Input-Output Multiplier Analysis for Major Industries in the Philippines.Pdf

11th National Convention on Statistics (NCS) EDSA Shangri-La Hotel October 4-5, 2010 INPUT-OUTPUT MULTIPLIER ANALYSIS FOR MAJOR INDUSTRIES IN THE PHILIPPINES by Madeline B. Dumaua For additional information, please contact: Author’s name Designation Affiliation Address Tel. no. E-mail Madeline B. Dumaua Statistician III Statistical Research and Training Center Quezon City +632-4260620 [email  protected] gov. ph INPUT-OUTPUT MULTIPLIER ANALYSIS FOR MAJOR INDUSTRIES IN THE PHILIPPINES1 by Madeline B. Dumaua2 ABSTRACT The study aims to assess the impact of the different major industries of the Philippines using Input-Output Multiplier Analysis. It attempts to do this by using the 2000 Input-Output Accounts of the Philippines (I-O Accounts), the most recently published tables by the National Statistical Coordination Board (NSCB). As the economic importance of the 11 major industries is growing among the policy makers and researchers, this study applied input-output technique in determining economic effects to gauge the significance of these industries in generating output, income and employment. Key sectors are identified in term of multipliers; the higher the multiplier, the stronger is the ability of the corresponding sector to create multiple impacts in the economy. The obtained multipliers showed that among major industries, the Manufacturing Industry showed the highest final demand-to-output multiplier; the Construction Industry gained the highest output-to-output multiplier; and Private Services Industry is found to have the highest income and employment multipliers. KEY WORDS: Input-output, Multiplier 1. Introduction Sectors of an economy are naturally interdependent. An input stimulates production in a sector directly, but it may also stimulate production in other sectors as well, where the intensity can be downgraded. The residual effect of an input beyond the intended sector is called multiplier that describes interrelationships among sectors of the economy. The multiplier effect provides a quantification of the direct and indirect effect on growth of the sector, possibly measured in terms of production output. Different economic multipliers like those for output, income, and employment can be used to determine economic effect for an industry. The Leontieff model or the Input-Output model can be used to track the complex web of production linkages among industries in the country within the framework of interdependencies. This study will assess the impact of the different sectors of the economy in terms of output, income and employment. Thus, Input-Output multiplier analysis was performed to determine the effect of the different major industry groups. 2. Objectives of the Study The study aimed to measure the economic effects of the major industry groups using Input-Output Multiplier Analysis. Specifically, the study intended to: 1. easure the multiplier effect of changes in final demand on the output of individual industries and the whole economy (Final Demand-to-Output Impact Multiplier) 1 2 One of the in-house research undertakings of the Research and Information Technology Division (RITD) of the Statistical Research and Training Center (SRTC) of the National Economic and Development Authority (NEDA) Statistician III, Res earch and Information Technology Division (RITD) of the Statistical Research and Training Center (SRTC) of the National Economic and Development Authority (NEDA) 1 2. etermine the impact of changes in each industry’s output on the total output (Outputto-Output Impact Multiplier) 3. find out the impact of changes in each industry’s output on household income (Household Income Multiplier) 4. determine the impact changes of output in an industry on employment (Employment Multiplier) 3. Significance of the Study In economics, the multiplier effect refers to the idea that the initial amount of money invested by government leads to an even greater increase in national income. In other words, an initial change in aggregate demand causes a change in ggregate output of the economy that is multiple of the initial. This measures the degree to which various businesses and households in an economy are interrelated. This measure the impact of a given external change, such as new inv estment, export expansion, start up of a new businesses, on total economic activity in a given community or country, through the respending of new dollars within that economy. The multiplier has been used to justify government spending or taxation relief that will stimulate aggregate demand. Many governments consider spending/tax break as instruments to stimulate aggregate demand. This is usually implemented during a period of recession or economic uncertainty. The money invested by a government is believed to create more jobs, which in turn will mean more spending that further fuel activities in various sectors of the economy. The idea is that the net increase in disposable income by different stakeholders throughout the economy will be greater than the original investment. As this happens, government can increase the gross domestic product by an amount that is greater than an increase in the amount it spends relative to the amount it collects in taxes. Multiplier focuses on the relationship between spending and consumption. It is also referred as expenditure multiplier. The concept holds that a spending, whether initiated by the government, corporations or households, will trigger the national income. Expenditure multiplier does not differentiate between consumption and investment spending. Examples of multipliers include I-O multipliers which are derived from I-O tables and show the impact of spending in certain industry on various economic variable including GDP, employment, output and wages and salaries, etc. . Limitations of the Study The paper makes use of the 2000 Input-Output tables from the National Statistical Coordination Board (NSCB). It only uses I-O multiplier analysis in estimating multipliers. While I-O multipliers can be a rich source of information, they also have some limitations. These include: I-O models treat all inputs as complements and exclude substitutes implying that increases in the demand for one input w ill only lead to demand increases for other inputs. The I-O model does not consider price-adjusting behavior or substitution effects. Because the model is entirely open, there is no scarcity of resources. The economy is assumed to have limitless amounts of all the inputs it requires. 2 I-O models produce a snapshot of the economy at a given point in time. Structural changes in the economy over time will reduce the validity of results produced by I-O models. Analysis based on I-O models does not explicitly consider alternatives and tends to show only benefits of expenditures while ignoring costs. The impacts considered through the I-O model are short-term and at the margin: there is no consideration of whether the economy has the capacity to incorporate the changes and whether changes in production are sustainable or cost competitive. Given these limitations, I-O multipliers can still provide a useful, but rough, initial indication of the economic impact of changes in spending in different industries. 5. Data and Methodology This study was primarily carried out based on the 2000 Input-Output Accounts of the Philippines (I-O Accounts), the most recently published tables by the National Statistical Coordination Board (NSCB). In order to assess the economic effect of all major industries in the whole economy, the Input-Output Multiplier Analysis was used. The major industry groups used in the study include the following: For the employment multiplier analysis, data for the total number of persons employed in each industry was taken from the 2000 Census of Philippine Business and Industry (CPBI) of the National Statistics Office (NSO) while data for the Gross Value-Added (GVA) was taken from 2000 Economic Accounts of the NSCB. Table 1. Major Industry Groups Major Industry Groups Code 01 Agriculture, Fishery and Forestry 02 Mining and Quarrying 03 Manufacturing 04 Construction 05 Electricity, Gas and Water 06 Transportation, Storage and Communication 07 Wholesale and Retail Trade 08 Finance 09 Real Estate 10 Private Services 11 Government Services 5. 1 Computation of Final Demand-to-Output Multiplier The step by step procedure in generating Final Demand-to-Output multiplier analysis is described below: 1. Get the column elements of the inverse matrix for all major industries. 2. Multiply the column elements by the impact variable to get the specific impact on each industry. . Get the total of the column elements of the inverse matrix for all major industries. 4. Multiply the total column elements by the impact variable to get the impact on the entire economy. 3 5. 2 Output-to-Output Multiplier The step by step procedure in generating Output-to-Output multiplier analysis is described below: 1. 2. 3. 4. Obtain the IO inverse matrix for all major industries. Divide each column by its diagonal element. Get the column sums of the output-to-output inverse matrix. The column sums are the output-to-output multipliers for each industry. 5. 3. Household Income Multiplier The step by step procedure in generating Household Income multiplier analysis is described below: 1. Get the household income coefficients of all the major industries in the economy by dividing the compensation of employees by the total input of the corresponding industry. 2. Multiply the column elements of the inverse matrix of all major industries by all the household income coefficients. 3. Add all the products to get the household income multiplier. 5. 4 Employment Multiplier The step by step procedure in generating employment multiplier analysis is described below: 1. Get employment coefficients of all industries in the economy by calculating the employment in each industry and dividing it by gross value-added (GVA). Data for the total number of persons employed in each industry was taken from the 2000 Census of Philippine Business and Industry (CPBI) of the National Statistics Office (NSO). Data for GVA was taken from 2000 Economic Accounts of the NSCB. 2. After getting the employment coefficients, get the employment multiplier. Employment multiplier is computed by multiplying employment coefficient with inverse matrix. This gives the individual effects of construction for each industry. If we sum up the multipliers, this somehow gives an effect of the construction industry in the economy. 3. In doing simulation, i. e. , government increases construction output by One (1) Billion, multiply the 1billion increase to each employment multiplier where the result will provide possible additional jobs in every industry creating a corresponding effect in the whole. 