The Bargaining Power Of Buyer

The Bargaining Power Of Buyer Fraser Neave holding Bhd. was incorporated at year 1883 when founders John Fraser and David Chalmers Neave formed a company named Singapore Straits Aerated Water Company in Singapore. Few years later, FN was consolidated and enter the food beverage industry. FN has its own vision to become the leading total beverage company in Malaysia and the region and their mission is to be a world-class multinational enterprise providing superior returns to their shareholders, excellent value for their customers and a rewarding career for their employees. FN Company is one of the Malaysia well known beverage company which the famous product is the isotonic drinks 100plus launched at year 1984. FN produce wide range of beverage that can be classified as soft drinks, dairies, non-carbonated beverages as well as separate business property. They were launching the sweetened condensed filled milk in year 1973, and the acquisition of Nestlà ©s canned milk business in Thailand and Malaysia in year 2007. Other than that FN high quality canned milk was also gain excellent reputation in Malaysia. This product is largely use as beverage mixers in coffee, tea and chocolate drinks and now canned milk has successfully to export this product to more than 20 countries around the world. In addition, the halal certification offers strong reassurance to Muslim customers in the growing Halal markets in the Middle East and Africa. FN Company was awarded The Readers Digest Trusted Brand from year 2005 to 2008, Media Magazine Top 1000 Asian Brands 2007 and so on. It proves that their customer was confident when using their products since they are concern about their health and safety quality. FN Company was continuously improve their quality and brands to challenges the marketplace and to become the leader. FN Company is also well-known company that caring about the social environment and working environment. They implemented and executed various environmental stewardship and launched numerous recycling campaigns in schools to inculcate good environmental habits among young people and thus, create awareness on the importance of recycling. FN Company also set-up a RM1.2 million funds named Chairmans Award to promote educational excellence and to recognize high-achievers among children of FN Groups employees. FN Company has achieved a safety record of zero accident (no loss time accident) accumulated from 1 February 2007 to 21 September 2009 with a total 962 days or 2.3 million working hours. In terms of its environmental compliance incident and achieved zero environmental compliance status. FN Company has three main businesses which are soft drinks, dairy products and property. Soft Drink FN Beverages Marketing Sdn Bhd represent Malaysias largest soft drinks manufacturer and distributor. There are four manufacturing plants nationwide, including its state of the art facility at its headquarters in Shah Alam, Selangor. Their products are 100PLUS, FN Fun Flavours, FN Originals, SEASONS, Ice Mountain and Fruit Tree. The company started operations in 1936 when FN Ltd obtained the franchise of Coca-Cola in Singapore and Malaysia. After that FN Coca-Cola (M) Sdn Bhd (FNCC) was born and license agreement would end in September 2011, the company renamed as FNBM. In Malaysia, 100PLUS is a outstanding local success story, cover 90 percent share of the isotonic drinks market and also the No.1 ready to drink (RTD) brand in Malaysia. For non-carbonated portfolio, SEASONS is currently No.2 in Asian drinks category while Fruit Tree continue to grow within the juice segment. The soft drinks division perform well during the festive periods and continue to pursue world class excellence in distribution so that the products are readily available with focus on market execution. Over the years, FNBM has used few strategic measures that emphasize on its brand presence by invested in advertising and promotions, product availability and operational efficiency. In April 2010, FNBM was selected to become exclusive distributor of Red Bull energy drinks in Malaysia and has improved FNBMs beverage portfolio. Dairies Products Next business is dairy products. FN Dairies (Malaysia) Sdn Bhd has produced varity such as sweetened condensed milk, evaporated milk, pasteurised milk, UHT milk, juice and ice cream. FNs dairy business had a joint venture with Beautrice Foods of Chicago, USA in 1959 with the construction of Southeast Asias first sweetened condensed milk plant in Petaling Jaya, Malaysia. The Carnation Company from US joined the partnership in 1965 to form Premier Milk as the manufacturing arm. The Group constantly seeks product innovation and invention, more products adding into portfolio and after that the Group had a successful journey into ice cream business. In 1989, the Group purchased the interests of Beatrice Foods and restructured its dairy operations under FN Dairies (Malaysia) Sdn Bhd. It was expanded further with the acquisition of Magnolia in 1995. In 1998, the Group started its pasteurised business. Today, FNs dairies division has a vision of being Malaysias leading dairy and food marketer with world class products, standards and capabilities forming part and parcel of its offerings. In 2011, FN Dairies (Malaysia) disposed off its entire ice cream business to FN Creameries (M) Sdn Bhd. Property About the property business, FN Properties is a business unit of Fraser Neave Holdings Berhad, the purpose is to unlock the value of land acquired and held by the company. The first property is the former FN factory land at Jalan Foss, has been developed into commercial spot called Fraser Business Park. The development follows the general direction of Fraser Neaves underlying philosophy of a socially responsible corporate citizen. Key value lies within the emphasis of continuously creating innovative designs and applications towards the development, giving its occupants a taste of the modern and the future alike. More is expected from future property launches as the unit break new ground with innovative design and product development that focus on feature that are particular to the FN brand name. In future, the property division will emphasize on changing existing Premier Milk plant into a landmark in Petaling Jaya. The redevelopment is estimated 5 to 8 years period. PEST Mission: To be a world-class multinational enterprise providing superior returns to our shareholders, excellent value for our customers and a rewarding career for our employees. Vision: To become the leading total beverage company in Malaysia and the region. Every company has their mission and vision statement served as overall purpose of business. The mission and vision statement above are set by FN. There are external environmental issues have or will affect