Leadership in organizations Essay Example | Topics and Well Written Essays - 1750 words

Leadership in organizations - Essay Example Secondly, it provides an insight into their leadership approach towards individuals and teams. Thirdly, aspects of effective and strategic leadership for change as well as team development and management remain considered in analyzing the company’s leadership style of the two managers. Lastly, a personal judgment on the management styles and recommendations of this case study group would be incorporated in the report. Report on the Leadership Style of Mountain West Company Introduction Leadership styles include autocratic, bureaucratic, laissez-faire and democratic. Democratic leaders believe that staffs can be led while autocratic leaders believe in pushing staffs. Autocratic, democratic and laissez-faire leaders exercise low, moderate and high delegation respectively whereas bureaucratic leaders believe in equal delegation for all staffs. Autocratic leader makes decisions and declares them or sells decisions whereas laissez-faire leaders define limits and ask staffs to make decisions or permit staffs to function within defined limits. Additionally, democratic leaders may present ideas and invite questions, present tentative decisions subject to change or could as well present problems to staffs to obtain suggestions and thereby make decisions. However, bureaucratic leaders apply any style in decision making depending on the staffs and the present situation. Evelyn demonstrates democratic leadership while James demonstrates autocratic leadership. Analysis and evaluation of the both leadership styles For several years, Mountain West employed various aspects in the operations of the call centre that gave the company a competitive edge over and above their direct competitors in the industry. Under the management of Evelyn, she ensured the allocation of regular breaks to the staffs of the department. As well, various training opportunities and trainings remained available to the staffs in facilitating an up to date acquisition of knowledge regarding custome r service techniques, different products and problem solving skills. Moreover, Evelyn having taken into account her vast experience at the department and the pressure related to the work made provisions for flexible working schedules for the call centre staffs. Furthermore, the team at the customer service department incorporated their operations to integrate customers’ needs. This encouraged staffs to take adequate time in understanding and resolving customers’ problems. This would also be attributed to the ability of Evelyn to foster organizational needs in their activities at the department as they felt part of the company irrespective of their low pay (Lussier & Achua 2009, pp. 404-407). By contrast, a young manager becomes employed following Evelyn’s retirement to manage the customer service department. The senior management perceives the appointment of James to the reduced and controlled costs of the department. With the mindset of attaining the mark, Jame s increased the number of calls per hour for each staff as well as cutting back on the number of training the department received. Under James’ management, performance would be measured in terms of efficient scheduling though not reflecting flexibility and speed. In the face of these changes, the costs of the depa

Technological solution that can bridge a gap, fix a problem or somehow Research Proposal

Technological solution that can bridge a gap, fix a problem or somehow benefit risk, crisis or emergency management - Research Proposal Example Robotics or robot technology can play a significant part in this context, which supports quick reaction in tough and unsafe working environments by substituting employees to perform the risky tasks. Fulfilling the requirements of such risky tasks involves independent control, planning and navigation, instrument fusion and machine astuteness. Robot technology can be used for preventing any problem or issue while ensuring quality and safety of human beings (Habib & Baudoin, 2010). The paper will describe the most significant problems for emergency management, and will propose the requirement for using robotic technological solutions to bridge the gap and accomplish the objectives. Crisis management is a significant area in robot technology which is developed for making major impacts towards dealing with emergency situations. The robots are expected to support in emergency conducts by improving the safety and the security of people throughout the operations. Robots can use advanced instruments and tools in those circumstances which are inconvenient for general people. The recent improvements in robot system and equipment have made the work of rescuing people possible even in harsh environments. Human beings face several difficulties in managing crisis due to several obstructions of environment, which create a gap in performance and objectives of crisis management. The robot technology provides one of the best solutions for bridging the gap in crisis management as it can perform better compared to human beings and certain other technologies (Tadokoro, Matsuno, Nardi, & Jacof, 2009). Presently, the computer and information technology (IT) has brought significant revolution in data processing. The utilization of computer technology and IT is widely spread in present era. Traditionally, the computer and IT was only limited to management of files, however, nowadays they are being used in observing the condition of entire planet and helping to generate

PESTEL and SWOT Analysis of AstraZeneca pharmaceuticals

PESTEL and SWOT Analysis of AstraZeneca pharmaceuticals This is a report about entering a new market of AstraZeneca which is one of the worlds greatest pharmaceutical manufacturing companies. Being an international manager of this company, this report clearly shows the marketing plan of the company. 1.0 Introduction of AstraZeneca pharmaceuticals AstraZeneca pharmaceutical is a rapidly leading growing company that has branches in several countries. This company was formed on 6 April 1999 through the merger of Astra AB of Sweden and Zeneca Group PLC of the UK two companies with similar science-based cultures and a shared vision of the pharmaceutical industry. It is a company fully focused on single purpose, to enable the people life altering condition to live better lives. It has a portfolio of products for major diseases like cancer, cardiovascular, gastrointestinal, infection, neuroscience, respiratory and inflammation. The motto of the company is to build a significant difference to patient throughout great medicines that bring do good to for patients and add value for stakeholders and society. Product market characteristics AstraZeneca is an innovative driven biopharmaceutical global business that supplies their products in more than 100 countries. In many countries, it manufactures the products while also export products to countries where they do not have manufacturing operations. With the aim to be success, AstraZeneca has developed flexible marketing strategies to market and distributes its products in local areas of emerging market. The company focuses the skills and resources in six important areas of health care. It discovers, develops, manufactures and markets prescription pharmaceutical on the areas which include cardiovascular, cancer, infection, gastrointestinal, respiratory and inflammation. AstraZeneca is providing medicines for these worlds serious diseases. Now a