Pens vs. Pencils Compare/Contrast

You are in the middle of writing the best story of your life. Every word is rolling out of you with ease; you feel as if nothing could stop this continuous flow of ideas, and then snap! That’s the sound of your pencil lead breaking. You get up to sharpen the utensil, but find that you have no way of doing so. You get out a small pocket knife and begin frantically whittling the end, hoping to see some sign of the soft graphite showing, so that you may continue your story, which is quickly evaporating from your brain.As you wait in the hospital emergency room, blood dripping from your punctured hand, you realize that you will never remember the end of the story you were writing, and you think to yourself, â€Å"Could anything be worse? Would a pen have saved my finger? † Well, my answer: Maybe. You make many decisions throughout your life, but one quandary that presents itself on a daily basis is the decision between writing with a pen or a pencil. Although both a pencil and pen function in very nearly the same way, there exist some key differences between the two. Pens and pencils are similar in a large number of ways.First, they both are used for writing and are essentially the same cylindrical shape. Also, they will both eventually, if used enough, be rendered useless: the pen by running out of ink, the pencil by running out of lead. Both a pen and a pencil can be relatively cheap to purchase also, and both can be erased, although the mark of a pen is often more difficult to remove. Recognizing all of these similarities, one may begin to think that pens and pencils are nearly the same, but this is far from true. One major way in which a pen and pencil differ is in the length of usage.Many pencils are quick to break, requiring sharpening again and again, while you are forced to watch helplessly as your new pencil quickly transmutes into an embarrassing stump of a writing utensil. Pens, on the other hand, never require sharpening, and they will oft en last days and days longer than even the best of pencils. This is not even to mention the annoyance of losing a brand new pencil eraser the first time you use it, because it decides, instead of yielding neatly and doing its job of effacing the misplaced mark, to completely snap off when the lightest of pressures is applied.Surely, the reader is familiar with this hazard and can see that the longer length of usage provided by a pen far outweighs the, some might say, advantage of the erasability of pencils. The major difference that can be noticed between these two utensils is more subtle. In regards to the feeling in the hand of the movement of the writing utensil, the difference between writing with a pen compared with using a pencil is nearly the same as the comparison between writing with a smooth, brand new Expo marker and scraping your sharpened nails down a two hundred-year-old crusty chalkboard.One is smooth, the other is not, and gratingly so. Many people prefer pens for ex actly this reason: the smooth feeling of writing with one. Where pencils can be rough and, if poorly sharpened, irritatingly dull, pens rarely fail to provide a smooth writing experience. Pens and pencils, though seemingly very similar, in fact, have a few major differences, and these differences show the advantages of using a pen. A pen will not normally break and will last a lot longer than a pencil.Pens also provide a smoother writing experience and do not give a feeling of scraping a chiseled piece of rock against your work. So, next time you have the decision to make between a pen and pencil, choose wisely, and remember these words if you make the wrong decision and end up in the hospital with your whittling knife stuck in the pad of you hand with the best story you have ever contrived slowly erasing itself from your mind. Pens vs. Pencils Compare/Contrast You are in the middle of writing the best story of your life. Every word is rolling out of you with ease; you feel as if nothing could stop this continuous flow of ideas, and then snap! That’s the sound of your pencil lead breaking. You get up to sharpen the utensil, but find that you have no way of doing so. You get out a small pocket knife and begin frantically whittling the end, hoping to see some sign of the soft graphite showing, so that you may continue your story, which is quickly evaporating from your brain.As you wait in the hospital emergency room, blood dripping from your punctured hand, you realize that you will never remember the end of the story you were writing, and you think to yourself, â€Å"Could anything be worse? Would a pen have saved my finger? † Well, my answer: Maybe. You make many decisions throughout your life, but one quandary that presents itself on a daily basis is the decision between writing with a pen or a pencil. Although both a pencil and pen function in very nearly the same way, there exist some key differences between the two. Pens and pencils are similar in a large number of ways.First, they both are used for writing and are essentially the same cylindrical shape. Also, they will both eventually, if used enough, be rendered useless: the pen by running out of ink, the pencil by running out of lead. Both a pen and a pencil can be relatively cheap to purchase also, and both can be erased, although the mark of a pen is often more difficult to remove. Recognizing all of these similarities, one may begin to think that pens and pencils are nearly the same, but this is far from true. One major way in which a pen and pencil differ is in the length of usage.Many pencils are quick to break, requiring sharpening again and again, while you are forced to watch helplessly as your new pencil quickly transmutes into an embarrassing stump of a writing utensil. Pens, on the other hand, never require sharpening, and they will oft en last days and days longer than even the best of pencils. This is not even to mention the annoyance of losing a brand new pencil eraser the first time you use it, because it decides, instead of yielding neatly and doing its job of effacing the misplaced mark, to completely snap off when the lightest of pressures is applied.Surely, the reader is familiar with this hazard and can see that the longer length of usage provided by a pen far outweighs the, some might say, advantage of the erasability of pencils. The major difference that can be noticed between these two utensils is more subtle. In regards to the feeling in the hand of the movement of the writing utensil, the difference between writing with a pen compared with using a pencil is nearly the same as the comparison between writing with a smooth, brand new Expo marker and scraping your sharpened nails down a two hundred-year-old crusty chalkboard.One is smooth, the other is not, and gratingly so. Many people prefer pens for ex actly this reason: the smooth feeling of writing with one. Where pencils can be rough and, if poorly sharpened, irritatingly dull, pens rarely fail to provide a smooth writing experience. Pens and pencils, though seemingly very similar, in fact, have a few major differences, and these differences show the advantages of using a pen. A pen will not normally break and will last a lot longer than a pencil.Pens also provide a smoother writing experience and do not give a feeling of scraping a chiseled piece of rock against your work. So, next time you have the decision to make between a pen and pencil, choose wisely, and remember these words if you make the wrong decision and end up in the hospital with your whittling knife stuck in the pad of you hand with the best story you have ever contrived slowly erasing itself from your mind.

Kristens cookie company Essay

From the given data we can draw the following Process Flowchart The case analysis yields the following points 1. The time taken to fill rush order will depend on whether there are any orders that are being processed currently or not. Accordingly we will have two scenarios a). No order is being processed when the rush order is received. The time in this case will be equal to the sum of the time required for all the processes. Time = 6 + 2 + 1 + 9 + 5 + 2 + 1 = 26minute b). An order is being processed when the rush order is received. In the worst case, the cookies will have just been put in the oven. Thus oven will not be free before (1 + 9)= 10 minutes. By this time, the washing of the bowl and mixing of the dough for the rush order will be done. This will take 8 min. Since oven will not be free for 2 more minutes. Thus total time for this process will be 8 + 2 + 1+ 9 + 5 + 2 + 1 = 28 minutes Every additional order of a dozen cookies will take an additional 10 minutes to fulfill (as the time taken for baking is the only bottleneck involved) 2. If we are open for 4 hours (or 240 minutes), the number of orders that can be filled will be: Every order will take 10 minutes, since the baking time (ie 10min) is the bottleneck, except the first order which will take 6+ 2 =8min in the beginning and the last order which will take 5+2+1=8 more minutes. Thus, [240 – (8+8)] / 10 = 22.4 orders can be filled in a day. That is 22 orders or 22*12 = 264 cookies in a day. 3. I am performing the process of washing, mixing and filling the dough in the tray, while the roommate is putting the tray in the oven, packing, and collecting the payment Thus for each order I spend: 6 + 2 = 8 minutes Roommate spends: 1 + 2 + 1 = 4 minutes A problem of idle time arises when more than one order is to be fulfilled, now if 2 simultaneous orders come, then I will have an idle time of 2 minutes and the roommate will have an idle time of 6 minutes. 4. If we order 2 dozen cookies or 3 dozen cookies, then my time will be reduced for washing and mixing, since the dough for 3 dozen cookies can be mixed together. That is my time will be reduced by 6 minutes for a 2 dozen order and 12 minutes for a 3 dozen order. My roommate’s time will be reduced by 1minute for 2dozen and 2 minute for 3 dozen. It is the time required for collecting payment since now she will collect payment only once for the whole order. However the total time for the process is still the same, since the baking process is the bottleneck and this will not affect the process of baking ,If this time that is saved, can be utilized for some productive work, which can earn more than the discounts we give, only then should we give discounts for 2 dozen or 3 dozen orders. 5. The business can be run smoothly using only one food processor, but the minimum number of trays that are required are 2 trays. This can be explained as follows The total time required for fulfilling an order is 26 minutes, now if another order is taken before the fulfillment of the first order then we will need another tray in which to place the ingredient mix and prepare it for baking. If we have further orders then the first tray can be used again since it will have come back after the cooling cycle. 6. To make cookies in lesser time we can use 3 ovens or use an oven with a larger capacity. With 3 ovens we can make 3 dozen cookies in just 31 minutes as compared to 48 minutes taken with just 1 oven. This amounts to an increase of 35% in sales due to time being saved. Addition of an extra oven can also help in this regard; with an extra oven we can fill 28 orders in a day instead of only 22 orders. Thus the additional rent that we can pay for an additional oven will be an amount lesser than the additional profit made by tending to 6 extra orders in a day. The additional oven will be very useful since the main Bottleneck encountered in this process is the time taken to bake the cookies. Additional analysis 1. If I were to do the whole process by myself it would take me 36 minutes to fill 2 orders which come back-to-back. The problem in this case would be that there can be no parallel processing. Thus after every 2 orders the process of baking has to start afresh, hence the total number of orders that can be filled per day will be X = (240*2)/36 = 13.333 Therefore only 13 orders can be filled everyday as compared to 22 that can be filled by 2 people. Hence working alone would have the same costs but sales would decrease by close to 50%. 2. There will be no effect on the time taken to manufacture the â€Å"Crash priority† order that has come up; both the new order and the order already in the oven can be delivered on time. The only problem here can arise if we have other orders in queue when this order arrives, then those orders will have to be kept waiting when we attend to this order. We can charge the customer a premium which will be equal to the number of orders whose delivery time will be extended beyond an hour due to this order. i.e. if we have 6 orders in queue and 3 of them are delayed due to the new order then Premium charged= No. of orders unfulfilled due to the new order * price; 3. The entire process time taken here is 26 minutes; every additional order will take an additional 10 minutes. Therefore we can service 4 orders in the first hour and 6 orders in every subsequent hour, this holds good if we have to deliver within an hour. If that restriction is relaxed, then delivery time we promise will be determined by the number of orders already in queue and any work-in-progress The formula that we can use for determining delivery time will be Time = (No. of orders in the queue*10 minutes) + (Work in progress* Time remaining in baking) + 10 minutes (Baking time of the new order) + 8 minutes (time till packing) i.e. if we have 3 orders in queue and another order which has to be baked for a further 5 minutes the delivery time we can promise will be Time = (3*10) + (5) +10+8 = 53 minutes. This is how we can promise delivery. 4. The major factors that should be considered at this stage of planning the business are what prices to charge, how many orders to accept and what can the profit be, the business has no extra costs apart from the input costs. But to safeguard against breakdown of equipment we must add a maintenance charge for the machine maintenance, the other costs that can come into picture are the opportunity costs, i.e. if our time was utilized in other tasks what could have been the profit we could have made. Hence these are the important factors that must be considered at this stage of planning. 5. If the product was a standard product then the following changes could be made * We can have 3 ovens, this will be useful because if the product is a standard one then we will always make 3 dozen cookies every time we prepare a mix, thus it would be useful for us to have 3 ovens as it would considerably reduce our time and give faster output * We can increase the number of orders that we can service each night * The order-taking system will be changed since now there is no customization so we will only be required to ask the customer as to how many dozens does he/she want These are the changes that should be made if the product is changed to a standardized one.

