Strategic analysis of Pepsi Co.

Strategic analysis of Pepsi Co. Strategic Analysis: PepsiCos Restaurant Business Divestment Introduction In 1997, Pepsi Co announced that it would spin-off its restaurant business into a separate publicly traded company through issuance of tax free new stocks. The argument put forward by the PepsiCo top management was that the firm would like to concentrate on its core carbonated beverage business. It would be complemented by the high profit yielding snack foods division of Frito Lays. The figures below for FY 96, show that the restaurant business contributed the least to the profits earned by PepsiCo conglomerate. This was largely attributed to the sluggish growth in this segment. PepsiCo was compelled to take the divestment route to boost its stock price and somewhat mollify the investors, analysts and the markets in general. I believe the new restaurant company will be a powerful organization with great potential. For the separated companies, independence would make them far more capable of improving their operations to create solid, sustainable growth. PepsiCo emphasized that it already has taken steps to prepare its chains for independence, including consolidating their payroll, accounting, purchasing, data processing, construction and real-estate functions as well as unifying foreign operations under a single management team. Franchisees willing to comment on the spin-off gave upbeat assessments of the deal. David Adelman, restaurant analyst at Dean Witter Reynolds predicted that Intangible boon to the spun-off restaurant company would be greater pride of ownership. Its managers could be inspired by a more direct compensation correlation between what the company earns and their rewards. Larry Walker, controller for Holland Foods Inc., a 17-unit KFC franchisee in Texarkana, Texas, said that, after the spin-off, These separate companies will have a clearer direction. PepsiCos been a conglomeration; you get confused when you try to run that many businesses. Besides TGI would benefit from certain advantages once it is spun off from PepsiCo Sound commercial credit rating High cash flow contribution from franchising fees and royalties Strong asset base in its real estate portfolio and ownership of nearly 13000 restaurants Pepsi did not transfer any of its $9.5 billion outstanding debt to the new company Tricon Global International (TGI) Tricon Global International (TGI) is the holding company for the three restaurant brands of PepsiCo Kentucky Fried Chicken (KFC) Taco Bell Pizza Hut It owns, franchises or licenses the 29,000 worldwide branches of the three chains, whose worldwide sales exceeded $20 billion in FY 96 and was second only to $32 billion sales of McDonalds. The newly formed entity TGI would also be the worlds largest chain in terms of the number of outlets under its management, with around 29000 units. Kentucky Fried Chicken (KFC) Kentucky Fried Chicken was started in 1939 in Corbin, Kentucky. After ownership changed hands through the decades, it was finally acquired by PepsiCo in 1986 and rechristened as KFC. KFC primarily offers fried chicken recipes of which the iconic one is the Original Recipe prepared with secret blend of 11 herbs and spices. It was devised by the restaurant chain founder, Colonel Harlan Sanders. It later started to complement the mainstay product with add-ons like bread, potatoes, gravy, desserts and non-alcoholic beverages and also offered non-fried chicken dishes. The food is prepared and delivered on made-to-order basis, as and when customers place orders. KFC is the market leader in chicken QSR with 55% of the market share in the US in 1997. As of 1997, KFC operates 10397 outlets in 79 countries. In the US, KFC operates 5120 outlets either through franchises or through licensees. TGI is aggressively developing non-traditional outlets like educational campus, airports etc, where it expects to realize significant revenue that would reinforce sales from traditional outlets. KFC also has a significant international presence, with its major markets as below Taco Bell Taco Bell was founded by Glen Bell in 1962 in Downey, California. It gradually grew into a restaurant chain specializing in Mexican food with a pan-American outlet network. The chain was acquired by PepsiCo in 1978 and made a part of its restaurant chain. Taco Bell offers typical Mexican food like tacos, burritos, salads and nachos. The delivery is done after preparation of the order placed by the customer. As of 1997, it was the dominant player in the Mexican fast food category, commanding 72 % share of the US market. Pizza Hut Pizza Hut was started in 1958 by Frank and Dan Carney in Wichita, Kansas. At the time of its debut, pizza parlors dedicated outlets for pizza was unheard of, and the concept soon caught up across the US. Business expanded, even went overseas (starting with Canada) and PepsiCo finally took over the firm in 1977, to make it an integral part of it restaurant division. The main offerings are pizzas, appetizers, pasta, sandwiches, dessert and non-alcoholic beverages. Pizzerias prepare the food after the customer places the order while express counters serve readymade pan pizzas. Future Roadmap TGI would adopt the following strategy to re-invigorate the erstwhile restaurant business of Pepsi The top priority was to addresses the high employee turnover endemic to the industry. To accomplish this goal, Tricon gave each Restaurant General Manager (RGM) a one-time, $20,000 stock option grant called YUMBUCKS. This plan provided an opportunity to earn even more options based on the RGMs restaurant performance, along with a unique program to recognize outstanding restaurant teamwork. Through product innovation, advertisement, promotions and customer service, TGI would aim to increase same store sales growth. Tricon also would combine the three brands within single restaurants in an effort to give customers more choice under the same roof and increase the chance of a share of their wallet. By working closely with top-performing franchisees and company operators, TGI would seek more effective ways to bring down costs. To leverage economies of scale, TGI purchases its food, paper goods and equipment for all its U.S. restaurants through a $4 billion cooperative. The company also uses new technologies that simplify operations and improve service time. Tricon would focus on reducing complexity and redundancy, general