Monday, September 30, 2019

Ducati Case Analysis Essay

Executive Summary As of year 2000, global motorcycle market is dominated by a handful of players. Japanese manufacturers such as Honda, Yamaha, and Kawasaki are low cost players while Harley and Ducati are in the high end of the spectrum and have been able to successfully establish themselves as a premium brand. Harley dominates the cruiser motorbike segment and is a really strong player in the US, where it has a big fan following and loyal customer base. However Ducati has been struggling to increase market share and reach to Harley’s level of profit margin that is highest in industry. Ducati is self discovering itself with Minoli to target right customer segments, retaining its core competencies and establishing its brand image for which Ducati stands for. Minoli’s consideration of entering into Harley’s niche market of cruisers is an excellent choice for Ducati’s future growth, as it reinforces the premium flagship of products that Ducati is famous for. We recommend Ducati develop a â€Å"sports-cruiser† motorbike that offers the riding style and comfort of a cruiser such as Harley Davidson, and yet be fast and nimble. We also recommend offering customization capabilities through Ducati.com and company-owned stores as well as single franchise stores that would continue to offer the same legacy and brand association that Ducati loyalists prefer. The motorbike will be priced at E12,000 (USD 16,200) which is right in the range of Harley’s custom cruiser motorbikes and will take a  step away from Ducati’s current line of sports bikes. This move may seem a bit risky at first, but the fact that Ducati’s R&D expenses will be fairly low due to availability of high quality engines and large su pplier pool; this will not require significant new investment to the current setup. Additionally, the company will be able to entice new customers in a niche segment with high margins and get a significant opportunity for gaining market share. Also, Introduction of these motorbikes in Europe initially will also reduce the possibility of a backlash from Harley who is the leader in the US market. Ducati can then expand to US once they have acquired some sales momentum. Ducati does not expect retaliation from the low-cost Japanese players as it is still positioning itself as a premium manufacturer. However, there is still possibility of new entrants or Japanese makers to introduce a knock-off model in which case Ducati will be able to distinguish itself on attributes including high performance, customization, brand image and the prestige that it has historically enjoyed and is respected for in the industry as well as the global market. Evaluation of Global Motorcycle Industry Honda, Yamaha, Suzuki, Kawasaki and few of high end premium manufactures that include BMW, Harley-Davidson, Triumph and Ducati comprised the Global motorcycle Industry. These manufacturers compete in different market segments and select demographics based on different attributes and styles of motorcycles across the product offerings. Our analysis of the industry is summarized using Porter’s Five Forces analysis (Exhibit 1) Suppliers: Recent trends in the motorcycle manufacturing have been leaning towards outsourcing of most motorcycle components and the companies doing the final assembly in-house. Most manufacturers have multiple choices of component suppliers that they may switch at will. This strategy provides them with high negotiation power, reduced fixed assets, and greater flexibility to meet changing market conditions quickly. However, the companies need strong commitment from their suppliers for a quicker turn around, efficiency and quality. Buyers: Customers/end users have been categorized into different segments such as knee-down riders/fast riders, easy riders, hot rods/urban riders, and weekend riders. These riders choose the bike based on performance, lifestyle, function and comfort. A motorcycle is a highly  differentiated product that is used for transport and has lots of alternatives or competitors, and for this reason buyer power is high. Customers have myriad of choices ranging from different styles of bikes such as sports, super sports, off-road/dual purpose, cruisers, naked bikes, etc. to different brands including high end names such as BMW, Harley Davidson, Ducati, and low price options from Honda, Kawasaki, Suzuki, etc. Entry Barriers: The motorcycle industry is very difficult to enter and compete in due to high capital investments spent on R&D, well-established relationships with suppliers, and strong brand loyalty and recognition that has been established for decades. Motorcycles are becoming more and more technologically advanced, which makes it very difficult for a new entrants to compete on a similar level without large amounts of capital and innovative differentiators. Rivals: Rivalry between the eight major motorcycle manufacturers can be considered high. The total number of motorcycle manufacturers has declined dramatically, with only one major manufacturer remaining from the US. These major players are fierce competitors and are vying for market share based on the brand, style, attributes, service, and price (especially Japanese companies). As a result of such high competition within the industry, manufacturers constantly need to improve designs and functionality. Substitutes: Lastly, several substitutes are available if we consider motorcycle only as a mechanism of transport. However, in many cases, a motorcycle is beyond a mere mode of transportation as a curator in the case said, it is a â€Å"perfect metaphor for twentieth century.† Riding motorcycles provide a unique experience, and it has been a cultural icon as presented in a number of Hollywood movies. In this sense, threat of substitutes, which may be sports cars and racing cars or other mode of transportation, could be considered fairly low. The following section describes changes in the industry and how that affects Ducati. Industry Changes & Implications on Ducati: The industry is advancing at a high pace today due to technological innovations, such as the introduction of electronic components, advent of CNC and CAD technologies, advances in material science to introduce lighter and stronger composite materials. Superior engine performance combined with lower emissions and fuel consumptions is rapidly changing the face of the industry and competition. There is also a push from the manufacturers to improve  components like sophisticated air assisted forks, mono shock rear suspension, and front and rear disc brakes to meet the customers’ hunger for better quality as derived from market survey results and customer feedbacks. These technological changes and quality improvements are positive for Ducati who is abreast on its technological innovation and performance. Advanced engineering and state of the art technology have always been Ducati’s strengths, as evident by the number of World Superbike Championships won by Ducati between 1990 and 2000 (8 victories). Lighter materials help Ducati to continuously improve its already superior performance and retain its position in the sports segment where it already has a stronghold. Additionally, the outsourcing of components and in-house assembly platform of manufacturing turns in favor of Ducati as most of Ducati’s suppliers are concentrated in the Emilian district – a major hub of specialized parts and components suppliers. Ducati typically enters into short-term contracts with its suppliers. Effectively, Ducati has enjoyed a strong hold on its supplier base which in turn has made them the most-efficient manufacturer in the industry and this strategy will continue to provide them the flexibility and edge in design and sourcing of new components going forward. Ducati’s Current Strategy Frederico Minoli, the CEO of Ducati, had two strategic goals in mind when he took over: double digit growth and equaling Harley-Davidson’s profit level of EBITDA margin of 20%, which was the highest in the industry. The challenge was split within the company into polarized directions; Engineers wanted to continue company culture of high focus on product, and Minoli wanted to appeal to broader spectrum of customers and not just extreme riders. The following section provides our analysis of Ducati’s current strategy using Strategy Diamond method (Exhibit 2). Arenas: Ducati primarily offered performance bikes in sports and street category, which are broadly identified as Hyper-sport, Super-sport, Naked and Sport touring. They face tough competition from Japanese manufacturers such as Honda, Yamaha, Kawasaki and Suzuki, who have captured the lion’s share of the market. Research shows that a large number of new registrants are categorized under customs and small motorcycle segments with 32.7% and 22.9% market share respectively in 2000 (Case Exhibit 2). Ducati is lagging behind  in this segment as far as the market share goes. In regards to geography, Ducati has distribution through Italy, US, Germany, France, Japan, UK (Case Exhibit 14). Ducati currently attracts and retains young male â€Å"knee down† riders and racing aficionados who associate Ducati with extreme performance and functionality, and recently there has been an increase in women customers (who comprise of 8% of their Monster line – their most popular model). This could be a growing segment that Ducati has not yet considered. Lastly, Ducati’s products are in the sports niche; 41% to 54% of its customers own large bikes greater than 500cc. It gradually entered in sport touring category to address older customer base and also entered into accessories and apparel b usiness by acquiring Gio.Ca.Moto which produces line of accessories for Ducati. Nonetheless, Ducati’s limited editions in 1999 were icing on Ducati’s portfolio. Vehicles: Ducati has excellent engineers and designers who themselves are fanatics of the motorcycle- they are purist â€Å"knee down† riders, and have strong beliefs in speed, performance, and passion for races. Ducati invested a large proportion of their revenue in designing new technology, development of products and human resource management. Ducati’s core strengths including the Desmodromic valve distribution system and the technical superiority of its engines, and their collaboration with other firms such as Lamborghini and Ferrari fueled Ducati’s growth. Ducati advertises through specialized magazines and focus on the Italian style, history, young riders, and a sporty attitude. Ducati.com website used the internet as a vehicle, and sold 500 units of a limited edition in 31 minutes and 2,000 units in 10 days at different times, educated customers, and created awareness about its brand, this has been a real win for Ducati. Differentiators: Ducati’s goal was to improve average quality of dealers and increase competence sales force unlike Japanese manufactures who utilized multi-franchise retailers to sell multiple brands with less specialized knowledge of products. Secondly unlike their competitors, they established Ducati clubs approximately 400 which allowed members to â€Å"live† at racing events and get inside access to teams. Ducati also participated in social events and museum tours that has helped Ducati disseminate information about its history and brand which increased customer loyalty and helped acquire new ones. Ducati is heading in the right direction but is still far from Minoli’s vision to enable and foster dealers  to connect with clubs more easily. Staging: Minoli strategized Ducati to turn into a powerful brand and would move away from just competing with Japanese brands. Ducati decided to build museum instead of fixing the raining roof and that’s one key factor in building the brand image of Ducati and sending the right signal to employees and customers. It then identifies the 5 core attributes that Ducati signifies – technologically advanced engine, tubular trestle frame, Italian style and its unique engine sound. Ducati was able to reduce the time to market effort for all its new products utilizing their research centers muscle. Another important decision Minoli took was entering into accessories and apparel producing business. This created the â€Å"world of Ducati† a very successful initiative to build on Ducati brand and strengthen its customer loyalty. Economic Logic: Ducati is a premium brand that consumers appreciate and regard highly. The brand image and legacy allows Ducati to keep prices high and hence reap high profit margins on its motorbikes, accessories, apparel, etc. Ducati motorbike prices can max out at $21,895 compared to $14,350 for Harley Davidson, $9,500 for Triumph, and $9,300 for Honda. Also, its limited edition bikes were sold at world-wide price of E26,000 that made Ducati reap huge profit margins. Ducati’s own marketing and distribution process and exploiting power of internet (Ducati.com) helped it retain most of its profit and have higher margins and they controlled their production costs by standardizing components, (eg: only two crank case and 3 cylinder designs).. Recommendations and Specific Actions Arena: We recommend Ducati to design and launch a custom sports-cruiser bike targeting sports bike fans, who would prefer the riding comfort, style, and customization of a cruiser. This new product is essentially a fast motorbike that has a sports engine morphed into cruiser style chassis. We also recommend offering customization services to suit the style and needs of our individual customers. This will be introduced initially in Europe and eventually in the US and Asia. Europe is the market where Ducati has experience, design expertise, preferred supplier base, proximity to racing arenas, and association with other world-renowned sporting car companies like Maserati and Lamborghini. Hence, building a strong foundation in Europe first provides the advantage that is very hard to imitate by others. Our  target segment is riders in the age group of 30-50 who like the comfort and the style of a cruiser, and yet prefer the power, speed, and especially the handling that is synonymous to a sports bike. Additionally, there is interest in customization especially for cruiser segment that we would like to exploit and offer as an added benefit to our customers. Furthermore, we will leverage light-weight design components (magnesium alloy frame, carbon fiber body and parts) to provide the performance edge needed in a sports bike. This will attract young riders as well as women, who typically prefer lightweight bikes. Vehicle: Initial launch will focus on current Ducati owned stores. This will help us gauge customers response; provide early feedback from Ducati loyalists, as well as opportunity to attract customers using word-of-mouth advertising. Based on the feedback and learning from this rollout, we would be able to identify other possible locations to open new stores (combination o f company owned and single-franchise dealers), starting from Italy, and then expanding out into the European sub-continent. We do not plan to open any new stores immediately, until the market picks up and demand is more than 25% of existing sales. The assumption is that any increase within 25% of sales volume can be managed via the existing stores. Any franchising will be done through single-franchise dealerships so as to maintain more control and emphasize quality. As a long-term plan, we also would like to add 10 new Ducati owned stores leased at strategically important cities around Europe, which would cost us E10M (E200K/year) over 5 years , and another E5M for maintenance (design, upkeep, staffing, taxes etc.) Differentiators: Customers value Ducati for its brand, high performance engines, strong association with racing, Italian style, and the unique sound of its engine, among other things. We believe that our strategy will help maintain our core competencies and resources intact, while allowing us to expand into newer space as well. The customization services that we also plan to offer along with our product will be a value-add service to Ducati loyalists, which can be priced at a premium. These customization services include different body styles, paint schemes, accessories etc., which will benefit from the availability of the large pool of supplier base that we have local access to. This large and varied supplier base also provides Ducati with buying power and quick turn-around time of new designs. Advertising expenditure for Ducati comes to about  three times that of Harley in the year 2000 alone. About 14.5% of gross revenue is being spent on advertising, marketing and sales effort, close to about what we get in return as our net income. We do not plan to cut down on advertising and marketing but will have to come up creative, more cost effective ways to get our message out there to reach a broader spectrum of customers like Minoli envisioned. Using channels such as word-of-mouth, social-media, YouTube videos, collaboration with sports bike bloggers, commentators, and also investing and expanding Ducati fan/owners clubs are ways we can leverage cost-effective marketing techniques. Economic Logic: Our R&D team (including HPE) already has several high-end performance engines that can be utilized in designing such a bike, hence we feel our major R&D expenses will be towards the design of the frame and body components. This will reduce our overall R&D spend, as compared to a full blown redesign/production of a new engine technology. Furthermore, we only need about E2M for R&D expenses; E5M for CAPEX, leaving the remaining E12M for advertising. This CAPEX budget covers the additional manufacturing capacity as well as assembly line expenses. We plan to leverage the existing network of suppliers by continuing to outsource. We forecast a sale of 3,300 bikes to be sold in the first year after launch (initially Europe only), priced at E12,000 ($16,200 per unit), see Exhibit 3, which is 2% of the worldwide cruiser/custom motorbike market, where Harley is the leader. Ducati was able to sell about 3,500 units of its sports touring after launch, so we think that we should be able to meet this forecast of 3,300 for the new sports-cruiser hybrid. Thereafter, we project a 10% growth in sales in the 2nd year, and thereafter about 15% growth in the 3rd, 4th and 5th year. We are assuming that the life-span of a design is typically for 5 years; thereafter, this design/model would be retired or become obsolete. We would price the bike at about E12,000 so that it is not seen to be a cheap bike, while at the same time making sure it is not too expensive for Ducati fans to buy. At a discount rate of about 8% and an initial investment of E17M to launch the product in Europe, we anticipate a net return on investments of a bout E16.8M in 5 years. Major Internal and External Risks Currently, there is no market research available that shows a segment in Europe and US who would like to have a hybrid cruiser that drives as a  sports bike. The retail chain and distribution channels available in Europe and the US are perhaps more familiar with Harley-Davidson dominating the cruiser segment, and the Japanese players competing in both the cruiser and the sports segment in Europe. Ducati is a world renowned Italian sports bike brand and although we are positive that we will have considerable success in carving out a sizable market segment with this new product we plan to launch, there is always a risk in going after a new market segment, especially a niche segment. Significant capital would have to be invested to arrange ad campaigns, events, retail chains to raise awareness, all before a dime is earned. Internal Risks: Ducati’s expertise lies in the sports bike arena, and it has never offered a cruiser style motorbike. The needs of this customer segment are definitely different than the sports bike segment, and it is possible that Ducati could run short on delivering a product that meets the needs of the segment itis targeting. Ducati may not necessarily have the skills or the expertise to provide this sort of value to its customers. Translating and adapting its core skill-set to a different model type to develop a product more aligned with the cruiser model is not going to be easy. Also, this move could upset hard-core Ducati fans, who would not want Ducati to be associated to anything other than sport bikes. Ducati could possibly risk losing their loyal fan base, if it were to diversify into bike-variants other than sports. Diversifying too far from what Ducati is known for also puts the reputation and prestige of the company and its engineers who have become respected and well-known in the industry for making high quality performance bikes. The technical excellence and performance that Ducati is so well-known for around the world could well be seen to become diluted by moving into a cruiser bike segment which historically has been associated with a different demographic segment altogether. Yet, by carefully positioning this new product to be a sports bike at its core and by re-establishing our commitment to producing high-quality performance bikes that we have come to be known for, we could potentially re-assure our current fans. External Risks: Harley Davidson has dominated the custom cruiser segment for years with a very loyal fan base and supplier chain. Ducati’s entrance in this segment will be seen as an aggressive move by Harley, and Ducati must be prepared for some backlash. Harley has a strong network of suppliers, and distribution channels in the  US, and has set high entry barriers for Ducati in the US market. Ducati’s suppliers are primarily located in Bologna, and hence Ducati has enjoyed the benefit of being in close proximity to a large pool of supplier base and component manufacturers. Going with sports cruiser hybrid could mean that Ducati may need to establish relationships with a whole new set of suppliers based out of the US. US suppliers might not necessarily have a sense of the Italian style, a core value that the product provides. Therefore, we do not plan to enter the US market just yet, thereby preventing getting ourselves into a face-face with Harley. Once we build some credibility with customers in Europe, where we have a strong supplier base, and a decent distribution channel, we could potentially launch in the US in 2-3 years time frame based on the success of this launch. European markets have been dominated by Japanese players in sales volume, and entering the market could prompt them to bring out a competing product of their own, which could eat into the market share that Ducati is hoping to grab with this hybrid. If Ducati does not differentiate its product and service offerings enough, there is a risk of being dragged into a price war with the Japanese. However, this is the arena where Ducati shines and has made its name- superb performance, exquisite design, and the racing dominance. By strategically positioning our product for a whole new segment of customers Ducati can protect itself from appearing to start a war. By providing additional customization services, which would be charged at a high premium, we separate ourselves by going after an audience who is not a typical low-cost Japanese bike buyer. BMW successfully launched and defined its own cruiser and so can Ducati! Exhibit 3: Projected Sales Year Unit Sales Growth Units Sold Price/Unit (in Euros) Total Revenue EBITDA 0 -â‚ ¬17,000,000 1 3,300 â‚ ¬12,000 â‚ ¬39,600,000 â‚ ¬6,930,000 2 10% 3,630 â‚ ¬12,000 â‚ ¬43,560,000 â‚ ¬7,623,000 3 15% 4,175 â‚ ¬12,000 â‚ ¬50,094,000 â‚ ¬8,766,450 4 15% 4,801 â‚ ¬12,000 â‚ ¬57,608,100 â‚ ¬10,081,418 5 15% 5,521 â‚ ¬12,000 â‚ ¬66,249,315 â‚ ¬11,593,630 NPV â‚ ¬16,862,800