Addressing Employee Motivation Essay

Executive Summary Tom was seen to have a loss of motivation at work which was investigated. An analysis showed the main cause to be a lack of communication from his manager, a need for role definition, and a lack of publicity for the success of his project initiative. Recommendation is for Tom’s manager to be informed so they are hopefully able to address these issues and retain and develop Tom’s skills. A problematic work situation relating to a HRM concept in Book 2 1.1 A description of the work problem Tom has a well paid job as a project manager. He created an idea and initiated a project to design and implement a website. After setting up the design and defining the stakeholders, without discussion, another person was brought in to chair the project meetings and keep track of actions for the software team. He felt a lack of clarity in his role and without clear guidance and credit did not feel motivated to push the project as hard as before. Weekly work hours fell back to a normal 40 hours from 50 or 60, and his other ideas were not pushed to management with the same enthusiasm. Motivation was clearly falling. This example relates to motivation and Session 1 of Book 2 can be used to analyse what motivates Tom to go to work. See more:  First Poem for You Essay 1.2 Analysis of my experience using my chosen concepts To understand Tom’s motivation level’s I have analysed his situation using Maslow’s Hierarchy of needs (1954) from session 1 (The Open University, B120 Book 2). According to Maslow, â€Å"a satisfied need is not a motivator†. Matching which needs are met on the pyramid of five categories will give an indication of which unmet need should be a motivator. Figure [ 1 ] Maslow’s Hierarchy of needs pyramid, and summary of Tom’s status within it. Figure 1 Maslow’s Hierarchy of needs pyramid, and summary of Tom’s status within it. According to Maslow’s theory, Tom has reached the 3rd level, but the lack of communication and feedback has stopped him achieving ‘Esteem’. Maslow states that â€Å"Not meeting these needs has a negative effect on our mental health† and this could explain the low motivation that Tom’s behaviour indicates. Tom was also under the impression that his idea and the quick success of the project would be publicised by his manager and would open up opportunities to be involved in other senior projects within the business. This did not materialise, and the senior management was not made aware of any plans to utilise Tom’s skills. In fact Tom’s manager was based in another country and was often not reachable for consultation either by phone or email. This expectation and its failure to materialise also causes low motivation, as explained in the concept of a ‘psychological contract’ from The Open University (2012). By applying this concept, we can understand that Tom had reason to believe that a successful project would lead to acknowledgement and higher esteem within the company, and even though this was not part of a formal employment contract. When this did not occur Tom felt his psychological contract had been violated, and that his hard work was inconsequential, leading to his low motivation to keep working hard. 1.3 Proposed solutions to the problem The analysis above has identified possible causes of Tom’s low motivation. With this understanding of these reasons, each can be addressed with the right actions. . * Problem : Low motivation, * caused by : Perceived low likelihood of achieving Esteem (on Maslow’s hierarchy) * caused by : lack of communication about tasks. * Classified as : Broken psychological contract If we can determine the cause for the broken contract, we may be able to restore Tom’s motivation to work hard. Also relevant is the Job Characteristic Model from Hackman and Oldham cited by The Open University (2012) which lists five core job characteristics that contribute to satisfying work. If Tom’s work is missing any of the core characteristics his attitude to his job could be affected. Figure [ 2 ]. Hackman & Oldham JCM The lack of regular communication between Tom and his manager suggests that there is insufficient â€Å"Feedback from the Job†. B120, Book 2, Study session 4, highlights the importance of â€Å"Constructive feedback†, which â€Å"involves praising strengths and achievements†. Arranging another person to chair project meetings could also mean that â€Å"Task Identity† was not clear. To solve these items, Tom’s manager should take the following actions: * clarify Tom’s role and tasks within the project * Provide regular opportunities for feedback and communication, including praise of achievements when applicable. * Publicise Tom’s contributions to raise his profile in the senior management team and allow development of his career. Relevant Web sites http://businesscasestudies.co.uk/tesco/motivational-theory-in-practice-at-tesco/maslow-and-herzberg.html (accessed 28-Nov-2012) This shows how a successful company has used Maslow’s hierarchy and Herzbergs two factor theory to try to keep employee motivation high. Herzberg could be summarised as â€Å"If you want people to do a good job for you, then you must give them a good job to do.† The Times is a reputable publisher which lends credence to this site, but this is a case study utilising the theories in this report, and not and original source. http://gmx.xmu.edu.cn/ews/business/management/chapter16.htm#what (accessed 28-Nov-2012) This site was chosen because it contains some interesting definitions of motivation factors, and summarises a collection of different theories on analysing motivation in employees. The information is not verified but some theories corroborate with other sources. References The Open University (2012) B120 An introduction to business studies, Book 2 ‘An introduction to human resource management in business’, Milton Keynes. Web source 1: http://businesscasestudies.co.uk/tesco/motivational-theory-in-practice-at-tesco/maslow-and-herzberg.html dated unknown (accessed 28-Nov-2012) Web source 2: http://gmx.xmu.edu.cn/ews/business/management/chapter16.htm#what dated unknown (accessed 28-Nov-2012)

How Economic events occur around us every day, and aims to provide Assignment

How Economic events occur around us every day, and aims to provide association between what you learn from economic models and concepts in class with real-life events happening around you - Assignment Example unfortunate that politicians and Ideologues on both sides of the spectrum are majorly interested in quick fixes rather that the actual ground work of fixing the nation’s economy. During the past few years, the economy of the United States of America has faced major challenges. As the nation’s economy continue to spatter, research and studies have identified multiples areas that is really deteriorating the American Economy. The sum total of the federal government taxes currently stands at 18 percent of the GDP. The local and state taxes have however increased substantially over this period. The total taxes from all the sources are a round 34 percent which is higher that 26 percent in the mid-50s, but slightly lower than 36 percent reached over the past 15 years. Over year the years most developed countries have lowered their corporate taxes leaving the United State of America to be among the developed countries that still has high rate of corporate taxation (Michael, 2012). This measure discourages investment in the country, which in turn reduces wages and holds production. America business faces serious challenges in taxes. Most market in the American Economy fall between demand and supply extremes and the incidence of taxation is shared by both the consumer and producer in proportional that varies. Most American population, who are majority of consumers pay more tax than producers thus resulting into a general high taxation. The e area paid by paid by the consumer corresponds to the general change in equilibrium price. The remainder of the price which is the difference between cost of production and the new price of that commodity, is paid by the producer. The internal revenue service estimated that in 2002 the United States of America Tax gap was 345 billion. The tax gap is the difference between the amount actually collected and the amount of tax legally owed by the government. In 2006 the tax gap was estimated to be about $450 billion. Two years later it

Humanities Ethics Coursework Example | Topics and Well Written Essays - 1250 words

Humanities Ethics - Coursework Example This fundamental principle is what guides Immanuel Kant’s ethical system. According to Emmanuel Kant, categorical imperative is the standard of rationality upon which moral requirements are based. Categorical imperative is a formal technique that is used to evaluate any morally applicable action (Timmerman 23). In order to determine whether an action is morally right, the categorical imperative is used as a source of moral justification. Kant understood that moral law is by nature rational, impartial, and universal. For instance, an imperative is a command such as ‘Close the door!’ or ‘Come here!’ therefore; an imperative is either categorical or imperative. Kant defined Hypothetical imperatives as commands that are used to fulfill particular human goals and desires and he considered them dependent upon personal situations. As such, they are limited to specific circumstances, or to the people who have these dispositions. He argued that hypothetical im peratives are not necessarily impractical. In fact, he conceded that human beings live by these imperatives values in their everyday lives (Timmons 22). However, he noted that these imperatives are non-moral. If any action is performed as a means to an end then that action is based on a hypothetical imperative. ... On the other hand, it is categorical because it applies to those who possess the rational will without taking into consideration what ends they might have or might not have (Timmerman 57). However, its application to the rational humanity is not based on any condition that is, for any act to be deemed as a categorical imperative, it must prove to be good in itself and conforms to reason (Timmerman, 76). It must embody the ability to universalize the action. That is, in a similar circumstance, other people would act in accordance with the same rules. 4. Are the hypothetical imperatives in relation to Kant and right theories apply in the contemporary families? The main difference between categorical and hypothetical imperatives is that categorical imperative requires that we must act in accordance with it without exception. However, hypothetical imperative is limited to specific circumstances for instance; it allows that if one is tired, they are free to bed. Categorical imperative doe s not obligate humanity to undertake any particular action rather; it demands that actions should meet particular condition (Timmerman 36). Human being must be able to ensure that the maxim behind his or her action can be replicated by anyone else in a similar situation. 5. What are the relation and implication of Kant and maxim in the contemporary world? Kant figured out categorical imperative from two maxims; objectivity and respect for all persons. According to the objectivity maxim, an action is right only if would be right for any other individual in similar situation. The maxim of respect states that an act is right so long as it treats others as ‘ends in themselves’. It is important to note that categorical imperative is not directly

Protestant Reformation Essay Example | Topics and Well Written Essays - 1000 words

Protestant Reformation - Essay Example He was against corruption that prevailed in the Roman Catholic Church. John Calvin, a reformist of French origin was the father of Calvinism, a religion whose English believers were known as puritans. He was famous for his uncompromising theological and moral position and for instilling harsh teachings. He also placed a lot of emphasis on the freedom of the church and encouraged it to arrange its internal affairs by means of its own consistory. Hulrich Zwingli was another reformer. Most of the beliefs that he supported were Martin Luther’s. Like Luther, he was against how the church defined sacrament (Eucharist), celibacy, prayers to saints, confession and use of relics. He also emphasized on the existence of communion and baptism as the only two sacraments. Despite being more radical than Luther and more political than Calvin Zwingli’s vision and movement never developed into a church. The protestant reformation is also known as the reformation era. It refers to a great religious reform that took place in Europe during the 1500s (Grcic, 2009). According to Grcic, it â€Å"was a revolt against the authority of the Catholic Church and that destroyed the religious unity of Europe† (2009, p. 109). Different aspects of life, such as economics, government and homes were affected by reformation. In regard to the impact of the period on an international level, it changed religion, the church and the world as a whole. The protestant reformation developed from the values and ideas of the renaissance. During the reformation, reformers such as Martin Luther, John Calvin and Huldrich Zwingli among others accused the Catholic Church clergy of being corrupt and abusing the power bestowed on them (Grcic, 2009). They urged that Christianity ought to be more pure. As a result of the step taken by the reformers, the Catholic Church was very grieved

The Macroeconomic Situation In The United States Of America Essay

The Macroeconomic Situation In The United States Of America - Essay Example The country is facing issues with the unstable price of oil in the global market and this has also made the prices of commodity unstable and the level of inflation in the country is rather alarming (Jones, 2008). Thus, the current macroeconomic situation in the country is such that the citizens are faced with the instability of the price of commodity in the market. There are also issues with an absurd increase in the interest rate which has discouraged prospective investors from borrowing money from financial homes. The macroeconomic situation in the country has actually put the US Congress and the Federal Reserve on their toes. There are different things that can be done to salvage the macroeconomic situation in the US. The monetary policies in the country should be tightened through the use of expansionary fiscal policies that would help the country to fully recover from the economic recession that it is faced with. The problem of inflation could also be dealt with by making the ag gregate demand lower than the production capability of the economy.