and administrative expenses. In this regard, company leaders and franchisees from all three brands would meet to discuss Tricons one-system approach, share best practices and explore bundled brand expansion opportunities. Tricon would try to enhance shareholder value by investing in high return restaurant units and exiting persistently low return units. Besides there would be added focus on sales margin growth, reducing redundancies and well thought out expansion plans. PepsiCo has decided to align itself with a different strategy where its restaurant business would not fit into the scheme of things. Restaurant business is more management-intensive and labor-centric compared to the beverage or snack food distribution business. PepsiCos core strength is in marketing and distribution. It would be best put into effect in the other two divisions where it has historically yielded good returns. However the incompatibility between the requirements of restaurant business and PepsiCos capabilities was pulling down the performance of Pepsi stocks and causing much angst to the investors and markets alike. PepsiCo realized that the food-service business is becoming increasingly competitive with a large number of established players. Growth has started to plateau in the domestic market which is not helping to increase the groups revenues. While other players mostly standalone, were aggressively pursuing overseas markets, TGI association with PepsiCo was not helping matters. There was bureaucratic delays and large lead time in decision making, being a division of a conglomerate. PepsiCo could not tap into the fountain-dispensed soft drinks business, long dominated by Coke. It was partly due to Cokes monopolistic actions by which it did not allow food service distributors to deal with Pepsi. Food service distributors provide broad variety of consumable supplies like food, drinks, paper etc to restaurant chains, movie theaters etc. Also PepsiCos ownership of food chains did not allow it to effectively pitch for fountain service business with firms which were essentially its rivals in food business. In the light of these, PepsiCo decided to concentrate only on business where its core strengths could be leveraged. Thus the renewed and exclusive focus on beverages and snack food segment which would entail divestiture of the restaurant business. In the light of the above developments, it would be important to deliberate on the decision and its impact through different aspects of strategic management perspective External Environment Analysis The external environment can be further classified as General environment Industry environment Competitive landscape The analysis of the competitive landscape for TGI starts with an overview of the food beverage segment. The food services sector in the US can be classified based on the mode of distribution Full-service restaurant Limited-service/Quick-service restaurant (QSR) Cafeteria Snack non-alcoholic beverage bar Food service contractor Caterer Mobile food service Alcoholic drinking establishment In addition to this, there is considerable overlap with other business which act as non-traditional distribution centers and dispense food beverage service Grocery or convenience stores Gasoline filling stations Supermarkets Educational establishment Business Level Strategy PepsiCo has followed a differentiation strategy at the business level due to the following reasons The wide portfolio of products including carbonated beverages and snack foods help it reach out to a vast demography among the customer base. The assortment of choices enables various customers to meet their refreshment demands through PepsiCo products of their preference. PepsiCo is a global company with operations in several countries. In order to obtain a share of wallet of consumers in different regions, it must provide products that are tuned to the tastes and preferences, prevalent in those local regions. This also explains the rationale behind having variety of products so that buyers perceive value for money through their preferred brands. PepsiCo operates in a duopoly market competing with Coke only. It need not adopt a cost leadership strategy as both the cola majors take price signals from each other and adjust markup prices accordingly, to retain market share and revenue. There has rarely been an all-out price war between the two which would have ultimately bled both to huge losses. This allows both players to compete on the basis of differentiated products targeted at a wider and more diverse customer base TGI on the other hand needs to follow an integrated cost-leadership and differentiation strategy due to the nature of the industry it operated in Dining is a higher involvement activity compared to purchasing cola or snacks. While rest of PepsiCos business required more of a product marketing approach, the restaurant group was more of service business. Differentiation is the key in such a scenario to attract customers. Variety in terms of menu options, ambience etc leads to higher footfalls. Also the local divisions in foreign countries need to be geared up to cater to the local needs. Unlike a duopoly in cola segment, restaurant business has many established competitors. This has led to pressure on the price front resulting in reduced margins. To stay competitive, all players have to minimize cost and pass on the benefit or risk losing customers. As evident from the discussion above, the business level strategy for cola snacks divisions and that of the restaurant division are divergent. PepsiCo would have conflict in its day to day operations as well as long-term planning while trying to manage the requirements of the business. Corporate Level Strategy PepsiCo has been trying to adopt a corporate level strategy of related linked diversification due to the following reasons The cola and the snack food business would lead to synergy in the corporate activities. While beverages could be mass produced in bottling plants, separate and dedicated manufacturing facilities for snack foods would be required. The raw materials would also be procured through different routes. The ingredients of cola would primarily be water, sugar and chemicals and plastic or glass bottles. These could be obtained freely or from institutional suppliers like sugar mills, bottle manufacturers etc. The inputs for snack foods would be farmed vegetables sourced through the contract farming