Great Expectation Essays - English-language Films, British Films

Great Expectation Great Expectations The novel, Great Expectations, presents the story of a young boy growing up and becoming a gentleman. He must learn to appreciate people for who they are, not shun them for who they arent. Nicknamed Pip, Philip Pirrip, the main character, goes through many changes in his personality, as he is influenced by various people. Pip experiences tough times as a boy and a young man, but at the end he has become a fine, morale young man. In the beginning, Pip, an orphan, considers himself to be a common laboring boy, but he has a desire to improve his station in life. He is raised by his sister, and her husband, Joe Gargery. Then Pip meets Estella, the adopted daughter of Miss Havisham, an old lady who is bitter and eccentric. Estella taunts Pip and is very cruel to him, but he still falls in love with her. Miss Havisham is teaching Estella to hurt men, because she herself was deserted by her fianc? on her wedding day. One day, Mr. Jaggers, a lawyer, reveals to Pip, that there are Great Expectations for Pip. He is given the money to become a gentleman and receive a good education; he assumes that his benefactor is Miss Havisham. In London, Pip makes many new, high-society friends. When Joe Gargery comes to visit Pip in his new way of life, Pip is ashamed of Joe, because he is a commoner. At this time, Pip is around twenty years old. Estella is still the center of his attractions. When she comes! to London, he meets her, but she tries to warn Pip to stay away from her because she might hurt his feelings. She is being kind to him in the only way that she knows how. Around the same time, Pip receives a letter telling him that Mrs. Joe Gargery had died. A man from Pips past steps out, an ex-convict, named Magwitch, who he had fed many years ago; this man is his true benefactor. Pip finally knows the truth about this man. Magwitch is Estellas father, and Mr. Jaggers housekeeper is Estellas mother. A short time later, Estella is wed to Bentley Drummle, but she is very unhappy. Pip falls ill, and Joe comes to take care of him. While he is being nursed back to health, Pip starts to appreciate Joe and begins to look past the fact that he is common. He receives the news that Miss Havisham is dead. Pip visits Joes home and is told that Joe and Biddy, Pips friend, are married. Pip then returns to London and continues his life for eleven more years. Pip finally goes back to Joes house, to find that Joe and Biddy have a son, and they have named him Pip. During that last visit, he returns to Miss Havishams old run-down home. There he meets Estella, grown into a woman, her husband dead. There, Estella asks Pip to for! give her, he does, and all is well. So the story ends, with grown Pip and a changed Estella both at peace with each other. In conclusion, I thought that this was a very well written book. It took me a while to get into it and understand the plot, but now I see that Dickens wrote Great Expectations with a very complex plot and well described characters. From Joe Gargery to Miss Havisham, I really got to know the characters as if they were people. I would describe this book as a delightful story with a sprinkle of mystery and a handful of romance, with a pinch of fun all mixed in. English Essays