FN to achieve their mission. These external environmental issues are being categorized according to PEST(EL) model. PEST(EL) model is to analyze the external environment issues of company. It categorized environment issues into political, economic, social, technological, ecological and legal influences. Economic Improving growth prospect of Malaysia, Thailand and the region brings more income to FN as is signals economy are in good condition and peoples are willing to spend hence will increase sales in that particular region. The growth prospects include rising of Malaysia GDP in year 2010 that is approximately 10% compare to 4.5% in 2009 that rise from some major factor of manufacturing industry production with a double digit growth of 16.9% in year 2010. ASEAN countries are growing quick in their economy thus putting FN a favourable factor in growing of profits. FN has built up positive consumer sentiment to their product. For example 100PLUS, isotonic drink that is specialized for sportsmen to retain the metabolism. It is a concept well-built that it is voted number 1 isotonic drinks in Malaysia since its introduction in 1983. That well-built positive sentiment brings others drinks of FN to be well marketable. It is the consumer sentiment to the products enhanced the profitability factor of FN towards other competitor thus is at an advantage in the market. Political Government had put initiative to boost spending of consumer with new economic model (NEM), with this model being pursue, Malaysia economic boost as consumer purchasing power increases and are advised to spend. FN will get benefit by provide goods to be sold to the market hence boosting sales. FN products are all Halal hence are entitled for Halal Hub Tax Incentive. The incentive offered had decreased FN some percentage of tax liability to the government. It made FN more profitable compare to those companies which does not qualified for the incentive. Government has taken back some incentive in year 2009, the withdrawal of subsidy of fuel and sugar has put an impact to FN as most of the FN core businesses needed large amount of sugar which is dairies and soft drink business. The withdrawal of sugar subsidy lower the overall profit of the FN although there is a large improve a sales but the profit doesnt show much improvement as the sugar cost increases. Withdrawals of fuel subsidy did also impact on FN as the cost of their internal and external distribution cost increases thus reduces profit. Technological In the beginning of 2011, FN introduced new product, Ice Mountain and it has faster share gain among bottler waters player which established 5% market share in Malaysia. FN launched new beverage Zesta across Malaysia in October 2011.Zesta has remarkably great tasting berry soda flavored soda. It contents the Guarana tropical berries that originate from Amazon, South America. In addition, Guarana tropical berries invigorate the body and mind. Zesta is an extension of our already large array of FN beverages, a beverage that was initiated to complement our existing range of FN brands, creating a transition vehicle for our growing band of consumers, said Dato Ng Jui Sia, CEO of Fraser Neave Holdings Bhd. FN believes that Zesta is the illustration of growing trends for beverage enhanced soda. (Zesta 2011) Environmental Sichuan Earthquake of May 2008 has caused the raw material cost increase and companys profit is affected. Natural disaster is beyond expectation and control of the company. Profit before interest and tax in 2008 grew only 5%. This environmental factor has affected company to achieve their mission. Natural disaster would serve as obstacle that FN provide superior returns to shareholders. Porters 5 forces Today, Fraser Neave Holdings Bhd (FN) has extended business at more than 20 countries worldwide and established itself as a regional player. So that, FN need use Porters five forces model to analysis and understanding the nature of the competitive environment. FN has a lot of benefits from using Porters five forces model. They can ensure that management considers a wide range of potential impacts when devising strategy. They allow the division of the work in environmental analysis and make decision in time. In addition, Porters five forces also help to develop effective strategies to raise FN profitability, power, and competitive position in an industry. Porters five forces is divided into threat of entry, intensity of competitive rivalry, threat of substitute product, bargaining power of buyer and bargaining power of suppliers. Threat of entry Threat of entry is new entrants into market will bring extra capacity and intensify competition. The strength of the threat from new entrants will depend upon the strength of the barriers to entry and the likely response of existing competition to a new entrant. FN produce two new soft drink FN Clearly Citrus and Zesta were launched in soft drink market at year 2011. Zesta and FN Clearly Citrus are getting customer support and the new produces also have a higher demand from the buyer. Zesta sales would create other competitor have entered the soda market, it will be posted a threat for the FN affect the market sales. Therefore, FN should defensively competitor who are entered the soda market to creating barriers that new entrants to the market find difficult to overcome. This can ensure the Zesta sales would not affect and ensure the maximize shareholders wealth. FN able to occupy in the Malaysia soda market a very important role. Bargaining power of supplier Bargaining power of suppliers definition with the stronger power of suppliers in an industry the more difficult it is for firms within that sector to make a profit. It is because suppliers can determine the terms and conditions on which business is conducted. Most of the products are contented sugar, sugar is essential for production. Malaysian Government has removed sugar subsidies on selective basis and subsidy for Dairies Malaysia was removed. Increased of sugar cost and global commodity cost forced price of Sweetened Condensed Milk increased by 25%. However, sugar subsidy was removed on selective basis which means FN can look for suppliers whose sugar subsidies werent removed. In addition, competitors will also search for new suppliers and it may not easy to reduce cost as low as before. Apart from that, FN may have to concern about any switching cost for current suppliers. Bargaining power of buyer Bargaining power of buyer sense of the powerful buyer can force price cuts and quality improvement. The government removed sugar subsidy, FN material cost increased and affected the product selling price increased. In 2011, Sweetened Condensed Milk has increased 25% of the price which cause the demand reduced. Revenue and profit was decline during the