route. In spite of the diverse operational requirements of both the business, there exists ample opportunity to leverage the core competencies of PepsiCo for both type of products marketing muscle and wide distribution network. Both the products could be marketed by sharing the expertise within the divisions and the reach could be extended using the superior supply chain and logistics arrangements of PepsiCo. Such a synergy would not benefit the restaurant business. It not only has operational divergence with the soft drinks and snack foods business, but also the core competencies of PepsiCo in marketing and distribution cannot be meaningfully transferred. More of a service orientation is required for the restaurant division apart from managing disparate supply chain, large base of fixed assets especially real estate. The human resource perspective would also be different as in managing workers who are service providers rather than working in production lines. On the other hand, TGI would need to follow a corporate level strategy of dominant business The mainstay would be restaurant business and each of the constituent brands can leverage the common pool of resources of the company. Existing real estate, previously being utilized by a single brand, can be shared among the others to focus on new store growth. The supply chain can be streamlined through coordination with logistics providers to reduce redundancy in operations. Suppliers can be managed in an integrated manner to reduce costs through economies of scale. This can be achieved by consolidating the procurement process of the restaurant brands with TGI. The business can be consolidated by working with top performing franchises to improve efficiency and drive shareholder value. Conclusion The above mentioned facts and ensuing analysis of PepsiCos strategic decision to divest its stake in TGI, point to a few aspects that stand out. The restaurant business is a dominant player in all the QSR categories it operates in sandwich, pizza and chicken. There are also ample growth opportunities in overseas markets though the US domestic market is gradually maturing and growth is slowing down there. Pepsis core competencies in marketing distribution do not fit well with the requirements of a service-oriented business like QSR. Also PepsiCo would like to pursue customers with differentiated products across a broad portfolio like beverages, snack foods, health energy drinks etc. To this effect it would like to bring synergy in its manufacturing and customer reach for all products. This would necessitate diversifying into related categories and focus on growth in these. TGI on the other hand, has to not only to offer differentiated service to its customer, but also needs to compete on the cost front more vigorously. The business of TGI is such that it is concentrated in the food service sector and there is not much scope or rationale for diversification. This would lead to loss of focus and much ground would be lost to the competitors. There is evidently some incompatibility in the operational as well as corporate strategy of PepsiCo and TGI. This would hamper the prospects of both the groups in the long run and seriously undermine the global growth prospects of TGI which is so critical at this point of time. That the divestment decision was well thought and done with lot of foresight, was vindicated by the more than average returns of both PepsiCo and TGI shares thereafter. Pepsi was able to arrest the slide in its margin and seriously challenge its rival -Coke in many emerging markets like South Asia, Eastern Europe etc. TGI on the other hand was able to maintain its dominant position in the QSR and also increase its global footprint substantially

Why is this a Buddhist Poem? Essay -- Literary Analysis, Who Are You?,

The protagonist of the poem, Who Are You, attempts to define his identity in the manner that most humans fall victim to. The inquirer, assumed to be Buddhist, is unsatisfied with his response as it contradicts the Dharma of the enlightened Buddha. Peter, when asked, â€Å"Who are you?† endeavors to label himself by the people that surround him, the place in which he was born, and the traits that he feels connected to. The question, however, is a deception used in the hope of unveiling the flaws of the perception that humans carry for themselves. The Buddhist questioner engages in conversation with the motive of exposing the three marks of existence. The first is Anitya, impermanence, the second is Duhkha, dissatisfactoriness, and the third is Anatman, no self. The no self is a principle that other religions contradict, and most humans have difficulty comprehending. The Buddha replaces the concept of an intrinsic or everlasting soul with the Five Aggregates, thus further illust rating impermanence. In order to eradicate the Duhkha in Peter’s life, he must recognize all these notions within the Buddhist doctrine along with that of Dependent Arising. This further explains the source of Anatman, offers a passage to eradicate the Duhkha, and further cease the existence of Samsara. With the dharma of the Buddha, it is evident that Peter’s ignorance towards life will become replaced by wisdom and comprehension, allowing him a lifestyle liberated from Duhkha. The method, in which Peter desperately attempts to decipher who he is, represents the flaws that the Buddha recognized in most sentient beings. These flaws are epitomized by the three marks of existence. The first mark of existence, reflected in the man’s responses, becomes visible. This... ...t his identity, he finds that no answer seems to satisfy the other. The more perplexed Peter becomes, he discovers how little he truly knows, and upon declaring this, the questioner is appeased. This is because the motive of the Buddhist is to unveil the dharma of the Buddha in hopes of enlightening his disciple. Through his questions, he illustrates the three marks of existence, Anitya, Duhkha, and Anatman. The Buddha replaces Anatman with the Five Aggregates to explain the impermanence and the dissatisfactoriness in the human realm. In addition, the notion of dependent arising is prevalent in hopes of explaining the cause for Duhkha, ignorance, and the method to eliminating it. Through the banter between he who is enlightened, and he who is not, the reader is hopeful that Peter will appreciate the dharma presented and cease the delusion and dissatisfactoriness.