Homeland Security Presidential Directive 12 Cost Justification and Benefits

Homeland Security Presidential Directive 12 Cost Justification and Benefits Free Online Research Papers Homeland Security Presidential Directive 12 Cost Justification and Benefits Information Technology Essays The problem with today’s authentication is the ability to electronically prove and provide confidence in a person’s identity. Authentication focuses on confirming an individual’s identity based on reliable credentials. Homeland Security Presidential Directive 12 (HSPD) was created to solve this problem and provide better identity management security at federal agencies. The HSPD 12 directive requires the development and agency implementation of a mandatory, government-wide standard for secure and reliable forms of identification for Federal employees and contractors. This directive signed by President Bush in August 2004 established an official federal government policy for the issuance of a common identity verification standard. The purpose of this paper is to discuss how agencies justify the costs involved in complying with the HSPD 12 mandate, what benefits agencies expect in return for their investment, and the risks associated with identity management. The National Institute of Standards and Technology (NIST) determined that secure and reliable forms of identification need to be both physical and logical for entry into federal buildings and technology data centers. NIST decided the standard would include the use of smart cards with embedded biometric fingerprints, and public key infrastructure (PKI) that links an individual to a specified public key for electronic signing (See Appendix A). NIST created the Federal Information Processing Standard Publication 201 (FIPS 201) and Personal Identity Verification (PIV). According to NIST, the FIPS 201 includes two parts called PIV I and PIV II, and states the following (See Appendix B): The requirements in PIV I support the control objectives and security requirements described in FIPS 201, including the standard background investigation required for all Federal employees and long-term contractors. The standards in PIV II support the technical interoperability requirements described in HSPD-12. PIV II specifies standards for implementing identity credentials on integrated circuit cards (i.e., smart cards) for use in a Federal system. FIPS 201 requires agencies to: 1. Establish roles to facilitate identity proofing, information capture and storage, and card issuance and maintenance. 2. Develop and implement a physical security and information security infrastructure to support these new credentials. 3. Establish processes to support the implementation of a PIV program. (GSA, 2005a) The notion behind these standards is to provide enhanced security at Federal facilities and information systems. Cost Justifications: One way an agency can justify the cost of identity management is the fact that it enhances security by safeguarding access to buildings, secure areas, and electronic systems. Conventional authentication can be easily forged, stolen or altered to gain unauthorized access. This type of security breach can lead to identity theft that has the potential to cost individuals and agencies large financial losses. The Federal Trade Commission in 2004 conducted 4,057 interviews with individuals who incurred losses associated with identification theft and estimated the costs to them. The loss estimates were compiled from the data gathered from the interviews and was said to cost nearly $10,200 per incident and $33 billion total for agencies, businesses and financial institutions. The frequency of these incidents indicates a growing problem of theft and loss. Examples of compromised records include 1.4 million credit card numbers from DSW Shoe Warehouse, 200,000 client files from Ameritrade, reco rds for 30,000 students and staff at George Mason University, 59,000 student records at a California University, Bank of America tapes with information on 1.2 million government employees, University of California laptop stolen with 100,000 identities, 280,000 possible victims at LexisNexis, 145,000 social security numbers at ChoicePoint, (FTC, 2003) and most recently the social security numbers of 26.5 million veterans. The use of smart cards developed pursuant to the NIST PIV II standard would provide enhanced security authentication. What a smart card offers is a plastic device about the size of a credit card that contains an embedded hardware computer chip that is separate from the computer. (See Appendix C). If a compromised computer is infected, the smartcard itself would not be affected. Smart cards operate in their own separate space, which make them less susceptible to being compromised, thus making them a more robust method for authentication as well. A second way government agencies can justify the cost associated with smart cards is that they provide the hardening of logical security. This could prevent thieves from unauthorized access and help address the concerns associated with identity theft. The unique advantage that smart cards have over traditional cards with simpler technologies like magnetic stripes or bar codes is that they can exchange data with other systems and process information. (See Appendix D). Older card versions were static and could not exchange data. By securely exchanging information, a smart card can help authenticate the identity of the individual possessing the card in a far more thorough way than is possible with traditional identification cards. A smart card’s processing power also allows it to exchange and update many other kinds of information with a variety of external systems, which can facilitate applications such as financial transactions or other services that involve electronic record- keeping. (GSA, 2005b) This enhanced security reduces the risk of identity theft and financial losses. A third way government agencies could justify the costs associated with smart cards would be through enhanced security for remote authentication. (See Appendix E) Most agencies have developed systems to allow remote access even though it provides an alternative method for non employees to gain access. Normally, controlled computer environments like those found at federal agencies, banks, financial institutions and physical stores have security measures in place to stop malicious behaviors. This is not always the case when people work at home using their own computers. These computers are usually directly connected to the internet and are outside controlled settings. Because of this, the potential risks are significant when data is left unprotected. Using PKI public key cryptography can help solve the problem with unprotected data. This encryption technology stores a person’s digital certificate and has the ability to thwart thefts by safeguarding identities. Many agencies have looked at smart cards and the PKI model to include key management. When a certificate is created, there is a multistage process involved. Typically, for authentication and digital signature key pairs, the keys are generated locally on the smart card. The private key never leaves the smart card, while the public key is exported for inclusion in a certificate request. There are four key components for PKI to be successful: 1. Registration/Enrollment: To create a digital certificate, PKI systems require a secure process for verifying the persons identity. PKI products supported multiple methods of making sure that applicants for certificates were legitimate and actually were who they were claiming to be. The same secure registration process is needed for granting access to customer identity information. 2. Repository: PKI required both a trustable public repository for public keys and a secure repository for backup of private keys. Protecting stored identity information requires a secure repository, as well. 3. Revocation: For digital certificates to be meaningful, a process was needed to inform those relying on certificates that a certificate had expired, had been revoked or was, for whatever reason, no longer valid. Revoking access to customer identity information when that access no longer has business justification is a critical requirement. 4. Reliability: PKI systems included mechanisms for archiving and backing up encryption keys, had guidelines for protecting the PKI infrastructure, and had auditable mechanisms (defined in certification practice statements) for defining the security processes that would be employed to maintain the trust of the entire PKI. Systems that handle sensitive identity information should have standard formats for documenting similar assurances. (Pescatore, 2005a) Using the public key infrastructure (PKI) components described above has the ability to save government agencies time and money by mitigating the risks associated with identity theft. (See Appendix F) The recent incident involving the Department of Veterans Affairs (VA) that compromised the identities of up to 26.5 million veterans and some spouses provides plenty of justification of the cost for better identity management security. Gartner research evaluated costs related to identity thefts similar to the ones being publicly announced. They estimated that data breaches will cost companies 50 percent more than data protection will. Gartner states the following: A company with at least 100,000 accounts to protect can spend, in the first year, as little as $6 per customer account for just data encryption or as much as $16 per customer account for data encryption, host-based intrusion prevention and strong security audits combined. These unit costs will be reduced drastically if these strategies are applied to protecting millions of customer accounts. This compares with an expenditure of at least $90 per customer account when data is compromised or exposed during a breach. Likewise, these costs may escalate dramatically if proposed legislation mandating fines up to $11,000 per exposed and damaged customer account is imposed. (Pescatore, 2005b) According to Gartner research, nearly all data theft attacks could have been prevented if the sensitive data was encrypted and the encryption keys were properly protected. For large environments such as government agencies with over 100,000 records to safeguard, Gartner estimates the costs associated with equipment, integration and maintenance to be about $6 per person in the first year. The estimates of using PKI encryption would decrease each year and cost approximately $1 per account per year in recurring costs. Gartner research’s evaluations show there are significant losses associated with not protecting data. Their cost estimates for data encryption show a cost savings in comparison, and should help agencies decide whether to move forward with this technology. Benefits: One of the benefits of this technology is the ability to consolidate personal identity requirements. Consolidating logical and physical security controls into a single, card connected system has the potential to save money and reduce security costs by 40 to 60 percent over traditional approaches, while enabling an agency to control a greater percentage of its access points. A single system eliminates the costs of installing and wiring traditional access points. It also reduces the considerable expense of traditional architectures and system for access control at remote locations. These savings would allow agencies to expand the number of locations and systems that are electronically secured. Agencies can also benefit from using a single interface to control both wired and card-connected access points. This would allow administrators to manage a large number of users and locations more efficiently. Each smart card credential securely carries the roles and privileges of the individual from wired to standalone access points, creating a card-connected environment. The benefit is realized when the cardholders become an extension of the physical access network, and their cards carry information to and from the readers. By following this model, security is increased significantly at a fraction of the normal cost. For example, if an employee leaves the agency, rather than replace door locks and wiring (at a cost of $5,000 each, as well as time delays), the card permissions can be immediately revoked and the employee can no longer access the facility or information networks. (Electronic Government: Agencies Face Challenges in Implementing New Federal Employee Identification Sta ndard: GAO-06-178, 2006) A second benefit of this technology is electronic authentication. This provides simpler access to multiple agency applications through the re-use of credentials and established identities. Using a single central credential permits access to multiple systems without having to key in multiple passwords. An example of an industry leader providing easier access to multiple systems is UBS, a global financial company headquartered in Switzerland. They accomplished identity authentication by the successful implementation of PKI. This company implemented the use of digital certificates that linked their employees to a specified public key for electronic signing. They used the PKI security architecture as a method to address efficient and secure authentication. UBS concluded that the processes and technology that had worked in a centralized environment were no longer effective in a decentralized one. Major concerns were increased inefficiency, rising costs and the reduced ability to control r isk. Their problems included the following: 1. The network of open production systems could be reached from anywhere, putting critical data at significant risk. 2. Existing applications were not designed to function within such an environment. User authentication by plain old passwords was increasingly seen as providing an unacceptably low level of protection against illegitimate access in such an environment. 3. The bank had almost half a million different passwords in use: The average user had to remember at least 15 passwords, making it inevitable that many users would write down their passwords. Additionally, significant help desk resources were devoted to resetting forgotten passwords. (Noakes-Fry, 2005b) The technologies and processes that were in place prior to moving towards PKI could not eliminate or reduce the three problems indicated above. The company predicted the problems would only worsen as the network continued to grow. UBS decided it needed to change in order to provide a strong, reliable, and human-accessible user authentication to information resources. Identity authentication objectives at UBS were defined by a single sign-on process. This allowed each user to only remember a single PIN and authenticate once per login session to access all systems. The company used smart cards that permitted user access to the computer and authentication to additional systems. The public-key infrastructure (PKI) was the key component to support stronger user authentication and identity management in the environment. Cost savings were realized because UBS was able to reduce the number of help desk calls for password support. According to UBS, many hours were spent each retrieving or resetting users passwords which resulted in the loss of productivity. Since implementing single sign on the company has increased security, improved functionality and reduced help desk expenses. A third benefit of this technology is the ability to move away from paper signatures and towards public key digital signatures. This move has the potential to reduce the amount of time normally spent processing paperwork and transform business electronically. Moving away from paper records and towards electronic forms supports the Government Paperwork Elimination Act (GPEA). This act recommended that federal agencies establish electronic forms to provide immediate feedback from data submitted online. It stated that forms should be electronically fill-able, file-able, and signable, and a model of user friendliness and efficiency. Signed records can be stored and retained for the purposes of retrieving them for later use, either as part of a related business process or a legal proceeding. Some records may be retained for decades. This move was successful in the case of a student loan company with a portfolio of more than $2 billion that implemented an online application process for consolidation loans using digital signatures. According to Gartner research, the company met its goal of having electronically fill-able applications in place before the huge wave of applications began arriving in June. These electronic applications were signable with digital signatures and received immediate acceptance from borrowers. Gartner noted that the company experienced a significant reduction in cost and reduction in turnaround time for each application: It previously cost $12 to send an application via FedEx (and including a prepaid FedEx envelope cost another $12), but it now costs $1.35 to send. Under the old system, the company received 35 percent of the applications back with signatures; 65 percent of electronic applications are returned with digital signatures. Using previous delivery methods, it took 10 days to get the application back; with digitally signed electronic applications, turnaround is one day. (Noakes-Fry, 2005a) Risks: There are several risks involved with implementing HSPD 12. These risks include the cost and the looming October 2006 deadline for agencies to meet compliance. Cost is always a big concern at federal agencies, and implementation can be prohibitively expensive for any one agency to bear all of the expenses. Many federal agencies and contractors are already stretched for funding and resources. HSPD-12 is an initiative that requires interoperability between complex federal government systems, the reevaluation of business processes, and unprecedented collaboration between IT, human resources, and physical security staffs. Looking at the requirements for PIV card use, the implementation includes digital certificates, the PIV Cards, printing, middleware software, IDMS, a card management system (CMS), and an OCSP capability. These costs were estimated using models identified by the Office of Management and Budget (OMB): Larger departments estimate that the first year costs per person are between $90 – 110. It is anticipating that out years costs at larger departments will decrease to approximately $60 for initial year based on deployments exceeding 500,000 users. It is anticipated in time these cost will decrease even further. (GSA, 2005a) The recommendation from OMB states smaller agencies need to align themselves with larger federal agencies to lower the total costs of ownership. Moreover, there are a number of costly infrastructure components and processes that an agency may be required to purchase. This would include the expenses associated with physical access control systems that can link multiple agency locations together. These costs may exceed the amount agencies can afford and can absorb by themselves. The concern arises if a single agency were to out source the entire implementation to commercial vendors with its current employees and contractors. If this were to occur, OMB says the costs per person could easily exceed $200. The guidance from OMB proposes waiting until the larger agencies such as the Department of Defense implement smart card use. This way smaller agencies can align themselves with other large volume agencies to take advantage of volume discounts. The United States Government Accounting Office published key findings in the February 2006 report entitled, â€Å"Agencies Face Challenges in Implementing New Federal Employee Identification Standard.† This report provided guidance about smart card technology planning and budgeting activities. There were several concerns raised in the report with regards to the smart card technology. The concerns involved the time frame for effective planning, information gathering about risk, and cost benefit information. The GAO noted the following: As part of the annual federal budget formulation process, agencies are required to submit their budget requests 1 year in advance of the time they expect to spend the funds. In addition, in the case of major IT investments, which could include new smart-card based credentialing systems, OMB requires agencies to prepare and submit formal businesses cases, which are used to demonstrate that agencies have adequately defined the proposed cost, schedule, and performance goals for the proposed investments. In order for agencies to prepare business cases for future funding requests, they need to conduct detailed analyses such as a cost benefit analysis, a risk analysis, and an assessment of the security and privacy implications of the investment. However, agencies have lacked the information necessary to conduct such reviews. For example, agencies have not had reliable information about product costs and cost elements, which are necessary for cost-benefit analyses. In addition, without FIPS 201 compliant products available for review, agencies have been unable to adequately conduct risk analyses of the technology. Most importantly, the lack of FIPS 201 compliant products has inhibited planning for addressing the investment’s security and privacy issues. (Electronic Government: Agencies Face Challenges in Implementing New Federal Employee Identification Standard: GAO-06-178, 2006) The GAO did provide three recommendations that would be helpful in addressing the concerns and enable agencies to move forward with the HSPD 12 mandate. The report discussed the following key activities regarding the compliance standard and recommended the following three actions: 1. Provide specific deadlines by which agencies implementing transitional smart card systems are to meet the â€Å"end-point† specification, thus allowing for interoperability of smart card systems across the federal government; 2. Provide guidance to agencies on assessing risks associated with the variation in the reliability and accuracy among biometric products, so that they can select vendors that best meet the needs of their agencies while maintaining interoperability with other agencies, and 3. Clarify the extent to which agencies should make risk-based assessments regarding the applicability of FIPS 201 to specific types of facilities, individuals, and information systems, such as small offices, foreign nationals, and volunteers. The updated guidance should (1) include criteria that agencies can use to determine precisely what circumstances call for risk-based assessments and (2) specify how agencies are to carry out such risk assessments. (Electronic Government: Agencies Face Challenges in Implementing New Federal Employee Identification Standard: GAO-06-178, 2006) Conclusion: With little more information than a social security number, an identity can be stolen. As the Federal Trade Commission (FTC) points out â€Å"Social Security numbers play a pivotal role in identity theft. Identity thieves use the Social Security number as a key to access the financial benefits available to their victims.† (FTC, 2003) Identity theft is growing rapidly and has become a serious threat. It is easy to open fraudulent lines of credit in the name of some unsuspecting victim. The FTC statistics for 2004 indicate that credit card fraud (28%) was the most common form of reported identity theft, followed by phone or utilities fraud (19%), bank fraud (18%), and employment fraud (13%). Other significant categories of identity theft reported by victims were government documents/benefits fraud and loan fraud. (FTC, 2003) Congress is considering several measures to prevent the crimes identified by the FTC and among them is the Personal Data Privacy and Security Act of 2005. Senate Judiciary Committee Chairman Arlen Specter (R-PA) introduced the bill. He wanted the measure to require a review of federal sentencing guidelines to allow a maximum penalty to be imposed on identity thieves and impose financial penalties on data brokers for allowing data breaches to occur. The bill also outlines procedures for data brokers and consumers to follow to correct incorrect information contained in personal records, and increases criminal penalties for computer fraud involving personal data, unauthorized access to personal information. It also makes it a crime to intentionally conceal a security breach involving personal data. (Moye, 2006) The HSPD 12 implementation requires Federal agencies to make investments for secure and reliable forms of identification. HSPD 12 was formed to resolve problems associated with identity management and provide enhanced security at federal agencies. Government agencies will be asked to justify the costs involved in complying with the HSPD 12 mandate and understand what benefits it can expect in return for their investment along with the associated risks. Moving forward with the mandate will involve both logical and physical changes. These changes will most likely include costly infrastructure components and smart card readers for computers logging onto the network. Additionally, desktop computers will need to be equipped with smart card readers for logging onto the network and for accessing network resources. Moreover, the badging process will require additional physical security for buildings and secure areas. The conventional method of proving your identity will need to change to accommodate the enhanced public key infrastructure (PKI) components. Authentication to agency resources will involve the combination of biometrics, digital certificates, and passwords for single sign on capabilities. The technology has the ability to provide simpler access to multiple agency applications through the re-use of credentials and established identities. It also allows each user to only remember a single PIN and authenticate once per login session to access all systems. This will provide a relatively high level of security because it relies on multiple layers of specific information prior to authentication. The benefit to the user results in eliminating the need for multiple cards, remembering multiple PINs and login information. Like insurance, the real value can be measured against the cost and impact of the bad things that could happen if you do not protect yourself. Electronic Government: Agencies Face Challenges in Implementing New Federal Employee Identification Standard: GAO-06-178. (2006). GAO Reports, 1. FTC. (2003). STATEMENT OF ASSISTANT SECRETARY FOR FINANCIAL INSTITUTIONS WAYNE ABERNATHY ON THE FEDERAL TRADE COMMISSIONS IDENTITY THEFT SURVEY REPORT, FDCH Regulatory Intelligence Database. GSA. (2005a). Federal Identity Management Handbook: GSA. GSA. (2005b). GOVERNMENT SMART CARD HANDBOOK: GSA. Moye, S. (2006). Congress Assesses Data Security Proposals. Information Management Journal, 40(1), 20-22. Noakes-Fry, K. (2005a). Case Study: Loan Company Uses E-Signatures to Cut Costs and Save Time. Gartner Research(G00129945). Noakes-Fry, K. (2005b). Case Study: UBS Manages IDs with PKI-Based Smart Cards to increase Security and Reduce Costs. Gartner Research(G00130280). Pescatore, J. (2005a). Apply the Lessons of Public-Key Infrastructure to Protecting Customer Information. Gartner Research(G00126768). Pescatore, J. (2005b). Data Protection is Less Costly than Data Breaches. Gartner Research, G00130911. Research Papers on Homeland Security Presidential Directive 12 Cost Justification and BenefitsOpen Architechture a white paperNever Been Kicked Out of a Place This NiceThe Project Managment Office SystemIncorporating Risk and Uncertainty Factor in CapitalTwilight of the UAWGenetic EngineeringQuebec and CanadaPETSTEL analysis of IndiaResearch Process Part OneMarketing of Lifeboy Soap A Unilever Product