year. Buyers also have full information about the soft drink and dairy product market. They should know which company product cheaper, more health and best quality. FN need to retain the customer by improving product quality and introduce new product. Buyers always have different choice for their beverage and dairy product. Apart from that, same type of competitors product will be display nearby companys products. For example, Jusco will be placing same type of products together which allowed buyers to search easily. There is low switching cost for buyers. Beside, degree of product differentiation is low which customer may feel all bran ds are similar. This threat is more difficult to control, because FN management need to concentrate on changing buyers preference and also maximize the shareholders wealth. Threat of substitute product Porters 5 forces have indicated that the threat of substitute product is the other firms within the industry has offers similar product with similar benefits for the customer. This threat may affects the competitive environment of the company and influence our ability to achieve profitability. On FN Magnolia have offers Pasteurised Milk and Sterilised Milk. The range of the customers is children and adults. The Pasteurised Fresh Milk can be enjoyed chilled or warm, plain or mixed with other foods or beverages and they innovate into Lo-Fat Hi-Cal Milk provide less fat and more healthier of the Fresh Milk for our body. However, Marigold has offers HL Milk is low-fat milk No.1 in Malaysia. HL Milk has perfect balance of nutrients for everyone in the family and it consists high in calcium and protein, low in fat and lactose and fortified with 9 essential vitamins to supplement healthier lifestyle. Marigold HL Milk is first choice for the customers who are caring health conscious. FN should innovation their milk product provide more healthy to attract or retain consumer choices. Another competitor is Dutch Lady has provided a Dutch Lady Milk powder for satisfy customer needs who want mix it with other coffee or tea favour and it has a rich and creamy taste and allowed to dilute in hot or cold water easily. Furthermore, Dutch Lady also has provided different formulations to cater to children of different ages to promote their brain development and healthy growth. Therefore, most of the mother would choose Dutch Lady Milk products of their children rather than choose FN milk products. FN SEASONS offers soft drink products are leaders in countrys most comprehensive range of consumer, catering to every occasion. The Soya range provides protein nourishment while the Chrysanthemum and Grass Jelly provides healthier refreshment with less sugar let FN SEASONS become best quality and healthy drinks. However, they are having lesser favors for the customer choose. YEOS have more favors, such as Lychee drink, Sugarcane drink, Bandung Rose drink, coconut juice, soursop drink and guava drink for the customer to choice. Hence, consumers who are Sugarcane drink lover may change its option to YEOS products. Although there are many competitors for isotonic drink, 100Plus still able to gain over 88% of the market share. Company has done a lot promotion for 100Plus which the reason 100Plus is successfully gain more than half of the market share. (Annual Report 2010) Intensity of competitive rivalry Intensity of competitive rivalry among competitors in the industry strives to companies to gain competitive advantage over the rivals and drives the profit of the rivals firm to zero. The company can gains the competitive advantage by several ways, such as pricing policy, improving the products differentiation with other and exploiting relationships with suppliers. If can gain more competitive advantage over competitors can increase the profitability of the company. FN only provided soft drink products and dairy products, appears less competitive advantage compare with others. Nowadays, people more have health conscious when they buying products may choice to buy the products which consists more nutrition. In food and beverage industry also have many company has provide more diet product to satisfied the requirements of the different customers. Dutch Lady Low Fat Yoghurt is a healthy snack and it will enhance the absorption of nutrients, ensuring digestive system stays healthy. It contains Vitamin A, C and E, calcium and Active Live Cultures. In Addition, the Marigold have offer the Yogurt and cultured milk Vitagen which have consists nutrition products for the body. The Vitagen has billions of live probiotic cultures to helps maintain a healthy digestive system. Probiotic cultures in VITAGEN can withstand bile and acidic stomach juices and reach the intestines alive to fight harmful bacteria in the intestines. Furthermore, the Yoghurt contains live and active cultures help digestion and promote a healthy digestive system and calcium for the development of strong bones and teeth. Marigold also has offers Jelly is a great-tasting double-layered jelly that is filled with fresh fruits. Its cool and refreshing taste makes it great for everyone in the family and contains no preservatives and is a healthy alternative to fruits after a hearty meal. This makes Marigold become Malaysias first and only pasteurised Jelly. This all is key reasons that the consumer may change favors to this type of products. To gain competitive advantage, FN should provide more nutrition products for the customers have more choose. Porters national competitive advantage diamond Porters diamond model suggests that there are inherent reasons why some nations and industries within nations are more competitive than others on a global scale. The argument is that the national home base of an organisation provides organisations with specific factors which will potentially create competitive advantages on a global scale. (Michael Porter 1990) Porters diamond model consist of four conditions of national advantage which are factor conditions, demand conditions, related and supporting industries and firm strategy, structure and rivalry. Factor conditions Factor condition is about important elements that exist in a company which lead to national competitive advantage. It can be country specific or industry specific. FN Dairies had constructed plant in Pulau Indah costs RM350 million and will be completed within the second half of 2011. The new plant promotes cutting edge green technology which would have huge gains in water, energy and environmental conservation. With existence of this plant, FN Dairies could be on the top list of worlds largest producers of canned milk. (Annual Report 2011 pg 41) An increase in production line is an advantage of the company. FN had launched a new RM45 million polyethylene terephthalate (PET) monoblock production line which is the