Marketing Analysis of Li-Ning

LI-NING limited company was found in 1980. At the beginning of its establishment, it cooperated with Olympic team of China to push the development of sports goods. At the same time, LI-NING spared no effort to sponsor all kinds of matches. In 1995, it became the leading sports brand of China. Through exploration over 20 years, it gradually becomes a famous international sports brand representing China. In this report, it makes a marketing plan for the next three years according to detailed analyse of internal and external environment of LI-NING, which is based on the model of Benchmarking, Product Lifecycle and PESTEL. At the same time, it finds the key issues of LI-NING facing through news. Afterwards, according to the key issues, build the feasible objectives. And then it detailed recommend target market segment, positioning and marketing mix and critical factors for LI-NING limited company. Introduction Li-Ning Company Limited is one of the leading sports brand enterprises in the PRC, possessing brand marketing, research and development, design, manufacturing, distribution and retail capabilities. In addition, the mission of the company is that through sports to inspire people the desire and power to make breakthroughs. The vision is to be a world’s leading brand in the sports goods industry. At the same time, Breakthrough is the core values of LI-NING (LI-NING, 2010). There are a great number of products in LI-NING. However, Shoes of LI-NING is the aim of research in the report. Audit and analysis A marketing audit is a comprehensive systematic, periodic evaluation of a company’s marketing capabilities. The audit examines the goals, policies, and strategies of the marketing function. Marketing audits are performed on a regular basis by an unbiased, independent company and are used to improve a company’s overall marketing performance or to establish new marketing plans. An effective audit include these six points, they are marketing environment audit; marketing strategy audit; marketing organisation audit; marketing systems audit; marketing productivity audit and the marketing functions audit. (Kotler, et al, 2009) Audit is divided into two parts to analyse including internal and external analysis. Firstly, internal analysis onsists of two important points: the performance and determinates of strategic options. And two models will be adopted to make internal analysis, which are benchmarking process and product life cycle. In the performance, it is financial and marketing measures of past and current performance. Benchmarking process Researching and looking for the best practices in leading companies, it could compare with own enterprise, so that improving t o catch up the leading enterprise to enter and create a virtuous cycle of good performance. The key is learning from the best enterprise in the industry. In addition, through the study, the firm could rethink and improve the practices of business management, and then it could create their own best practice. Benchmarking focuses on practical experience and emphasis on specific links, interfaces and processes. (Kotler, et al, 2009) LI-NING regards NIKE and ADIDAS as its main competitors. At the same time, LI-NING is the leading sports brand in PRC. Actually, the product of LI-NING has advantage in the respect of sale, source and price. If it keeps remaining the advantage, it will have a good market share. If it loses the price advantage, although the advantage of brand and development of products still exist, the market share of LI-NING shoes will be decrease. At present, the main gap between LI-NING shoes and NIKE shoes is brand value. As for LI-NING, it is important to improve the value of shoes brand, so that it has the chance to increase market share, even catch up with NIKE and ADIDAS. Advantages and disadvantages of benchmarking Benchmarking is an effective management tool because it overcomes ‘paradigm blindness’. It gives firms a new method, idea and tool to improve their effectiveness. The major limitation is that it remains inadequateness to measure the whole effectiveness of such metrics. Product life cycle The product life cycle is defined as the period that starting with initial product design, such as research and development, and ending with the withdrawal of the products from the marketplace. It is a series of stages, including introduction, growth, maturity, and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix. LI-NING shoes are currently in the growth stage. On the one hand, LI-NING always wants to catch up with the sales of NIKE shoes in china. LI-NING continually research and develop new technologic shoes for young people interested in sport. At the moment, the demand of their new technological shoes is increasing. On the other hand, LI-NING is well known for providing sports products in china and lots of people like to purchase their shoes. Advantages of disadvantages of Product Life cycle Product Life cycle is an applicable method for the internal analysis. It is convenient for marketing manager to apply different marketing mix strategy based on the different stages. In addition, it is easy to observe due to the two variables, which are time and sales. There are 3 key points to describe the limitation of product life cycle. Firstly, there are no clear classification criteria of starting and ending point. Secondly, not all of product cycle curve is standard s-type; also there are many special product life cycle curves. Thirdly, the decline of product does not mean that it cannot regenerate. If it improved through appropriate ways, it could recreate a new product life cycle. External analysis It is determinants of strategic options refer to past and current strategies, strategic problems, organisational capabilities and constraints, financial resources and constraints, strengths and weaknesses. On the other hand, micro environment and macro environment are the key factors to analyse. Customers and competitors usually are considered as the micro environment factors. Any company cannot serve every customer in markets, only through effective market segmentation and then choose their own target market, so