day, people of every country is suffering from different type of bacterial infection. The death rate in developing country due to inflectional diseases is also increasing due to lack of appropriate medicine. There is a high demand of antibiotic medicine around the world in developing countries as well as in developed countries. Performance of AstraZeneca The performance at AstraZeneca is committed to achieve the financial and strategic objectives at the same time as maintaining the core values as the number one priority in counting to bring the best products to market all over the world. Research and Development is a key competitive advantage for this company. Without RD AstraZeneca could not have become the global leading biopharmaceutical company. The revenue of the company in 2009 was increased by 7% as well as new emerging markets businesses grew strongly by 12% revenue in constant currency time. There was improved in efficiency throughout the organization and some extra gains within other income. Although company revenue growth is slowing down due to continuous pressure on healthcare costs and pricing as well as vast competition from generic medicines, the demand for health care will derive the company future growth remain strong. (AstraZeneca Annual report 2009) 2.0 International marketing planning According to McDonald, marketing planning is a structured way of identifying a range of options for the company, of making them explicit in writing, of formulating marketing objectives which are consistent with the companys overall objectives and of scheduling and costing out the specific activities most likely to bring about the achievement of the objectives.(L S Walsh, International Marketing, third edition) 2.1 Internal and External environment It is also needed to take into consideration those internal factors close to the unit that have a direct impact on the unit and AstraZeneca strategic marketing.   These will include:   CUSTOMERS   AstraZeneca survive on the basis of meeting the needs, wants and providing benefits for their customers. Failure to do so will result in a failed business strategy.    EMPLOYEE   Employing the correct staff and keeping these staff motivated is an essential part of the strategic planning process of a AstraZeneca. Training and development plays an essential role particular in service sector marketing in-order to gain a competitive edge. The success is due to the 62,000 people they employ in their businesses. SHAREHOLDERS   It is the responsibility of the AstraZeneca to meet the expectation of Shareholder and perception. This company is trying its best to fulfill its strategy so that they can meet shareholdersexpectation.   When dealing with the marketing environment it is important for a company to become proactive. By doing so, they can create the kind of environment that they will prosper in and can become more efficient by marketing in areas with the greatest customer potential. It is important to place equal emphasis on both the macro and microenvironment and to react accordingly to changes within them. External strategy The PEST analysis examines changes in the marketplace caused by Political, Economic, Social, Technological factors. Political is political change whether it be through the European Union or the UK, from one party to another in control. Economic influences are the level of interest rates and the level of inflation. Social change involves changing attitudes and lifestyles. Technological change creates opportunities to invest in new products cutting costs. Political factors The government can have a major influence on the eating out industry, as all laws are passed through parliament. The types of laws that can affect the eating out industry are, tariffs on imports, a possible raise in value added tax and new health and safety laws, and also there is the possible introduction of laws from the European Union. So government regulations and legal issues have a direct impact on the way AstraZeneca operates. In result of growing awareness of the environmental consequences, U.K Government is planning actions to ensure aviation reflects its environmental impacts. Proposals are emerging for a tax on aviation, fuel and VAT on air tickets. Governments taxation policies and decision about the increase in the petrol prices have affected the buying power of the individuals in U.K. All of the above can cause a rise in costs so prices may rise in order to pass the costs onto the consumer. Economical factors AstraZeneca is also affected by economical factors nationally and globally. Whether an Economy is in a boom, recession or recovery will also affect consumer confidence and behavior. Economic factors have affected the purchasing power of potential customers, and the state of the internal/external economy in the short and long-term. As a result the company needs to consider: à ¢Ã¢â€š ¬Ã‚ ¢ Economic growth à ¢Ã¢â€š ¬Ã‚ ¢ Interest rates à ¢Ã¢â€š ¬Ã‚ ¢ Inflation rate à ¢Ã¢â€š ¬Ã‚ ¢ Budget allocation à ¢Ã¢â€š ¬Ã‚ ¢ The level of inflation à ¢Ã¢â€š ¬Ã‚ ¢ Employment level per capita   Interest rates are the lowest they have been for forty years and this affects the rate of consumer spending on goods and services. The rate of interest affects the economy through its influence on aggregate demand, the higher the rate of interest, the lower the rate of aggregate demand. A fall in interest rates usually means that assets rise in value; this means that consumers become wealthier. Social factors Social factors will include the demographic changes, trends in the way people live, work and think and cultural aspects of the macro environment. These factors affect customer needs and the size of potential market: à ¢Ã¢â€š ¬Ã‚ ¢ Population growth rate à ¢Ã¢â€š ¬Ã‚ ¢ Age distribution à ¢Ã¢â€š ¬Ã‚ ¢ Internal/external emphasis on safety à ¢Ã¢â€š ¬Ã‚ ¢ Internal/external attitudes to change à ¢Ã¢â€š ¬Ã‚ ¢ What is the stakeholder expectation of the unit?   Technological factors The complexities of achieving business success through increased efficiency, effectiveness and competitiveness, combined with innovative applications of modern technology, has heightened the awareness of both technology and business managers towards more strategically oriented approaches for planning and management of AstraZeneca. SWOT Factors SWOT factors refer to the strength, weaknesses, opportunity and threats of the company. The main strengths of AstraZeneca are its brands. It has an ability to deliver the potential of existing and future products through the power and reach of a combined global sales and marketing resources. It has a wide spread class coverage in key therapy area such as cardiovascular and respiratory diseases due to complementary nature of product. It is focused on constantly developing new products to expectations. Since it is a global industry it is a member of many organisations all over the world. The world population has doubled in the last 50 years from three billion to over six billion and is expected to reach nine billion by 2050. In addition, the number of people who can access the highest standards of healthcare continues to increase, particularly among the elderly, who represent a rising proportion of populations in developed nations and continue to offer opportunities for the industry to supply an expanding number of patients who can benefit from medicines. Currently, the threat of new viable competitors in the global industry is not very substantial. The main rivals of the company are GlaxoSmithKline plc, Merck Co.Inc, Novartis AG. The threat of substitutes, however, is a very real threat. The UK, and especially London, has been a prime target of the religious fundamentalists and terrorist outfits. London and other cities in the UK have been frequently under high alert since9/11 in general and after the war in Iraq in particular. 