A Critical Review of Trifles Essays

A Critical Review of Trifles Essays A Critical Review of Trifles Paper A Critical Review of Trifles Paper Mrs.. Peters and Mrs.. Hale into Mrs.. Wrights kitchen who is arrested for the murder of her husband. When the men go upstairs to find evidences that they dont think they will get in the kitchen, because In their perspective It Is silly area since It belongs to women, Susan Is creating a space for the women during their dialogue to show their Intelligence and their analysis that Is based on questions. Through their talking they find a dead bird which is one of the most important details that they build their conclusions on. The women hide this because they dont want the men find it as a motive for Mrs.. Wright to kill her husband, and the play ends after the women mislead the men. The bird in the play is highly symbolic for Mrs.. And Mr.. Wright which I think Susan has succeeded in using it. Review Description Symbols in literature add further meanings and make the meaning stay in the readers mind. As many plays Trifles has several symbols that make the reader understand deeply the characters and their roles throughout the play. The major symbol In the play Is the bird which Is used to represent Mrs.. Wright herself and her life that lacks of freedom, because after her loveless marriage she became imprisoned in a gloomy house. In the story, Mrs.. Wright wants it as an alternative of children, and she likes it because it reminds her of her past when she used to sing, so she wants to recall her cheerfulness. It was the only left hope for her before Mr.. Wright has put it down, and for Mr.. Wright is a fake hope, so he wanted to get rid of it. The birds ultimate freedom through death also resonates with Minces freedom through her husbands death. Even though she is Jailed in the play, her spirit is freed through the revenge she enacts upon Mr.. Wright notes Dalton. Evaluation The play is very effective because Susan Slapped used all the elements of the play successfully, so the meaning is delivered clearly and emotionally. Her active description of the setting helps the reader to understand the psychological situations of the characters. Also, her using of the dialogue of the women and the Irony In the play forces the reader to sympathize with the protagonist, because she highlights throughout the womens conversation the protagonists stillness and suffering with ere rough NASDAQ Ana makes NV or near unreason Tanat ten murder Is a result and outcome of these factors. The symbols give the play powerful meanings and explain her state of mind of being lonely, motherless and imprisoned. In my opinion, the end is successful because it evokes the reader to think about Mrs.. Wrights destiny which I think as a reader that Mrs.. Wright will go out of the Jail because of lack of enough evidences. Conclusion Trifles by Susan Slapped is considered as a feminist drama because it is mainly about women and their struggle. The author points out the male perspective toward female. She tries to change this perspective by showing women intelligence and also by the tragic situation that the house of the Wrights has become.

Henry V essays

Henry V essays What is the scene in the very beginning of the movie? It is the backstage of a theatre. It is modern day, you can tell by the building, lights, and the match. The man speaks in very old language for such surroundings. The scene we are next brought to is obviously much farther back in time. It is lit by candles. The clothing worn by the men is cloth with accents of metals. They look like very good clothes I also believe these people are all upper class/royal in some way. The priests bless the king. The language is very difficult to understand. Kenneth Branaugh looks much younger in this movie then others he ha made, I assume it is one of his earlier movies. The throne Henry V sits on is wooden and simple. The doors in Henrys hall were enormous. The common men and women wore simpler cloth clothing. The women wear such ragged clothing, its hardly anything. Some of the more warrior-like men wear chain-mail and have swords. When we see Henry again, he is wearing a bright blue and red shi rt. The kings royal wear is much different than the clothes worn by others. The French king wears a gold crown. The warrior wears chain mail, another wears metal armor. The French maid wears a very interesting sort of hat that comes down over her ears. There is quite a long scene in French, and I dont understand a word. The Frenchmen wear more colorful clothes than the English. They wear more blues, especially. The hanging of the man by Henry brought back of a flashback of a promise he made not to hang thieves. This shows how Henry is going against anything he had promised. When it began to rain when they were outside hanging the man, they all pulled capes out from behind them and covered their bodies. It must have been the worlds first poncho. When the French troops arrive at the hillside, they are all decked out with shields, armor, and horses. There are arrows flying through the air how can they be su ...