Business Ethics and Social Responsibility Case Study

Business Ethics and Social Responsibility - Case Study Example   This is made possible for the various forms of interrelationships established in the organization as persons interact with one another in the different levels of its structure, carries with it the core belief that each member of the organization are working towards the achievement and realization of the organization’s goals as they achieved human development and excellence in their field of expertise. And that actions performed by all its players are considered as within the purview of the organizations good. Thus, it is assumed as given and therefore not questioned the truism of the belief that workers and employees do not just perform their tasks in an excellent manner in order to yield a good product but that they have a sense of loyalty to the organization where they are members. However, the relationship between the organization from the management level and the employees is not always a bed of roses. Critical issues demanding decisive actions and decision making some times arise as some factors and judgments may tend to disturb the â€Å"harmonious† balance of the organization. Business has always been considered as â€Å"amoral.†(De George, 1999, p5) Implying that basically business enterprises have no other interests than to gain profit. Thereby, presenting the notion that businesses do not bother itself to question of right or wrong which is the interests of morality and ethics but are, instead, concerned with the question of how companies will be able to increase its gains and profits. This view, in fact, is also held by the Noble Laureate Milton Friedman that â€Å"the only social responsibility of business was to increase profit.†(Davies, 2000, p 99)  Ã‚  

Apple and samsung Essay Example | Topics and Well Written Essays - 1000 words

Apple and samsung - Essay Example Apple and Samsung companies are doing very well and they have several things in common. The objective of this writing is to compare and evaluate the two major competitor corporations, Apple and Samsung. According to Wagstaff & Kim (2012), it is undeniable that both companies are similar in terms of size though were founded in different periods. Steve Jobs and Steve Wozniak founded Apple in 1976 while Samsung was founded in 1938 by a Korean businessperson, Byung-Chull Lee. Even though Samsung started as a vegetable and fruit company, it later started back in 1969 as an electronic company. Apple’s personal computers were amongst the best but later experienced a decrease in sales after the high competition in electronics began. The company then started to produce new product iPod that largely enhanced her revenues. On the other hand, Samsung was developing slowly through introduction of various products in the market prompting it to change her mission statement to keep pace with its growing global operations, changes in the world economy as well as escalation from well-established companies. Moreover, Apple prides herself on innovation and is known for taking 8 years to develop a single product before releasing it to market. Worstall (2013) explains that Apple’s culture is to release products that are not perfect and once released, they make major updates hardly, confident that their original work is the best. This technique ensures a fascinated tech press and awed public, which compels a certain level of security as well as secrecy that segregates the company from attaining valuable market feedback prior to launch. This further raise the stakes of every product launch to the market changing and checking on any of their recent launches such as iPhone 5 and iOS7, it is nearly impossible for Apple live up to the demand for their products. Samsung however, releases a less than perfect product and iterate their way to success, which conforms, to their hi story of releasing new products that are far from perfect. The company does not make massive splash, instead the first generation product is meant to gauge interest and test capabilities since they are content to iterate their way to successful products. It is worth noting that Samsung uses less resources in product launch compared Apple although they are both at the top of the global smartphone market (Worstall, 2013). Although Samsung is a vast industrial conglomerate that manufacturers several things such as refrigerators and semiconductors, most people identifies it with smartphones, which is actually powering her growth. The company’s stunning fourth quarter results saw her profits rising to 87%. It is apparent that the phone division contributed to half of the profit and it does not break out smartphone revenues (Gupta, Kim and Levine, 2013). In 2011, Samsung sold almost 63.5 million in the quarter of which 40 million came from Samsung Galaxy S3 although the market seem to reach saturation in developed countries and the competition is high in developing countries. In the last quarter of 2011, Apple saw a remarkable profit of $13bn, which included 48 million of iPhones outpacing the Samsung Galaxy S3. Apple is even more dependent for profits for profits on smartphones compared to Samsung and Apple still takes a vast share of the mobile phone

Cause marketing costs Essay Example | Topics and Well Written Essays - 250 words

Cause marketing costs - Essay Example However, there are emerging issues even as multinational companies seek to maximize profits. Corporate social responsibility, international labor law, ethical issues and level competitive ground are the realities that companies have to address. Owing to the relatively tight competition in different industries, for-profit companies have to embrace non-price competitive strategies. Reconciling the increasing cost of production and profit margin explains the redefinition of value chain process. The source of the product does not matter in the current society as long as the brand is known. The companies are majoring on marketing and brand quality. Exploiting technology differences, labor and input factor cost variations across countries has become useful in surviving by the companies(Cullen & Parboteeah, 2014). Public image of the company is closely related to its product brand and this can be evidenced in the market size scramble by firms of the same products like Nike, Puma and Adidas among others in the sports and apparel industry. It can therefore be noted that globalization has restructured the socio-economic and political behavior of people which is reflected in the companies’ competitive trend and consumer