Sunday, September 29, 2019

Human recourses professional map (HRPM) Essay

Briefly summarise the HRPM (i.e. the 2 core professional areas, the remaining professional areas, the bands and the behaviours) comment on the activities and knowledge specified within any 1 professional area, at either band 1 or band 2, identifying those you consider most essential to your own (or other identified) HR role Human recourses professional map (HRPM) The CIPD in HRPM In general sets out how HR adds value to the organization. It describes standards of professional competence for organization. Each and every HR practitioner must know their organization inside out and truly understand it. Also they have to know the main ways in HR expertise and set the behavioural skills. This allows us to then turn the knowledge into action. The two core areas of HRPM apply to all professionals. Insight Strategy and Solutions explains how to develop actionable insights and solution, which are adjusted to a deep understanding of business. Using personal experience I will develop understanding of the organization and its context. To achieve this I will have to do series tasks, which include tasks like using relevant information and articles to build and widen understanding of new initiative and practices and generalist areas of Human Recourses. To spot potential opportunities and risks for organization I will collect, collate and analyse data in one of the professional area I am interested in -Performance and reward (Band One) I would analyse data and performance and reward information on individuals or groups and advise colleagues to aid decision-making. I will collect all information and feed in ideas and observation from reward functional and performance surveys to my colleagues and others to influence policy, process and decisions. Also I would have to provide all the relevant information, data (analysis and insights from reward data to support development of reward plans and strategy) Help employees understand their role in change, the reasons for it and the results that are expected by Providing data and analysis regarding market positioning. Support the delivery and evaluation of planned one-off and on going people programmes and projects. Keep records of identified risks and plans to mitigate against them Collect,  collate and analyse project metrics, data and report back on key Promote the value of diversity and inclusion in all activities Support employees and managers to apply people policies consistently and fairly. Provide accurate and timely information, data and advice to managers and employees on oganisation’s people policies and procedures and employment law Recognise team and organisational culture and its impact on activity To develop understanding of the organization and its context organisational purpose, key products/services and customers Relevant press relating to the organisation Basic financial and non-financial performance information on the performance of the organisation The sector context in which the organisation operates; legal and market factors that impact performance. Significant issues within the organisation’s environment which impact you and others around you, for example economic, social, political, environmental conditions Diversity and inclusion initiatives and activities within your area The way the organisation, and/or functions   and teams are structured and managed The governance and decision-making processes guiding how you deliver A sense of how things really work in the organisation and the barriers to change The capability and skills that are needed within the organisation How the 10 professional areas in this Map combine together to create an overall human resources offering to the organisation Knows or can access relevant law, in relevant local and international jurisdiction Where to access external information on HR or specialist area good practice and thought leadership. Project management principles and practices How a strategy and in-year operating plan relate Group and individual responses to change. How to collect and provide information required to support business cases and monitor budgets Leading HR is important for professionals even if they are not in leading role as is important that they grow and develop in this area which provide active, insight- led leadership. They can do that by driving themselves, others and activity in organization. The other eight segments identify the activities and knowledge that are required to provide specialist support. *Organizational design ensures that the organization is well design to deliver its objectives and that structural change is effectively managed. *Resources and Talent Planning is making sure that organization identify and attract key people who are able to create competitive advantages. *Performance and Reward builds a high- performance culture by delivering programmes that recognise and reward critical skills, capabilities, experience and performance. Ensures reward system are equitable ( fair) and cost effective. *Employee Relations ensures that the relationship between an organization and its staff is manage appropri ately within clear frame work and that relevant employment law, policies, procedures, communications, negotiations and consultations are followed. *Organizational Development is  making sure that the work force deliver strategic ambition. Ensures that an organization culture value, environmental support enhance its performance and adaptability *Learning and Talent Development ensures people at all levels posses and develop skills, knowledge and experiences to fulfil organizational ambitions. *Employee engagement ensures that all aspects of employment experience, the emotional connections, that employees have with their work, colleagues and organization is positive and understood. *Service and Delivery Information ensures that the delivery of HR services and information to leaders and employees within organization is accurate, timely and cost effective. HR data manage professionally The CIPD in HRPM model out eight behaviours which describe how work activities should be carried out. They are: Collaborative (people skills), Courage to Challenge (Confidence to speak out), Driven to Deliver (Deliver best results), Role Model (Lea ds by example), Curious (Future focused, open minded), Decisive Thinker (Decision maker), Skilled Influencer (Demonstrates ability to influence), Personally Credible (Deliver Professionalism)

