Environmental Issues in the Car Industry

Environmental Issues in the Car Industry What are the environmental issues facing the future of the European car industry? Abstract This paper looks at the issues facing the European car industry with regard to environmental issues. This is done by looking at past and present published material that revolves around the subject matter under specified themes. Theoretical perspectives within the European business environment such as pestle, models of market structure, profit maximisation, sources of finance, market segmentation, branding strategy, European business and its effects on the environment are all explained in relation to their relevance of environmental issues. These theoretical themes are used because they all act as a catalyst to the subject matter of the problems caused by cars which are not fuel efficient or less pollutant within Europe. In addition, a recently published paper on the directive for labelling on cars with regard to CO2 emissions, awareness of consumers, and fuel efficiency types in the European Union is used as empirical evidence to support ones findings as there was a shortage of time to carry out one. Finally a critical review of matches and miss-matches is used to compare and contrast similarities between the theoretical perspectives identified to prove the latter mentioned and the empirical evidence gathered for this paper, so as to forge a way forward for the European Car Industry. Chapter 1: A Brief History of The Car Industry Introduction The European Car Industry is one that has come of age. From its early beginnings over 100 years ago, it is beginning to show signs of struggling in today’s modern society. This has come about due to the new challenges that the industry is facing in the new millennium. Issues such as air pollution, congestion, traffic jams etc., are all factors that have made the car industry rethink its goals, objectives, its marketing, and the consequences that are not foreseen. As a whole the car industry makes nearly 60 million cars and trucks every year, and employs millions of people around the world. Average profit margins have declined from 20 present or more in its hey days of the1920’s to around 10 present in the 1960’s and less than 5 present in this present day, infect some volume car makers such as Fiat, Ford, and Vauxhall, have actually been losing money. It can be stated that over century ago the car industry feasibly invented modern industrial capitalism. In the Economist (2004) the car started life in Germany and early development of the industry began in France (hence the word automobile, a French word) in the 1900’s, but it was in America that the car industry came of age with the Henry Ford T-Model of mass production which started in Chicago round about the same period(1900’s). In the 1920’s Alfred Sloan’s ideas of running General Motors provided the model for the great corporations that grew up to dominate the second half of the 20th century. General Motors soon swept past Ford as Alfred Sloan revolutionized the young car industry, and Ford never regained the dominance it enjoyed in its infancy days of mass production. The car industry can be said to be ahead of its time in many respects. For example, in ‘planned obsolescence, which is the frequent changes in design and style that tempted customers to switch to a newer model every year or so. In the 1970’s when the oil price quadrupled, the industry found itself under attack from environmentalists outraged by its products gas consuming and exhuming nature, (air pollution, etc.). It was also the first industry to come under government scrutiny, from safety concerns to environmental issues to antitrust worries in the days when General Motors had 60 present of its domestic market and could shut out competitors with a few well-chosen price cuts. However, when small economical and reliable Japanese Cars started to eat into Detroit’s market share, the American government imposed restraints on those imports. Soon afterwards, theca industry in Europe came under the same similar pressures and followed suit. Due to the sporadic recognition and existence as a pillar of industrial capitalism, the car industry also found itself at the mercy of trade unions in the 1920’s and 1930’s. Its workers increasingly pushed for trade unionisation in which a times the car factories in the Detroit area, the British Midlands, in Frankfurt, Germany, and the huge plants around Paris were the main battleground of the Class war. Although today trade union membership is still as high as ever, the power they wielded in the 1920’s to 1970’s has diminished immensely. Today, the motor car is the epitome of mass production, mass marketing and mass consumption, with some of the strongest brands in the world. For most households in rich countries, it is the second-biggest purchase after a house or flat, which makes the industry a pillar of modern industrial capitalism as earlier mentioned. Few other consumer goods industries depend so heavily on second hand market for their products. Now, understanding how the European Car Industry operates and the many pressures that it faces is essential to an understanding of the predicament the UK car buyers currently faces. Around 70 present of new cars sold in the UK are imported, with the great majority of these imports coming from the rest of Europe. The UK market is intrinsically tied into the pattern of car making and distribution across Europe. Thus the behaviour of the UK motor industry towards both its retailing and service partners and towards consumers is part of the wider behaviour of the European Car Industry. The industry can be said to be mature one. In virtually every country of North West Europe, the density of car ownership has almost reached its practical maximum. There are some opportunities for growth left in Southern and Central Europe, but they will be largely used up in the next few years. Following on, the consequences of mass production, and a slow introduction of cars that run on synthetic or alternative fuels has led to a rapid increase in environmental pollution, CO2 emissions, traffic jams, congestion, and human related diseases such as lung cancer, all of which are serious environmental issues, which the European Car Industry have found itself slow to adapt, change, amend and implement to the betterment of the wider society. This has led to directives and committees from the European Union to be setup to tackle the issued mentioned above and the latter. With this in mind a review of existing material that has been published in the press and journals will now be critically analysed. Chapter 2: Existing Literature Reviewed The need to galvanise and understand the unforeseen circumstances of mass car production and environmental issues in the European Union has been stressed by researchers for more than three decades. According to the Europa (2005), the EU is the largest automotive production region (34%) in the world and the industry comprises 7.5% of the manufacturing sector in the union. Direct employment by the automotive industry stands at about two million employees, while the total employment effect (direct and indirect) is estimated to be about ten million. It also adds that since the year 2001, the motor vehicle production has decreased in the European Union, from 17.2 million units in 2001 to 16.9 million units in 2002. The decline continued into2003, with 70,000 motor vehicles less being produced, compared to2002. This decline is due to the worsening of the macro-economic situation where consumer demand has been decreasing. Lagunas (2005)correlates with this by stating that motor vehicles have become the prime means of personal and commercial mobility in today’s world. Growing prosperity has led to a spectacular rise in car use, phenomenon being repeated in the new member states which joined the Union in 2004. In China and other booming countries with looser anti-pollution rules than the EU, trends show major increases in private transportation. This success has generated serious concerns about the environmental effects of vehicle use, in particular traffic congestion, air pollution, traffic-related diseases, and noise. In addition Lagunas (2005) states that these concerns have led the EU to formulate the objective of decoupling economic growth from transport growth. The EU has come up with legislation and initiatives to drive the change towards cleaner cars while promoting sustainable transport modes and model shift. It goes on to state that the interest in cleaner, less polluting vehicles and fuel has grown rapidly in recent years. Emissions from petrol and diesel engines have been significantly reduced in the last decade, driven mainly by European legislation and will continue to be reduced. In elaboration Lagunas(2005) states that in the EU, almost 40 present of the transport sector’s CO2 emissions are produced by the use of private cars in cities, CO2 emissions are damaging the environment and contributing to climate change; both petrol and diesel engines have their good and bedsides as regards emissions; engines working with diesel fuel emit lessCO2 than the ones working with petrol; on the other hand diesel engines are releasing more cancer causing particles in the air. Air pollution caused by car emissions has health impacts; problems include aggravation of respiratory and cardio-vascular diseases, asthma, and decreased lung functions. Gartner (2005) also argues that the effectiveness of the directive made by the EU relating to the availability of consumer information on fuel economy and CO2 emissions has been successful and gained momentum in some European countries but not all. Reasons being consumers lack awareness of fuel economy and environmental impacts of fuels as well as available information tools, in which one of the possibly ways to tackle this as stated by Gartner(2005) was to increase consumers awareness by standard equipment of new cars with fuel consumption indicators or cruise control. In addition Gartner (2005) argues that fuel economy and environmental impact are in general no major factor in vehicle purchase decisions and fuel consumption is mostly only important because of the cost, but not to environmental issues. ACNielsen (2005) agrees with this by saying when it comes to what influences consumer’s choice of car brand, manufacturers of luxury vehicles may be surprised to learn that image and prestige do not appear to be a top priority, in which engine size and environmentally friendly cars are regarded as the least important features to the Europeans when it comes to buying a car. Interest; however is growing slowing with a greater awareness of climate change and CO2 emission issues. Gartner (2005) also states that general awareness of label, poster/display and guide on CO2 emissions and fuel efficiency on cars is quite small and most of the information tools are not regarded as very informative or effective, although it can be said that this varies f rom one EU country to another. For example, in Austria, the label is regarded as the most informative and efficient element, compared to teak where the label was not assessed as effective in detail. In an article by the BBC (2002) it was argued that there are five major groups of car manufacturers in the world, they are General Motors, Ford, DaimlerChrysler Benz, Toyota, and Volkswagen. Of these only Toyota relies on one global brand name. All the others have a web of subsidiaries spanning the world. We must understand that the real reason why the car manufacturing firms are in business is to make money and maintain their prestige as a world class car manufacturer. To do this means they (car manufacturers) will have to constantly roll-out new models, with better gadgets, with performance and style. That is why, as Madsen (2002) argues, Volkswagen launched its luxury car, ‘the Phaeton’ to compete against the Audi, Bentley, Bugatti, and Lamborghini brands. This initiative was and is deemed as a risky push by the Group. However, the Chairman of the group Rd. Bernd Pischetsrieder argues that success would not be measured by sales volumes that the key was to enhance the Volkswagen brand. It was also argued by critics from within and outside the firm that the launch of the Phaeton, delayed the launch of the Audi, which is a car from within the group. However, he was quick to mute the negative by stating that possibly, the dealers learn to be a bit quicker and not to find the competitor in-house but out-house, and this will help the business; adding it