Strategic Organizational Leadership in Capstone Paper

Strategic Organizational Leadership in Capstone Paper Overview Chrysler Group LLC is the third largest American Automobile manufacturer and fifth largest in the American market with an 8.79% market share on sales of 931,402 units. (Chrysler, 2010) The Chrysler Group LLC was created in 2009 through a 20% purchase of Chrysler LLC by The Fiat Group. The Chrysler Group LLC consists of Chrysler, Jeep, Ram, Dodge, Mopar and Global Electric Motorcars (GEM) brands of vehicles and parts. The recent alliance between the Fiat Group and Chrysler Group LLC is said to better position both companies in the global market (Chrysler, 2010). Chrysler Group LLC dates date to 1925 when it was founded by Walter Chrysler. The original Chrysler Corporation merged with Daimler-Benz in 1996 to form Daimler-Chrysler. In 2007 the Chrysler division of Daimler-Chrysler was purchased by Cerberus Capital Management to form Chrysler LLC, the precursor to the current Chrysler Group LLC. Fiat Group was started in 1899. Both companies have a unique history of innovative and storied products (Chrysler, 2010). Having survived a brief Chapter 11 bankruptcy reorganization in 2009, the company position is positioning itself for an automotive resurrection by choosing a back-to-basics alliance with Fiat. The collaboration gives Chrysler access to the Italian companys small-car expertise and global markets, while still manufacturing its Chrysler brands, including Dodge, Jeep, and Ram vehicles. Chryslers trademarked MOPAR (MOtor PARts) division, with its 30% market share, carries over 280,000 parts, options, and accessories for vehicle customization; it expanding to incorporate Fiat parts. Chryslers GEM (Global Electric Motor Cars) makes neighborhood electric vehicles (NEVs). Headquartered in Auburn Hills, Mich., Chrysler Group LLCs product lineup features some of the worlds most recognizable vehicles models, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. History In 1920, the president of Buick and Vice President of General Motors (GM) resigned his positions in the GM Corporation following political differences with founder and then-president of General Motors William Durant. This former automotive Vice President was promptly approached by a group of investors to focus his business acumen in the fledgling automotive industry on a small, financially troubled New York company called Maxwell Motor Corporation. The one-time automotive vice president was installed as president of Maxwell Motor Company (Hyde, 2003). The mans name was Walter Percy Chrysler. In short order, Walter Chrysler brought the Maxwell Motor Corporation out of bankruptcy. The financial improvement was due in large part to Mr. Chrysler introducing a new Maxwell model- the Chrysler Six (Hyde, 2003). This car was very well received by the automobile buying public and went on to sell 32,000 units in its first year, generating a profit of over $4 million for the small company. On the heels of the success of the Chrysler Six, Walter Chrysler changed the name of the Maxwell Motor Corporation to the Chrysler Corporation. Capitalizing on the success of the initial Chrysler model, Walter Chrysler introduced 4 additional Chrysler models know as the Chrysler 50, the Chrysler 60 the Chrysler 70 and the Chrysler Imperial 80. Interestingly the model numbers were derived from the top speed of these new vehicles as gauged on level ground. As a point of reference, Fords Model T was, until the introduction of the new Chrysler models, the fastest road car with a top speed of 35mph. I t was these new Chrysler models that caused Henry Ford to notoriously shut the doors of the Ford Motor Company for nine months to create a replacement for the Model T. By the time Ford closed its doors to redesign its offering, Chrysler had established itself as formidable competition. With sales of 192,000 of these new models, Chrysler officially became the fifth largest automobile manufacturing company in the industry (Hyde, 2003). Walter Chrysler determined that to achieve the greatest manufacturing cost efficiency, he would have to build his own plants to produce the various parts needed for his vehicles. The capital expenditure required to do this was estimated at $75 million. While successful, the Chrysler Corporation could not afford this capital expense and so Walter Chrysler contacted the banking firm of Dillon Read and Company in New York; a firm that fatefully had just purchased the Dodge Corporation from the widows of the late Dodge Brothers. Dillon Read and Company was eager to do business with the well known Chrysler Corporation. As part of the arrangement, the Dodge Corporation became a division of the Chrysler Corporation. This merger effectively increased the size of the Chrysler Corporation fivefold. Shortly after the merger, the Chrysler Corporation unveiled its new, low cost Plymouth and Desoto models. In a reversal of strategy, Walter Chrysler ended his drive to bring all manufacturing in-house. He was wise to see that the speed with which the automotive industry was growing demanded greater flexibility that in-house manufacturing could provide. Outsourcing automobile components was more expensive but allowed for greater flexibility and a more rapid development cycle in designing new models. In this same period, Walter Chrysler made research and development a budgetary priority. Research and Development persevered at the presidency of Chrysler was This foresight allowed Chrysler to weather the Great Depression and emerge in a more sound financial position than many others in the automotive industry (Curcio, 2000) In 1931, Joseph E. Fields assumed the presidency of Chrysler from Walter Chrysler and in 1936 Walter Chrysler fully handed of the daily operation of the company. At the beginning of the 1940s the Chrysler Corporation, along with most other large American manufacturers switched to wartime production. The Chrysler Corporations Dodge, Plymouth and Chrysler models were put on hold while the company contributed to the production of wartime necessities including small ammunition, submarine nets and, perhaps most notably, B-29 bomber engines (Hyde, 2003). As American industry adjusted to post-war production needs, the Chrysler Corporation started to falter and performance began to wane. The vivacity and forward momentum that Walter Chrysler imparted to the company were no longer present. After the automotive technology boom of the 20s and 30s, the rate of innovate in the industry began to slow. Post-war Americas tastes began to change toward streamlined, nontraditional models and, at times, at the expense of reliability and built quality (Hyde, 2003). To some extent, flashy advertising was influencing buying decision more than quality, features and nameplate. Chrysler was detrimentally slow to react to this new America. In 1950, a long-time legal counsel for the Chrysler Corporation by the name of L. L. Colbert became president. He immediately took the reins of the company to institute managerial reforms with the help of a professional management consulting firm. Colbert concentrated on three areas; expanding into international markets, centralizing corporate management and refocusing the engineering department on innovation. Despite his decisive changes, Colberts efforts did little to improve Chryslers position in the industry. In two short years, Colbert was replaced as head of Chrysler by Lynn Townsend. In charge of the struggling company, Townsend proved to be more successful in his revival attempt. He sold, closed or otherwise divested of unproductive manufacturing facilities and downsized the labor force thereby improving efficiency. He purchased a single early model IBM computer which helped workforce reduction efforts by eliminating the need for almost 800 employees. The early 1950s saw the dawn of Total Quality Management Theory lead by pioneers in the field including W. E. Deming and A. V. Feigenbaum (Kreitner, 2007). Townsend seemed to take notice of this movement as his most notable achievement was a focused quality improvement effort that did boost sales and allowed Chrysler to offer a warranty unprecedented in the industry thus far. To further the momentum,. Townsend undertook an aggressive marketing campaign touting the new, improved quality of Chrysler vehicles. Where Colbert had failed, Townsend succeeded; Chrysler was again a stable, financially healthy and expanding corporation. As might be expected, with this new success came growth. In the midst of the American space age of the 1960s, Chrysler expanded to include an aerospace division and became a principal subcontractor for NASAs Saturn rocket program. Townsends consistent push to grow international business resulted in Chrysler plants in 19 countries by the end of the decade. At the onset of the 1970s, the American car market was feeling the effects of a rising consumer price index, increasing competition from foreign auto manufacturers, and the first signs of the crude oil crisis. In 1969, Chrysler reported losses of almost $5 million dollars and, with an infrastructure to support he growth of the 1960s, was operating at only 65% of capacity. Chrysler met this changing market climate with a product stable that included large, expensive, gas thirsty vehicles as well as smaller more economical cars. The company seemed more content to contend with the traditional American competition than to assess the changing market demand and consequently, Chrysler was faced with an excess inventory of the vehicles the market wasnt buying and a severe shortage of the vehicles the market was demanding. Despite significant price reductions to move its excess inventory, Chryslers financial fortune continued to slide. Chryslers presidency was assumed by John Riccardo. Ricardo, with an accounting background was intent on cutting operating costs. Total employment, payroll and individual budget area were affected by the cost cutting measures. This period also marks the first efforts to import and sell vehicles manufactured overseas. Chryslers shortsightedness with regard to market demand was not over. Despite the inconsistency between what the company was manufacturing and the market was demanding, Chrysler continued to make larger, less efficient models right into the Arab oil embargo. In 1974, Chrysler reported an unprecedented budget deficit of over $50 million. In 1975, the damage was five times as great at over $250 million in losses. The American auto market was severely impacted by several factors including inflation and the Arab oil embargo but Chryslers significant foreign interests were still showing a profit. This profit served to offset the domestic losses however, in 1978 Chrysler again reported losses of over $200 million. Riccardo continued to cut costs, consolidate the various divisions of the Chrysler Corporation and direct manufacturing efforts toward smaller, more efficient vehicles but the Chrysler Corporations financial health continued an unsustainable slide. Chrysler ended the 1970s on the brink of bankruptcy. The company was spared bankruptcy proceedings by federal intervention in the form of a $1.5 billion lifeline loan guarantee. This loan came with conditions including the requirement that Chrysler raise $2 billion in additional money on their own and they make significant management changes. This last requirement ended the tenure of J. J. Riccardo as president of Chrysler. Riccardo was replaced by charismatic industry veteran Lido Anthony Lee Iacocca. Where Riccardo was an accountant, Iacocca was adept at public relations and marketing. He employed these skills in communicating to both the workforce at the Chrysler Corporation and the public at large the need for federal intervention By the mid-1980s, the company was back on track and stronger than ever before. Chrysler benefited from the combined impacts of strong industry demand and shifting consumer preferences toward pickup trucks and minivans, products that dominated Chryslers lineup. By 1997, Chrysler reported annual sales of 2.9 million vehicles, record revenues of $61 billion, and record earnings of $2.8 billion. Chryslers year-end market capitalization was $22.8 billion and its US market share crossed over 16%. Chrysler had become one of the most profitable automotive companies in the world and had roughly $7.5 billion in cash on hand.2 Nick Colas, an analyst with Credit Suisse First Boston, declared: Chrysler has a better business model for building and selling cars than General Motors and Ford do.3 As profitable as Chrysler was, however, the company was not capitalizing on the growth of the global automotive industry. Since the company had made limited investments in overseas markets up to this point, finding a partner made the most strategic sense. On May 7, 1998, Chrysler merged with Daimler, the leading German luxury car manufacturer, for $36 billion of Daimler stock, the largest trans-Atlantic merger in history. The merger was orchestrated in order to create an efficient and lean automotive powerhouse that would better compete in the global marketplace. The transaction was reported as a merger of equals in the business press. The combined company would have a market capitalization close to $100 billion. In 1997, Daimler reported revenues of $62 billion and net income of $1.8 billion. Though Daimler was soundly profitable and had a strong foothold in the European market with its Daimler, Mercedes-Benz, and Smart Car brands, Daimlers US market share was less than 1%.4 Daimlers management hoped that Chrysler would give the company greater inroads into the lucrative US automotive market with its extensive dealership network and powerful brand name. During the early 1980s, Iacoccas skills as a superb television salesman were of crucial importance as Chrysler lost nearly $1.8 billion in 1980the largest loss ever for a U.S. companyand another $475 million in 1981, before returning to the black in 1982. In August 1983 Chrysler was able to pay off the government loan guarantees seven years early, with the government making a $350 million profit on its investment. Chryslers road to recovery was a difficult one, demanding the closure of several plants and the reduction of the companys workforce. Once restructured, Chrysler scrapped its plans to diversify and divested the Gulfstream Aerospace unit it had purchased five years earlier, selling it to a New York investment firm for $825 million in early 1990. Two other units in the companys Chrysler Technologies subsidiaryElectrospace Systems and Airborne Systemswere slated for divestiture as well, which underscored Iacoccas intent to create a leaner, more sharply focused company. Meanwhil e, there were two key developments in the 1980s that helped form the foundation for the 1990s resurgence: the introduction of the minivan in 1984 and the acquisition three years later of American Motors Corporation and its Jeep brand for $1.2 billion. Reorganized as such, Chrysler entered the 1990s braced for a full recovery, but the economy did not cooperate. The decline in automotive sales during the fourth quarter of 1989the companys first fourth quarter decline since 1982portended a more crippling slump to come, as an economic recession gripped businesses of all types, both domestically and abroad. Net income in 1990 slipped to $68 million, then plunged to a $795 million loss the following year, $411 million of which was attributable to losses incurred by the companys automotive operations. Mired in an economic downturn, Chrysler appeared destined for more of the same, rather than headed toward recovery as Iacocca had hoped, but part of the reason for 1991s losses also led to the companys first step toward genuine