Friday, September 27, 2019

Theories of the text- academic summary Essay Example | Topics and Well Written Essays - 1000 words

Theories of the text- academic summary - Essay Example The purpose of stilwell’s chapter on the importance of sound in cinematography and film is not to suggest that audio is more important than the visuals, but to explore why sound plays such an important part in the making of the film and to argue that more attention should be paid to the study of audio. Stilwell begins the analysis of sound by illustrating that sound is very different from light in many respects, although there is a temptation to separate sound (not just in film, but through life) into components like dialogue, effect and music. Stilwell argues that this may not be wise, as these are all intersecting aspects of the same audial landscape. Additionally, the dialogue may often overshadow interpretation of the music and effects, which can be taken on by specialists or often ignored altogether. Stilwell also argues that music and effects often play a more subliminal part for the audience than dialogue, but are integral to the experience of the film and thus should n ot be ignored academically. Stilwell then elaborates into the focus of the chapter: how subjectivity and gender are both part of the interpretation of the audio landscape. ... This idea is backed up by the nature of cinema, including the ‘ego-gratifying identification with the male hero and the libidinal spectacularisation of the female body’ (stilwell, 2005). Stilwell then goes on to argue about the types of sound that can be experienced in the cinematic landscape and how these have semi-formal relationships with gender. In freudian analyses, the male voice is dominant and the female voice is submissive. In this sense, the male voice can be equated to important dialogue (as expressed before, the most noticeable part of the soundscape) and the female voice can be equated to music or effects. The link can be moved further: sound is the ignored feminine and visuals are the dominant masculine part of the film (Stillwell 2005). This aspects makes subjectivity be viewed as a complex concept. The author points out that subjectivity has overlapping meanings. Subjectivity varies according to meanings and can be understood the associated cultural codin g. While female voice in films is associated subjectivity the females are expected to be submissive in many cultures including the western cultures. The author tries to point out that sound, especially hearing, is associated with irrational and emotional aspects. Sound is magnified by its subject, which is music. Music, emotions, and irrationality are highly associated with feminine inherent in culture. The alliance of music, irrationality, and emotion is woven into the psychoanalytic theory (Stillwell 2005). The same alliance has both positive and negative implications, specifically for the female subjectivity. These implications are further extended to

Managerial accounting Essay Example | Topics and Well Written Essays - 1000 words - 1

Managerial accounting - Essay Example This concept states that stock is valued at lower of NRV or cost. Since NRV is not given in this case, we will include the purchase price or the cost of stock which is 750 in this case. The cost of skilled employees: The cost of skilled employees is the direct cost of the order. As a result, there wages can easily be allocated to this order because we know that they have worked on this particular order during the week we can easily apportion this to the order and since it is the job of accountants to allocate all the recognizable costs to the appropriate cost centers, this order is the cost center and the cost activity of the workers is rightly apportioned to this order. The extra cash lost: Accountants are only concerned with the explicit costs and they are least concerned with the implicit cost. Implicit costs are the opportunity cost like this one. These are not the real costs but are based on economic assumption of the next best alternative. Similarly, since these costs are based on assumptions, we cannot tell the accurate amount of these costs. However, economists do use these costs when calculating normal profit of a project or of an item. But, since cost statement is done by accountants and not the economists, we will ignore these costs in the job order cost statement. We are only going to include those costs that have factual evidence as the concept of "materiality" states. As a result, when preparing the job order cost statement, I have not included the implicit amount as it is of little value to the accountants. Machinery depreciation: Machinery depreciation is a fixed cost. It means that irrespective of the operations performed by the machinery, a depreciation charge will be levied. Such costs do not vary with the output or the operations performed and hence we call them the fixed costs. In this case, since we have made a separate adjustment of the fixed overheads, it will lead to double addition if we add this cost separately. In other words, the depreciation charge is already included in the fixed overheads and it will lead to distortion of the cost statement if we include a separate head for machinery depreciation. In more professional terms, these will windows dress the financial statement and hence will give a different picture to the cost statement than it is in reality. For the reasons given above, I have excluded the amount for machinery depreciation from the cost statement. Electricity: The statement in the question tells us whether the order is received or not, the machinery will be in continuous use. Since all machinery is run on electricity, we can assume that the charge of electricity is also fixed. The entire costs related to machine are fixed as it is indifferent to the order and hence these costs will also be included in the fixed overheads. Hence by adding them separately, we will again be making a mistake of double debiting our cost statement. This again will distort the cost of the order in reality and will make us assume that we are incurring more costs than we really are. This is called as window dressing and should be avoided from both the ethical and legal point of view. Hence, this amount is excluded from the job order cost statement. Fixed overheads: Certain indirect costs are incurred when a company is working on a

Thursday, September 26, 2019

The Better Man Essay Example | Topics and Well Written Essays - 1250 words

The Better Man - Essay Example By examining the single most important feature of both candidates’ policy i.e. economic policy, the author argues that Obama is the better man because he has a comprehensive approach to solving the most pressing issue today: the American economy. As shown by a Times-Rockefeller Foundation poll, the biggest problem that 85% Americans want to see resolved is related to the economy in some way (Saporito, 2008). The current economic situation and its impact on middle class, working Americans is a sharp shift away from the expectations brought by living the American dream. A further classification of the TIME poll found that 96% black Americans and 88% latin Americans were unhappy with the economy. It does make sense that most Americans are extremely unhappy dealing with falling income, real-estate bubble burst, a shaky stock market and rising poverty (Saporito, 2008; FOX Business, 2008; Epstein & Gorzelany, 2008; Villaraigosa, 2007). In Michigan alone, unemployment has risen by 76% from 2001, Income has fallen 11.5% and poverty has increased by 30% from 2000 to 2006 (FOX Business, 2008). It is clear that the most pressing issue for Americans is in fact their own economy. As the author of this paper will continue to show, the Ame rican people, and more specifically the working class Americans deserve an economic policy that reflects their hard work and strength to survive the impending doom in their lives. According to Epstein and Gorzelany (2008), more than 5 million people will fall under the already large poverty line by 2010. The poverty rate would increase an average of 2 points to about 16%. More importantly, â€Å"the US stands second only to Mexico as having the worst rate of relative poverty among the world’s developed nations. Let us examine what this means for a lower-middle or lower income American: These figures are not being quoted

Wednesday, September 25, 2019

Inventory Management Essay Example | Topics and Well Written Essays - 2500 words - 1

Inventory Management - Essay Example This research paper examines the aspects of inventory management based on the fact that inventories are the major expense incurred during the operations of any organization. In this regard, it is prudent for managers to emulate effective systems of controlling their stock. In order to meet the demand of their customers, most businesses maintain an inventory system that ensures optimal inventory is maintained while at the same time tracking the movement of stock. Organizations that are product-oriented greatly value the concept of inventory control. For example, in order to enhance efficiency in their operations, manufacturers aim at having as little inventory as possible (Andrew and John 35).On the other hand distributors are focused at maintaining a certain amount of stock that meets the needs of their customers. This paper seeks to analyze various methods that Wooden Wonders Ltd can emulate in order to ensure that costs of ordering and holding inventories are minimal as well as ens uring that company inventories are sufficient and not surplus. Economic order quantity entails the level of inventory that minimizes the ordering cost as well as the inventory holding costs. The model that was developed by Ford Harris in 1913, seeks to identify whether or not the inventory held by a company is reasonable. One of the major aspects of EOQ is that it is used if there is no change in demand for the product throughout the year. The model consists of fixed cost that does not change regardless of the quantity of the units ordered.

Tuesday, September 24, 2019

Engineering management Essay Example | Topics and Well Written Essays - 1250 words

Engineering management - Essay Example The oil and gas sector controls approximately 90% of the global economy. The gross domestic product of many oil producing and exporting countries is heavily reliant on the production of these resources [3]. Exploitation of oil and natural gas is done both onshore and offshore and it is then transported from the wells through pipelines to the refineries. Globally, an average of 2500-3000 billion barrels of oil is produced daily and due to the increasing demand for oil and natural gas, production has increased over the years [1]. Due to the increasing exploitation of oil, it is feared that this important resource will eventually be exhausted and there is need to put sustainable measures of exploitation in order to ensure that the economies are not adversely affected. Due to the increased production of oil, more networks of pipelines have been laid out to transport oil between points [3]. Losses of oil due to spillage and theft has increased substantially and this has mainly resulted fr om various factors such as: defects in materials, pipes corrosion, erosion on the ground, vandalism of oil facilities and the tectonic forces occurring due to movement of tectonic plates. The impact of these occurrences can be fatal since they result into environmental pollution, massive fires and if the spillage occurs onshore, marine life is greatly endangered [2]. Nigeria is the leading country in oil theft and spillage. Oil spillage results from corrosion of pipes, poor maintenance of the oil and gas facilities, sabotage, failure of equipment and theft. Multinational companies such as shell that have heavily invested in the country have lost millions of dollars due to oil spillage costing the economy one billion dollars every month [2]. The government of Nigeria has enacted laws to curb oil theft and spillage which enforce heavy