Celebration Essay Example | Topics and Well Written Essays - 2000 words

Celebration - Essay Example The paper discusses that there are two traditional festivals attributed to the Islamic faith, which includes Eid-ul-Fitr and Eid-ul-Adha, both of which are observed according to the lunar Islamic months or sighting of the moon. The term Eid simply means festivity, happiness or joy; consequently, both the Eids are considered to be synonymous with happiness. The Muslims in Saudi Arabia begin the 1st day of Shawwal with Fajr prayer, one of the five daily obligatory prayers. The houses are especially cleansed and decorated all over the country to welcome the festival. After it, some sweet dish is taken, which has already been cooked for Eid day by women. The Saudis wear new clothes, which are specially prepared for this day, and start gathering for another prayer, called Eid prayer, which is generally offered in some vast ground, field or spacious mosque (Cartright~Jones, 2001:5). Before offering the prayer, the Saudis pay fit ran or charity to the deserving and needy people, from all family members, which is obligatory for every Muslim. To conclude, it becomes evident that both the Eids contain meaning and message in their nature and scope. Celebrating the festivals reflect the true spirit of the faith that all humans are equal in the eyes of the Creator, and only the pious and sacrificing enjoys superior status according to the noble teachings of the faith. Since Eid-ul-Fitr and Eid-ul-Adha serve as the two sole religious-cultural festivals of the country, the Saudis take very active part to celebrate them in an exciting and thrilling manner.

Ad Proposal for Apple 2014 Research Paper Example | Topics and Well Written Essays - 1500 words

Ad Proposal for Apple 2014 - Research Paper Example He was awarded the Lange-Tailor Prize in 2009, and best Magazine Writing from the Society for Professional Journalists (Christian Parenti.com). Parenti’s book â€Å"the tropic of chaos† is the result of his immense research and hard work. It took him six long years to produce this outstanding work of art. Parenti travelled to various slums, countries that were at war and countries that were affected with scarcity of food and water shortages. In the book â€Å"Tropic of chaos,† the writer shows his concern of how climate change results in ruining our ecological civilization. The author discusses the region, which lie between the Tropic of Cancer and the Tropic of Capricorn. Parenti’s focus is on East Africa, Afghanistan, India, Pakistan, Kenya, Kyrgystan, Brazil, Mexico. These regions according to him are: â€Å"a belt of economically and politically battered post-colonial states girding the planet’s mid-lattitudes†(Parenti, 9). He labels thes e countries as â€Å"Tropic of chaos† because these countries are facing what he calls a â€Å"Catastrophic convergence of poverty, violence and climate change† (Parenti, 5), which means that climate change is not only causing water and food scarcity but also giving birth to violence in the regions. According to the writer, these countries are too sensitive to shifts in weather changes because they rely on farming and fishing. The writer explains how that the Global North has reacted to this impending crisis with greater oppression and surveillance instead of finding friendly ways to reduce tensions. In short, between the tropic of Cancer and tropic of Capricorn, we mostly find â€Å"most of the failed and semi failed states of the developing world.† (Parenti, 9). Hence, the crisis is taking a toll because the Global South is getting involved in warfare to attain there basic needs. The author begins his narrative by asking, â€Å"who is responsible for killing Ekaru Loruman?† Ekaru Loruman was from Kenya, belonged to a Turkana tribe, and was killed by a rival tribe for stealing cattle, or what the author explains as â€Å"the age old tradition of stock theft† (Democracy now). Moreover, the reason for these frequent killings is that the country is experiencing severe drought and the Turkana Pastoralists are forced to stealing cattle because their animals die due to scarcity of water, so they have to take laws in their own hands, as there are no proper government rules regarding this issue. Here, the author is pointing to an important issue of how the ugly U.S. policies have given rise to everyday violence in these countries. Moreover, the answer to all Parenti’s questions can be answered only if we go back in time when the British rules Africa. History tells us that British during their rule have adopted harsh methods to stop violence. Since that time the violence has never stopped. He gives examples of countries like S omalia, a failed state, which was attacked and demolished by Cold war. After the downfall of the Somalian government, the weapons were transferred to Kenya which resulted in more violence and killings in the form of cattle raids. Moreover, as Kenya does not run any support programs for farmers, this has given rise to more corruption because the farmers have only weapons to defend and protect themselves. The worst part is that when the Somalian refugees reach Kenya, most of the women are being raped and tortured and the sad part is that it is usually the brother who is ordered to rape her sister and if he denies he gets killed. In addition, when the refugees cross the border and reach Kenya they are unable to make a living because Kenyan government is unable to support millions of Somalians who are living in camps. Pakistan is

Listening and Paraphrasing Essay Example for Free

Listening and Paraphrasing Essay The first person I interviewed was my sister’s friend who is nineteen years old and is in college. She works part-time a crew in a coffee shop just outside our village. I asked her about her job and how she was able to manage her time juggling work and studies. According to her, what she is doing is tiresome but she was able to do both activities since it is not simultaneous and that, she really has to be able to do so. She mentioned how she prioritizes work over her studies. She attends to her class regularly but admits that, most of the time, she isn’t attentive. She said that she had to miss some of her morning classes because she’s too tired to get up in the morning. She gets to miss several classes but never miss even a minute of work. She told me that she doesn’t resent having to work while studying unlike other students because she believes that she is learning more and is getting personally better when she is forced to work and study at the same time. She takes everything as a training for what else worse that could happen. She said she feels like there’s nothing that she won’t be able to get through because she has gotten stronger after all the early struggles in her life. She also said that her job as a crew is not all about the money she is earning. She said that she is also enjoying the work because she wants to put up business someday and she is planning to pursue food business. She has been learning a lot by working and feels more unfortunate than other students because she was able to directly apply what she learns from school. In this interview, I would have to repeat some of her answers to make it appear that I am deeply interested in what she is saying. I have learned that paraphrasing also eliminates bars between two communicating parties because it makes one believe one is interested with the other’s tales (USDVA, 2004). When I repeat what she tells me, I say it in a different manner like this one time when she said, â€Å"I really don’t mind if I don’t get too good grades. Passing is enough for me. I just know that I am more knowledgeable than them and I understand exactly what the principles are saying. They only know it by words! † I would say, â€Å"You are no longer after the high grades because you know you understand the subject very well and school grades are just evaluation of school performance. † And I would follow it immediately with a question to keep our conversation going. The next person I interviewed is my grandfather who is already seventy-eight. We’ve talked about his life as part of the navy, how he met my grandmother and who is his favorite among his children. The talked about who is his favorite child is the most interesting part of our conversation. He said, â€Å"Your father wouldn’t lift a hand to reach something and would wait for his siblings or his mother or me to pass by so we could reach it for him. † I said, â€Å"My dad wouldn’t bother himself trying to reach something and would have to rely on someone else so he could get that something. † Having to repeat their words would mean understanding the matter more clearly (RMIT, 2005). It is also a tool for clarifying ideas. In communication, it is very effective because when one feels that the other understands him, he feels more comfortable to talk about anything without any hesitations (Rowley, 2002). I was able to demonstrate it when I was able to extract information from my sister’s friend that is in a more personal level and when I was able to let my grandfather to bring back the memories he had with my father. References: RMIT University. 2005. Paraphrasing. Study and Learning Center, RMIT. Retrieved February 10, 2009 from http://www. dlsweb. rmit. edu. au/lsu/content/4_WritingSkills/writing_tuts /paraphrase_LL/index. html. Rowley, Richard. 2002. Active Listening. Retrieved February 10, 2009 from http://www. aligningaction. com/activeli. htm. U. S. Department of Veterans Affairs. 2004. Listening to Paraphrase. Retrieved February 10, 2009 from http://www1. va. gov/adr/page. cfm? pg=46.