recovery. Partly to blame for the $795 million loss in 1991 were the high preproduction and introduction costs associated with Chryslers new Jeep Grand Cherokee and increased production costs at the companys St. Louis minivan plant. These two types of vehiclesminivans and sport utility vehiclesrepresented the key to Chryslers recovery. The popularity of these vehicles, coupled with significant price advantages over Japanese models, fueled Chryslers resurgence. In 1992, Chrysler turned its $795 million loss the year before into a $723 million gain. It was a signal achievement, accomplished in Iacoccas last year as CEO. Taking over during 1992 was Robert Eaton, who was hired away from GM, where he was head of European operations. Chrysler then went on to enjoy its most successful year ever, with 1994 earnings of $3.7 billion on revenues of $52.2 billion. The good news at Chrysler continued into the late 1990s, after the company managed to fend off a $22 billion buyout proposed by billionaire investor Kirk Kerkorian in 1995. The long prosperity and low gasoline prices of the middle to late 1990s created a huge demand for large vehicles, and Chrysler was producing hot models in each of the hottest segments: the Dodge Ram pickup truck; the Town Country minivan; and several sport utility vehiclesthe Jeep Grand Cherokee, the Jeep Wrangler, and the Dodge Durango. Questions about the quality of Chrysler products continued to pop up, but the companys share of the U.S. auto market reached as high as 16.7 percent in 1996, the highest level since 1968. In 1996, the year Chrysler moved into new headquarters in Auburn Hills, Michigan, sales reached $61.4 billion. The Creation and Early Years of DaimlerChrysler Daimler-Benz Chief Executive JÃ ¼rgen Schrempp had concluded as early as 1996 that his companys automotive operations needed a partner to compete in the increasingly globalized marketplace. Chryslers Eaton was drawing the same conclusion in 1997 based on two factors emerging around the same time: the Asian economic crisis, which was cutting into demand, and worldwide excess auto manufacturing capacity, which was looming and would inevitably lead to industry consolidation. With annual global overcapacity as high as 18.2 million vehicles predicted for the early 21st century, it became clearer that Daimler-Benz and Chrysler could survive as merely regional players if they continued to go it alone. After several months of negotiations, Daimler-Benz and Chrysler reached a merger agreement in May 1998 to create DaimlerChrysler AG in a $37 billion deal. The deal was consummated in November 1998, forming an auto behemoth with total revenues of $130 billion, factories in 34 countries on four continents, and combined annual unit sales of 4.4 million cars and trucks. The two companies fit well together geographically, Daimler strong in Europe and Chrysler in North America, and in terms of product lines, with Daimlers luxurious and high-quality passenger cars and Chryslers line of low-production-cost trucks, minivans, and sport utility vehicles. Although this was ostensibly a merger of equalsthe company set up co-headquarters in Stuttgart and Auburn Hills, naming Eaton and Schrempp co-chairmenit soon became clear that the Germans were taking over the Americans. DaimlerChrysler was set up as a German firm for tax and accounting purposes, and the early 2000 departures of Thomas Stallkamp , the initial head of DaimlerChryslers U.S. operations, and Eaton (who was originally slated to remain until as late as November 2001) left Schrempp in clear command of the company. During 1999 DaimlerChrysler concentrated on squeezing out $1.4 billion in annual cost savings from the integration of procurement and other functional departments. The company organized its automotive businesses into three divisions: Mercedes-Benz Passenger Cars/smart, the Chrysler Group, and Commercial Vehicles. In November 1999 DaimlerChrysler announced that it would begin phasing out the aging Plymouth brand. The Debis services division was merged with Chryslers services arm to form DaimlerChrysler Services, while DASA was renamed DaimlerChrysler Aerospace. Late in 1999 the company reached an agreement to merge DaimlerChrysler Aerospace with two other European aerospace firms, the French Aerospatiale Matra and the Spanish CASA, to form the European Aeronautic Defence and Space Company (EADS). DaimlerChrysler would hold a 30 percent stake in EADS, which would be the largest aerospace firm in Europe and the third largest in the world. In early 2000, DaimlerChrysler set the lofty goal of becoming the number one automaker in the world within three years. The companys most pressing needs were to bolster its presence in Asia, where less than 4 percent of the companys overall revenue was generated, and to gain a larger share of the small car market in Europe. Filling both of these bills was DaimlerChryslers purchase of a 34 percent stake in Mitsubishi Motors Corporation for $2 billion, a deal announced in late March. The company later increased its interest in Mitsubishi when it purchased a 3.3 percent stake from Volvo. In another key early 2000 development, DaimlerChrysler agreed to join with GM and Ford to create an Internet-based global business-to-business supplier exchange named Covisint. DaimlerChryslers lofty goal would remain unrealized however, as the company faced a host of challenges. The Chrysler Group division was plagued by high costs and weak sales which ultimately cost James P. Holden his CEO position. Buoyed by its strong sales in the mid-1990s, Chrysler had spent heavily on product development in the late 1990s and bolstered its work force while costs were skyrocketing. By the second half of 2000 Chrysler lost $1.8 billion while spending over $5 billion. Dieter Zetsche was tapped to reorganize the faltering U.S. division. He launched a major restructuring effort in February 2001 that included cutting $2 billion in costs, making additional cuts in supplier costs, slashing 20 percent of its workforce, and making changes to Chryslers product line that included the elimination of the Jeep Cherokee (the Grand Cherokee remained in the product line) and the launch of the Jeep Liberty. At the same time, global economies began to weaken in the aftermath of the September 11, 2001, terrorist attacks. To entice customers, car makers began offering buyer incentives that began to wreak havoc on profits. Industry analysts began to speculate that the 1998 merger may have been a mistakeSchrempps proclamation that the deal would create the most profitable car maker in world had indeed fallen short. In fact, the companys market capitalization was $38 billion in September 2003. Before the union Daimlers market cap had been $47 billion. Meanwhile, the companys Mercedes division plugged along launching the E-Class sedan, the SLK roadster, and the Maybach luxury vehicle. In 2003, Chrysler launched the Crossfire, a roadster developed with Mercedes components, and the Pacifica, a SUV/minivan. It also began to heavily market its powerful Hemi engine, which could be purchased for the Dodge Ram pickup and its passenger cars. In early 2004, Chryslers 300C sedan and the Dodge Magnum sports wagon made their debut. Competition remained fierce in the auto industry prompting DaimlerChrysler to make several changes in its strategy. In December 2003, the company sold its MTU Aero Engines business. That year the firm acquired a 43 percent stake in Mitsubishi Fuso Truck and Bus Corporation hoping to cash in on Asias growing truck market. Perhaps its most drastic move, however, came in April 2004 when DaimlerChryslers supervisory board voted against providing funds to bailout Mitsubishi Motors, which by now was struggling under losses and a huge debt load. Mitsubishi played a crucial role in Schrempps Asian expansion strategy and it developed the platforms for Chryslers compact and midsize cars. The failure to provide funds put a strain on the business relationship between the two and threatened to result in huge problems for Chrysler, which had cut back on engineering capacity as it relied on Mitsubishi to develop its small and mid-sized cars. At the same time, DaimlerChrysler moved ahead in the Chinese marketwithout Mitsubishi and without another partner, Hyundai. To bolster is presence in the region, DaimlerChrysler restructured its joint venture with Beijing Automotive Industry Holding Co. Ltd. and set plans in motion to tie up with Chinese Fujian Motor Industry Group and the Taiwanese China Motor Corporation to launch several cars in the Chinese market by 2005. Rumors circulated that DaimlerChryslers relationship with Hyundai was faltering as a result, and in 2004 the company signaled that it would sell its interest in the South Korean automaker. By 2004, Schrempps DaimlerChrysler was a far cry from what the 1998 merger promised to deliver. The companys financial record was lackluster, bogged down by Chryslers $637 million loss in 2003. DaimlerChrysler remained the worlds number three car maker, leaving the 2000 goalto become the number one auto company in the worldunfulfilled. Whether the merger would provide the hoped-for results remained to be seen. Literature Review Leadership is the process through which one individual influences the attitudes perceptions and motivations of other members of a group toward the achievement of a specific group or organizational goal (Greenberg Baron, 2008). Strategic leadership, by extension, is a leaders ability to foresee and proactively act on external conditions, and empower group members to implement change toward the strategic plan as necessary (Kreitner, 2007). Strategic change therefore is that change that happens as an organization moves toward the attainment of their strategic plan. (Kreitner, 2007). Strategic leadership is serves several functions, includes extending managerial influence through other group members, and makes organizations more able to successfully meet the need for change that is brought by ever quickening change in the market and market forces (Nickels et al., 2002). The ability to understand and analyze internal realities as well as market forces is a necessary component of strategic leadership. With this information in-hand, it is then necessary to perform complex information analyses. Appling a strategic management process successfully will aid in bringing about effective strategic leadership (Hitt and Keats, 1992). As this description suggests, strategic management is not without complexities, but it is critically necessary for successful strategic leadership. Many organization in todays business environment fall victim to the over-managed, under-led paradigm and so the understanding and successful implementation of strategic leadership is more important than ever (Kreitner, 2007). The successful application of strategic leadership starts at the top. By virtue of his or her position, the CEO should not consider delegating this specific duty to lower management. Once the CEO is effectively practicing strategic management, his or her methods may be adopted by other managers to effectively implement strategic management in the various divisions of an organization (Hitt, Ireland, and Hoskisson, 1995). Hitt, Ireland, and Hoskisson (1995) formulated a strategic leadership model which consists of six components; Determining strategic direction, exploiting and maintaining core competencies, developing human capitol, Sustaining effective corporate culture, emphasizing social responsibility and ethical practices, and establishing strategic controls. (1) Determining strategic direction; (2) Exploiting and maintaining core competencies; (3) Developing human capital; (4) Sustaining an effective corporate culture; (5) Emphasizing social responsibility and ethical practices; and (6) Establishing strategic controls. Determining strategic direction of an organization involves using all information available on market, competition, core competencies and well as foresight and vision to clearly define long range goals for the organization (Kreitner, 2007). Strategic intent means leveraging the firms internal resources, strengths, opportunities and core competencies to accomplish the goals that have been defined in the strategic planning process. Strategic directions give the members of the organization a clear path to attainment of the set goals (Kreitner, 2007). An organizations efforts can be considered strategic intent exists when all members of the organization or united in their pursuit of the specific benchmarks set forth by the strategic plan and belive that these goals are attainable and attainment will enable the organization to have a competitive advantage over other organizations in their industry. (Kreitner, 2007). Intel, Canon, and Xerox Microsoft are good example of corporations that have clearly discernable strategic intents (Loeb, 1993). Clear strategic intent requires effective strategic planning and effective strategic planning requires long range vision and foresight, usually five to ten years into the future. This long range vision must incorporate organizational and human resource strategy, design strategy, product planning strategy and information use and information system strategy and, finally, it must provide for a system of strategic control (Hunt, 1991). Exploiting and Maintaining Core Competencies is the second of the six components. Core competencies are the internal and external resources and the body of capabilities and expertise that give an organization its identity in the market and ultimately, its competitive advantages. Usually, core competencies relate to an organizations ability to produce their main products, be they material of informational. Some examples might include industrial manufacturing, research, customer interfaces and customer service, retail sales, technology or even specific patents held by the company. Unique market positioning, and unique customer benefits or product value are results of core competency and so, these things should be analyzed when determining core competency. A good question to ask is: why do our customers do business with us?. A main responsibility of strategic leaders in business today is to first identify, and then strengthen and grow their core competencies. Once core competencies are identified, they can then be utilized. As strategic leaders, corporate managers make decisions intended to help their firm develop, maintain, strengthen, leverage, and exploit core competencies. Exploiting core competencies involves sharing resources across units. In general, the most effective core competencies are based on intangible resources, which are less visible to competitors because they relate to employees knowledge or skills. Effective strategic leaders promote the sharing of intangible resources across business units in their firms (Hitt and Keats, 1992). In many large, diversified firms, core competencies are developed and applied across different units in the organization (economies of scope) to create a competitive advantage. Miller Beer, for example, has applied marketing and promotion competencies across its multiple businesses (Maruca, 1994). In many multinational corporations, the development, nurturing, and application of core competencies also facilitate managing complex relationships across business operating in different international markets. Whirlpool has emphasized competency across country borders (Lei, Hitt, and Bettis, 1990). 3. Developing Human Capital Human capital refers to the knowledge and skills of the organizations work force employees as a capital resource (Hitt, Ireland, and Hoskisson, 1995). Much of the development of American industry can be attributed to human capital. One-third of the gr