Monday, September 23, 2019

In Asthmatic Children under the age of 5yrs is spacer inhaler more Essay - 1

In Asthmatic Children under the age of 5yrs is spacer inhaler more beneficial than a nebulizer - Essay Example Asthma prevalence is increasing with corresponding increase in incidences of emergency department admissions. Pollution as well as changes in lifestyle has contributed significantly in increasing the prevalence of asthma (Dhuper et al, 2011). Certain demographic factors such as poor socioeconomic status, are also contributing to higher numbers of asthma prevalence among certain ethnic populations such as African American and Hispanic populations (Dhuper et al, 2011). Among children, asthma is found to be 10 to 15% prevalent and a major cause of admissions to the emergency departments with high morbidity and mortality rates (Kovesi et al, 2010). Management of younger children remains a challenge as there are lot of constraints on the test results. Children show less cooperation, are more anxious and are not in the development stage to understand instructions or abide by them (Kovesi et al, 2010). The similar reasons are the cause of difficulty in diagnosis of the condition. While wheezing is a very common phenomena present in children, not all wheezing can be categorized as asthma. This is because wheezing pattern of breathing is quite similar to noisy breathing, which is caused by nasal secretions in children which they haven’t learnt to swallow (Kovesi et al, 2010). Children also show different asthma presentations as compared to adults (Kovesi et al, 2010). Therefore, the diagnosis of asthma is based mainly on symptoms and treatment responses than testing methods such as pulmonary function tests. Bronchodilator therapy remains a mainstay in the management of asthma conditions in children. The bronchodilator therapy can be carried out either orally or through inhalation. Inhalation therapy is now the preferred method of treatment of asthma symptoms due to lesser systemic effects as compared to oral therapy. Inhalation therapy is also speedier in remission of asthma

Sunday, September 22, 2019

In-court identification Essay Example for Free

In-court identification Essay In a criminal prosecution, the positive identification of the accused would most likely result in conviction. The likelihood that the defense would contest or suppress in-court identification by prosecution witnesses is therefore high. Over the years, our courts have formulated rules regarding the propriety of suppressing in-court identification by witnesses. The accuracy of eyewitness identification depends on factors personal to the witness such as: (1) perception; (2) memory; (3) communication; and (4) candor. (Moses, 2001) However, the suppression of in-court identification testimony largely depends upon the admissibility of the out-of-court identification, which preceded it. Such admissibility can be challenged principally on two grounds: first, that it violated the right to counsel of the accused under the Sixth Amendment or, second, that it violated due process. For purposes of this paper, the former will not be discussed since what is involved in the issue at hand is a photographic identification and therefore the accused cannot invoke his right to counsel, be it pre-indictment or post-indictment, since there is no adversarial confrontation involved. (United States vs. Ash, 1973) The case most applicable is Manson vs. Brathwaite, 432 U. S. 98 (1977). The facts of the case are: Glover, a trained undercover state police officer purchased heroin from a seller through the open doorway of an apartment while standing for two or three minutes within two feet of the seller in a hallway illuminated by natural light. A few minutes later Glover described the seller to another police officer as being a colored man, approximately five feet eleven inches tall, dark complexion, black hair, short Afro style, and having high cheekbones, and of heavy build. The other police officer, suspecting from the description that respondent might be the seller, left a police photograph of respondent at the office of Glover, who viewed it two days later and identified it as the picture of the seller. (Manson vs. Brathwaite, 1977) The court identified two issues. First, whether the police used an impermissibly suggestive procedure in obtaining the out-of-court identification. Second, whether, under all the circumstances, that suggestive procedure gave rise to a substantial likelihood of â€Å"irreparable misidentification. † (Manson vs. Brathwaite, 1977) As to the first inquiry, the court held that the photographic identification was â€Å"impermissibly suggestive† and â€Å"unnecessarily so. † (Manson vs. Brathwaite, 1977) However, the court ultimately ruled in favor of the admissibility of the photographic identification and did not take a per se exclusion route as what happened in the case of Stovall vs.Deno, 388 U. S. 293 (1967), which declared that the evidence of an out-of-court identification is inadmissible if the evidence revealed that the out-of-court confrontation was so unnecessarily suggestive and conducive to irreparable mistaken identification that he was denied due process of law. The court declared that â€Å"reliability is the linchpin in determining the admissibility of identification testimony† (Manson vs. Brathwaite, 1977) The Court relied upon several factors, the â€Å"Biggers factors† (George, 2005, p. 9), that provide the basis in determining whether the witness had a picture of the perpetrator in his or her mind before the police suggestiveness occurred: 1) the amount of time or opportunity to view the suspect during the crime; 2) the witness’s degree of attention while viewing the suspect (casual observer or victim); 3) the accuracy of the description given prior to the identification procedure; 4) the witness’ level of certainty; and 5) the time between the offense and the identification. (Neil vs. Biggers, 1972) In the issue at hand before us, it must be determined: first, whether or not the photographic identification procedure was â€Å"impermissibly suggestive† and â€Å"unnecessarily so†; second, whether or not the â€Å"totality of the circumstances† (Manson vs. Brathwaite, 1977) would show that the identification made was indeed reliable. First, it is submitted that the out-of-court identification by the tellers are impermissibly suggestive and unnecessarily so. According to the cases of Manson v. Brathwaite, 432 U. S. 98 (1977) and Mason v. United States, 414 F. 2d 1176 (D. C. Cir.1969), showing a single photograph is highly suggestive and the suggestivity is unnecessary unless there are compelling circumstances which would show otherwise. The act of the police officer in showing to one of the tellers the photograph of the defendant is considered unnecessarily suggestive as laid down by jurisprudence. The inquiry therefore which needs to be addressed is, whether or not the out-of-court identification by the tellers is reliable, regardless of the impermissible and unnecessary suggestive procedure conducted by the police officer a few day after their statements were noted. It is submitted that the out-of-court identification by the tellers are not reliable for the following reasons. First, there are no facts which suggest the amount of time or opportunity the tellers had in viewing the suspect during the commission of the robbery nor the witnesses’ degree of attention while viewing the suspect. Second, the level of certainty of the tellers as to the identity of the accused is highly contentious. That one of the tellers called up the police station and identified the defendant as the robber is not reliable because of the fact that she had seen a report on television the previous night regarding the arrest of the defendant. Such circumstance can be regarded as â€Å"suggestive. † Her â€Å"belief† that the arrested person is the robber is not a sufficient indicia of reliability and certainty on the part of the witness. Also, the identification by the other teller of the defendant as the robber by pointing to a picture of him in a newspaper article about the arrest is suggestive and highly suspect for the same reason. Moreover, the police officer conducting the investigation could have tested the assertions of the witnesses by conducting a line-up or photographic array identification subsequent to the taking of statements. But he did not. It is therefore concluded that the in-court identification by the witnesses should be suppressed for being made under impermissible and unnecessary suggestive procedure and for being unreliable considering the totality of all circumstances. WORKS CITED: George, A. (March, 2005). â€Å"That’s the man who did it! † Identification Evidence Under the 5th and 6th Amendments. † Retrieved November 2, 2006, from http://www.fd. org/pdf_lib/Due%20Process%20Under%205th%20Amendment. pdf Moses, R. (2001). Misidentification: The Caprices of Eyewitness Testimony in Criminal Cases. Retrieved November 2, 2006, from http://www. criminaldefense. homestead. com/eyewitnessmisidentification. html Motions to Suppress Eyewitness Identification Testimony. Retrieved November 2, 2006, from http://www. pdsdc. org/Cpi/CH_21. pdf. LEGAL SOURCES: Manson vs. Brathwaite, 432 U. S. 98 (1977). Mason v. United States, 414 F. 2d 1176 (D. C. Cir. 1969). Neil vs. Biggers, 409 U. S. 188 (1972). Stovall vs. Deno, 388 U. S. 293 (1967). United States vs. Ash, 413 U. S. 300 (1973).