4. These multipliers are additional jobs aside from the existing employment in the construction. In other words, the multiplier analysis assumes that from start to finish, these additional employments were generated already, or in place. The IO multiplier analysis cannot determine whether these additional jobs happened before, during or after the construction stages. 6. Results and Discussion 6. 1 Summary of Multipliers Following the computation procedure presented above, the I-O multipliers were estimated for output, income and employment in the Philippine economy. An I-O model has the ability to identify the important sectors of an economy at a national (or even at a regional level). Key sectors are identified in term of multipliers; the higher the multiplier, the 4 stronger is the ability of the corresponding sector to create multiple impacts in the economy. The sectoral multipliers are used in the impact analysis to estimate the impacts for policy change in all 11 sectors, see Table 2 for details. Among the 11 major industries, the Manufacturing Industry yields the largest finaldemand to output multiplier of 2. 15. The Construction Industry and the Transportation, Communication and Storage Industry constitute the second and third most important output generating industries with both multipliers of around 1. 93, respectively. However, output-to-output multiplier shows that the Construction Industry yields the highest multiplier of 1. 2, which means that a one-peso change in the output of the Construction Industry generates a 1. 92 pesos worth of additional output in the economy. This is followed by Transportation, Communication and Storage and the Private Services, with multipliers of 1. 85 and 1. 70, respectively. Output-to-output multipliers can be used to measure the impact of a change in output in a particular industry on the output of the whole economy. The Private Services Industry is the most important income generating sector with the highest income multiplier of 0. 39. The second most important sector is the Construction Industry in terms of income generation which is holding an income multiplier of 0. 36. The Agriculture, Fishery and Forestry ranks third among the income generating industries with an income multiplier of 0. 33. 5 Table 2. Summary of the Multipliers: Final Demand-to-Output, Output-to-Output, Household Income, and Employment. Final OutputHousehold Total DemandOutput Income Employment Industry Description Output Multipliers Multiplier Multipliers Multipliers Agriculture, Fishery and Forestry 1. 466693 1. 321942 0. 336922 0. 000001 Mining and Quarrying 1. 702768 1. 647777 0. 235379 0. 00002 Manufacturing 2. 152964 1. 340648 0. 265802 0. 000004 Construction 1. 937681 1. 923491 0. 365889 0. 000003 Electricity, Gas and Water 1. 567449 1. 431400 0. 198316 0. 000002 Transportation, Communication and Storage 1. 937634 1. 859610 0. 256182 0. 000003 Trade 1. 658849 1. 611999 0. 265008 0. 000005 Finance 1. 654636 1. 636633 0. 244516 0. 000003 Real Estate 1. 197308 1. 194264 0. 05703 0. 000004 Private Services 1. 919238 1. 701126 0. 391793 0. 000006 Government Services 1. 533628 1. 533628 0. 080845 0. 000001 6 The number of employment generated for a given unit of expenditure/output can be estimated by employment multiplier. The result shows that the Private Services Industry has the highest employment multiplier of 6Ãâ€"10-6. The second highest important sector in generating employment is the Trade (Wholesale and Retail) Industry with a multiplier of 6Ãâ€"10-5 followed by the Manufacturing and Real Estate Industries with both employment multipliers of around 6Ãâ€"10-5. 6. 2 Final Demand-to-Output Multiplier Effect The final demand-to-output multiplier is used to measure the impact of a change in final demand on the output of individual industries and the whole economy. This tells us about the additional output generated in each industry given an impact increase in the investment in each industry (impact variable). Table 3 shows the impact of a 100 million peso increase the investments in the 11 major industries. Results showed that this spending has the greatest impact in the Manufacturing Industry with an additional generated output of 215 million pesos. This is followed by the Construction Industry and the Transportation, Communication and Storage Industry with both an additional output of approximately 193 million pesos. 7 Table 3. Final Demand-to-Output Multiplier Effect for a 100 Million Investment. Industry Output Multipliers Impact Agriculture, Fishery and Forestry 1. 466693 146,669,300 Mining and Quarrying 1. 702768 170,276,800 Manufacturing 2. 152964 215,296,400 Construction 1. 937681 193,768,100 Electricity, Gas and Water 1. 567449 156,744,900 Transportation, Communication and Storage 1. 937634 193,763,400 Trade 1. 658849 165,884,900 Finance 1. 654636 165,463,600 Real Estate 1. 197308 119,730,800 Private Services 1. 919238 191,923,800 Government Services 1. 533628 153,362,800 8 Table 4 shows the inverse matrices of the 11 major industries, which is the direct and indirect effect of a one-peso change in final demand for a particular industry on the output of other industries and the economy as a whole. The sums of column elements of the inverse matrix for the 11 industries are called final demand-tooutput multipliers. The Manufacturing Industry yields the largest output multiplier of 2. 15 among the 11 major industries. Of its 2. 15 multiplier, the additional output generated in the Manufacturing itself for a peso change in the final demand for Manufacturing Industry is 1. 0; an additional output of 0. 19 in the Agriculture, Fishery and Forestry Industry; and an additional generated output of 0. 13 in the Trade Industry. The Construction Sector, which constitutes the second most important output generating industry, has a multiplier of 1. 93. This shows that a peso change in the final demand for the Construction Industry generates 1. 93 pesos worth of additi onal or incremental output in the economy. Moreover, of this total multiplier, a peso change in the final demand for the Construction Industry generates an additional output of 1. 00, 0. 53 and 0. 0 in the Construction, Manufacturing and in the Transportation, Communication and Storage industries, respectively. 9 Table 4. Final Demand-to-Output Impact Multipliers Code 01 02 03 04 05 06 01 1. 109499 0. 045780 0. 195436 0. 066634 0. 030540 0. 073292 02 0. 013579 1. 033373 0. 084080 0. 055157 0. 086973 0. 031180 03 0. 241695 0. 342875 1. 605913 0. 536138 0. 238312 0. 582694 04 0. 001967 0. 013762 0. 002122 1. 007377 0. 002711 0. 002136 05 0. 018788 0. 073066 0. 045204 0. 021301 1. 095046 0. 023748 06 0. 011616 0. 026676 0. 031898 0. 108802 0. 020999 1. 041957 07 0. 028925 0. 037978 0. 131903 0. 058128 0. 042323 0. 059100 08 0. 13211 0. 025827 0. 020688 0. 028335 0. 008581 0. 042086 09 0. 001723 0. 004155 0. 004100 0. 010400 0. 001524 0. 012501 10 0. 025690 0. 099276 0. 031620 0. 045409 0. 040440 0. 068940 11 Total 1. 466693 1. 702768 2. 152964 1. 937681 1. 567449 1. 937634 Source: Input-Output Accounts of the Philippines 2000, NSCB. 07 0. 058268 0. 023337 0. 313948 0. 001075 0. 016836 0. 125663 1. 029063 0. 043095 0. 009477 0. 038087 1. 658849 08 0. 034172 0. 014104 0. 235991 0. 004210 0. 029420 0. 069130 0. 023819 1. 011000 0. 037840 0. 194950 1. 654636 09 0. 009747 0. 004625 0. 069402 0. 008938 0. 005641 0. 008494 0. 007558 0. 034009 1. 002549 0. 46345 1. 197308 10 0. 091426 0. 028537 0. 491699 0. 000990 0. 049594 0. 030003 0. 053011 0. 033758 0. 012004 1. 128216 1. 919238 11 0. 039646 0. 014503 0. 240350 0. 025834 0. 023496 0. 032847 0. 026221 0. 037171 0. 011392 0. 082168 1. 000000 1. 533628 10 6. 3 Output-to-Output Multiplier Effect In many instances, the impact on the economy comes from a change in output instead of a change in final demand. In this case, an output-to-output multiplier analysis is required. This gives us information that a one-peso or one-u nit change in the industry’s output will generate pesos worth of additional/incremental output in the economy. Table 5 shows the individual and total effects of a one-peso change in the output of a particular industry. Out of the 1. 92 multiplier for the Construction, the Construction, Manufacturing and the Transportation, Communication and Storage industries generated additional outputs of 1. 0, 0. 53, and 0. 10 respectively, for every peso change in the Construction output. 11 Table 5. Output-to-Output Impact Multipliers Code 01 02 03 04 01 1. 000000 0. 044302 0. 121698 0. 066146 02 0. 012239 1. 000000 0. 052357 0. 054753 03 0. 217842 0. 331802 1. 000000 0. 532212 04 0. 001773 0. 013318 0. 001321 1. 000000 05 0. 16934 0. 070706 0. 028148 0. 021145 06 0. 010470 0. 025814 0. 019863 0. 108005 07 0. 026070 0. 036751 0. 082136 0. 057702 08 0. 011907 0. 024993 0. 012882 0. 028128 09 0. 001553 0. 004021 0. 002553 0. 010324 10 0. 023155 0. 096070 0. 019690 0. 045076 11 Total 1. 321942 1. 647777 1. 340648 1. 923491 05 0. 027889 0. 079424 0. 217627 0. 002476 1. 000000 0. 019176 0. 038650 0. 007836 0. 001392 0. 036930 1. 431400 06 0. 070341 0. 029924 0. 559230 0. 002050 0. 022792 1. 000000 0. 056720 0. 040391 0. 011998 0. 066164 1. 859610 07 0. 056622 0. 022678 0. 305081 0. 001045 0. 016361 0. 122114 1. 000000 0. 041878 0. 09209 0. 037011 1. 611999 08 0. 033800 0. 013951 0. 233423 0. 004164 0. 029100 0. 068378 0. 023560 1. 000000 0. 037428 0. 192829 1. 636633 09 0. 009722 0. 004613 0. 069226 0. 008915 0. 005627 0. 008472 0. 007539 0. 033923 1. 000000 0. 046227 1. 194264 10 0. 081036 0. 025294 0. 435820 0. 000877 0. 043958 0. 026593 0. 046987 0. 029922 0. 010640 1. 000000 1. 701126 0 0 0 0 0 0 0 0 0 0 1 1 12 6. 4 Household Income Multiplier Effect Moreover, changes in an industry’s output can impact on household income. To quantitavely determine the impact of changes in each industry’s output on household income, a household income ultiplier analysis is needed. This tells us about the additional household income in the whole economy due to a one-peso or one-unit cha nge in final demand for each industry. Table 6 shows the individual and total effect of a one-peso change in the final demand for each major industry. Private Services Industry is found to be the most important income generating sector with the highest income multiplier of 0. 39. This means that a peso increase in final demand of private services implies an increase in household income by 0. 39. For individual effects, additional household income of 0. 29, 0. 02 and 0. 4 are generated in the Private Services itself, Manufacturing, and the Agriculture, Fishery and Forestry respectively, due to a one-peso change in the final demand for Private Services. 13 Table 6. Household Income Multipliers. Code 01 02 03 04 01 0. 293397 0. 012106 0. 051681 0. 017621 02 0. 001810 0. 137770 0. 011210 0. 007354 03 0. 023844 0. 033825 0. 158427 0. 052891 04 0. 000478 0. 003347 0. 000516 0. 244972 05 0. 002275 0. 008849 0. 005475 0. 002580 06 0. 001532 0. 003519 0. 004207 0. 014351 07 0. 005075 0. 0066 64 0. 023145 0. 010200 08 0. 001846 0. 003608 0. 