is the engineers and marketers of the Audi brand that have the serious challenge of making sure that the brand does well. With this type of attitude within car firms it shows that environmental issues are the least likely concern within the European Car Industry. In the UK, white paper by DETR (2002) stated that many towns and cities suffer from traffic jams and polluted streets and as a result, are less attractive places in which to live and do business. Reducing the negative impacts of traffic on the quality of people’s lives is a key element of improving the urban environment, as set out in the government’s recent urban white paper. Adding that emissions of air pollutants arising from road traffic are set to decline over the period to 2010 as a result of improvement s in vehicle technology and fuel quality, but are forecast to begin rising again beyond 2010 due to increased traffic growth. Indirectly, an increase in car sales that are not fuel efficient means more air pollution, increased traffic jams, and lung cancer. However, in Europe the car market has become largely a market for replacement vehicles within a largely static market rather than one driven by a growing buyer base, Consumer association (2000). In addition, the market is crowded with over 40 marques and 250 models on offer and major product innovation is rare and rapidly imitated. Notwithstanding, product branding activity is intense and advertising spends are large and directed at creating a sense of differentiation. In another article by the BBC (2002) it was argued that in the UK, car prices were still too high and one of the major reasons for this was the ‘block exemption’, which allows network of national or regional dealers selected by car manufacturers, to flourish. However, this (block exempt) has now been abolished byte European parliament. In another article by the BBC (2002), it was argued that the number of car manufacturing companies had shut down due to the fall in export demand owing to the euros weakness against the pound; this is in relation to the fact that 70% of cars driven on Roads are European Imports. In the Economist (2004), it was argued that out of the world’s top 17 car compani es, only half were earning more than the cost of their capital. The value creators in Europe were Porsche, the Mercedes bit of DaimlerChrysler, BMW, and Peugeot. In Asia, Toyota, Nissan, Honda, Hyundai, and Kia made the cut. But America’s big three GM, Ford, and Chrysler, were all in the value destruction group, along with Renault, Fiat, Mazda, Mitsubishi, and. In the same article GM’s boss argues that the Japanese government is providing indirect aid to the country’s car companies by holding down the yen, thereby lowering their costs of producing export models and parts for the American assembly plants and also in Europe. American and European manufacturers maintain that the Japanese do this solely to boost their exports; but it can be stated that the real reason for the Japanese government of implementing such a policy may have been to head off deflation and revive the domestic Japanese economy. In another article by Europa (2005) Verheugen, the vice-president of the European Commission responsible for Enterprise and Industry argues that a legal framework will need to be created via CARS 21 High level group, in which the overall objective is to make recommendations for the short, medium and long-term public policy and regulatory framework for the car industry that enhances its global competitiveness as well as employment, while sustaining further progress in safety and environmental performance at a price affordable to the customer. Corby (2005) also argues that the environmental performance of cars has been improved dramatically over the past decade. New cars have become more fuel efficient and they emit less toxic emissions than cars in the 1970’s, adding that environmental innovation is essential for the sustainability and competitiveness of the European car industry. The previous mentioned shows that great changes are being made in the European Car Industry with regard to environmental issues. In a press release by the Auto Industry (2003), it was argued that new car average CO2 emissions fell to 174.2 g/CO2per km in 2002, 8.2 present down on the 1997 baseline and 1.9 present below the 2001 average. The rise of the superman in the UK over recent years has helped to lower average CO2 emissions through the wider appeal of smaller cars. In the same article, it was stated that Diesel fuelled cars have been a significant influence on the reduction in average CO2 emissions. Diesel models took a record 23.5 present share of the UK market in 2002, with demand up 38 present. In another published article by Lagunas (2005), it was suggested that the average new car in the EU – 15 was releasing almost 12% less CO2 in 2003 than it did in 1995, however pressure was growing, especially from Berlin, to push automakers to make further cuts. In the same article, the German Advisory Council on the Environment (SRU), a government body, blamed the European commission for allowing car makers to exceed limit values for particulate matter (pm) and CO2. It criticizes the industry’s voluntary target to reduce emissions to 120 g/km by 2012 as being too modest, saying a target of 100g/km is achievable by that date. It therefore, proposes an ‘innovation forcing strategy’ to push carmakers embarking on the global competitive race for improved environmental performance of vehicles. Balzac (1998) adds to the furore that because the Yen is one of the leading international currencies, solving the problem (devaluation of Yen) requires international answers. In the same article, as the Car industry is considered one of the key industries in Japan and Europe, a devaluation of the Yen directly affects the European Car Industry. As mentioned in the latter sections a devaluation of the Yen enables Japanese car manufacturers to sell their cars at much lower affordable prices to potential customers in Europe, and North America, in which the European Car Industry would suffer the most due to a high value of the currencies within the European Union member states. With all this in mind, the remainder of this paper proceeds as follows: Chapter 3: Theoretical Perspectives on the European Business Environment  and Marketing Chapter 4: Empirical Evidence. Chapter 5: Critical analysis of Theoretical perspectives and empirical evidence Chapter 6: Summary and Conclusion. Chapter 3: Theoretical Perspectives On The European Business Environment and Marketing In order to have a clear understanding of the concept of the business environment within Europe and the marketing of the car industry, we will first need to identify the meaning of the terminologies. European business is a generic term which describes Avery wide variety of agricultural, industrial and service activities undertaken by a large number of different organisations across the continent of Europe. Examples of European business might include: Privatised telecommunications companies such as Deutsche Telekom; a French recording company based in a converted barn in Normandy, France; a farm in Eastern England, highly mechanised and engaged in agribusiness; a transnational organisation such as the German car producer Volkswagen, with factories in Germany (VW and Audi), Spain (Seat), the Czech Republic (Skoda) and the UK (Bentley) etc. European business may be run by one person or it may be a small private company. Alternatively it may be a large organisation employing thousands of people, with assets worth hundreds of millions of euros and based in many different European countries. The European business environment refers to the conditions within which European businesses operate. Typically it involves a number of different interacting forces which shape the environment, and thus how a business formulates its long-term strategy, its tactics and its daily operations within this environment. These factors may include political, economic, social, cultural, religious and linguistic forces. Now, marketing is the social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others Kilter et al. (2005). For example, important terms such as needs, wants, and demands; products and services; value, satisfaction and quality; exchange, transactions and relationship; and markets are all core marketing concepts which are linked, with each concept building on the one before it. Each part of the marketing definition defines what marketing is and how it is practised. With this in mind we can now move on to discuss about the theoretical concepts used in the understanding of the business environment and marketing of the European car industry. There are several important conceptual frameworks that are used for understanding the environmental impacts of the European car industry. The ones used in this paper are: †¢ PESTLE †¢ Models of Market Structure †¢ Profit Maximisation †¢ Sources of Finance †¢ Market segmentation †¢ Branding strategy †¢ The European Business and the environment 3.1 PESTLE This means, Political factors influencing a business environment; Economic factors; Sociological influences; Technological influences; Legal factors; and Environmental/ethical issues. This framework issued to analyse the European business environment. 3.1.1 Political The political beliefs of governments and the policies they implement to pursue them have a major impact on the European business environment. This is both in their own right and also through other policies, such as economic ones; hence the re-emergence of political economy in recent years. Additionally, other political philosophies may also have an impact on EU society and hence on the business environment. In the extreme case the economic policies pursued by the former Soviet bloc, with its emphasis on central planning, clearly had massive impact on the ownership, organisational structure, operations and lack of profitability of government-owned European businesses operating in this area. Similarly, the UK Thatcher governments of the1980s created a business environment of entrepreneurship which was largely shaped by the political beliefs of Margaret Thatcher and her close advisors, which subsequently influenced other countries in Europe 3.1.2 Economic The economic policies pursued by EU governments clearly have significant influence on the environment within which European businesses operate. Since the signing of the Treaty of Maastricht was completed in 1993 EU currency (SEC), formerly called the European currency unit (ecru) but now known as the euro, as part of the moves to Economic and Monetary Union (EMU). The commitment by EU governments to meet the Maastricht convergence criteria, as a precondition for acceptance to the first wave of membership of the single European currency, has obliged them to demonstrate fiscal restraint to meet the criteria relating to budget deficit (not to exceed 3 present of the country’s gross domestic product or GDP) and national debt (not to exceed 60 present of GDP). The purpose of the convergence criteria, as their name suggest, is to converge potential members’ economies to broadly similar levels in terms of the rate of inflation, the level of long-run interest rates, and the stability of their exchange rates and, as noted, government debt. In addition the ability of countries to converge to a common position in their business cycles, in practice to converge their business cycles with that of Germany’s as the leading Economy. In practice the problems of non-convergence were demonstrated in the early 1990s when Germany raised its interest rates to counter inflationary pressures. These had resulted from borrowing to fund major expenditure in Eastern Germany to redevelop the infrastructure and productive capacity after the collapse of the communist regime of the former East Germany. 