in white goods. Vestel Durable Goods Marketing s mission is to offer service to its customers both on pre-sale and after sale basis. Thanks to Call-Center, the information related to products and services are simply made available.

A total of 690 service centers and their experienced staffs throughout Turkey offer after sale services. As a result of the synergy created among units, the information flow is ensured, thus the company may efficiently and rapidly respond to market developments. In todays global world, the company follows up the latest trends and implements the innovations, which are considered feasible. Vestel Marketing A. Þ. also pursues investments in continuous development of distribution channels. (Zorlu Holding Company Profile) Their managements point of priority To satisfy their employees.

In this regard, hey are carrying out their operations with their dynamic, experienced and qualified personnel in order to reach pre-established goals. In addition, they are offering the best service to final customers by implementing the most recent marketing methods and focusing on how to offer extra value. The reason is that the customer priorities are continuously changing in recent years. Their mission Going beyond the current expectations of their customers, they are focusing on new marketing activities, which are at the same time encouraging sales.

The main objective of Vestel Marketing To prepare for the era called Customers Who Will Never Satisfy” Because; the customer priorities are rapidly changing in all markets. In this regard, they are offering quality products at reasonable prices and payment conditions by exceeding their expectations via their effective distribution channels. The developments in information processing and communication fields have accelerated the elimination of trade borders, despite the political ones.

As a consequence of Vestel Marketings dynamic structure, they have left the traditional was behind and turned into a firm which sets the market standards by forming “creative strategies” and making innovations. http://www. vestel. com. tr) Vestel Foreign Trade Vestel Foreign Trade was established in 1986 to promote the export of Vestel group products, principally color televisions and, more recently, monitors and satellite receivers. In 1997, it as one of Turkey’s top five exporters with revenues of US$255 million and in 1998; it aims to increase these to US$ 700 million.

The professionalism of this marketing and sales organization and its Aggressive approach growth and rising market shares in major European markets. Between 1994 and 1997, the Vestel Group increased its exports by 450% to 1,600,000 units and its hare of the highly competitive European television market from less than 1% to 7,5%. In 1997 alone, Vestel Foreign Trade doubled its export markets to over 80 countries in Europe, the CIS, Asia, the Middle East, Africa, and South America. In 1998, it will initiate large-scale exports to the US, Canada, China and Australia.

In addition to penetrating new markets, Vestel Foreign Trade will initiate exports of a new range of high-technology products in 1998, such as PC monitors and information technology devices. With the worldwide launch of its Internet set-top-box in early 1998. Vestel as become one of the Global pioneers of this market segment. (Vestel Company Profile) Vestel Foreign Trade’s marketing strategy To supply,” value for money” products at internationally competitive prices, payment terms and delivery times.

Vestel Foreign Trade strives to meet or exceed the specifications of its customers and to anticipate future developments in consumer preferences through close and constant observation of its key export markets and large retailing chains. Vestel’s large retailing accounts include Quelle and Schneider in Germany, Alba in the UK and Carrefour in France. These alliances offer customers just-in-time delivery of customized designs under their own label while securing for Vestel extensive distribution and after-sales services in its target markets.

International Marketing Vestel Holland BV in Rotterdam, Vestel France SA in Paris and VesegGermany GmbH in Saar rücken support Vestel Foreign Trades marketing and sales activities in Europe. In 1999 Vestel Group will establish marketing companies in Spain, Italy and the US. Vestel U. S. A Established in 1998, Vestel Information Appliances Division innovator and manufacturer of a complete family of Internet Information Appliances and is the only North American manufacturer to offer flexible, easy-to-use, Internet-centric hardware solutions for the home and business markets.

Vestel Information Appliances Division is based in Mountain View, California and is a wholly owned subsidiary of Vestel, Inc. with European, Middle East & Africa headquarter located in Istanbul, Turkey. Vestel Visecon Vestel Visecon founded in September 1998, with a strong management view and enthusiastic, dynamic consultant team, which has extensive experience implementing, SAP in major projects within the Zorlu Vestel Holding Group of Companies. Company’s culture is based on honesty, dedication, handwork and quality.

Vestel Visecon aim is to focus on business performance improvement through Enterprise Resource Planning, Supply Chain Management and related products & services. Company started their projects in the second half of 1997 with a core team. In four months company completed Vestel Marketing, Vestel Biliþim and Zorlu Linen projects and five SAP/R3 modules were implemented HR, FI, CO, MM, SD. In the first quarter of 1998 Vestel Electronics project was started and FI, MM, SD, CO, PP, HR modules are implemented in 8 months. Dexar

Dexar Multimedia and Telecommunications was established in early 1998 for the servicing in communication technologies and it is the first company which has signed “Turksat Digital Satellite Platform” agreement with Turk Telekom on March 5, 1999 Dexar is established to introduce digital data transfer technologies via satellite for consumer and corporate users. Dexar has came together with Hughes Network Systems, USA and Raytheon Training Inc. as a strategically alliance. Dexar will provide the following Multimedia and Telecommunication services with DVB (Digital Video Broadcast) technologies.

Direct Pc Services / Turbo Internet BARRACUDA/SPEEDWARE Package Delivery,Multimedia, Webcast, Newscast BOD (Bandwidth On Demand) ISBN-IP (Integrated Satellite Business Network) The vision of the Dexar is; depending on the bulk transponder capacity of TURKSAT 1-B satellite; · To spread usage all over the country combining the content of multimedia and fast and wide spread communication technology according to the needs, · To provide communication availability in requested bandwidth and time period, · To offer high quality telecommunication possibilities in Turkey by making these services available for all companies n anywhere and anytime.

Some of the applications; · Turbo Internet · Interactive Distance Learning · TeleMedicine/TeleEducation · Voice, data and video transmission in close networks (point to point, point to multipoint) · Inteleconference · Multimedia applications · Broadcasting (Webcast, Newscast) (Vestel Company Profile) Vestel Human Resources Philosophy Following the principles embodied in their Credo ” The Human First” they are building up an environment at VESTEL where all of their employees will be working productively, where there is no discrimination of any sort and where the relations are based on mutual espect and trust.

They are aware that the most important element of their continual development is the intellectual capital they possess in VESTEL. Above all, what gives VESTEL its reputation is its hard working, top quality professional cadre. Their aim is to have a common signature, as the Vestel family, under all the great successes and to move ahead altogether successfully. Everyone in Vestel is the leader in his or her area; their flexible organization structure gives everyone the opportunity to have his or her own initiative and to have the responsibilities in their areas.