002890 0. 003959 09 0. 000043 0. 000104 0. 000102 0. 00259 10 0. 006621 0. 025587 0. 008150 0. 011704 11 Total 0. 336922 0. 235379 0. 265802 0. 365889 05 0. 008076 0. 011595 0. 023510 0. 000659 0. 132620 0. 002770 0. 007426 0. 001199 0. 000038 0. 010423 0. 198316 06 0. 019381 0. 004157 0. 057484 0. 000519 0. 002876 0. 137434 0. 010370 0. 005880 0. 000312 0. 017768 0. 256182 07 0. 015408 0. 003111 0. 030972 0. 000261 0. 002039 0. 016575 0. 180568 0. 006021 0. 000236 0. 009816 0. 265008 08 0. 009036 0. 001880 0. 023281 0. 001024 0. 003563 0. 009118 0. 004179 0. 141245 0. 000943 0. 050246 0. 244516 09 0. 002578 0. 000617 0. 006847 0. 002174 0. 000683 0. 001120 0. 001326 0. 04751 0. 024990 0. 011945 0. 057030 10 0. 024177 0. 003805 0. 048507 0. 000241 0. 006006 0. 003957 0. 009302 0. 004716 0. 000299 0. 290783 0. 391793 11 0. 010484 0. 001934 0. 023711 0. 006282 0. 002846 0. 004333 0. 004601 0. 005193 0. 000284 0. 021178 0. 080845 14 6. 5 Employment Multiplier Effect Changes in every industry’s output can impact on employment. To quantitavely determine the impact changes of output in an industry on employment, an employment multiplier analysis is done. This shows us the additional/incremental employment in the whole economy due to a one-peso or one-unit change in each industry’s output. Given a 100 Billion peso increase in the investment, the number of additional employment generated can be estimated by employment multiplier. The result shows that the Private Services Industry has the highest employment multiplier effect of 572, 637 additional employment in the whole economy due to a 100 billion change in the final demand for Private Services. The second highest important sector in generating employment is the Trade (Wholesale and Retail) Industry with a multiplier effect of 504, 821 followed by the Manufacturing Industry with additional employment of 430, 785. 15 Code 01 02 03 04 05 06 07 08 09 10 11 Total Table 7. Employment Multiplier Effect Due to a 100 Billion Investment. 01 02 03 04 05 06 07 35,541 1,467 6,261 2,135 978 2,348 1,867 1,108 84,309 6,860 4,500 7,096 2,544 1,904 51,498 73,057 342,175 114,236 50,778 124,156 66,894 194 1,359 209 99,452 268 211 106 1,553 6,039 3,736 1,761 90,508 1,963 1,392 1,758 4,036 4,826 16,463 3,177 157,656 19,014 10,921 14,338 49,800 21,946 15,979 22,313 388,519 2,324 4,542 3,639 4,983 1,509 7,402 7,579 589 1,420 1,401 3,554 521 4,273 3,239 9,651 37,294 11,878 17,058 15,192 25,898 14,308 115,136 227,861 430,785 286,088 186,005 348,762 504,821 08 1,095 1,151 50,283 416 2,432 10,460 8,993 177,811 12,933 73,234 338,807 9 312 377 14,788 882 466 1,285 2,853 5,981 342,644 17,410 387,000 10 2,929 2,328 104,767 98 4,099 4,540 20,014 5,937 4,103 423,823 572,637 11 1,270 1,183 51,212 2,550 1,942 4,970 9,900 6,538 3,893 30,867 114,325 16 7. Conclusion and Recommendation This paper quantified the multipliers of the 11 major industries for the Philippine economy using in put-output technique. As the economic importance of the 11 major industries is growing among the policy makers and researchers, this study applied input-output technique to determine multipliers that will measure the significance of these industries in generating output, income and employment. The obtained multipliers showed that among major industries, the Manufacturing Industry showed the highest output multiplier; Construction Industry yielded the highest output-to-output multiplier; and Private Services Industry is found to have the highest income and employment multipliers. The results of the study will still have to be evaluated when the NSCB will release the latest I-O table. 8. Future Directions Since the study utilized a competitive type of I-O table wherein each cell element does not explicitly distinguish the domesticallyproduced from the imported, the study is bound to construct a noncompetitive or domestic type of IO table wherein the import content of each I-O transaction is netted out. After which, the Leontief inverse matrix will be re-estimated which will be used to calculate domestic multipliers for the major industries. This is important in order to be able to quantify correctly the impact of final demand on the various economic variables. 9. Appendices 9. Input-Output Analysis There are a number of methodologies developed to determine the multipliers. The most widely used approach is the input-output technique. The major strength of the input-output analysis is that it provides detailed information on the direct and indirect effects of spending on all economic measures for different industries in the 17 local economy (Loomis and Walsh, 1997). Th erefore, in order to satisfy the aforementioned objectives, the methodology employed in this paper in based on Leontief input-output techniques where structure of an economy is analyzed in terms of inter-relationships between economic sectors (e. . Miller and Blair, 1985). The inputoutput technique of a particular economy represents the flow of goods and services among its different industries for a particular time period. In the framework of the input-output technique, the relationships between economic sectors can be described in a system of linear equations where total output produced by each sector is either consumed as an intermediate input by other sector, or, sometimes internally by the producing sector itself, or, by the final demand sector, or both. The presentation of the flow of goods and services could be expressed either by physical units or in money terms. To define, let there be an economy with n-producing sectors and a final demand sector. Total output of sector i will be: Supply = Demand n Qi = ? qij + Fi j =1 (1) where Qi = gross output of industry i; qij = the sales of industry i to industry j; Fi = the final demand vector; i = 1, †¦, n. Let ij be the technical (input) coefficient which represents the amount (value) of sector i’s output needed to produce one unit (one peso) of sector j’s output; thus using the assumption of constant production coefficient, we get: a aij = qij Qi or qij = aij Q j This means that the total value of purchases of goods and services by sector j from sector i is aij Q j . Therefore, for a given target of final demand on goods and services, F, this relation defines how much each producing industry must produce in order to satisfy a particular bundle of final demand on goods and services, i. e. , Equation (1) in reduced matrix form can be written as: 18 Q = AQ + F Solving the Equation (2) can be found as: (2) (3) Q = [I ? A] F ? and [I ? A] is the total requirement matrix or mostly known as Leontief inverse matrix. ? In equation (3), Q is the output vector; I is an identity matrix The general solution of Equation (3) determines how much each industry of the economy must produce in order to satisfy a given level of final demand. It is mandatory that [I ? A] should be a equal to zero to have a unique solution in the form of [I ? A] . When ? non-singular matrix meaning that the determinant of [I ? A] does not the Leontief inverse matrix is assumed to be [I ? A]? = Z, then zij ’s stand for the elements of the Leontief inverse matrix. Each element of the Leontief inverse matrix shows the direct and indirect requirements of output sector i per unit of final demand. . 2 Output Multiplier The final demand-to-output multiplier is used to measure the impact of a change in final demand on the output of individual industries and the whole economy. This will tell us about the additional output generated in each industry given an impact increase in the investment in each industry (impact variable). An output multiplier for sector j is defined as the total value of pr oduction in all sectors of the economy that is necessary in order to satisfy a peso’s worth of final demand for sector j’s output. For the simple output multiplier, this total production is the direct and indirect output effect, obtained from a model in which households are exogenous. The initial output effect on the economy is defined to be simply the initial peso’s worth of sector j output needed to satisfy the additional final demand. Then formally, the output multiplier is the ratio of the direct and indirect effect to the initial effect alone. 19 The output multiplier measures the sum of direct and indirect output requirements from all sectors needed to deliver one additional peso of output of i industry to final demand. It is derived by summing the zij ’s or the entries in the column under industry i in the Leontief inverse matrix tables. Although the output multiplier represents total requirements per unit of final output, it is not particularly useful concept except as indicator of the degree of structural interdependence between each sector and the rest of the economy. In economic impact studies we are more usually concerned with income or employment generating effects, and these require income or employment multipliers. 9. 3 Income Multiplier Changes in an ndustry’s output can impact on household income. To quantitatively determine the impact of changes in each industry’s output on household income, a household income multiplier analysis is needed. This tells us about the additional household income in the whole economy due to a one-peso or one-unit change in final demand for each industry. The income multiplier is obtained by multiplying the row vector of income coefficient s, say e with the zij ’s, which are entries in the column under industry i in the Leontief inverse matrix tables. Row vector of income coefficients or e are referred to as salaries and wages (compensation) for each industry divided by the corresponding output. This gives us the following equation for income multiplier: ? ? I = e[I ? A] 9. 4 Employment Multiplier ? ?1 (4) Impact analyses are frequently preoccupied with employmentcreating effects of industrial expansion, because policymakers may be primarily and legitimately concerned in forecasting jobs in a particular area. For this reason, it is often useful to be able to derive not only income multipliers from an I-O model, but as well as employment multipliers. 20 The following method was used to estimate employment multipliers. The employment coefficients, l , defined as employment per million pesos of outputs, was multiplied by the zij ’s, which are entries in the column under industry i in the Leontief inverse matrix tables, in order to obtain the multiplier. Mathematically, employment multi ? plier is expressed as follows: L = l [I ? A] 10. References ? ?1 (5) Miller, Ronald E. and Blair, Peter D. Input-Output Analysis: Foundations and Extensions. Englewoods Cliffs, N. J. Prentice Hall 1985. Thijs Ten Raa. The Economics of Input-Output Analysis. Cambridge University Press 2005. National Statistical Coordination Board. The 2000 Input-Output Accounts of the Philippines. Economics Statistics Office 2000. National Statistics Office. 2000 Census of Philippine Business and Industry. Presentation Material of Dr. Cid L. Terosa, UA&P Professor. 21