Analysis of The Scarlett Letter Essay -- Literary Analysis

Nathaniel Hawthorne was a man of business, politics, nature, morals, dedication and imagination who was greatly haunted by the actions of his Puritan ancestors (Gollin 360). Being one of the pioneers of noteworthy American literature, Hawthorne used the issues of his time and the history of Puritan New England as his settings. He was the son of Nathaniel Hathorne and Elizabeth Manning and was born on July 4, 1804 in Salem, Massachusetts. After his father’s death, Hawthorne and his family moved to their mother’s house. Later, he went to Bowdoin College and graduated in 1825. Here, he became friends with future U.S. president Franklin Pierce. He lacked interest in medicine, ministry and law, so he chose to write (Gollin 358). Perchance in shame of sharing a tie with men like John and William Hathorne, he then added a w to his last name. His early works were short stories put into periodicals and eventually into the Twice Told Tales which earned him fame. Then, he spent a year at both the Boston Custom House and the utopian Brook Farm. Both of these experiences stifled his imagination, and so he left. After marrying Sophia Peabody and having children, Hawthorne became destitute. So, he earned through Democratic Party ties a stable job at the Salem Custom House but lost it when the Whigs took over. So, he began to write again and produced his greatest acclaimed works. Eventually, President Pierce appointed him as the U.S. consul in Liverpool. From Liverpool, he moved to Italy, where he wrote a novel, back to England and finally back to Concord, Massachusetts. There, he died on May 19, 1864. Hawthorne covered the literary gamut with children’s books and short stories to powerful novels. Ultimately, Hawthorne represents how the issues ... ...Book Encyclopedia. Vol. 9. Chicago: World, 2009. 114-115. Print. Delaney, Bill. â€Å"Hawthorne, Nathaniel.† Magill’s Survey of American Literature. Rev. ed. Pasadena: Salem, 2007. Literary Reference Center. Web. 23 Dec. 2010. . Gollin, Rita K. â€Å"Hawthorne, Nathaniel.† American National Biography. Ed. Garraty and Carnes. Vol. 10. New York City : Oxford UP, 1999. 356-363. Print. Hawthorne, Nathaniel. â€Å"Nathaniel Hawthorne.† Preface. The Scarlet Letter. By Hawthorne. New York City: Bantam, 1988. N. pag. Print. - - -. The Scarlet Letter. 1850. New York City: Bantam, 1988. Print. Liukkonen, Petri, and Ari Pesonen. â€Å"Nathaniel Hawthorne.† Kirjasto. N.p., 2008. Web. 23 Dec. 2010. .