2.3 Marketing goals and objectives The main objectives of the company is to be the worlds largest pharmaceuticals company and to build a significant difference to patient all the way through great medicines that bring do good to for patients and add value for stakeholders and society. Boosting efforts to source improvement from outside the company and working in partnerships across all aspects of RD to broaden the base for a success. Market analysis Now a day, people of every country is suffering from different type of bacterial infection. The death rate in developing country due to inflectional diseases is also increasing due to lack of appropriate medicine. The demand for health care is more in every country so the companys future is bright and growth remains strong. Population are increasing and people are living longer. There is a high demand of antibiotic medicine around the world in developing countries as well as in developed countries. Although this company has its market in different countries, there are more countries where this company can gain its market. So, I have a target to provide medicines for inflectional diseases in new market. Merrem/Meronem (meropenen) is an ultra broad spectrum injectable antibiotic for a wide variety of serious infections, including meningitis and pneumonia. To meet the goals of the company even though it has its market in more than 100 countries, being an international manager of the company I would like to enter into other new market. So, first of all I am going to research the business environment of the country. I have chosen four countries Singapore, Bangladesh, Sri lanka and New Zealand. By doing PEST analysis of these countries I would choose the best one for my new market. PEST ANALYSIS OF FOUR COUNTRIES Countries Political factors Economical factors Socio cultural factors Technological factors Demographic factors Singapore Political condition is stable as there is parliament republic ,English law is accepted Highly developed and free market economy and GDP rate is also higher than other developed countries. Mix of culture and education is the main instrument Excellent transportation, communication system Population is less than other three contries ,total area is 756950sqkm Bangladesh political condition is not stable, Poor economic condition due to recession Different types of languages and religions, health standard is improving Modern communication system and advanced road system 7th highest population in the world Sri lanka republic Developing country, estimated GDP growth rate is 3.5% Various languages and religion, multi ethnic countries Sophisticated transportation communication services Population is estimated 20,238,000 New Zealand Free market economy, can compete globally Modern, Prosperous and high standard of living Rich in culture, different religious Excellent technological factors services Population is 43677000. Source: Wikipedia of all countries According to PEST analysis, I found New Zealand and Singapore are the strong country than Bangladesh and Sri lanka in every aspect. Among these two countries I am going to choose New Zealand for new market for my product. New Zealand is one of the prosperous and high living standard countries. Political environment is stable so there is no difficulty for the businesses. Since 99% of people are educated they are aware about their health and they demand for better healthcare. The average life expectancy is 80 years, as people live longer they suffer from different diseases. 3.0 Market Entry Strategy There are different methods of entering an overseas market. Expansion of business into international market can be done through following mechanisms which are discussed below. Export Joint Venture (franchising, licensing) Foreign Direct Investment Export: It is a traditional and well established method of market entry to foreign markets. This method is less expensive as we dont have to establish new company in other market but have to find distributor for my product. Joint venture: In this type the two or more companies in different countries agree to perform the business and share the profit and bear the losses. Nowadays this method is famous as there is low risk and burden is divided. Joint venture can be done in two ways: licensing and franchising Licensing: It is a wide range of agreements relating to the sale or leasing of industrial or commercial expertise by one party to other in returns for valuable considerations. Franchising: it is a form of licensing by which the franchiser provides a standard package of components or ingredients together with management and marketing services. The franchisee provides capital, market knowledge and personal involvement. Foreign Direct Investment: It is the direct ownership of facilities in the targeted country. It is the 100%investment in that country. It can be done by acquisition of existing company in the targeted country. Advantages and disadvantages of market entry methods Methods Advantages disadvantages Export Less expensive, minimize investment, efficiency as there is speed entry. Limits access to local information and market, transportation cost may be high, risk of exchange rate of currency joint venture Low risk, less investment required, overcomes ownership and cultural distances Conflict between two parties, differences in cultures and management styles Foreign direct investment Greater knowledge of the market, 100% control, gives the company fully protection Higher risk than other methods, lack of managerial skills as well as ,expensive, 4.0 Implementing marketing plan ps Product Price Place promotion .

Suicide Will Condemn One to Hell Essay -- essays research papers

Suicide Will Condemn One to Hell   Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Suicide is the only simple act that gives man absolute control of his life. Everyone from an early age contemplates and fantasizes with the idea of being able to end their life. Throughout time, this act has become more accepted, and easier to accomplish. Many people today believe there are reasons to justifiably end one’s own life. Though, through Christianity, it is found that not only is suicide wrong, but is the only simple act that will condemn one to hell.   Ã‚  Ã‚  Ã‚  Ã‚  Suicide is not really suicide when it deals with children. From childhood, people are tempted with the idea of suicide. Children, from the media, their friends and family are introduced with this idea from an early age. Though, there are not many cases where children commit suicide, there are a few instants that leave survivors puzzled. The difficult part about child suicide is, how old do you have to be to realize what you are doing. If a child does not know what they are doing is wrong, by committing suicide, it is not suicide. When the child does not know what they are doing, then the suicide changes from murder to an accident.   Ã‚  Ã‚  Ã‚  Ã‚  Another instance, in which suicide could be justified as not wrong, is when it deals with the mentally unstable. This is also like child suicide, because the insane are not capable of judging right from wrong. No one knows the degree of sanity one needs to be able to decipher their own actions, so this is also completely left up t...