3.1.3 Sociological This is examined in three broad areas: culture, language and religion. Culture: The fact that the British have a totally private sense of distance. This is most visibly seen in the shared pretence that Britain is a lonely island in the middle of an empty green sea. Culture has been described as ‘the way we do things round here’. In this sense it may be viewed as the inherent values, attitudes, social conventions and mores of a nation. In most cases these are transmitted from one generation to another, usually through the family. Increasingly, however, culture is modified by education, the media and peer influences as the pace of change accelerates in modern society. Cultural differences contribute to the diversity of the people who live in Europe and hence are an enriching experience. Cultural differences can also create barriers, however, which in turn have significant implications for European Businesses since, if they are to succeed another than their domestic market, these differences must be taken into account. Examples of cultural differences are: the business organisation, in Germany businesses are rigid in their approach and expect everything to be done through proper bureaucratic channels with full technical detail provided. In contrast, British firms involved in collaborative ventures, or who have opened subsidiary companies in Germany, are more casual and relaxed enabling them to be more flexible when sudden response is needed to market change. This difference in operational philosophy can cause problems. Class is also a major factor in determining social attitudes in the business environment, particularly in the UK but also in other parts of Europe. In contrast, in less class-divisive societies such as Denmark, Sweden, and Norway attitudes may be quite different, people such as senior managers secretaries are regarded as important people in the organisation, whereas in the previously mentioned countries this would not be so tithe same extent. Business attitudes to delivery dates are also important. European businesses operating in Germany soon find that when they promise a delivery date for a new product consumers expect it in the shops on that day, not several weeks later Firms who slack on this simple rule find themselves bombarded with telephone calls-mails, and letters. In contrast, in Spain and Greece attitudes are much more causal in this respect; the personal appearance and behaviour, the French place much emphasis on establishing personal contact in business dealings and expect the people they deal with to have style. The Spanish believe in the importance of being smartly but conservatively dressed and demonstrating worldly knowledge, for example of good cuisine and wine; these are important issues when dining out, attending trade delegation receptions and so on, where business contacts are made. Scandinavians in contrast are much more casual in their dress; Cultural training programmes, these differences have implications for the training policies adopted by companies; some European businesses are now adopting recruitment policies where new employees are expected not only to have fluency in more than one language, but also to demonstrate some cross-cultural knowledge. Language: In the EU there are currently 13 EU official languages and another 35 territorial minority languages, which include Basque, Breton, Catalan, Cornish, Frisian, Galician, Letzeburgesh, Irish Gaelic, Occitan, Slovene, and Welsh. Language above all else defines group of people as distinct from all others in Europe, since it also implies culture, inherited knowledge and beliefs and terms of reference and thought specific to that group alone. In that sense there is therefore an overlap with the above. Different languages and dialects as a whole all create market differences. Religion: In the traditional Catholic countries of Europe, particularly Eire, Italy, Poland and Spain, the impact of formal organised religion on society and hence business is very important. Past controls on the sale of contraceptives in Eire are one such example. In Poland the Catholic Church has a vital role to play in the political scene with all parties having a commitment to Christian values in their policies. As a whole, businesses in Europe must bearing that increasingly the EU is becoming a society of many faiths. Certainly the large number of Jews resident in Europe has always been obvious. Now however many Muslims have entered EU countries and their religious and moral susceptibilities must also be heeded as much as another religion. 3.1.4 Technological Clearly technology has had a major impact on the European business environment, particularly information technology. The impact of its use will be so pervasive as to be hard to imagine life without it. This ranges from autopilots on aeroplanes to computer-controlled traffic management systems in our cities; from computer-controlled robots on factory assembly lines to screen trading in stock and foreign exchange markets; from the growth of consumer purchases via the internet to the use of e-mail rather than conventional letters or faxes. In this sense Bill Gates of Microsoft has argued that the internet will in effect act as a market-maker, bringing together buyers and sellers with minimum friction, and not just for goods and services but also in the Labour market. In 1994 the EU setup a first policy framework for the EU information society. These proposed initiatives to regulate the information society: it sought to bring together all those involved in creating networks, applying information technology and establishing the basic services; and it sought to raise public awareness about information technology. Most of these have now been implemented or are in the process of being implemented. This has had significant implications for European businesses by shaping the environment within which they operate. 3.1.5 Legal Inevitably legal systems can differ significantly from European country to country both in terms of their content and how they are interpreted. At the one extreme in Russia, transformation has required work, in the 1990s, to develop a legal system to come to terms with the concepts of private property (particularly ownership of land) and the legal existence of private and public limited companies with the ability to hire and dismiss labour, enter into contracts, buy, own and sell assets and so forth. At the other extreme, in the EU, Union legislation applies to all member countries and is establishing elements of a common legal framework for all, even though individual countries still, of course, have their own laws. This is based on key treaties, such as, the Treaty of Rom 1957, the Single European Act1987, the Maastricht Treaty 1993, and so forth. All these treaties will directly affect European Businesses. The main influences of country’s legal system on a business are through their impact on the business’s marketing mix and the laws affecting competition. For the most legal systems are based on civil law that is detailed rules and regulations which are strictly interpreted. In the UK, in contrast, the legal system is based on common law which is determined by past precedent and is more flexible in its interpretation. In terms of marketing a product EU countries tend to be more regulated because the Environmental Issues in the Car Industry Environmental Issues in the Car Industry What are the environmental issues facing the future of the European car industry? Abstract This paper looks at the issues facing the European car industry with regard to environmental issues. This is done by looking at past and present published material that revolves around the subject matter under specified themes. Theoretical perspectives within the European business environment such as pestle, models of market structure, profit maximisation, sources of finance, market segmentation, branding strategy, European business and its effects on the environment are all explained in relation to their relevance of environmental issues. These theoretical themes are used because they all act as a catalyst to the subject matter of the problems caused by cars which are not fuel efficient or less pollutant within Europe. In addition, a recently published paper on the directive for labelling on cars with regard to CO2 emissions, awareness of consumers, and fuel efficiency types in the European Union is used as empirical evidence to support ones findings as there was a shortage of time to carry out one. Finally a critical review of matches and miss-matches is used to compare and contrast similarities between the theoretical perspectives identified to prove the latter mentioned and the empirical evidence gathered for this paper, so as to forge a way forward for the European Car Industry. Chapter 1: A Brief History of The Car Industry Introduction The European Car Industry is one that has come of age. From its early beginnings over 100 years ago, it is beginning to show signs of struggling in today’s modern society. This has come about due to the new challenges that the industry is facing in the new millennium. Issues such as air pollution, congestion, traffic jams etc., are all factors that have made the car industry rethink its goals, objectives, its marketing, and the consequences that are not foreseen. As a whole the car industry makes nearly 60 million cars and trucks every year, and employs millions of people around the world. Average profit margins have declined from 20 present or more in its hey days of the1920’s to around 10 present in the 1960’s and less than 5 present in this present day, infect some volume car makers such as Fiat, Ford, and Vauxhall, have actually been losing money. It can be stated that over century ago the car industry feasibly invented modern industrial capitalism. In the Economist (2004) the car started life in Germany and early development of the industry began in France (hence the word automobile, a French word) in the 1900’s, but it was in America that the car industry came of age with the Henry Ford T-Model of mass production which started in Chicago round about the same period(1900’s). In the 1920’s Alfred Sloan’s ideas of running General Motors provided the model for the great corporations that grew up to dominate the second half of the 20th century. General Motors soon swept past Ford as Alfred Sloan revolutionized the young car industry, and Ford never regained the dominance it enjoyed in its infancy days of mass production. The car industry can be said to be ahead of its time in many respects. For example, in ‘planned obsolescence, which is the frequent changes in design and style that tempted customers to switch to a newer model every year or so. In the 1970’s when the oil price quadrupled, the industry found itself under attack from environmentalists outraged by its products gas consuming and exhuming nature, (air pollution, etc.). It was also the first industry to come under government scrutiny, from safety concerns to environmental issues to antitrust worries in the days when General Motors had 60 present of its domestic market and could shut out competitors with a few well-chosen price cuts. However, when small economical and reliable Japanese Cars started to eat into Detroit’s market share, the American government imposed restraints on those imports. Soon afterwards, theca industry in Europe came under the same similar pressures and followed suit. Due to the sporadic recognition and existence as a pillar of industrial capitalism, the car industry also found itself at the mercy of trade unions in the 1920’s and 1930’s. Its workers increasingly pushed for trade unionisation in which a times the car factories in the Detroit area, the British Midlands, in Frankfurt, Germany, and the huge plants around Paris were the main battleground of the Class war. Although today trade union membership is still as high as ever, the power they wielded in the 1920’s to 1970’s has diminished immensely. Today, the motor car is the epitome of mass production, mass marketing and mass consumption, with some of the strongest brands in the world. For most households in rich countries, it is the second-biggest purchase after a house or flat, which makes the industry a pillar of modern industrial capitalism as earlier mentioned. Few other consumer goods industries depend so heavily on second hand market for their products. Now, understanding how the European Car Industry operates and the many pressures that it faces is essential to an understanding of the predicament the UK car buyers currently faces. Around 70 present of new cars sold in the UK are imported, with the great majority of these imports coming from the rest of Europe. The UK market is intrinsically tied into the pattern of car making and distribution across Europe. Thus the behaviour of the UK motor industry towards both its retailing and service partners and towards consumers is part of the wider behaviour of the European Car Industry. The industry can be said to be mature one. In virtually every country of North West Europe, the density of car ownership has almost reached its practical maximum. There are some opportunities for growth left in Southern and Central Europe, but they will be largely used up in the next few