7s Model Samsung

Case Study 2. : Trade and Innovation in the Korean Information and Communication Technology Sector1 . Onodera, Osamu Kim, Hanna Earl OECD Journal: General Papers; 2008, Vol. 8 Issue 4, p109-155, 47p, 34 Charts, 20 Graphs This includes the strategy of the organisation, the innovation strategy, the culture in the organisation towards risk-taking and change, the motivation of employees, cross functional learning, knowledge management and the use of internal and external networks. â€Å"Employees’ willingness to take risks very much depends on the existence of a †noblame† culture. A strong culture fosters innovation only if it is built on norms such as accepting failure†¦Ã¢â‚¬  (Goffin & Mitchell, 2005, s. 265). †Multifunctional learning fosters innovative and learning by doing on the part of the employees and help them keep up to date with the latest developments. It also serves as a basis for creating a climate that can bring about organizational transition† (Takeuchi & Nonaka, 1986). â€Å"Organizations need to increase their innovative capacity and one powerful mechanism for doing so is to extend participation in the process to a much wider population. Mobilizing high levels of participation in the innovation process is unfamiliar and, for many organizations, relatively untested and apparently risky† (Bessant, 2003, s. 767). †Mobilizing and managing knowledge becomes a primary task and many recipes offered for achieving this depend on mobilizing a much higher level of participation in innovative problem-solving† (Bessant, 2003, s. 767) †Companies increasingly cannot expect to warehouse their technologies, waiting until their businesses make use of them† (Chesbrough, 2003, p. 32) Thirdly, the 7-S framework contains the very process of innovation. The process is divided into a series of relatively well-known steps in the â€Å"funnel† approach that seems to be standard in theory and praxis these days. However, it has been chosen to illustrate this differently than conventionally, because:†Ã¢â‚¬ ¦ The assumption of a sequential progression without feedback loops and recurring tasks is unreali stic †¦Ã¢â‚¬  (Saren, 1994, s. 633). Hence, the illustration of the process circling the innovation fundamentals. So what is contained within the process element of the 7-S framework? Again this can be illustrated by using a quotation from some of the state-of-the-art literature:† †¦ There is no doubt that for managers to increase the success rate of their new product efforts, they should master techniques for the planning, development, deployment, evaluation and control of necessary competencies throughout the new product (NPD) process, i. e. , from the generation of the new idea to the launch of the product to the marketplace †¦Ã¢â‚¬  (Tzokas et al. , 2004, s. 619). In other words, the innovation process is measured by looking at project management, project planning, top management involvement, project managers, and the application of innovation fundamentals across the seven stages of the process. Companywide, we will build a content-rich business structure that fosters innovation in hardware and software. Building from our creative platform, we will develop new businesses in health, the environment, and renewable energy. A company that epitomises the transformation of the Korean ICT sector is Samsung Electronics. Samsung Electronics is one of the world leaders in semiconductors, in particular DRAMs and fiash memories. Liquid Crystal Displays (LCDs), mobile phones, and digital appliances such as fiat panel TVs. While Samsung had quickly grown from an assembler of black and white TVs in the 196()s to one of the market leaders in DRAMs in the late 1980s, making use of foreign technology and based on foreign markets, it was generally a market follower rather than an innovator even in the late 1980s. Changes in the business environment in the early 1990s, i. . greater competition at the lower end of the market due to the increasing use of evolving production networks in the Asian region by Japanese producers, increased competition in the Korean domestic market due to progressive trade and investment liberalisation, and withdrawal of the generalised system of preference (GSP) privileges in export markets, triggered a transformation of Samsung with a greater emphasis on technology, increased global production and sourcing, and enhanced international sales and distribution. The fact that Samsung now has research facilities not only in Europe, US and Japan but also in Russia, India and most recently China, that it now has 27 manufacturing facilities in 12 countries, with overseas I 1E;CD JOtJRNAL; GENERAL PAreRS – VOLUME 2008/4 – ISSN -IMS-2821  © oe C D 2008 112-CASE STUDY 2 production reaching 35. 9% in 2007, and that it has doubled its sales tietwork from 32 sales organisations in 23 countries in 2000, to 60 in 48 countries iti all regions, shows how global Satnsung's operations have become as a result hich has become one of the leading firms in the ICT industry worldwide from a modest position in the past two decades. The study assesses how regulatory, trade, and investment policy choices have helped, alongside other key policies, to provide the right framework conditions for technology absorption and innovation. In addition, it examines how the private sector, and more particularly Samsung, has taken advantage of those conditions to enhance its innovation capacity. The objective of this study is not to provide a comprehensive history of Korea's development or to evaluate Korea's innovation policy. Rather it is an attempt to shed some light on the relationship between trade and innovation from the recent rapid growth of Korea's ICT industry in the past 15 years. focuses on Samsung's strategies in international R;D, manufacturing, sourcing, supply chain management, sales and distribution. (Other key determinants of Samsung's success include its strong branding and marketing strategy, its investment strategy of investing in large capacity when other companies are cautious, and effective human resource management. The Samsung Group is today the largest chaebol in Korea, which has businesses spanning from electronics and electro-mechanics, shipbuilding and engineering, petrochemicals and fine chemicals, life insurance and securities to trading and constructions. Samsung Electronics is its largest company with 2006 consolidated sales of OECD JOURNAL: GENERAL PAI^RS – VOLUME 2008/4 – [SSN -1995-2S21 O OECD 2U0B CASE STUDY 2 – 1 4 1 USD 92 billion and net income of USD 8. 5 billion. It employs 128 000 people in more than 120 offices in 57 countries, and is organized into five major businesses: semiconductors (memory chips, system LSI devices and hard disc drives), LCDs (TFTLCD products in various applications). Telecommunication networks (mobile phones, telecommunication systems), digital appliances (washing machines, refrigerators, air conditioners and stoves) and digital media (TVs, audio/video products, PCs and computer peripherals) (Samsung. 2006). It is among the global leaders in semiconductor such as DRAM. SRAM chips, and flash memory. CDMA mobile handsets, and digital media technologies such as Liquid Crystal Displays (LCDs), and has fast become a truly global multinational company. For example, value of tbe Samsung brand was USD 16. 1 billion in 2006 in the Brand Value Survey conducted by Business week magazine and Intcrbrand, or 20†³Ã¢â‚¬Ëœ among all corporations in tbe worid and 7†³Ã¢â‚¬Ëœ in the IT sector. Samsung Electronics is also ranked 27'*† in the worid on Fortune magazine's list of Global Most Admired Companies. Samsung's success in particulariy noteworthy in light of two factors: first, the company's medium sized domestic market (Korea has a population of 48 million) and, second, its origins and recent history. Samsung started off in 1938 as a trading company, and while it entered two manufacturing sectors {i. e. sugar and textiles) in the mid-1950s, it was not until 1969 that the firm entered the electronics industry with the incorporation of Samsung Electronics Co. One major characteristic of Samsung's entry into the electronics industry was its reliance on foreign technology. ^^ Table 21 provides a brief overview of Samsung's evolution to the 1990s. Table 21. Samsung tecbnological capabilities and features of international production 1970s 1980s 1990s 20008 Key activities Main sources of capabilities Level of technologicai capabilities International production and scope of interaction Conglomerate diversification J/V partners, Original Equipment f/lanufacturer (OEM) buyers and overseas training Capabilities in mass production (TVs) Entry into DRAM market OEM buyers, foreign licensing, reverse engineering Broader product range (VCR, MWO, DRAfvl, components) but very weak in ability to introduce a major change of product US & EC for lowend markets (limited success). Centralised intrafirm interaction Organisational reform, internationalisation Acquisitions. strategic alliances, in-house R&D Continued weakness in product development International production of lowend items in peripheral regions. Moving toward decentralised intraand inter-firm interaction Transformation into a global company. In-house R&D, strategic alliances and increasing emphasis on intellectual property. Strengthened R&D and design capabilities, with a core competency in product development. Creation of a global production network ainly in the Asian region but also in other parts of the globe as well. Source : Kim (1994) for 1970s – 1990s. IH-XD JOl'RN. M. : GENERAL PAPERS – VOLl/ME 2008/4 -ISSN -1995-2821  ©OECD 2008 142-CASE STUDY 2 1970s – Dependence on foreign technology Given its lack of expetience in electronics, Samsung had no choice but to turn to foreign sources of technology in management, production in marketing and Samsung established a close relationship with Japanese and US firms. It created several joint ventures with foreign technology suppliers such as NEC, Sanyo, Corning Glass Works and other companies. ^ It reached numerous agreements to assemble electronic products for foreign original equipment manufacturer (OEM) buyers, who provided it with design and engineering support as well as with an international market. Samsung also relied extensively on outside suppliers for the purchase of core components. However. Samsung and its affiliated partners have increased its capabilities for parts supply and for some parts even began to ship parts to Korean and Japanese customers. Samsung electronics expanded and improved its assembling capacity, producing ten million black and white TV sets by the end of the 1970s. Most sales were through OEM channels. OEM buyers provided Samsung with product design, quality control and engineering support, leaving Samsung to increase its manufacturing capability. Samsung continued to increase access to other international distributors and was able to renegotiate TU and ease initial geographical restrictions imposed by its jomt venture partners. † Samsung expanded its OEM channels and capabilities by adding two new products – VCRs and microwave ovens. As Samsung was unable to gain foreign licensing for these products, it used â€Å"reverse engineering†, and succeeded in developing its own microwave in 1978 and VCR in 1979. Samsung further diversified into the telecommunication sector through a 1977 JV with GTE of the US. In 1974, Samsung acquired Korea Semiconductor Co. (KSC), a joint venture between Korea Engineering & Manufacturing Co. and Integrated Circuit International, a US firm, which manufactured simple integrated circuits for electr onic watches, which formed the basis for Samsung's entry into the dynamic random access memories (DRAMs) business. 980s and early 1990s – Upgrading of technology – entry into DRAMs The 1980s was the period of expansion and diversification for Samsung. As Samsung began to experience limitations on growth in the CTW and VCR markets due to lack of component availability. Samsung made a decision to enter the IC business. To achieve its objective, Samsung once again tried to learn foreign technology through a broad range of formal and informal contacts, and decided to enter the DRAM market which was considered more suitable for Samsung which had familiarity with incremental process innovation and large scale manufacturing efficiency both of which could become sources of competitive advantage in this sector. In 1983, Samsung licensed a DRAM design from Micron Technology, a US company, and entered the merchant market for DRAMs which require the most advanced manufacturing technologies and huge capital outlays. In 1983, Samsung successfully developed a 64K-DRAM, followed by a 256K in 1984. and a lM DRAM in 1986. Samsung continued to upgrade its technology and decreased its reliance on outside technology, except for capital equipment and thus rose from a virtually zero share in memory chips in 1984 to be the world market leader in DRAMs by 1992. Table 22 shows how Samsung has gradually caught up with technology leaders: Samsung kept closing the gap between itself and the technology leaders, and has been the leader in DRAM development since 1992 when it the first company in the worid to develop 64 Mbit DRAM. OECD JOURNAL: GENERAL PAPERS – VOLUME 2008/4 – ISSN -1995-2821 O OECD ZIKlti CASE STUDY 2 – 1 4 3 Table 22. Samsung technology gap in DRAM 64Kbit' 256Kbit IMblt 4Mbit' 16Mblt 64Mbit 256Mblt IGbIt 4GbIt First development company Intel NEC Toshiba Hitachi ^^jj^^†^^ Samsung Samsung Samsung Samsung Development date by Leader 06/1979 01/1981 07/1984 08/1987 08/1992 08/1994 11/1996 12/2000 Development dale by Samsung 12/1983 01/1984 06/1986 02/1988 07/1990 08/1992 08/1994 '11/1996 '12/2000 Gap between Leader and Samsunq ^^^†Ã¢â‚¬ ^ ^ ^^^^^ ^ ^^^'^ ^ months 3 months – . . . 1 Design licensing from Micron Technology; Process technology from Sharp 2 Samsung with two Korean partners Source. Kim (1997), Siegel and Chang (2006), Samsung website (http://www. samsung. com). By the late 1980s, Samsung was able to produce a wide variety of semiconductors for use in phone sets, computers, private automatic branch exchanges (PABXs). acsimile machines, and VCRs (Kim. 1997). As a result, it was able to reduce dependency on Japanese suppliers for core components. Nonetheless the majority of the DRAMs produced in Korea were exported to foreign countries and the other non-memory chips required (I. e. microprocessors) continued to be imported from other countries (Kim , 1998). The strong resource shift to semiconductors meant that development of other capabilities suffered to some extent. While Samsung Electronics Co. had a minor change capability, it remained weak in major change capability (Kim, 1997). As a result, it continued to use license technology from foreign companies for its main export products in this period. ‘ OEM channels remained dominant in the company sales at over 65% of total sales even in 1988. and Samsung maintained close relationships with OEM buyers such as JC Penney, Sears Roebuck, GTE, Toshiba, IBM, Hewlett Packard, RCA and Crown Corporation (Kim. 1997). It was towards the end of the 1980s that Samsung slowly started to build its own technological capability with the acquisition in 1988 of Micro Five Corporation, a US company, and with the establishment of Samsung Infonnation Systems America Inc. SISA) in Silicon Valley to support export activities as well as to gather information on ICT products. It was also in this period that Samsung began its search for foreign talent as a means to compensate for its lack of internal expertise (Box 3). It was also in the 1980s that Samsung started to internationalise its production for certain products such as colo ur TVs, audio products and microwave ovens. Samsung also sowed the seeds of its telecom business at this time, acquiring Korea Telecommunications in 1980 and started production of a cellular phone in 1986. Box 3, Technology transfer through hiring One of the ways Samsung has overcome its lack of technical capabilities has been through recruiting top level engineers from world leading competitors. ^† In early days, Samsung focused on recruiting Korean engineers working at foreign companies. Hwang Chang-gyu, a former president of Samsung Electronics, was recruited from Intel, and Chin Daeje. another former president, worked at IBM's Watson Research Center before being hired by Samsung, to name just a few. These people have significantly contributed to the transformation of Samsung from a me-too memory producer to the world leader by bringing cutting-edge technical knowledge and managerial skills. Samsung also hired foreigners in order to fill the gap it identifies to upgrade its technical capabilities. It is widely known