Business Buying Behavior

Business buyer Behavior| | | | In last Lesson we discussed the Consumer Buying behavior. Today We will discuss business buyer behaviour, types of buying situations, participants in the business buying process, and major influences on business buyers so our today’s topic is:BUSINESS MARKETS AND BUYING BEHAVIORThe  business market  includes firms that buy goods and services in order to produce products and services to sell to others. It also includes retailing and wholesaling firms that buy goods in order toects resell them at a profit. Because asp of business-to-business marketing apply to  institutional  markets  and  government markets, we group these together. The business marketer needs to know the following: Who are the major participants? In what decisions do they exercise influence? What is their relative degree of influence? What evaluation criteria does each decision participant use? The business marketer also needs to understand the major environmental, interpersonal, and individual influences on the buying process. A. What is a Business Market? The business market comprises all the organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others. It also includes retailing and wholesaling firms that acquire goods for the purpose of reselling or renting them to others at a profit. In the business buying process business buyers determine which products and services their organizations need to purchase, and then find, evaluate, and choose among alternative suppliers and brands. Companies that sell to other business organizations must do their best to understand business markets and business buyer behavior. B. Characteristics of Business MarketsIn some ways, business markets are similar to consumer markets. Both involve people who assume buying roles and make purchase decisions to satisfy needs. However, business markets differ in many ways from consumer markets. The main differences, are in the market structure and demand, the nature of the buying unit, and the types of decisions and the decision process involved. Business markets also have their own characteristics. In some ways, they are similar to consumer markets, but in other ways they are very different. The main differences include:1. Market structure and demand. Business markets typically deal with far fewer but far larger buyers. They are more geographically concentrated. Business markets have derived demand  (business demand that ultimately comes from or derives from the demand for consumer goods). Many business markets have  inelastic demand; that is, total demand for many business products is not affected much by price changes, especially in the short run. A drop in the price of leather will not cause shoe manufacturers to buy much more leather unless it results in lower shoe prices that, in turn, will increase consumer demand for shoes. Finally, business markets have morefluctuating demand. The demand for many business goods and services tends to change more—and more quickly—than the demand for consumer goods and services does. A small percentage increase in consumer demand can cause large increases in business demand. Sometimes a rise of only 10 percent in consumer demand can cause as much as a 200 percent rise in business demand during the next period. 2. Nature of the Buying Unit:Compared with consumer purchases, a business purchase usually involves more decision participants and a more professional purchasing effort. Often, business buying is done by trained purchasing agents who spend their working lives learning how to make better buying decisions. Buying committees made up of technical experts and top management are common in the buying of major goods. Companies are putting their best and brightest people on procurement patrol. Therefore, business marketers must have well-trained salespeople to deal with well-trained buyers. 3. Types of Decisions and the Decision ProcessBusiness buyers usually face  more complex  buying decisions than do consumer buyers. Purchases often involve large sums of money, complex technical and economic considerations, and interactions among many people at many levels of the buyer's organization. Because the purchases are more complex, business buyers may take longer to make their decisions. The business buying process tends to be  more formalized  than the consumer buying process. Large business purchases usually call for detailed product specifications, written purchase orders, careful supplier searches, and formal approval. The buying firm might even prepare policy manuals that detail the purchase process. Finally, in the business buying process, buyer and seller are often much  more dependent  on each other. Consumer marketers are often at a distance from their customers. In contrast, business marketers may roll up their sleeves and work closely with their customers during all stages of the buying process—from helping customers define problems, to finding solutions, to supporting after-sale operation. They often customize their offerings to individual customer needs. In the short run, sales go to suppliers who meet buyers' immediate product and service needs. C. Business Buyer BehaviorThe model in Figure suggests four questions about business buyer behavior: What buying decisions do business buyers make? Who participates in the buying process? What are the major influences on buyers? How do business buyers make their buying decisions? a. A Model of Business Buyer BehaviorAt the most basic level, marketers want to know how business buyers will respond to various marketing stimuli. Figure shows a model of business buyer behavior. In this model, marketing and other stimuli affect the buying organization and produce certain buyer responses. As with consumer buying, the marketing stimuli for business buying consist of the four Ps: product, price, place, and promotion. Other stimuli include major forces in the environment: economic, technological, political, cultural, and competitive. These stimuli enter the organization and are turned into buyer responses: product or service choice; supplier choice; order quantities; and delivery, service, and payment terms. In order to design good marketing mix strategies, the marketer must understand what happens within the organization to turn stimuli into purchase responses. Within the organization, buying activity consists of two major parts: the buying center, made up of all the people involved in the buying decision, and the buying decision process. The model shows that the buying center and the buying decision process are influenced by internal organizational, interpersonal, and individual factors as well as by external environmental factors. b. Major Types of Buying SituationsThere are three major types of buying situations. At one extreme is the  straight rebuy,  which is a fairly routine decision. At the other extreme is the  new task,  which may call for thorough research. In the middle is themodified rebuy,  which requires some research. In a  straight rebuy  the buyer reorders something without any modifications. It is usually handled on a routine basis by the purchasing department. Based on past buying satisfaction, the