Strategic Marketing at Burberry

Content Page Introduction2 1. Business planning and developing a strategy. 3 2. 1. The formation of Burberry’s new strategic business plan. 3 2. 2. Business strategy, vision and mission 4 2. 3. 1. Successful strategy and achieving the goals based on analysis. 5 2. 3. 2. Vision and mission7 2. Protect, Explore and Inspire. Burberry values. 8 3. 3. Values8 3. 4. Classification of Burberry values. 8 3. 5. 3. Protect8 3. 5. 4. Explore9 3. 5. 5. Inspire 10 3.Monitoring and evaluating of Burberry strategic goals and objectives. 11 Conclusion 12 References 13 Introduction The report below tells about the history and development of the iconic luxury brand from Britain, Burberry. It reflects the company’s mission, vision and core purpose, which consequently form the values of the brand. The report indicates the key strategic goals and objectives, which form the competitive advantage of the company, how they are being monitored and evaluated.Having been found as a small shop in B asingstoke, Hampshire, by a young draper Thomas Burberry in 1856 and developed into a large world-know brand ever since, Burberry is one of the first names that springs in mind when it comes to fashion and luxury. [4] The company went through many-years history of change and development. However, the core Burberry product still remains the trench coat made out of the brand weatherproof but breathable Gabardine invented and introduced by Thomas Burberry himself in 1880. [4] Today, according to Business Weekly, Burberry is the 98th most valuable brand. 10] 1. Business planning and developing a strategy Creating the strategy of an organisation is a part of business planning, on one hand, but it is the essence of the strategic planning on the other, where the difference between the strategic plans and the business planning is only in timing of implementing and the process of evaluating the two. Different authors writing in the field of strategic marketing give various definitions of str ategic planning. However, all of them tend to agree in the fact that it always includes the major points below. Vision – developing a common â€Å"vision for the future† or a â€Å"conceptualization† of where an organisation wants or desires to be in the long-term;[10] * Assessment – appraising or determining where an organisation is currently (i. e. , its goals, objectives, activities, results, etc. );[10] * Strategies – identifying how an organisation will actually realise (via concrete and predetermined actions) its mission, goals, and objectives;[10] * Measurement – evaluating the progress of an organisation in the implementation of its action strategies. [10]The report below will be based on the resumptive understanding of the term as a process of formulating of the mission, vision and goals of the organization and choosing the specific paths for outlining and gaining the desired resources to be used in order to provide the successful f unctioning of an organisation in future. Strategic planning is a useful tool in making the decisions concerning the total management of an organisation. Its main purpose is to ensure the right amount of innovation and modification for the organisation to be able to respond to the changes on the market.However, creating a strategy does not lead to an immediate action, but it sets up the general direction for the company to follow in order for its fence-mending and growth. 2. 1. The formation of Burberry’s new strategic business plan One of the main features that characterizes the strategic plan is its possibility to be adapted to the ever changing circumstances initiated by both internal and external factors. Thus over the decades Burberry has been changing its strategy and approach to trading.So when the age of the globalization brought new strong competitors into the market new ways of winning the customers loyalty and preference were to be found. In the 2006 the current CEO Angela Ahrendts joins the company replacing Rose Maria Bravo, who managed to greatly expand the Burberry market share in the US. [6] Ahrendts modernizes every aspect of the company’s behaviour and positioning itself on the market having chosen an innovative five year strategic business plan. 2. 2. Business strategy, vision and missionAccording to the new plan the company concentrates its investment efforts on opening its own stores rather than on the wholesale, especially in London. The new CEO recognizes Burberry’s presence in its genuine way and major PR activity in this city precisely, as another way to emphasize the British heritage of the brand. However, Ahrendts points out there are 25 such â€Å"Londons †, where Burberry will strive for recognition and loyalty, which include such metropolises as Paris, New York, Hong Kong, Dubai, etc. 12] As due to the fact that the company produces luxury goods Ahrendts prefers to play more or less safe and concentrate on those parts of the world which are likely to be protected from the wider economic problems. As another crucial factor for the growth and development that Ahrendts chooses, predicting the future customer be younger, is the company to not maintain their traditional product line and merchandising way only, but to enhance it with the new design and presentation to be able to satisfy the demand of the new type of a customer.Thus the new strategy with the new vision and mission appeared that has brought changes into every area of the company. 2. 3. 1. Successful strategy and achieving the goals based on analysis According to Michael Porter â€Å"Competitive strategy is about being different. It means deliberately choosing different set of activities to deliver a unique mix of value†. [13]The creation and the development of a new strategy to manage such a diverse business with the global outreach as Burberry is very complex in nature. Depending on various both internal and extern al factors it often requires to be made in the uncertain situations.It also often involves the radical change in the current culture of an organisation which is always uneasy for the employees and may adversely affect the performance of the organisation. Being an international company with the Global outreach makes it challenging for the company like Burberry to develop and maintain the competitive strategy that will encourage financial growth and gain advantage on the market. Nevertheless, Angela Ahrendts chooses the most ambitious and strategic plan Burberry has had in almost 50 years. * Leveraging the franchise[4]Where the goals are brand momentum by consistent global articulation, marketing innovation and product excellence. * Intensifying the development of non-apparel[4] By focusing on the yet under-penetrated non-apparel categories, such as men’s collections, soft accessories collections and licensing the eyewear, fragrance, make-up and watches products globally. * Acc elerating retail-led growth[4] To change the static wholesale model of the company to a dynamic retail model by driving the productivity, putting the customer needs in the centre, and investment into opening new stores. Investing in the underpenetrated markets[4] The goals are engaging China, developing India and the Middle East markets and elevating the wholesale presence. * Pursuing operational excellence[4] To be recognised not only by operational excellence, but by product and marketing excellence. However, despite the most well-considered strategy a company is always dependent on both internal and external factors able to make an impact on its development and trade. PESTEL method will help to analyse the macro external environment Burberry may find difficult to deal with in order to realise its strategic plan.Political| Economical| Social| Technological| Environmental| Legal| Being an international company may create problems with possible tensions between the governments of th e countries where Burberry trading takes place| Continuous recession| Fairtrade responsibilitiesAnti-fur/ leather campaigns| New highly technological approaches to selling , buying and advertising the product appear| The impact on the Planet while manufacturing and transporting the goods | Different taxation and trading rules and regulations in different countries|However, not only the macro external factors, but the micro external factors too might cause obstacles for the company’s strategy. Michael Porter’s Five Forces analyses gives the clearest understanding of the micro external environment, which includes the threat of the existing competitive rivalry, threat of bargaining power of the suppliers, threat of substantial products, as well as the threat of the customer bargaining power and the threat of the new entrants. It can be seen from the scheme, that Burberry’s main existing competitors include Stella McCartney in the market of clothing and shoes (appar el); Hermes in the non-apparel market, e. . bags and scarfs; and Chanel to talk about make-up. Moreover there is also a threat from the substantial products, such as those produced by Sisley, Ted Baker and Karen Miller, which are not luxury brands, however do have a reputation of a great quality and they are also British. Which means in times of recession people might switch to them. There is a threat from the suppliers in case they would increase the price, as Burberry only works with those the members of the Ethical Trading Action Group.There is a threat coming from the customers too due to the fact that most of the Burberry products are fashion oriented, which means once they are out of fashion, people will refuse buying them. However, the threat of the new entrants is not essential, as even though the new brands may offer novelty, they cannot offer the name with such a rich background and heritage that Burberry has. All of these factors must be taken into consideration for Burbe rry current strategy to be successful. 2. 3. 2. Vision and missionWith the appointing of Angela Ahrendts as a CEO in 2006 when the Internet was booming bursting the opportunities of the global trade with its no-boarders possibilities, Burberry steps on a completely new path of high-tech cooperation with its customer. [5] With the core Burberry ideology of â€Å"The faster we move forward, it becomes even more critical to look back and never forget who we are and never forget where we came from. And what made this brand such a great global luxury brand today†[2] in mind Ahrends sets the new core purpose for Burberry. We had a vision† – she admits in one of the interviews – â€Å"And the vision was to be the first company who was fully digital from end-to-end†. [2] Ever since the company has been working on integrating various digital approaches to its business. Burberry’s advertising campaigns and catwalk shows became more and more technologic ally complex whereas the on-line trading on the contrary became easier and more available by the company’s partnering with various on-line selling platforms to take that vision and built the social enterprise.The experience expected was that the customer would have the total access to Burberry across any device anywhere and would get exactly the same feeling of the brand, feeling of the culture, regardless of where, when, how they were accessing the brand. Everyone now should be able come into Burberry world and see the Burberry journey and mission. The new vision enhanced the Burberry mission to sell its â€Å"distinctive Britishness† to the world with the new flavour of community that every customer is believed to become a part of buying or at least being interested in a Burberry product.Such attitude intends to create greater customer’s loyalty to the brand as this is the community, where one’s opinion in a way of a feedback is valued and appreciated. Even the personal preferences of how the core Burberry product should look like is taken into consideration from now on as the company launched www. artofthetrench. com web platform, where anyone can post their photos wearing a Burberry trench, moreover, can create their own trench coat based on the iconic trench from Burberry. Ahrendts goal is to deepen, broaden and vary the communication between the company and the customer through every activity the company is involved in.She emphasizes on the vital necessity of the cross-channel communication to be â€Å"totally connected to everyone who touches your brand†. [2] The new vision and the new additions to the established mission of the company have formed the brand’s new strategic intentions 2. Protect, Explore and Inspire. Burberry values. 3. 3. Values Burberry is a brand with over 150 years of history. [6] All that time the company has been run by the efforts of many people and, naturally, these people might have bee n of a completely different personalities, views and opinions. However, being a company, which in this case is Burberry, draw hese people together united not only by common vision of where the company is going, but also by the values, which in a context of a corporate culture set the behavioural norms of the company through years for everyone who entered it. Edgar H. Schein describes corporate values as â€Å"A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems†. 7] Burberry defines their core values as Protect, Explore and Inspire. Angela Ahrendts, Burberry’s CEO, often refers to the company as the â€Å"new and old company†[9] and such description definitely reflects the way the company constantly strives for the new opportunities, but always staying faithful to its old priorities. The essence of the Protect, Explore and Inspire company’s core values can be explained through the objectives of Burberry as an organization. 2. 2. Classification of Burberry values 2. 2. 