Saturday, September 21, 2019

Indian Lubricant Industry An Introduction Marketing Essay

Indian Lubricant Industry An Introduction Marketing Essay Indian lubricant industry in a recent past has presented new market opportunities. Firm growth in the Indian power, engineering and automotive sectors has been a boon for lubricant manufacturers. In automotive sector, as consumers migrate to efficient vehicles and motorbikes, they use higher grade lubricants. As a result, multi-grade lubricant products are getting benefitted. In the industrial segment, high level of investment in manufacturing, transport and power sectors have the potential to drive very strong growth for marine aviation lubricants and transformer oil. The automotive lubricant market in India is highly price sensitive the volume growth is getting stagnated due to longer lasting lubricants. The retail trade and original equipment segment are two major marketing channels in the Indian context. Due to ever growing competition, tie-ups OEMs are becoming important as they provide the value proposition of a brand. In retail trade, Petrol pumps (ROs) form the major distribution channel. Sales of lubricants via ROs or the bazaar trade has changed the Indian automotive lubricant market into a FMCG sector. The other marketing channels are garages, super markets, rural and agricultural dealers, authorized service stations and wholesale distributors. PSU companies manufacture their own base oil and follow a different distribution strategy as compared to their private counterparts that solely dependent on imports. PSUs sell from their own wide spread network of ROs while private manufacturers prefer supermarkets. Engine oil plays the most important role in deciding the market share of lubricant manufacturers. Increase in demand for 4-stroke motorcycles, tie ups with OEMs and implementation of new norms of pollution are few of the key drivers of the growth of the engine oil segment. Growth in heavy commercial vehicle segment, increasing awareness among the customer base, new cooling technologies and OEM tie-ups has led to increase in coolant demand which has become the next largest segment in the automotive lubricants market. In brake oil segment, introduction of new brake systems, increasing growth in LCVs, consumption of lubes by CPVs and changing customer mindset related to specialty lubricants are believed to push demand further. The gear oil market is also growing fast and has high potential owing to increasing number of vehicles on road. Vehicles of new generation with advanced gear system technologies automatic transmission systems need special type of lubricants conceiving greater demand for API synthetic and multi axel gear oil, API MT-1, API GL-5 ultra-Matic, which reduces the oil changing intervals. In the long run, the overall picture for automotive lubricants sector looks bright due to growth of Indian economy along with increased purchasing power of consumers. BPCLs Lube Division Bharat Petroleum offers a complete range of Gear Oils, Automotive Engine Oils, Specialty Oils, Transmission oils and Greases. The fine quality of the lubricant and its correct usage ensures longer engine life and trouble free operation. Lubricants were totally deregulated during the liberation era of early nineties. Thereafter, a large number of players have forayed into this market. Despite operating in a totally competitive environment, BPCLs Lubricants SBU has been registering a growth in lubricant sales continuously over the past couple of years. As compared to 2008-2009, a growth of 13.73% has been achieved and sales volume of 231.12 TMT has been achieved. The channels viz. retail and direct saw a growth of 20%. BPCL has a strong RD competency, extensive distribution network; own source of Group II+ base oil, highly motivated and dedicated workforce which serves as a strengthening mechanism for it but due to increased competition and continuous phasing out of 2-stroke engines are threat to the company in its growth path. Birth of MAK In 1998, BPCL re-launched lubricants in new attractive packs. It was mainly in automotive category with three major brands- Automol for Petrol Engine oils, MAK for Diesel Engine oils and Glide for 2-3 wheelers. The year 2003, MAK was named as an umbrella brand and subsequently all industrial grades too were branded with it. MAK Lubricants sales and its market share The Lubricants business of BPCL delivered a sales volume of 231.12 TMT in 2009-10 as compared to 203.22 TMT in 2008-09, a growth of 13.73%. The volume of finished lubricants grew by 23% during the last year. Both the reseller channel and direct channel grew by over 20%. MAK Lubricants are now available at more than 23,000 retail counters across the country apart from the small mechanic shops and authorized service stations. Products like MAK Chakda and MAK Boat XP were launched during the year. There has been an expansion in customer base across the segments with prime focus on the key growth sectors. The wide range of products cater to normal applications like Engine oils to Hydraulic, Marine, Cutting and very specialized products for Defense applications and Railways. Products catering to specific applications like MAK Amocam Plus, MAK Steel for steel plant applications and superior Industrial Gear Oils were launched. In the retail channel, focus was on generating secondary sales at the retail outlet. Initiatives like One Day Wonder and MAK QUIK improved visibility of the brand and also offered a value proposition to the customers. Segment specific oils like MAK Auto XL and MAK D-Gen were introduced to cater to niche markets. The network of MAK distributors was further expanded with the objective of achieving leadership position in the high value grades. On the exports front, BPCL entered Sharjah and consolidated its presence in Nepal, Sri Lanka and Bangladesh. Point of Purchase Lubes Shop They are exclusive lubricants reselling points to facilitate the customers for their Lubricants requirement and confirming with the Quality and other standards of BPCL. The deregulation in the industry along with entry of multinationals has led to a shift of trade to the bazaar. Owing to huge potential with competitors providing huge discounts, BPCL too has forayed in this direction and has started giving discounts to the end customer instead of the channel. These branded lubes shops are available all across the country in all major cities. These C:UsersRomioDesktopLubeshoppe.gif MAK Garage BPCL started a campaign by enrolling the mechanic segment under the umbrella network of MAK Garage. It was launched in 2006 to promote the MAK lubricants and currently about 800 MAK garages across the country exclusively uses MAK Lubricants C:UsersRomioDesktopmak_garage.gif Hero Honda Service Stations JV between Hero Honda and Bharat Petroleum. The initiative is to utilize the vast BPCL network across the country to provide value added services to the customers through the City Work network at our ROs. Currently, there are around 170 Hero Honda City Works operating across the country C:UsersRomioDesktopcitywrk.png TASS TATA Authorized Service Station is yet another initiative for strengthening our relationship with TATA, Indian Auto Major. There is a joint collaboration for marketing co-branded greases, lubricants and specialty products MAK TATA products. TASS provides TATA vehicle service network throughout Dealer network across the country. This network of service is of two types SUVIDHA for TATA Ace vehicles and TASS for heavy vehicles C:UsersRomioDesktoptass.jpg VCC BPCL launched a new initiative VEHICLE CARE CENTRE at the retail outlets. This ought to provide esteemed customers state of the art facility at affordable rates. The network is in growth phase and is gaining huge popularity across the country. C:UsersRomioDesktopvcare.png MAK Quik Lube Oil Change To value the time proposition of the esteemed customers, new initiative MAK Quik Lube oil Change has been started at various outlets. It mainly caters to the Bike and Car/SUV customers for changing the Engine oil in the vehicles within a short span of time. The major advantages to the customer out of this initiative is à ¢Ã¢â€š ¬Ã‚ ¢ Quick Oil change in front of eyes à ¢Ã¢â€š ¬Ã‚ ¢Mechanized system of changing Oil which helps in removing the layer of old oil completely. à ¢Ã¢â€š ¬Ã‚ ¢Genuine MAK product à ¢Ã¢â€š ¬Ã‚ ¢ No Servicing cost- only the cost of product needs to be paid by the customers. à ¢Ã¢â€š ¬Ã‚ ¢ Fast turnaround time for the customers. à ¢Ã¢â€š ¬Ã‚ ¢ Exceptional offers to the customers C:UsersRomioDesktopservice_makquik.jpg OEM Tie-ups   Due to the ever growing competition, the tie-ups with OEMs have become important as they help in reinforcing the value proposition of a brand. BPCL is continuously working with OEMs to help them in providing the best value for money to the customers by developing and upgrading genuine oils for the vehicles and equipments by addressing the requirements of the changing technology. The marketing and RD teams have been providing the solutions for specialized lubricant applications in cement, power, steel, road construction, engineering and other leading industries in India. The RD team has developed about 300 different formulations in last 10 years out of which last 3 years saw about 50. BPCL has started its own LOBS plant in Mumbai by using the latest All Hydro Processing Technology a Chevron Lummus Global patent. This has enabled them to manufacture finer quality MAK Base oils beyond the requirement of API Group II which is rated as Group II plus. OEMs acknowledge BPCLs identity in producing quality base oil, best of RD capabilities and deep marketing acumen. OEM Partnerships BPCL has agreements with top notch automotive manufacturers which have both National and International presence. This is in addition to presence across the country with plethora of options available for all the sections of the industry. With superior technology, strong brands and vast distribution, MAK Lubricants is a perfect partner for OEMs looking for offering their consumers the best of products and services. Hero Honda Motor Limited It has an association with BPCL since the year 2004. MAK Lubricants has become the biggest supplier of engine oils in a span of first five years for initial fill and to Hero Honda Motor Limited dealers, Authorized service stations spare part stockists.   BPCL has been developing speciality products like Engine oils Shock Absorber with joint working with HHML that can meet the stringent HONDA, Japan specifications. Also, BPCL has started Hero Honda City Works exclusive service outlets for HHML customers  at BPCL ROs.http://www.maklubes.com/Images/HHSuperPremium4TPlus.jpg http://www.maklubes.com/Images/Hero_Honda.jpg This is the largest manufacturer of commercial vehicles in India. There exists a strategic alliance with Authorized Service Network, Tata Motors dealerships and Tata Motor Spare part dealerships for supply of Engine oils and Co-branded engine oils speciality products to. MAK Lubricants jointly works with Tata Motors in areas including joint product development, customer service promotion. MAK TATA MOTORS CH4 15W40, specially developed for Tata Motors, is authorized by Tata Motors to use in all commercial vehicles fitted with Tata Cummins Engine. Tata Motors Commercial Vehicles Division http://www.maklubes.com/Images/MAK_ATF-A.jpg http://www.maklubes.com/Images/tata_motors.jpg BPCL and GM have entered a strategic alliance to supply Co-branded engine oils and speciality products to the GM dealerships authorized service networks across the country. BPCLs GM MAK Genuine 15W40 Diesel Petrol Engine Oils are specially developed for GM is endorsed by GM for use in all its passenger cars and Utility vehicles.  General Motors India http://www.maklubes.com/Images/MAK_Genuine_Diesel_Engine_O.jpg http://www.maklubes.com/Images/general_motors.jpg The 3rd largest 2-wheeler manufacturer in India and among top ten in the world, TVS had an annual turnover of more than $1 billion in 2008-2009. BPCL and TVS Motor Company have an exclusive tie-up to supply engine-oils for initial service fill TVSM dealers, spare part stockists Authorized service stations. TVS TRU 4;  the 1st JASO MA2 specification oil of its type has been manufactured by BPCL for TVSM two- wheelers. It is available at all TVS Motor authorized dealerships workshops and BPCLs extensive reseller network. TVS Motor Company Limited http://www.maklubes.com/Images/Mak_TVS_tru4.jpg http://www.maklubes.com/Images/tvs_motors.jpg   LT KOMATSU A market leader in excavator segment, it commands greater than 50% of the market share. Tie-up for past 5 years for supplying oils LT Komatsu dealerships and users. BPCL also develop, manufacture supply specially formulated speciality products and hydraulic transmission oils for use in to LT Komatsu excavatorshttp://www.maklubes.com/Images/LT_Komatsu.jpg . Competitors of Bharat Petroleum Corporation Limited (BPCL) Lubricants HPCL IOCL Honda Engine Oil Yamaha Lubes Castrol India Ltd Savita Group Total Group, India Gulf Oil Corporation Ltd (Lubricant Division) Apar Industries Ltd The Andrew Yule Group Gagan Gases Ltd Balmer Lawrie Co Ltd Major Competitors Engine Oils used at authorized Service Stations Honda Engine Oil Honda 4-stroke engine oil is developed by the RD, Honda Motors Ltd., Japan. It conforms to International specifications of SAE 20W40 and API SJ. It has been developed keeping difficult driving conditions prevalent in India. Savita Chemicals Limited In 1961, it started as a small manufacturing unit in Mumbai started producing white mineral oil. Presently, SCL specializes in manufacturing of petroleum specialty products like petroleum jelly, liquid paraffin, white mineral oil, transformer oil, automotive other industrial lubricants. It is in technical collaboration with largest independent oil company of Japa, Idemitsu Kosan, for manufacturing automotive and industrial lubricants. It supplies lubricants to OEMs like Honda Siel, Toyota and HMSI. Yamalube ® These are made by combining base oils, additives and solvents; chosen and mixed to work perfectly for the vehicle. It was designed to work in harmony with the important mechanical components of vehicle. 4-stroke fully synthetic engine-oil for high-performance bikes and competition engines. 4-stroke semi-synthetic engine-oil Æ’Â   a unique blend for all road bikes in normal conditions. 4-stroke mineral engine oil premium quality 2-stroke semi-synthetic engine oil for 2-stroke engines Æ’Â  for standard or unleaded petrol engines. The Marketing Channels **Pie areas not to the scale Till date, the Indian consumers associate filling of lubricants to petrol stations. With the deregulation of market fierce competition, lubricant is being positioned as high involvement consumer goods. Hence, there is a resultant drift outside the petrol stations, shift to bazaar trade. In the developed World, Do-it-Yourself concept has evolved for filling up of engine oil as customers have high degree of awareness sensitivity. This is still the job of mechanics service stations in India. This shift had the following effects: Dumping of products in bazaar. Decline in Market Share of oil companies in public sector. Industry got transformed to FMCG owing to crowding of the market Entry of spurious lubricants. War of trade discounts ending in lesser margins for dealers. Consumer Buying Behavior To start the understanding of the behavior, first we need to know who the consumer is or rather we should define the consumer. A consumer is one who owns a motor vehicle; it can be a motor-bike, a car, a truck or an auto. Let us take example of a farmer who owns a tractor, jeep and a truck. He does not buy separate lubricants for his truck or tractor but rather he would buy for one in bulk and would use it for other two. This might be due to his belief that diesel oils are better than petrol ones. Also, in many parts of country, the farmers use left-over/old oils in their tractors/trucks into the agricultural pump sets. Motivators The main motivators or influencers in the buying decision of customers are retailers/mechanics/dealers. As quite obvious, the owner of the vehicle or the driver has a very little chance of knowing about the intricacies or the composition of the lubricant oils in the market. Initial purchase of lubricant for hi is influenced by the brand recommended by the dealer or the mechanic. Subsequent purchases may be influenced by the petrol pump attendants or dealers. He would go for the brand which provides him value for money and would not consider the costliest one. Favorite brands As seen during the study, the consumers are bargain seeker and can shift their loyalty for a matter of few bucks. This can be attributed to the fact that the purchase of lubricants is a low involvement purchase for the majority of people. For a person having multiple motor vehicles can purchase the engine oil and subsequently use them in some other means as for example in pumps as discussed earlier. But one who is having a sole motor vehicle say a truck would rather prefer to buy diesel than lubricants as this would directly have an effect on his livelihood. His choice of lubricants would be influenced by:- Promotions Now-a-days, by adopting a customer-oriented approach, companies focus on creating brand awareness via print and visual media. E.g., promotional campaigns and trade shows offer gifts to their customers; these are ways of driving sales of the automotive lubricants MAK MALAMAAL DAILY JEET KI KHUSHI SCRATCH WIN This promotional offer provides a chance to win up to Rs. 30 on MAK 4T plus 900 ml 1 ltr pack and a chance to win up to Rs.100 on selected MAK Petrol Diesel Engine oil packs from 3-5 ltrs. http://www.maklubes.com/MAKADMIN/Promotiondata/8_Image_JEET_%20KI_KHUSHI.jpg This promises the customers a Promise Tooth Paste and Binaca Toothbrush free with every pack of MAK GE 20W-50 : 1 ltr pack MAK PUMP 3.5 ltr pack. GADI MEIN DHAMAK HASI MEIN DHAMAK! http://www.maklubes.com/MAKADMIN/Promotiondata/10_Image_HASI_MEINDHAMAK.jpg MAK MALAMAAL DAILY KISMAT KI BALTI KHOLO This provides a chance to win up to Rs. 500 on purchase of MAK Lubricants Engine/gear oils packs from 7.5 -20 ltr packs. Double offer An unbreakable LED torch light free with every pack of 15 20 ltr http://www.maklubes.com/MAKADMIN/Promotiondata/2_Image_Kismat_ki_balti.jpg Awareness/Sales Booster Mechanism Diversification Going on the lines of innovation, BPCL MAK have embarked upon thinking beyond Lubricants. As a part of this inventiveness, MAK lubricants have through dynamic RD have offered new products catering to specific requirements and the problems faced by the customers. MAK All-Season HMO Apple Spray Tea Spray Oils This Horticultural Mineral oil is manufactured out of Group II plus MAK Base oils which are environment friendly, therefore, they not only protect the tender plants and fruits but also their users. It is superior to both Summer and Dormant Oils and has no side effects. All season protection Reduces number of sprays Broad spectrum protection against pests and diseases Avoids usage of synthetic pesticides Excellent crop return Valuable tool when it comes to integrated pest management programs Reduces pest control costs Environmental benefits Eco-friendly approach No residue on evaporation Organic biodegradable Safe on predatory complexes No toxic elements No interference with plant respiration Authentication Increases crop value