first in Asia Pacific. This able to done all the things in only one production line, for example blow bottles, fill and pack all carbonate soft drinks products. (Annual Report 2010 pg 32) FN has the latest innovation and technology that bring advantages to them. With this latest technology, FN can enhance its operations by continuing improve production lines. FN can produce more products in effective and efficient way. In addition, the new machineries increase as the production lines increases. The warehouse management system has implemented to make operation work run smoothly. Besides, the introduction of new sales forecasting tools helps in manufacturing, if sales forecast is low, the manufacturer will produce less stock. Supply chain act as an important role in a business. Without supply, production would not be carried out. Improvement in supply chain lead to high efficiency of production and logistic by upgrade the systems. FN introduce higher level of operational automation and inventory management to ensure the manufacturing process has no error. Besides, the product quality management has to make sure that the products are in acceptable quality and safety measures are enhanced in order the product would not harm people. Demand conditions Secondly, the demand conditions state that if the local market for a product is larger and more demanding at home than in foreign markets, local firms potentially put more emphasis on improvements than foreign companies. This will potentially increase the global competitiveness of local exporting companies. FN non-carbonated portfolio has slightly increased from 25.4 per cent to 28 per cent in soft drinks business. This represent there is a growing demand for drinks. During the year, FN included fruit teas and juices to its range of soft drinks, and launch new drink called Zesta recently catering consumers of this segment. The ability to innovate, differentiate and manufacture new product lines will bring advantages such as gain more market share. (Zesta 2011) FN Fruit Tree released five new flavours in bottle form which are orange, apple, lychee, blackcurrant and mango. As the demand increases, Fruit Tree has becoming one of the fastest growing categories in Malaysia. The new flavours are the extension to the Fruit Tree cans range and the research shows that consumer preference toward these flavours compared to other brand in the market. (Annual Report 2010 pg 36) FN Holding Berhad has built a new warehouse in Kuching which triple larger than previous warehouse capacity to improve the quality of service and make sure delivery to customers is on time. Furthermore, it utilised advanced warehousing technology such as high selective racking, super flat flooring and Very Narrow Aisleway (VNA) trucks. Related and supporting industries Thirdly, the related and supporting industries mean that when local supporting industries and suppliers are competitive, home country companies will potentially get more cost efficient and receive more innovative products. In February 2010, 100PLUS signed a partnership agreement with AirAsia Berhad, officially sell 100PLUS on AirAsia flights which depart from Malaysia. AirAsia Berhad is a Malaysia top airlines company, being a partner of AirAsia Berhad has a real competitive advantage for FN. This agreement is a big step for division to extend business offshore. Passenger dehydration happened frequently in air travel, with 100PLUS the passenger can get over the dehydration. Support from AirAsia is like an advertisement effect, whenever there is a flight, there is an appearance of 100PLUS. (Annual Report 2010 pg 038) Firm strategy, structure and rivalry Structure and management system can affect competitiveness. FN is running beverage and dairies business in addition to food business too. FN buy 23.08 per cent share in Cocoaland Holdings Berhad. Cocoaland is a major snack food manufacturer in Malaysia. FN is diversifying the business risk to various subsidiaries. FN develop the food business to supplement beverage and dairies business. As the Malaysia grow into high income economy country, the consumption of middle income will increase and food business will be benefited. GE model 3 portfolio business Property Dairy product Soft drink GE business matrix Industry Attractiveness- Economic Factor Business Strength- Brand Strength High Medium Low High Investment/ Growth Soft drinkSelective Growth Selectivity Medium Dairy productSelective Growth Selectivity Harvest/Divest Low Selectivity Property businessHarvest/Divest Harvest/Divest FNs business has divided into 3 portfolio and that are Soft Drinks, Dairy Products and Properties. First of all, we will use the environmental factor and brand strength as the industry attractiveness factors and business factors benchmark. Soft Drinks FNs core soft drinks business portfolio will be classified at the classes of selective growth. The company soft drinks 100plus and Zesta are popular in Malaysia and have helped the company in bringing certain level of stable income.100plus as the companys core product have promoting an active lifestyle and healthy living to consumer. Many events have been run to promote 100plus as it is isotonic drink of choice at major sporting events. 100plus is present at top sports events such as Piala Malaysia Final 2011 100plus Tunku Abdul Razak Cup, KL Marathon 2011 and so on to continue building prestigious images of 100plus to consumers. Profit of division has been growing from year 2007 to 2011. However, sugar subsidy withdrawn by Malaysian Government has major impact on price of sugar. The division has lesser growth rate for year 2011. In addition, global commodity cost has increased which is unfavorable economic factor. Soft Drink division has very high brand strength but economic factors are not really favourable to the division. Dairy Products FNs dairy products will be classified at the classes of selectivity. Companys dairy products have included sweetened condensed milk, evaporated milk, pasteurised milk, UHT milk, juices and ice cream. Dairy Products also suffered from withdrawal of sugar subsidy and global commodity price increased in 2011. FNs dairy products business has classified at selectivity, with medium level of attractiveness and medium business strength on the dairy products. Although the product Milo is popular in Malaysia, Milo is not owned by FN, it was franchised. This product reduces business strength as it is not the only major player in the market. The dairy products will seem less attractive to the investors to consider investing because the deliberate of the milk market is very costly. In addition, the cost for hire workers and the cost to obtain technology for producing the dairy products are costly for subsequent production of dairy products. Moreover, the dairy products