years. Following on, the consequences of mass production, and a slow introduction of cars that run on synthetic or alternative fuels has led to a rapid increase in environmental pollution, CO2 emissions, traffic jams, congestion, and human related diseases such as lung cancer, all of which are serious environmental issues, which the European Car Industry have found itself slow to adapt, change, amend and implement to the betterment of the wider society. This has led to directives and committees from the European Union to be setup to tackle the issued mentioned above and the latter. With this in mind a review of existing material that has been published in the press and journals will now be critically analysed. Chapter 2: Existing Literature Reviewed The need to galvanise and understand the unforeseen circumstances of mass car production and environmental issues in the European Union has been stressed by researchers for more than three decades. According to the Europa (2005), the EU is the largest automotive production region (34%) in the world and the industry comprises 7.5% of the manufacturing sector in the union. Direct employment by the automotive industry stands at about two million employees, while the total employment effect (direct and indirect) is estimated to be about ten million. It also adds that since the year 2001, the motor vehicle production has decreased in the European Union, from 17.2 million units in 2001 to 16.9 million units in 2002. The decline continued into2003, with 70,000 motor vehicles less being produced, compared to2002. This decline is due to the worsening of the macro-economic situation where consumer demand has been decreasing. Lagunas (2005)correlates with this by stating that motor vehicles have become the prime means of personal and commercial mobility in today’s world. Growing prosperity has led to a spectacular rise in car use, phenomenon being repeated in the new member states which joined the Union in 2004. In China and other booming countries with looser anti-pollution rules than the EU, trends show major increases in private transportation. This success has generated serious concerns about the environmental effects of vehicle use, in particular traffic congestion, air pollution, traffic-related diseases, and noise. In addition Lagunas (2005) states that these concerns have led the EU to formulate the objective of decoupling economic growth from transport growth. The EU has come up with legislation and initiatives to drive the change towards cleaner cars while promoting sustainable transport modes and model shift. It goes on to state that the interest in cleaner, less polluting vehicles and fuel has grown rapidly in recent years. Emissions from petrol and diesel engines have been significantly reduced in the last decade, driven mainly by European legislation and will continue to be reduced. In elaboration Lagunas(2005) states that in the EU, almost 40 present of the transport sector’s CO2 emissions are produced by the use of private cars in cities, CO2 emissions are damaging the environment and contributing to climate change; both petrol and diesel engines have their good and bedsides as regards emissions; engines working with diesel fuel emit lessCO2 than the ones working with petrol; on the other hand diesel engines are releasing more cancer causing particles in the air. Air pollution caused by car emissions has health impacts; problems include aggravation of respiratory and cardio-vascular diseases, asthma, and decreased lung functions. Gartner (2005) also argues that the effectiveness of the directive made by the EU relating to the availability of consumer information on fuel economy and CO2 emissions has been successful and gained momentum in some European countries but not all. Reasons being consumers lack awareness of fuel economy and environmental impacts of fuels as well as available information tools, in which one of the possibly ways to tackle this as stated by Gartner(2005) was to increase consumers awareness by standard equipment of new cars with fuel consumption indicators or cruise control. In addition Gartner (2005) argues that fuel economy and environmental impact are in general no major factor in vehicle purchase decisions and fuel consumption is mostly only important because of the cost, but not to environmental issues. ACNielsen (2005) agrees with this by saying when it comes to what influences consumer’s choice of car brand, manufacturers of luxury vehicles may be surprised to learn that image and prestige do not appear to be a top priority, in which engine size and environmentally friendly cars are regarded as the least important features to the Europeans when it comes to buying a car. Interest; however is growing slowing with a greater awareness of climate change and CO2 emission issues. Gartner (2005) also states that general awareness of label, poster/display and guide on CO2 emissions and fuel efficiency on cars is quite small and most of the information tools are not regarded as very informative or effective, although it can be said that this varies f rom one EU country to another. For example, in Austria, the label is regarded as the most informative and efficient element, compared to teak where the label was not assessed as effective in detail. In an article by the BBC (2002) it was argued that there are five major groups of car manufacturers in the world, they are General Motors, Ford, DaimlerChrysler Benz, Toyota, and Volkswagen. Of these only Toyota relies on one global brand name. All the others have a web of subsidiaries spanning the world. We must understand that the real reason why the car manufacturing firms are in business is to make money and maintain their prestige as a world class car manufacturer. To do this means they (car manufacturers) will have to constantly roll-out new models, with better gadgets, with performance and style. That is why, as Madsen (2002) argues, Volkswagen launched its luxury car, ‘the Phaeton’ to compete against the Audi, Bentley, Bugatti, and Lamborghini brands. This initiative was and is deemed as a risky push by the Group. However, the Chairman of the group Rd. Bernd Pischetsrieder argues that success would not be measured by sales volumes that the key was to enhance the Volkswagen brand. It was also argued by critics from within and outside the firm that the launch of the Phaeton, delayed the launch of the Audi, which is a car from within the group. However, he was quick to mute the negative by stating that possibly, the dealers learn to be a bit quicker and not to find the competitor in-house but out-house, and this will help the business; adding it is the engineers and marketers of the Audi brand that have the serious challenge of making sure that the brand does well. With this type of attitude within car firms it shows that environmental issues are the least likely concern within the European Car Industry. In the UK, white paper by DETR (2002) stated that many towns and cities suffer from traffic jams and polluted streets and as a result, are less attractive places in which to live and do business. Reducing the negative impacts of traffic on the quality of people’s lives is a key element of improving the urban environment, as set out in the government’s recent urban white paper. Adding that emissions of air pollutants arising from road traffic are set to decline over the period to 2010 as a result of improvement s in vehicle technology and fuel quality, but are forecast to begin rising again beyond 2010 due to increased traffic growth. Indirectly, an increase in car sales that are not fuel efficient means more air pollution, increased traffic jams, and lung cancer. However, in Europe the car market has become largely a market for replacement vehicles within a largely static market rather than one driven by a growing buyer base, Consumer association (2000). In addition, the market is crowded with over 40 marques and 250 models on offer and major product innovation is rare and rapidly imitated. Notwithstanding, product branding activity is intense and advertising spends are large and directed at creating a sense of differentiation. In another article by the BBC (2002) it was argued that in the UK, car prices were still too high and one of the major reasons for this was the ‘block exemption’, which allows network of national or regional dealers selected by car manufacturers, to flourish. However, this (block exempt) has now been abolished byte European parliament. In another article by the BBC (2002), it was argued that the number of car manufacturing companies had shut down due to the fall in export demand owing to the euros weakness against the pound; this is in relation to the fact that 70% of cars driven on Roads are European Imports. In the Economist (2004), it was argued that out of the world’s top 17 car compani es, only half were earning more than the cost of their capital. The value creators in Europe were Porsche, the Mercedes bit of DaimlerChrysler, BMW, and Peugeot. In Asia, Toyota, Nissan, Honda, Hyundai, and Kia made the cut. But America’s big three GM, Ford, and Chrysler, were all in the value destruction group, along with Renault, Fiat, Mazda, Mitsubishi, and. In the same article GM’s boss argues that the Japanese government is providing indirect aid to the country’s car companies by holding down the yen, thereby lowering their costs of producing export models and parts for the American assembly plants and also in Europe. American and European manufacturers maintain that the Japanese do this solely to boost their exports; but it can be stated that the real reason for the Japanese government of implementing such a policy may have been to head off deflation and revive the domestic Japanese economy. In another article by Europa (2005) Verheugen, the vice-president of the European Commission responsible for Enterprise and Industry argues that a legal framework will need to be created via CARS 21 High level group, in which the overall objective is to make recommendations for the short, medium and long-term public policy and regulatory framework for the car industry that enhances its global competitiveness as well as employment, while sustaining further progress in safety and environmental performance at a price affordable to the customer. Corby (2005) also argues that the environmental performance of cars has been improved dramatically over the past decade. New cars have become more fuel efficient and they emit less toxic emissions than cars in the 1970’s, adding that environmental innovation is essential for the sustainability and competitiveness of the European car industry. The previous mentioned shows that great changes are being made in the European Car Industry with regard to environmental issues. In a press release by the Auto Industry (2003), it was argued that new car average CO2 emissions fell to 174.2 g/CO2per km in 2002, 8.2 present down on the 1997 baseline and 1.9 present below the 2001 average. The rise of the superman in the UK over recent years has helped to lower average CO2 emissions through the wider appeal of smaller cars. In the same article, it was stated that Diesel fuelled cars have been a significant influence on the reduction in average CO2 emissions. Diesel models took a record 23.5 present share of the UK market in 2002, with demand up 38 present. In another published article by Lagunas (2005), it was suggested that the average new car in the EU – 15 was releasing almost 12% less CO2 in 2003 than it did in 1995, however pressure was growing, especially from Berlin, to push automakers to make further cuts. In the same article, the German Advisory Council on the Environment (SRU), a government body, blamed the European commission for allowing car makers to exceed limit values for particulate matter (pm) and CO2. It criticizes the industry’s voluntary target to reduce emissions to 120 g/km by 2012 as being too modest, saying a target of 100g/km is achievable by that date. It therefore, proposes an ‘innovation forcing strategy’ to push carmakers embarking on the global competitive race for improved environmental performance of vehicles. Balzac (1998) adds to the furore that because the Yen is one of the leading international currencies, solving the problem (devaluation of Yen) requires international answers. In the same article, as the Car industry is considered one of the key industries in Japan and Europe, a devaluation of the Yen directly affects the European Car Industry. As mentioned in the latter sections a devaluation of the Yen enables Japanese car manufacturers to sell