Spider Essay Example | Topics and Well Written Essays - 1250 words

Spider - Essay Example To date, 40,000 species of spiders have been recorded. It has been said that there might be thousands more which have yet to be discovered. These types have been found in all parts of the world except for Antarctica. According to Carl Alexander, author of’ Spiders, volume 8 (1929)’, the kingdom of spiders is Animalia, the phylum is Arthropoda, the class is Arachnida, and the order is Araneae. (8) According to James H. Emerton, author of ‘The common spiders of United States (1961)’, the most interesting types are mouse spider and black widow spider. Mouse spider is discovered first in Australia, is not harmful to human, and its bite is dry. The black widow spider is found around the world, has a large body, and excretes poison secretion that is harmful to human nerve (25). The scientific name given to the black widow spider is ‘Latrodectus Hesperuses’. This spider is mostly found in the United States, mainly, North America. The spider got its na me from the fact that the female spiders usually eat the male spiders after mating. This characteristic of the female black widow spider makes a male spider to approach the female carefully and gradually. In order to mate, the male spider would vibrate the female spider’s web in a certain way so that the female recognizes it and allows it to mate with her. The male spiders are not as venomous as the females as their main purpose is to mate; hence, they spend their entire lifetime searching for mates and even stop feeding. The female black widow spider have been known to be quite venomous, however, it is not life threatening as it secretes only a small amount of poison when bites. The body structure of a female black widow spider and a male are very different. The females have a shiny black body which is relatively longer. Moreover, there is a red marking just below the abdomen. The females are poisonous than the males. The males, however, are almost half the size of females. They have longer and leaner legs and most of them have red and yellow marks at the back. Both males and females body is parted in two. Their jaws are strong which support poisonous fangs. They have a hard, long exoskeleton. According to Donald M. Tuttle and Edward W. Baker, authors of ‘Spider mites of the United States’, spiders have about six holes underneath their abdomen called eyes. The silk goes out from these holes to expose to the air, then, it converts to thread. Spider’s female form its web from an extremely thin elastic silky thread. They use the glands that are in the lower part of their abdomen to form the web (34). According to Maggie Daley, author of ‘Illinois insects and spiders’, spiders have eight legs, eight eyes, and they do not have wings or chewing organs. Moreover, their bodies consist of two parts, the chest and the external part. The chest part is consists of the head with the brain and eyes, the stomach, legs and the mouth. T he external part consists of lungs, heart, liver, reproductive organs and the glands that play important role in producing the silk. (14) The black widow spider is further categorized into three main types, the Northern Black widow Spider, the Western Black Widow Spider and the Southern black Widow Spider. The Northern black widow is mostly found in the north east parts of USA and south east Canada. The Western Black Widow is mainly found in the western parts of USA, Canada and some parts of Mexico. Furthermore, the

Knowledge management structures in NATO versus the United Nations Essay

Knowledge management structures in NATO versus the United Nations - Essay Example n and knowledge far better then it was previously possible, knowledge management in organizations has also the added dimension of interaction, knowledge sharing, communication and analysis. A lot of organizational knowledge is contained in the heads of personnel within the organizations. Because humans have a finite life – span and ambitions about better opportunities, all organizations have structures which not only create new knowledge but also transfer existing knowledge to those in need of it. The nature of the knowledge which is important to an organization is dependant on the task or mission which the organization is expected to perform and different organizations may have different requirements associated with the speed, reliability, volume of information or knowledge which has to be communicated for organizational use. The knowledge management structures which are put into place within organizations are shaped by the organizational requirements for knowledge management , which are different for various organizations. In this essay, an attempt has been made to compare the knowledge management structures within NATO with those which exist in the United Nations. NATO, which is a military alliance, has a requirement to manage large amounts of information which can quickly become obsolete and convert this information into knowledge for reliable and secure communications for the use of designated personnel. The pace at the United Nations is more leisurely. Hence, the knowledge management structures at these two organizations are slightly different. The term knowledge management refers to the management of intellectual capital which has bee described as: â€Å"Intellectual capital is intellectual material – knowledge, information, intellectual property, experience – that can be put to use to create wealth. It is the collective brainpower†. The term knowledge is subjective to the organizational and social context in which it is being thought of. Knowledge

Importance of Agriculture in Economy Essay Example for Free

Importance of Agriculture in Economy Essay The direct contribution of the agriculture sector to national economy is reflected by its share in total GDP, its foreign exchange earnings, and its role in supplying savings and labor to other sectors. Agriculture and allied sectors like forestry and fishing accounted for 18.5 percent of total Indian Gross Domestic Product (GDP) in 2005-06 (at 1999-2000 constant prices) and employed about 58 percent of the countrys workforce (CSO, 2007). It accounted for 10.95 percent of India’s exports in 2005-06 (GoI, 2007) and about 46 percent of Indias geographical area is used for agricultural activity. There has been a structural transformation in the Indian economy during the past few decades. The composition of Gross Domestic Product at 1993-94 constant prices reveals that the share of agriculture including forestry and fishing has declined as growth in industrial and services sectors far outpaced agricultural sector (Figure 1). The share of mining, manufacturing, electricity and construction sector has increased from 21.6 percent in 1970-71 to 27 percent in 2004-05 and services sector has increased significantly from 32 percent to 52.4 percent during the same period. Despite a steady decline of its share in the GDP, agriculture is still an important sector and plays a significant role in the overall socio-economic development of the country. Therefore, fostering rapid, sustained and broad-based growth in agriculture remains key priority for the government. Consistent with the trends of economic development at national level, role of agricultural sector in the state economies is also changing rapidly. The share of agriculture in Gross State Domestic Product (GSDP) has declined significantly during the last two decades. In some States, such as Bihar, Punjab, Uttar Pradesh, Haryana, Rajasthan, and Orissa, the sector today contributes more than one-quarter of GSDP, while in some states, such as Gujarat, Kerala, Karnataka, Tamil Nadu and Maharashtra, the sector contributes less than 20 percent to GSDP (Figure 2). However, contribution of agriculture to GSDP has declined in almost all States between 1993-94 and 2004-05. The decline was the highest in Karnataka (16%), followed by Haryana (14.2%), and Kerala (13.7%). In Karnataka, decline was mainly due to significant increase in the share of service sector (from 37.9% in 1993-94 to 54.7% in 2004-05) mainly driven by informational technology (IT) industry. Similar is the case with Haryana the decline is due to faster development of services sector in cities around the national capital, Delhi. Despite declining share of agriculture in the economy, majority of workforce continue to depend on agricultural sector for employment and in rural areas dependence on agriculture is more as nearly 75 percent of rural population is employed in agricultural sector. However, there is disguised employment in the sector due to limited opportunities for rural non-farm employment. This disguised employment leads to lower labor and resources productivity in the sector relative to other sectors of the economy. The low labor productivity leads to higher rates of poverty in rural areas (Figure 3). Agriculture in India is constitutionally the responsibility of the states rather than the central government. The central governments role is in formulating policy and providing financial resources for agriculture to the states. Agriculture finance Meaning: Agricultural finance generally means studying, examining and analyzing the financial aspects pertaining to farm business, which is the core sector of India. The financial aspects include money matters relating to production of agricultural products and their disposal. Definition of Agricultural finance: Murray (1953) defined agricultural. finance as â€Å"an economic study of borrowing funds by farmers, the organization and operation of farm lending agencies and of society’s interest in credit for agriculture .† Tandon and Dhondyal (1962) defined agricultural. finance â€Å"as a branch of agricultural economics, which deals with and financial resources related to individual farm units.† What is Agriculture Finance Agricultural finance is the study of financing and liquidity services credit provides to farm borrowers. It is also considered as the study of those financial intermediaries who provide loan funds to agriculture and the financial markets in which these intermediaries obtain their loanable funds. John B. Penson, Jr. and David A. Lins (1980) Why Agriculture Finance India is mainly an agricultural country. Agriculture accounts for approximately 33 percent of Indias GDP and employs nearly 62 percent of the population. It accounts for 8.56 % of Indias exports. About 43 % of Indias geographical area is used for agricultural activity. Agricultural production in this country depends upon millions of small farmers. It is intensity of their effort and the efficiency of their technique that will help in raising yields per acre. Finance in agriculture is as important as development of technologies. Technical inputs can be purchased and used by farmer only if he has money (funds). But his own money is always inadequate and he needs outside finance or credit. Because of inadequate financial resources and absence of timely credit facilities at reasonable rates, many of the farmers, even though otherwise willing, are unable to go in for improved seeds and manures or to introduce better methods or techniques. The farming community must be kept informed about the various sources of agriculture finance. Agricultural finance possesses its usefulness to the farmers, lenders and extension workers. The knowledge of lending institutions, their legal and regulatory environment helps in selecting the appropriate lender who can adequately provide the credit with terms and related services needed to finance the farm business. Nature and Scope: Agricultural finance can be dealt at both micro level and macro level. Macrofinance deals with different sources of raising funds for agriculture as a whole in the economy. It is also concerned with the lending procedure, rules, regulations, monitoring and controlling of different agricultural credit institutions. Hence macro-finance is related to financing of agriculture at aggregate level. Micro-finance refers to financial management of the individual farm business units. And it is concerned with the study as to how the individual farmer considers various sources of credit, quantum of credit to be borrowed from each source and how he allocates the same among the alternative uses with in the farm. It is also concerned with the future use of funds. Therefore, macro-finance deals with the aspects relating to total credit needs of the agricultural sector, the terms and conditions under which the credit is available and the method of use of total credit for the development of agriculture, while micro-finance refers to the financial management of individual farm business. Significance of Agricultural Finance: 1) Agril finance assumes vital and significant importance in the agro – socio – economic development of the country both at macro and micro level. 