that companies can get market shares. Based on a few of professional marketing research, the customer of LI-NING shoes actually is higher than their excepted. The core customer is 14- 45. However, as for sports industry, the ideal age should be young people from 14-25 years old. However, because of the influence force of brand, budget of spread, market position and price strategy, the enterprise of sports products often focus on the second and third city. However, in the primary city, they cannot catch up with the international enterprise. So, LI-NING counts NIKE and ADIDAS as its main competitors. In the new competition time, LI-NING developed hi-technology and youthful products to compete with NIKE and ADIDAS. For instance, LI-NING developed the new technology called ‘gong’ as if the some shoes of NIKE put air in shoes, which is used in shoes to improve the bounce of people. PESTEL PESTEL is the main method to analyze the macro-environment, consisting of political, economic, social, technological, environmental and legal. Political Johnson (2008) indicates that political is about business activities of organisation and the potential impact by political power, relevant policies laws and regulation. As for LI-NING, there is a stable political environment, and the main market in domestic which is supported by nation. On the other aspect, the policy will not change rules for controlling the organisation or collecting more tax, this helps LI-NING to compete with mighty foreign sports brand to occupy the market share of nation. Economic Johnson (2008) suggest that it is the economic structure of external organisation, industry distribution, resources situation, the level of economic development and the trend of economy in the future. China's increasing quickly economy is obviously known by people in the whole world. In 2010, the GDP is ?3405. 07 billion, which increased by 9. 1%. Based on the exchange rate of the end of year 2010, it is approximate 4986. 8 billion dollar which is rank of number three in the world. Therefore, the level of customer purchasing capacity enhance continually. Social Johnson (2008) suggests that it is about cultural change, expectations, demographics and family change. For the company of LI-NING, firstly, the language barrier does not seem an actual problem for foreign products in market. Secondly, because of the increase continually GDP of PRC, customer have consumption capacity to purchase ideal shoes. Technology Johnson (2008) indicate that technology include new technology of product, new design, new material, development trend and application prospects. As for LI-NING, the first is that the technology can reduce the cost of products and services, and increase the quality. Secondly, the improved technology can make it more convenient for customers to purchase products. For instance, customer can purchase product and pay money through internet bank. Thirdly, changing the way of sale by improving technology, LI-NING can sell shoes in network shop. Finally, technology improves a new way for LI-NING to communicate with customers. For example, customer can communicate with the company on the internet. Environment Johnson (2008) indicates that it is about an activities, product or services of organisation that can interact with the environment factors. As for LI-NING, it is the most famous brand in sports industry in PRC. However, it has a big gap to the world famous brand. Regarding as the leading enterprise in China, it has some influences on the other sports firms. On the other aspect, to produce LI-NING shoes is not dangerous for environment and it can be cyclic utilization. Legal Johnson (2008) indicates that it is the laws, regulations and judicial status of external organisation and the legal awareness of integrated system consisting of citizens. As for LI-NING, it has registered trade mark. Also it is not against law for the organisation to produce or to sell shoes. Advantages and disadvantages of PESTEL PESTLE can effectively analyse the macro-environment of LI-NING. As for the disadvantages of PESTEL, there is a rapid change in society and the effect of analysis will not last for a long time. In addition, PESTEL only refers to the external environment and sometime it needs to be considered in connect with other factors such as the organisation itself, competitors and the industry that it is operating. Key issues There are 5 key issues faced by LI-NING are below: 1) American marketing research organization, sporting goods intelligent (SGI), the beginning of January 2008 had shown the rank of market value for the whole world sporting goods companies. LI-NING beyond the Asics of Japan in the comprehensive world sporting goods companies. Arranging after NIKE, ADIDAS and PUMA, it is number four. The market value of NIKE is 32. 039 billion dollar, ADIDAS is 15. 364 billion dollar, puma is 6. 4 billion dollar and LI-NING is 3. 86 billion dollar. However, there is a big distance to catch up NIKE and ADIDAS. (bin 2008) 2) There is a wide gap between LI-NING and NIKE or ADIDAS. The days of sales of inventory of NIKE are 84 days, and ADIDAS is 64 days, but LI-NING is 161 days. It means the inventory of LI-NING occupied a large capital, which influence the cash flow and Return on Capital Employed. (song 2010) 3) The shoes of LI-NING are not professional in the aspect of sports shoes as NIKE and ADIDAS. The professional shoes of LI-NING remain keeping the level of the protection for athletes in competition. (song 2010) 4) Compared with the advertisement star of NIKE and ADIDAS, the spreading strategy of LI-NING cannot attract the eyes of customer. Because of the lack of super star, the popularity of LI-NING is lower than the other two competitors. ) Both of the two companies NIKE and ADIDAS have developed over 40 years, and the popularity of shoes is considerable bigger than shoes of LI-NING. Therefore, LI-NING could lost a number of customer who is aim to purchase the famous brand shoes. (CTEI 2009) Objectives The objective is the starting point of the marketing plan. The objectives can find after analysis the environment of market. In addition, the objecti ves should use SMART criteria. The