Friday, September 20, 2019

Introduction Of Silk Industry

Introduction Of Silk Industry Silk is the queen of all fabrics which is historically one of the most important industries in India. India is the second largest producer of silk, contributing to about 18 percent to the world production. Silk production in India In nature, Asia is the major manufacturer of silk in the world and produces in excess of 95% of the entirety global output. Some of the countries which give important for producing silk are China, India, Japan, Brazil and Korea. India is the leading manufacturer of silk and also have largest consumer of silk in the world. India has a well-built tradition and culture bound home market of silk. In India, mulberry silk is produced mainly in the states of Karnataka, Andhra Pradesh, Tamil Nadu, Jammu Kashmir and west Bengal. The non-mulberry silks are produced in the state like Jharkhand, Chhattisgarh, Orissa and north-eastern states. Silk produce in Kanchipuram The kanchipuram saree holds a special position among the wide range of silk sarees available in India. Kanchipuram sarees are available all around the world. The production of these silk sarees is centred in kanchipuram. The town kanchipuram is fine known as silk city because roundabout of its population is reliant upon the silk industry. In the order of 60,000 silk looms work, filled within town. This town has an annual turnover of more than Rs.200 crores by means of the exports comprising around Rs. 3 crores. The export figures are incomplete due to the inadequacy of weaving on the whole sarees, which has its possess demand, but is moderately lesser over other outfits. Basic Functioning of the Silk Industry in specific to production The first silk filament cloth was made in Ancient china. Silk filament is a fine, touch, elastic fibre which is produced from caterpillars name called bombyxmori. After thirty-five days it has hatched from the eggs laid by its parent moth, the caterpillar, normally referred to as silkworm, that silkworm usually spends its time in eating the leaves of a mulberry tree. Within two or three days spinning it surrounds itself in a cocoon which consists of a continuous and very fine filament of silk. Then silkworm turns into a moth, which escapes by making a hole through the cocoon. The first cocoons were placed in very hot water to soften the sticky gum, sericin, which holds the filament together. The ends of the filament are found and it would be unwound. This progression is called reeling. The silk filament is put on to large reels which are known as swifts. Silk is not like cotton or wool, it is not spun but twisted, then term throwing rather than spinning. Throwing includes the revolvi ng of two sets of bobbins at different, carefully adjusted, speeds. PORTERS FIVE FORCES Shaping an industry and define its competitors and attractiveness can be determine through porters five forces. Threats for new entrance high The silk industry always has potential threat entrance from developing countries like china in relation to global exports. Through there are lots of barriers like capital requirements and chemical requirements. It is difficult for the other countries to develop the market because of the capital requirement and to gain the confidence of the government. Since there is a government support which results in gaining a new entrance for the competitors with inexpensive labour. That threat for new entrance is relatively high. Barriers power of the buyers high The buyer power is relatively high in the textile industry as they drive the industry as such. There is the best utilization of the resources such that there is a major investment from the buyers. The buyers drive the industry due to price proximity and quality of the product. Barriers power of the suppliers low Suppliers for the textile industry are provided by the chemical industry as they are one of the structural drivers. The supplier is relatively low as compare to the other industries. The suppliers are those who supply the raw material to the textile industry for the production of the textile materials. The pricing of the chemical substances which has been supplied to the textile industry is rising due to economic recession and inflation. Threats of substitute high The substitutes product for silk industry is cotton and wool. Normally the demand for the cotton is very high, because it is the one of the cheapest product in textile material. Silk fabric is the one of most costly and luxury material in textile industry. Demand for the wool material is high during winter seasons. While that time silk material is not that much demand while comparing with cotton. Competitive rivalry high The competitive rivalry within the industry is very high and this is justified rivalry within silk industry producers who supply a large variety of silk products to instigate further demand in market also supporting the justification it is clearly noticeable that the product line depth width of the silk supply is high and portfolio of the product is of a high variety within the silk industry. PESTLE (Macro environmental analysis for the Silk Industry in India) The concept of PESTEL analysis provides the framework of macro-environmental factors to scan the external environment. It the basic tool to understand market growth or decline. This framework evaluates the impact of political, economic, social, technology, environment and legal factors on the business environment. This analysis provides opportunities or threats for an organization in external environment. Political environment The political factors in silk textile industry include trade regulations, tax policies. The silk industry add up major growth as it one of the booming sector in India. The government have lots of subsidiary to textile industry as it is the second largest producer of silks. The tax exemption has been provided on the exports done from the industry. Economic environment The GDP growth for the silk textile industry in the last two years is declining because of the global economic recession, due to this the labour cost as considerably increase in a gradual pace. This has also decrease customer spending capability. Purchasing power of the consumer is high, because silk sarees shows the prestige status of women in India. Social analysis The silk industry has normally changes the customers living standard and also changes the social cultural factors in the fashion designing industry. Silk is the maximum consumed in south India which has abundant resources of fabrics and raw materials. The silk sarees resemble the social culture of women in India particularly in Tamil Nadu. Technology analysis India being one of the major exporters of silk, the silk industry in India has gained maximum focus and attention from the government wherein any new technological advancement in production is introduced to this industry adding to the important to this industry. Recently there are lot of new invention and technological developments which are taking place in the textile industry and which will provide the customer and the government to improve the revenue considerably. Environmental analysis There are few critical problems in terms of environment and ecology which are facing the silk industry; these include the chemical wastes and emission from silk producing factories which tend to cause nervous disorders. Another issue which recently is gaining spotlight attention relates to the disruption of the ecological system and imbalance due to the killing of silk worms and this problem was one of the main driver to produce what is called harmless silk (i.e.) silk produced without harming the silk worms. Legal analysis The health and safety issues are always consider in this type of industry there are committees in international organizations to take care the benefits of the workers. Compensation for the workers is low in silk industry. There are many times the weavers have strike to raise the salary for them. STRUCTURAL DRIVERS OF CHANGE IN SILK INDUSTRY In this silk industry there are many structural drivers of change. These drivers of change can be seen in fashion of the people, government and purchasing power of the consumers. Fashion trends of the people Indian saris are the habitual clothing of Indian women. Fashion of the people remains changing, so the textile industries also produce the saris according to the people wants. The silk sarees are defensible as that they are easy to carry; light weighted and help in free movement. This silk sarees are softness and crispness which assure the best quality. The reason for the popularity of the silk sarees is suitability to all occasions. There are many varieties of silk saree like jamdani silk saree, pure silk bridal wear, ethnic kanchipuram saree make for purely traditional wear, the art silk sarees, printed silk sarees, khadi silk sarees and kora silk which are more fashionable Indian silk sarees. Government The silk industry is the one of the major sector which developed the Indian economy and it increase the GDP. There are 2000 set of new textile policy reforms in textile sector, which dealing with removal of raw material price distortions, cluster approach for power looms, pragmatic exit of idle mills, modernisation of outdated technology, etc. The Union Budget of 2005-2006 announced economical progressive policies, which includes: Reduction in corporate tax rate from 35% to 30% with 10% surcharge. Reduction in depreciation rate on plant and machinery from 25% to 15%. Initiation of cluster development for handloom sector. Availability of health insurance package to 0.2mn weavers from 0.02mn initially. Purchasing power of the customer Silk sarees make the best among all Indian sarees. The price of the Indian sarees start from few thousand rupees, a good silk saree can cost a lot of rupees. This silk saree shows the prestige status for women. Few years before rich people can only buy the silk sarees, while that time price of the sarees is at high. Middle and lower class people cannot able to buy the silk sarees. But now a days purchasing power of the middle class is raised. At present the Indian middle class people is where around 351 million. Purchasing power of the customer has been increased. INDUSTRY LIFE CYCLE OF SILK INDUSTRY Development The silk industry is the second largest producer and it has an exclusive pose in India; it plays an important role textile industry and export. It produces 18% of raw silks in total world. The total production of silk during 2005-06 was 16,500 MT and export were Rs. 2,879.56 crores. Source: http://www.india-crafts.com/business-reports/indian-textile-industry/sericulture-silk-sector.htm Accessed Date: 13-3-2010 Introduction Silk industry is one of the most important industries from historical period in India. The sericulture industry employs over 700,000 farm families and is mostly concentrated in Southern India. As in today 56 lakhs people are dependent on this sericulture industry. The potency of this industry defamation in its extensive base, the sustaining market demand pulls particularly from the Indian handloom weaving sector. Source: http://ezinearticles.com/?Indian-Silk-Industryid=364907 Accessed Date: 13-3-2010 Growth The revenue from the textile industry has boosted up the GDP growth in India. The industry magnitude has long-drawn-out from USD 37 billion in 2004-05 to USD 49 billion in 2006-07. In this era, the local market witnessed an escalation of USD 7 billion; this is from USD 23 billion to USD 30 billion. The export market developed from USD 14 billion to USD 19 billion in the same period. Source: http://business.mapsofindia.com/india-gdp/industries/textile.html Accessed Date: 13-3-2010 Maturity This is a growing industry which mainly depends on GDP growth and the inflation around the globe. Maturity stage is the stage where the industry cannot grow as they have seen a complete product development and review but the silk industry falls on the growing stage. If the silk industry reaches the maturity stages then the industry start to decline. Decline The Indian silk industry will not see the decline till the year 2020. CONCLUSION FOR INDUSTRY LIFE CUYCLE As seen the Indian economy is growing in faster pace than the other developing countries there is a considerable growth for the past two years. The budget is also presented in a diversified manner such that the industry grows as the inflation decrease. The industry falls in between the growth and maturity stage in the industry life cycle diagram. SCENARIOS Recycling the silk sarees Chemical wastage Artificial silk Scenario-1 Recycling the silk sarees The old silk sarees are recycled into new silk sarees and it can be sells in the market at better price. There are some manufacturing company which collect damaged and old silk sarees from people and that sarees recycled into new one. This progression saves the manufacture time and that sarees can be produced with new designs. Even though the sarees are recycled the value of the sarees did not reduce, so manufacturer can sell the sarees in fine price. In this process, cost of production is less and it can gain more profit. This process is environment friendly, normally dyeing company produce water pollution but in this recycling process creating pollution is very less while compare to the dyeing company. This process is introduce because, people consuming silk sarees are more in India they can use the silk sarees for maximum five years then they dont use that saree, so that old sarees can be recycled in this process. Scenario-2 Chemical wastage In silk industry, dyeing and finishing sector uses the large amount of water and extensive qualities of compound chemicals. The chemical using in this process can be reduced and the sarees can be produce with less chemical effects. The dyeing companies are facing lot of challenge in this process. These companies are the main reason for the water pollution. The chemical wastage which produces in the dyeing companies is mix with the river water and creates water pollution for the environment. The dyeing companies should have the proper outlet for the waste water. So the chemical usage can be reduce in the production of silk sarees and that dyeing companies should have the proper outlet for that chemical wastage and that chemical wastage should not mix with the river water. This process saves our environment. Scenario-3- Artificial silk Now a days silk is cultivated in Japan, China, Spain, France and Italy are replaced to artificial fibers that has been used of silk in much of the textile industry. The silk industry has a business worth of $200-$500 million annually. A small piece of silk fabric is produced by killing thousands of silkworms. Some of the industries in India are trying to produce silk cloth without killing of silkworms. Ahimsa silk sarees which is produced in Hyderabad, India is without killing silkworms. At the present time people dont like the sarees which is produced by killing silkworms, they are prefer for this ahimsa silk. These ahimsa silk sarees are eco-friendly. In future silk sarees can be produced without killing silkworm. RECOMMENDATION Commencing from above scenarios 3rd and 2nd can be suggested, because the third scenario tells about the producing of silk cloths without killing silkworm so generation of the silkworm is also saving through this method. Scenario 2 which tells regarding the reducing of chemical wastage in dyeing industry, this process will save the environment pollutions. CONCLUSION In India silk industry is a foremost player in the global scenario and the growth forecast for the industry appear to be optimistic. Method like the support of additional technological and economic research in the different aspects of sericulture, regularity and quality control of silk and silk products and explanation of marketing and stabilization of prices of silk cocoons and raw silk it might increase quickly than yet before. REFFERENCE: http://ezinearticles.com/?Indian-Silk-Industryid=364907 Accessed Date: 14-3-2010 http://business.mapsofindia.com/india-gdp/industries/textile.html Accessed Date: 14-3-2010 http://www.iloveindia.com/economy-of-india/textile-industry.html Accessed Date: 20-3-2010 Ahimsa Silk: Silk Saree without killing a single silkworm Accessed Date: 20-3-2010 http://www.articlesnatch.com/Article/The-Kanchipuram-Silk-Industry/152671 Accessed Date: 20-3-2010 http://www.collectibles-articles.com/Article/Things-To-Remember-About-Silk-Sarees/23170 Accessed Date: 28-3-2010 http://indiansilk.kar.nic.in/body_silk.html Accessed Date: 28-3-2010

