Marketing Plan

by Matt Bacak
Creating a marketing plan for your business is crucial. Without one, it would be difficult for a business to generate revenue and successfully make a profit. It's essential you devise a plan that will clearly define the value of your products or services, with the end result benefiting your customers.

Gathering What Counts

There are four major areas that you must have information about before creating a marketing plan: business resume`, target market, product message, and 'how-to' get the message to prospective customers (advertising).

Business Resume: Clarity is the objective of a business resume`. Within the text, list the strengths of your product or service. Think of it as molding your knowledge. After all, would you write a marketing plan about something you know nothing about?

Target Market: Five simple questions will assist you in identifying your target market. Who are they? What is their age? What is the average income? What is their status? Do they have children? It's important that you evaluate your target market to determine 'what' product or service would sell the best.

Product Message: A product message is a 'direct call to action.' This message must create value in the minds of everyone, that hears it, and for every feature, you offer a direct benefit to the customer must be demonstrated.

Advertising: Advertising is an appealing and compelling invitation to buy your product or service. It is an investment that should never be an expense. Finding the right advertisement takes trial and error, what marketers` refer to as “test” advertising. First time out of the box and you can't expect immediate results.

Every business needs an outline of how they plan to approach the market. Make certain that you address the following questions in the process.

1. What medium is the most popular among your target market? (TV or Radio)
2. What is the percentage of participants in watching or listening to these mediums?
3. Do they read the local paper or magazine?
4. Should you consider direct mail?

Think of writing a marketing plan as breaking down the important elements and charting a path to success. These strategies will be of great assistance when faced with possibility of failure. Business owners need to step into the world of marketing with confidence and knowing where to begin writing your marketing plan is a start.

Matt Bacak became "#1 Best Selling Author" in just a few short hours. Recent Entrepreneur Magazine’s e-Biz radio show host is turning Authors, Speakers, and Experts into Overnight Success Stories. Discover The Secrets To Unleash The Powerful Promoter In You! Sign up for Matt Bacak's Promoting Tips Ezine ($100 value) just visit his website at http://www.powerfulpromoter.com or http://promotingtips.com

Don't Plan Your Business If You Plan To Fail!

by Chris Stirling
So you have a great idea for a profitable online business. Before you can do anything with your business, be sure that you have a plan before. This is not the time to “pick it up as you go”. These are some basic things that should be included in your business plan.

The first part of your plan must consider your target market. The target market is the customers that you expect to see visiting your site. For example will your product be more appealing to college students or single moms? Your plan should clearly state who is your target market?

Once your target market is established you need to research the various methods for advertising online to advertise where your target market will se it. You should become educated about search engines and how they work since each one is different. Also be sure that you know how to submit your site to search engines. You should be prepared to spend a small amount of money on advertising, but the profits that you will gain from the advertisements will prove to be money well spent.

When advertising consider the competition for your business. Visit sites that are advertising similar businesses as yours. Find out the cost, and how they are marketing their business. Finds out the pros and cons of their business and try to improve your business based on their flaws. When you are advertising and checking out the competition you need to think about pricing. Pricing can play a big role in the success of your product since selling a product well below the average price may lead customer to think that there is a problem with the product or that it is not of the best quality. However, pricing items too high could also detour customers. See what your competition is charging for their products or services.

Finally you will need to consider the different methods of payment that you will accept. By not accept credit cards, you should be ready to give up half if not more of your sales. If you decide to accept credit cards will you use a merchant account or will you use a third party credit card processing centre? Both will help you get started and the third party processing centre will handle all of the business so you don’t have to. You should decide which you will use and also if you will accept checks or money orders. It is essential to have a secure server when taking credit cards.

These few things will help your online business to become a great success and also provide you with peace of mind knowing that you have thoroughly thought about and planned for the opening of your online business.

Chris Stirling's website is dedicated to help YOU start your own profitable business on the Internet within the next 24 hours... To learn more, visit: http://www.stirls.com
Visit his Home Based Biz Blog http://www.stirls.com/blog
http://www.marketingsource.com/articles/view/2889

strategy - what is strategy?

Overall Definition:

Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows:

"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".

In other words, strategy is about:

* Where is the business trying to get to in the long-term (direction)

* Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope)

* How can the business perform better than the competition in those markets? (advantage)?

* What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)?

* What external, environmental factors affect the businesses' ability to compete? (environment)?

* What are the values and expectations of those who have power in and around the business? (stakeholders)

Strategy at Different Levels of a Business

Strategies exist at several levels in any organisation - ranging from the overall business (or group of businesses) through to individuals working in it.

Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a "mission statement".

Business Unit Strategy - is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.

Operational Strategy - is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.

How Strategy is Managed - Strategic Management

In its broadest sense, strategic management is about taking "strategic decisions" - decisions that answer the questions above.

In practice, a thorough strategic management process has three main components, shown in the figure below:

Strategic Analysis

This is all about the analysing the strength of businesses' position and understanding the important external factors that may influence that position. The process of Strategic Analysis can be assisted by a number of tools, including:

PEST Analysis - a technique for understanding the "environment" in which a business operates

Scenario Planning - a technique that builds various plausible views of possible futures for a business

Five Forces Analysis - a technique for identifying the forces which affect the level of competition in an industry

Market Segmentation - a technique which seeks to identify similarities and differences between groups of customers or users

Directional Policy Matrix - a technique which summarises the competitive strength of a businesses operations in specific markets

Competitor Analysis - a wide range of techniques and analysis that seeks to summarise a businesses' overall competitive position

Critical Success Factor Analysis - a technique to identify those areas in which a business must outperform the competition in order to succeed

SWOT Analysis - a useful summary technique for summarising the key issues arising from an assessment of a businesses "internal" position and "external" environmental influences.

Strategic Choice

This process involves understanding the nature of stakeholder expectations (the "ground rules"), identifying strategic options, and then evaluating and selecting strategic options.

Strategy Implementation

Often the hardest part. When a strategy has been analysed and selected, the task is then to translate it into organisational action.

http://tutor2u.net/business/strategy/what_is_strategy.htm

strategy - value chain analysis

Introduction

Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Influential work by Michael Porter suggested that the activities of a business could be grouped under two headings:

(1) Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly); and

(2) Support Activities, which whilst they are not directly involved in production, may increase effectiveness or efficiency (e.g. human resource management). It is rare for a business to undertake all primary and support activities.

Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best provided by others ("out sourced").

Linking Value Chain Analysis to Competitive Advantage

What activities a business undertakes is directly linked to achieving competitive advantage. For example, a business which wishes to outperform its competitors through differentiating itself through higher quality will have to perform its value chain activities better than the opposition. By contrast, a strategy based on seeking cost leadership will require a reduction in the costs associated with the value chain activities, or a reduction in the total amount of resources used.