2) It is playing a catalytic role in strengthening the farm business and augmenting the productivity of scarce resources. When newly developed potential seeds are combined with purchased inputs like fertilizers plant protection chemicals in appropriate / requisite proportions will result in higher productivity. 3) Use of new technological inputs purchased through farm finance helps to increase the agricultural productivity. 4) Accretion to in farm assets and farm supporting infrastructure provided by large scale financial investment activities results in increased farm income levels leading to increased standard of living of rural masses. 5) Farm finance can also reduce the regional economic imbalances and is equally good at reducing the inter–farm asset and wealth variations. 6) Farm finance is like a lever with both forward and backward linkages to the economic development at micro and macro level. 7) As Indian agriculture is still traditional and subsistence in nature, agricultural finance is needed to create the supporting infrastructure for adoption of new technology.   8) Massive investment is needed to carry out major and minor irrigation projects, rural electrification, installation of fertilizer and pesticide plants, execution of agricultural promotional programmes and poverty alleviation programmes in the country .LECTURE -2 Credit needs in A Credit needs in Agriculture – meaning and definition of credit-classification of credit based on time, purpose, security, lender and borrower. _____________________________________________________________________ The word â€Å"credit† comes from the Latin word â€Å"Credo† which means â€Å"I believe†. Hence credit is based up on belief, confidence, trust and faith. Credit is other wise called as loan. Definition: Credit / loan is certain amount of money provided for certain purpose on certain conditions with some interest, which can be repaid sooner (or) later. According to Professor Galbraith credit is the â€Å"temporary transfer of asset from one who has to other who has not† Credit needs in Agriculture: Agricultural credit is one of the most crucial inputs in all agricultural development programmes. For a long time, the major source of agricultural credit was private moneylenders. But this source of credit was inadequate, highly expensive and exploitative. To curtail this, a multi-agency approach consisting of cooperatives, commercial banks ands regional rural banks credit has been adopted to provide cheaper, timely and adequate credit to farmers. The financial requirements of the Indian farmers are for, 1. Buying agricultural inputs like seeds, fertilizers, plant protection chemicals, feed and fodder for cattle etc. 2. Supporting their families in those years when the crops have not been good. 3. Buying additional land, to make improvements on the existing land, to clear old debt and purchase costly agricultural machinery. 4. Increasing the farm efficiency as against limiting resources i.e. hiring of irrigation water lifting devices, labor and machinery Credit can be classified on the basis of time, purpose, security, lender and borrower. (i)Time classification:- It classifies credit into three groups, i.e. short, medium and long term. (a) Short-Term (for periods up to 15 months): The short-term loans are generally advanced for meeting annual recurring purchases such as, seed, feed, fertilizers, hired labour expenses, pesticides, weedicides, hired machinery charges, etc., and termed as seasonal loans/crop loans/production loans. These are expected to be repaid after the harvest. It is expected that the loan plus interest would be repaid from the income received through the enterprise in which it was invested. The time limit to repay such loans is a year or at the most 18 months. (b) Medium-Term (from 15 months up to 5 years): Medium-term loans are advanced for comparatively longer lived assets such as machinery, diesel engine, wells, irrigation structure, threshers, shelters, crushers, draught and milch animals, dairy/poultry sheds, etc., where the returns accruing from increase in farm assets in spread over more than one production period. The usual repayment period for such type of loan is from fifteen months to five years. (c) Long-Term (above 5 Years): Loans repayable over a longer period (i.e. above 5 years) are classified as long-term loans. Long-term loans are related to the long lifed assets such as heavy machinery, land and its reclamation, errection of farm buildings, construction of permanent-drainage or irrigation system, etc. which require large sums of money for initial investment. The benefits generated through such assets are spread over the entire life of the asset. The normal repayment period for such loans ranges from five to fifteen or ev en upto 20 years. (ii) Purpose classification:- Credit is also classified based on purpose of loans e.g. crop loan, poultry/dairy/piggery loan, irrigation loan, machinery and equipment loan, forestry loan, fishery loan etc. These loans signify the close relationship between time and use as well as rate of return (or profitability). Some times loans are also classified as production and consumption loans due to the fact that production loans are diverted for consumption purposes by the weaker sections. So, the banks have also started financing for consumption purposes (exclusively for home consumption expenditures) besides financing for the production purposes. The consumption loans are also to be repaid from the sale proceeds of the crop. (iii) Security classification:- Security offered/obtained provides another basis for classifying the loans. The secured loans are advanced as against the security of some tangible personal property such as land, livestock and other capital assets, i.e., medium and long term loans. The borrowers credit worthiness may act much more than the security offered, which if doubtful may result willful default. Moreover, the secured loans are further classified on the basis of type of security e.g. mortgage loans, where legal mortgage of some property such as land is offered to the lender, i.e., loans for intangible property such as land improvement, irrigation infrastructures, etc. and hypothecated loans, where legal ownership of the asset financed remains with the lender though physical possession with the borrowers i.e. loans for tangible property such as tractor, machinery and equipments. The private money lenders, usually possess items such as gold ornaments / jewellery or land as security, which reminds the borrower about his obligations of loan repayments. On the contrary, unsecured loans are generally advanced without offering any security e.g. short-term crop loans. (iv) Lender classification:- Credit is also classified on the basis of lender such as (a) Institutional Credit e.g. co-operative loans, commercial bank loans and government loans; (b) Non-Institutional Credit e.g. professional and agricultural money lenders, traders and commission agents, relatives and friends etc. (v) Borrower classification:- The credit is also classified on the basis of type of borrowers (i.e., production or business activity as well as size of business) such as crop farmers, dairy farmers, poultry farmers, fisherman, rural artisans etc. or agricultural labourers, marginal/small/medium/large farmers, hill farmers or tribal farmers etc. Such classification has equity considerations. credit is broadly classified based on various criteria: 1. Based on time: This classification is based on the repayment period of the loan. It is sub-divided in to 3 types Short–term loans: These loans are to be repaid within a period of 6 to 18 months. All crop loans are said to be short–term loans, but the length of the repayment period varies according to the duration of crop. The farmers require this type of credit to meet the expenses of the ongoing agricultural operations on the farm like sowing, fertilizer application, plant protection measures, payment of wages to casual labourers etc. The borrower is supposed to repay the loan from the sale proceeds of the crops raised. Medium – term loans: Here the repayment period varies from 18 months to 5 years. These loans are required by the farmers for bringing about some improvements on his farm by way of purchasing implements, electric motors, milch cattle, sheep and goat, etc. The relatively longer period of repayment of these loans is due to their partially-liquidating nature. Long – term loans: These loans fall due for repayment over a long time ranging from 5 years to more than 20 years or even more. These loans together with medium terms loans are called investment loans or term loans. These loans are meant for permanent improvements like levelling and reclamation of land, construction of farm buildings, purchase of tractors, raising of orchards ,etc. Since these activities require large capital, a longer period is required to repay these loans due to their non liquidating nature. 2. Based on Purpose: Based on purpose, credit is sub-divided in to 4 types.   