SMART criteria are consisted of specific, measurable, achievable, relevant and time bound. Specific means that the objective should state exactly what is to be obtained. For example, it might set an objective of getting ten hundreds new customers. Measurable means that an objective should be capable of measurement, so that it can be determined whether it has been obtained. Achievable means that the objectives should be realistic given circumstances in which it is set and the resources available to the business. Relevant means that objective should be relevant to the people responsible for achieving them. Time bound means that objectives should be set a deadline. To set up marketing objectives, there are two parts of objectives including marketing and financial. Doyle (2006) indicates that in the marketing goals that the marketing plan should have a clear sales goal. The primary market objectives are sales and share. In the financial goals, profits, return on investment and cash flow should be the primary financial objectives. For the LI-NING limited company, there are six objectives. Financial objectives: 1) Earn an annual rate of return on investment of 20% during the next three years after taxes. Compared with the data of year 2009, it should increase a little from 18% in 2009 to 20% during the next three years. 2) Achieve average net profits of ?23. million in China over the next three years period. Because the profits in 2009 is ?15. 6 million and the new series of professional sports shoes for target customers will coming in China market, and then the net profits will increase 50% at ?23. 4 million in the next year. 3) Achieve average cash flow of ?37. 9 million in China over the next three years period. Because of there will be a good sales in future, the inventory will reduce. Therefore, the cash flow will increase 40% to ?37. 9 million. Marketing objectives: 1) Increase the market share from 17% to 20% or 22% in china during the next three years. Due to the arrival of new sports series, it will attract a number of attentions from young person. Therefore, the market share will increase 3% to 5%. 2) Increase customer awareness of the professional sports shoes of LI-NING brand from 15% to 30% over the next three years period. The information of professional sports shoes could deliver to young customers interested in through all kinds of advertisement. Therefore, it will attract a large number of customers’ attention. Target market segments Market segmentation Before deciding the target market segment, it should make market segmentation. Doyle (2006) indicates that a market is divided into different homogeneous groups of consumers. They have different benefits wants, the amount they are able or willing to pay, the media they see and the quantities they buy. A market segment is a customer group with one or more characteristics that cause them to demand similar product. In most markets the need of for segmented offering is obvious because a single product will not meet all the customers. Segmentation has two variable types: needs and profilers. Customer needs are the basic criteria for segmentation of market. As for profilers, these are descriptive, measurable customer characteristics such as geographic location, nationality, age and income. Doyle (2006) states that ‘consumer and industrial markets generally differ in their sets of need and profiler variables’. Commonly, consumer market segmentation is divided by four main parts, Geographic, Demographic, Psychographic and Behavioural. Organisational market segmentation could consist of seven parts. They are industry of end user, organisational type, size of organisation, geographic location, application, usage and purchasing organisation. In addition, the strategy of choosing target market segment is important, and it has three ways to choose. 1) Undifferentiated marketing It means that enterprise regard the whole market as own target market. Stern (2006) indicates that enterprise ignores actual or potential differences among segments, and targets one offer to the whole market. 2) Differentiated marketing The strategy of differentiated marketing is divided the whole market into a number of different market. According to the different market, it develops different product considers the different marketing strategy to meet the needs of different customer. ) Focused marketing Stern (2006) indicates that firm does not aim to compete in the majority of the market, but rather specialises in one segment, or a small parts of segments. Therefore, the firm can exert the advantage in the minority market and improve the occupancy of market. Choosing target market segment However, the most important point is to choose target marke t segments. There are five factors govern the attractiveness of the segment, including segment size, segment growth, profitability of the segment, current and potential competition and capabilities of the business. LI-NING is a leading sports brand enterprises in the PRC, and their shoes product should have a right direction. There are three key points to describe the target market of LI-NING, including brand positioning, target market and target customer group. The selection of LI-NING target market: Brand positioning: young, fashion and professional sports shoes. The reason is that the market consumption capacity of young people has enhanced and people have the tendency to buy high-end products. Target market: relatively quite wealthy city. The reason is that LI-NING as a leading brand of sports industry is quite expensive for low income group. Because of LI-NING is aim to produce good quality and functional shoes, the cost could higher than normal shoes. Therefore, it is suitable for relatively quite wealthy city to purchase. Target customer group: 14-35 years old, athlete, young person, people who love sports. And the most of middle-end market and the less of high-end and low-end market and The reason is that the shoes of LI-NING are quite suitable for young person and athlete. Additionally, it has the function to protect foot when people putted on shoes. On the other respect, according to produce some high quality to improve the image of