license also difficult to be approved by the government. New entrant will find difficult to entry, because the market has been controlled and played by a few major competitors. New entrant will find difficulty to enter to the market as these factors created entry barriers. Properties FNs property business had generated more revenue in year 2007 compared to the year 2006 by 6%. Revenue for the year 2008 had declined by 24% compare to year 2007. FNs property business has classified at selectivity with high level of attractiveness and low business strength. The company is more concentrated in the soft drink products and has no initiative to promote companys property to the public, not many people knows that FN has already entered into properties. FNs property business is non comparable with beverage business that seems to be so successful and FNs property business strength is low in this industry. The property business that has high profitability in the industry will attract more investors to invest. The government encourage removing of old building and build more new business park in order to bring in more prosperity to our country. Moreover, our property business is at growth stage because it is newly introduced into the industry, hence it does not have strong bus iness strength on the property business. Ratio analysis and Key performance Indicators Revenue of continuing operation continues to grow from 2009 to 2010 by 11.2% and 2010 to 2011 7.6%. In 2010, the revenue is able to grow better than 2011 due to improved economic conditions. Malaysia Government has introduced New Economic Model 2010 helps to boost spending in Malaysia. Profit before interest and tax growth rate also decline from 2010 to 2011, 31% to 14%. The result was affected because of particular division wasnt doing well in 2011. Soft Drink Soft Drink division has current ratio of 1.77 and 1.99 for year 2010 and 2011. It indicated improvement in managing assets and liabilities. The growth momentum of soft drink division has continued. The division has been doing well over the years. It contributes the largest profit to FN. In 2010, the soft drink division was able to generate revenue 21% more compared to last year. Soft drink was delivering higher volume especially during festive periods such as Chinese New Year. In addition, sales volume of 100Plus Seasons have grew more than 20% and reflected strong consumption and growing popularity of the brands. 100Plus generated over 88% of market share in isotonic category and Seasons generated 27% market share of Asian drink category. While Badminton competition Thomas Cup was around, 100PLUS Thomas Cup 1 Million Support Campaign was held for Malaysian to show their support for Malaysian badminton team. Apart from that, the division served as distributor of Red Bull energy drinks in Malaysia and commenced from 1 April 2010. Soft drink volume was able to benefit from Red Bull which contributed 2.2% helps to improve the divisions beverage portfolio. (Annual Report 2010) Soft drink division grew only 16% from 2010 to 2011. The growth rate is eroded due to the reason of Malaysian government has withdrawn the subsidy of sugar and fuel. Therefore, raw material cost has increased and causes the profit margin diminished. Coca-Cola business exits the FN in September 2011 which also the reason of profit margin diminished. However, 100Plus and Seasons still generated volume growth 10% and 14% to benefits the division. 100Plus and Seasons are the leading brands in the division and continue to enhance the divisions beverage portfolio. 100Plus was being promoted continuously as 100PLUS New Thematic Launch in July 2011. Beside, FN SEASONS Nourishing You Malaysia National Consumer Contest held between March and April 2011 to create consum

Barilla Spa Case Study

Barilla SpA (Barilla), is an Italian largest pasta manufacturer in the world manufacturer that sells pasta to retailers largely through third-party distributors. Barilla has been facing huge variability in demand which is straining the manufacturing and distribution network of the company. This fluctuation in demand, are forcing the CDCs to maintain a higher level of inventory. The proposed new system, Just-In-Time Distribution (JITD), is the solution suggested to resolve the demand fluctuation issues and lower costs.This new process would move forecasting and shipment allocation responsibilities to Barilla rather than allowing each distributor/retailer place the order amounts separately. This approach has both internal and external complications as there is much resistance from both within the company and from the suppliers and distributors. Implementing the JITD is a good idea for a number of reasons.This will streamline the information flow, reduce uncertainty in demand , reduce t he lead time, and decrease both finished and raw material inventory, thus making the system efficient and reducing the overall cost. A good plan would be for Barilla to start by running a pilot test within its own depot then with 1 or 2 distributors and  use the results of the test regarding the cost savings and improvement in supply chain efficiency to convince other distributors about how beneficiary will be to all by implementing JITD.ISSUE IDENTIFICATIONImmediate issue:The main issue in this case is the fluctuating demand imposed on Barilla’s manufacturing and distribution system. Once this is brought under control, many other problems will be solved. These following are some of the causes of this fluctuating demand that must be addressed: Demand fluctuations (Bullwhip effect)Cost of having to hold high inventory in order to meet distributor’s order Transportation costBarilla’s sales strategy relied heavily on the use of promotions Long Lead timeCustomer s ervice.Higher overall warehouse and transportation costsSales Representatives Incentives based on the amount of the products that they sold to the distributorsISSUE IDENTIFICATION & ROOT CAUSE Demand fluctuations (Bullwhip effect)As the 1980s progressed, Barilla has been facing huge variability in demand essentially affecting dry products, such extreme demand fluctuation strained the manufacturing and distribution network of the company (see Exhibit 12) Cost of having to hold high inventoryThis fluctuation in demand and the difficulty of the manufacturing process to deal with fast-track orders are forcing the CDCs to maintain a higher level of inventory in order to meet distributor’s order. â€Å" A distributor warehouse held a two- week supply of Barilla dry products in inventory†. (see Exhibit 13) Reduce the number of SkusTransportation costThe greater number of trucks that it required in periods of high demand increased its Transportation costs. Barilla’s sal es strategy relied heavily on the use of promotions In the form of