that Shigeo Fukuda, who was hired from Kyocera, played a critical role in the Samsung's new initiative in 1993 known as â€Å"New Management. † It is believed that his critical comments on Samsung during the 1980s pushed the company to enhance its product development processes and design capabilities. More recently hiring has become increasingly diverse from all over the world including David Still (US), David Henri (France). Roman Sepeda (US). Nelson Allen {US). Hao In (China), and Tung Wang (China). OECD JOURNAI. : GENERAL PAPERS – VOLUME 2008/4 – ISSN -1995-282! O OECD 2008 144-CASE STUDY 2 Transformation into a global company – 1993 and onwards Several changes in the business environment faced Samsung in tbe early 1990s. First, lower trade barriers and transportation costs and enhanced ICT from the latter 1980s and the 1990s resulted in greater fragmentation of the ICT industry. In the late 1980s, Japanese producers rapidly increased overseas production in response to increased competition from Korean competitors and the rapid appreciation of the yen, which led to greater competition at the lower end of the market. Secondly, Korea's domestic electronics market which had long been protected from foreign competition was gradually liberalised as Korea prepared to join the ranks of industrial nations. † In 1989. import quotas on consumer electronics were removed. By 1993 there was a plan to cut the average tariff rate below 10% for all imported electronics goods. The number of items subject to the import diversification programme wbich shielded the Korean market from Japanese competitors was steadily decreased with a schedule put in place for abolition in 1999. Thirdly, on the export side, the generalised system of preferences privileges were withdrawn from Korean electronics goods by the US and EC in 1988. The Won also started to appreciate against the dollar making exports from Korea less attractive. The above changes in the business environment led to a strong initiative headed by the Chairman Kun-Hee-Lee in 1993 lo become a truly global company. ‘ Under this new initiative, Samsung began its transformation from a successful company to one of the global leaders in the industry. There was a renewed emphasis placed on quality, and several new products were subsequently introduced such as the TFT-LCD and CDMA mobile handsets. The Asian financial crisis presented a further challenge as the domestic market plunged, and Samsung had to unde rgo a fundamental restructuring of its activities, exiting from numerous businesses, cutting 30% of its workforce and cutting its debt-toequity ratio from 300% to 30%. However, the Asian crisis also presented an opportunity for Samsung to consolidate its domestic market as competitors weakened their positions, while shifting more of its resources to the Liquid Crystal Display (LCD) and mobile phone businesses which has allowed it to diversify its revenues. The growth has been particularly strong in the CDMA mobile handset market, where Samsung has leapt from almost a negligible share in the global market to number one in CDMA pbones with a share of about 30%, and number two in the global market overall bebind Nokia. Below we focus on three main strategic responses of Samsung: greater emphasis on technology, global productions and sourcing, and international sales and distribution. Greater focus on technology (globalisation of R&D and strategic alliances) Samsung's R;D expenditure in Korea bas continuously increased both in terms of amount and as a percentage of sales, on average 18% annually from 2002 to 2006, and now approaches 10% of total sales (Figure 21). ‘^ Tbe proportion of R&D staff has jumped from 16% in 1997 to 24% in 2006, and the company plans to push it up to 32% by 2010. The number of scientists and engineers at various research centres in Korea has increased by 70% since 2001. Table 23 indicates how Samsung has aggressively recruited scientists and engineers with graduate degrees; tbe number of Ph. D. ‘s is up by 50% and the number of Master's degree holders has been more tban doubled. Samsung bas also changed its patenting activities since the early 1990s (Table 24). While Samsung only bad 1 704 patents for applications made before 1994, it was granted over 2 600 patents for applications made in the three yeai- period 1994-1996, and has consistently been granted over 1 000 patents since then. * This shows how Samsung has OECD JOURNAL: GENERAL PAPERS – VOLUME 2008/4 – ISSN -IWS-2821  ® OECD 200s CASESTUDY2-145 become aggressive in the application of patents in the United States as part of its technology strategy. Figure 21. Samsung Electronics R&D expenditures 12. 00* 10,00% 0. 00% 2002 2UU3 2001 2005 2006 Table 23. Nunfiber of scientist and engineers in Samsung research laboratories Period Ph. D. Master's Bachelor Total 2001-02 2003-04 2005-06 1 039 873 1 537 2 980 3 453 8 320 6 038 6815 7 363 10 057 11 141 17 220 Table 24. Number of Samsung patents in the United States 1 Patents by year of grant Patents by application year Patents by year of grant {cont. ) Patents by application year (cont. ) Pre-1994 850 1 704 2001 1 446 1 550 1994 412 498 2002 1 328 1 804 1995 423 656 2003 1 313 2412 1996 485 1 532 2004 1 604 2 005 1997 584 1 613 2005 1 641 890 1998 1 305 1 845 2006 2 451 216 1999 1 542 1470 2007 2 723 13 2000 1 437 1 336 Total 19 544 19 544 Source : Based on US Patent and Trademark Office (2007). Samsung's efforts to strengthen its research capabilities have not been limited to Korea. In order to improve responsiveness to the local demand conditions and tap into the pool of cutting edge scientists and engineers, the company established R&D centres in various paits of the worid (Table 24). Samsung started by setting up Samsung Information Systems America (SISA) in Silicon Valley in 1988, followed by Samsung Electronics Research Institute in London in 1991. These two research facilities are typical examples of R&D facilities set up to monitor abroad as is the case with the Dallas and OECD JOURNAL: GENERAL PAPERS – VOLUME 2008/4 – ISSN -1995-2821 O CffiCD 2008 †¢ ] †¢ †¢ ‘ 146-CASESTUDY2 Yokohama facilities in 1997. More interestingly, the company has rapidly expanded its global network of research centres with the objective of utilising the foreign pool of research talent starting with Russia (1993), India (1996) and the three recently added research centres in China focusing on semiconductor, mobile telecommunications, and electronics. Samsung has also seriously increased the size and capabilities of the foreign research centres: its research centre in Moscow had only one Ph. D. and seven Masters in 2001 and now has ten Ph. D. ‘s and 29 Masters; its Bangalore software facility had no Ph. D. , 17 Masters, and 37 Bachelors in 2001 and now hires four Ph. D. ‘s, 179 Masters, and 164 Bachelors. Table 25. Samsung R;D facilities Research centre Samsung Information Systems America Samsung Electronics Research Institute Moscow Samsung Research Centre Samsung Electronics India Software Operations Dallas Telecom Laboratory Samsung Telecom Research Israel Samsung Yokohama Research Institute Beijing Samsung Telecommunication Samsung Semiconductor China R;D Samsung Electronics China R;D Location San Jose London Moscow Bangalore Dallas Yakum Yokohama Beijing Suzhou Nanjing Established 1988 1991 1993 1996 1997 1997 1997 2000 2003 2004 Core tasks Strategic parts and components, core technologies Mobile phones and digital TV software Optics, software algorithms and other new technologies System software for digital products, protocols for wired/wireless networks and handsets Next generation telecommunications systems Hebrew software for mobile phones Core next-generation parts and components, digital technologies Mobile telecommunications standardization and commercialization for China Semiconductor packages and solutions Software, digital TVs and MP3 players for Chin While, Samsung had already begun to use strategic alliances especially for acquiring technologies, the increasing R;D capabilities of Samsung is allowing it to benefit from strategic alliances in developing new cutting edge technologies (Table 26). Because there is an increasing convergence of technologies, for example between telecommunications and broadcasting, mobile phones and personal computers, telecommunication equipment and household appliances, it is becoming increasingly difficult and expensive to conduct the research and development necessary to cover all technology areas in one company. Samsung, therefore, has been using its technology base to conduct strategic alliances to build new strategic capabilities. OECD JOURNAL: GEKERAL PAPERS – VOLUME 2008/4 – ISSN -1993-2821 O OECD 2130 » i' Partners Table 26. Date Selection of recent strategic alliances Areas of cooperation CASE STUDY 2 -Ul Nokia April 2007 Limo Alcatel Sony (S-LCD) IBM Intel & Microsoft Discovery Salvarani Sun Microsystems VDL Charter Bang & Olufsen Kent State University Qualcomm Toshiba (TSST) Sony (S-LCD) IBM Dell Hewlett-Packard Disney Napster Sony NEC Matsushita Microsoft January 2007 October 2006 July 2006 March 2006 March 2006 September 2005 July 2005 July 2005 February 2005 January 2005 November 2004 October 2004 July 2004 April 2004 Maroh 2004 March 2004 January 2004 September 2003 September 2003 September 2003 August 2003 July 2003 January 2003 November 2001 Co-develop technology for handsets and DVB-H standardisation solutions Establish a joint venture for developing a Linux platform (SAMSUNG Electronics, Vodafone. DoCoMo, Motorola and NEC) Cooperate on satellite DVB-H Jointly invest in 8th-generation LCD line (2200mm x 2500mm motherglass) Co-develop and market technologies for industrial printer solutions Co-develop UMPCs Cooperate on high-definition contents Co-develop new built in products combining household electronics and furniture Cooperation in solution business and next-generation business computing systems Cooperate in commercialisation of terrestrial DMB Co-develop cable broadcasting receiver and set-tcp box for digital TV Full Duplex service Partner in home theatre business Co-develop display technologies Cooperation in MDDI (Mobile Display Data Interface) technology Develop and market optical storage devices Establish joint venture for 7th generation LCD (1870 x 2200 mm) line Co-develop nano-logic process technologies Supply multi-functional laser printers Share technology for ink-jet printers Supply â€Å"Movie Beam† set-top box for VOD Co-develop and market SAMSUNG-Napster player Expand and consolidate memory stick business Cooperate in high-end business computer systems Standardise technology, co-produce and jointly market DVD recorders Co-develop digital household electronics Source: Based on Samsung homepage. OECD JOURNAL; GENERAL PAPERS – VOLUME 20U8/4 – ISSN -1995-2821 O OECD 2008 148-CASE STUDY 2 Globalisation of the production network and global sourcing Samsung Electronics began to build its global production network in the early 1980s when it established its first manufacturing facilities in the U. S. and Portugal. It went on to establish a subsidiary in the UK (1987). Mexico (1988) and Thailand in 1988. Since then, the company has continued to expand the network by adding new countries to the network as well as setting up new facilities in countries where it has already established its production facility. In 1989. Samsung further set up production subsidiaries in Spain, China. Hungary and Turkey. Table 27 lists the countries where the company has its production facilities and illustrates that the company has been selectively expanding its global production network. Table 28 shows how overseas production is gradually increasing in recent years reaching 35. 9% in 2007. It should be noted that while this figure is a measurable increase from the levels in tbe early 1990s, it remains considerably smaller than comparable figures for Japanese electronics companies which exceeded 70% as of the early 1990s (Table 8). The major products manufactured in overseas facilities are consumer electronics products such as TVs. VCRs, refrigerators, and microwave ovens. The company's Mexican production subsidiaries produce flat-screen TVs and LCD TVs and export them to the US and other Latin American countries. As Mexico is a member of NAFTA, Samsung's exports to the U. S. from Mexican plants are exempt of import tariffs. Samsung Electronics Hungarian Co. Ltd.. established in 1989, produces 3. 2 million TVs annually and exports them to Western and Eastern Europe, and Central Asia. † ‘ Recently, Samsung announced to increase its production capacity of the mobile phone manufacturing plant in Haryana, India from one million to three million units per year. In addition to the importance of the local market, India is considered as a strategic alternative to China to hedge tbe uncertainty from relying heavily on Chinese operations. â€Å"†Ã¢â‚¬Ëœ In the semiconductor sector, Samsung pursues a triad strategy: Giheung complex in Korea as the R&D and frontier semiconductor manufacturing hub. the American facilities in Austin. Texas as strategic manufacturing hub for the Americas, and the Suzbou complex in China as the global testing and packaging hub. ^^ Table 27. Samsung electronics global production network* Korea North America Asia Pacific Europe South America Middle East and Africa CIS 2000 Six Facilities Mexico, U. S. China(7), India, lndonesia(2), Maiaysia(2), Thaiiand, Vietnam Hungary, Spain, U. K. Brazil None Uzbekistan 2006 Eight Facilities Canada, Mexico(2}, U. S. Ct]ir)a(13). india(2). Indonesia, Malaysia(2), Philippines, Thaiiand, Vietnam Hungary, Slovaiiia None None None † The number in parentheses is tlie number ol subsidiaries in the country; Countries in italics are those newly added to the list between 2000 and 2006. Source: Samsung Electronics' website (www. amsung. com/us). OECD JOURNAL: GENERAL PAPERS – VOLUME 2008/4 – ISSN -I9;I5-282I O OECD 2008 CASE STUDY 2 – 1 4 9 Table 28. Samsung production network (KRW million) 2003 2004 2005 2006 2007 Total Domestic production Overseas production 64 817 456 100% 43 582 016 67. 2% 21 235 440 32. 8% 81 57 24 963 009 100% 632 359 70. 3% 330 650 29. 7% 80 629 510 100% 57 457 670 71. 3% 23 171 840 28. 7% 85 58 26 834604 100% 972 765 68. 7% 861 839 31. 3% 98 507 817 100% 63 175 968 64. 1% 35 331 849 35. 9% Source: Korean Government. International sales and distribution Samsung's initial expansion of international sales was through Samsung Corporation, the group affiliate involved in general overseas trading in the early 1970s. While this may have aided Samsung initially, it blocked Samsung Electronics† further expansion and in 1978, Samsung established its own sales affiliate in the United States for the first time. Since then, Samsung Electronics has continuously expanded its sales and distribution network around the world (Table 29). In 2000, the company had a network of 32 sales organizations in 23 countries and its primary emphasis was on North American and European markets. However, the company doubled its sales subsidiaries to 60 in 48 countries over six years, and it is now paying more attention to emerging markets, including Asia Pacific. Middle East, Africa. CIS, and South America. According to Samsung Electronics' homepage as of 2008, Samsung had a total of 53 sales subsidiaries and branch ofllces in 36 countries. ^'^ Samsung has achieved over three quarters of its sales overseas in recent years (Table 30). Table 29. Samsung electronics global network of sales subsidiaries* 2000 2006 North America Canada, Mexico, United States (6) Canada, Mexico, United States (4) Asia Pacific Europe South America Middle East and Africa CIS Australia, Hong Kong. India, Japan, Philippines, Singapore, Taiwan France, Germany{2), Italy, Poland, Portugai, Sweden, The Netherlands(2), U. K. (2) Argentina, Colombia, Panama South Africa, U. A. E. Russia Australia, China(6). Hong Kong. lndia(2). Indonesia. Japan. Malaysia. Pakistan. Philippines, Singapore. Taiwan, Thailand. Vietnam Austria, France, Germany(2), Greece, Hungary. Italy, Poland, Portugal, Spain, Sweden, Netherlands. U. K. (2 Argentina, Brazil. Chile, Colombia, Panama, Peru Algeria. Iran. Jordan, Kenya. Morocco. Nigeria. Saudi Arabia. South Africa. Tunisia. Turkey. U. A. E. Kazakhstan. Russia. Ukraine. Uzbekistan The number in parentheses is the number of subsidiaries in the country; COUNTRIES in italics are those newly added to the list between 2000 and 2006. Source: Samsung Eiectronics' website (www. samsung. com/us). UKCD JOURNAL: GENERAL PAPERS – VOLUME 2008/4 – ISSN -1W5-2S2I  © OECD 2008 150-CASE STUDY 2 Table 30. Samsung sates network 2003 2004 2005 2006 2007 Domestic sales Overseas sales % of overseas sales to total Source : Korean Government