Primary Activities

Primary value chain activities include:

Primary Activity	Description
Inbound logistics	All those activities concerned with receiving and storing externally sourced materials
Operations	The manufacture of products and services - the way in which resource inputs (e.g. materials) are converted to outputs (e.g. products)
Outbound logistics	All those activities associated with getting finished goods and services to buyers
Marketing and sales	Essentially an information activity - informing buyers and consumers about products and services (benefits, use, price etc.)
Service	All those activities associated with maintaining product performance after the product has been sold

Support Activities

Support activities include:

Secondary Activity	Description
Procurement	This concerns how resources are acquired for a business (e.g. sourcing and negotiating with materials suppliers)
Human Resource Management	Those activities concerned with recruiting, developing, motivating and rewarding the workforce of a business
Technology Development	Activities concerned with managing information processing and the development and protection of "knowledge" in a business
Infrastructure	Concerned with a wide range of support systems and functions such as finance, planning, quality control and general senior management

Steps in Value Chain Analysis

Value chain analysis can be broken down into a three sequential steps:

(1) Break down a market/organisation into its key activities under each of the major headings in the model;

(2) Assess the potential for adding value via cost advantage or differentiation, or identify current activities where a business appears to be at a competitive disadvantage;

(3) Determine strategies built around focusing on activities where competitive advantage can be sustained

http://tutor2u.net/business/strategy/value_chain_analysis.htm

strategic planning - the link with marketing

Introduction

Businesses that succeed do so by creating and keeping customers. They do this by providing better value for the customer than the competition.

Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (“competitive advantage”).

The main problem with this process is that the “environment” in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning.

Where does marketing planning fit in with the overall strategic planning of a business?

Strategic planning is concerned about the overall direction of the business. It is concerned with marketing, of course. But it also involves decision-making about production and operations, finance, human resource management and other business issues.

The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives.

Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the “environment”.

Sometimes this is quite a straightforward task. For example, in many small businesses there is only one geographical market and a limited number of products (perhaps only one product!).

However, consider the challenge faced by marketing management in a multinational business, with hundreds of business units located around the globe, producing a wide range of products. How can such management keep control of marketing decision-making in such a complex situation? This calls for well-organised marketing planning.

What are the key issues that should be addressed in strategic and marketing planning?

The following questions lie at the heart of any marketing and strategic planning process:

• Where are we now?
• How did we get there?
• Where are we heading?
• Where would we like to be?
• How do we get there?
• Are we on course?

Why is marketing planning essential?

Businesses operate in hostile and increasingly complex environment. The ability of a business to achieve profitable sales is impacted by dozens of environmental factors, many of which are inter-connected. It makes sense to try to bring some order to this chaos by understanding the commercial environment and bringing some strategic sense to the process of marketing products and services.

A marketing plan is useful to many people in a business. It can help to:

• Identify sources of competitive advantage
• Gain commitment to a strategy
• Get resources needed to invest in and build the business
• Inform stakeholders in the business
• Set objectives and strategies
• Measure performance

http://tutor2u.net/business/strategy/strategy_marketing.htm

stakeholders - introduction

Some definitions of a stakeholder:

• An individual or group with an interest in an organisation.
• Any individual or group who can affect or are affected by the achievement of a firm’s objective.
• Groups/individuals that have an interest in the well being of the company and/or are affected by the goals, operations, activities of the organisation.

Stakeholders can be classified as:

• Internal stakeholders (e.g. employees, managers)
• Connected stakeholders (e.g. shareholders, customers, suppliers, financiers)
• External (e.g. government, the community, pressure groups)

The main stakeholders in any business are:

• Shareholders
• Employees
• Customers
• Suppliers
• Creditors
• Society
• The government
• Competitor

Shareholders look for:

• High profits
• High dividend
• Long term growth
• Prospect of capital gain
• A say in the business
• A positive corporate image
• Preferential treatment as customers

Employees look for:

• High pay
• Job security
• Good working conditions
• Fair treatment
• Fringe benefits
• Health and safety
• Promotion prospects
• Training opportunities

Customers look for:

• Low prices
• Value for money
• High quality products
• Good service
• Innovation
• Certain and regular supply
• Choice of goods i.e. variety
• Clear and accurate information

Suppliers look for:

• A long term relationship with the firm
• Large size and high value of contracts
• Frequent and regular orders
• Prompt payment
• Fair prices
• Growth of the firm leading to more orders

Creditors look for:

• Prompt payment
• Payment of interest on outstanding debt
• Repayment at agreed date
• Credit worthiness of the organisation
• Sufficient positive cash flow to meet obligations

The community looks for:

• Employment prospects
• Safeguarding the environment
• Acceptance of social responsibility
• Ethical behaviour

Government looks for:

• Compliance with laws and regulations
• Efficient use of resources
• Employment
• Contribution to the national economy
• Payment of taxes

http://tutor2u.net/business/strategy/stakeholders-introduction.html

Business Motivation

• Success Leaves Clues
• Are You Seeing a Vision?
• Joe Vitale Reveals 4 Hidden Secrets To Writing Hyp...
• The Only Option is to Succeed
• Lighten UP!
• 18 Profitable Principles That Create a Healthy and...
• How to Profit on the High Road
• How to Keep a POSITIVE and PROFITABLE Attitude in ...
• How to Create Balance in a CRAZY World!
• Turbulent Times Force One Man To Discover and Live...
• Bouncing Back
• Motivation ABC’s: Tune Up Your Booth Staff
• The Power of Beliefs
• Marketing Plan
• The Three Factors Of Leadership Motivation
• How to Motivate Under-Performing Personnel
• Employee Motivation Strategies
• The Power of Our Minds
• Adversity Gives You Strength
• Success - It's A Habit
• Self Promotion Brings Business Success
• Is Procrastination Holding You Back?
• Keeping Your Sales Team Motivated
• Worry less. Accomplish more

Self Promotion Brings Business Success

by Wendy Gray Maynard
Your business success depends on your ability to promote your services, your products, and yourself. Fortunately, promotion is simple. People will buy them because they need them and because they have a relationship with you. It's the personal connection you make with your prospects that will help them remember you, and like you.

Your business success depends on your ability to promote your services, your products, and yourself. Fortunately, promotion is simple. I know...you hate selling. "But, I'm not a born salesperson," you say. "I don't want to hustle people." And, images of high-pressure, arm-twisting solicitors come to mind. But, that doesn't have to be you. You're not pushing your services/products onto others; people will buy them because they need them and because they have a relationship with you. It's the personal connection you make with your prospects that will help them remember you, and like you.

Self-promotion doesn't come easily to everyone. But, to grow your business, you must market your services and your products everyday. Your selling job consists of two things: First, making people aware of your services/products and second, making it easy for them to do business with you. Here are some easy marketing tips:

1. Evaluate your promotional materials: Are they consistent? Do they appear professional, yet personal? Your promotional materials should put your customers first, and discuss ways that you can help them. Write with the intent of creating value for the clients you serve. Use a professional agency to design your marketing message and refine your corporate identity. Keep the style, fonts, and colors the same for your letters, brochures, and newsletters.

2. Persuade naturally: Develop a partnership with your customers. Approach each client's situation as a team effort, rather than something that you are supplying. Don't rattle off your capabilities; instead, tell your prospect a story about how you helped another client.

3. Develop your personal presence: A winning image starts with how you look. Pay attention to your appearance, the way you make eye contact, how you use your voice, the things you talk about, and the firmness of you handshake - these reflect how well you think of yourself and how you want others to think of you.

4. Create the right telephone presence: A phone call may be the first contact you have with a potential customer. Create the same kind of atmosphere that you would in a face-to-face meeting. Listen carefully to what your prospective client says and really respond.