1. Protect 1. Cultural value of the company to traditionally remain a â€Å"quintessentially British† brand.Burberry is proud of its rich heritage which has seen over a 150 years of British history. Thus the company is passionate about the the authenticity of their trade mark and core product in design and purpose, such as world-wide recognized trademark check and Prorsum horse logo and a traditional modern classic style trench coat. 2. Environmental value aims the environmental excellence of the company. Burberry is continuously aware about the environmental issues, such as climate change and carbon dioxide emissions and animal welfare, for example.The company is a member of the UN Global Compact and uses the Compact’s Ten Principles to guide its Corporate Responsibility activities. It is listed on the FTSE4Good Index and achieved the Carbon Trust Standard. [15] The work of the Business for Social Responsibility Sustainable Luxury Working Group, of which Burberry was a founding member, also continued this year, focusing on animal welfare guidelines and the exotic skins supply chain. As a result, the release of a common Animal Welfare Policy by the Group was communicated to Burberry suppliers, detailing its high expectations in respect of welfare standards. 15] Burberry is also a member of the Leather Working Group, supporting its efforts to improve transparency in the leather industry. Burberry does not utilise sandblasting on any of its products manufactured by or on behalf of the Group. [15] 3. Ethical value is in the desire of the brand to ensure the rights of their employees are highly valued and carefully followed. Burberry constantly shows its striving towards the improved C orporate Responsibility (CR) performance.To achieve long-term improvements in labour conditions, Burberry provides support and resources to suppliers to empower them to take responsibility for their factory and subcontractor conditions. The CR team delivers supplier training covering the Group’s ethical trading expectations, management systems and counsel on transparency and standards for subcontractors. [5] Burberry strongly believes that a policy of equal opportunity in employment is integral to the strength and growth of its business as a global brand with a diverse stakeholder and customer base.The company aims to ensure that the most capable job applicants are recruited and the most competent employees in the company progress. All decisions about people’s employment are based solely on an objective assessment of their suitability for the job. Burberry aims to maintain a working environment free from harassment or intimidation on discriminatory grounds and ensures that employment conditions and job requirements reflect its commitment to equal opportunities. [5] 2. 2. 2. Explore Burberry values in that area are very much business oriented.Thomas Burberry, the founder of the brand, explored the world of outerwear of his generation by inventing his sensational waterproof Gabardine and a trench coat, which none has ever seen nor worn before. Today Burberry’s aims to expand its production range to make it as diverse as possible to increase the market share. However at the moment the range already goes from the core innovative outerwear to not only womenswear and menswear, but to the non-apparel items, e. g. accessories, watches, childrenswear and even some home decoration items. 8] Burberry has always been aiming for the new markets: first sports and outdoors, then military usage and later civilian clothing. Now that the company has established itself on the different types of market, it is striving for the geographical expansion taking mar kets throughout the world, with a balance across major geographic regions. 2. 2. 3. Inspire They are the Burberry social objectives. Burberry believes that contributing into the local communities the company works with will make a positive impact.In 2008 Burberry established the Burberry Foundation charity organisation the purpose of which was to help young people realise their potential through fashion and creativity, built their confidence and self-esteem. [9] 3. Monitoring and evaluating of the strategic goals and objectives Ahrendts approach to monitoring and evaluating of the strategy execution and achieving the goals is â€Å"Divide and conquer†. According to that there were particular teams created to monitor and evaluate particular aspect of the new strategy. Design team, headed by Chief Creative Office, responsible for everything the consumer sees, including merchandising and creative media;[4] †¢Marketing team responsible for integrated advertising, PR and comm unications functions, which together focus on building and elevating brand awareness through traditional and digital media;[4] †¢Digital commerce newly-formed team, driving digital commerce globally to accelerate the brand’s digital leadership position in the luxury sector and help unlock the huge opportunities in this high-growth channel;[4] †¢Merchandising and planning team, which assorts, procures, and analyses the global collections in alignment with brand initiatives and commercial opportunities. [4] Every year Burberry reveals their annual results and achievements according to the itinerary in their annual report. ConclusionA straight forward highly innovative strategy by the new Burberry CEO caused uncertain reaction from different people in 2006 as well as it still causes doubts. Some think those were unnecessary changes, which made Burberry loose its original look and spirit, and some believe it was the best thing that have happened to Burberry in the last 50 years. However, the facts and numbers indicate that Burberry grew up to 500 stores in over 50 countries and led to increase the total revenue up to +23% in five years by September 2012 with the on-line sales increase in 50%. [3] Almost certainly the course has been changing during those five years due to the macro and micro external factors, which were indicated above.Nonetheless, it is obvious that creating a relevant and detailed strategic business plan and a consistent monitoring of its results and execution are crucial for a successful management of the company. Also, the earliest possible setting of the strategic goals and stating the company’s vision and mission and staying faithful to them makes the strategic plan effective. And in conclusion, understanding the values of an organisation will keep the corporate culture of the company stable, which is directly linked to productivity and job satisfaction among employees. References 1. Angela Ahrendts. (2011). Burberry uses salesforce com to create the ultimate Social Enterprise. Available: http://www. youtube. com/watch? v=oRpLo44nUEQ. Last accessed 13. 12. 2012. 2.Angela Ahrendts. (2011). The Young-Old Company – Angela Ahrendts, Burberry. Available: http://www. youtube. com/watch? v=_i50d6wiCBc. Last accessed 13. 12. 2012. 3. Burberry. (2012). Annual report. Available: http://www. burberryplc. com/documents/full_annual_report/burberry_ar_final_web_with-urls_indexed. pdf. Last accessed 13. 12. 2012 4. Burberry. (2012). Annual report. Available: http://www. burberryplc. com/documents/full_annual_report/burberry_ar_final_web_with-urls_indexed. pdf. Last accessed 13. 12. 2012. 5. BW staff. (2009). The 100 Best Global Brands 2009. Available: http://images. businessweek. com/ss/09/09/0917_global_brands/4. htm . Last Strategic Marketing at Burberry Content Page Introduction2 1. Business planning and developing a strategy. 3 2. 1. The formation of Burberry’s new strategic business plan. 3 2. 2. Business strategy, vision and mission 4 2. 3. 1. Successful strategy and achieving the goals based on analysis. 5 2. 3. 2. Vision and mission7 2. Protect, Explore and Inspire. Burberry values. 8 3. 3. Values8 3. 4. Classification of Burberry values. 8 3. 5. 3. Protect8 3. 5. 4. Explore9 3. 5. 5. Inspire 10 3.Monitoring and evaluating of Burberry strategic goals and objectives. 11 Conclusion 12 References 13 Introduction The report below tells about the history and development of the iconic luxury brand from Britain, Burberry. It reflects the company’s mission, vision and core purpose, which consequently form the values of the brand. The report indicates the key strategic goals and objectives, which form the competitive advantage of the company, how they are being monitored and evaluated.Having been found as a small shop in B asingstoke, Hampshire, by a young draper Thomas Burberry in 1856 and developed into a large world-know brand ever since, Burberry is one of the first names that springs in mind when it comes to fashion and luxury. [4] The company went through many-years history of change and development. However, the core Burberry product still remains the trench coat made out of the brand weatherproof but breathable Gabardine invented and introduced by Thomas Burberry himself in 1880. [4] Today, according to Business Weekly, Burberry is the 98th most valuable brand. 10] 1. Business planning and developing a strategy Creating the strategy of an organisation is a part of business planning, on one hand, but it is the essence of the strategic planning on the other, where the difference between the strategic plans and the business planning is only in timing of implementing and the process of evaluating the two. Different authors writing in the field of strategic marketing give various definitions of str ategic planning. However, all of them tend to agree in the fact that it always includes the major points below. Vision – developing a common â€Å"vision for the future† or a â€Å"conceptualization† of where an organisation wants or desires to be in the long-term;[10] * Assessment – appraising or determining where an organisation is currently (i. e. , its goals, objectives, activities, results, etc. );[10] * Strategies – identifying how an organisation will actually realise (via concrete and predetermined actions) its mission, goals, and objectives;[10] * Measurement – evaluating the progress of an organisation in the implementation of its action strategies. [10]The report below will be based on the resumptive understanding of the term as a process of formulating of the mission, vision and goals of the organization and choosing the specific paths for outlining and gaining the desired resources to be used in order to provide the successful f unctioning of an organisation in future. Strategic planning is a useful tool in making the decisions concerning the total management of an organisation. Its main purpose is to ensure the right amount of innovation and modification for the organisation to be able to respond to the changes on the market.However, creating a strategy does not lead to an immediate action, but it sets up the general direction for the company to follow in order for its fence-mending and growth. 2. 1. The formation of Burberry’s new strategic business plan One of the main features that characterizes the strategic plan is its possibility to be adapted to the ever changing circumstances initiated by both internal and external factors. Thus over the decades Burberry has been changing its strategy and approach to trading.So when the age of the globalization brought new strong competitors into the market new ways of winning the customers loyalty and preference were to be found. In the 2006 the current CEO Angela Ahrendts joins the company replacing Rose Maria Bravo, who managed to greatly expand the Burberry market share in the US. [6] Ahrendts modernizes every aspect of the company’s behaviour and positioning itself on the market having chosen an innovative five year strategic business plan. 2. 2. Business strategy, vision and missionAccording to the new plan the company concentrates its investment efforts on opening its own stores rather than on the wholesale, especially in London. The new CEO recognizes Burberry’s presence in its genuine way and major PR activity in this city precisely, as another way to emphasize the British heritage of the brand. However, Ahrendts points out there are 25 such â€Å"Londons †, where Burberry will strive for recognition and loyalty, which include such metropolises as Paris, New York, Hong Kong, Dubai, etc. 12] As due to the fact that the company produces luxury goods Ahrendts prefers to play more or less safe and concentrate on those parts of the world which are likely to be protected from the wider economic problems. As another crucial factor for the growth and development that Ahrendts chooses, predicting the future customer be younger, is the company to not maintain their traditional product line and merchandising way only, but to enhance it with the new design and presentation to be able to satisfy the demand of the new type of a customer.Thus the new strategy with the new vision and mission appeared that has brought changes into every area of the company. 2. 3. 