their cars at much lower affordable prices to potential customers in Europe, and North America, in which the European Car Industry would suffer the most due to a high value of the currencies within the European Union member states. With all this in mind, the remainder of this paper proceeds as follows: Chapter 3: Theoretical Perspectives on the European Business Environment  and Marketing Chapter 4: Empirical Evidence. Chapter 5: Critical analysis of Theoretical perspectives and empirical evidence Chapter 6: Summary and Conclusion. Chapter 3: Theoretical Perspectives On The European Business Environment and Marketing In order to have a clear understanding of the concept of the business environment within Europe and the marketing of the car industry, we will first need to identify the meaning of the terminologies. European business is a generic term which describes Avery wide variety of agricultural, industrial and service activities undertaken by a large number of different organisations across the continent of Europe. Examples of European business might include: Privatised telecommunications companies such as Deutsche Telekom; a French recording company based in a converted barn in Normandy, France; a farm in Eastern England, highly mechanised and engaged in agribusiness; a transnational organisation such as the German car producer Volkswagen, with factories in Germany (VW and Audi), Spain (Seat), the Czech Republic (Skoda) and the UK (Bentley) etc. European business may be run by one person or it may be a small private company. Alternatively it may be a large organisation employing thousands of people, with assets worth hundreds of millions of euros and based in many different European countries. The European business environment refers to the conditions within which European businesses operate. Typically it involves a number of different interacting forces which shape the environment, and thus how a business formulates its long-term strategy, its tactics and its daily operations within this environment. These factors may include political, economic, social, cultural, religious and linguistic forces. Now, marketing is the social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others Kilter et al. (2005). For example, important terms such as needs, wants, and demands; products and services; value, satisfaction and quality; exchange, transactions and relationship; and markets are all core marketing concepts which are linked, with each concept building on the one before it. Each part of the marketing definition defines what marketing is and how it is practised. With this in mind we can now move on to discuss about the theoretical concepts used in the understanding of the business environment and marketing of the European car industry. There are several important conceptual frameworks that are used for understanding the environmental impacts of the European car industry. The ones used in this paper are: †¢ PESTLE †¢ Models of Market Structure †¢ Profit Maximisation †¢ Sources of Finance †¢ Market segmentation †¢ Branding strategy †¢ The European Business and the environment 3.1 PESTLE This means, Political factors influencing a business environment; Economic factors; Sociological influences; Technological influences; Legal factors; and Environmental/ethical issues. This framework issued to analyse the European business environment. 3.1.1 Political The political beliefs of governments and the policies they implement to pursue them have a major impact on the European business environment. This is both in their own right and also through other policies, such as economic ones; hence the re-emergence of political economy in recent years. Additionally, other political philosophies may also have an impact on EU society and hence on the business environment. In the extreme case the economic policies pursued by the former Soviet bloc, with its emphasis on central planning, clearly had massive impact on the ownership, organisational structure, operations and lack of profitability of government-owned European businesses operating in this area. Similarly, the UK Thatcher governments of the1980s created a business environment of entrepreneurship which was largely shaped by the political beliefs of Margaret Thatcher and her close advisors, which subsequently influenced other countries in Europe 3.1.2 Economic The economic policies pursued by EU governments clearly have significant influence on the environment within which European businesses operate. Since the signing of the Treaty of Maastricht was completed in 1993 EU currency (SEC), formerly called the European currency unit (ecru) but now known as the euro, as part of the moves to Economic and Monetary Union (EMU). The commitment by EU governments to meet the Maastricht convergence criteria, as a precondition for acceptance to the first wave of membership of the single European currency, has obliged them to demonstrate fiscal restraint to meet the criteria relating to budget deficit (not to exceed 3 present of the country’s gross domestic product or GDP) and national debt (not to exceed 60 present of GDP). The purpose of the convergence criteria, as their name suggest, is to converge potential members’ economies to broadly similar levels in terms of the rate of inflation, the level of long-run interest rates, and the stability of their exchange rates and, as noted, government debt. In addition the ability of countries to converge to a common position in their business cycles, in practice to converge their business cycles with that of Germany’s as the leading Economy. In practice the problems of non-convergence were demonstrated in the early 1990s when Germany raised its interest rates to counter inflationary pressures. These had resulted from borrowing to fund major expenditure in Eastern Germany to redevelop the infrastructure and productive capacity after the collapse of the communist regime of the former East Germany. 3.1.3 Sociological This is examined in three broad areas: culture, language and religion. Culture: The fact that the British have a totally private sense of distance. This is most visibly seen in the shared pretence that Britain is a lonely island in the middle of an empty green sea. Culture has been described as ‘the way we do things round here’. In this sense it may be viewed as the inherent values, attitudes, social conventions and mores of a nation. In most cases these are transmitted from one generation to another, usually through the family. Increasingly, however, culture is modified by education, the media and peer influences as the pace of change accelerates in modern society. Cultural differences contribute to the diversity of the people who live in Europe and hence are an enriching experience. Cultural differences can also create barriers, however, which in turn have significant implications for European Businesses since, if they are to succeed another than their domestic market, these differences must be taken into account. Examples of cultural differences are: the business organisation, in Germany businesses are rigid in their approach and expect everything to be done through proper bureaucratic channels with full technical detail provided. In contrast, British firms involved in collaborative ventures, or who have opened subsidiary companies in Germany, are more casual and relaxed enabling them to be more flexible when sudden response is needed to market change. This difference in operational philosophy can cause problems. Class is also a major factor in determining social attitudes in the business environment, particularly in the UK but also in other parts of Europe. In contrast, in less class-divisive societies such as Denmark, Sweden, and Norway attitudes may be quite different, people such as senior managers secretaries are regarded as important people in the organisation, whereas in the previously mentioned countries this would not be so tithe same extent. Business attitudes to delivery dates are also important. European businesses operating in Germany soon find that when they promise a delivery date for a new product consumers expect it in the shops on that day, not several weeks later Firms who slack on this simple rule find themselves bombarded with telephone calls-mails, and letters. In contrast, in Spain and Greece attitudes are much more causal in this respect; the personal appearance and behaviour, the French place much emphasis on establishing personal contact in business dealings and expect the people they deal with to have style. The Spanish believe in the importance of being smartly but conservatively dressed and demonstrating worldly knowledge, for example of good cuisine and wine; these are important issues when dining out, attending trade delegation receptions and so on, where business contacts are made. Scandinavians in contrast are much more casual in their dress; Cultural training programmes, these differences have implications for the training policies adopted by companies; some European businesses are now adopting recruitment policies where new employees are expected not only to have fluency in more than one language, but also to demonstrate some cross-cultural knowledge. Language: In the EU there are currently 13 EU official languages and another 35 territorial minority languages, which include Basque, Breton, Catalan, Cornish, Frisian, Galician, Letzeburgesh, Irish Gaelic, Occitan, Slovene, and Welsh. Language above all else defines group of people as distinct from all others in Europe, since it also implies culture, inherited knowledge and beliefs and terms of reference and thought specific to that group alone. In that sense there is therefore an overlap with the above. Different languages and dialects as a whole all create market differences. Religion: In the traditional Catholic countries of Europe, particularly Eire, Italy, Poland and Spain, the impact of formal organised religion on society and hence business is very important. Past controls on the sale of contraceptives in Eire are one such example. In Poland the Catholic Church has a vital role to play in the political scene with all parties having a commitment to Christian values in their policies. As a whole, businesses in Europe must bearing that increasingly the EU is becoming a society of many faiths. Certainly the large number of Jews resident in Europe has always been obvious. Now however many Muslims have entered EU countries and their religious and moral susceptibilities must also be heeded as much as another religion. 3.1.4 Technological Clearly technology has had a major impact on the European business environment, particularly information technology. The impact of its use will be so pervasive as to be hard to imagine life without it. This ranges from autopilots on aeroplanes to computer-controlled traffic management systems in our cities; from computer-controlled robots on factory assembly lines to screen trading in stock and foreign exchange markets; from the growth of consumer purchases via the internet to the use of e-mail rather than conventional letters or faxes. In this sense Bill Gates of Microsoft has argued that the internet will in effect act as a market-maker, bringing together buyers and sellers with minimum friction, and not just for goods and services but also in the Labour market. In 1994 the EU setup a first policy framework for the EU information society. These proposed initiatives to regulate the information society: it sought to bring together all those involved in creating networks, applying information technology and establishing the basic services; and it sought to raise public awareness about information technology. Most of these have now been implemented or are in the process of being implemented. This has had significant implications for European businesses by shaping the environment within which they operate. 3.1.5 Legal Inevitably legal systems can differ significantly from European country to country both in terms of their content and how they are interpreted. At the one extreme in Russia, transformation has required work, in the 1990s, to develop a legal system to come to terms with the concepts of private property (particularly ownership of land) and the legal existence of private and public limited companies with the ability to hire and dismiss labour, enter into contracts, buy, own and sell assets and so forth. At the other extreme, in the EU, Union legislation applies to all member countries and is establishing elements of a common legal framework for all, even though individual countries still, of course, have their own laws. This is based on key treaties, such as, the Treaty of Rom 1957, the Single European Act1987, the Maastricht Treaty 1993, and so forth. All these treaties will directly affect European Businesses. The main influences of country’s legal system on a business are through their impact on the business’s marketing mix and the laws affecting competition. For the most legal systems are based on civil law that is detailed rules and regulations which are strictly interpreted. In the UK, in contrast, the legal system is based on common law which is determined by past precedent and is more flexible in its interpretation. In terms of marketing a product EU countries tend to be more regulated because the