5. Handwrite a message in your correspondence: Include this personal touch whether it's a thank-you note or a simple P.S. at the bottom of a letter.

6. Show your customers that you appreciate them: Do things that help your clients. For example, record a "tip of the day" on your voice mail message, send clients two tickets to a special event with a note, photocopy interesting articles and send them to clients and prospects with a hand-written "FYI" note and your business card.

Wendy Gray Maynard is the co-owner of Kinesis. Kinesis specializes in marketing, graphic design, and business writing. Visit www.kinesisinc.com to sign up for Kinesis Quickies, our free e-newsletter featuring free marketing wisdom and tips.

Is Procrastination Holding You Back?

by C.J. Hayden

When you look at your marketing to-do list, do many of the items on it look all too familiar? Have entries like "call Donna Sanchez" and "follow up with Floyd Corp." been copied from a previous week? Putting off unappealing tasks may be human nature, but for an entrepreneur, procrastination can be deadly.

Delays in contacting a prospect can lose the business to the competition. Failing to get the word out about an upcoming event may forfeit dozens of opportunities. Wasted marketing time can never be recovered. By the time you realize you might not make your goal for the month, quarter, or year, it may already be too late.

Finding tasks on your to-do list week after week is a clear sign you are procrastinating, but it's not always this obvious. Can you identify with any of these situations?

1. Feelings of overwhelm. You have a backlog of work that seems insurmountable. You wake up in the morning already thinking about everything you must accomplish that day. It seems impossible to get it all done. If you are routinely unable to complete what's on your list in the time available, you may be creating the problem yourself by putting tasks off week after week.

2. Making excuses. You find yourself constantly having to make excuses to your business buddies, referral partners, potential clients, or even your coach about why you never followed up on that great referral, that important sales call wasn't made, the marketing package wasn't sent, or the proposal wasn't written. After a while, the excuses begin to sound flimsy, even to you.

3. Trivial pursuits. You notice that you are doing unimportant chores -- rearranging your desk drawers, filing old business cards, shopping for just the right desk, surfing the Net -- while neglecting crucial marketing activities.

4. Overflowing pipeline. A form of procrastination unique to entrepreneurs and salespeople is continuing to develop new leads instead of contacting the prospects you already have. If you are spending more time attending networking events or reviewing lists of names than getting on the phone, putting your fingers to the keyboard, or driving to appointments, this problem may be yours.

If you ARE procrastinating, what then? Begin to change this habit by getting in touch with your motivation to do better. What rewards, tangible and intangible, do you get from your work? Remind yourself of that payoff on a daily basis. Post a picture or note that represents those rewards to you on your calendar, phone, or dashboard.

Break down each of the activities you are having trouble with into small steps. Pick what seems like the easiest place to start, and block out time on your calendar to make a beginning. You may find that once you are taking action, the rest seems much less difficult than you had feared.

If you find that you really do have too much on your plate to have enough time for marketing, it's essential that you cut back on some of your other activities immediately. A business without marketing isn't a business; it's a hobby.

Create more accountability for yourself by telling a buddy, support group, or coach exactly what you plan to get done each week. Ask them not to accept any excuses from you, and to remind you why you said you were doing all this in the first place. You can partner in this way with a colleague by setting up a weekly check-in where each of you reports to the other.

It may take time to break the procrastination habit, so give yourself permission to fail a few times. Remember that even a small amount of progress may be allowing you to achieve more than you ever have before.

C.J. Hayden is the author of Get Clients NOW! Thousands of business owners and salespeople have used her simple sales and marketing system to double or triple their income. Get a free copy of "Five Secrets to Finding All the Clients You'll Ever Need" at http://www.getclientsnow.com

Keeping Your Sales Team Motivated

by Frank Rumbauskas

Sales managers frequently approach me for advice on how to keep salespeople motivated, especially when sales reps get into a rut — and seem to keep slipping deeper into it. Telling managers what not to do usually solves the problem. Most managers do things to de-motivate salespeople without even knowing it.

Let’s take the idea of funnels and forecasts, for instance. Funnels and forecasts are important aspects of running any sales operation. Both salespeople and managers need to know where they stand in terms of potential opportunities, and funnels serve to track those opportunities. No successful business can operate and properly plan for the future without accurate forecasting. In theory, these are absolutely essential to the success of any operation. In reality, however, few words strike terror in the hearts of salespeople like “funnel” and “forecast.”

For most salespeople, the term “funnel review” equates to micromanagement, probation and performance improvement plans. Just hearing the term is enough to shift a sales rep’s frame of mind from positive to negative. He or she suddenly loses enthusiasm and doesn’t know why. Many managers increase funnel reviews as performance slips, which causes performance to slip further, and in the end nobody wins. Endless funnel reviews, especially if they’re not positive, only serve to reinforce salespeople’s self-doubts and limiting beliefs.

Forecasts are a similar problem, but in different ways. Few salespeople forecast accurately. Nobody wants to fall short on their forecast, so they embellish, exaggerate and make sure the numbers add up to where they should be rather than where they really are. This results in managers who expect those numbers, and salespeople who dodge managers because they know they aren’t going to perform as forecasted. Then there are salespeople like myself who do the exact opposite — since I hated nothing more than having a manager constantly ask me, “When is this one going to close? When is that one going to close?,” I intentionally left good deals off my forecast. While it eliminated the problem of constantly being asked when all those deals would sign, it created another form of stress in having to deal with the consequences of a funnel that fell short of expectations.

Another word that instantly de-motivates salespeople is “activity.” Unfortunately, in the absence of any other viable advice, most managers simply blurt out, “You need to increase your activity” to anyone who isn’t at quota. This accomplishes nothing other than setting up the rep to believe that a series of funnel reviews and performance improvement plans are soon to follow.

Finally, I see entirely too many managers pushing too hard to spend extra time with salespeople who are falling short. While it’s necessary to spend time with these people, it’s not a good idea to keep asking them what they need help with and to insist on riding along with them. This only turns up the heat another notch on an already stressed-out rep. Nobody who is having trouble likes to be singled out, especially when the extra attention easily can be mistaken for micromanagement.

To keep a struggling salesperson motivated:

1. Keep the talk of funnels, forecasts and activity to a minimum.
2. Offer help without being overbearing.
3. Put your trust and confidence in that salesperson.

Stick with these guidelines and you’ll not only do a better job of helping those who are having difficulties, but you’ll see an overall increase in your sales team’s motivation and enthusiasm.

Frank Rumbauskas is the author of “Cold Calling Is a Waste of Time: Sales Success in the Information Age.” He is the founder of FJR Advisors LLC, which publishes training materials on generating business without cold calling. He also owns a nationwide insurance agency. For more information, please visit http://www.nevercoldcall.com.

Worry less. Accomplish more

by Sharmen Lane

Worry. Nothing good comes from this emotion. As a matter of fact, most of the time only bad things come from worry. Worry usually causes stress, anxiety, sleeplessness, headaches, grey hair and wrinkles. So why, do we do it?