Analysis Of Change Initiative At Toyota Motor Corporation Management Essay

Analysis Of Change Initiative At Toyota Motor Corporation Management Essay Over the past several decades change management has become one of the mostly discussed topics across different industries on the market. The importance of change management has turn out to be a crucial task for managers and leaders of not only the big global corporations but also small and medium sized enterprises. Research suggests that the change management is fundamental issue that has to be considered especially when it comes to introducing and adjusting new strategies and policies that will influence the companys future perspectives and developments. It is essential part of the long-term competitive success formula (Pettigrew and Whipp, 1991). Although many research findings imply that change management can be defined in different ways depending on the industry and the company, there is a common ground on which the perceptions of the roles of the managers are build on. It is argued that people are the main drivers of change and innovation in the competitive environment of the business world. For this reason, human resources departments play a major role in choosing the right people for the right position and train and develop their employees to become goal and future oriented. Findings suggest that in order for a company to have a successful change management implementation, human resources managers have to be able to cope with both transformation and change within a single company (Urlich, 1997). According to Urlich (1997) transformation entails fundamental cultural change within a firmà ¢Ã¢â€š ¬Ã‚ ¦HR managers managing transformation become both cultural guardians and cultural catalysts. Since nowadays many companies operate on a global scale, the main issue in managing transformation is to lead the company through adaptation and acceptance of new culture without influencing the old beliefs and values. On the other hand change is usually related to introducing a certain degree of newness to the company, starting from employing new employees up to introducing new strategies and reshaping the overall corporate culture, mission, and vision of a company. More precisely change can be considered to be interrelated with transformation. It is defined as à ¢Ã¢â€š ¬Ã‚ ¦the ability of an organization to improve the design and implementation of initiatives and to reduce cycle time in all organizational activities (Urlich, 1997). In order for a change to be enacted and successfully accepted within a company, it is argued that change has to happen at three different levels 1) organizational, 2) team and 3) individual. When the new strategies and initiatives are accepted at all of the three levels, the implementation of change is successful (Hirtz, 2008). In order to have a successful change management implementation across the different levels of processes within a single company, research findings emphasize on the importance of having change agents. According to some historical data on human resources, the main drivers for change within a company were considered to be the human resource managers (Urlich, 1997). Being a global company inflicted with differences among the team members, individuals, and the overall organizational structure, the role of the change managers have changed over the years. It is claimed that nowadays the managers and the leaders at all levels within a single company are obliged to assert the need for change and its productive implementation. They are the key to successful understanding of cultural, social, political, and legal differences and the main drivers of motivation to the company as a whole (Hartley et al., 1997). In todays business world companies are striving to achieve a high level of change management implementation. In order to do so, an important factor that has to be taken into consideration is the time scale and planning. According to Caudwell (2004), a successful change management should be carefully planned and it should consist of an identified beginning and an ending that will provide desirable outcomes. However, research suggests that during the change implementation, managers often forget to go back and look at the results that they get at the very beginning of the process, which is the reason why many companies failed to transform and change according to their initial plans. For this reason, findings imply that the change management has to be perceived not as a one-time implementation project, but as an on-going, long-term and future oriented strategy (Caudwell, 2004). Lewins Force Field Analysis Model More than fifty years ago Kurt Lewin, using his experience in social psychology and human behavior, developed the widely known force field analysis model in order to explain how changes can happen within a single company. The force field analysis model, or also known as the 3-step model was primarily developed to help change managers identify the so called driving (or external) and restraining (or internal-individual and group behavior) forces that might influence the change within a single company (Burns, 2004a). In order for a successful and effective change to happen, Lewin proposed that there are three stages that every company and the individuals and groups being part of that environment should go through. Graphical depiction of the model is shown in Figure 1. Figure 1 Note: Table is taken from http://rapidbi.com/management/kurt-lewin-three-step-change-theory/ The first stage is the so-called unfreezing stage where the current situation should be carefully analyzed by producing disequilibrium between the driving and the restraining forces. By identifying the field- term referring to the current individual attitudes and beliefs within a group change agents are ready to move on, from the so-called status quo position, into the next stage called the move or change stage (Burnes, 2004a). At this point change managers are required to develop a plan that will initiate the urge for change among their employees. The change agents are expected to influence their employees and initiate acceptance and adaptation to the new processes, by strongly focusing on motivation and support. Finally, the third and the last stage is the so called refreezing stage where the role of the change managers is to successfully implement the change strategy (in terms of norms, practices, policies, and culture) and make sure that these newly accepted changes are not subj ect to deterioration (Burnes, 2004b) Even though Lewins model is one of the most widely used contributors to understanding the change management within a company, there are some critics that have been developed over the past fifty years. Research suggests that the implication of the model is useful in identifying the need, the type, and the resources needed to implement a certain degree of change within a company. It implies that the change occurs only at the times when the need for change is identified and that, once the individuals beliefs and attitudes are influenced and the social conflict is resolved, the change is accepted as a positive influence (Greener and Hughes, 2006). Findings propose that the model is based on simplistic assumptions that the companies operate as static and mechanistic environments and that the change would follow a clear pattern (Burnes, 2004a). Victor and Franckeiss (2002) suggest that in todays highly globalized and highly competitive business world, influenced by the differences in cultures, economies, and politics, change management is a phenomenon that occurs constantly and is planned, revised and updated on a regular basis. It is considered to be a must-do element of their day-to-day activities, and their future growth and expansion plans (Victor and Franckeiss, 2002). Analysis of change initiative at Toyota Toyota Motor Corporation is a multinational corporation with its headquarters located in Toyota city and Tokyo- Japan and it is the worlds leading automaker. Since its establishment in 1937, the company has successfully managed to expand globally entering the US market in 1957, Asia, Middle East, and China in 1962, and Europe and Africa in 1987. Today Toyota has its overseas bases in 27 countries and regions, as well as 52 production bases and 8 overseas offices. Toyota employs approximately 320,808 employees in their directly affiliated companies around the globe not counting the substantial number of indirectly employed dealers and suppliers. One of the main differentiation strategies of the company is that they managed to keep the same organizational culture and strategy throughout the years of their existence. The company has their own Guiding Principles at Toyota and the Five Main Principles of Toyoda that have been successfully implemented in every Toyota subsidiary, factory, a nd even among their dealers and suppliers. The main purpose of their principles is to keep their stakeholders motivated and prompt to change at any time (Toyota, 2010). More detailed information on the Toyota principles can be found in Figure 2. Figure 2 Guiding Principles at Toyota Honor the language and spirit of the law of every nation and undertake open and fair corporate activities to be a good corporate citizen of the world. Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in the communities. Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities. Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide. Foster a corporate culture that enhances individual creativity and teamwork value, while honoring mutual trust and respect between labor and management. Pursue growth in harmony with the global community through innovative management. Work with business partners in research and creation to achieve stable, long-term growth and mutual benefits, while keeping ourselves open to new partnerships. Five Main Principles of Toyoda Always be faithful to your duties, thereby contributing to the Company and to the overall good. Always be studious and creative, striving to stay ahead of the times Always be practical and avoid frivolousness. Always strive to build a homelike atmosphere at work that is warm and friendly. Always have respect for God, and remember to be grateful at all times. Note: Table is taken from the official web page of Toyota Motor Corporation. Since the birth of Toyota, the companys philosophy has been based on successfully contributing to the society, meaning identifying the local cultural and social differences and creating products that will satisfy the needs and wants of the local customers all around the world. Throughout the years the company has managed to keep up with its corporate principle of delivering glocal products by creating a business model that is mainly a mixture of localization for their global markets (Toyota, 2010). Although keeping their unique corporate culture and values, and implementing the same business strategies and principles of doing business all around the globe, they have managed to differentiate and bring innovativeness to the international markets. The key behind this success is in the regiocentric management orientation. The company has effectively managed to spot the differences and similarities in the home and host countries and develop local view that allowed them to bring changes into their company, starting with the development of few global names of their products with localization content, and developing special training and support programs that will sustain the cultural differences and will allow their new employees to merge with the company much easier (Toyota, 2010). Toyota is one of the worlds widely known companies not only because of their successful business plan that has been implemented at home and overseas, but also because of their revolutionary change that made their management strategy stay the same over the years. By developing the Toyota Production System or TPS which is the method of managing people engaged in work that emphasizes frequent rapid problem solving and work redesign, the company has set the global model for successful performance and productivity (Thompson et al, 2003). The model was originally developed in the 1970s and it was mainly used to facilitate production and improve the speed. Over the last several decades the model was widely accepted by many companies operating in different industries. The reason behind the adoption of the model lies in the efforts of Toyota to bring constant change through experimenting and applying new concepts to the already existing processes (Spear, 2004). But what is the main drive behind successfully applying the TPS strategy? According to Parks (2002) Toyota has been the only company that has managed to apply the process without facing major failures. He claims that for introducing such innovative approach, the whole organizational culture and management should undergo the necessary changes. At Toyota the changes always start with their stakeholders. All the ideas and possible solutions to the existing problems are generated from their employees from all over the world. The solutions are discussed and are implemented as part of their experimental processes after which the final assessment is done. After the decision is made, extensive cross-functional training programs are inducted in order to have productive multifunctional workers who will understand the processes and the implementation of the new strategies. In order to get the desired results, strong change management is needed that will provide guidance and will result in disci plined and effective implementation of the change strategies (Parks, 2002). Having a strong management that promotes open and fair corporate activities involving all of the companys employees, introducing diversity programs that support the different cultural backgrounds, and following a clear set of rules (The Code of Conduct) enacted by extensive on-site training activities, is the key factor for success of Toyotas change management processes and strategies (Toyota, 2010). Conclusion Although the importance of having an effective change management has been introduced more than five decades ago, it seems that in todays business world its significance and implementation has a greater influence and application among the companies operating in different industries. Globalization and internationalization had significantly influenced the companies to embrace the change management strategies. Operating on different markets around the world requires compliance with the local cultures, economies, and politics which are the main factors for success of an international company. The main issue is to manage to create synergies between the home business strategy and corporate culture and the host- local cultures and procedures. Although it might seem like a logical transformation that has to be done, without implementing strong change management policies that will be based on the differences and similarities of the markets and the people, administering change can turn out to b e one of the most difficult processes. Following the example of Toyota, in order to have efficient change management teams and change strategies that would be accepted within a company, managers should stress out the importance of all of their employees. By becoming part of the problem solving and decision making processes, managers would get the opportunity to understand the cultural backgrounds of their employees and eliminate the factors that might influence their behavior. On the other hand the employees would feel involved and motivated and the implementation of the possible changes would result in positive outcomes. This is the reason why over the years Toyota has managed to keep the same organizational culture and strategy, yet always being able to bring innovativeness and set benchmark for other companies on the market to follow.