Thursday, September 19, 2019

Sequels and phobias in The Return of the Soldier of Rebecca West :: Rebecca West

Times of war and peace: Sequels and phobias in The Return of the Soldier of Rebecca West. Rebecca West (1892-1983) was a prolific writer who tried every literary genre; journalism, literary critique, the short story and the novel. Her first novel The Return of the Soldier published in 1918 spans half a century of creative output culminated in 1966 with her last novel The Birds Fall Down. However, all her narrative is easily identifiable because of her unmistakable style, the structure of her novels, the topics she chooses and the coherence of her ideas about mankind and society. Subsequently, all her novels are psychological, historical and social documents depicting human behavior in a precise historical and social context. West synthesizes what she observes rooting her ideas in British literary tradition. Her keen critical eye is both penetrating and enlightening, for example, when in The Return of the Soldier, Margaret Grey appears poorly dressed daring to invade the Baldry mansion with her mud covered boots, while Jenny, the narrator, expresses crude feelings of resentment towards Margaret and her social group. The latter is represented: ‘... as the rich hate the poor, as insect things that will struggle out of the crannies which are their decent home, and introduce ugliness to the light of day’ (West, 1918, rpt.1984: 32)1. West’s literary reputation was revived in the 1980s with the disintegration of Yugoslavia. Her Black Lamb and Grey Falcon; A Journey through Yugoslavia (1941) brought her wide critical attention because this novel was the last of her efforts to understand the pre-war situation. Furthermore, it was central to West’s next book, The Meaning of Treason (1947), where she concentrated on the psychological characteristics of traitors and she wondered what caused these people to do what they did—for West, war fosters deception and betrayal. The final example of West’s interest in treason is her novel The Birds Fall Down (1966) which concludes with the deaths of both the traitor and the friend he betrayed and in The Return of the Soldier, a study of the sequels of war in human mind, the protagonist is betrayed by his family. In the aforementioned novel, West employs what at the time was an original device, amnesia from war trauma or ‘shell shock’ as well as an unusual perspective on war—that of those who waited at home. West tries to explore the reactions of three women to a returning soldier who, though married, remembers only an earlier love for another woman. In spite of its obvious literary quality, The Return of the Soldier proved to be a novel severely punished by critics.

Wednesday, September 18, 2019

Concepts Of Lifetime Fitness :: essays research papers

Concepts of Lifetime Fitness Homeostasis is the state of equilibrium in which the internal environment of the human body remains relatively constant.   Two excellent examples of homeostasis are how the body maintains a constant temperature and blood pressure during strenuous physical activity or exercise.   Although there are many other activities in the body that display homeostasis, I will only discuss these two.    Temperature in the human body is usually kept at approximately 37 degrees Celsius.   To maintain such a strict temperature, the body has a few functions to combat the outside elements.   People cannot make themselves cold as readily as make themselves hot, however I will mention both homeostasis functions.   When the external temperature decreases, a portion of the brain called the hypothalamus detects the drop by means of the blood.   To compensate, the brain sends chemical and electrical impulses to the muscles.   These impulses tell the muscles to begin to contract and relax at very high intervals.   This is commonly known as shivering.   The production of Adenosine Triphosphate or ATP in the mitochondria of the muscles produces heat.   If the body temperature does not rise immediately after this, then a second function begins. The brain will signal the blood vessels near the skin to constrict or narrow in diameter.   This occurs so the heat deep in the muscles is conserved.   Since the vessels are now smaller in diameter, less blood is needed to fill them.   Since less blood is needed through the vessels, the heart begins to slow.   If the body remains in this slowed state, hypothermia could result.   Hypothermia is the condition in which metabolic processes are inhibited.   The medical world has taken advantage of this by inducing hypothermia in patients that are undergoing organ transplants. To fight temperatures higher than normal, as in exercise or on hot days, the body reacts in the opposite way than with cold.   Again, the hypothalamus detects the change of temperature in the blood.   The brain signals blood vessels not to constrict, but to dilate.   This increases the diameter of the vessels, and results in the need for more blood. Since more blood is needed to fill the vessels, the heart pumps faster and that causes respiration to increase.   The increased respiration will make the body exhale some of the internal heat, like placing a fan in a window to cool a room.   The blood vessels are dilated so the heat deep in the muscles is easily released.   Another commonly known mechanism to fight heat is sweating.   Sweat glands found throughout the body are stimulated by the hypothalamus to excrete sweat and when the sweat evaporates,