price, transportation and volume discountsLong Lead timeBarilla supplied its distributors between 8 and 14 days after it received their orders, the average lead-time being 10 days. Customer service Barilla has no visibility when it comes to plan and forecast in order to meet the customer demand. Higher overall warehouse and transportation costsThe fluctuation demand may lead to overtime shifts in order to meet the demand, higher inventory of raw materials and frequent capacity adjustments, as well as higher transportation costs which all increase the overall cost of the product. Sales Representatives Incentives based on the amount of the products that they sold to the distributors. This was causing problems as the sales reps would try and push more products during the promotional period to get a bonus and were not able to sell as much during non-promotional periods.ALTERNATIVES AND OPTIONThe proposed new system, Just -In-Time Distribution (JITD), is one solution I suggest to resolve the demand fluctuation issues and lower costs. PROS:1- Resolve the demand fluctuation that often lead to the bullwhip effect. 2- Offer additional service to the customer at no extra cost 3- Increase supply chain visibility and there by fewer stock outs 4- Reduce forecasting errors5- Lower cost of capital tied up in inventory 6- Improve customer service 7- Improve the information flow, 8- Reduce the lead time 9- Decrease both finished and raw material inventory, thus making the system efficient and reducing the overall cost. CONS:1- Heavy Investment in information technology in order to implement the JITD program 2- The internal resistance to the JITD system, comes from the  production, sales and marketing divisions and the top management. The production division is concerned about the lack of a sophisticated forecasting system in order to properly use the data received from the distributors in an efficient way. The sales representatives are concerned about their compensation, they will lose their incentives, because the sale will be predictable or flat and their responsibilities will be minimized under the new mode of operation.The top management will be concerned about the added responsibility of predicting demand on Barilla without any guarantee of cost reduction. 3- The external resistance comes from the distributors and retailers. They will be concerned about the loss of control in deciding their inventory levels. The JITD system gives more power to Barilla which may be looked on with doubt by some distributors who are not sure about the long term intentions of Barilla.These distributors expressed concerns about becoming too tight to Barilla and fearful of losing control by giving Barilla the power to push products into their warehouse just so they Barilla can reduce its costs. 4- Difficulty to run trade promotions with JITD which may push the customer to switch to another brand. 5- Custo mer need to improve their equipment ( computer, bar-code, scanner..) 6- Customer will have to share their sales data with Barilla on a daily basis in order to insure replenishment 7- Loss of control in deciding their inventory levelsRECOMMENDATIONS1- Eliminate or reduce the promotional discounts to customers because it leads to demand accumulation and a release during the promotion period. 2- Volume discounts to distributors should be reduced or eliminated for the same reasons highlighted above. 3- Barilla should also move to a new compensation for sales representatives, they should be rewarded on company performance not on their own. Their responsibilities and relationships should be closer to distributors and retailer in order to improve and insure Barilla’s customers satisfaction. 4- The distributors will have to be offered collaboration incentives in order to keep them on board 5- Keep the assessment period the same but stagger the end dates for these periods over sales r epresentatives to smooth out demand fluctuations.IMPLEMENTATIONHow to effectively implement JITD at Barilla? And When?1- Start by running a test pilot within its own depot then with few distributors and use the results to convince the internal and external resistance on how the new program will reduce dramatically their cost. and improve supply chain efficiency. 1- Collaborative Planning: Barilla and the distributors can work as a team and plan on different issues. 2- Manage the demand: Barilla should not only forecast demand but also should try to shape and influence it by marketing using surveys to determine the needs and expectations of the consumers and designing products to satisfy them.3- Gather information from point of sale: This model has been successfully implemented in Wal-Mart’s distribution system. However Barilla will have to improve its relationship with retailer and that will involve a costly investment as the retailer doesn’t have the computer to commu nicate the information to Barilla.MONITOR AND CONTROLThe JITD system has the potential to substantial reduce costs if it is implemented correctly. In order to do so Barilla should begin implementing JITD within its own Depots and expand with pilot projects with the Distributors. Therefore mentioned analysis discussed a variety of methods by which to make such implementation more viable than it was in the past. However, such a list is in no way conclusive. Ideas such as reducing the number of SKUs and rearranging distribution channels should also be explored in the long term as they can also result in substantial cost savings. Barilla should be able to monitor and control the partnership with its distributors by measuring their performance, these are the following list of inclusions that may be used for this purpose:

Negative Effects Of Advertising On Children - 1261 Words

As the concentration of media rises along side technology so does our exposure to advertisements. Children are especially vulnerable to the negative effects from advertising as many argue they are unable to decipher media content from an advertisement. The center for disease control reports that the obesity rates in children ranging from 2-11 has more than doubled in recent years. The majority of the research for this critique comes from the United States but can be applied to nations with similar media exposure like Canada. One predicted cause of the increase of obesity in children is due to advertising unhealthy foods to children. Advertising to children is extremely controversial as children are unable to deconstruct messages in the†¦show more content†¦I estimate that with the rise of Web 2.0 and online television the exposure time would be more than 2 hours. It is unfair to be targeting children as consumers before they are able to understand the negative repercussions and true meaning of corporate advertising. As stated in the article, Fantasy In Food â€Å"Child possess lower levels of persuasion knowledge than adults They lack the ability to critically evaluate commonly employed advertising tactics such as fantasy and mat form judgements based on primarily on their affective evolutions of an advertisements execution.