Grey Marketing Activities Within the Software Industry

Grey Marketing Activities Within the Software Industry Future ABSTRACT The research work has presented an enlarged view of the operation within the grey markets, their functioning, pricing structure, the customer base lastly the arguments in favour, thereby evaluating -‘Can grey be good? It has also focussed on grey markets- as a subject of annoyance for the IT players OEMs. Counter-arguments hostile measures adopted to combat grey goods have also been the point of discussion. Overall, this piece of research is being successful in presenting a balanced view of the goods the bads of the grey industry from the perspective of industry players, grey entrepreneurs as well as consumers. INTRODUCTION 1.1 AIMS To obtain information insights about grey marketing activities within the software industry. With the help of Journals, case studies secondary research activities shed light on the present scenario of the grey markets (consumer targeting inclination, pricing etc). The pros cons of grey marketing shall also be presented to have an equalised view. To know what are the hostile measures adopted by firms to prevent grey activities. Present cases to depict the preventive measures adopted by firms like HP Microsoft to combat grey market products. The paper also focuses on the initiatives adopted by independent agencies such as AGMA BSA towards grey market activities. Market Penetration Grey Markets Can grey market ever be an alternative to market penetration? If yes, to which extent can it be possible? In addition, understanding the concept of ‘free riding as a way for market penetration, as mentioned in the Journal of Business Venturing (Vol 4). To evaluate: Can grey ever be good? Based on the research undertaken, evaluating thereby concluding the positives negatives of grey markets. Should they be encouraged? Can they boost an economic scenario of a country? lastly how effective can they be in increasing sales of a product? 1.2 OBJECTIVES The methodology that is to be adopted for fulfilment of the above aims is as under: Journals, Newsweekly, Internet (secondary research) along with white papers provided by firms shall be the main sources of information for this research. Primary data obtained through interviewing shall be the most vital aspect (it shall be considering not only the consumer perspective towards grey markets its products, but also of dealers operating within this arena). finally, the crux of the research (insights, analysis evaluation) will be presented to obtain a concluding perspective. 1.3 GREY MARKET: AN NTRODUCTION Majority of distribution companies are flourishing thanks to distribution channels that shepherd product from a manufacturer eventually direct them to the consumers through a chain of legitimate distributors across the world. But a mounting quite detrimental market subsists that can cause ignorant customers to buy technology products with untrue warranties, several designed for use in other countries or worse products consisting counterfeit parts. These practices can erode customer satisfaction harm brand integrity, causing major profit attrition for manufacturers. Welcome to the global ‘Grey Market where branded products have been sidetracked from the authorised supply channel within a country or are imported into a country without the approval or awareness of the manufacturer. Grey market goods are usually sold at lesser prices than those proposed by the legitimate distributors. And the pricing disparity amongst various legitimate markets customers generates an opportunity for the brokers to procure labelled products at discounted prices move them to markets where they can fetch high income. A research study by KMPG demonstrates that grey market goods pose a grave challenge to information technology manufacturers their authorised dealers. The study reveals that IT manufacturers are communally losing up to US$5 billion in profits on yearly basis, a figure that is mounting. While the grey market affects many businesses, including automobiles, consumer products, pharmaceuticals, fashion accessories others, this study shall validate that computers related products are the industry segments most affected by grey market actions. 1.4 INTRODUCTION TO THE PROBLEM (a) Software Counterfeiting Counterfeiting is amongst the most exigent problem facing the information technology (IT) industry today. Illegal replicas of brand-name high tech products are flooding the marketplace, causing harm to legitimate companies profits and dropping their aptitude to invest in research and development (RD). Multiplication of technology employed to make computers, servers, and a host of high tech products—as well as a lack of regulatory enforcement in developing countries—is speeding up counterfeiting. It is now estimated that as much as 10 percent of all high tech products sold globally are counterfeit. (b) Free Riding: A Way To Penetrate Markets? ‘Free Riding is a term which comes into picture when software products have been counterfeited. Free-riding was first introduced by Tan et al. (1995, 1997) as an alternative explanation for the incidence of grey marketing, whereby grey entrepreneurs are provided with the opportunity to enter money-making markets that are presently supplied by big firms. However, hostile measures have been taken to prevent grey market activities by agencies like AGMA BSA as well as biggies like Microsoft, HP etc. HP is administrating reseller spot checks and distie reviews to stamp out the grey market in a variety of regions without being hesitant to exercise the law courts against resellers who â€Å"breach contractual requisites†. The firm, at the moment, is taking legal action in opposition to one UK reseller for violation of agreement and cautions it has other cases under review. While, Microsoft has collared another plagiarist in the UK for flogging grey software on eBay. The software giant has scored  £35,000 in compensation against an internet trader for copyright violations and illegitimately bringing in cheap American software to Europe. Meanwhile, an agency like Business Software Alliance (BSA) is outing bandits by setting a bounty on their heads. The group announced its Blow the Whistle operation which presents $1m to workers who squeal on their companies. Certain firms are trying to launch software which might allow manufacturers detect sales through unofficial mediums. 1.5 SCOPE FOR THE REASERCH The main reason behind the proposed research subject is to obtain information on the grey markets the practices that are being carried out. The scope for undertaking the research work is as under: Understanding the global phenomenon of ‘grey marketing. Understanding the logistics within grey markets. The precautionary measures adopted by the firms agencies to prevent grey activities. The concept of free riding to penetrate markets within the software arena. lastly analysing evaluating the research produced to gather provide insights. 1.6 LIMITATIONS TOWARDS THE REASERCH The possible shortcomings for the proposed research topic are as under: Being an unconventional subject for research, obtaining information can be tough. Tracking the right sources of information is a major challenge. Information gathered through ground research cant be entirely relied upon, as it can be manipulative. Information obtained from grey suppliers may not be fruitful, as they might not give out precise information about the present scenario Interviewing people from companies or firms who are being targeted by grey marketers may prefer to remain low profile on the preventive measures they plan to adopt in future. 1.7 REASEARCH STRUCTURE The research has five focus groups (in order to understand the information.) The first chapter offers an inside view of the topic with its backdrop. It also contains the customary objectives which form the foundation for a focused research study. Meanwhile, it also describes how the established purpose will be achieved and the manner they would provide help. This section gives rationale and importance of conducting this research. The second chapter comprises the prior literature on grey markets, constructed by a range of authors and researchers in earlier years. This would aid to shed light on the pros cons in grey marketing. In addition; this chapter provides live cases published in reputed newsweekly. The third chapter talks about the type of methodology the researcher has employed to achieve the study. It gives out the arguments in favour against of each method in order to gain understanding. Furthermore, it exemplifies of some important sources which have been accessed to complete the study. Thus, this chapter explains the different techniques to achieve the objectives. The fourth chapter forms the body of the thesis as it entails the detailed analysis of the various aspects to establish the objectives. This chapter generates convincing points to support the study. The fifth and the last chapter of the paper summarises all the information gathered, finally, concluding the thesis. 1.8 SUMMARY HYPOTHESIS To summarise the above literature in few words, I shall be basically focusing weather grey markets can influence the sales of a product, thereby helping towards market penetration. Concepts, rather strategies, such as free riding shall be looked researched upon to present realistic as well as optimistic view towards grey markets, thereby analysing -‘Can grey ever be good? ‘Can grey goods help in market penetration? LITREATURE REVIEW Almost exclusively, the existing literature on grey marketing regards the occurrence as a pricing problem but falls short to identify it as a market entry opportunity for start-up entrepreneurs. The grey marketing strategy forms apt for start-up entrepreneurs in view of their resource limitations and the risk of being a first-mover in market development. Within this paper, the researcher shall be focusing on how an entrepreneur can effectively penetrate an established market by adopting suitable approaches. This is most favorable for an incumbent trader to accommodate the entrepreneur/grey marketer even if the former could compel the latter out of the market through hostile counter actions. Moorthy (1985) demonstrated the game theoretic methodology is most appropriate to investigating the behavior of market participants in such a state. This game theory is being pursued by Lim G.H., Lee K.S., Tan S.J. (Journal of Business Venturing, Jul 2001, Vol 16) to depict the strategic communications between parties concerned in grey markets and to recognise the circumstances under which entrepreneurs can effectively enter these markets. 2.1 THE POSITIVES OF GREY MARKETING A study offered by USC Marshall Research in fall 2004 by Mark Bergen (Carlson School of Management, Kersi D. Antia (University of West Ontario, London) Shantanu Dutta (Marshall School of Business, University of California) portrays the optimism towards grey markets. According to the paper, grey markets are often an helpful way to react to competitive demands, control distribution channels, fragment markets, reach unexploited markets alter the changes in market conditions. Some of the positive aspects of grey markets are being highlighted below: Incremental Sales: Grey markets are favourable if they reach formerly untapped markets. Grey markets also disclose the existence of new markets. Cell phone manufacturers competing in Malaysia, for instance, discovered a buying segment keen to pay premium prices for the newest phone gadgetry. Supply restrictions: Grey markets are advantageous if they permit dealers to overcome supply constraints scarcities. For example, IBM relied on the illegal outlets in China to get around government policies requiring the participation of local companies. Rather than make huge investments to fake partnerships with local distributors, IBM turned a blind eye to a flood of grey market imports from Hong Kong. Competitive need of opportunity: Competitors will frequently exploit grey markets if they are lucrative companies which do not follow trail shall lose significant market share, position power. This is precisely what happened to Indian-branded manufacturers of PCs. With the evident competition and sales went on at high-end retailers, the actual sales volume that led to economies of scale market penetration took place in the unorganised sector, accounting nearly 60% of total market. Several branded PC maker in India, uncared for this market, failing to reach a large unexploited segment of customers whose wants were not being met by the existing channel. Competitors that did sell to this sector have since grown to be key players. Market Segmentation: It is at times complicated to segment market within an existing distribution channel structure. Grey markets permit firms to segment their customer base more profitably than they could if they employ only a constricted base of distributors, customer uncertainty branded dilution that arrives from selling through a multi-channel network of legitimate dealers. IBM used a twofold channel approach to sell profitably in high end markets while still attaining more price responsive consumers with grey market goods; this strategy helped the company meet sales targets, spawn profits produce sales economies in manufacturing. Channel Management: Occasionally it is less expensive to abide grey market activity than to close it entirely. Shutting down grey market can be very pricey in terms of management time other resources required sensing breach, filing them, communicating them internally with distributors, and punishing the lawbreakers. Grey markets may also be a less expensive means to serve small customer sections that do not have access to authorised outlets or customers who do not value the services offered by authorised dealers. Varying market environment: In many situations, distribution channels cannot modify adequately to meet new market realities. For example, auto dealers have supply networks in places that are hard to switch. But in an epoch of soft sales, sustained incentives continually growing competition, they are struggling for numbers, even if it means forgone revenues. With effect, dealers have been more tolerant to grey markets as long as these markets let them to get in touch with a broader set of customers at improved prices. Market Aptitude: Companies that reveal grey market activities the causes following them discover about their customers their markets. Since grey markets materialise on their own, outside existing supply channels structures, they are frequently driven by influential market forces (such as short supply to a particular segment that wants the product) therefore put forward some of the purest forms of market intelligence accessible. 2.2 CONS OF GREY MARKETING 1. Dilution of exclusivity: Perhaps the most instant outcome of grey market is the draining down of exclusive rights to distribute a product. Instead of being the solitary distributor or one of a select few enterprises for delivering a product, the authorised distributor becomes merely one of several sources. The consequence is a radical drop in margins as multiple outlets struggle for the same customer. What follows promptly thereafter is only to be expected: loud complaints from the legitimate distributors and calls to the company to â€Å"do something concerning it!