Information Systems Development from a Semiotic Point of View Essay

Information Systems Development from a Semiotic Point of View - Essay Example Likewise, the design and analysis of information systems involves development of signs (digital codes) and a translation of these signs to some level of construct. The semiotic principles help in understanding the representation of information through some data and a better understanding of the information through appropriate interpretation. It is also important to understand that changes occur in the settings in which these information systems are used similar to the applications of signs at different settings. This paper focuses on semiotics as it applies to information system development. The development and growth of semiotics The development of this field of study is greatly attributed to a Swiss linguist Ferdinand de Saussure (1857-1913) and an American pragmatist Charles Sanders Peirce (1839-1914) (About.com, 2012). Other theorists have made significant contribution towards the development of modern semiotics. Some of these are Roland Barthes (1915-1980), Algirdas Greimas (191 7-1992), Umberto Eco (b.1932), and Julia Kristeva (b.1941) among other theorists (Chandlers, n.d). The individuals worked independently to understand how meaning is developed from the structures that are used. Saussure developed a two-part model of sign that consists of a signifier (the sign) and the signified (the concept that is represented by the sign). The agreed practice enables the meaning to be derived. A sign is, thus, a ‘recognizable combination of a signifier with a particular signified’ (Chandlers, n.d). According to Saussure, there is no relationship between the signifier of a meaning (words or symbols) and the actual meaning (About.com). The framework of the model developed by Saussure provides the famous difference that has been observed between language and speech.... This essay stresses that telecommunication systems, process control systems, environmental control systems, and command and control systems are some of the common information systems in businesses. Business organizations need information systems to communicate to their customers, suppliers, or the shareholders whereas governments need the systems to provide services to its citizens at low costs. In either case, the accuracy, validity, and reliability of information are essential. This paper makes a conclusion that the development of information systems applies theories and principles derived from semiotics. Computer-based information system is described as ‘a sign system embedded in an artifact with action capabilities for organizational purposes’. Semiotics concerns signs and interpretation of their meanings. Likewise, the design and analysis of information systems involves development of signs and a translation of these signs to some level of construct. The semiotic principles help in understanding the representation of information through some data and a better understanding of the information through appropriate interpretation. It is also important to understand that changes occur in the settings in which these information systems are used similar to the applications of signs at different settings. Generally, the development of information systems is derived largely from methods and theories in semiotics. Semiotics is the study of the nature of signs and the laws governing the interpretation of these signs.

Research Methods Coursework Example | Topics and Well Written Essays - 2750 words

Research Methods - Coursework Example While on the other hand a research hypothesis is also relevant to the formulation of the report. Thus it is referred to as the assumption made by a researcher about the possible outcome of the study. A hypothesis of a study must be simple, theoretically clear and specific (Kumar, 2005, p.75). Among the mentioned questions of the case, the least suitable for testing the hypothesis is the issue related to the opinion of the local population about the new facility. Hence the first question i.e. Q (b) is least suitable for hypothesis testing. The reason this has been cited as the least appropriate one is that the opinion of the local population is difficult to measure. Moreover it is also exploratory in nature. Hence a meaningful hypothesis cannot be formulated. Rather is must be guided by a clear sense of purpose. An Operational hypothesis states a quantifiable relationship among the variables. Therefore the operational hypothesis for the mentioned questions is illustrated below:- Opera tional hypothesis of Q a: - Increased road traffic has raised the number of road fatalities of large mammals because there is high pressure on the roads and less maintenance. Research Design for Q a: - Case study approach of qualitative research design can be used in this case for the purpose of evaluation. Case study approach has been chosen because it will provide an opportunity to have in-depth analysis of the matter within a stipulated time frame. Operational hypothesis of Q c: - The establishment of the factory will improve