1. Successful strategy and achieving the goals based on analysis According to Michael Porter â€Å"Competitive strategy is about being different. It means deliberately choosing different set of activities to deliver a unique mix of value†. [13]The creation and the development of a new strategy to manage such a diverse business with the global outreach as Burberry is very complex in nature. Depending on various both internal and extern al factors it often requires to be made in the uncertain situations.It also often involves the radical change in the current culture of an organisation which is always uneasy for the employees and may adversely affect the performance of the organisation. Being an international company with the Global outreach makes it challenging for the company like Burberry to develop and maintain the competitive strategy that will encourage financial growth and gain advantage on the market. Nevertheless, Angela Ahrendts chooses the most ambitious and strategic plan Burberry has had in almost 50 years. * Leveraging the franchise[4]Where the goals are brand momentum by consistent global articulation, marketing innovation and product excellence. * Intensifying the development of non-apparel[4] By focusing on the yet under-penetrated non-apparel categories, such as men’s collections, soft accessories collections and licensing the eyewear, fragrance, make-up and watches products globally. * Acc elerating retail-led growth[4] To change the static wholesale model of the company to a dynamic retail model by driving the productivity, putting the customer needs in the centre, and investment into opening new stores. Investing in the underpenetrated markets[4] The goals are engaging China, developing India and the Middle East markets and elevating the wholesale presence. * Pursuing operational excellence[4] To be recognised not only by operational excellence, but by product and marketing excellence. However, despite the most well-considered strategy a company is always dependent on both internal and external factors able to make an impact on its development and trade. PESTEL method will help to analyse the macro external environment Burberry may find difficult to deal with in order to realise its strategic plan.Political| Economical| Social| Technological| Environmental| Legal| Being an international company may create problems with possible tensions between the governments of th e countries where Burberry trading takes place| Continuous recession| Fairtrade responsibilitiesAnti-fur/ leather campaigns| New highly technological approaches to selling , buying and advertising the product appear| The impact on the Planet while manufacturing and transporting the goods | Different taxation and trading rules and regulations in different countries|However, not only the macro external factors, but the micro external factors too might cause obstacles for the company’s strategy. Michael Porter’s Five Forces analyses gives the clearest understanding of the micro external environment, which includes the threat of the existing competitive rivalry, threat of bargaining power of the suppliers, threat of substantial products, as well as the threat of the customer bargaining power and the threat of the new entrants. It can be seen from the scheme, that Burberry’s main existing competitors include Stella McCartney in the market of clothing and shoes (appar el); Hermes in the non-apparel market, e. . bags and scarfs; and Chanel to talk about make-up. Moreover there is also a threat from the substantial products, such as those produced by Sisley, Ted Baker and Karen Miller, which are not luxury brands, however do have a reputation of a great quality and they are also British. Which means in times of recession people might switch to them. There is a threat from the suppliers in case they would increase the price, as Burberry only works with those the members of the Ethical Trading Action Group.There is a threat coming from the customers too due to the fact that most of the Burberry products are fashion oriented, which means once they are out of fashion, people will refuse buying them. However, the threat of the new entrants is not essential, as even though the new brands may offer novelty, they cannot offer the name with such a rich background and heritage that Burberry has. All of these factors must be taken into consideration for Burbe rry current strategy to be successful. 2. 3. 2. Vision and missionWith the appointing of Angela Ahrendts as a CEO in 2006 when the Internet was booming bursting the opportunities of the global trade with its no-boarders possibilities, Burberry steps on a completely new path of high-tech cooperation with its customer. [5] With the core Burberry ideology of â€Å"The faster we move forward, it becomes even more critical to look back and never forget who we are and never forget where we came from. And what made this brand such a great global luxury brand today†[2] in mind Ahrends sets the new core purpose for Burberry. We had a vision† – she admits in one of the interviews – â€Å"And the vision was to be the first company who was fully digital from end-to-end†. [2] Ever since the company has been working on integrating various digital approaches to its business. Burberry’s advertising campaigns and catwalk shows became more and more technologic ally complex whereas the on-line trading on the contrary became easier and more available by the company’s partnering with various on-line selling platforms to take that vision and built the social enterprise.The experience expected was that the customer would have the total access to Burberry across any device anywhere and would get exactly the same feeling of the brand, feeling of the culture, regardless of where, when, how they were accessing the brand. Everyone now should be able come into Burberry world and see the Burberry journey and mission. The new vision enhanced the Burberry mission to sell its â€Å"distinctive Britishness† to the world with the new flavour of community that every customer is believed to become a part of buying or at least being interested in a Burberry product.Such attitude intends to create greater customer’s loyalty to the brand as this is the community, where one’s opinion in a way of a feedback is valued and appreciated. Even the personal preferences of how the core Burberry product should look like is taken into consideration from now on as the company launched www. artofthetrench. com web platform, where anyone can post their photos wearing a Burberry trench, moreover, can create their own trench coat based on the iconic trench from Burberry. Ahrendts goal is to deepen, broaden and vary the communication between the company and the customer through every activity the company is involved in.She emphasizes on the vital necessity of the cross-channel communication to be â€Å"totally connected to everyone who touches your brand†. [2] The new vision and the new additions to the established mission of the company have formed the brand’s new strategic intentions 2. Protect, Explore and Inspire. Burberry values. 3. 3. Values Burberry is a brand with over 150 years of history. [6] All that time the company has been run by the efforts of many people and, naturally, these people might have bee n of a completely different personalities, views and opinions. However, being a company, which in this case is Burberry, draw hese people together united not only by common vision of where the company is going, but also by the values, which in a context of a corporate culture set the behavioural norms of the company through years for everyone who entered it. Edgar H. Schein describes corporate values as â€Å"A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems†. 7] Burberry defines their core values as Protect, Explore and Inspire. Angela Ahrendts, Burberry’s CEO, often refers to the company as the â€Å"new and old company†[9] and such description definitely reflects the way the company constantly strives for the new opportunities, but always staying faithful to its old priorities. The essence of the Protect, Explore and Inspire company’s core values can be explained through the objectives of Burberry as an organization. 2. 2. Classification of Burberry values 2. 2. 1. Protect 1. Cultural value of the company to traditionally remain a â€Å"quintessentially British† brand.Burberry is proud of its rich heritage which has seen over a 150 years of British history. Thus the company is passionate about the the authenticity of their trade mark and core product in design and purpose, such as world-wide recognized trademark check and Prorsum horse logo and a traditional modern classic style trench coat. 2. Environmental value aims the environmental excellence of the company. Burberry is continuously aware about the environmental issues, such as climate change and carbon dioxide emissions and animal welfare, for example.The company is a member of the UN Global Compact and uses the Compact’s Ten Principles to guide its Corporate Responsibility activities. It is listed on the FTSE4Good Index and achieved the Carbon Trust Standard. [15] The work of the Business for Social Responsibility Sustainable Luxury Working Group, of which Burberry was a founding member, also continued this year, focusing on animal welfare guidelines and the exotic skins supply chain. As a result, the release of a common Animal Welfare Policy by the Group was communicated to Burberry suppliers, detailing its high expectations in respect of welfare standards. 15] Burberry is also a member of the Leather Working Group, supporting its efforts to improve transparency in the leather industry. Burberry does not utilise sandblasting on any of its products manufactured by or on behalf of the Group. [15] 3. Ethical value is in the desire of the brand to ensure the rights of their employees are highly valued and carefully followed. Burberry constantly shows its striving towards the improved C orporate Responsibility (CR) performance.To achieve long-term improvements in labour conditions, Burberry provides support and resources to suppliers to empower them to take responsibility for their factory and subcontractor conditions. The CR team delivers supplier training covering the Group’s ethical trading expectations, management systems and counsel on transparency and standards for subcontractors. [5] Burberry strongly believes that a policy of equal opportunity in employment is integral to the strength and growth of its business as a global brand with a diverse stakeholder and customer base.The company aims to ensure that the most capable job applicants are recruited and the most competent employees in the company progress. All decisions about people’s employment are based solely on an objective assessment of their suitability for the job. Burberry aims to maintain a working environment free from harassment or intimidation on discriminatory grounds and ensures that employment conditions and job requirements reflect its commitment to equal opportunities. [5] 2. 2. 2. Explore Burberry values in that area are very much business oriented.Thomas Burberry, the founder of the brand, explored the world of outerwear of his generation by inventing his sensational waterproof Gabardine and a trench coat, which none has ever seen nor worn before. Today Burberry’s aims to expand its production range to make it as diverse as possible to increase the market share. However at the moment the range already goes from the core innovative outerwear to not only womenswear and menswear, but to the non-apparel items, e. g. accessories, watches, childrenswear and even some home decoration items. 8] Burberry has always been aiming for the new markets: first sports and outdoors, then military usage and later civilian clothing. Now that the company has established itself on the different types of market, it is striving for the geographical expansion taking mar kets throughout the world, with a balance across major geographic regions. 2. 2. 3. Inspire They are the Burberry social objectives. Burberry believes that contributing into the local communities the company works with will make a positive impact.In 2008 Burberry established the Burberry Foundation charity organisation the purpose of which was to help young people realise their potential through fashion and creativity, built their confidence and self-esteem. [9] 3. Monitoring and evaluating of the strategic goals and objectives Ahrendts approach to monitoring and evaluating of the strategy execution and achieving the goals is â€Å"Divide and conquer†. According to that there were particular teams created to monitor and evaluate particular aspect of the new strategy. Design team, headed by Chief Creative Office, responsible for everything the consumer sees, including merchandising and creative media;[4] †¢Marketing team responsible for integrated advertising, PR and comm unications functions, which together focus on building and elevating brand awareness through traditional and digital media;[4] †¢Digital commerce newly-formed team, driving digital commerce globally to accelerate the brand’s digital leadership position in the luxury sector and help unlock the huge opportunities in this high-growth channel;[4] †¢Merchandising and planning team, which assorts, procures, and analyses the global collections in alignment with brand initiatives and commercial opportunities. [4] Every year Burberry reveals their annual results and achievements according to the itinerary in their annual report. ConclusionA straight forward highly innovative strategy by the new Burberry CEO caused uncertain reaction from different people in 2006 as well as it still causes doubts. Some think those were unnecessary changes, which made Burberry loose its original look and spirit, and some believe it was the best thing that have happened to Burberry in the last 50 years. However, the facts and numbers indicate that Burberry grew up to 500 stores in over 50 countries and led to increase the total revenue up to +23% in five years by September 2012 with the on-line sales increase in 50%. [3] Almost certainly the course has been changing during those five years due to the macro and micro external factors, which were indicated above.Nonetheless, it is obvious that creating a relevant and detailed strategic business plan and a consistent monitoring of its results and execution are crucial for a successful management of the company. Also, the earliest possible setting of the strategic goals and stating the company’s vision and mission and staying faithful to them makes the strategic plan effective. And in conclusion, understanding the values of an organisation will keep the corporate culture of the company stable, which is directly linked to productivity and job satisfaction among employees. References 1. Angela Ahrendts. (2011). Burberry uses salesforce com to create the ultimate Social Enterprise. Available: http://www. youtube. com/watch? v=oRpLo44nUEQ. Last accessed 13. 12. 2012. 2.Angela Ahrendts. (2011). The Young-Old Company – Angela Ahrendts, Burberry. Available: http://www. youtube. com/watch? v=_i50d6wiCBc. Last accessed 13. 12. 2012. 3. Burberry. (2012). Annual report. Available: http://www. burberryplc. com/documents/full_annual_report/burberry_ar_final_web_with-urls_indexed. pdf. Last accessed 13. 12. 2012 4. Burberry. (2012). Annual report. Available: http://www. burberryplc. com/documents/full_annual_report/burberry_ar_final_web_with-urls_indexed. pdf. Last accessed 13. 12. 2012. 5. BW staff. (2009). The 100 Best Global Brands 2009. Available: http://images. businessweek. com/ss/09/09/0917_global_brands/4. htm . Last