† 2. Free riding: But what if a manufacturer turns blind eye or, worse yet, writes off its authorized distributors complaints? While it is improbable that a distributor would split relations with the supplier in protest, there are several indirect but possibly more insidious ways of reaching the manufacturer. One of these is free riding. Free-riding was initially offered by Tan et al. (1995, 1997) as an alternative justification for the event of grey markets. In such situations, authorised traders, dispirited by anemic margins and manufacturers ineffectiveness, begin skimping on the imperative services they generally offer—such as presale service, consumer awareness education on product features, salesperson training and so on—in an attempt to lessen their expenses and match grey marketers price. This approach can weaken the value-added services and activities that often lay at the heart of several enterprises sources of differentiation and competitive plan in the market place. As one automobile dealer put it, â€Å"We invest millions in sales and service facilities. Its hard to compete with someone whose only investments are a briefcase and a cell phone.† The under provision of services is the death knell of high-end brands, as customers who value service will discard the brand in droves. 3. Damage to channel relations: Perhaps the prime cost of grey marketing is its impact on the relations and trust amid members of the distribution system. When a manufacturer has made major investments in official channel members or is dependent on one or a few associates (or both), grey markets that rip off these relationships can be particularly pricey. Visualise an official supplier that has recently coughed up $2 million to set up a new outlet and its related trappings—all to accomplish its contractual obligations. The manufacturer has guaranteed the dealer that ownership of an exclusive region will more than add up for his venture. Just as the distributor begins to foresee the promised sales, he receives word that the cash cow of the product line is offered down the street at a markdown of 15% to 20% off its own posted price. Frenzied phone calls to the manufacturer are met with empty reassurances or even stony silence. What should the enterprise do? Should it (a) match the price of its grey market opponent, doing whatsoever necessary to cut costs, (b) complain robustly to the manufacturer or (c) seek assistance from the courts, suing whoever appears liable for his current remorseful situation? 4. Undermining segmented pricing schemes: The spill over from this distribution headache expands with equivalent viciousness to most essential elements of a marketing strategy, including pricing. A basic characteristic of multinational operational strategy is the facility to price goods at levels that every local market can bear. As long as a company can fragment each market, it has a winning hand. But globalisation tosses a twist in the works. Tumbling trade barriers, easy accessibility of information and improved logistical potentials have collectively made the watertight local market a quaint belief; these factors also make it easier for grey market operators to flourish. 5. Repute and legal liability: A manufacturers ability to support its product is taken for granted. In the case of grey market goods, however, the manufacturer loses control of the product. FOR AN EXAMPLE OF how these five fundamentals can work together, consider the troubles faced by manufacturers of new, high-end IT products. High levels of services are often required to instruct customers on the features and benefits of these products. To really understand quality new product features and their functioning with other technologies, it is obligatory for the customers to learn from a salesperson at the retail outlet. To make such services available, the manufacturer time and again needs to develop a relatively elite set of distributors, fostering strong contacts and supporting the distributors actions with subsidies and an opportunity to achieve high margins. Authorised suppliers are chiefly vulnerable to grey markets in this condition. Illegitimate dealers can free ride, allowing other dealers invest in the service and offering the similar products at lower prices. Budding customers can take what they discover from authorised dealers and hunt for low-service, lower-price grey markets. The authorised sellers thus face high costs, shrinking margins and low sales. Often, the clarification they opt is to provide less service and to be more price competitive. As their margins contract, channel clashes grow, and the dealers start routing customers to competitors products which offer higher margins. The difficulty, then, eventually budges from the authorised distributors and comes to rest on the shoulders of the manufacturer. Below presented are two different cases providing two different perspectives towards grey practices. The first consist of a comparative study amongst countries the pricing structure of the grey goods that are being sold. The second case depicts the current scenario of grey activities in China. The case focuses mainly on the problem of counterfeiting of IT products the preventive measures that can be taken to minimise this nuisance. CASE 1: BUYING FROM THE GREY MARKET Are you tempted to buy cheap and cheerful goods from the grey market or should you take the authorised route? asks Sean Fleming. Anyone who has visited the US or the Far East will have found themselves going misty-eyed and waxing lyrical on the subject of how cheap things are over there. But you dont have to cross an ocean to see bargains. The difference in the price of new cars in Britain and mainland Europe they are often as much as 20% cheaper on the continent has many people hopping mad. The UKs Director General of Fair Trading has concluded the market isnt working, and has now ordered the Monopolies and Mergers Commission to investigate whether or not cartels exist in the car industry. Whatever the cause, people are realising that we must be paying over the odds in the UK for a whole range of goods and services. But do we complain? No, thats not the British way, is it? So that decision to investigate high prices in the UK will come as music to many peoples ears. Trade and industry minister Stephen Byers says he has identified this as a key obstacle to the concept of a harmonised Europe. If you want proof that things cost more here in the UK, there is plenty of it around. Bureau European des Unions de Consommateurs (BEUC), the European consumers organisation, carried out a survey last year in 52 cities across Europe in which it compared the prices of 400 different products. From this it produced an index of the cheapest and most expensive countries. The UK turned out to be the dearest of the 10 countries sampled, with a rating of 124 overall. By comparison, France scored 107, Luxembourg 102 and Germany a rating of 100. Report after report, survey after survey, they all come back with the same result when you compare like-for-like goods, we in the UK are paying more than just about everyone else in the developed world. Sure enough, its the same story with IT equipment both hardware and software. Feel like paying through the nose? No? Thats unfortunate, because the chances are youre going to. There is a painfully simple solution to all of this, of course. If stuff is cheaper somewhere else, then go somewhere else to buy it. Plenty of people import cars from Holland and Germany, and even from the Far East, so why not do it with IT? The practice of buying from non-standard, unauthorised outlets is often referred to as buying from the grey market. The grey market is a bit like the black market, except in this case no ones actually breaking the law just risking the annoyance of original manufacturers. There are big savings to be had from going grey. For example, an IBM PC 300GL, with PII 400MHz chip, 32Mb memory and a 4.2Gb hard drive running Windows 98 would set you back about #814 in the UK, but bought on the European mainland, the same PC will cost you #689. Thats a 15% saving. How about a Cisco 1601CH router? Itll cost you about #779 here and only #649 on the other side of the channel. Mike Almond is business development manager at ProSource, a company which specialises in finding this sort of deal for its customers. Using a combination of overseas contacts and the Net, ProSource keep tracks of international prices on a daily basis. When asked by a customer for a particular product, it can go out and find the best price. Were not saying were better than established channels or that our approach is the right one for organisations to adopt, but our results speak for themselves. More importantly, we offer an alternative option to our customers. Thats what a free market should deliver, Almond says. Its not difficult to find this stuff. Some manufacturers will discount heavily in particular countries to make in-roads into that market. We can use those markets to buy products back cheaper. There is, of course, a catch buy your kit from another country and the manufacturers warranty is invalid when you get home. No warranty means no technical support, no helpline advice and certainly no upgrades. Some manufacturers are so inflamed at the thought of people saving money like this that they will not just refuse support; they will also claim the law is being broken. This is despite the fact that Europe is now a single market. Phil Humphries is head of IT services at Surrey Police and it is no surprise that hes extremely cautious about ending up on the wrong side of the law, whether statutory or a manufacturers warranty rule. As part of his forces year 2000 project, a lot of equipment has been replaced, at the same time as migrating to Windows NT. He may have seen lots of expensive equipment being bought, but Humphries is not tempted by the lure of the grey market. I am aware that some of the things we use could be bought cheaper overseas by using the grey market, but I dont think the differences are as great as they used to be, he says. Apart from which, the hassle factor would be enough to put me off. This is an important factor for many people. All too often you dont know exactly what youre buying and who you are buying it from. In the event of a problem, can you be sure youll be able to get hold of them? Humphries said. But theres more to it than that. Saving money on initial capital outlay may have its attractions, but Humphries feels this is a short-term gain had at the expense of longer term success. We are moving away from a situation where we are buying boxes. Now we want to deal with a partner which can offer the right support we need from start to finish. Most of the bargain-basement IT offers that crop up in the small ads will be for software. Adverts purporting to have US versions of Microsoft Office at less than half price are fairly commonplace. David Gregory, Microsoft UKs customer legal licensing manager, warns there is more to these offers than meets the eye. He explains: Our biggest problem with people using unauthorised sources is that the overwhelming majority of this software is counterfeit. It will be passed off as being from the US, but in about 90% of cases it is pirated. The individual serial number on the product tells us where that product was bought or if it is a copy. Finding anyone with IT purchasing responsibility who will admit to using the grey market is difficult, although one IT manager confided anonymously: Most of our procurement has to go through a centralised process. However, some stand-alone projects are bought on an ad-hoc basis and thats when buying on the cheap becomes a viable option. But why is any of this stuff priced so much higher in the UK in the first place? Almost all the major manufacturers operate different pricing policies in different countries, but few can explain why the UK gets clobbered quite so comprehensively. As far as Microsoft is concerned, Gregory says: The majority of software originates from the US and there are certain unavoidable costs incurred when taking that software into other territories local support services, language support, translating documentation and so on. Not to mention currency fluctuations. But with the worlds foremost software vendor moving toward shipping single every-language versions of its products, this position is set to become obsolete. On the hardware front, the worlds number one in PCs, Compaq, also varies prices between the countries that it sells to. David Petts, Compaq UK commercial unit business manager, explains: Local pricing exists because different markets have different patterns of economic behaviour. In Europe, Compaq prices are set by the companys European HQ in Munich, and individual countries are then able to fix their own prices within a given range. So, if one were to charge at the top end of the range and another charged at the lower end, you could, in theory, see material price differences, he says. Why the UK is hit hardest by these price differentials is obviously a difficult subject for manufacturers to discuss candidly. One source within a major hardware company begrudgingly admits: Lots of things are cheaper in the US and Japan. Its the way of the world people just need to face up to it. So, there you have it put up and shut up. If you dont put up, and instead succumb to the grey market, your warranties wont work. However, there are ways to get around the warranty issue. In the case of Compaq, any warranty in operation in the UK will also cover the rest of Europe and vice-versa. You can buy Compaq kit in Holland, for example, and not have to worry about your warranty. ProSources Almond explains that it is important to keep geography in mind when venturing into the grey market. Manufacturers will claim warranties are not valid, but under EC law there is nothing to stop you buying things from any other EC country. If we have a customer that is very sensitive about maintaining the warranties, well be careful to only buy from within the right region, he says. In the case of IBM, things are even more straightforward: good old Big Blue offers global support on all its products, so it doesnt matter if you bought your ThinkPad in Durban but you live in Doncaster. A long-standing champion of the grey market is Cirencester-based RBR Networks, Ciscos largest European distribution partner. Before getting its Cisco accreditation in October 1997, RBR was something of a thorn in Ciscos side. It was doing so much business in grey-market Cisco product that in the end the company had to be brought into the fold. RBR marketing director, Jos White, takes a fairly pragmatic view of the subject. He does, however, prefer the term second sourcing to grey market he believes it doesnt sound so grubby. Using second sourcing, we could make a healthy margin and still sell cheaper than most of the competition, says White. It has to be up to the manufacturer to make it worth everyones while to use the authorised channels, he adds. Manufacturers cannot simply try and ban this sort of thing and it is definitely not on for them to throw their weight around, threatening everyone by saying that their licences are invalid and they may be breaking the law. It comes as no surprise that a manufacturer such as Compaq is against the use of the grey market. It has nothing to Grey Marketing Activities Within the Software Industry Grey Marketing Activities Within the Software Industry Future ABSTRACT The research work has presented an enlarged view of the operation within the grey markets, their functioning, pricing structure, the customer base lastly the arguments in favour, thereby evaluating -‘Can grey be good? It has also focussed on grey markets- as a subject of annoyance for the IT players OEMs. Counter-arguments hostile measures adopted to combat grey goods have also been the point of discussion. Overall, this piece of research is being successful in presenting a balanced view of the goods the bads of the grey industry from the perspective of industry players, grey entrepreneurs as well as consumers. INTRODUCTION 1.1 AIMS To obtain information insights about grey marketing activities within the software industry. With the help of Journals, case studies secondary research activities shed light on the present scenario of the grey markets (consumer targeting inclination, pricing etc). The pros cons of grey marketing shall also be presented to have an equalised view. To know what are the hostile measures adopted by firms to prevent grey activities. Present cases to depict the preventive measures adopted by firms like HP Microsoft to combat grey market products. The paper also focuses on the initiatives adopted by independent agencies such as AGMA BSA towards grey market activities. Market Penetration Grey Markets Can grey market ever be an alternative to market penetration? If yes, to which extent can it be possible? In addition, understanding the concept of ‘free riding as a way for market penetration, as mentioned in the Journal of Business Venturing (Vol 4). To evaluate: Can grey ever be good? Based on the research undertaken, evaluating thereby concluding the positives negatives of grey markets. Should they be encouraged? Can they boost an economic scenario of a country? lastly how effective can they be in increasing sales of a product? 