the conditions of the participating households, as they will be financially benefitted. Research Design for Q c: - Non-experimental design approach of quantitative research design can be employed for this purpose. It has been chosen because non-experimental design takes into account the reliance of one aspect on the other. The aspects are establishment of factory and the financial condition of the households. Operational hypothesis of Q d: - Improved mango v ariety will produce more pulp as it is scientifically processed. Research Design for Q d: - Experimental design approach of quantitative research design can be chosen to test it. This approach has been chosen because hypothesis is based on experimental testing. Moreover experimental design also tries to change the outcomes of the participants. Operational hypothesis of Q e: - Proximity of households to the road intensifies the supply of mangoes. Research Design for Q e: - In this context once again case study approach has been chosen to test the hypothesis. This will also reveal the fact that whether the closeness of road actually increases the supply of mango. (Word Count: 494) Q2: Protocol for an Experimental Design A research protocol can be defined as the detailed plan of a study (Rch, 2008). Hence every research study must contain a well defined research protocol. Now the case is about a company namely Country jams and Pickles who is planning to open a factory at a remote place for the production of pickles and jams. Consequently they will require adequate supply of fruits on time to maintain the flow of production. Therefore a study will be undertaken which will be principally focused to find whether supplying of free storage container to the farmers will increase the supply of fruits to the factory. Therefore according to the objective of the study hypothesis can be drawn as follows:- H0 –

Becoming Successful: A Good Business Strategy

Becoming Successful: A Good Business Strategy Becoming a successful entrepreneur doesnt happen by accident or by chance. It is a long process that involves various strategies, characteristics and quality of person who wants to become a successful entrepreneur. Madan Paliwal who is a successful entrepreneur in his state, says Becoming a successful entrepreneur is not an easy task! There are certain qualities and strategies that are absolutely necessary if you would like to become successful in your business ventures. Madan Paliwals example shows that how some characteristics, qualities and strategies support to becoming a successful entrepreneur. He strongly believes in quality rather than quantities. According to Sharma (2009), It is essential to follow some strategies for the growth and strongly development of business. An entrepreneur organizes different types of industries right from inception has different approaches and call for an in-depth knowledge base. The importance is the entrepreneur starts and operates his own new b usiness. characteristic of An Entrepreneur Kant (2000), All the entrepreneur were men of discipline, high integrity and with strong need for achievement. In India Mr. Madan Paliwal CMD of Miraj Group of Industries has following characteristics and qualities which is important: Initiative: Mr. Madan Paliwal used resources and plan for his business. He started his business with Rs. 200 (Â £3) capital. Now Miraj Group of Companies capital cross Rs. 1000 Crore (Â £15000000). The following companies in Miraj Group of Companies: Miraj Products Pvt. Ltd., Miraj multicolor, Miraj pipe fittings, Miraj Hotels, Miraj Engineering, Eye view motion pictures, Miraj developers, Miraj realcon, Asia packs. (Group profile of miraj group) Miraj groups consumer products are tobacco, tea, soap, matches, plastic, stationary, pipes etc. Therefore we can say the entrepreneur should be initiative to use the available resources and plan for all those who are involved in an enterprise. Goal: An entrepreneur should be able to set realistic but challenging goals for himself as well as for others in the organization. At the time of beginning Madan Paliwal had clear goal and he has achieved maximum goal. Involvement for long time: Madan Paliwal started his business on 18th August 1987. He continues involve in his business. Hence commitment from the entrepreneur for longer period may be 5 to 15 years is necessary for conceptualization, building and running an enterprise. Capacity for problem solving: In the initial phases of an enterprise many teething problems may happen and an entrepreneur should be a creative problem solver to turn difficulties into advantages. Madan Paliwals life is full of struggle. He solved many problems in his business. Good team leader and motivator: An entrepreneur builds up his team; he should educate them, keep them on high level of motivation and also provide an environment for creativity and good work culture. Madan Paliwal started his business as a single person but now a days 1000 employees in his companies. Energetic: Managing resources and running an enterprise calls for long hours of work for longer period of