When we worry we are doing one of two things. Either thinking about the past or projecting into the future. Neither one has anything to do with right now. I've been using this phrase for many years now and it goes like this. “Worry about tomorrow and you lose today”. If there is something you are worried about, stop yourself and ask, are my thoughts about the future or the past? I can almost guarantee it will be one or the other.

If you find you are thinking of the past, ask yourself if there is anything you can do to change it? Unless you have some magic time machine chances are the answer is no. Therefore, why are you spending time thinking about it? Don’t waste time and energy thinking about what happened and wishing it were different. No amount of thinking about it is going to change it.

If you find you are thinking of something that hasn’t happened yet then you are projecting your thoughts into the unknown future. That is a waste of time and energy. Your imagination is what is working here and nothing else.

In either case, if you are thinking about the past or the future, you are not being present. The sure fire way to eliminate worry is to accept, plan and take action. Whatever happened in the past isn’t going to change so accept it, find the good that came out of it and make a plan to prevent it from happening again. If you are concerned about something in the future, accept that hasn’t happened yet, make a plan to get the results you are looking for and take the steps necessary to get the desired results.

If you are worrying about a mistake you made at work yesterday, can you rewind time and undo what has already happened? NO! Therefore, accept what happened and evaluate your current situation. Then come up with a plan to correct the mistake or make it right then take action.
If you are worried about how you are going to pay the rent next month, is worrying about it going to help you pay the rent? NO! What will? Finding a way to save money and make more. Now that will pay the rent.

The next time you find yourself having the emotion you would identify as worry or concern, get present. Think about now, make a plan and take action to get what you want.

For more information visit http://www.sharspeaks.com or email us at sharspeaks@yahoo.com

seasonality - introduction

Seasonality

Seasonality refers to fluctuations in output and sales related to the seasonal of the year.

For many (or even most products) there will be seasonal peaks and troughs in production and/or sales.

In some cases there will be fluctuations over the week or even within the working day but the time based fluctuation that produces the greatest problem concerns fluctuations related to seasons of the year.

Demand or supply?

We should distinguish between seasonality of demand and seasonality of supply.

Products whose production is affected by the weather and the cycle of the year can be subject to seasonality in supply.

The main examples of seasonality in supply relate to agricultural, horticulture and related activities.

If production takes places in the open then seasonal changes will have an impact.

But manufactured products and services are produced indoors and supply is not affected by the seasons and the weather.

Seasonal demand

Supply of manufactured goods and services is little affected by seasonal factors. But demand for these goods is subject to seasonal fluctuation.

In some cases it can be explained in terms of culture and customs e.g. religious festivals.

In other cases the seasonality can be explained in terms of the weather.

Obvious examples of products with highly seasonal demand include:

• Christmas cards
• Valentine cards
• Easter eggs
• Fireworks
• Sun lotion
• Overcoats
• Swimwear
• College textbooks
• Holidays
• Winter clothes
• Summer clothes
• Back to school clothes

Less obvious examples of products with seasonal demand include:

• Demand for slippers peaks in the run up to Christmas
• Demand for strawberries peaks in the period around the Wimbledon fortnight
• Demand for plants at garden centres is linked to the planting season
• There is high demand for decorating materials before the Easter weekend
• Demand for electricity and gas rises in the winter
• High street retailers such as M&S rely heavily on the Christmas period. Up to 25% of sales occur around Christmas
• Many theatres take a similar proportion of their income during the Christmas pantomime season – hence the desire to sign up UK and Australian soap stars

Example of induced seasonality

• Car registration induced a distinct seasonal pattern to sales of new cars
• Each year, from 1st August onwards, new cars were given a new registration suffix
• The purpose was to introduce some transparency to the market so that the age of the car was clear to all concerned. But it produced an unfortunate effect
• Sales of new cars slumped in the spring and early summer and a high proportion of sales were concentrated in August
• This was an example of seasonal fluctuation as an unintended by-product of a bureaucratic decision
• As it distorted the market in new cars the practice was abandoned

http://tutor2u.net/business/strategy/seasonality-introduction.html

strategy - introduction to PEST analysis

PEST analysis is concerned with the environmental influences on a business.

The acronym stands for the Political, Economic, Social and Technological issues that could affect the strategic development of a business.

Identifying PEST influences is a useful way of summarising the external environment in which a business operates. However, it must be followed up by consideration of how a business should respond to these influences.

The table below lists some possible factors that could indicate important environmental influences for a business under the PEST headings:

Political / Legal	Economic	Social	Technological
- Environmental regulation and protection	- Economic growth (overall; by industry sector)	- Income distribution (change in distribution of disposable income;	- Government spending on research
- Taxation (corporate; consumer)	- Monetary policy (interest rates)	- Demographics (age structure of the population; gender; family size and composition; changing nature of occupations)	- Government and industry focus on technological effort
- International trade regulation	- Government spending (overall level; specific spending priorities)	- Labour / social mobility	- New discoveries and development
- Consumer protection	- Policy towards unemployment (minimum wage, unemployment benefits, grants)	- Lifestyle changes (e.g. Home working, single households)	- Speed of technology transfer
- Employment law	- Taxation (impact on consumer disposable income, incentives to invest in capital equipment, corporation tax rates)	- Attitudes to work and leisure	- Rates of technological obsolescence
- Government organisation / attitude	- Exchange rates (effects on demand by overseas customers; effect on cost of imported components)	- Education	- Energy use and costs
- Competition regulation	- Inflation (effect on costs and selling prices)	- Fashions and fads	- Changes in material sciences
	- Stage of the business cycle (effect on short-term business performance)	- Health & welfare	- Impact of changes in Information technology
	- Economic "mood" - consumer confidence	- Living conditions (housing, amenities, pollution)	- Internet!

http://tutor2u.net/business/strategy/PEST_analysis.htm

strategic planning - mission

Mission

A strategic plan starts with a clearly defined business mission.

Mintzberg defines a mission as follows:

“A mission describes the organisation’s basic function in society, in terms of the products and services it produces for its customers”.

A clear business mission should have each of the following elements:

Taking each element of the above diagram in turn, what should a good mission contain?

(1) A Purpose

Why does the business exist? Is it to create wealth for shareholders? Does it exist to satisfy the needs of all stakeholders (including employees, and society at large?)

(2) A Strategy and Strategic Scope

A mission statement provides the commercial logic for the business and so defines two things:

- The products or services it offers (and therefore its competitive position)
- The competences through which it tries to succeed and its method of competing

A business’ strategic scope defines the boundaries of its operations. These are set by management.

For example, these boundaries may be set in terms of geography, market, business method, product etc. The decisions management make about strategic scope define the nature of the business.

(3) Policies and Standards of Behaviour

A mission needs to be translated into everyday actions. For example, if the business mission includes delivering “outstanding customer service”, then policies and standards should be created and monitored that test delivery.

These might include monitoring the speed with which telephone calls are answered in the sales call centre, the number of complaints received from customers, or the extent of positive customer feedback via questionnaires.

(4) Values and Culture

The values of a business are the basic, often un-stated, beliefs of the people who work in the business. These would include:

• Business principles (e.g. social policy, commitments to customers)

• Loyalty and commitment (e.g. are employees inspired to sacrifice their personal goals for the good of the business as a whole? And does the business demonstrate a high level of commitment and loyalty to its staff?)