1.2 OBJECTIVES The methodology that is to be adopted for fulfilment of the above aims is as under: Journals, Newsweekly, Internet (secondary research) along with white papers provided by firms shall be the main sources of information for this research. Primary data obtained through interviewing shall be the most vital aspect (it shall be considering not only the consumer perspective towards grey markets its products, but also of dealers operating within this arena). finally, the crux of the research (insights, analysis evaluation) will be presented to obtain a concluding perspective. 1.3 GREY MARKET: AN NTRODUCTION Majority of distribution companies are flourishing thanks to distribution channels that shepherd product from a manufacturer eventually direct them to the consumers through a chain of legitimate distributors across the world. But a mounting quite detrimental market subsists that can cause ignorant customers to buy technology products with untrue warranties, several designed for use in other countries or worse products consisting counterfeit parts. These practices can erode customer satisfaction harm brand integrity, causing major profit attrition for manufacturers. Welcome to the global ‘Grey Market where branded products have been sidetracked from the authorised supply channel within a country or are imported into a country without the approval or awareness of the manufacturer. Grey market goods are usually sold at lesser prices than those proposed by the legitimate distributors. And the pricing disparity amongst various legitimate markets customers generates an opportunity for the brokers to procure labelled products at discounted prices move them to markets where they can fetch high income. A research study by KMPG demonstrates that grey market goods pose a grave challenge to information technology manufacturers their authorised dealers. The study reveals that IT manufacturers are communally losing up to US$5 billion in profits on yearly basis, a figure that is mounting. While the grey market affects many businesses, including automobiles, consumer products, pharmaceuticals, fashion accessories others, this study shall validate that computers related products are the industry segments most affected by grey market actions. 1.4 INTRODUCTION TO THE PROBLEM (a) Software Counterfeiting Counterfeiting is amongst the most exigent problem facing the information technology (IT) industry today. Illegal replicas of brand-name high tech products are flooding the marketplace, causing harm to legitimate companies profits and dropping their aptitude to invest in research and development (RD). Multiplication of technology employed to make computers, servers, and a host of high tech products—as well as a lack of regulatory enforcement in developing countries—is speeding up counterfeiting. It is now estimated that as much as 10 percent of all high tech products sold globally are counterfeit. (b) Free Riding: A Way To Penetrate Markets? ‘Free Riding is a term which comes into picture when software products have been counterfeited. Free-riding was first introduced by Tan et al. (1995, 1997) as an alternative explanation for the incidence of grey marketing, whereby grey entrepreneurs are provided with the opportunity to enter money-making markets that are presently supplied by big firms. However, hostile measures have been taken to prevent grey market activities by agencies like AGMA BSA as well as biggies like Microsoft, HP etc. HP is administrating reseller spot checks and distie reviews to stamp out the grey market in a variety of regions without being hesitant to exercise the law courts against resellers who â€Å"breach contractual requisites†. The firm, at the moment, is taking legal action in opposition to one UK reseller for violation of agreement and cautions it has other cases under review. While, Microsoft has collared another plagiarist in the UK for flogging grey software on eBay. The software giant has scored  £35,000 in compensation against an internet trader for copyright violations and illegitimately bringing in cheap American software to Europe. Meanwhile, an agency like Business Software Alliance (BSA) is outing bandits by setting a bounty on their heads. The group announced its Blow the Whistle operation which presents $1m to workers who squeal on their companies. Certain firms are trying to launch software which might allow manufacturers detect sales through unofficial mediums. 1.5 SCOPE FOR THE REASERCH The main reason behind the proposed research subject is to obtain information on the grey markets the practices that are being carried out. The scope for undertaking the research work is as under: Understanding the global phenomenon of ‘grey marketing. Understanding the logistics within grey markets. The precautionary measures adopted by the firms agencies to prevent grey activities. The concept of free riding to penetrate markets within the software arena. lastly analysing evaluating the research produced to gather provide insights. 1.6 LIMITATIONS TOWARDS THE REASERCH The possible shortcomings for the proposed research topic are as under: Being an unconventional subject for research, obtaining information can be tough. Tracking the right sources of information is a major challenge. Information gathered through ground research cant be entirely relied upon, as it can be manipulative. Information obtained from grey suppliers may not be fruitful, as they might not give out precise information about the present scenario Interviewing people from companies or firms who are being targeted by grey marketers may prefer to remain low profile on the preventive measures they plan to adopt in future. 1.7 REASEARCH STRUCTURE The research has five focus groups (in order to understand the information.) The first chapter offers an inside view of the topic with its backdrop. It also contains the customary objectives which form the foundation for a focused research study. Meanwhile, it also describes how the established purpose will be achieved and the manner they would provide help. This section gives rationale and importance of conducting this research. The second chapter comprises the prior literature on grey markets, constructed by a range of authors and researchers in earlier years. This would aid to shed light on the pros cons in grey marketing. In addition; this chapter provides live cases published in reputed newsweekly. The third chapter talks about the type of methodology the researcher has employed to achieve the study. It gives out the arguments in favour against of each method in order to gain understanding. Furthermore, it exemplifies of some important sources which have been accessed to complete the study. Thus, this chapter explains the different techniques to achieve the objectives. The fourth chapter forms the body of the thesis as it entails the detailed analysis of the various aspects to establish the objectives. This chapter generates convincing points to support the study. The fifth and the last chapter of the paper summarises all the information gathered, finally, concluding the thesis. 1.8 SUMMARY HYPOTHESIS To summarise the above literature in few words, I shall be basically focusing weather grey markets can influence the sales of a product, thereby helping towards market penetration. Concepts, rather strategies, such as free riding shall be looked researched upon to present realistic as well as optimistic view towards grey markets, thereby analysing -‘Can grey ever be good? ‘Can grey goods help in market penetration? LITREATURE REVIEW Almost exclusively, the existing literature on grey marketing regards the occurrence as a pricing problem but falls short to identify it as a market entry opportunity for start-up entrepreneurs. The grey marketing strategy forms apt for start-up entrepreneurs in view of their resource limitations and the risk of being a first-mover in market development. Within this paper, the researcher shall be focusing on how an entrepreneur can effectively penetrate an established market by adopting suitable approaches. This is most favorable for an incumbent trader to accommodate the entrepreneur/grey marketer even if the former could compel the latter out of the market through hostile counter actions. Moorthy (1985) demonstrated the game theoretic methodology is most appropriate to investigating the behavior of market participants in such a state. This game theory is being pursued by Lim G.H., Lee K.S., Tan S.J. (Journal of Business Venturing, Jul 2001, Vol 16) to depict the strategic communications between parties concerned in grey markets and to recognise the circumstances under which entrepreneurs can effectively enter these markets. 2.1 THE POSITIVES OF GREY MARKETING A study offered by USC Marshall Research in fall 2004 by Mark Bergen (Carlson School of Management, Kersi D. Antia (University of West Ontario, London) Shantanu Dutta (Marshall School of Business, University of California) portrays the optimism towards grey markets. According to the paper, grey markets are often an helpful way to react to competitive demands, control distribution channels, fragment markets, reach unexploited markets alter the changes in market conditions. Some of the positive aspects of grey markets are being highlighted below: Incremental Sales: Grey markets are favourable if they reach formerly untapped markets. Grey markets also disclose the existence of new markets. Cell phone manufacturers competing in Malaysia, for instance, discovered a buying segment keen to pay premium prices for the newest phone gadgetry. Supply restrictions: Grey markets are advantageous if they permit dealers to overcome supply constraints scarcities. For example, IBM relied on the illegal outlets in China to get around government policies requiring the participation of local companies. Rather than make huge investments to fake partnerships with local distributors, IBM turned a blind eye to a flood of grey market imports from Hong Kong. Competitive need of opportunity: Competitors will frequently exploit grey markets if they are lucrative companies which do not follow trail shall lose significant market share, position power. This is precisely what happened to Indian-branded manufacturers of PCs. With the evident competition and sales went on at high-end retailers, the actual sales volume that led to economies of scale market penetration took place in the unorganised sector, accounting nearly 60% of total market. Several branded PC maker in India, uncared for this market, failing to reach a large unexploited segment of customers whose wants were not being met by the existing channel. Competitors that did sell to this sector have since grown to be key players. Market Segmentation: It is at times complicated to segment market within an existing distribution channel structure. Grey markets permit firms to segment their customer base more profitably than they could if they employ only a constricted base of distributors, customer uncertainty branded dilution that arrives from selling through a multi-channel network of legitimate dealers. IBM used a twofold channel approach to sell profitably in high end markets while still attaining more price responsive consumers with grey market goods; this strategy helped the company meet sales targets, spawn profits produce sales economies in manufacturing. Channel Management: Occasionally it is less expensive to abide grey market activity than to close it entirely. Shutting down grey market can be very pricey in terms of management time other resources required sensing breach, filing them, communicating them internally with distributors, and punishing the lawbreakers. Grey markets may also be a less expensive means to serve small customer sections that do not have access to authorised outlets or customers who do not value the services offered by authorised dealers. Varying market environment: In many situations, distribution channels cannot modify adequately to meet new market realities. For example, auto dealers have supply networks in places that are hard to switch. But in an epoch of soft sales, sustained incentives continually growing competition, they are struggling for numbers, even if it means forgone revenues. With effect, dealers have been more tolerant to grey markets as long as these markets let them to get in touch with a broader set of customers at improved prices. Market Aptitude: Companies that reveal grey market activities the causes following them discover about their customers their markets. Since grey markets materialise on their own, outside existing supply channels structures, they are frequently driven by influential market forces (such as short supply to a particular segment that wants the product) therefore put forward some of the purest forms of market intelligence accessible. 2.2 CONS OF GREY MARKETING 1. Dilution of exclusivity: Perhaps the most instant outcome of grey market is the draining down of exclusive rights to distribute a product. Instead of being the solitary distributor or one of a select few enterprises for delivering a product, the authorised distributor becomes merely one of several sources. The consequence is a radical drop in margins as multiple outlets struggle for the same customer. What follows promptly thereafter is only to be expected: loud complaints from the legitimate distributors and calls to the company to â€Å"do something concerning it!