time and hence an entrepreneur is a man of high energy level. Madan Paliwal works 15-16 Hrs. daily. According to him -A labour is also do hard work daily in his life but he earns only 100-200 Rs. per day, hence entrepreneur do work hard in right way. ( Paliwal, 2008) Good communication skills: As a leader an entrepreneur communicates effectively with all concerned such as financiers, employees, customers, suppliers and all who are concerned with the new enterprise. Madan Paliwal is also good communicator. Mental ability: Madan Paliwal born at Nathdwara, A small town in Rajasthan (India). He started small scale industries (Miraj industries), now it is converted into Miraj Products Pvt. Ltd. Sharma (2009) An entrepreneur will be a man of high level intelligence, creative, positive thinking and decision maker with clear objectives in mind. Good Human relation: Tactful and warm human relation is an important factor which brings success to an entrepreneur. Emotional stability and keeping himself as a model to others. Motivates the employees to put their best performance at all levels in the organization. Madan Paliwal also follows good human relations. Strategies: Kant (2000) Strategies are the way of performing the target i.e. how to do a particular work for the achievement of predetermined objectives. 2.0 Business Strategies: There are various strategies which are prepared in the business enterprise like- 2.1. Market Strategies Market Strategies includes the companys relationship with existing and potential customers, its knowledge of changing needs and opportunities in the market, the way it identifies and reaches its customers. Madan Paliwal started Real-estate business at Jaipur. He launched affordable homes, Villas, commercial complex etc. His marketing strategies were very good. After getting success in Jaipur he started new projects in Ajmer, Udaipur, Bhilwara, Mumbai other cities in India. He says that the main strategies that are necessary for getting success in market is attract the market to us, Examine managements assumptions, perceptions, predispositions about the market, and determine to what extent they are valid. And finally evaluate new opportunities in the market, new products, collaboration with others etc. (paliwal, 2008) 2.2. Organization Strategies Organization consists of the structures, systems, policies, procedures and activities of a business, the manner in which it exercises authority, takes decisions, communicates, coordinates and integrates its activities. Madan Paliwal is good organizer. He manages more than 1000 employees in his group of companies. He says the main strategies that are necessary for success in organization strategies are: Analyze the jobs of executives, managers, and supervisors to identify tasks that can be delegated to lower levels and the conditions necessary to make that delegation effective. Next establish clear job descriptions for every position, and create a system whereby the responsibilities and authority of each position are clear to other people in the company. Furthermore determine whether we can innovate any new systems that will further improve our performance. Determine if there are systems successfully employed by other companies that could be used by our company. Finally Assess the eff ectiveness of important systems in the company (e.g. Accounting , Budgeting , Personnel information, Planning etc.) in terms of their speed, their personnel requirements, quality of work, cost of operations, and whether fully being utilized.(paliwal 2008) 2.3. Products, sells and services strategies It means the capacity of the company to deliver products and services. It includes the range and quality of products and services it markets, the technical knowledge and skill of sales and service staff, and the level of technology incorporated in its products and services and utilized to carry on business. Madan Paliwal launched affordable homes for middle lower class people in every project because affordable homes selling easily. After selling homes villas he launches commercial complex in project, hence commercial complex (very costly) become successful (interview with paliwal, 2010). He says that main strategies that are necessary for success in Products, sells and services strategies are: Improve the technology of our products and services by adding new dimension into it and Examine every technology in our company employs. And identify ways to reduce cost. Then Match our products and services as closely as possible with the needs of the market. Next Identify and adapt new and recent technologies to better meet the needs of our customers. Furthermore Introduce new or improved technologies internally that will improve the functioning of our own organization. Besides this Make improvement in our organization (structure, activities, systems, job positions, procedure, rules, regulations etc.) that will improve the development and operation of our technology. Finally continuously expand and upgrade the product and services knowledge and technical expertise of our people. 