• Guidance on expected behaviour – a strong sense of mission helps create a work environment where there is a common purpose

What role does the mission statement play in marketing planning?

In practice, a strong mission statement can help in three main ways:
• It provides an outline of how the marketing plan should seek to fulfil the mission
• It provides a means of evaluating and screening the marketing plan; are marketing decisions consistent with the mission?
• It provides an incentive to implement the marketing plan

http://tutor2u.net/business/strategy/mission.htm

global business - introduction

Introduction to international business

International business is not new – businesses and nations have conducted trade across national boundaries for centuries.

Lured by the prospects of large markets and/or sources of raw materials, businesses have traded with other parts of the world.

But as we will see later global business and global industry is different.

Overseas trade and Ansoff’s matrix

Thinking about international business in the context of Ansoff’s matrix:

• Entry into overseas markets represents market development.
• Existing products are sold in new markets.
• It is appealing because:

  - market penetration is difficult in saturated markets.
  - product development is costly.
  - diversification is risky

Why enter overseas markets?
The reasons for entering overseas markets can be categorised into “push” and “pull” factors:

Push factors

• Saturation in domestic markets
• Economic difficulty in domestic markets
• Near the end of the product life cycle at home
• Excess capacity
• Risk diversification

Pull factors

• The attraction of overseas markets
• Increase sales
• Enjoy greater economies of scale
• Extend the product life cycle
• Exploit a competitive advantage
• Personal ambition

Factors in the choice of which overseas market(s) to enter:

• Size of the market (population, income)
• Economic factors (state of the economy)
• Cultural linguistic factors (e.g. preference for countries with similar cultural background)
• Political stability (there is usually a preference for stable areas)
• Technological factors (these affect demand and the ease of trading)

Constraints and difficulties in entering overseas markets:

• Resources
• Time
• Market uncertainty
• Marketing costs
• Cultural differences
• Linguistic differences
• Trade barriers
• Regulations and administrative procedures.
• Political uncertainties
• Exchange rates (transactions costs & risks)
• Problems of financing
• Working capital problems
• Cost of insurance
• Distribution networks

Exporting is only one method of doing business internationally

• We normally think of overseas trade in terms of exporting and importing goods and services
• This involves transporting goods and selling them across national boundaries.
• Direct exporting implies that the domestic firm is actively involved in selling the goods abroad
• Indirect exporting means that the marketing of goods is delegated to export agents and the UK manufacturer concentrates on production
• But exporting involving the movement of goods is only one method of engaging in international business

Other methods of market entry

• Overseas product an/or assembly (producing goods abroad)
• International alliances and joint ventures (working with foreign companies)
• International M&A (mergers and acquisitions across frontiers)
• International franchising and licensing allowing foreign based firms to produce, market and distribute goods in specified areas abroad)

http://tutor2u.net/business/strategy/global-business-introduction.html

global business - global strategy

A global industry

A global industry can be defined as:

• An industry in which firms must compete in all world markets of that product in order to survive
• An industry in which a firm’s competitive advantage depends on economies of scale and economies of scope gained across markets

Global markets are international markets where products are largely standardised.

Michael Porter argued that industries are either multi-domestic or global.

Global industries: competition is global. The same firms compete with each other everywhere.

Multi-domestic industries: firms compete in each national market independently of other national markets.

In general businesses adopt a global strategy in global markets and a multi-local strategy in multi domestic markets.

Global strategy

Companies such as Sony and Panasonic pursue a global strategy which involves:

• Competing everywhere
• Appreciating that success demands a presence in almost every part of the world in order to compete effectively
• Making the product the same for each market
• Centralised control
• Taking advantage of customer needs and wants across international borders
• Locating their value adding activities where they can achieve the greatest competitive advantage
• Integrating and co-ordinating activities across borders
• A global strategy is effective when differences between countries are small and competition is global. It has advantages in terms of
  • Economies of scale
    Lower costs
    Co-ordination of activities
    Faster product development

However, many regret the growing standardisation across the world.

Multi domestic strategy

• A multi-domestic strategy involves products tailored to individual countries
  Innovation comes from local R&D
• There is decentralisation of decision making with in the organisation
• One result of decentralisation is local sourcing
• Responding to local needs is desirable but there are disadvantages: for example high costs due to tailored products and duplication across countries

Comparison of the two strategies

Four drivers determine the extent and nature of globalisation in an industry:

(1) Market drivers

• Degree of homogeneity of customer needs
• Existence global distribution networks
• Transferable marketing

(2) Cost drivers

• Potential for economies of scale
• Transportation cost
• Product development costs
• Economies of scope

(3) Government drivers

• Favour trade policies e.g. market liberalisation
• Compatible technical standards and common marketing regulations
• Privatisation

(4) Competitive drivers

• The greater the strength of the competitive drivers the greater the tendency for an industry to globalise

http://tutor2u.net/business/strategy/global-business-global-strategy.html

Private Banking is developing fast under International Financial Crisis

In China, the private banking service objects in Chinese funded banks are the customers whose financial assets are above 8 million Yuan (1.17 million USD) or 10 million Yuan (1.46 million USD). According to the conservative estimation, there are at least 500 thousand people whose financial assets are above 1 million USD by the end of the first quarter of 2009 in China, the total financial assets of them exceeding 5 trillion USD.

In order to occupy more shares of the private banking, the banks in China include the private banking in their key development strategy in droves. At present, they set up the private banking branches in domestic large cities so as to open up the high-income group market.

In the battle of attracting more private banking customers, the joint stock banks and foreign funded banks are more popular. When Chinese customers choose the private banks, they are likely to choose the joint stock banks and foreign funded banks. The state owned commercial banks, however, are slightly inferior because of service quality and so on.

By the end of 2008, China Merchants Bank had opened seven private banking centers in Shenzhen, Beijing, Shanghai, Tianjin and Harbin with the customers reaching to 6,398, up by 36% year on year, and the scale of asset management of the private banking customers reaching to 129.9 billion Yuan (18.56 billion USD), up by 34% year on year.

On 1st April 2009, Agricultural Bank of China announced that it would engage in propelling the strategic transformation of the retail business and integrating the retail business. Therefore, it will establish 5 private banks, 15 gold key wealth management centers and 500 gold key money-managing centers. Besides, Agricultural Bank of China will initially set up private banking department in Shanghai and set up the private banking headquarters and divisions in the branch banks in Beijing, Shenzhen, Ningbo and Tianjin etc, where have abundant high-end customer resources, directly extending and maintaining the private banking customers.

On the afternoon of 2nd April, the private banking center of China Citic Bank gathered a group of macro-economic experts and initially set up the macro-economic expert consultant group. China Citic Bank expressed that to establish the macro-economic expert consultant group is to provide the value added services of macro-economic trend analysis, business investment and personal investment analysis for the private banking customers.

There is huge potential for the private banking market in China, but there still exist shortcomings. Chinese private banks are short in establishment time, short of experiences and basically similar in the customer positioning and services and devoid of distinct characteristics.

As far as the foreign funded banks are concerned, their services and experiences are hard to reflect in short time in China because of the serious strikes from the international financial crisis and supervision policy limitation in China’s banking industry.

Apart from the careful advantage and the advantages from the financial crisis, Chinese funded banks also have emotional and policy advantages.