† 2. Free riding: But what if a manufacturer turns blind eye or, worse yet, writes off its authorized distributors complaints? While it is improbable that a distributor would split relations with the supplier in protest, there are several indirect but possibly more insidious ways of reaching the manufacturer. One of these is free riding. Free-riding was initially offered by Tan et al. (1995, 1997) as an alternative justification for the event of grey markets. In such situations, authorised traders, dispirited by anemic margins and manufacturers ineffectiveness, begin skimping on the imperative services they generally offer—such as presale service, consumer awareness education on product features, salesperson training and so on—in an attempt to lessen their expenses and match grey marketers price. This approach can weaken the value-added services and activities that often lay at the heart of several enterprises sources of differentiation and competitive plan in the market place. As one automobile dealer put it, â€Å"We invest millions in sales and service facilities. Its hard to compete with someone whose only investments are a briefcase and a cell phone.† The under provision of services is the death knell of high-end brands, as customers who value service will discard the brand in droves. 3. Damage to channel relations: Perhaps the prime cost of grey marketing is its impact on the relations and trust amid members of the distribution system. When a manufacturer has made major investments in official channel members or is dependent on one or a few associates (or both), grey markets that rip off these relationships can be particularly pricey. Visualise an official supplier that has recently coughed up $2 million to set up a new outlet and its related trappings—all to accomplish its contractual obligations. The manufacturer has guaranteed the dealer that ownership of an exclusive region will more than add up for his venture. Just as the distributor begins to foresee the promised sales, he receives word that the cash cow of the product line is offered down the street at a markdown of 15% to 20% off its own posted price. Frenzied phone calls to the manufacturer are met with empty reassurances or even stony silence. What should the enterprise do? Should it (a) match the price of its grey market opponent, doing whatsoever necessary to cut costs, (b) complain robustly to the manufacturer or (c) seek assistance from the courts, suing whoever appears liable for his current remorseful situation? 4. Undermining segmented pricing schemes: The spill over from this distribution headache expands with equivalent viciousness to most essential elements of a marketing strategy, including pricing. A basic characteristic of multinational operational strategy is the facility to price goods at levels that every local market can bear. As long as a company can fragment each market, it has a winning hand. But globalisation tosses a twist in the works. Tumbling trade barriers, easy accessibility of information and improved logistical potentials have collectively made the watertight local market a quaint belief; these factors also make it easier for grey market operators to flourish. 5. Repute and legal liability: A manufacturers ability to support its product is taken for granted. In the case of grey market goods, however, the manufacturer loses control of the product. FOR AN EXAMPLE OF how these five fundamentals can work together, consider the troubles faced by manufacturers of new, high-end IT products. High levels of services are often required to instruct customers on the features and benefits of these products. To really understand quality new product features and their functioning with other technologies, it is obligatory for the customers to learn from a salesperson at the retail outlet. To make such services available, the manufacturer time and again needs to develop a relatively elite set of distributors, fostering strong contacts and supporting the distributors actions with subsidies and an opportunity to achieve high margins. Authorised suppliers are chiefly vulnerable to grey markets in this condition. Illegitimate dealers can free ride, allowing other dealers invest in the service and offering the similar products at lower prices. Budding customers can take what they discover from authorised dealers and hunt for low-service, lower-price grey markets. The authorised sellers thus face high costs, shrinking margins and low sales. Often, the clarification they opt is to provide less service and to be more price competitive. As their margins contract, channel clashes grow, and the dealers start routing customers to competitors products which offer higher margins. The difficulty, then, eventually budges from the authorised distributors and comes to rest on the shoulders of the manufacturer. Below presented are two different cases providing two different perspectives towards grey practices. The first consist of a comparative study amongst countries the pricing structure of the grey goods that are being sold. The second case depicts the current scenario of grey activities in China. The case focuses mainly on the problem of counterfeiting of IT products the preventive measures that can be taken to minimise this nuisance. CASE 1: BUYING FROM THE GREY MARKET Are you tempted to buy cheap and cheerful goods from the grey market or should you take the authorised route? asks Sean Fleming. Anyone who has visited the US or the Far East will have found themselves going misty-eyed and waxing lyrical on the subject of how cheap things are over there. But you dont have to cross an ocean to see bargains. The difference in the price of new cars in Britain and mainland Europe they are often as much as 20% cheaper on the continent has many people hopping mad. The UKs Director General of Fair Trading has concluded the market isnt working, and has now ordered the Monopolies and Mergers Commission to investigate whether or not cartels exist in the car industry. Whatever the cause, people are realising that we must be paying over the odds in the UK for a whole range of goods and services. But do we complain? No, thats not the British way, is it? So that decision to investigate high prices in the UK will come as music to many peoples ears. Trade and industry minister Stephen Byers says he has identified this as a key obstacle to the concept of a harmonised Europe. If you want proof that things cost more here in the UK, there is plenty of it around. Bureau European des Unions de Consommateurs (BEUC), the European consumers organisation, carried out a survey last year in 52 cities across Europe in which it compared the prices of 400 different products. From this it produced an index of the cheapest and most expensive countries. The UK turned out to be the dearest of the 10 countries sampled, with a rating of 124 overall. By comparison, France scored 107, Luxembourg 102 and Germany a rating of 100. Report after report, survey after survey, they all come back with the same result when you compare like-for-like goods, we in the UK are paying more than just about everyone else in the developed world. Sure enough, its the same story with IT equipment both hardware and software. Feel like paying through the nose? No? Thats unfortunate, because the chances are youre going to. There is a painfully simple solution to all of this, of course. If stuff is cheaper somewhere else, then go somewhere else to buy it. Plenty of people import cars from Holland and Germany, and even from the Far East, so why not do it with IT? The practice of buying from non-standard, unauthorised outlets is often referred to as buying from the grey market. The grey market is a bit like the black market, except in this case no ones actually breaking the law just risking the annoyance of original manufacturers. There are big savings to be had from going grey. For example, an IBM PC 300GL, with PII 400MHz chip, 32Mb memory and a 4.2Gb hard drive running Windows 98 would set you back about #814 in the UK, but bought on the European mainland, the same PC will cost you #689. Thats a 15% saving. How about a Cisco 1601CH router? Itll cost you about #779 here and only #649 on the other side of the channel. Mike Almond is business development manager at ProSource, a company which specialises in finding this sort of deal for its customers. Using a combination of overseas contacts and the Net, ProSource keep tracks of international prices on a daily basis. When asked by a customer for a particular product, it can go out and find the best price. Were not saying were better than established channels or that our approach is the right one for organisations to adopt, but our results speak for themselves. More importantly, we offer an alternative option to our customers. Thats what a free market should deliver, Almond says. Its not difficult to find this stuff. Some manufacturers will discount heavily in particular countries to make in-roads into that market. We can use those markets to buy products back cheaper. There is, of course, a catch buy your kit from another country and the manufacturers warranty is invalid when you get home. No warranty means no technical support, no helpline advice and certainly no upgrades. Some manufacturers are so inflamed at the thought of people saving money like this that they will not just refuse support; they will also claim the law is being broken. This is despite the fact that Europe is now a single market. Phil Humphries is head of IT services at Surrey Police and it is no surprise that hes extremely cautious about ending up on the wrong side of the law, whether statutory or a manufacturers warranty rule. As part of his forces year 2000 project, a lot of equipment has been replaced, at the same time as migrating to Windows NT. He may have seen lots of expensive equipment being bought, but Humphries is not tempted by the lure of the grey market. I am aware that some of the things we use could be bought cheaper overseas by using the grey market, but I dont think the differences are as great as they used to be, he says. Apart from which, the hassle factor would be enough to put me off. This is an important factor for many people. All too often you dont know exactly what youre buying and who you are buying it from. In the event of a problem, can you be sure youll be able to get hold of them? Humphries said. But theres more to it than that. Saving money on initial capital outlay may have its attractions, but Humphries feels this is a short-term gain had at the expense of longer term success. We are moving away from a situation where we are buying boxes. Now we want to deal with a partner which can offer the right support we need from start to finish. Most of the bargain-basement IT offers that crop up in the small ads will be for software. Adverts purporting to have US versions of Microsoft Office at less than half price are fairly commonplace. David Gregory, Microsoft UKs customer legal licensing manager, warns there is more to these offers than meets the eye. He explains: Our biggest problem with people using unauthorised sources is that the overwhelming majority of this software is counterfeit. It will be passed off as being from the US, but in about 90% of cases it is pirated. The individual serial number on the product tells us where that product was bought or if it is a copy. Finding anyone with IT purchasing responsibility who will admit to using the grey market is difficult, although one IT manager confided anonymously: Most of our procurement has to go through a centralised process. However, some stand-alone projects are bought on an ad-hoc basis and thats when buying on the cheap becomes a viable option. But why is any of this stuff priced so much higher in the UK in the first place? Almost all the major manufacturers operate different pricing policies in different countries, but few can explain why the UK gets clobbered quite so comprehensively. As far as Microsoft is concerned, Gregory says: The majority of software originates from the US and there are certain unavoidable costs incurred when taking that software into other territories local support services, language support, translating documentation and so on. Not to mention currency fluctuations. But with the worlds foremost software vendor moving toward shipping single every-language versions of its products, this position is set to become obsolete. On the hardware front, the worlds number one in PCs, Compaq, also varies prices between the countries that it sells to. David Petts, Compaq UK commercial unit business manager, explains: Local pricing exists because different markets have different patterns of economic behaviour. In Europe, Compaq prices are set by the companys European HQ in Munich, and individual countries are then able to fix their own prices within a given range. So, if one were to charge at the top end of the range and another charged at the lower end, you could, in theory, see material price differences, he says. Why the UK is hit hardest by these price differentials is obviously a difficult subject for manufacturers to discuss candidly. One source within a major hardware company begrudgingly admits: Lots of things are cheaper in the US and Japan. Its the way of the world people just need to face up to it. So, there you have it put up and shut up. If you dont put up, and instead succumb to the grey market, your warranties wont work. However, there are ways to get around the warranty issue. In the case of Compaq, any warranty in operation in the UK will also cover the rest of Europe and vice-versa. You can buy Compaq kit in Holland, for example, and not have to worry about your warranty. ProSources Almond explains that it is important to keep geography in mind when venturing into the grey market. Manufacturers will claim warranties are not valid, but under EC law there is nothing to stop you buying things from any other EC country. If we have a customer that is very sensitive about maintaining the warranties, well be careful to only buy from within the right region, he says. In the case of IBM, things are even more straightforward: good old Big Blue offers global support on all its products, so it doesnt matter if you bought your ThinkPad in Durban but you live in Doncaster. A long-standing champion of the grey market is Cirencester-based RBR Networks, Ciscos largest European distribution partner. Before getting its Cisco accreditation in October 1997, RBR was something of a thorn in Ciscos side. It was doing so much business in grey-market Cisco product that in the end the company had to be brought into the fold. RBR marketing director, Jos White, takes a fairly pragmatic view of the subject. He does, however, prefer the term second sourcing to grey market he believes it doesnt sound so grubby. Using second sourcing, we could make a healthy margin and still sell cheaper than most of the competition, says White. It has to be up to the manufacturer to make it worth everyones while to use the authorised channels, he adds. Manufacturers cannot simply try and ban this sort of thing and it is definitely not on for them to throw their weight around, threatening everyone by saying that their licences are invalid and they may be breaking the law. It comes as no surprise that a manufacturer such as Compaq is against the use of the grey market. It has nothing to