buyer simply chooses from the various suppliers on its list. â€Å"In† suppliers try to maintain product and service quality. In a  modified rebuy, the buyer wants to modify product specifications, prices, terms, or suppliers. The modified rebuy usually involves more decision participants than the straight rebuy. The in suppliers may become nervous and feel pressured to put their best foot forward to protect an account. Out suppliers may see the modified rebuy situation as an opportunity to make a better offer and gain new business. A company buying a product or service for the first time faces a  new-task  situation. In such cases, the greater the cost or risk, the larger the number of decision participants and the greater their efforts to collect information will be. The new-task situation is the marketer's greatest opportunity and challenge. The marketer not only tries to reach as many key buying influences as possible but also provides help and information. The buyer makes the fewest decisions in the straight rebuy and the most in the new-task decision. In the new-task situation, the buyer must decide on product specifications, suppliers, price limits, payment terms, order quantities, delivery times, and service terms. The order of these decisions varies with each situation, and different decision participants influence each choice. c. Participants in the Business Buying ProcessThe decision-making unit of a buying organization is called its buying center: all the individuals and units that participate in the business decision-making process. The buying center includes all members of the organization who play any of five roles in the purchase decision process. †¢Ã‚  Users  are members of the organization who will use the product or service. In many cases, users initiate the buying proposal and help define product specifications. †¢Ã‚  Influencers  often help define specifications and also provide information for evaluating alternatives. Technical personnel are particularly important influencers. †¢Ã‚  Buyers  have formal authority to select the supplier and arrange terms of purchase. Buyers may help shape product specifications, but their major role is in selecting vendors and negotiating. In more complex purchases, buyers might include high-level officers participating in the negotiations. †¢Ã‚  Deciders  have formal or informal power to select or approve the final suppliers. In routine buying, the buyers are often the deciders, or at least the approvers. †¢Ã‚  Gatekeepers  control the flow of information to others. For example, purchasing agents often have authority to prevent salespersons from seeing users or deciders. Other gatekeepers include technical personnel and even personal secretaries. The buying center is not a fixed and formally identified unit within the buying organization. It is a set of buying roles assumed by different people for different purchases. Within the organization, the size and makeup of the buying center will vary for different products and for different buying situations. Business marketers working in global markets may face even greater levels of buying center influence. The buying center concept presents a major marketing challenge. The business marketer must learn who participates in the decision, each participant's relative influence, and what evaluation criteria each decision participant uses. The buying center usually includes some obvious participants who are involved formally in the buying decision. d. Major Influences on Business BuyersBusiness buyers are subject to many influences when they make their buying decisions. Some marketers assume that the major influences are economic. They think buyers will favor the supplier who offers the lowest price or the best product or the most service. They concentrate on offering strong economic benefits to buyers. However, business buyers actually respond to both economic and personal factors. Far from being cold, calculating, and impersonal, business buyers are human and social as well. They react to both reason and emotion. Today, most business-to-business marketers recognize that emotion plays an important role in business buying decisions. When suppliers' offers are very similar, business buyers have little basis for strictly rational choice. Because they can meet organizational goals with any supplier, buyers can allow personal factors to play a larger role in their decisions. However, when competing products differ greatly, business buyers are more accountable for their choice and tend to pay more attention to economic factors. Figure lists various groups of influences on business buyers— environmental, organizational, interpersonal, and individual. Major Influences on Business Buyers†¢Ã‚  Environmental FactorsBusiness buyers are influenced heavily by factors in the current and expected  economic environment,  such as the level of primary demand, the economic outlook, and the cost of money. As economic uncertainty rises, business buyers cut back on new investments and attempt to reduce their inventories. An increasingly important environmental factor is shortages in key materials. Many companies now are more willing to buy and hold larger inventories of scarce materials to ensure adequate supply. Business buyers also are affected by technological, political, and competitive developments in the environment. Culture and customs can strongly influence business buyer reactions to the marketer's behavior and strategies, especially in the international marketing environment. The business marketer must watch these factors, determine how they will affect the buyer, and try to turn these challenges into opportunities.   Organizational FactorsEach buying organization has its own objectives, policies, procedures, structure, and systems. The business marketer must know these  organizational factors  as thoroughly as possible. Questions such as these arise: How many people are involved in the buying decision? Who are they? What are their  evaluative criteria? What are the company's polici es and limits on its buyers? Interpersonal FactorsThe buying center usually includes many participants who influence each other. The business marketer often finds it difficult to determine what kinds of  interpersonal factors  and group dynamics enter into the buying process. Participants may have influence in the buying decision because they control rewards and punishments, are well liked, have special expertise, or have a special relationship with other important participants. Interpersonal factors are often very subtle. Whenever possible, business marketers must try to understand these factors and design strategies that take them into account. Individual FactorsEach participant in the business buying decision process brings in personal motives, perceptions, and preferences. These individual factors are affected by personal characteristics such as age, income, education, professional identification, personality, and attitudes toward risk. Also, buyers have different buying styles. Some may be technical types who make in-depth analyses of competitive proposals before choosing a supplier. Other buyers may be intuitive negotiators who are