Production loans: These loans refer to the credit given to the farmers for crop production and are intended to increase the production of crops. They are also called as seasonal agricultural operations (SAO) loans or short – term loans or crop loans. These loans are repayable with in a period ranging from 6 to 18 months in lumpsum .Investment loans: These are loans given for purchase of equipment the productivity of which is distributed over more than one year. Loans given for tractors, pumpsets, tube wells, etc. Marketing loans: These loans are meant to help the farmers in overcoming the distress sales and to market the produce in a better way. Regulated markets and commercial banks, based on the warehouse receipt are lending in the form of marketing loans by advancing 75 per cent of the value of the produce. These loans help the farmers to clear off their debts and dispose the produce at remunerative prices. Consumption loans: Any loan advanced for some purpose other than production is broadly categorized as consumption loan. These loans seem to be unproductive but indirectly assist in more productive use of the crop loans i.e. with out diverting then to other purposes. Consumption loans are not very widely advanced and restricted to the areas which are hit by natural calamities. These loams are extended based on group guarantee basis with a maximum of three members. The loan is to be repaid with in 5 crop seasons or 2.5 years whichever is less. The branch manager is vested with the discretionary power of sanctioning these loans up to Rs. 5000 in each individual case. The rate of interest is around 11 per cent. The scheme may be extended to 1) IRDP beneficiaries 2) Small and marginal farmers 3) Landless Agril. Laborers 4) Rural artisans 5) Other people with very small means of livelihood hood such as carpenters, barbers, washermen, etc. 3. Based on security: The loan transactions between lender and borrower are governed by confidence and this assumption is confined to private lending to some extent, but the institutional financial agencies do have their own procedural formalities on credit transactions. Therefore it is essential to classify the loans under this category into two sub-categories viz., secured and unsecured loans. Secured loans: Loans advanced against some security by the borrower are termed as secured loans. Various forms of securities are offered in obtaining the loans and they are of following types. I. Personal security: Under this, borrower himself stands as the guarantor. Loan is advanced on the farmer’s promissory note. Third party guarantee may or may not be insisted upon (i.e. based on the understanding between the lender and the borrower) II. Collateral Security: Here the property is pledged to secure a loan. The movable properties of the individuals like LIC bonds, fixed deposit bonds, warehouse receipts, machinery, livestock etc, are offered as security. III. Chattel loans: Here credit is obtained from pawn-brokers by pledging movable properties such as jewellery, utensils made of various metals, etc. IV. Mortgage: As against to collateral security, immovable properties are presented for security purpose For example, land, farm buildings, etc. The person who is creating the charge of mortgage is called mortgagor (borrower) and the person in whose favour it is created is known as the mortgagee (banker). Mortgages are of two types a) Simple mortgage: When the mortgaged property is ancestrally inherited property of borrower then simple mortgage holds good. Here, the farmer borrower has to register his property in the name of the banking institution as a security for the loan he obtains. The registration charges are to be borne by the borrower. b) Equitable mortgage: When the mortgaged property is self-acquired property of the borrower, then equitable mortgage is applicable. In this no such registration is required, because the ownership rights are clearly specified in the title deeds in the name of farmer-borrower. V. Hypothecated loans: Borrower has ownership right on his movable and the banker has legal right to take a possession of property to sale on default (or) a right to sue the owner to bring the property to sale and for realization of the amount due. The person who creates the charge of hypothecation is called as hypothecator (borrower) and the person in whose favor it is created is known as hypothecate (bank) and the property, which is denoted as hypothecated property. This happens in the case of tractor loans, machinery loans etc. Under such loans the borrower will not have any right to sell the equipment until the loan is cleared off. The borrower is allowed to use the purchased machinery or equipment so as to enable him pay the loan installment regularly. Hypothecated loans again are of two types viz., key loans and open loans. a) Key loans : The agricultural produce of the farmer borrower will be kept under the control of lending institutions and the loan is advanced to the farmer . This helps the farmer from not resorting to distress sales. b) Open loans: Here only the physical possession of the purchased machinery rests with the borrower, but the legal ownership remains with the lending institution till the loan is repaid. Unsecured loans: Just based on the confidence between the borrower and lender, the loan transactions take place. No security is kept against the loan amount 4. Lender’s classification: Credit is also classified on the basis of lender such as Institutional credit: Here are loans are advanced by the institutional agencies like co-operatives, commercial banks. Ex: Co-operative loans and commercial bank loans. Non-institutional credit : Here the individual persons will lend the loans Ex: Loans given by professional and agricultural money lenders, traders, commission agents, relatives, friends, etc. 5. Borrower’s classification: The credit is also classified on the basis of type of borrower. This classification has equity considerations. Based on the business activity like farmers, dairy farmers, poultry farmers, pisiculture farmers, rural artisans etc. Based on size of the farm: agricultural labourers, marginal farmers, small farmers , medium farmers , large farmers , Based on location hill farmers (or) tribal farmers. 6. Based on liquidity: The credit can be classified into two types based on liquidity and they are Self-liquidating loans: They generate income immediately and are to be paid with in one year or after the completion of one crop season. Ex: crop loans. ï‚ · Partially -liquidating: They will take some time to generate income and can be repaid in 2-5 years or more, based on the economic activity for which the loan was taken. Ex: Dairy loans, tractor loans, orchard loans etc., 7. Based on approach: Individual approach: Loans advanced to individuals for different purposes will fall under this category Area based approach: Loans given to the persons falling under given area for specific purpose will be categorized under this. Ex: Drought Prone Area Programme (DPAP) loans, etc Differential Interest Rate (DIR) approach: Under this approach loans will be given to the weaker sections @ 4 per cent per annum. 8. Based on contact: Direct Loans: Loans extended to the farmers directly are called direct loans. Ex: Crop loans. Indirect loans: Loans given to the agro-based firms like fertilizer and pesticide industries, which are indirectly beneficial to the farmers aSource of Agricultural Credit are called iidirct loans. The sources of agricultural finance are broadly classified into two categories: (A) Noninstitutional Credit Agencies or informal sources, and (B) Institutional Credit Agencies or Formal Sources. A. Non-institutional Credit Agencies i) Traders and Commission Agents: Traders and commission agents advance loans to agriculturists for productive purposes against their crop without completing legal formalities. It often becomes obligatory for farmers to buy inputs and sell output through them. They charge a very heavy rate of interest on the loan and a commission on all the sales and purchases, making it exploitative in nature. ii) Landlords: Mostly small farmers and tenants depend on landlords for meeting their production and day to day financial requirements. iii) Money lenders: Despite rapid development in rural branches of different institutional credit agencies, village money lenders still dominate the scene. Money lenders are of two types- agriculturist money lenders who combine their money lending job with farming and professional money lenders whose sole job is money lending. A number of reasons have been attributed for the popularity of moneylenders such as: (a) they meet demand for productive as well as unproductive requirement; (b) they are easily approachable at odd hours; and (c) they require very low paper work and advances are given against promissory notes or land. Money lenders charge a very high rate of interest as they take advantage of the urgency of the situation. Over the years a need for regulation of money lending has been felt. But lack of institutional credit access to certain sections and areas had facilitated unhindered operation of money lending. B. Institutional Credit Agencies The evolution of institutional credit to agriculture could be broadly classified into four distinct phases 1904-1969 (predominance of co-operatives and setting up of RBI), 1969-1975 [nationalisation of commercial banks and setting up of Regional Rural Banks (RRBs)], 1975-1990 (setting up of NABARD) and from 1991 onwards (financial sector reforms). Institutional funding of the farm sector is mainly by commercial banks, regional rural banks and co-operative banks. Share of commercial banks in total institutional credit to agriculture is almost 48 percent followed by cooperative banks with a share of 46 per cent. Regional Rural Banks account for just about 6 per cent of total credit disbursement. i) Government: These are both short term as well as long-term loans. These loans are popularly known as Taccavi loans which are generally advanced in times of natural calamities. The rate of interest is low. But it is not a major source of agricultural finance. ii) Cooperative Credit Societies: The history of cooperative movement in India dates back to 1904 when first Cooperative Credit Societies Act was passed by the Government. The scope of the Act was restricted to establishment of primary credit societies and non-credit societies were left out of its purview. The shortcomings of the Act were rectified through passing another Act called Cooperative Societies Act 1912. The Act gave provision for registration of all types of Cooperative Societies. This made the emergence of rural cooperatives both in the credit and noncredit areas, though with uneven spatial growth. In subsequent years a number of Committees were appointed and recommendations implemented to improve the functioning of the cooperatives. Soon after the independence, the Government of India following the recommendations of All India Rural Credit Survey Committee (1951) felt that cooperatives were the only alternative to promote agricultural credit and development of rural areas. Accordingly, cooperatives received substantial help in the provision of credit from Reserve Bank of India as a part of loan policy and large scale assistance from Central and State Governments for their development and strengthening. Many schemes involving subsidies and concessions for the weaker sections were routed through cooperatives. As a result cooperative institutions registered a remarkable growth in the post-independence India. iii) Commercial Banks: Previously commercial banks (CBs) were confined only to urban areas serving mainly to trade, commerce and industry. Their role in rural credit was meagre i.e., 0.9 per cent in 1951- 52 and 0.7 per cent in 1961-61. The insignificant participation of CBs in rural lending was explained by the risky nature of agriculture due to its heavy dependence on monsoon, unorganized nature and subsistence approach. A major change took place in the form of nationalisation of CBs in 1969 and CBs were made to play an active role in agricultural credit. At present, they are the largest source of institutional credit to agriculture. iv) Regional Rural Banks (RRBs): RRBs were set up in those regions where availability of institutional credit was found to be inadequate but potential for agricultural development was very high. However, the