The foreign funded banks are hard to compare with Chinese funded banks in the field of establishing close personal relationship with the customers, owing to the differences in the cultural backgrounds and communications.

In January 2009, Citi Bank, the first bank of setting up the private banking in China, closed its private banking department, which had been set up for about three years. The original customers were all integrated into the retail business department. However, the private banking department of Chartered Bank announced that its private banking customers were two folds by the end of 2008 compared with those in 2007.

Besides, Chinese funded banks have policy advantage, less service limitation compared with the foreign funded banks. Chinese funded banks have internet resource advantage within China, which can cover more cities and provide inter-bank convenient cross region business for the customers.

Under the influences of international financial crisis, the private banks are heavily stricken regardless of the brand or the assets. However, for the private banking in China, it is an opportunity. China has become the comparatively safe place for investment.

It is predicted that the private banking among Chinese local banks and the foreign funded banks will be much fiercer in recent years.

Credit Report Counseling

Note the following items on this section of the credit report:

1. The file number is indicated; this gives Dana a way to notify the credit bureau of any errors in the report, by referring to this number.
2. The information shown on this section of the report is generally self-explanatory. However, there are a few items of personal data that Dana should strive to keep secure, in particular, her social security number and date of birth. Note that a portion of the social security number has been masked out--this is a desirable option when personal information is printed out.
3. Dana should examine all items, including the credit union's record of previous addresses and employment history, and notify the credit bureau of any errors.

Account History - the history of an account can be viewed as a summary or in detail.

Dana should review the accounts displayed in the report, including the balances reported. By clicking on the show details link, she can get a listing of the payments she has made, and the status of each payment. Late payments will be flagged with the number of days the payment was late. It is important that Dana verify the validity of the report contents, because potential creditors, landlords, or insurance companies may be able to examine this report, and make decisions based on report data. Additionally, Dana's credit score can be affected by contents of this report. The report may contain both active credit accounts and ones that have been closed.

Inquiries Section - will show inquiries by credit providers, landlords, insurance companies and others. A review inquiry is typically done by a company you owe money to ensure your credit is still in good standing. A promotional inquiry is typically done by a company who is evaluating your report for future credit - they may be planning to send you a promotional credit offer or other service.

Another type of inquiry that may appear on the report is an internal inquiry, initiated by Dana herself. If she finds an error on the report and notifies the credit bureau, her action will appear as an internal inquiry.

Public Records Information
Although not illustrated in the credit bureau report for Dana Thomas, a credit report may contain information from the court system that a potential creditor might need to know. For example, a bankruptcy, lien, judgment or failure to make child support payments could be reported, or an account that has been turned over to a collection agency.

Contact Information
At the end of the credit report, you will find contact information, in case you wish to contact the credit bureau. There are three approaches--over the internet, by telephone, and by mail. The appropriate information for each method will be supplied on the report.

Banking Solutions for Customer Convenience

Banking has evolved with time. The entire infrastructure and concept of traditional piled files and documents has given away to a much more sophisticated and sleek outlook. Moreover with technology growing with a rapid pace the time consuming factor has been replaced with doorstep banking methods which permits you to carry on with your banking 24/7 without having to pay the bank any visit. Money orders and transfers have taken a backseat for Online Money transfers, Card and mobile banking.

When Banking started of for Independent India, you had Nationalized and regional banks handling the country’s finances. As the years progressed you had more branches opening up. The 80s and 90s saw a whole lot of Global Banks like Standard Chartered, Barclays, Grindlays opening their banks up in India. Still banking didn’t seem to be convenient. The modus of transaction was pretty gloomy and boring with people having to wait their turns to visit the teller’s counter to complete their transactions. With technology coupled with the internet coming into play banking solutions have become more custom made for the average consumer. Online Banking ensures that a person is tuned completely with his finances at any given point from any part of the world. Ditto for mobile banking. The last couple of decades also saw numerous Indians migrate abroad on a bid to pursue their lives and carrier. Getting monetary transactions wasn’t easy then. Postal services and courier faux passes weren’t that convincing. Now with banks offering many solutions NRI Banking has also been made easier.

Various facilities for NRI Banking consist of NRI Savings account, NRI Term Deposits and provision to remit money to India. Mobile Banking and Online Banking also offer Mobile bill payment and online bill payments respectively. Typical business banking ensures commercial as well as retail banking services. In Commercial Banking, various corporate entities and major industrial houses are liable to be offered loans to proceed with their business and financial commitments. This kind of banking is generally profitable as it includes a large amount of money. Incase of retail banking services which is basically mass marketing business transactions, direct transaction with individuals which includes loans, various accounts and deposits, and locker facilities banks look to improve their consumer base. Establishing good customer relationship strengthens your financial base as with every major deal that you incorporate via your customers adds to your treasury. As of now the Retail section is undergoing a strain courtesy the recession. The failure to repay debts has seen the fall of global financial houses. So it is very important that a thorough examination is done to ensure know your customer (KYC) norms prior to issuing major loans.

Banks also provide special facilities to their HNI (High net individual) worth customers. These people generally have a huge amount invested with the financial house and indulge in hefty transactions. They are provided with world class banking facilities termed as Priority Banking and Premier Banking, both words justifying their meaning. Savings account for the average investor has also been made easier where you no longer need a referral to open an account or minimum balance to save in your account (* condition applies in both cases). Currently the major Global players in the Indian Finance Sector include Standard and Chartered, HSBC and Barclays. Banks of Indian origin that have gradually made waves include ICICI, HDFC, SBI and Axis Bank. All in all modern day banking has every element that ensures Wealth Management Services for the longer run.

Take Care When Banking Online

Here is a good list of online places you might want to avoid when doing your banking and other financial accounts online:

Unacceptable Charges and Fees

You should follow your gut when it comes to fees associated with opening a new account. If you find that any company charges fees for something that is normally free or if the fees being charged seem way too high, your instinct is probably correct. Key to not falling for a trap – shop around. See what several companies are charging for the same services. There are likely many companies that are legitimate where fees are either not there or at least reasonable.

Interest Rates

There has been a lot of commotion about interest rates being raised for seemingly no reason in the credit card industry. A good measure for comparison is any rate over 20% should throw up a red flag. You may want to keep shopping for more reasonable rates, especially if your credit is very good.

Less of a Return

When you have a savings account online, you can typically earn more of a percentage than you would at your home bank. If you are interested in opening a high-yield savings or checking account but the return percentage seems a bit low, look for other companies that have higher interest percentages for your return. Don't commit to any one company until you have comparison shopped.

Offshore Or Uninsured Companies

While it is smart to shop around for the best situation for your finances, you also need to be sure that any accounts you plan to open are done so with a reputable company. Those companies that offer deals that seem too good to be true usually are. Avoid companies that do not have insurance by the FDIC or those companies that are headquartered outside of the country. In the event something happens, you can end up losing all of your money because you have no protection.

Quality of Customer Service

Regardless of whether or not you are conducting all of your business online, you still need to know you can contact customer support by phone if needed. See if the company you are contemplating using answers their phones or email with a real person. Evaluating the customer service response early can help you know what would happen in the event you do need support.