adept at pitting the sellers against one another for the best deal. D. The Business Buying ProcessThere are eight stages of the business buying process. Buyers who face a new-task buying situation usually go through all stages of the buying process. Buyers making modified or straight rebuys may skip some of the stages. We will examine these steps for the typical new-task buying situation. a. Problem RecognitionThe buying process begins when someone in the company recognizes a problem or need that can be met by acquiring a specific product or service. Problem recognition can result from internal or external stimuli. Internally, the company may decide to launch a new product that requires new production equipment and materials. Or a machine may break down and need new parts. Perhaps a purchasing manager is unhappy with a current supplier's product quality, service, or prices. Externally, the buyer may get some new ideas at a trade show, see an ad, or receive a call from a salesperson who offers a better product or a lower price. In fact, in their advertising, business marketers often alert customers to potential problems and then show how their products provide solutions. b. General Need DescriptionHaving recognized a need, the buyer next prepares a general need description that describes the characteristics and quantity of the needed item. For standard items, this process presents few problems. For complex items, however, the buyer may have to work with others—engineers, users, consultants—to define the item. The team may want to rank the importance of reliability, durability, price, and other attributes desired in the item. In this phase, the alert business marketer can help the buyers define their needs and provide information about the value of different product characteristics. c. Product SpecificationThe buying organization next develops the item's technical product specifications, often with the help of a value analysis engineering team. Value analysis is an approach to cost reduction in which components are studied carefully to determine if they can be redesigned, standardized, or made by less costly methods of production. The team decides on the best product characteristics and specifies them accordingly. Sellers, too, can use value analysis as a tool to help secure a new account. By showing buyers a better way to make an object, outside sellers can turn straight rebuy situations into new-task situations that give them a chance to obtain new business. d. Supplier SearchThe buyer now conducts a supplier search to find the best vendors. The buyer can compile a small list of qualified suppliers by reviewing trade directories, doing a computer search, or phoning other companies for recommendations. Today, more and more companies are turning to the Internet to find suppliers. For marketers, this has leveled the playing field—smaller suppliers have the same advantages as larger ones and can be listed in the same online catalogs for a nominal fee: The newer the buying task, and the more complex and costly the item, the greater the amount of time the buyer will spend searching for suppliers. The supplier's task is to get listed in major directories and build a good reputation in the marketplace. Salespeople should watch for companies in the process of searching for suppliers and make certain that their firm is considered. e. Proposal SolicitationIn the proposal solicitation stage of the business buying process, the buyer invites qualified suppliers to submit proposals. In response, some suppliers will send only a catalog or a salesperson. However, when the item is complex or expensive, the buyer will usually require detailed written proposals or formal presentations from each potential supplier. Business marketers must be skilled in researching, writing, and presenting proposals in response to buyer proposal solicitations. Proposals should be marketing documents, not just technical documents. Presentations should inspire confidence and should make the marketer's company stand out from the competition. f. Supplier SelectionThe members of the buying center now review the proposals and select a supplier or suppliers. During supplier selection, the buying center often will draw up a list of the desired supplier attributes and their relative importance. In one survey, purchasing executives listed the following attributes as most important in influencing the relationship between supplier and customer: quality products and services, on-time delivery, ethical corporate behavior, honest communication, and competitive prices. Other important factors include repair and servicing capabilities, technical aid and advice, geographic location, performance history, and reputation. The members of the buying center will rate suppliers against these attributes and identify the best suppliers. As part of the buyer selection process, buying centers must decide how many suppliers to use. In the past, many companies preferred a large supplier base to ensure adequate supplies and to obtain price concessions. These companies would insist on annual negotiations for contract renewal and would often shift the amount of business they gave to each supplier from year to year. Increasingly, however, companies are reducing the number of suppliers. There is even a trend toward single sourcing, using one supplier. With single sourcing there is only one supplier to handle and it is easier to control newsprint inventories. Using one source not only can translate into more consistent product performance, but it also allows press rooms to configure themselves for one particular kind of newsprint rather than changing presses for papers with different attributes. Many companies, however, are still reluctant to use single sourcing. They fear that they may become too dependent on the single supplier or that the single-source supplier may become too comfortable in the relationship and lose its competitive edge. Some marketers have developed programs that address these concerns. g. Order-Routine SpecificationThe buyer now prepares an order-routine specification. It includes the final order with the chosen supplier or suppliers and lists items such as technical specifications, quantity needed, expected time of delivery, return policies, and warranties. In the case of maintenance, repair, and operating items. h. Performance ReviewIn this stage, the buyer reviews supplier performance. The buyer may contact users and ask them to rate their satisfaction. The performance review may lead the buyer to continue, modify, or drop the arrangement. The seller's job is to monitor the same factors used by the buyer to make sure that the seller is giving the expected satisfaction. We have described the stages that typically would occur in a new-task buying situation. The eightstage model provides a simple view of the business buying decision process. The actual process is usually much more complex. In the modified rebuy or straight rebuy situation, some of these stages would be compressed or bypassed. Each organization buys in its own way, and each buying situation has unique requirements. Different buying center participants may be involved at different stages