Service Blueprint For 100 Yen Sushi Information Technology Essay

Service Blueprint For 100 Yen Sushi Information Technology Essay The US might eventually reach and equally high penetration of wireless device and acquire abundant number of content provider and dealers that target mobile users. It is hard to imaging however that people in US would spend at least 1 hour daily looking at their cellular phon. A phenomenon commence commuter in Japan. The legacy effect of excellent land line telephone services in the US would delay the rapid adoption of M-Commerce as weaknesses in other country. Using a customer as a partial employee in the service process has several organizational implication such use create the tradeoff between operational efficiency and operational control. When customer provides element of the service may result enhance efficiency of the service capacity because the capacity is added to the system at the moment it is needed. At the same time, however, much of the quality of the service may be out of the control of the organization mistake made by the customer may be costly. For example, the self-service yogurt machines in a grocery stall is a highly efficient delivery system but it may also result in waste extra work for the cleaning staff and damage to the equipment when customers misuse it. The use as customer as partial employee also require management to train the customer in how to behave often the training must take place at the time when the train sought failure to communicate the proper behavior may result in customer anxiety and dissatisfaction. Customer who act as partial employee have implication for marketing operation, services may target the type of customer who desire a lot of control over the process and who is a quick learner. An example may be seen in the relationship between airline and frequent business traveler who are often control oriented and well education. What possible dangers are associated with developing complementary services? The possibility of increasing the firms liability because of those added services. For instance adding cold or hot sandwiches at convenient grocery store incur the possibility that a customer might suffer food poisoning and take legal action against the store. Another example seen the addition self service guest bunk which involve the risk of fire damage and injuries. When the complementary services attract customer who may hurt business consider a shopping mall that install a video arcade may become a heaven, for noisy and teenagers who will drive away those customer who want to shopping in peace. Suggest diversions that could make waiting less painful. Offer attention diversion suggests video games, travel poster, music and magazine. Group waiting people in cluster to promote intention. Acknowledge the customer present, inform the customer about the waiting time and advise the customer about any requirement of limitation of service for he or she is waiting. Make the customer aware of any other services the organization might offer promote community services; provide information about non-competing organization by scenic side and etc. Provide live entertainment, example musician in a restaurant; divert attention for customers who wait for services. Provide toys to young children. Offer education materials, suggest video tapes relating to customers need, example, the divert person will show the tapes related to condition. Offer refreshment. How can effects of service recovery be understood as customer perceived fairness? There are three dimension of perceive fairness in regard to the service process: Distributive fairness related to the extent to reach recovery offer equates that the customer feel is deserved or needed. Procedure fairness relates to how much influences, the customer feels has on the process and to how timely or convenient the recovery is. Interactional fairness is concern with the quality of interpersonal interaction occurring during offer recovery. Example, fair, honest, empathy interaction, fair communication and behaviour. An excellent recovery process can turn a quality disaster to positive experiences. Tutorial 11 Explain why the goods analogy of a supply chain is inappropriate for services. For physical goods, the analogy of a chain ideally capture the linear hand off of inventory between players in the distribution of product firm supplier à ¢Ã¢â‚¬  Ã¢â‚¬â„¢ Manufacturer à ¢Ã¢â‚¬  Ã¢â‚¬â„¢ Distributors à ¢Ã¢â‚¬  Ã¢â‚¬â„¢ Retailer à ¢Ã¢â‚¬  Ã¢â‚¬â„¢ Final Customer. The chain can be rather short, for Dell computer that sell directly but substantially longer for end for an automobile manufacturer selling through independent dealers. The simultaneously production and consumption nature of service doesnt lend itself to the chain analogy but rather the service encounter is the essence of the service experience. The service provider can in turn have supplier but virtual analogy is a hub rather than chain. Suggest some strategies for controlling the variability in service times. To limit the service provider or to standardized them, eg. Fast food restaurant, they offer limited menu and standardized the ways in which the worker provide the services. To partition demand into categories such as we see for commercial customer at bank or express lane customers at supermarkets. Pizza Hut delivery services can guarantee delivery within a specific time by controlling variability to several measure. They standardize the preparation of the pizza and they locate store strategy throughout the town. They also organize the delivery people, so each one can make several delivery on each trip. When the line becomes long at some fast-food restaurants, an employee will walk along the line taking orders. What ate the benefits of this policy? To discourage customer to reneging once an order is taken the customer feel committed to follow. Taking orders from customer while they still in line, save time when the counter is rich. The only tasks remaining are taking money and filling the order which reduce services time and increase the capacity to serve. Such strategy establishes customer contact early in the encounter may avoid having to play catch up point later. Personnel who are on the floor taking orders during busy time can also keep wash for tables that need to be clean and make ready to accommodate the new customers. Will the widespread use of yield management eventually erode the concept of fixed prices for any service? More service establish to some extent the capacity constraint dilemma faced by airline and hotel there are unable to inventory their product (seat on flight or room for night) to avoid losing the revenue for time perishable capacity constraints airline/hotel services are motivated to presale the inventory when possible by using reservation and giving discount to avoid loss sales. eg. Travellers found that the publish room rate for under utilize hotels are quickly abandoned if the quest request a discount. The exemption to business that practise thus strategy are budget hotel that fill on those room each time, yield management has allocate customer to perishable measure of capacity constraints services and this knowledge will destroy fixed price for many service lead to price negotiation for all services. Tutorial 12 (Managing Capital Demand) What organizational problems can arise from the use of part-time employees? The uses of part time employees can be very helpful to businesses that have peak demand period such as restaurant, supermarket and bank. Part time employees are usually paid lower wages and they enjoy fewer if any benefits of company are provided for full time employees. Also, it is not generally flexible for a company to carry carrier development incentives to part time employees; it is also more difficult to fit them into their organization structure. In addition, part time employees generally have lower experience than full time employee. As a result, part time employee may have bad attitudes and loss loyalty and commitment which could affect reliability performance the quality of work. This situation can leave the direct impact on customer and the business. In view of this condition, part time employee may require greater supervision and control that could be necessary for full-time employee. Also, there is usually a greater turnover in part time employee, so more time must be spent in training new employee. Finally, the business must hire more part time employee than full time people to start position which create more administration work for scheduling, personal record and payroll. How can computer-based reservation systems increase service capacity utilization? The main function of the reservation systems is to pre-sell the services. A reservation system allows the customer to reserve a service long before it is actually utilized. Allowing customer to make reservation has certain advantages. The reservation systems can be used to reflect demand to other times or location where services capacity is available. For example, if a passenger wants flight that is full reservation, the reservation clerk can suggest immediately suggest alternatives fly are available. Thus demand of service capacity has been effectively re-routed to under utilize capacity. Reservation systems also allow the services to over book its capacity when it reasonably expect to have no show. Illustrate how a particular service has implemented successfully strategies for managing both demand and capacity. Because a service is consume and produce simultaneously a failure to provide enough capacity to serve results in idle servers and facilities. Public school had been experiencing this variability in demand recently owing to frustration in the no. of school age children a move of family from center city to suburban and increasing enrollment in private school. Some strategies for managing the demand and supply are as followed. Managing Demand: Expand education services by offering adult education, early childhood education programs and before and after school child care program. Offer social services such as community education program, job retraining programs, programs for senior citizen and summer recreation programs. Promote of peak demand in some areas by offering summer school classes. Managing capacity: Use school building when classes are no longer held because of declining and enrollment for warehousing school supply or for admin office or lease those to other organization until school demographic change. Hire teachers who are train in more than 1 subject in order to cope with a fluctuating demand for courses. Hire part time teacher in small schools for support areas such as art, music and physical education. Suggest some strategies for controlling the variability in service times. To limit the services provider or to standardize them, fast food restaurant provide an excellent example of both approach they offer menu and they standardize the wears in which the worker provide the services. To patricians demand categories such as we see for commercial customer at bank or express lane customers at market. Pizza Hut delivery services can guarantee delivery within a specific time by controlling variability to several measure. They standardize the preparation of the pizza and they locate store strategy throughout the town. They also organize the delivery people. Each one can make one several delivery in each trip. Discuss the functions of inventory for different organizations in the supply chain (i.e., manufacturing, suppliers, distributors, and retailers). Manufacturing- factory inventory can be divided into 3 categories: raw materials, walk-in-progress (WIP) and finished goods. Raw materials are usually purchase in bulk quantities that often take advantages of price discount or forward buying in anticipation of future price increase. WIP is materials found on the