Population Assignment Example | Topics and Well Written Essays - 250 words

Population - Assignment Example Given the economic position of the country and other development as observed in the opening of the Sochi 2014 Opening Ceremony, these facilities are attractive to the young population that will create a strong foundation for the future of the nation. The population shift in Russia is highly due to the poor standards of living. As a result, the mortality rate for the males is high leading to a need for an immediate intervention. Unfortunately, the ban policy adopted by the government has more adverse impacts than advantages. As observed, the number of children adopted by American couples is high thus reducing children-related expenses for the administration (Herszenhorn and Eckholm n.p). With the current poverty and health care status, more children are likely to suffer from malnourishment and diseases increasing infant mortality beyond its present rate. Consequently, the future demography of the country will constrain the government, as dependent ratio will be very high. Herszenhorn, David  M., and Erik, Eckholm. "The New York Times." Putin Signs Bill That Bars U.S. Adoptions, Upending Families. The New York Times,  2012. Web. 24  Mar.  2015.

Evidence-Based Management of a Chronic Wound in an Elderly Female Research Paper

Evidence-Based Management of a Chronic Wound in an Elderly Female Patient with Type II Diabetes - Research Paper Example APA Format: Nussbaum, E.L. (2010). Evidence-Based Management of a Chronic Wound in an Elderly Female Patient with Type II Diabetes. Physiotherapy Canada, 62(2): 129-133. Database and Accession Number The article was accessed in the Cumulative Index to Nursing and Allied Health Literature (CINAHL) Plus with Full Text Databases with accession number 2010644352. Keywords such as â€Å"evidenced-based, â€Å"chronic wound,† and â€Å"type II Diabetes† were used to locate the article. Summary The article identified the role of physical agents such as ultrasound, electrical stimulation, ultraviolet radiation, low-level laser therapy, and pulsed short-wave therapy in the management of chronic wounds (Nussbaum, 2010, 129). The clinical problem in question is whether there are supportive evidences and studies that would prove that ultrasound alone will be effective in wound healing and management of chronic wounds or supportive evidences and studies will suggest non-significant effect of ultrasound in wound healing and management of chronic wounds. Based on the clinical problem, the PICO question formulated is: â€Å"In elderly patients with Type II diabetes, how does wound treatment with ultrasound vs. wound treatment with all the physical agents affect wound healing and wound management?† The PICO question is formulated in a way that would emphasize the effect of ultrasound only in wound healing. Evidences from literatures are inconclusive of the effect of ultrasound to wound healing. Meta-analysis, Cochrane Group Reviews, and Randomized-Controlled Trials (RCTs) were the framework, model, or systematic approach used by the author to evaluate, compare, and critique the available literature. Critique from meta-analyses and reviews suggest that available evidence are inconclusive because of methodological limitations in terms of small number of trials and participants, heterogeneous methods, and limited pooling results (Nussbaum, 2010, 130). Meta-an alysis of RCTs from 1998 and 2002 showed benefits of uncertain degree in reduction of ulcer area; however, it was not clear whether reduction was a result of low-frequency (30 kHz) ultrasound or of water footbath. In the 2008 Cochrane Update using gel coupling instead of water footbath, pooling trials are interpreted using statistical measures of risk ratio and weighted mean difference, wherein, outcome showed that more ulcer were healed from using ultrasound and that using ultrasound was beneficial (Nussbaum, 2010, 130). Available literatures lack RCTs using ultrasound on non-venous origin. In general, there was no evidence of benefit from using ultrasound on wound healing and methodological limitations did not rule out possibility of benefit or harm. The outcome of the clinical problem is measured, compared, and evaluated using an acetate sheet, a free image software, a cotton-tipped probe and ruler, and Bates-Jensen Wound Assessment Tool. The acetate sheet was used for tracing th e patient’s ulcer, the free image software for calculating the area of the wound, the cotton-tipped probe and ruler for approximating maximum wound depth and undermining, and the Bates-Jensen Wound Assessment Tool for the assessment of healing and ensuring validity and reliability (Nussbaum, 2010, 131). The biweekly photographic documentation must show a reduction of at least 30% over a 4-week period to consider ultrasound as an effective

Team Communication Essay Example | Topics and Well Written Essays - 250 words

Team Communication - Essay Example Thus, members must be able to use both written and verbal communication patterns to their full advantages. The same communication media could likewise be utilized for offshore teams. Aside from those that were mentioned, team members across different countries should frequently correspond through mobile phones, sending relevant documents through facsimile, Skype, video conferencing, or other more advanced technological applications. Whatever technological advances in communication resources that are similarly available in both countries could assist in enhancing the communication process. However, there are challenges in addressing barriers of communication across offshore teams in terms of language and cultural barriers. Thus, aside from ensuring that members of offshore teams share similar understanding of the universal language, English, for instance; both parties must have some knowledge on addressing cultural disparities, especially with regards to business practices. As aptly recommended by All (2011), â€Å"team members with limited proficiency may be more comfortable communicating in writing, as they can make use of online translation services† (p. 1). Likewise, the members of offshore teams must be able to respect local times in their respective time zones and should expect correspondences to be answered in the earlist possible and accessible time frame. All, A. (2011, April 21). More Tips on Communicating with Offshore Teams. Retrieved from IT Business Edge:

Film Essay Example | Topics and Well Written Essays - 500 words - 8

Film - Essay Example However, even though the films are of same genre and have similar background themes, the setting and the characters are distinct, and have unique personalities. The films ‘It Happened One Night’ (1934) and ‘Maid in Manhattan’ (2002) have similar background themes where a wealthy person falls in love with a ‘commoner.’ The love interest gets the wealthy characters (Ellie and Chris) distracted from the goals they had set to achieve. For example, in the movie ‘It Happened One Night,’ the female character Ellie runs away from her wealthy father to get married to a man of her choice. However, when she meets Peter and gets to know him during their travel to New York, she falls in love with him and gets distracted from the goal for which she had run away from her father. Similarly, in the film ‘Maid in Manhattan,’ Christopher Marshall who is a senatorial candidate, gets distracted from his goal of focusing on his campaign when he falls in love with a maid working in a classy hotel in which he stays. However, the contrast in the theme is that when Ellie confesses her love towards Pete r, he agrees that he is also in love with her. However, the character of Marissa, who is a maid, tries to avoid Christopher when she realizes that he is romantically interested in her. The other difference in the themes of the films is the truth about the characters who are ‘commoners’. In the movie ‘It Happened One Night,’ Peter discloses his real self to Ellie right from the beginning, and that too, with certain flamboyance and charm. On the other hand, Chris misunderstands Marissa as a socialite guest at the hotel, and considers her as a wealthy woman and not a ‘commoner’. Hence, when Chris falls in love with Marissa, he is not aware about her true identity of a maid. In this way, even though basic themes of the films are similar, the shades of the characters are different. The basis of the romantic comedies

Customer Relationships Article Example | Topics and Well Written Essays - 250 words

Customer Relationships - Article Example The vertical integration on mighty franchise ensured that they distributed their auto parts to customers in more than forty states without causing delays. Moreover, the company realized the shift in the market that preferred prevention of their motor rather than repair. Through the integration, the company diversified and grew making it record better financial performance. Mighty distributors ensured that they remained in partnership with the motor makers who provided them with the required information on the current changes in market and production. Customers’ satisfaction was measured from the repeat purchase. The company also pegged satisfaction on customer loyalty and customer comments about mighty corporation. Furthermore from mighty financial statements, increment in sales from the diverse locations could be traced thereby helping in the analysis of customers’ satisfaction and response. Mighty distributors further ensured that they maintained monitoring the trend in the market to enable them satisfy changing preference in the industry. The president asserted that their leadership model ensured the company remained abreast of the changes in the automotive industry (Wall Street Journal, n.d). The success in attracting and retaining customers was therefore supported by the integrated operations and strategic partnership. Taylor, M. (2009). A model of B2B e-commerce, based on connectivity and purpose. International Journal of Operations & Production Management, 27(2), 205-225 retrieved from