Tuesday, September 17, 2019

Issues with Revenue Recognition Within the Software Industry

Issues With Revenue Recognition within the Software Industry The Isoft Example Financial Controller-SoftWarehouse Ltd This report has been prepared for the Board of Directors of SoftWarehouse Ltd for elucidation about the contentious issues that have given rise to the publication of the article concerning Isoft’s issues with revenue recognition. Finally, it will also assess whether or not these issues are likely to affect SoftWarehouse Ltd. TABLE OF CONTENTS Executive Summary:3 Introduction:5Part 1- Examining the Isoft Ltd example:5 PART 2 – The issues faced by software companies in relation to revenue recognition:6 Part 3- Issues raised that may impact SoftWarehouse Ltd:7 Part 4 – Future changes in revenue recognition standard:8 Conclusion:9 Reference List:10 Executive Summary: This report has been prepared for the Board of Directors of SoftWarehouse Ltd for elucidation about the contentious issues that have given rise to the publication of the article concernin g Isoft’s issues with revenue recognition.Finally, it will also assess whether or not these issues are likely to affect SoftWarehouse Ltd. In January 2006, Isoft, a Manchester based supplier of software applications for the healthcare sector, announced that its profit would be below market expectations due to a required change in its accounting policy for revenue recognition. Isoft was forced to reverse revenue of approximately ? 70m in 2005 and ? 55m in 2004 – when Deloitte found that Isoft was recognizing revenue sooner than it should have been.The underlying principle of Isoft’s historic revenue recognition policy had been that the value of the product licenses was recognised at the time of delivery, while the value of support and servicers was recognised as they were performed. Moreover, the value of licences was identifiable and separable form the implementation and support services provided. This is not aligned with what the AASB Revenue states. Consequent ly, Isoft engaged in controversial accounting practices. The company recognised revenue at the start of long-term contracts instead of recognising revenue over the life of the contract.Isoft was recognising revenues from contracts even though actual payments for some projects were due over an extended period (for example: one project it recognized revenue even though actual payments were to be paid over a two-year period). The accounting practice of recognising revenue in this method lead to an overstatement of its income, and therefore had the effect of misleading the stock market and Isoft’s overall credibility. After realigning its revenues to the current period (in 2006) to reflect a fair value of its performance, 40% was taken off its share values and the company was forced to lay off 10% of its staff.Isoft adopted a new revenue recognition policy, which more appropriately reflects the changing nature of the business as the group is involved with more complex and long-te rm product supply projects. In the new policy, licence revenues will be recognised over the same period as the implementation of revenues, which may range from a few months to a number of years from contract signature. This will increase visibility and predictability of earnings. At SoftWarehouse Ltd, our contracts with our customers involve the sale of customised software as well as its implementation and maintenance services.We recognise revenue in accordance to AASB 118. The revenue therefore, is recognised over the length of the contract. Due to the fact that our selling prices include an identifiable amount for the subsequent services, that amount is deferred and recognised as revenue over the period during which the service is performed. We recognise revenue by reference to the stage of completion of the transaction at the end of the reporting period. Therefore, I am confident that we will not encounter similar issues, which were faced by Isoft.However, due to the lack of guid ance from the IFRS and GAAP standards on revenue recognition, it is foreseeable that interpretations could become misguided or unaligned with these standards in the future. The issues raised by Isoft elucidate the importance of recording an accurate picture of its earnings. The joint project of the FASB and the IASB is trying to converge the two sets of standards and offer a single revenue recognition model that can be applied consistently to various transactions – which would address these issues of lack of guidance.Introduction: In January 2006, Isoft Ltd, a Manchester based supplier of software applications for the healthcare sector, announced that its profit would be below market expectations due to a change in its accounting policy for revenue recognition, when it announced its results for the year ended April 2006. This situation is not unusual within the software industry and reflects the issues that software companies face when it comes to accounting for revenues.As t he financial controller of SoftWarehouse Ltd, my goal is to clarify and explain the main issues faced by Isoft Ltd; the consequences of those issues on the business and finally; to determine if those practices could also impact the financial reporting within SoftWarehouse Ltd. Part 1- Examining the Isoft Ltd example: The underlying principle of Isoft Ltd’s historic revenue recognition policy had been that the value of product licences was recognised at the time of delivery, while the value of support and services was recognised as they were performed (Isoft 2006).Moreover, under this policy, the value of licences was identifiable and separable from the implementation and support services provided (Isoft 2006). AASB 118- Revenue (AASB 2010), gives some guidance on how to recognise revenue: â€Å"When the selling price of a product includes an identifiable amount for subsequent servicing, that amount is deferred and recognised as revenue over the period, which the service is p erformed. AASB (2010) illustrates that statement by giving an example which can be applied to Isoft Ltd’s situation: â€Å"When the selling price of a product includes an identifiable amount for subsequent services (for example, after sales support and product enhancement on the sale of software), that amount is deferred and recognised as revenue over the period during which the service is performed. The amount deferred is that which will cover the expected costs of the services under the agreement, together with a reasonable profit on those services. † Therefore, it seems that Isoft Ltd’s traditional policy is acceptable under AASB 118- Revenue.Isoft Ltd had to change its revenue recognition after Deloitte had found that some revenues had been recognised earlier than they should have been (Stafford 2006), which lead to an overstatement of its income and therefore had the effect of misleading the stock market (Griffiths and Bowers 2006), and thus affect Isoftâ⠂¬â„¢s credibility. When the company was obliged to realign its revenues to the current period in 2006 to reflect a fair value of its performance, its revenues got wiped out and it knocked 40% off its share values. The company also announced that at 10% of its staff would be laid off (Meyer 2006).Under Isoft Ltd’s new revenue recognition policy, licence revenues will be recognised over the same period as implementation revenues, which may range from a few months to a number of years from contract signature, and over the full duration of the contract in the case of managed services (Isoft Ltd 2006). The group stated that a change of accounting policy for revenue recognition is needed to more appropriately reflect the changing nature of the business as the group is involved with more complex and long-term product supply projects (Isoft Ltd 2006).Isoft Ltd also mentioned that its new revenue recognition policy would increase visibility and predictability of earnings (RNS 2006). PART 2 – The issues faced by software companies in relation to revenue recognition: Isoft Ltd was accused of being engaged in controversial accounting practices. The main issue with Isoft Ltd’s accounting practices is that it was recognising revenue sooner than it should have been. The company recognised revenue at the start of long-term contracts instead of recognising revenue over the life of the contract (Moulds 2006).Indeed, during the year 2004-2005, Isoft Ltd accounted in full for the revenue raised as part of long-term contracts at the time of receiving part prepayments. Analysts had found that Isoft Ltd, the main software supplier for the NHS’s ? 6. 2bn IT project, was recognising revenues from contracts even though actual payments for projects were only due over two years time (Neveling 2006). For the year ending April 2004, Isoft Ltd recognised ? 30m of payments from Accenture and CSC who were implementing the NHS’s technology overhaul (UK Parli ament 2007).One of the main issues in accounting is about revenue recognition, especially in our IT industry. As KPMG (2009) stated, IFRS does not provide any specific guidance on revenue recognition for software related transactions. The IFRS standard and the Australian GAAP standard on revenue recognition lack guidance when a transaction involves both a good and services related to that good (IASB 2008) – which is often the case for software companies. The difficulty for software companies resides in the fact that due to this vagueness, it is hard to distinguish the revenue from the software and the revenue from the services offered.As Stafford (2006) mentioned, Isoft Ltd is not the first software company to have had issues with revenue recognition. Part 3- Issues raised that may impact SoftWarehouse Ltd: At Softwarehouse Ltd, we are providing customised software to our customers in the mining industry. Our contracts with our customers involve the sale of customised softwar e as well as its implementation and maintenance services. We recognise revenue according to AASB 118, which we previously mentioned in detail in part 1.AASB (2010) adds an interesting point for guidance: â€Å"fees from the development of customised software are recognised as revenue by reference to the stage of completion of the development, including completion of services provided for post delivery service support. † The revenue is therefore, recognised over the length of the contract. Due to the fact that our selling prices include an identifiable amount for the subsequent services we deliver, that amount is deferred and recognised as revenue over the period during which the service is performed.We recognise revenue by reference to the stage of completion of the transaction at the end of the reporting period. We are confident that we will not encounter a similar situation than the one Isoft Ltd went through. However, I have to admit that the AASB is not giving clear guida nce regarding revenue recognition, which leaves us with our own interpretation. Due to this lack of guidance, it could be foreseeable that our interpretation could become misguided or unaligned with the AASB. We should always be aware that even though our policy is acceptable under the Australian GAAP, it doesn’t mean that we are protected from making mistakes.Indeed, Isoft Ltd’s traditional policy was acceptable under the Australian GAAP. However, as their contracts changed, Isoft Ltd did not update its policy, which led to misalignment. At Softwarehouse Ltd, we have to bear in mind that if the type of contracts or transactions that we offer change, then we will have to update our policy to accurately reflect our financial position. Ultimately, we must ensure that we do not recognise revenue too early and overstate our income. Part 4 – Future changes in revenue recognition standard:We are still keeping a close eye on the project regarding the new revenue recogn ition model: the Contract- based revenue recognition model. This is a joint project of the FASB and the IASB whose goal is to converge the two sets of standards (Henry & Holzmann 2009) and to offer single revenue recognition model that can be applied consistently to various transactions (IASB 2008). If adopted the proposed standard will replace existing standards AASB 118- Revenue. The core principle of this model is that an entity would recognise revenue from contracts with customers when it transfers promised goods or services to the customer.The amount of revenue recognised would be the amount of consideration promised by the customer in exchange for the transferred goods or services (RSM Bird Cameron 2011). Under this new revenue recognition model, it is stated that the â€Å"entity should recognise revenue when its net position in a contract with a customer increases as a result of satisfying a performance obligation. An entity satisfies a performance obligation when it transf ers goods and services to a customer. † (IFRS 2008). The last exposure draft (IFRS 2011) indicates â€Å"if a romised good or service is not distinct, an entity would combine that good or service with other promised goods or services until the entity identifies a bundle of goods or services that is distinct. Therefore, the entity would account for the bundle as a single performance obligation†. The revenue for that performance obligation would then be recognised over time by selecting an appropriate measure of progress towards complete satisfaction of the performance obligation (IFRS 2011). Conclusion: One of the main issues in accounting concerns revenue recognition, especially within the software/IT industry.The IFRS and the Australian GAAP standards on revenue recognition lack guidance when it comes to multiple element transactions. Due to this lack of guidance, it is foreseeable that interpretations could become misguided or unaligned with the IFRS or Australian GAA P standards. The issues raised by Isoft Ltd, elucidate the importance of recording an accurate picture of its earnings. Indeed, Isoft had to change its revenue recognition after it was exposed that some revenues had been recognised earlier than they should have been, which lead to an overstatement of its income and therefore had the effect of misleading the stock market.The joint project of the FASB and the IASB is trying to address these issues of lack of guidance. Reference List: Australian Accounting Standards Board 2010, AASB 118 Revenue. Available from: www. aasb. gov. au. [20 March 2012]. Griffiths, I & Bowers, S 2006, ‘Revealed: Isoft’s U-turn on accounts problems’, The Guardian 2 November. Available from: . [8 April 2012]. Henry, E & Holzmann, OJ 2009, ‘Contract-Based Revenue Recognition’, The Journal of Corporate Accounting & Finance, pp. 77-81. Available from: Proquest [28 March 2011].House of Commons, Committee of Public Accounts 2007, Dep artment of Health: the national programme for IT in the NHS, The Stationary Office, London. International Accounting Standards Board 2008, Discussion Paper Preliminary views on revenue recognition in contracts with customers. Available from: . [20 March 2012]. IFRS 2011, Exposure draft revenue from contracts with customers. Available from: . [5 April 2012]. KPMG 2009, Impact of IFRS on the Information Technology and Business Process Outsourcing Industries. Available from: < https://www. in. kpmg. com/securedata/ifrs_Institute/Files/IFRS_IT. df>. [ 10 April 2012]. Meyer, D 2006, ‘NHS IT timescale questioned as Isoft CEO resigns’, Zdnet 15 June. Available from: . [7 April 2012]. Moulds, J 2006, ‘Isoft directors and ex- auditors face questioning in new inquiry’, The Telegraph 26 October 2006. Available from: . [5 April 2012]. Neveling, N 2006, ‘What’s going on at Isoft’, Financial Director 31 August 2006. Available from: . [7 April 2012]. R NS 2006, Isoft Change in Accounting Policy. Available from: . [5 April 2012]. RSM Bird Cameron Chartered Accountants, 2011, Revenue Recognition- New and Revised Proposal, Available from: http://www. rsmi. com. au/rsbcwr/_assets/main/lib90034/111220_financial%20insight_revenue%20recognition%20web. pdf>. [28 March 2012]. Stafford, P 2006, ‘Revenue Recognition is Isoft’s Curse’, Financial Times 9 August. Available from: http://www. ft. com. [5 April 2012]. Uk Parliament 2007, Memorandum submitted by Ian Griffiths and Simon Bowers. Available from: . [8 April 2012].