main thrust of the RRBs is to provide loans to small and marginal farmers, landless labourers and village artisans. These loans are advanced for productive purposes. At present 196 RRBs are functioning in the country lending around Rs 9,000 crore to rural people, particularly to weaker sections. v) Microfinancing: Microfinancing through Self Help Groups (SHG) has assumed prominence in recent years. SHG is group of rural poor who volunteer to organise themselves into a group for eradication of poverty of the members. They agree to save regularly and convert their savings into a common fund known as the Group corpus. The members of the group agree to use this common fund and such other funds that they may receive as a group through a common management. Generally, a self-help group consists of 10 to 20 persons. However, in difficult areas like deserts, hills and areas with scattered and sparse population and in case of minor irrigation and disabled persons, this number may range from 5-20. As soon as the SHG is formed and a couple of group meetings are held, an SHG can open a Savings Bank account with the nearest Commercial or Regional Rural Bank or a Cooperative Bank. This is essential to keep the thrift and other earnings of the SHG safely and also to improve the transparency levels of SHGs transactions. Opening of SB account, in fact, is the beginning of a relationship between the bank and the SHG. The Reserve Bank of India has issued instructions to all banks permitting them to open SB accounts in the name of registered or unregistered SHGs. Genesis and Historical Background The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD) set up by the RBI under the Chairmanship of Shri B Sivaraman in its report submitted to Governor, Reserve Bank of India on November 28, 1979 recommended the establishment of NABARD. The Parliament through the Act 61 of 81, approved its setting up. The Committee after reviewing the arrangements came to the conclusion that a new arrangement would be necessary at the national level for achieving the desired focus and thrust towards integration of credit activities in the context of the strategy for Integrated Rural Development. Against the backdrop of the massive credit needs of rural development and the need to uplift the weaker sections in the rural areas within a given time horizon the arrangement called for a separate institutional set-up. Similarly. The Reserve Bank had onerous responsibilities to discharge in respect of its many basic functions of central banking in monetary and credit regulations and was not therefore in a position to devote undivided attention to the operational details of the emerging complex credit problems. Thispaved the way for the establishment of NABARD. CRAFICARD also found it prudent to integrate short term, medium term and long-term credit structure for the agriculture sector by establishing a new bank. NABARD is the result of this recommendation. It was set up with an initial capital of Rs 100 crore, which was enhanced to Rs 2,000 crore, fully subscribed Role and Functions †¢ NABARD is an apex institution accredited with all matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas. †¢ It is an apex refinancing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas †¢ It takes measures towards institution building for improving absorptive capacity of the credit delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of personnel, etc. †¢ It co-ordinates the rural financing activities of all the institutions engaged in developmental work at the field level and maintains liaison with Government of India, State Governments, Reserve Bank of India and other national level institutions concerned with policy formulation. †¢ It prepares, on annual basis, rural credit plans for all districts in the country; these plans form the base for annual credit plans of all rural financial institutions †¢ It undertakes monitoring and evaluation of projects refinanced by it. †¢ It promotes research in the fields of rural banking, agriculture and rural developmentby the Government of India and the RBI. Mission Promoting sustainable and equitable agriculture and rural development through effective credit support, related services, institution building and other innovative initiatives. In pursuing this mission, NABARD focuses its activities on: Credit functions, involving preparation of potential-linked credit plans annually for all districts of the country for identification of credit potential, monitoring the flow of ground level rural credit, issuing policy and operational guidelines to rural financing institutions and providing credit facilities to eligible institutions under various programmes Development functions, concerning reinforcement of the credit functions and making credit more productive Supervisory functions, ensuring the proper functioning of cooperative banks and regional rural banks Objectives NABARD was established in terms of the Preamble to the Act, for providing credit for the promotion of agriculture, small scale industries, cottage and village industries, handicrafts and other rural crafts and other allied economic activities in rural areas with a view to promoting IRDP and securing prosperity of rural areas and for matters connected therewith in incidental thereto. The main objectives of the NABARD as stated in the statement of objectives while placing the bill before the Lok Sabha were categorized as under : 1. The National Bank will be an apex organisation in respect of all matters relating to policy, planning operational aspects in the field of credit for promotion of Agriculture, Small Scale Industries, Cottage and Village Industries, Handicrafts and other rural crafts and other allied economic activities in rural areas. 2. The Bank will serve as a refinancing institution for institutional credit such as long-term, short-term for the promotion of activities in the rural areas. 3. The Bank will also provide direct lending to any institution as may approved by the Central Government. 4. The Bank will have organic links with the Reserve Bank and maintain a close link with in. sources of Funds Authorised share capital of NABARD is Rs 500 crores and issues and paid up capital is Rs 100 crores. NABARD accrues additional funds from borrowings from the Government of India and any institution approved by the Government of India, issue and sale of bonds i.e. Rural Infrastructural Development Bond, borrowings from RBI, deposits from State Governments and local authorities and gifts and grants received . NABARD have been providing financial assistance to various financial institutions engaged in Rural Credit Delivery System. These agencies include Co-operative Credit Institutions, Regional Rural Banks and Commercial Banks. The demand for funds for rural development has come up considerably in recent times. To meet the increasing demand of rural credit, NABARD raises funds from the following sources: (i) Capital: It went up from Rs.100 crore in March 1992 to Rs.1500 crore in March 1998 and further Rs. 2000 crore in 1999. The total Capital of NABARD is contributed by Government of India and RBI. The capital remained at Rs. 2000 crore in March 2002. (ii) Deposits: The deposits mainly come from Rural Infrastructural Development Fund (RIDF) introduced in Central Government Budget from the year 1995-96. Another source of deposits comes from banks which fall short of attaining priority sector target. The total outstanding RIDF deposits aggregated Rs. 9725 crore as on 31st March 2002. (iii) Borrowings: NABARD raises funds through market borrowings, Loans from Union Government and borrowings in Foreign Currency from abroad. Apart from these they also borrow funds from RBI. Their borrowings are mainly from three sources. They are by issue of bonds, borrowings from Government of India and borrowing abroad in foreign currency. The total outstanding borrowing amounted to Rs. 15,772 crore in March 2002. (iv) Reserves and: The excess of income over expenditures is generally accumu- Surplus lated as Reserves and surplus. As on March 2002, these reserves aggregated to Rs. 3626 crore. (v) Nation Rural Credit: These funds were earlier provided by RBI to NABARD in con- Funds (Long-term section with assistance under Agriculture Sector. These were Operation Fund given out of profits earned by RBI. They stood at Rs.11064 crore Stabilization Fund) as on March 99. However it has gone up to Rs. 13,975 crore as on March 2002. However, Reserve Bank stopped contributing large sums towards these two Funds from 1994. Presently, the RBI contributes only Rs.1.00 crore each to these funds as a symbolic gesture because the RBI Act provides for such contributions. The balance contribution now comes from NABARDs own profit. (vi) Rural Infrastructural Development Fund (RIDF): The setting up of RIDF was announced in the Union Budget for 1995-96. The RIDF was set up with a contribution of Rs. 2000 crore mainly to provide assistance to State Governments to take up infrastructure projects pertaining to irrigation, rural roads, bridges and flood control measures. Contributions to this Fund came from Indian Scheduled Commercial Banks (other than RRBs) which failed to achieve the minimum agricultural lending target of 18 per cent of net bank credit. The shortfall of amounts in the target achievement was required to be kept in the RIDF with NABARD. Similarly RIDF II was set up in 1996-97 with contributions made by public sector banks which failed to achieve the minimum priority sector advances of 40 per cent. The shortfall in their target amount has to be kept in RIDF II. RIDF III was set up in 1997-98 with shortfall in priority sector landings of all private and public sector commercial banks. The contributions to these Funds were eligible for interest payment to be decided by Reserve Bank from time to time. The Funds are managed by NABARD. Loans out of these funds are mainly provided to State Governments to complete existing rural infrastructural projects and also for taking up new infrastructural projects in rural areas. Loans out of RIDF I was provided interest at the rate of 13.0 per cent and at 12.0 per cent out of RIDF II and III. The projects generally pertain to irrigation facilities and construction of Roads and Bridges in rural areas. Similarly RIDF IV and V were created in the Union Budget during 1998-99 and 1999- 2000. Further RIDF VI and VII were created in 2001 and 2002 with a corpus of Rs. 4,500 crore and Rs. 5,000 crore respectively. The scope of the fund has been extended to cover Gram Panchayats, Self Help Groups to develop rural infrastructural facilities like soil conservation, rural market yards, drainage improvement, etc. Students may observe the capital of NABARD has gone up by Rs. 1,500 crore to Rs. 2,000 crore during the year 2002. Similarly, the RIDF deposits which were only Rs. 3,608 crore in March 1999 were increased to Rs. 9,725 crore as on March 2002. The borrowing of NABARD has gone up substantially in the recent past from Rs. 9,000 crore in March 1999 to Rs. 15,772 crore in March 2002. The aggregate resources of NABARD were also substantially increased from Rs. 28,986 crore in March 1999 to Rs. 45,098 crore in March 2002. On the uses of funds while the loans and advances increased by about 25% between March 1999 and March 2002 loans out of RIDF funds went up substantially from Rs. 3,667 crore to Rs. 10,435 crore during the same period.