It's never a good idea to play around with your money so you always need to stay on top of where you are putting it. Don't accept any offer that comes your way without first investigating it thoroughly. Check in with the Better Business Bureau if you have doubts or ask friends for honest referrals of places they have put their money. Online banking can be as safe as you make it. You don't necessarily have to be afraid of it but you certainly do have to make sure you check things out well before making any commitments.

http://www.articlesbase.com/banking-articles/take-care-when-banking-online-892855.html

Security risks online and off are at a peak in recent years. Many people have been concerned to do any business, such as banking, online because they have a large fear of frauds and scam artists. On the reverse of that, many others will look at any offer that seems remotely legit and think that it is fine to disclose financial information. The reality is, just like in the offline world, the online one has it's share of scams and top of the line business offers. It is up to you, the consumer, to verify that you are working with a company that is indeed legitimate.

Expanding Business with Proper Payment Processing

First, the merchant will setup a credit card merchant account. Some of these set-up accounts are free for the merchant, and others do charge a fee. When choosing a service provider to have your credit card merchant account, what the services provide the merchant should be the first order of business. Some services give 24/7 customer service and special discounted pricing.

The merchant must chose the best service for what the merchant is selling and which cards will be accepted. There are credit card processing services that only allow for one type of credit card to be processed through them. Most of the services process the credit cards within a network that is reliable and in real-time or batch credit card processing services.

Reliability of any payment processing is essential in finding the merchant account that fits. Now there is even wireless payment processing so you have access to receiving payments through most wireless equipment. The payment processing services selected will even usually accept checks that process just like credit cards.

Once your credit card merchant account is up and running there is a host of ways to process payments into your credit card merchant account. A great many doctors, lawyers, CPAs and online retail stores have a credit card merchant account with a reliable service provider.

The credit card processing revolution is here; you are now able to purchase just about anything you want online, and the new age of ecommerce is open for business in the retail markets. A merchant now has access to funds immediately from a purchase and will receive their money through a full range of services provided by the bank or payment service chosen. A merchant will chose a network that gives the best rate for all the services provided to be part of the payment processing and easy accessibility for the clients.

A Brief History of Banking

It was during the heyday of the Babylonian Empire from 1728 - 1686 BC that the Code of Hammurabi, named after the sixth and most successful king of Babylon, was devised and written. Details of the country’s laws and financial regulations were carved on tablets of stone six feet high, including details of how loans, interest and guarantees would operate according to a set of standardised procedures. However, the Code of Hammurabi established some important principles, namely that organised banking cannot exist without the essential quartet of rules, regulations, political stability and a developed economy.

Both Ancient Greeks and later the Romans developed their own domestic banking systems based on the use of a universal currency and credit notes. But as countries’ borders were crossed and travel throughout the globe became more common, a need for international banking arose.

By having such a resolute banking system foreigners outside the empire could also trade with Romans with confidence, knowing that definite rules applied. So, even though the Greeks had successfully operated a credit-based banking system with the Egyptians several centuries earlier, it was the Romans who crucially introduced legislation to regulate financial institutions and practices.

Their successful and respected international banking model existed in the Mediterranean until the fall of the Roman Empire in the sixth century after which Europe entered a dark period of political instability and mistrust. As a result, this meant that banking could not operate in the same formalised way. It wasn’t until almost a millennium later, during the 16th century that westernised banking emerged and with it the false impression that banking itself was an entirely new concept. However, it developed from the same essential needs that drove first the Babylonians, Greeks and finally the Romans to establish their banking rules, regulations and standards and led to the formation of the London Royal Exchange in 1565; generally regarded as the formation of UK banking. It was from those renewed beginnings that standardised systems for deposits, loans and guarantees evolved and eventually were copied throughout the world.

Over the past four centuries westernised banking principles have become firmly established across the globe and although King Hammurabi of ancient Babylon wouldn’t recognise it now, international banking is most firmly rooted in his initial concepts devised almost four thousand years ago.

Although the general perception may be that organised banking is a relatively new phenomenon that has only developed over the last few centuries, the reality is that has been in thriving in one form or another for almost 3,750 years.

strategy - portfolio analysis - ge matrix

The business portfolio is the collection of businesses and products that make up the company. The best business portfolio is one that fits the company's strengths and helps exploit the most attractive opportunities.

The company must:

(1) Analyse its current business portfolio and decide which businesses should receive more or less investment, and

(2) Develop growth strategies for adding new products and businesses to the portfolio, whilst at the same time deciding when products and businesses should no longer be retained.

The two best-known portfolio planning methods are the Boston Consulting Group Portfolio Matrix and the McKinsey / General Electric Matrix (discussed in this revision note). In both methods, the first step is to identify the various Strategic Business Units ("SBU's") in a company portfolio. An SBU is a unit of the company that has a separate mission and objectives and that can be planned independently from the other businesses. An SBU can be a company division, a product line or even individual brands - it all depends on how the company is organised.

The McKinsey / General Electric Matrix

The McKinsey/GE Matrix overcomes a number of the disadvantages of the BCG Box. Firstly, market attractiveness replaces market growth as the dimension of industry attractiveness, and includes a broader range of factors other than just the market growth rate. Secondly, competitive strength replaces market share as the dimension by which the competitive position of each SBU is assessed.

The diagram below illustrates some of the possible elements that determine market attractiveness and competitive strength by applying the McKinsey/GE Matrix to the UK retailing market:

Factors that Affect Market Attractiveness

Whilst any assessment of market attractiveness is necessarily subjective, there are several factors which can help determine attractiveness. These are listed below:

- Market Size
- Market growth
- Market profitability
- Pricing trends
- Competitive intensity / rivalry
- Overall risk of returns in the industry
- Opportunity to differentiate products and services
- Segmentation
- Distribution structure (e.g. retail, direct, wholesale

Factors that Affect Competitive Strength

Factors to consider include:

- Strength of assets and competencies
- Relative brand strength
- Market share
- Customer loyalty
- Relative cost position (cost structure compared with competitors)
- Distribution strength
- Record of technological or other innovation
- Access to financial and other investment resources

http://tutor2u.net/business/strategy/ge_matrix.htm

crisis management - planning and action

Contingency planning

Organisations prepare contingency plans in recognition of the fact that things do go wrong from time to time
Contingency planning involves:

• Preparing for predictable and quantifiable crises
• Preparing for unexpected and unwelcome events

The aim is to minimise the impact of a foreseeable event and to plan for how the organisation will resume normal operations after the crisis

Contingency plans

The contingency plan:

• Identifies alternative courses of action that can be taken if circumstances change with time
• Details standby procedures to enable the continuation of essential activities and services during the period of the emergency
• Includes programmes for improving the business in the longer term once the immediate situation has been resolved

Steps in drawing up a contingency plan

• Recognise the need for contingency planning
• Identify possible contingencies - all the possible adverse and crisis scenarios
• Specify the likely consequences
• Assess of the degree of risk to each eventuality
• Determine risk strategy to prevent a crisis & to deal with a crisis should one occur
• Draft the plan and identify responsibilities
• Simulate crises and the operate of each plan

Dealing with the “what if” question
Scenario analysis:

• This involves constructing multiple but equally plausible views of the future
• The scenario consists of a “story” from which managers can plan