International Market Entry and Development Essay - 5

International Market Entry and Development - Essay Example These diverse markets differ with the local ones in terms of the needs of customers, their buying patterns, the cultures and traditions followed by the customers etc. The process for market research starts with defining the problem and planning out the objectives of the research. This is often the most difficult step of this process as this step gives a direction to the entire research process. Once the problems and objectives have been identified, the researchers must establish the extent of information needed and develop a plan for gathering the needed information along with the management plan for the research. The research objectives must be transformed into information needs which are clear and specific. The research plan can include the collection of either secondary or primary data. Secondary data is the data which has already been conducted before for some other purpose whereas primary data is one which is to be collected for the specific purpose of the international market r esearch. For international market research, the researchers need to carry out primary research due to the lack of secondary data. The next step is to actually implement the research plan and this involves collecting, processing as well as analyzing information. This step of the process is the most expensive step and needs to be carried out with a lot of attention. The researchers must analyze the collected data and tabulate results. The last step is to interpret the findings in order to find conclusions and report it to the management for further action. With the increase in globalization, companies have to sell products not only in their domestic countries but also in international countries and markets. The companies have realized that they need to change some aspects of their products in order to cater to the specific needs of the buyers in international markets. This is known as

Diversity Paper Essay Example | Topics and Well Written Essays - 750 words

Diversity Paper - Essay Example The supportive personality is more introverted and team-oriented. They are supportive and helpful and thrive in interpersonal relationships. The cautious personality is also reserved and seeks consistency, value and is task-oriented. Their primary focus is on being accurate and correct in their assessments (Rohm, 2004). In addition to these underlying personality traits, many other factors play a role in determining a person’s personality and behavior such as gender, socioeconomic status and sexual orientation. Studies have shown, not surprisingly, that boys are quicker to openly display their temper than are girls. This is because girls are taught from a young age that angry displays are inappropriate and proper control of their emotions is a societal expectation for which they are rewarded. Socially acceptable behavior for girls includes being soft of voice at all times while vocal, outward displays of anger are intolerable. They are taught not to cause hurt feelings or be the cause of another’s anger. Gender stereotypes which are taught from a very early age reinforce to girls the importance of avoiding conflicts and to always act pleasantly, especially in a social setting. Females are expected to be attractive. The less physically attractive she is, the more the girl must take on a subservient role. Girls are also taught to manipulate a situation for their own benefit, but not to control it by being overbearing. There are those examples of girls who actively discard this stereot ype by rebelling against it often by means of intimidating those girls who fall under the ‘normal’ stereotype of which they are rebelling against. The abuse of sex, alcohol and drugs are common aspects of this rebellion. Males who adhere to society’s typical stereotype for suitable behavior and appearance believe they are masters of their own universe. If males are athletic and good-looking, they assume and society confirms that they are

Marginal Revolution Research Paper Example | Topics and Well Written Essays - 1250 words

Marginal Revolution - Research Paper Example In his treatment of the concept of human wants, we see a different connotation from that realized from Walras who showed no particular interest in that aspect and Jevons who viewed a want as a balance between the physical and mechanical forces of humanity. Walras and Jevons addressed the aspect of exchange of goods and services as the exchange between equivalents. Menger, on the other hand, felt that it was improper to regard quantities as equivalents in the subjective sense. On this account it is realized that Menger’s theory, unlike Walras’ and Jevons,’ could not effectively explain the concept of pricing. Menger did not, however, ignore the concept of price arbitrarily (Black 67). It was out of the feeling that price as an exchange measure was simply a superficial demonstration of much complex forces at play. Menger appears different from his two contemporaries given that he treats his theory in a way that is much connected to the real word. Therefore, unlike Jevons and Walras, he does not want to present his cases in grounded mathematical connotations which are quite common in mainstream economics. It is at this point that the Austrian School of thought began to emerge with Menger being the founder (Bellet 78). Menger wanted to relate his theory to the real world as much as possible. To him, this could only be facilitated by avoiding the representations of equilibrium as was common in the works of the other two economists. However, Menger was well aware of the possibility of attaining equilibrium levels in the real world. His concern was nevertheless on the impediments that would alter such an eventuality. Hence, he opted to take a new orientation with regard to equilibrium and disequilibrium. The greatest difference of Menger from Jevons and Walras lies in his (Menger) omission of integral and classical calculus from his works. Though he knew mathematics, he totally took a different turn with regard to the use of mathematics in economi cs. To him, mathematics should only be a subsidiary way of advancing economic knowledge but not as the central device of communicating economics. His different orientation in that respect was the main genesis behind the Austrian School of thought where economics is normally treated in theoretical means. The Austrian school was, therefore, developed directly from the different vies that Menger held in the practice of economics. Menger felt that economic inquiry should be conducted through the study of economic phenomena and realities in order to unearth the facts and not through the use of abstract mathematics which to him could not really bring the ideas into focus. In his works, Walras feels that through the construction of simultaneous equations to represent the marginal utility principle, the ultimate behavior of man could easily be traced. Much of that notion was shared by Jevons who also advocated the use of calculus and mathematical formulae in the understanding of economic be havior. To Menger, the object of economic inquiry was to bring into focus the behavior of man in all respects of life, a goal that could not be achieved through mathematics. The socialist arguments that were further grounded in the Austrian School of thought were mainly originally connected by Menger through his approach of economics. Ludwig Von Mises was most influenced by the works of Menger with respect to

Tanglewood casebook Essay Example for Free

Tanglewood casebook Essay The store associate position is one that mainly deals with assisting customers, be it to find certain products, deal with issues, or to just make their experience a pleasant one while dealing with the daily operations of the store. The open method to recruiting means that we are casting a wide net to catch any applicants that we can and see what we get. It’s possible that we may get exactly what we are looking for, but it’s possible that it may just be wasted resources. I recommend the targeted method to recruitment, which means that we are going to go for a specific group of people with specific KSAOs. By using the targeted method we will address some of the staffs concerns about hiring new store associates. The first concern was to reduce turnover; by casting a smaller net, but getting more qualified individuals we may eliminate some of the turnover. This will also help with the lag time, which was the second issue, in that there will be less applicants to sift through, thus letting us get to the more qualified candidates more quickly. This will help us target the applicants we want, which were college to middle age individuals with at least a high school diploma, preferably some college course work, with retail and customer service experience. By getting employees that already have customer service experience, they will already know what they are getting themselves into and what the expectation may be. Hopefully this will also help to acquire people who fit into the culture and are looking for a career and not just a job. By using online applications with specific requirements we will better be able to target these applicants. The same goes for staffing agencies, though costly, we will more effectively acquire qualified individuals. Employee referrals may be a good way to keep up employee relations and morale, but it may not lead to the type of individuals we need. The same goes for open applications. 3) In Western Washington, the highest one year retention rate compared to the amount of applicants hired was by job service agency, followed by employee referrals. This seemed to be effective for them, because the most qualified individuals fell into the referral category, however the total cost was significantly higher for employee referrals at this site, though after a year of survival ended up being the most cost effective method of hiring. In Eastern Washington, the referral method came out the most effective as far as retention rates went, followed by the kiosk method. Following the same trend as the Western Washington region, these individuals seemed to be the most qualified. Again similar to the previous region it also was the most expensive as far as total cost went, but the most effective as far as cost per first year of survival. In Northern Oregon, the agency method had an extremely high retention rate after the first year of hire, followed by the kiosk method. In this region the kiosk method was the most expensive followed by hiring agencies. The hiring agency was the most effective after the first year of hire. In Southern Oregon, a similar trend happens compared to Northern Oregon. The agency method has a the highest post one year retention rate, followed by the referral method. And similar to Northern Oregon, it is the second most expensive as far as total cost goes, but the most effective as far as post first year hire cost is concerned. 4) It would be ineffective to follow the same hiring methods for all four regions in that in both Oregon based regions the best recruitment method seems to be agency based and in the Washington regions the referral method is most effective. If the company attempted to force all regions to have the same hiring standards they would incur higher cost, less effective recruitment methods, and would obtain less qualified individuals. 5) It has proven true for the company that cheaper is not always better, therefore getting the cheapest labor will not yield the most effective customer service. It would be beneficial to rate employee performance in accordance to high, middle, and low performers and to discuss with them how they feel they are doing in conjunction with suggestions on yielding better performance. Better performance should come with some type of reward, for example an extra vacation day, a more desirable assignment, or an annual pay increase. It also would be beneficial to employees to have additional training in customer service issues in order to prepare them for what issues they may run into. As far as the bottom line hiring requirements go, at least a year of customer service related experience should be required for employment. As previously stated this will ensure that these new candidates will know what to expect from their job, and what expectations an employer would have of them. (Please refer to question 2 for how managerial concerns will be addressed.) 6) The targeted method would be aiming at a specific group of candidates. They may say that they are searching for a candidate with some completed college coursework and customer service experience looking to work as a store associate at Tanglewood. It also should state that if the associate seems promising they may be put on the fast track to management if they desire. The realistic method gives a real view of what the job would entail. It may say something like dealing with day to day store issues including customer complaints. It gives an employee a real look as to what they may be doing, but some argue that it may turn away good potential candidates before they actually have the opportunity to experience both the good and the bad. The branded recruitment strategy is searching for a candidate that will fit into your brand. They may say looking for a self starting individual who wants to be part of not just a company, but a family. By doing this employees feel a tie to the company’s brand and want to work for the company and not just the job. Work Cited Heneman III, Herbert G., Judge, Timothy A., and Kammemeyer-Mueller, John D. Staffing Organizations: 7th Edition. Middleton: Mendota House, 2012. Print. Kammemeyer-Mueller, John. Tanglewood Casebook for use with Staffing Organizations: 7th Edition. Middleton: Mendota House, 2012. Print.