The Strategic Finance Of Nestle Management Essay

The Strategic Finance Of Nestle Management Essay Nestlà ©s case study provides various examples which demonstrate a link between concepts drawn from pre-requisite modules. In my opinion, the link between First Mover Advantage model clarified in Strategic Management and the concept of Merger Acquisition covered in Strategic Finance are the most interesting. Figure 1.1 provides evidence found through the combination of these two concepts. Figure 1.1: Link between FMA and MA Evidences In the 20th Century, Nestle expanded through a series of acquisitions Nestle enters markets early-before competitors Acquires local firms when good opportunities arise Local brand for local market (Customization) 2/3 of Nestlà ©s growth generated from acquisitions FMA to Polish market Nestlà ©s Acquisition of Goplana Strategic Finance (NarayananNanda, 2004) First Mover Advantage Strategic Management (Johnson et.al, 2008) Merger Acquisition First Mover advantage is defined as the benefits generated for a firm that breaks in new markets first (Johnson et.al, 2008). The aim is to build a strong and sustainable position within the market as a way to defend potential competitive newcomers. Regarding Nestlà ©, the company enters emerging markets early before prospective competitors in order to build a significant position within them (Case Study, 2011). Thus the company is able to respond to any potential economic and population growth within emerging markets as well as to any possible upcoming competition. Mergers Acquisitions are strategic components dealing with buying or combining different companies that can assist the company to a speedy growth and improve its financial performance especially in the long term (NarayananNanda, 2004). During the 20th century, Nestlà © has undertaken a number of mergers and acquisitions, most notably the acquisition of Maggi in 1947, and thus has achieved to extend its geographic presence and product line (Case Study, 2011). Nestlà ©s acquisition of Goplana, is an interesting example of how its activities link with the companys long-term strategy of achieving first mover advantage within the Polish market (Case Study, 2011). The company was aiming to rush its development inside the market and maintain its authority. As such, Nestlà © retained the local staff and management of the acquired company and carefully adjusted the Goplana product line to better fit local opportunities (Case Study, 2011). Overall, acquisitions have been an important function for Nestlà ©s growth (Cook et.al, 2003). Alongside the MA group, the firm uses people from the finance sector as to assist the financial analysis of MA process (Cullinan et.al, 2003). This shows a clear link between Nestlà ©s FMA strategy and its MA activities. The firm maintains local companies with regional staff in local markets as to better customize its performance by creating share value and local expertise. Significantly, the success of Nestlà © in growing local companies also depends on the management development programmes that Nestlà © uses in order to come closer and train its local managers (Case Study, 2011). The process of entry for a company influences its ability to create value. According to Rahman Bhattacharyya (2003), Nestlà © has benefited by acting as a first mover in emerging markets. In terms of business development, the company sometimes involves mergers and acquisition activities as a way to grow and create value. Moreover, the reasons behind the MA activities can vary according to expectations. These may be the economies of scale, speed of entry, shareholder expectations and so on (Johnson et.al, 2008). Mergers and acquisitions are considered as one of the most dynamic ways in which a firm can recombine assets to create value (AhernWeston, 2007). By being the first mover into a market it may hides some drawbacks. Hill Jones (2009) noted that first movers have to tolerate large costs of pioneering that later movers may not. Also first movers may fall into substantial mistakes and risks as they lack experience, where second movers can enjoy knowledge and improvements through first movers gaffes. Similarly, MA is a particularly stressful practice for people involved within the new corporate culture and structure that can create ambiguity, anxiety and antipathy amongst companys staff (Appelbaum et al 2000). Such a fact can destroy the organisations value. 2nd Question: Does it make sense for Nestlà © to focus its growth efforts on emerging markets? Why? According to the Case Study (2011), by the early 1990s Nestlà © realised that it faced important challenges in maintaining its rate of growth within the markets of Western Europe and North America. Therefore, the company has turned its attention to emerging markets for further growth. Rapoport (1994) stated that developed markets are in the saturated phase of their life cycle where the competition is becoming higher, creating the war of price and substitution. Due to the economic downturn in such markets, people incomes have been characterised as incomplete and thus consumers are becoming more price conscious. Additionally, population indexes show that the population growth rate has been stagnated in contrast with the emerging world which is expected to expand by the year 2015 (Delegge, 2009). Delegge (2009) stated that emerging market economies are growing at a faster pace than those in developed countries. Furthermore, the researcher indicates that due to the combination of the global recession and the downturn of real estate prices, residents of emerging markets are expected to outperform both American and European consumers in terms of spending dynamics. Thereby Nestlà © translated emerging markets as an opportunity of higher growth returns with the promise of significant market share in the long term. In order to maintain its growth rate, it does make absolute sense for Nestlà © to focus its growth efforts on emerging markets. Goldman Sachs introduced the BRIC acronym (Brazil, Russia, India and China) that refers to the countries which are estimated for the next decades to be at a better stage than the current developed markets (ONeilStupnytska, 2009). Furthermore, they announced the concept of the Next Eleven (N-11) countries such as Nigeria, Mexico and Turkey which have the potential of becoming along with BRICs, the worlds dynamic markets by 2032 (ONeilStupnytska, 2009). Nestlà © has already been active in developing economies but it is therefore slight in contrast with their rival company Unilever. Moreover, the US food drink report (2010) notes that even with the greatest exposure in such markets; Unilever has experienced negative average revenue. This was due to its poor business management and incorrect decisions made over the last five years. Nestlà ©s core competencies and capabilities can enable the company to continue performing in emerging markets. Nestlà © has the ability to create brands quickly and in a sustainable fashion with products such as Nescafe, which also give strong focus on RD which enables the company to generate greater profits (Datamonitor, 2010). The company has the unique strength to customize global products with the same quality standards based on customer needs in the local market. Also, the firm has unmatched geographic existence in the emerging markets and so the company has the flexibility to deal with circumstances that sometimes cannot be easily predicted (SinghChild-Villiers, 2010). Applying those distinctive competencies, Nestlà © can earn greater returns and gain a sustainable advantage over its competitors. Rahman Bhattacharyya (2003) supported that unique performance within emerging markets can offer differential advantages for a first mover company. Following a first mover strategy, Nestlà © has benefited in many emerging markets as it was the first company which offered differentiated affordable products in local markets (RahmanBhattacharyya, 2003). Nestlà © aims to build a substantial position by achieving successful customer perceptions. Moreover, as the market grows and income levels rise, Nestlà © can potentially benefit by being responsive in such possible situations. Nestlà © can also take advantage of location economies, which are created from performing a value creation activity in the best location possible (HillJones, 2009). For instance, Nestlà © has opened a new factory in Nigeria which was dedicated in Popularity Positioned Products (Nestle, 2011a). This enabled the company to achieve lower costs and therefore facilitated the company to customizing its products in terms of price and accessibility. Thus, by enduring in such location economies, Nestlà © can gain a competitive place in each single location. 