of the process. Although certain buying process steps usually do occur, buyers do not always follow them in the same order, and they may add other steps. Often, buyers will repeat certain stages of the process. E. Institutional and Government MarketsSo far, our discussion of organizational buying has focused largely on the buying behavior of business buyers. Much of this discussion also applies to the buying practices of institutional and government organizations. However, these two nonbusiness markets have additional characteristics and needs. In this final section, we address the special features of institutional and government markets. a. Institutional MarketsThe institutional market consists of schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care. Institutions differ from one another in their sponsors and in their objectives. Many institutional markets are characterized by low budgets and captive patrons. For example, hospital patients have little choice but to eat whatever food the hospital supplies. A hospital-purchasing agent has to decide on the quality of food to buy for patients. Because the food is provided as a part of a total service package, the buying objective is not profit. Nor is strict cost minimization the goal—patients receiving poorquality food will complain to others and damage the hospital's reputation. Thus, the hospitalpurchasing agent must search for institutional-food vendors whose quality meets or exceeds a certain minimum standard and whose prices are low. Many marketers set up separate divisions to meet the special characteristics and needs of institutional buyers. . Government MarketsThe government market offers large opportunities for many companies, both big and small. In most countries, government organizations are major buyers of goods and services. Government buying and business buying are similar in many ways. But there are also differences that must be understood by companies that wish to sell products and services to governments. To succe ed in the government market, sellers must locate key decision makers, identify the factors that affect buyer behavior, and understand the buying decision process. Government organizations typically require suppliers to submit bids, and normally they award the contract to the lowest bidder. In some cases, the government unit will make allowance for the supplier's superior quality or reputation for completing contracts on time. Many companies that sell to the government have not been marketing oriented for a number of reasons. Total government spending is determined by elected officials rather than by any marketing effort to develop this market. Government buying has emphasized price, making suppliers invest their effort in technology to bring costs down. When the product's characteristics are specified carefully, product differentiation is not a marketing factor. Nor do advertising or personal selling matter much in winning bids on an open-bid basis. Key TermsBusiness Markets:The  business market  includes firms that buy goods and services in order to produce products and services to sell to others. Straight Re-buythe buyer reorders something without any modifications. Modified Re-buy  the buyer wants to modify product specifications, prices, terms, or suppliers. New Task Buying  A company buying a product or service. Users  are members of the organization who will use the product or service. In many cases, users initiate the buying proposal and help define product specifications. Influencers  Often help define specifications and also provide information for evaluating alternatives. Technical personnel are particularly important influencers. Buyershave formal authority to select the supplier and arrange terms of purchase. Decidershave formal or informal power to select or approve the final suppliers. Gatekeeperscontrol the flow of information to others. |

Exxon Mobil Stock Analysis

STOCK ANALYSIS REPORT – Exxon Mobil Corporation (XOM) –August 15th , 2011 [pic] Industry: Oil and Gas Operations Sector: Energy Recommendation: SELL Price: $74. 29 (as of  Ã‚  August 15th 2011, 4:00pm ET) Intrinsic Value: $52. 10 or 42. 6% overvalued Fundamentals Grade: A Investment Style: Large Cap Blend CORPORATE INFORMATION [pic] Location: 5959 Las Colinas Boulevard Irving, TX 75039 Phone: 972-4441000 Fax: 972-4441348 Web Site: http://www. exxonmobil. com/ Employees: 83,000 Exchange: NYSE BUSINESS SUMMARY Exxon Mobil Corporation (Exxon Mobil) through its divisions and affiliates is engaged in exploration for, and production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products. †¢ ExxonMobil is the largest integrated oil company, with operations in over 200 countries. This globally diversified enterprise produces superior returns in its business segments when compared to other major oil and gas companies. †¢ Exxon has a strong balance sheet with a cash position of approximately $13B and 0. 7 Debt-to equity. Exxon has the liquidity and credit to invest in high return projects around the world. †¢ Prices for oil and gas are expected to rise in the foreseeable future. Emerging market growth and increasing need for energy will place upward pressure on prices. Exxon will benefit as the world’s largest oil and gas company (by reserves, excluding national oil companies). The average industry return is 27%, which is greater than that of S&P500 (21%). †¢ Exxon’s all-stock purchase of XTO Energy is dilutive to share holders and not expected to increase EPS in 2011 or 2012. Exxon’s size and breadth of operations make it difficult to find investments large enough to produce market beating growth. We expect Exxon’s growth to slightly lag the overall economy, especially smaller exploration and production companies that have better investment opportunities relative to their size. †¢ Exxon’s inability to organically replace reserves means that it must acquire oil and gas assets to supply its operations with replacements for the reserves it consumes. Acquired assets will likely come at a higher price and produce a lower return. Production from Exxon’s Upstream segment (exploration and production of oil and gas) has been declining (down 30% since 2006). While the acquisition of XTO will replace some of this lost production, it is expected that the company will continue to experience declining production from its existing fields. KEY STATISTICS |Market Cap (intraday)5: |360. 57B | |Enterprise Value (Aug 17, 2011)3: |363. 1B | |Trailing P/E (ttm, intraday): |9. 78 | |Forward P/E (fye Dec 31, 2012)1: |8. 21 | |PEG Ratio (5 yr expected)1: |1. 32 | |Price/Sales (ttm): |0. 91 | |Price/Book (mrq): |2. 0 | |Enterprise Value/Revenue (ttm)3: |0. 93 | |Institutional Ownership |49. 12% | |Earnings Yield |9. 28% | |Return on equity (RoE) |24. 69% | |36 month Beta |0. 9 | |Dividend Yield |2. 48% | |Profit Margin |8. 51% | |Current Ratio |0. 97 | |Debt to equity ratio |0. 