product, for instances the product suitable to play golf. On the other hand, to produce the low-end product, it is aim to reduce the interference from the other low-end brand. However, the core market is the middle-end market. In the market, it can follow the original brand, which is aim at ages around 24 to 35 years old that they have quite good income and consumption capacity, and also they are the main customers of LI-NING. Market positioning To make a market positioning, it should choose a strategy to position it and apply a suitable tool to analyse. Firstly, market positioning has been shown how a business can offer superior value by strategies that add value or reduce costs. Marketing positioning also called product positioning, which is according to the position of the existing product of competitors in the market segment to create a new product which is different with competitors’ to give customer different feeling, so that the product possess the capacity to compete. Doyle and Stern, 2006) On the other hand, before making market positioning, it should analyse the situation of market, and then to choose an appropriate tool to find the answer of market positioning. There are two tools to analyse it, including perceptual mapping and the pane mapping. Compared with pane mapping, the perceptual mapping is quite usual in normal analysis. It is a visualization statement of customer for products or brand perception and preference. The aim is to attempt to deliver the view of customer or potential customer using a clear and visual map. The chart has shown the information about LI-NING, NIKE and PUMA. Both of NIKE and PUMA have high quality. And then, the shoes of LI-NING have the gap to them in the quality. On the other hand, compared with NIKE and PUMA, LI-NING has the advantage of price. LI-NING can apply the price advantage to expand stores in the most of city, so that people who have low income and cannot afford to buy the product of NIKE and PUMA could purchase the shoes of LI-NING which is also a famous sports brand in the world. In addition, according to a new positioning in market, LI-NING has another advantage, which is possessed the approximate function and fashion design to attract more customers of young person. Meanwhile, to choose an appropriate strategy to position product, it is possible to beat competitors. Therefore, the strategy of market positioning is a kind of strategy of competition, which means that according to the characteristic of product and the awareness of customer for product determine the competition relationship between own product and competitors’. There are three ways for enterprises to position market. * Avoiding powerful enterprises positioning It means that avoiding powerful enterprises to find a place which is belong to self. The advantage is avoiding the directly competition with powerful firm, and build an own image in customer’s mind. Because of the way of position has a quite low risk, and has a high success rate. Usually, it is adopt by the most firms. * Competitive positioning The aim of the way is to compete with powerful competitors, so that it can achieve a great market advantage once beat powerful competitors. However, there is high risk for firm. * Repositioning It is to change characterise of product, and then changed the image in customers’ mind. The aim is for target customer having a new understanding for the new image of product. Wilson and Gilligan 2005) LI-NING should adopt the way of repositioning. The reason is that from 2006 to 2007, LI-NING has researched the main customer group, and it has big gap between actual customer group and target customer group. The age of actual customer group is around 35 to 40, so that a number of young person feel that LI-NING is inferior t o international brands on the cool and fashion. It is unsustainable for LI-NING in the future. To catch up the new objectives which love and focus by a great number of young person, LI-NING should adopt the way to change the old image in customer’s mind. At the same time, according to change the technology and design of shoes, it is possible loved by more and more young person. Marketing mix Marketing mix is the sort of marketing decisions, which management makes to apply its positioning strategy and reach its objectives. There are four parts in marketing mix including product, price, promotion, and place. Product decisions include product variety, product performance, product features, product design, packaging, sizes and brand name. Price consists of discounts, allowances, geographical pricing, payment terms and credit terms. As for promotion, it includes sales force, public relations, customer promotion, advertising, trade promotion and direct marketing. Place refer to distribution selection, density of distribution and dealer support. (Doyle ;Stern, 2006) Product As for LI-NING, it is facing a strong challenge from NIKE and ADIDAS in the future. To keep the shoes of specialization, technological innovation is the key point. LI-NING should keep researching and developing the shoes which is good for young person more professional and fashion. The price should suits the level of young person and lowers than NIKE and ADIDAS, so that a number of customers choose the shoes of LI-NING. According to the value principal, even though the price of LI-NING shoes is lower than the other competitors such as NIKE and ADIDAS, the degree of satisfaction and comfort is quite high. Promotion There are three key points. Firstly, to find the suitable sports match to sponsor, it attracts a large number of attentions for LI-NING shoes. Secondly, it should make an accurate advertisement positioning. ‘Make the change’ is the slogan of LI-NING. The aim is to give customers an impression that they could change everything when they putted on shoes of LI-NING. Finally, it should choose a suitable media to spread advertisement such as TV, newspaper, internet and broadcast. Place The place should distribute with two methods including traditional and new distribution. In traditional distribution LI-NING has its own stores where consumers could purchase it. Also LI-NING could use intermediaries to sell its shoes. On the