3rd Question: What is the companys strategy with regard to business development in emerging markets? Does this strategy make sense? From an organisational perspective, what is required for this strategy to work effectively? Regarding the business development in emerging markets, Nestlà ©s strategy was to enter markets before competitors in order to get the first mover advantage. The company aims to build a significant position within the developing world and thus be able to understand and satisfy the requirements of local population. Nestlà © acquires local firms when valuable opportunities arise during the entry process of the company into new emerging markets. A good example is that of 1995 where Nestlà © acquired Rossia, one of the leaders of chocolate manufacturer in Russia (Nestle, 2009). Nestlà © realised the chances that have been offered from the opening of Russian market and the increase of income levels, by making this new investment. In addition, there are times when Nestlà © enters emerging markets by building its own infrastructure from scratch, such as in China. Considering such a method, the company enters markets where no actual competitors exist and thus creates its own paths as a way to establish a market presence. Nestlà ©s product portfolio includes a strong presence of numerous key brands which focus on developing local marques for their respective markets thereby escaping its global brands for these customers (Urde, 1999). Overall, the company owns 8500 brands under its organisational umbrella and less than 10% are registered in more than one country. As an alternative way of trying to force a product in a market, the company customizes its product based on the needs of the local consumer and focuses at the extent of achieving economies of scale. At the moment, Nestlà © follows the strategy of adaptation to local conditions by using its in house PPP (Popularity Position Products) method which offers affordable products of high quality to meet the needs of emerging consumers (Nestle, 2010b). In the long-term, Nestlà © is aiming to supply the whole region with various products in order to realize economies of scale. For instance, as part of its long term business development strategy in Middle East, Nestle has established a network of factories in five countries. According to Porters generic strategies figure 1, Nestlà © adopts focus/niche strategy which reduce company risks and focus its marketing efforts on a limited number of market segments (Eldring, 2009). By adopting such a strategy, the company aims to build a substantial position in these particular markets so as to gain a competitive advantage using product innovation and marketing activities. Due to the fact that these economies are growing at a fast pace, Nestlà © is able to escape such segments and can offer a wider variety of upscale products such as mineral water and prepared foodstuffs (Case Study, 2011). (Source: Adopted from: www.mindtools.com/media/Diagrams/GenericStrategies) The successful presence of Nestlà © within developing markets verifies that the implication of Nestlà ©s strategy has been correctly applied. The corporate structure that Nestlà © comprises is closely related with the idea that all markets are equally important. Lavelle (2004) mentioned that Nestlà ©s strategies originated from a particular point and are independently applied from its local units. In order for the strategy to work effectively, it is necessary for the company to consider the following issues. Firstly, the firm must have available resources to invest in RD as well as the fast and effective production of innovative products (Hitt et.al, 2009). Nestlà © has established 6 RD centres in emerging markets that provide the ability to launch new products quickly and efficiently (BulckeSingh, 2011; Bauer, 2011). In order for the company to maintain its advantages over the competition it is imperative to continue focusing and investing on its RD activities. Secondly, the company must ensure that products can be customized at the requirements of any local market. Using the PPP model, Nestlà © is able to offer its products based on the requirements of the emerging consumers. Finally, Nestlà © must continue focusing on long-term investments in order to sustain a competitive advantage within the emerging markets. 4th Question: Through your own research on NESTLE, identify appropriate performance indicators. Once you have gathered relevant data on these, undertake a performance analysis of the company over the last five years. What does the analysis tells you about the success or otherwise of the strategy adopted by the company? Key Performance Indicators can be described as the main companys parts that assist to define and evaluate the success of a strategy in which the business is involved (Eckerson, 2009).Obviously, companys performance indicators can differ according to the reasons that have been composed for. Performance Indicators can be defined using numerous models, one of which is the Balanced Scorecard. The concept involves both qualitative and quantitative measures which evaluate the performance regarding the strategy chosen (Johnson et.al, 2008). Figure 4.1 applies the concept of Balanced Scorecard for Nestlà ©; an analysis has been carried out and can be seen below. Figure 4.1: Nestlà ©s Balanced Scorecard Financial Sales EBIT Net Profit NESTLE To be recognised as the world leader in Nutrition, Health and Wellness, trusted by all its stakeholders To be the reference for financial performance in its industry Internal Business Employees Factories Customer PPP Customer Acquisition Learning Innovation GLOBE-NCE RD (Source: Adapted from Johnson et.al, 2008 www.nestle.com) Firstly, the financial perspective can help the company understand its shareholders perception. Nestlà ©s EBIT grew steadily in the past 5 year period from CHF 13302 million to CHF 16194m in the year 2010, a growth of 21.7% (Nestle, 2011c). Significantly, 2009s EBIT was reported at CHF 15699m, an increase of just 0.15%. Moreover, the relative sales figures grew from CHF 98458m in 2006 to CHF 109722m in 20010, dropping at CHF107618m in 2009 after a successful year in 2008 where sales were at CHF109908m (Nestle, 2011c). In addition, the net profit margins showed a dramatic growth over the last five years from CHF9197m in 2006 to CHF34233m in 2010. Such a significant increase of net profit was due to the disposal of 52% of Alcons outstanding capital, which increased the profit (as a percentage of sales) from 9.7% in 2008 to 31.2% in 2010 year (Nestle, 2011c). Secondly, an internal analysis makes it possible to identify the level of operational procedures of Nestlà ©. During the year 2006, Nestlà ©s workforce involved 265 000 people, a number that increased in the year 2008 to 283000. Throughout 2009, the company cut about 5000 jobs resulting in a 281000 person workforce for 2010 (Nestle, 2011b). In addition, the company in 2009 was operating 449 factories 30 less from the year 2006 (Nestle, 2007b; 2010a). With respect to the third perspective of Learning Innovation, Nestlà © seems to have a strong focus throughout the years. Taking into consideration Nestlà ©s product innovation, it can be seen that the company is aiming for a deeper scope within this area. In 2006, Nestlà © spent about CHF 1.7 billion for its RD with a further increase in the following years (Nestle, 2007b). According to Nestlà © (2010a) spends about 1.9% of its annual revenues on its RD program which is considered as one of the key drivers of growth. In addition, the company combines two programs, GLOBE and NCE, which enable the reduction of production waste. Through these models, Nestlà © has achieved CHF 1 billion in 2008 which has further increased its efficiencies to a CHF 1.5 billion saving in 2009 (Nestle, 2010a). Finally, the consumer perspective is related to how customers perceive Nestlà ©. This can be measured through Nestlà ©s PPP model which aims to focus on low-income consumers around the world (Nestle, 2010b). Within 2007, the PPP performance involved 37 countries while in 2008 this number almost doubled to 70, generating an organic growth of 27% (Nestle, 2008). In 2009, PPP achieved sales of CHF 8.8bn with an organic growth of 12.7% (Nestle, 2010b). As a final point, 2010s concept encompassed 90 countries with sales figures of CHF 11bn and a double digit growth (Bulcke, 2011) Overall, the analysis of such indicators shows that Nestlà © has been able to improve its performance over the last five years. Despite the crisis triggered in 2008, Nestlà © is actually steady on a financial and non-financial scale. It seems that the long term strategy generates positive results for the short term as well. Giving focus on customization of local markets through the PPP concept, the company builds strong roots for the future, particularly in emerging markets as there are high growth potentials. 5th Question: How would you describe Nestlà ©s strategic posture at the corporate level; is it a pursuing, a global strategy, a multi-domestic strategy, an international strategy or a transnational strategy? Multinational companies use four main primary strategic postures when competing in the international environment. These are illustrated in figure 5.1. Such strategies depend on factors that are related to two types of pressures, Cost Reductions and Local Responsiveness (Hill, 2009). Figure 5.1: International Operations Strategies TRANSNATIONAL STRATEGY Move material, HR, ideas across national boundaries Economies of scale Location Economies Ex. Nestle, Kraft GLOBAL STRATEGY Standardized products Economies of scale Ex. Motorola, Intel High MULTIDOMESTIC STRATEGY Customization Different National Markets Ex. MTV, McDonalds INTERNATIONAL STRATEGY Import/export Minimal local customization Ex. Microsoft, PG Low High Low (Source: Adapted from Hill, 2009; AhlstromBruton, 2009) Figure 5.1, demonstrates the conditions under which each of the International Strategies are most appropriate. In addition, it shows some key characteristics of each strategy and gives examples of companies that follow different strategies. Regarding Nestlà ©s strategic posture, the company traditionally operated on a decentralized structure as a way to customize its product offerings to local needs, a key characteristic of a multi-domestic company. With the multi-domestic strategy, an organisation focuses on national differences and customizes its products by responding to the needs of the local preferences. This is in contrast to the global strategy where the company is able to improve its profits and development through lower costs that are derived from location economies and economies of scale (Hill, 2009). Due to the high competitive conditions that Nestlà © faced along with the need to obtain cost reductions, the company moved one step ahead by adopting a transnational strategy (Busco et.al, 2006). Such a strategy involves elements of global and multi-domestic strategies through which the company seeks to achieve both cost efficiencies and local customization (Hitt et.al, 2009). Child-Villiers, Head of Investor Relations, noted