†(M. Rose, Merchant and Bakir 2012 75) As well, children are unable to earn money, therefore they must consume through their parents using techniques like pester power. Pester power is when a child nags their parents to purchase an item being sold. This is often to the extent that the parent caves in order to satisfy their child. Meaning that the parent is being influenced as the consumer. The Brooklyn Law Review believes in the need â€Å"for increased adult responsibility toward vulnerable children, children s helplessness due to age and inexperience in the marketplace and the disfavor evident in the law for adults who ex ploit this helplessness.† (Pauker 1980) Overall from the argument in which advertising to children should be restricted before an age where they are able to deconstruct and understand the messages in advertising, more strict laws andShow MoreRelatedNegative Influence of Advertising1524 Words   |  7 PagesNegative influence of advertising on society Advertising by definition is a paid form of  communication  intended to  persuade  an audience (viewers, readers or listeners) to purchase or take some action upon products, ideas, or services. We are taken  into what the advertisers exactly want us to do - buy their products. Advertisements in themselves are not bad. They do perform an important  role in the society and that is the promotion of products and services  so that people will become aware ofRead MoreNegative Effects of Sex in Advertising1151 Words   |  5 PagesSex in advertising can be defined as the use of any type of sexual imagery to draw the interest of the consumer to buying a particular product or service. The use of sex in advertising as mentioned earlier is said to have boasted a lot company’s revenues, but it also has its negative side which has caused a lot of problems in societies around the world. The idea of using sex in advertising is a very smart way that advertisers use to gain attention of consumers, but it has its negative effects likeRead MoreDoes Advertising Has Negative Effect on Teenagers?832 Words   |  4 PagesDoes advertising has negative effect on teenagers? In the simplest sense the word â€Å"advertising† means â€Å"drawing attention to something† or notifying or informing somebody of something(Dyer 1982).These days, advertising could be found everywhere, no matter you are watching television, surfing the internet or even travelling on public transports. These producers aimed at selling more of their products through advertising without consider the kind of messages they have sent out to the consumers, especiallyRead MoreFast Food Nation Essay862 Words   |  4 PagesFast food is very popular amongst today’s society. Fast Food Nation has reasons for the explosion in popularity of fast food restaurants in the mid-1900’s. It also explains negative effects on American Culture in today’s society. The fast-food industry has multiplied across America and changed the food industry. Eric Schlosser describes in Fast Food Nation the way people think about what they eat and what people think of the fast food i ndustry, and also its impact on society. 2 ND There are manyRead MoreThe Frightening Effects of Aggressive Advertising Targeting Children1386 Words   |  5 PagesFrightening Effects of Aggressive Advertising Targeting Children Modern society in the United States is driven by consumerism, advertising is key. For this reason companies have been increasingly targeting children in an effort to increase sales and loyalty to their brands. Brand loyalty is key to their future sales and greatly increases future revenues. For this reason large corporations have been studying and working with large advertising firms in an effort to capture children attention andRead MoreBad Influence of Mass Media on Kids1499 Words   |  6 Pagesfewer hours with their children. As a result, outside influences have greater access and influence over our children than ever before. The internet and the media are bringing the outside world into your home; your childs peers; the influences on children from movies and the music they listen to are growing in importance and influence every day, the negative effects of television violence to children, negative effects marijuana , cigarettesRead MoreEssay about Effect of Television Viewing on Child Development952 Words   |  4 Pageseveryday lives. Children have begun to turn to television for their main source of entertainment .Television has its own good sides but research shows that the disadvantages of television watching for children outweigh the advantages. This is because it will affect children’s health, children’s educational development, children’s cognitive skill and also children’s behaviour. There are many negative health impacts of television watching for children. First of all, children who love to watchRead MoreEffects Of Advertising On Children And The Overall Effects It Has On Our Society1404 Words   |  6 PagesIntroduction Marketing to children is not a new phenomenon; however, there have been many ethical debates on its rightness; is advertising to children a gentle persuasion of the innocent or a sinister threat to our society? There’s too much as stake if we remain silent and simply assume that marketing companies have our children’s best interests at heart; the truth is they don’t. This paper will explore to implications of marketing to children and the overall effects it has on our society. I willRead MoreAdvertising And Their Influence On Children1516 Words   |  7 PagesEthics in advertising and their influence on children: Introduction Advertising has grown massively due to the expansion of technology and this has transformed the advertising industry. Organisations are spending heavily in advertising to differentiate their brands and cut throat competition among advertising companies is a priority. However, in this race for standing out, advertisers and marketers might overlook the ethical policies. Ethics in advertising has become critical in today’s scandalRead MoreThe Media And Its Effects On Teen And Young Undeveloped Brains1237 Words   |  5 PagesThe advertising business views teenagers in society as a viable market section, due to their immature understanding of the media and its dazzling impact on teen and young undeveloped brains. The media is progressively specializing in children and adolescents to captivate with advertisements. according to market research corporations, teenagers are vital to marketers because they can pay a considerable open income, spend family cash easily, and they are easily able to influence their families to spend