2.4. Finance Strategies This component defines the way in which the company manages monitors and utilizes capital resources for its growth. It includes the quality of systems and skills for accounting, budgeting and financial management, cash and credit management, control over purchasing and inventory, access to capital. Madan Paliwal started his business with only Rs. 200 capital. He follows following financial strategies to manage financial activities in his companies: A. Determine that our company is exploring and taking advantage of every conceivable source of finance to make our business grow. B. Determine how our company can utilize financial information as a positive instrument for tracking and monitoring performance on key activities. C. Determine what can be done to improve accuracy and timeliness of accounting so that information on performance is available as soon as possible after the day, week, the month, or the job is over. D. Determine what type of indicators we can develop as positive motivating tools to help managers and employees evaluate their own performance. E. Determine what are the keys areas in which the company can save money by improving performance. 2.5. Personnel strategies This component covers the energies, abilities, skills, and attitudes of employees that can be harnessed for growth. People and companies grow together. Miraj Group of companies provides maximum opportunities for their people to grow, find maximum opportunities for their own growth (interview with paliwal, 2010). His Group follows the following personal strategies: A. Recruit people with a high level of energy, good health, highest possible level of education and experience and write type of personality to work well in our company and implement its values. B. Review wage and salary scale, and ensure that the compensation for every position is not only fair, but perceived as fair. Whenever necessary, educate people to understand the true value of the companys benefits package. C. Introduce profit-sharing or equity programs to make our people owners of company and develop the physical and technical skills of our people through formal training programs. D. Develop the managerial and psychological skills of our people through formal training, regular and ongoing training, personal guidance and attention. E. Give greater personal attention to the people you work with (not to their work) and encourage them to do likewise with their people. F. Recognize and reward individual efforts to improve the functioning of our organization. G. Maintain clear and effective two-way communication with all employees H. Implement psychological values such as respect for the individual, personal growth, freedom, and harmony to the highest level. I. Give regular feedback to individuals on their performance and what they can do to improve. 3.0. Other strategies Other strategies have been followed by Miraj Group of Companies are: 3.1 Stability strategy Miraj Group has a stable environment, limited number of products, customers, suppliers and competitors, minimum need for skills and so on may follow what is called the Stability Strategy such an organization is satisfied with its existing level of activities and wants the same to continue. 3.2 Growth strategy An organization that wants to raise its level of performance may adopt what is called the Growth Strategy. The following measures adopted by Miraj Group of companies: Development of new products for the existing markets. Creation of new uses for the existing products. Development of new products for new markets. 3.3 Vertical Integration strategy A business enterprise itself may decide to produce the raw materials needed for production to ensure continuous supply. On the other hand, it may also decide to start its own sales outlets to serve its customers better. In either case, the strategy is known as the Vertical Integration Strategy. 3.4 Product Elimination Strategy A business unit may also eliminate products that have become unpopular with the buyers and bring only losses. Such unsuccessful products also damage the image of the business. Thus, the Product Elimination Strategy may be adopted by a firm to avoid loss of profits as well as reputation. 3.5 Merger Strategy It is also possible that identical business units may combine to rationalize production and sales and thereby derive the benefits of economics of large-scale operations. This is what is known as the Merger Strategy. 4.0 Conclusion In the 21st century the concept of entrepreneurship is essentially related to innovative endeavors. It is through to be concerned with introducing something new in the environment of tough competition. Entrepreneur types of individuals who are highly determined, confident, creative and innovative, sales oriented personalities well in tune with trends and who are able to translate a vision into a real small business. They are encouraging young individual to form new business enterprises and providing such government supports as infrastructural facilities (like water, power, Transpiration, Industrial sheds or developed plots, Communication system and tax incentives, to facilitate this formation process. Madan paliwal successfully followed all above mention strategies in his business since many years. All these strategies are very efficiently and effectively followed by an enterprise for the success of his own as well as for the growth of business enterprise As good as the business strategies; the well is the position of the business. It is impossible to become a successful entrepreneur without business strategy. All the strategies which are mention above should be followed by the person who wants to become a successful entrepreneur. Word Count (2183)