that Nestlà © is now integrated in a proactive and efficient way within the markets. He also supported that the company goes one step ahead as it links the globe with Nestlà ©s Continuous Excellence programme (BulckeSingh, 2011). Similarly, its competing company, Kraft Foods shifted to a transnational international strategy to better compete and grow (FoodProcessing.com, 2007). Within Nestlà ©, its national units are characterised as semiautonomous as they are able to involve decisions such as pricing and marketing in order to customize the products to local needs. Localization rather than globalization is the key characteristic of the companys idea which is also supported by the belief that there is not a single product for everyone (Nestle, 2007a). Although the authority of local subsidiaries are still decentralised, the firm has an integrated structure of seven strategic business units (SBUs) that manage advanced strategic decisions for key products ranks and achieve cost economies by centralizing operations such as acquisitions, production and RD (Hill, 2009). The company is divided into five divisions made up of Africa, America, Europe, Asia and Oceania. However, each zone assists in the development of the overall strategy but do not interrupt the local strategic decisions. It can be noted that Nestlà ©s activities and resources are neither centralised in the company, nor decentralised so that each subsidiary unit is able to operate separately in local market. Peter Brabeck-Letmathe, the CEO of Nestlà © noted that while the company comes closer with the consumer the more decentralized it is, he nevertheless supported that the more it is dealing with high level judgments, the more centralized decision making becomes (Wetlaufer, 2001, p.116) Moreover, following a transnational strategy it may sometimes require the company to adapt a more flexible tactical expansion and therefore involves a partnering with other organisations or exclusively owned acquisitions (DooleLowe, 2008). For instance, in 2003, Nestlà © formed a partnership with Colgate-Palmolive in order to develop a gum and candy product line. This was done in an attempt to capture a share of a market dominated by other competitors (Fox, 2005). 6th Question: Does this overall strategic posture make sense given the markets and countries that Nestlà © participates in? Why? Generally, Nestlà © operates almost in every country all around the world. Within the developed markets Nestlà © has a strong basis while in developing world the company involves a huge presence as they are potential markets for growth. According to Hill (2009), transnational strategy makes most sense in markets where the pressures for cost reductions and local responsiveness are high. Due to the high competitive levels and the financial complications that exist in developed markets, companies have to rethink about their strategies in order to survive (Hill, 2009). Then again, emerging markets involve low spending consumers with different preferences and tastes as well. It is therefore important for firms to respond at the cost pressures and the local requirements of the markets (Hill, 2009). Following this transnational structure, Nestlà © is able to customize global products in accordance with consumer requirements in the local market. This can be achieved through its autonomous local units which are responsible to understand the local needs and decisions related to marketing and distribution. Using an extensive market research, the company offers its products under the organisation umbrella and specializes on building brand names that are associated with local conditions (XieBoggs, 2006). Consequently, the company achieves the advantage of building customer loyalty and brand equity in local markets (Pass et.al, 1994). Allowing the subsidiaries to modify their packaging and distributions channels to meet local needs is a further benefit for Nestlà ©. In instance, Nestlà © and Mars in UK have combined their confectionery deliveries to Tesco, as a way to reduce as much possible trucks from Britains roads (IGD, 2010). This had a result to reduce both environmental and distribution costs. Since the early 1990s Nestlà © UK has been recycling its packaging as a way to reduce the amount of packaging used (IGD, 2008). The company decreased not only the costs of packaging but also its transportation costs since less Lorries are required. Regarding Nestlà ©s strategic posture, the companys subsidiaries within emerging markets have achieved to reap previous learning and ideas that have been used in developed markets (BulckeSingh, 2011). It seems that the company has succeeded to successfully transfer capabilities, skills and core competences in these markets. Hill (2009) supported that a transnational enterprise must give strong attention on flexibility by exploiting an information flow among the organisation and its local units. Thus, the key characteristic of transnational strategy offered the ability for Nestlà © to achieve almost 40 billion of sales in emerging markets and a growth of 11.5% in 2010 year (BulckeSingh, 2011). This worldwide combination strategy allows Nestlà © to enjoy benefits of low cost through location economies and economies of scale (Ireland et.al, 2008). For instance, as part of its strategy in the Middle East region, Nestlà © has set up a network of factories in five countries with a prospect to supply the whole region, achieving at the same time economies of scale (Case Study, 2011). Through the integration of regional economic groupings the company is able to produce larger units which can supply entire areas, building at the same time competitive advantage (Nestle, 1999). Sometimes, the transnational strategy involves a complex structure which includes a potential danger of losing control. Under this circumstance the organisation involves problems of creating a practical and valuable organizational structure and it is therefore impossible to manage the strategy (Hill, 2009). According to Bartlett et.al (2010) in order avoid any risks the transnational strategy requires a balanced binary of decision making and not a choice of one or the other but of where, how, when. 7th Question: Is Nestlà ©s management structure and philosophy aligned with its overall strategic posture? The management structure and philosophy is well affiliated with Nestlà ©s overall strategic posture. Nestlà © provides cooperation between local autonomy and centralized decision making. Even that the authority to local subsidiaries is decentralised, the firm is organised into seven SBUs that involve in the overall strategy development. Thus the multinational firm focus on local responsiveness and global integration (BartlettGhosal, 2000). The companys structure is well matched with the concept of transnational strategy. The SBUs that Nestlà © performs around the world are responsible for top strategic decisions which have specific focus on particular product lines such as coffee and beverages (Parsons, 1996). In addition, these SBUs participate within the overall companys strategy where Cook et.al. (2003) noted that the acquisitions made from the SBUs are essential drivers of firms success. Beside that structure of SBUs, Nestlà © includes regional divisions in five key geographical zones (Case Study, 2011). In combination with SBUs, these regional organisations are also supporting the overall strategy and business development. It is also important to state the RD that Nestlà © operates which focus on the creativity and production of products that meet local requirements. The RD function involves 29 research groups within various countries around the world (Bauer, 2011). Beyond such structure, Nestlà © decentralized as the responsibility for market decisions is carried down to local units which are basically operate autonomously for various local judgments. Nestlà © supports the philosophy that there is no single product for everyone, which achieves to understand local preferences through its subsidiaries and thus develops tailored products that meet those tastes and habits. Figure 7.1: Nestlà ©s organisation chart (Source: Adopted from: www.Nestle.com) Following the above figure 7.1, it can be seen that Nestlà © operates within a global matrix structure. As it has been already stated above, Nestlà ©s structure centralizes in some operating decisions and at the same time decentralizes in cases of national operations. The company integrates its functional competencies and capabilities into local teams such as to successfully respond within the global marketplace (BulckeSignh, 2011). Thus using a global matrix structure the company is able to fulfil customer requirements from different geographical places (Ireland et.al, 2008). According to Hill (2009), a global matrix structure is highly recommended for an organisation which adopts transnational strategy in order to be effective implement. Since 2000, Nestlà © has developed its Global Business Excellence (GLOBE) approach with a prospect of simplifying its organisational process structure through an integrated knowledge system. The programme provides Nestlà ©s companies with similar plans, structures and best performance to integrate actions thru the entire organization and to support organizational strategy for business objectives (Johnson, 2005). Recently, the company reorganised its structure through the development of an additional programme known as NCE (Nestlà © Continuous Excellence). Through that method Nestlà © is able to reduce production waste by saving million tonnes of product material through know-how production such as recycling (Nestle, 2010c). Bulcke Signh (2011) noted that the combination of those two programmes, GLOBE and NCE, enable the company to drive cost-effective growth and outperform the market. Concluding, the idea behind those programmes was to reorganise the organisations structure as t o be linked with the overall strategy.