90s Hip Hop and Rap - 1320 Words

Rap and hip-hop first started to come together in the 1970 s, but didn t really materialize and become popular until the 1990 s. With a huge surge in popularity and growth in the 1990 s, it seemed that rap and hip-hop had started a cultural phenomenon that still has noticeable effects easily seen today in music and also in pop culture. A cultural phenomenon is an idea, trend, or movement that shapes and defines that time period. During the 1990 s, rap and hip-hop spread like wild fire across the nation, from the inner cities to the suburbs to anywhere where you can find a radio. Rap and hip-hop brought a different kind of lyrical rhythms and upbeat, energetic music that most people weren’t too familiar with. This cultural†¦show more content†¦This team was first team in the history of the NCAA to start five African American freshmen, and they created fashion styles and promoted rap and hip hop during the 90 s. The baggy shorts, the black socks, the swagger, the w ay they played the game said Berger describing some of the fashion styles that the Fab 5 created. These simple wardrobe changes made such a big impact that still-Show MoreRelatedHip Hop Culture And Culture1196 Words   |  5 PagesHip-Hop Culture and race have had a complicated relationship in the past two decades. It has been commonly referred to as â€Å"black music† and a reflection of black culture. However, recent studies done by the Mediamark Research Inc. showed that 60% of rap music buyers are white. With the emergence of white, Latino, Asian, and other rappers with diverse backgrounds on the Hip Hop scene it is important recognize the changing color of the genre and the stereotype it holds as â€Å"black music†. Black cultureRead MoreHip Of Hip Hop Music1128 Words   |  5 Pages Hip Hops Redemption Hip hop music is described as, â€Å"a subculture especially of inner-city youths who are typically devotees of rap music†. (Merriam.com) Hip hop music is one of the most listened to genres in history. Hip-hop music started in the mid 1970’s, but some say that it started much earlier. Many people today would argue that Hip Hop is disgraceful now a days, and that it has no positive message given. Me personally, I would agree since the days have changed overRead MoreHip Hop Music And Its Effect On People1130 Words   |  5 PagesHip hop music is described as, â€Å"a subculture especially of inner-city youths who are typically devotees of rap music†. (Merriam.com) Hip hop music is one of the most listened to genres in history. Hip hop music started in the mid 1900’s, but some say that it started much earlier. Many people today would argue that Hip Hop is disgraceful now a days, and that it has no positive message given. Me personally I would agree since th e days have changed. I could argue that music as a whole has changed andRead MoreThe Music Of Hip Hop Essay1373 Words   |  6 Pagesbirth of Hip Hop in the 70s, controversial topics have always been one the forefront of discussion. Media sources, like The Source, founded in 1988, have been a platform to broadcast the triumphs and disasters that face the hip hop community has faced. In addition to displaying media, they have made a platform where they also broadcast some of the letters that their audience wrote back about their content in a section titled â€Å"Letters.† With each decade since having its own set of issues, the 90s was aRead MorePunk And Hip Hop Music1084 Words   |  5 Pagestangent of the mainstream, it is a dynamic and fluid genre with many distinct songs. Don Letts, a mainstay in the London punk scene during the 70’s and 80’s, went as far to say that hip-hop was essentially â€Å"black† punk. While punk and hip-hop music are stylisti cally different, the fundamental tone of the two genres is the same. Even throughout the decades, hip-hop has sang the same issues as punk, including the plight of the lower class, police brutality, and gang violence. No matter how the economy changesRead MoreHip Hop Culture Essay1326 Words   |  6 PagesHip-Hop culture is often confused with the Hip-Hop genre. Hip-Hop as a culture is more than just the music, it is a way of life. Hip-Hop music as a genre has changed from being Rap to including Pop. Hip-Hop is an evolving culture, constantly changing as the older generation fades and the newer generation carries on the legacy along with incorporating its new style. The new generation of Hip-Hop or rather Hip-Hop today focuses more on Partying, music, and Swag rather than the original elements: DeejayingRead MoreAnalyzing Past And Present Hip Hop1590 Words   |  7 Pages Examining past and present Hip Hop Lyrics: How has the culture of Hip Hop changed overtime How has the Hip Hop culture changed overtime? In looking at the dynamic in which music has changed by its usage of language and various forms of dialect and productivity it is clear that Hip Hop is a lot different in today s modern society then in the 80 s and in the 90 s. In dissecting the lyrics of the Modern day lyrical rapper J.Cole and High End rapper Nas in order to understand the level of distinctionRead MoreHip Hop And Rap Music1505 Words   |  7 PagesSwiss Hip Hop and Rap According to Michael Dyson and Wikipedia, Hip hop music and Hip Hop culture formed during the 1970s when block parties became increasingly popular in New York City. The genre became home to and was developed by African American youth residing in the Bronx. Block parties involved DJs playing very percussive breaks of popular songs Then Rapping developed as the primary vocal style of the genre. Hip hop s early evolution occurred as sampling technology and drum-machines becameRead MoreThe Music Of The Hip Hop1673 Words   |  7 Pagesâ€Å"I said the hip hop, Hippie to the hippie, the hip, hip hop, and you don’t stop, a rock it to the bang, bang boogie, say you jump the boogie, to the rhythm of the boogie, the beat.† â€Å"Rapper’s Delight† is a song recorded in 1979 by American hip hop trio The Sugarhill Gang. It was the original 12-inch single was 15 minutes of incontestable urban-playboy bragging. â€Å"Rapper’s Delight† was not the first si ngle but, it is generally considered to be the song that made hip hop in the United States popularRead MoreThe Music Of The Hip Hop1550 Words   |  7 Pagesâ€Å"I said the hip hop, Hippie to the hippie, the hip, hip hop, and you don’t stop, a rock it to the bang, bang boogie, say you jump the boogie, to the rhythm of the boogie, the beat.† â€Å"Rapper’s Delight† is a song recorded in 1979 by American hip hop trio The Sugarhill Gang. It was the original 12-inch single was 15 minutes of undeniable urban-playboy bragging. While it was not the first single to feature rapping, it is generally considered to be the song that first popularized hip hop in the United