Swot Ryanair

Miriam Mennen An Analysis of Ryanair’s Corporate Strategy Essay Document Nr. V145623 http://www. grin. com/ ISBN 978-3-640-56879-6 9 783640 568796 Global Corporate Strategy – A Case Study on Ryan Air An Analysis of Ryanair’s Corporate Strategy Executive Summary Ryanair was founded in 1985 as a family business that originally provided full service conventional scheduled airline services between Ireland and the UK.The airline started to compete within the confines of the existing industry by trying to steal customers from their rivals, especially the state monopoly carrier Air Lingus, outlined by Chan Kim and Renee Mauborgne (2004) as â€Å"Bloody or Red Ocean Strategy†. Ryanair seemed to follow a â€Å"me-too strategy†; according to Osborne, K. (2005), they â€Å"tried to be all things to all people†. Even they started restructuring; their strategy was not enough differentiated and their cost advantage was too low to be profitable. In 1986, th ey got â€Å"stuck in the middle†, outlined by Porter (1985) as they had a limited cost advantage and no service advantage.Ryanair then created a competitive advantage through the alignment of the three components of business systems; 1) Creating superior value for their customers (outside perspective) 2) Supplying their superior value-adding activities in an effective and efficient manner (which jointly form the â€Å"Value Chain†) 3) Possessing over the resource base required to perform the value-adding activities, (inside perspective) According to Porter (1987), â€Å"corporate strategy is what makes the corporate whole add up to more than the sum of its business unit parts. It is seen to be concerned with the overall purpose and scope of the organisation and to meet the expectations of major stakeholders. All aspects of Ryanair’s value chain are important to the company and their shareholders as Ryanair’s decisions add value to both. The following re port outlines the three perspectives of shaping Ryanair’s business system. The value creation dimension of Ryanair’s business model will be outlined, considering the theories of Porter and the more recent authors Kim and Mauborgne (2004).Further, the linkages in the airline’s value chain and their resource base will be analysed, considering Hamel and Prahalad’s (1990) core competency model (inside-out approach). 1 Global Corporate Strategy – A Case Study on Ryan Air In section 2, the future challenges of the airline are considered. Ryanair’s strengths and weaknesses will be analysed, internal value creating factors such as assets, skills or resources, to consider how the airline can create alignment to its opportunities and threats, external factors.An stronger â€Å"outside – in† approach for Ryanair’s future corporate strategy will be considered, applying Porter’s five forces model, placing the market, the compe tition, and the customer at the starting point of the strategy process. I An evaluation of Ryanair’s key strategic perspectives 1) Creating superior value for their customers The low cost market segment Ryanair has found a source of leveraging a competitive advantage; the knowledge about the opportunities associated with implementing the low cost strategy, which was created by Southwest Airlines.The Texas airline found a unique approach to the market through reconceptualisation of market segments. In 1990, Ryanair successfully applied their model in the European market, becoming a â€Å"no frills† airline, focussing on short haul destinations and keeping its planes in the air as frequently as possible in a 24 hour period. The new low price market segment, which did not exist before in Europe, could be described as the development of a ‘blue ocean’, uncontested market space through the expansion of boundaries of the existing industry, outlined by Kim and Ma uborgne (2004).Ryanair’s low fares created demand, particularly from fare-conscious leisure and business travellers who might otherwise have used alternative forms of transportation or would not have travelled at all (Case Study, p. 3). The competition became less relevant and allowed Ryanair to develop and sustain high performance in an overcrowded industry. Up to now he airline benefits from the early profitable and rapid growth within the blue ocean and successfully executes the low cost business model, which became obvious when the airline announced that it has beaten its own downbeat forecasts to record a 29 % increase in pre-tax profits and 19 % passenger growth, having carried more than 27. 