ICT in the Community :: ICT Essays

ICT in the Community I live in the community of Maidenhead in the south-east of England. ICT is used everyday and without it the community would start to break down and the way of life would run much slower. Cyber cafes The cyber cafà © in Maidenhead is perfect for tourists that take digital photos and want to send them to family and friends, also if a tourist wants to contact family and friends it is probably cheaper to email them from a cyber cafà © that having to use the phone to call another country although using the phone is quicker than email. Also people from within the community can use cyber cafà ©s to do just about anything they would need to on a computer. They can read emails, send emails, browse the web and create documents. Some cyber cafà ©s also offer scanners, printers and photocopiers although the cyber cafà © in Maidenhead only offers a black and white printer. The down side with using a cyber cafà © is the price; to use the facilities in Maidenhead it costs  £5.00 per hour. Websites and Forums The Maidenhead Rugby Club has there own website which keeps fans up to date with the team and how things are going, this also gives contact details to get hold of people such as the manager and coach, so now they don't have to put adverts or news in the maidenhead advertiser which not only costs but it only gets publish weekly so information could be old or irrelevant. The website also offers a forum for fans to talk to each other about the team. The good thing about this website is that it is kept up to date by people that work along side the team so the information posted onto the site is true. The down side with the forum is that forums can go down and sometimes there can be problems with logins. The website could have the choice to have a live chat but with this messages are not save where as with a forum

Conquering the Texas Frontier :: essays research papers

Conquering the Texas Frontier When looking at the vast lands of Texas after the Civil War, many different people came to the lands in search for new opportunities and new wealth. Many were lured by the large area that Texas occupied for they wanted to become ranchers and cattle herders, of which there was great need for due to the large population of cows and horses. In this essay there are three different people with three different goals in the adventures on the frontier lands of Texas in its earliest days. Here we have a woman's story as she travels from Austin to Fort Davis as we see the first impressions of West Texas. Secondly, there is a very young African American who is trying his hand at being a horse rancher, which he learned from his father. Lastly we have a Mexican cowboy who tries to fight his way at being a ranch hand of a large ranching outfit. Emily K. Andrews, wife of Col. George Andrews of Fort Davis, starts her journey in mid summer around the Austin area. She travels with others as they make their way East. Through her journal entries to her father, we can see that this was no easy trip. She seems to be used to a solid roof over her head, as well as a non-dirt floor. She tells that on many occasions of the threat of Indians, and how ruthless they are, keeping her distance and even sleeping "with one eye open" while in the camps along the way. Being a woman out on the frontier she does not seemed to be scared yet comes off as being rather brave and very smart. Her descriptions of the land and the towns they encountered along the way are very precise and if it had been possible for other females to read would have set their minds at ease. In her journal she talks about how inviting the other frontier people are and how reassuring that is to help keep her mind off the ever threatening Indian attacks. On the other hand there were people trying to settle and make a living for themselves, especially after the freeing of all the slaves. Will Crittenden is one of those people. He was born in Texas after his father moved here from Alabama. Will had been taught about being a horse rancher at the age of 5 from his father and now at the age of 15 was ready to go out on his own.

Guide to Web Research and MLA Essay

The World Wide Web is the broadest source of information today. Other than this fact, it is also accessible through the computer, given that it has Internet access. Since it has a broad source of information, people use it for academic research, besides its use for entertainment. However, one major problem with Web searches is the published material’s credibility since it is often open to a wide variety of audiences and contributors. Since the students’ reliability on Web research is increasing, then there is a need to address the issue about the web sources’ credibility. One way to ensure the sources’ credibility is to evaluate the details on the website itself—like the author, date published, and web site title. These details can help one to understand the worth and uniqueness of the information on the website since some information tend to be rehashes of the original one. To make things simpler, it is quite advisable to look at academic websites—like university databases—and online scholarly journal sites. Most of the time, the information here is quite credible since the authors from such websites have the credentials to prove their words’ worth. I believe everyone already had their fair share of frustration from web research. More often than not, the information that appears on the first page tend to come from websites ranging from slightly reliable to non-reliable. Other than that, I have also encountered links to websites wherein payment is required in order to gain access to the information—like many online libraries. These problems can discourage students and force them into accepting the information regardless of its credibility. Furthermore, it can also exhaust the energy of students, making them more timid. The Modern Language Association or MLA is a language and writing institution developed in order to create a common guide of academic writing that the students, scholars, and members of the academe could follow. It basically provides a network upon which members from different places could share information and academic trends with others (MLA, 2008). Since the organization has a myriad of members wherein most are experts in the academe, their guide becomes a requirement in order to help the students and other members of the academe to organize their academic papers properly. Fighting Until the Very End of Life The poem Do not Go Gentle into that Good Night by Dylan Thomas shares the struggle of a dying person or a person’s grief on the gradual loss of a dying loved one. Basically, the poem centers on the theme of not giving up and fighting until death. Once a person succumbs to the thought of death, then he or she may already be considered dead. In a nutshell, the first stanza entails a persona telling the reader (or to whom the poem is dedicated) to not give up easily and go fight against death and weakness—basically, to become fierce. In stanzas two to five, the persona gives out specific examples of fierce men never giving up, which in turn supports the first stanza. In stanza six, the persona addresses the reader (or to whom the poem is dedicated) to show him or her the fierceness that he or she once had, or the fierceness of his or her soul, which would make the persona happy (Thomas, 1971). The persona of the poem may be Dylan Thomas himself, as he wrote this poem for his dying father—growing weaker from old age and blindness. Throughout the poem, he sought to encourage his father to fight on for his life, no matter how inevitable death was (citation). Besides him being the persona, it could also assume the role of a dying person who encourages others to fight on and to never give up until the very end. The persona assumes a sad yet encouraging tone throughout the poem. The phrases Do not go gentle into that good night and Rage, rage against the dying light are also reiterated throughout the poem in order to give emphasis to the theme of the poem. The persona also constantly reminds the reader and the target person to never go down without a fight since giving up life early would mean that the person is just as good as dead already. The two connotative words that have been heavily used throughout the poem is night and (dying) light. Basically, night here could be referring to the dying person (not the persona) accepting his or her fate peacefully, although there may as well be other connotations for this word. On the other hand, light or the phrase dying of the light could be pertaining to death, or at least weakness. The poem follows an alternating rhyme scheme, wherein the key words to follow are night and day. There is also a repetition of the two phrases Do not go gentle into that good night and Rage, rage against the dying light which gives more emphasis to the theme of the poem. The poem’s form and tone seem too soft and gentle for the poem’s subject which is death. This creates an irony that the persona is asking the dying person to become enraged against death. Metaphors and personifications are used throughout the poem, in order to give a hopeful tone for the persona’s beseeching of the dying person, instead of a tone associated with grief and loss. An example would be the stanza: â€Å"Though wise men at their end know dark is right, / Because their words had forked no lightning they / Do not go gentle into that good night† (4-6). References Thomas, D. (1971). Do not go gentle into that good night. Poets. org. Retrieved July 4, 2009 from http://www. poets. org/viewmedia. php/prmMID/15377. MLA. (2008). About the MLA. Retrieved July 4, 2009 from http://www. mla. org/about.