07 | [1]Source: Yahoo finance; http://ycharts. om/companies/XOM/return_on_equity ANALYSIS Exxon Mobil (XOM) is the largest market capitalized oil company in the world which in 2008 obtained the highest quarterly and annual profit in United States history. The Company plans to invest $125 billion over the next five years to develop new technology, deliver new Upstream projects, increase refining capacity, and grow their Chemical business. Exxon Mobil’s revenue and profit have increased 60% and 79% respectively in the last 5 years. The Company exhibits a healthy profit margin and return on equity of 8. 51% and 20. 4% respectively and maintains an above average earnings yield of 10. 27%. Exxon Mobil has plenty of liquidity enabling the Company to pay all its long-term debt in less than three months on profit alone. Exxon Mobil is valued at $52. 1 as of August 15th 2011. The Company is 42. 61% overvalued for the current price of $74. 29. The PB ratio is slightly above the industry average of 2. 0. Risks to Exxon Mobil include depreciating reserves, decreasing number of new oil fields, adverse environmental impacts, government regulations, geopolitical risks, market volatility, macroeconomic difficulties, etc. Balance Sheet The balance sheet of XOM is pristine. Debt comprises only 9% of total capital, and in a business that is very capital intensive, that’s a great sign. The current ratio is low at 0. 94, slightly lower than the generally accepted â€Å"safe† level of 1. $30 billion in earnings in 2010 is more than enough to repay the roughly $15 billion in total debt the company has in only a few years. Return on Equity The return on equity closely followed the rise of oil prices up until 2008, the fall in 2008- 2009 and the subsequent increase ever since. Right now Exxon-Mobil has a high return on equity of 20%. Given the high oil prices, I expect ROE to reach its 2008 highs this year. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time. Dividends Exxon Mobil has paid an increasing dividend for the past 27 years, and according to their website, averaged 5. 7% over that time period. The most recent increase came on April 27 of this year, when they raised the quarterly payout 6. 8% from $0. 44 to $0. 47 a share. This is an annual raise from $1. 74 to $1. 88, or 8%. Projections: 2011 2012 2013 2014 2015 Dividends Per Share $1. 4 $2. 00 $2. 04 $2. 07 $2. 10 Dividend Growth 11. 7% 2. 7% 2. 4% 1. 3% 1. 3% DIRECT COMPETITOR COMPARISON | |COP |CVX |XOM |Industry | |Market Cap: |91. 75B |195. 65B |360. 57B |26. 52B | |Employees: |29,900 |62,000 |83,600 |11. 00K | |Qtrly Rev Growth (yoy): |45. 70% |30. 60% |36. 30% |8. 0% | |Revenue (ttm): |210. 76B |216. 90B |392. 72B |18. 63B | |Gross Margin (ttm): |23. 43% |32. 58% |31. 45% | 32. 51% | |EBITDA (ttm): |28. 78B |45. 90B |65. 78B |4. 19B | |Operating Margin (ttm): |9. 46% |15. 07% |12. 74% |11. 65% | |Net Income (ttm): |11. 3B |23. 01B |37. 93B |N/A | |EPS (ttm): |7. 93 |11. 45 |7. 59 |2. 46 | |P/E (ttm): |8. 43 |8. 53 |9. 78 |12. 94 | |PEG (5 yr expected): |6. 21 |1. 61 |1. 32 |1. 14 | |P/S (ttm): |0. 43 |0. 90 |0. 91 |1. 39 | P/E ratios are higher for firms with strong growth prospects, other things held constant, but they are lower for riskier firms. All the three companies have P/E lower than the Industry average. Profit margin is very useful when comparing  companies in similar industries. A higher profit margin indicates a more profitable company that  has better control over  its costs compared to  its competitors. Here again, XOM has a relatively good control of cost. As per the comparison of the ratios with industry average, Exxon Mobil is high performing company with higher ratios than industry standards. Current Market Price (as of 08/17/11) of the Stocks: |  Company name |Current Market Price | |Chevron Corp |$92. 02 | |ConocoPhillips |$62. 29 | |Exxon Mobil |$74. 29 | EXXON MOBIL’S INTRINSIC VALUE: †¢ Current US 90 days Treasury Bill – Rate of Return: 3. 5%   †¢ Historical return on long term Treasury Bond = 5. 8% †¢ Long term risk free rate = rRF = 5. 8% (historical return) Return for the market or an average stock(rM): For this project, it is assumed that the historical rate of return for the S&P500   is same as the market risk = 10. 4%. I am using CAPM method to estimate the market risk premium and calculating the historical risk premium by comparing historical to historical rates. The historical risk premium is 10. 4 -5. 8 = 4. 6% Required Return on Common Stock Required return on common stock (rS) for Exxon Mobil rS = rRF + (rM – rRF)*b = 5. 8% + (10. 4% – 5. 8%) * 0. 49   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = 8. 05% Dividend Growth Model: Common stocks provide an expected future cash flow stream, and a stock’s value is found as the present value of the expected future cash flow stream. The expected final stock price includes the return of the original investment plus an expected capital gain. The expected cash flow consists of two elements: 1. the dividends expected in each year. 2. the price investors expect to receive when they sell the stock. Formula1:  Ã‚  Ã‚  Ã‚   P hat 0 = D1/rS – g Where P hat 0 = intrinsic value of the stock today as seen by the investor D1 = D0 (1 + g) = expected dividend in the first year. D0 = recent dividend paid g = expected dividend growth rate. rS = required rate of return Formula2: r hat S = D1/P0 + g Where r hat S = expected rate of return D1/P0 = expected dividend yield P0 = actual market price of the stock today. g = expected growth rate or capital gains yield. One would buy the stock only if expected rate of return is equal to or greater than required rate of return. For Exxon Mobil: D0 = $1. 8; g = 5. 7 %; rS = 8. 05% P0 = 1. 38 (1+ 0. 057)/ (0. 085 – 0. 057) = 1. 457/ 0. 0280 = $52. 1 The current price is greater than intrinsic value, the Exxon Mobil stock is overvalued by $22. 20 r hat S = 1. 96% + 5. 7% = 7. 66% The expected rate of return is less than required rate of return, which means investor will not buy. Conclusion: SELL Comparing the averaged value of $52. 10 a nd the closing price on 08/15/11 of $74. 29, XOM is adversely overpriced price, with an approximate 42. 6% difference. At this point in time, I think Exxon Mobil’s risks outweigh the potential opportunity here. While I feel the dividend is safe (at a 25% payout ratio) and the current yield is adequate (2. 48%), the Company's ability to increase the payout and create outsized returns for investors is limited by the Company's cyclical market and weak consensus estimates. Sources: †¢ http://financialanalysisonline. com/ †¢ http://www. thedividendpig. com/? p=1395 †¢ http://investing. money. msn. com/investments/stock-price? symbol=xom †¢ http://www. stock-analysis-on. net/NYSE/Company/Exxon-Mobil-Corp/Valuation/Ratios#Current-Valuation-Ratios †¢ http://www. dailyfinance. com/2011/08/08/big-oil-outlook-major-oil-stocks-with-bullish-opti/? ource=TheMotleyFool †¢ http://www. exxonmobil. com/Corporate/Files/news_pubs_sar_2010. pdf †¢ http://www. exxonmobil. com/corporate/investor_dividend. aspx †¢ http://ycharts. com/companies/XOM/price_to_book_value †¢ http://financialanalysisonline. com ———————– [1] 1 Data provided by Thomson Reuters 2 Data provided by EDGAR Online 3 Data derived from multiple sources or calculated by Yahoo! Finance 4 Data provided by Morningstar, Inc. 5 Shares outstanding is taken from the most recently filed quarterly or annual report and Market Cap is calculated using shares outstanding.