6 million passengers in the past financial year (Jameson, A. , 2005). 2 Global Corporate Strategy – A Case Study on Ryan Air Ryanair’s position within the industry However, ‘blue oceans’ are not easily protected and Ryanair has been facing competitors that try to copy their low cost approach.Further, Ryanair has always been competing within the ‘red ocean’, by targeting a broad range of customers, e. g. the business segment and â€Å"stealing customer from rivals†. This outlines that Kim and Mauborgne’s strategy approach cannot be seen as exclusive. Competing with new entrants of competitors (and differentiators), Ryanair was able to launch an â€Å"all out war†, lowering prices and remaining profitable whilst increasing the frequency of flights and establishing new routes (Case Study). According to Porter (1980, 1985), the relative competitive position within an industry lies at the core of success or failure of firms.He defined two basics types of competitive advantage; cost leadership and differentiation (and focus). Ryanair set out to be best in the budget market segment, becoming the lowest cost airline in its industry (cost focus), e. g. no paper tickets, no passenger meals, no pre-arranged sea ting, enabling to cope and remain profitable, even on low yields. The airline constantly strives to reduce or control four of the primary expenses involved in running a major scheduled airline; their aircraft equipment costs, personnel productivity, customer service costs, airport access and handling costs.The airline deals successfully with competitive forces and is Europe’s leader in low fares by generating a superior return on investment (Osborne, 2005). This supports Mintzberg’s argument of price leadership being more relevant to competitive advantage than cost leadership. Planning to turn into a â€Å"no-fares-airline† by offering flights for free (Case Study), Ryanair can be argued to follow price leadership as one of the six ways to differentiation outlined by Minzberg.According to Mr O’ Leary (2005), new planes will enable him to drive down average fares by 5% a year causing a â€Å"bloodbath†. We are going to show up in your market and tra sh your yields. † (â€Å"Ryanair rolls out plans for European domination†, 2005). Differentiation through price outlines the superseding of Porter’s generic strategies by the resource/competence-based strategy frameworks. In addition to low prices, Ryanair’s branding emphasises on punctuality and efficiency, which is mainly achieved through operating from secondary airports.According to Ryanair, their success is not just due to their low fares â€Å"but also a winning combination of our No. 1 on-time record, our friendly and efficient people and our new Boeing 737-800 series aircraft† (Ryanair, 2005). It can therefore be argued that in a globalized competitive environment, even cost leaders need to differentiate 3 Global Corporate Strategy – A Case Study on Ryan Air their message (‘hybrid strategy’), contradicting Porter’s original idea of fundamentally different routes to competitive advantage.International expansion Ryan air further constantly created value for customers by following generic growth and internationalisation strategies; they moved their operations into more and more countries, expanding the route system from its primarily Irish-UK emphasis to serve 86 destinations on 133 routes across 16 countries. According to Mr. O’ Leary (2005), they â€Å"will deliver 34m passengers from 12 European bases and have identified a further 48 potential bases. † The airline expanded recently by placing an order for 70 more Boeing 737-800 aircraft to keep growing at 20% a year (â€Å"Ryanair rolls out plans for European domination†, 2005).Ryanair can compete on price, as the airline has besides its low cost product offering an activity system and resource base that match the price positioning, opposite to traditional airlines that seem to get â€Å"stuck in the middle†, as outlined by Porter, when undergoing severe cost cutting which affects their areas of differentiation, e. g. Aer Lingus. 2) Supplying superior value-adding activities in an effective and efficient manner The â€Å"Value Chain† As Ryanair’s low cost/price pproach leads to overlapping value chains, the company is a perfect example of linking its opportunities, as outlined by Campbell and Goold (1998, in Meyer and de Witt, 2004). From a Value Based Management point of view, Porter's Value Chain framework can be seen as one of two dimensions in maximizing corporate value creation, outlining how well a company performs relatively towards its competitors (‘Relative Competitive Position’). Even Ryanair subscribes to a similar basic model compared to e. g. Easyjet, the airline has an entirely different value chain.Ryanair’s low cost/price approach adds value to most of Ryanair’s processes, e. g. clear corporate identity and brand image in addition to limited organisational complexity, increasing the differentiation towards their competitors. Ryanair main tains their efficient, high quality and low cost services through operating from secondary