Sensitivity analysis

• Involves testing the effect of a plan on alternative values of key variables
• e.g. the effect of a 50% loss of capacity

Crisis management

• Crisis management involves:
• Identifying a crisis
• Planning a response
• Responding to a sudden event that poses a significant threat to the firm
• Limiting the damage
• Selecting an individual and team to deal with the crisis
• Resolving a crisis

Stages of a crisis

Pre-crisis	Prior to the event
Warning	Indications that there is or may be or could be an event liable to cause a significant impact on the organisation
Crisis point	When the event begins to cause significant impact on the organisation
Recovery	The acute stage of crisis has passed and the organisation is able to focus on a return to normal operations
Post crisis	Evaluation of the effects Repair to the organisation

Role of the crisis manager

• Crisis assessment
• Event tracking
• Managing human considerations
• Damage assessment
• Assessment or resources and options
• Development of contingencies
• Managing communications
• Co-ordination with external bodies
• Controlling information
• Controlling expectations
• Managing legal requirements

Advice on handling a crisis

• Appoint a crisis manager
• Recognise that the crisis manager is likely to adopt a more authoritarian style than is normal
• Do an objective assessment of the cause (s) of the crisis
• Determine whether the cause (s) will have a long term effect or whether it will be a short term phenomenon
• Project the most likely cause of events
• Focus on activities that will mitigate or eliminate the problem
• “Look for the silver lining”- opportunities in the aftermath
• Act to guard cash flow

Dealing with the financial aspects of a crisis

• Accelerate accounts receivable (payment by debtor)- by offering a discount if necessary.
• Slow up payment to creditors where possible.
• Increase short term, sales
• Reduces expenses - especially “non mission critical” expenses
• Outsource non mission critical operations.
• Re-schedule loans

Dealing with the “people” aspects of a crisis

• Form a crisis team
• Designate one person only to speak about the crisis to the outside world
• Act to prevent or counter the spread of negative information
• Make use of the media to provide a counter argument
• Do not tell untruths - trying to manipulate or distort the information will backfire

http://tutor2u.net/business/strategy/crisis-management-planning-and-action.html

crisis management - introduction

Defining and categorising crises

A crisis is defined as

• An unexpected event that threatens the wellbeing of a company, or
• A significant disruption to the company and its normal operations which impacts on its customers, employees, investors and other publics

Crises can be categorised as

• Fairly predictable and quantifiable crises, or
• Totally unexpected crises

Types of crises

Natural disaster (so called acts of God)

• Physical destruction due to natural disaster e.g. flood
• Environmental disaster

Industrial accident

• Construction collapse
• Fire
• Toxic release

Product or service failure

• Product recall
• Communications failure
• Systems failure
• Machine failure causes massive reduction in capacity
• Faulty or dangerous goods
• Health scare related to the product of industry

Public relations

• Pressure group or unwelcome media attention.
• Adverse publicity in the media.
• Removal/loss of CEO or other key management

Business and management

• Hostile takeover
• Sudden strike by workforce or that of a key supplier
• Major customer withdraws its support
• Competitor launches new product
• Sudden shortfall in demand

Legal

• Product liability
• Health scare
• Employee or other fraud

Examples of crises

• Asian tsunami - crisis for the countries concerned and for the tourist industry
• Three Mile Island - US nuclear industry crisis in the 1980s
• Sudan 1 dyestuff in processed food
• Coca Cola’s Dansani purified water –contained a carcenogen and as a result the European launch was abandoned
• Hurricane Katrina

Case study - Exxon Valdez

• This oil tanker which got into trouble in Prince William Sound off Alaska caused an oil spillage amounting to 30m US gallons
• In addition to the loss of product and a major asset:
• The clean up took three years and cost Exxon $2.2 billion
• Legal settlement with the state and federal government amounted to $1billion

Case study - Buntsfield (2005)

In 2005 the oil storage depot at Buntsfield, Hemel Hempstead suffered major explosion and fire
The result was:

• Loss of product
• Significant loss of capacity
• Disruption to supplies
• Loss of business
• Physical damage to neighbouring houses and commercial premises
• Possible environmental damage
• Damage to reputation
• Claims for compensation
• Legal action

Case study - a different type of disaster

• In 1991 Gerald Ratner, head of the chain of high street jewellers that bore his name, explained why his products were so inexpensive
• He said that a decanter sold in his shop was cheap because it was “total crap”
• He “sold a pair of earrings for under £1,which was cheaper than a prawn sandwich from M&S, but probably wouldn’t last as last as long”
• The result: share values fell substantially, Mr Ratner left the company and it was sold

http://tutor2u.net/business/strategy/crisis-management-introduction.html

corporate social responsibility - business in the community

Business in the Community

BITC is an independent charity set up by leading business organisations to inspire, engage, support an challenge continually improve the impact they have on society

It defines CSR as “a company’s positive impact on society and the environment, through its operations, products or services and through its interaction with key stakeholders” (www.bitc.org.uk)

The BITC index

Each year BITC conducts a self assessment survey on how companies are managing, measuring and reporting their social and environmental impacts

For each of community, environment, market place and workplace assessment is made in terms of:

• Community issues
• Environmental issues
• Market place issues
• Workplace issues

Scores are given and a BITC index is produced

How the BITC measures CSR:

• Commitment to CSR is evaluated in terms of the extent to which:
• Responsibilities have been clearly defined at all levels
• Policies are in place to ensure responsible business behaviour
• Objectives and targets have been set to create improvement
• There are effective communications systems to share knowledge
• Training is provided to ensure competency and delivery of objectives
• A process is in place for stakeholder consultation and engagement
• There are monitoring systems in place to assess and report progress
• Key issues, targets and performance are reported quickly.

BITC Index 2006: the top 20

• Co-operative Bank.
• BAA.
• Barclays
• BT
• National Grid
• PriceWaterhouseCoopers
• CE Electric UK
• Scottish and Southern Energy
• Veolia Water UK
• Boots
• Co-operative Insurance
• HBOS
• Lloyds TSB
• John Lewis Partnership
• RWE Npower
• Tesco
• Reckitt Benckiser
• Rolls Royce
• United Utilities
• And joint 20th- BBC,M&S, Scottish Power, Severn Trent Water.

(Source :Sunday Times 7/5/06)

Case study in CSR - Tesco
Tesco went on the offensive against criticism that it is an uncaring retail giant by unveiling a plan in turn it into a “better neighbour”

In addition to the investing in sustainable environmental technology such as wind turbine to light its stores, Tesco announced a 10 point action plan

Was this a genuine measure or corporate responsibility or an attempt to defect criticism of the power of the supermarket giants?

Tesco’s Ten Point Action Plan:

• Halve average energy used in Tesco buildings by 2010 compared with 2000
• Double the amount that customers recycle at stores by 2008
• Make all carrier bags degradable
• Put nutritional labeling on all own brand products by 2007
• Help educate parents about healthier food for their children
• Get 2m people running, cycling or walking in sponsored events leading up to the 2012 Olympics
• Be a quieter neighbour by cutting the number of deliveries to Express convenience stores
• More consultation before building new stores from 2007
• Make it easier for small suppliers to gain access to Tesco
• Sell more local product than other retailers and introduce regional counters into stores

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