factory floor in various steps of competition, WIP creates buffers between different manufacturing various steps and those allow some independent in operation. Finished goods if not representing a completed customer order ready for shipment are those available for immediately delivery. Suppliers- in addition to the role of inventory share with other manufacturer, suppliers are expected to the role make delivery to their manufacturing cost on a just in time (JIT) basis. Using electronic data intra changes (EDI) suppliers are indirect contact with manufacturing contact with manufacturing cost and those they are reduce ordering delay significantly using EDI and JIT delivery, inventory level can reduce. Distributors- act as consolidator of retail demand and provide more efficient distribution of goods because demand can be aggregated of regional level, distributors allow small manufacturer the opportunity to reach market efficiently by sharing the distribution cost with other firms. Retailers at the retail level inventory are on display for ready accepts by customer. Lack of inventory for immediate sale that is stock out represent a lose sale and possible loss of future sales if the customers never return. Suggest ways that service management can influence the arrival times of customers. Use appointment or reservation. Fill appointment times with walk in Advertise the time during the day/week when the facility is seldom busy Offer reduce rates for the services of weekends, example, telephone rates Segment the market by time sensitivity, example, retire people with no schedules and business people at lunch time and student after school Offer inducements suggest double stands on Wednesday gifts for the first specific customer who was arrived reduce the matinee rates for early theatre performance or meals. Tutorial 13 (Growth and Globalization of Services) Discuss the implications of service outsourcing for employees, stockholders, customers, and host-country economy when a firm outsources a call center overseas. Employees of the firm will lose their job resulting in personal hardship, a lot of tax base of the local economy, unemployed employees and unexpressed of the government. Stockholders will probably see some infinite improvement profit due to saving but this will dissipate when competitors follow the outsourcing practice. Customers may be unaware the claim but could put off if the outsource call center is less responsive to customer need. Eg, Dell computer give up its oversea call center for its high dollar business clients following complaint poor service. The host country economy and its citizen should benefit from the creation of new job. In what ways are service sector inventory problems different from typical manufacturing inventory problems? Services inventory problems differ from manufacturing inventory problems in the following ways: Set up/ordering cost are typically not of great concern Number of products is much larger Shelf space limitation are a main concern They are usually loss sales not back orders Product substitution often occur in services Demand variances is often much higher Information accuracy is lower What is the main difference between offshoring and outsourcing? Discuss THREE (3) potential risks of outsourcing. Offshoring involve moving work to a different country, workers can be employes by the same firm or different firm. Outsourcing involve moving work to a different company, workers can be in a same country or a different one. Outsourcing vs. Offshoring Risk: Outsourcer may collapse financially, go bankrupt, experience labor strike and a company might have to find a new solution on a short notice. Outsourcer might share or sell the sensitive company information to competitors. Company can become so tide or dependent on a particular outsources that outsource can drastically increase price in the future. Potential Risk of outsourcing Loss of direct control over quality Jeopardizes employee loyalty because of job loss fears Exposure to data and security and customer privacy issues Dependence in one supplier compromises future negotiation leverage Additional coordination expense and delays Waste of in-house capability to perform outsourced service What is the main purpose of yield management techniques? Suggest and explain FOUR (4) tactics to be used to manage supply. Purpose of yield management techniques: To sell right capacity to the right customer with right price. manage demand capacity to maximize revenue 4 tactics to manage supply: à ¢-   Daily / weekly work shift scheduling ~ Carefully scheduling work shifts, profile of service capacity can be made to approximate demand à ¢-   Cross training employees ~ cross -training employees to perform tasks in different operation creates flexible capacity to meet peaks in demand à ¢-   Increase customer participation ~ Customer provides labor just at the moment its required ~ Thus, capacity to serve varies directly with demand rather than being fixed à ¢-   Using Part-Time Employees ~ A ready part-time labor pool is available for who are interested in supplementing their primary source of income Company can utilize creative work schedule to solve the problem of unevenness of customer demand throughout a day such as non-uniform starting time and work days that have variable work hours. The traditional method for a control strategy cuts total labor by encouraging customer to participate in serving themselves. By cross-training personnel for different jobs, a company can flexibly shift personnel temporary to increase the capacity of any position. Capacity can offer be shared between department or between firm for personnel or equipments that is needed only occasionally. Eg., sharing the same secretarial accounting and office management team. How is a service level determined for most inventory items? Many factors are considered in determining a service level for an inventory item. The most of obvious included the cost of holding extra inventory as a safety stock and the cost associated with a stock out using an information database and expresses the delivery. This cause can be reducing significant need, for example, some retailers will have a stock out item, shop directly to the cost from another store. The competitive circumstances or willingness of the customer to place a back order also play a part. Rural store with competitors will seldom have the variety found in urban areas. What is the inherent conflict in a franchising arrangement? A franchiser is interested in delivering a consistent offering across all units in order to establish a brand that attract travelling customer. However franchising attracts either entrepreneurial owner-operator or large firm operating several franchises. In the case of the owner-operators that is a desire to personalize the establishment and cattle to the local customer base. Large firm with multiple units under management have the power and economy self-incentives to challenges the franchiser in particular with respect to any binding agreement (example: supplies and materials). Given the atypical nature of the franchise contract two business entities bound together in a contract seeking mutual and separate profitability, it is unsurprisingly susceptible to disputation. Conflicts can be categories five groups, relating to: values; relationships; data; structures; and interests. Causes of franchising conflict: financial issues can cause franchisees to seek either release or re-negotiation of their agreement; disputes with third parties; operational disputes with potential to impact on others involved in the same franchise scheme; financial issues interconnected with family and personal issues.

Comparisons betwen the movie One Flew over a Cuckoos Nest and a visit to a mental institution :: essays research papers

In this paper I will be comparing the visit to the State Mental Institution and the movie One Flew Over a Cuckoo's Nest. I think the two aspects of metal illnesses has had a effect on the way I see people who are not mentally stable. The three topics that are being compared are; staff concerns, spiritual development, and treatment methods. In the movie One Flew Over a Cuckoo's Nest the staff concernments was different from the staff concernments at the mental institution. In the movie nurse Ratchet was an bad influence to the patients who needed to be helped in the social groups. Instead of nurse Ratchet listening to the patients, she patronized and compressed them into their own kind of thinking. I think instead of helping them, Ms. Ratchet only mad the worst come out of the patients because of the way she downed their inner feelings and did not treat them as real people . From the visit at the State Hospital, the staff seem to real care about the patients and their mental stableness. I think with most mental illness people can really get help from people who actually care. If the staff really listen to what their patients have to say, then a patient can only be lead to better health. I think in any mental institution spiritual development with God should be allowed regardless of anything. In the movie, there really was not anything spiritual that was talked about. I think that if the nurse's and the patients had a spiritual side to them, then the sessions that took place could have been more helpful to the patients. In the State Institutionone staff memeber, told us that spirituality was show in the institution, but not to much because the staff members do not want to force their religion on the patients. The ways of treatment to the patients was an huge difference between a movie and reality. In the movie the shock treatment was heavily used for the patients who would get out of hand in the sessions. I thought that was nurse Ratchet crazy way to deal with the patients mental illnesses. In the movie there was also a time called; Medicine Time, where the patients would line up to take their medicine. In the State Institution we really did not see any patients lining up for their medicine, because they were treated like people.

Ealry Film :: essays papers

Ealry Film Being able to capture motion has occupied the human psyche sine primitive times. This is evident through the Lascaux cave paintings which depict buffalo with multiple legs in a attempt to represent the animal running. Other simple innovations also led to the motion picture, these ‘optical toys’ demonstrated the eye’s persistence of vision. These ‘toys’ grew more advanced, but lifelike motion could not be achieved until the photographic process was nearly perfected. In the 1870’s Eadweard Muybridge was successful in capturing the complete motion of a horse galloping. This was the first step in bringing pictures to life. The next invention came from a Rev. Hannibal Goodwin, who devised a thin, flexible, plastic base he called celluloid, on which could be put photosensitive material. George Eastman was the first to market this celluloid film, and in 1890 Thomas Edison and William Dicksom successfully tested the Kinescope. The first motion picture captured and copyrighted on this Kinescope was titled â€Å"The Sneeze†, which is simply a man sneezing. Edison continued to make short films in his studio, nicknamed the Black Maria. His shorts usually were comprised of people performing vaudeville acts as a form of sideshow attraction. These films would be viewed in Kinescope parlors, from large wooden boxes with a eyepiece on top. On the other side of the Atlantic, in France, the Lumieres brothers improve on Edisons Kinescope, and create the Cinematograph, a smaller more portable camera, that can film and view motion pictures. With this new Cinematograph, the Lumieres brothers were able to film and then project the product for an audience. They filmed what was around them, daily life for upper-middle class Europeans, their first was a whole group of people leaving a factory at the end of a work day. Simple, but for its time it was amazing, seeing live people walking around and moving just as they normally would, but on a big screen! These types of films became the Lumieres trademark, slice of life documentary work that would be shown in front of audiences. One of the Lumieres films: Arrival of a Train in the Cioat Station, was a train coming straight for the camera on an angle, that terrified the viewers. Edison continued to make films, under his own, controlled conditions. Although both Edison and the Lumieres, saw the motion picture as nothing more than a sideshow act and both filmed very documentary-esque work, each had their own criteria for filming.