other hand, in the new distribution it could sell shoes on the internet through the online store. Critical factors Critical factors refer to the detailed implement and control of marketing plan for companies. It helps companies to achieve expected objectives. Firstly, marketing implementation is a strategy, which means that it is the process from marketing plan to action and task. Also, it make sure the task is been completed. For the other point, marketing control is a working system to make sure firms run according to expected objectives. (Kotler, 2000) As for LI-NING, there are five critical factors in the implement and control of marketing plan. ) The strength and direction of advertisement. Advertisement is a method of promotion. Efficient implementation of advertisement can increase the popularity of LI-NING shoes, and then a large number of customers will concentrate on it. 2) The quantity and quality of raw materials. Possessing enough raw materials can help the firm to produce enough shoes to meet the needs of customers. Additionally, because of high quality of raw mater ials, LI-NING can produce the high quality shoes. 3) The depth of researching and developing technology. Technology is a key point for LI-NING to positioning. Developing the professional sports shoes through deeply researching on technology can help LI-NING to reach objectives smoothly. 4) The grasp of the professional sports technology knowledge for dealers and salesmen. It increases the impression of LI-NING for customer. Because dealers and salesmen can detailed describe the functions of shoes to increase the impression of LI-NING shoes which is the product of high technology. 5) The monitoring level of manager. For instance, in the process of marketing implementation, the effective monitoring on each step from manager can help LI-NING to immediately find the existing problems and solve them. Recommendation The shoes of LI-NING are in the growth stage of the Product Lifecycle, there are many methods can keep it increasing. A few suggestions mentioned below to help LI-NING. 1)The direction of advertisement should aim at target customer group. Since the customers between 15 and 29 years old are quite like watching basketball and football matches in china, LI-NING should sponsor these matches to attract the attention of young customers. 2)The LI-NING shoes are the marketing leader in the sports brand in china. Therefore, it should try and introduce new series products to take more market share. The brand loyal customers will also buy the new series products to try. 3)LI-NING should offer a sale of bundle on selling shoes. For instance, on the purchase of a pair of shoes, the price of accessory such as stocks and shoelace is discounted or is a presentation. 4)Product differentiation of LI-NING shoes is a key factor. The LI-NING shoes have different series for different situation to wear. Therefore, it should to describe the different shoes on advertisement, websites, and retailer, helping customers to choose the right one for them. )As for the shoes of ultralight series, it is positioned as racing shoes. However, there is a same type product existing called marathon. Therefore, it is better to change the ultralight to the kind of performance training that could be a new product and will be concerned. 6) Allow customers to try shoes is another way for LI-NING to effectively sell shoes. When new shoes arrival in store, it should allow customers to try the shoes within 60 days. If they not satisfy the shoes, customers can send back their shoes. 7)Enhance training salesmen. They should improve politeness and professional knowledge to communicate with customers better. Conclusion. In a word, this report adopts relevant models to analyse the internal environment and external environment of LI-NING. It finds the key issues through news. Based on the analysis of key issues, the feasible objectives are drawn up for the company. In addition, the marketing management action suggests are given to reach the objectives. The marketing management action includes target market segment, positioning and marketing mix and critical factors in implementation and control. Finally, there are some recommendations given to LI-NING shoes. ;

Building Blocks Of Collaborative Teams - 2028 Words

CHAPTER III: COLLABORATIVE TEAMS Building Blocks of Collaborative Teams In this model, each group of people would embrace and utilize the building blocks of collaborative teams as an integral part of their work. In this sense, the structure embeds the components necessary for a culture of PLCs to exist. DuFour contends that collaborative teams are the building blocks for a PLC to exist thus in order for a team to be truly collaborative, these building blocks must be in place. The building blocks of collaborative teams include norms, roles, people, self-assessment, PLC goals, and support. Each of these is included in the PLC self-assessment rubric in the tools section of this chapter as the first category of the rubric. Brief†¦show more content†¦DuFour et. al (2016), Hord, Roussin, Sommers (2010) PLC Goals Based on our assessment, what will be our PLC goal in terms of moving toward collaboration champions? Teams establish PLC goals around moving toward high-functioning collaborative teams? Sheard Kakabadse (2002), DuFour et. al (2016), Hord, Roussin, Sommers (2010) Support How will we decide when support is needed and whom will we access? Do we need support now? Teams have identified a network of support and access them regularly as needed through the PLC process. *Specific information on resources can be found in the references section at the end of this Guide. A colorful graphic around the building blocks and guiding questions is offered in the tools section of this chapter and can be reproduced when introducing these Building Blocks as a part of the PLC culture within your district and high school. As you think abut implementing this within your district or high school, I challenge you to think about who might the learners be for each group that supports collaborative teaming as an element of creating the culture of PLCs. 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