Anne Hutchinson :: essays research papers fc

Anne Hutchinson challenged the traditional role of women in the Puritan society through her opposing religious beliefs. Anne Hutchinson was most likely not the first woman to have her own thoughts. She was simply the first to act on them. Anne Hutchinson was born on or about July17, 1591 in Alford, Licolnshire, England. She was the daughter of Reverend Francis Marbury. Rev. Marbury spoke out that many of the ordained ministers in the Church of England were unfit to guide people's souls. For this act of defiance, he was put in jail for one year. Anne read many of her father's books on theology and religion. Much of Anne's independence and willingness to speak out was due to her father's example. Anne admired her father for his defiance of traditional church principles. Then in 1612 she married William Hutchinson. Together they had 15 children. In 1634 she and her husband moved to Boston. Here Anne began holding informal church meetings in her home discussing the pastor's services and also preaching her beliefs to her followers. Threatened by meetings she held in her Boston home, the clergy charged Hutchinson with hersey. An outspoken female in a male hierarchy, Hutchinson had little hope that many would speak in her defense, and she was being tried by the General Court. In 1636 she was charged with hersey and banished from Massachusetts Bay Colony. Several years later when she moved to New York she was killed in an Indian attack. Anne challenged the Puritan clergy. She believed that: "1.One can feel one's salvation and is filled with the spirit of God after conversion. 2.One needn't be learned in the Bible or in the Puritan writers in order to be saved. 3.The ministers are all under the covenant of works, except John Cotton, who is under the covenant of grace.4. Inner light is the guarantee of salvation.5. All responsibility for salvation is placed on Christ. 6.Every person has the ear of God if only he or she would ask for it, and listen to the answer. 7. Indian slavery is wrong - people of all skin colors are of one blood. 8.Sunday shouldn't be set aside as the Lord's Day because every day is the Lord's day. 9.Christians will have new bodies when they get to heaven.10.Predestination is unfounded.11.Prayers should not be memorized, but inspired by love for God, waiting on Him.12.Holy Spirit dwells within each Christian like a personal union.

Biography of Aldous Huxley Essay

Aldous Leonard Huxley was born on July 26, 1894 in Surrey, England, as the third son of Dr. Leonard Huxley and Julia Arnold. Huxley was born into a long line of scientists and intellectuals. His grandfather Thomas Henry Huxley had the nickname â€Å"Darwin’s Bulldog† for his fierce defense of evolutionary science and for his passion for teaching Victorian scientific advancements to Britain’s working classes. Aldous Huxley was also related to the poet Matthew Arnold on his mother’s side of the family. These two disciplines, literature and science, converged at the end of the Victorian era and characterize Huxley’s own career and ambitions as an author, journalist, and humanist. Educated at Eton, Aldous Huxley was forced to leave the school at the age of seventeen due to an affliction of the eyes. He was partially blind for two or three years and therefore was unable to complete the rigorous scientific training he had undertaken. Though problems with his eyes would remain with him for the rest of his life, Huxley was able to attend Oxford where he received a degree in English literature. Huxley’s career began in journalism and included music and artistic criticism as well as book reviews. He also began writing poems, essays, and historical pieces. Huxley’s first introduction to British intellectual society occurred while working as a farm laborer at Garsington Manor, the site of the â€Å"Bloomsbury Society,† a group of public intellectuals that included Bertrand Russell. There he would marry Maria Nys and they would have one child, Matthew Huxley. He also wrote his first book, a volume of poetry called The Burning Wheel. While working as an editor for â€Å"House and Garden† during the1920s, Huxley wrote many novels including Brave New World. Huxley spent several years in Italy where he formed a friendship with D.H. Lawrence. They would remain close friends and Huxley would later edit Lawrence’s collected letters after his death. In 1937, Huxley moved back to the United States to live in Hollywood, California, where he helped write scripts for several Hollywood movies of the time, although he never had a lasting career in movies. After World War II, he famously became involved with the early psychedelic drug movement. Huxley was an early proponent of the use of LSD, mescaline, and peyote for their mind-altering effects. His 1954 book The Doors of Perception argued that through the use of psychedelic drugs, people would be able to â€Å"cleanse† the doors of perception in order to embrace the infinite reality of the world. A controversial figure for most of his life, Huxley died from cancer on November 22, 1963, only hours after President John F. Kennedy’s assassination in Dallas, Texas. By the time of his death, he was embraced in some circles as an intellectual and writer of the highest class, especially for his creation of the dystopian fantasy in his novel Brave New World and his engagement of the theme of commercialization in modern society. Others, however, saw him as a pseudo-scientist for his work in mystical traditions and his insistence on experiencing alternate realities through meditation, Eastern religions, and drug use. For his accomplishments, Huxley received the Award of Merit for the Novel from the American Academy of Arts and Letters in 1959.

Isolation in Hardy’s poems ‘Nobody Comes’ and ‘The Darkling Thrush’ Essay

In the poems â€Å"The Darkling Thrush† [‘TDT’] and â€Å"Nobody Comes† [‘NC’], Hardy presents two similar images of isolation. In both poems, the personae are isolated from human company, whilst Hardy explores this using imagery of ghosts and the supernatural in both also. However, individually there are differences in tone; although NC ends upon as dire a note as it begins, Hardy engineers an optimistic outlook in TDT and suggests that the persona’s isolation may not Hardy ensures that the persona of ‘TDT’ is isolated from any other human presence or, until the poem’s third stanza, any living organism. Whilst leaning against â€Å"a coppice gate†, he notes that â€Å"all mankind†¦ had sought their household fires†. Although this is an indication of the low temperature, it is noticeable that the rest of humanity are seeking light in an otherwise dark environment; reciprocally, the persona is deprived of both warmth and living company. To further this point, Hardy personifies non-human entities, such as frost and winter – â€Å"Winter’s dregs†, for example. In this way, Hardy makes the reader personal not with living creatures but with inanimate entities, isolating the animate persona even more. Indeed, Hardy makes such a division more striking by picturing the persona’s surroundings as very extreme. Surrounded by deathly imagery, the persona imagines the landscape as â€Å"the Century’s corpse/ His crypt the canopy,/ The wind his death lament†. Even Hardy’s animate entities seem ghostly; â€Å"Frost was spectre-gray† and â€Å"mankind†¦ haunted nigh†. Such is the state of decay that even â€Å"the ancient pulse of germ and birth was shrunken† – the regenerative power of life has itself died, leaving the persona as the sole animate existence. A similar loneliness can be seen in ‘NC’, especially towards the end of the poem. In the aftermath of the car passing, the persona observes, â€Å"mute by the gate†, that he â€Å"stand[s] again alone.† The sudden silence and soft, finite ‘t’ sound of â€Å"mute† – in contrast to the onomatopoeic â€Å"whangs† – amplifies the persona’s loneliness; as does the empty assonance in the repeated ‘a’ sound, in â€Å"alone† and â€Å"again†. Equally, the present tense verb â€Å"stands† and â€Å"again† emphasizes that this is an ongoing and repeated state of isolation. However, the persona in ‘Nobody Comes’ is not simply isolated in terms of being physically alone or the sole living creature – he is also isolated from modernity. Hardy again uses ‘supernatural’ imagery to explore this. The persona notes that â€Å"The telegraph wire†¦ intones†¦ like a spectral lyre/ Swept by a spectral hand†. Rather than see the telegraph wire as a means of communication, the persona rejects it in presenting an image of disassociation; the vagueness of the verb â€Å"intones† summons an image of faceless voices. He also creates negative supernatural connotations; there is an innate ghostliness about the archaic lyre – juxtaposed to contrast with the innate modernity of the telegraph wire – which is reinforced by the wraithlike â€Å"spectral†. Hardy repeats this for emphasis in â€Å"spectral hand†. In this phrase, he also creates an incongruity between the concrete verb â€Å"swept† and noun â€Å"hand† and the abstract concept of â€Å"ghostliness† – the ‘hand’ does not exist. Its invisible presence and visible effects are unnerving, making the modern telegraph wire an unpleasant image. The persona’s rejection of modernity can be seen also in the depiction of â€Å"a car com[ing] up†. Having shone its aggressive lamps at â€Å"full glare† – which Hardy emphasizes by placing at the end of the line –the persona states that â€Å"it has nothing to do with me†. This maxim, in being so blunt, is very powerful. It operates to present a rift between the persona and the modern world and, given the unusually colloquial verb â€Å"whangs†, it indicates that the car is viewed as a callous representation of modern life from which the persona wishes to isolate himself. It leaves â€Å"leaving a blacker air†, which may indicate either a corruption of nature (in terms of polluting the otherwise fresh air) or a darkening in the persona’s emotions. Indeed, the poem concludes with the same negativity, with the word â€Å"nobody† in both the title and the last line. The persona is left â€Å"again alone† and isolated, prompting a large amount of sympathy from the reader. By contrast, ‘TDT’ concludes with a hopeful note. At the appearance of the thrush, in the third stanza, the reader notes that the bird is similarly isolated and surrounded by death. In truth, the reader’s initial reaction to the â€Å"aged†¦ frail, gaunt and small† thrush is to question whether the creature will survive the bleak conditions. There is a sense of desperation present â€Å"fling[ing its] soul/ Upon the growing gloom.† However, the persona notices â€Å"some blessed Hope† in the bird’s â€Å"happy good-night air†. Although â€Å"unaware† of why this may be – such â€Å"joy illimited† is unintelligible to the persona – this leads the poem to end in an optimistic fashion. Although both the persona and the thrush remain isolated from any other company (the persona fails to deeply associate with the bird) and the anxiety about the future lingers, Hardy does much to suggest that such deep rooted â€Å"fervourlessness† may change in TDT’s persona, as opposed to the ongoing isolation present in NC.