airports and by exploiting the advantages of outsourcing, a strategic management model, transferring the business processes of services to outside firms, e. g. passenger and aircraft handling, ticketing. This allows the 4 Global Corporate Strategy – A Case Study on Ryan Air ompany to achieve competitive rates at fixed prices and to stay focused on its core competencies. Further, outsourcing can improve customer satisfaction (primary activity), mitigate risks, and add value to their reputation, accessed skills and technology, increased overall visibility of accounting and performance (controlled infrastructure), and avoided capital investments. Their strategy is to deliver the best customer service performance in its peer group, having just six staff in their customer care department; one for every two million passengers compared to British Airways which has 10 times the coverage (Ryanai r, 2005).Porter’s Value Chain Firm Infrastructure Support Activities Human Resource Management Technological Development Procurement M g ar in Primary Activities The technology of the company’s Internet booking system allowed to capture more value from its operations, to improve its contact with its customers (outbound logistics) and to increase control over the quality of their services. According to Mr O'Leary (2005), Ryanair saves 15% on the price of every ticket by using direct booking through the internet.For the fiscal year ended March 31, 2004, Ryanair generated virtually all of its scheduled passenger revenues through direct sales (Ryanair, 2005). All value-creating activities that transform the inputs into the final service of Ryanair are kept extremely lean. Ryanair does not interlink its operations with competitors, avoiding costs of trough service and delays and their Human Resource Management is tailored to continually improving the productivity of its alr eady highly-productive work force whilst controlling their labour costs. 5 M Logistics Logistics ar gi n InboundOperations Outbound Marketing & Sales Service Global Corporate Strategy – A Case Study on Ryan Air Ryanair focuses on centralised recruitment and training. In the year ended March 31, 2004 productivity calculated on the basis of passengers booked per employee continued to improve by 21% on the year ended March 31, 2003 (Ryanair, 2005). Ryanair emphasizes on modest base salaries and productivity-based pay incentives, including commissions for on-board sales of products for flight attendants and payments based on the number of hours or sectors flown by pilots and cabin crew personnel.Employees can participate in Ryanair’s stock option programs (worth up to 5% of the share of the company, Ryanair 2005). Ryanair even adds value to their low cost reputation through the refusal to recognise trade unions whilst having a competitive advantage over the heavily unionis ed nature of employment of the state owned Aer Lingus. (Ethical considerations, outlined in section 2). Ryanair has extremely low airport access fees by focusing on secondary and regional airport destinations that offer competitive cost terms, e. g. ess expensive outdoor boarding stairs, and allow for higher rates of on-time departures, faster turnaround times, fewer terminal delays, which maximises aircraft utilisation, eases restriction on slot requirements and on the number of allowed takeoffs and landings, adding value to customer satisfaction. Ryanair further added value to their infrastructure, procurement and reputation through negotiating favourable contracts with Boeing (inbound logistics); knowledge that is difficult to codify and replicate for competitors, as it is not only observable facts or data but complex and difficult to specify (core competence).Ryanair is said to be paying less than half the Boeings list price of $66m each (Money Telegraph, 2005). The procurement with Boeing 737-800s allows the airline to benefit from synergies through fleet commonality, limited costs associated with training (Human Resources), maintenance efficiency, and greater flexibility in the scheduling of crews and equipment (inbound logistics). Again, the new aircrafts provide the newest technology; blended winglets that reduce drag and drive down 2% of the fuel cost, driving down the average fares by 5% a year (O’ Leary, 2005).Ryanair’s business model as a whole is distinct, having an entirely different configuration altogether, in relation to their competitors in the airline industry, increasing the barriers to imitation or substitution. According to Teece, Pisano and Shuen (1997, in Meyer and de Witt, 2004, p. 253), â€Å"even if competitors are successful at identifying embedded competences and imitating them, the company with and initial lead can work at upgrading its competences in a race to stay ahead (‘Dynamic capabilities view’).R yanair seems to have â€Å"outpaced† their 6 Global Corporate Strategy – A Case Study on Ryan Air competitors through upgrading its resources, activity system and product offering more rapidly, as outlined by Gilber and Strebel (1989). Ryanair’s unique firm resource; their knowledge of demand for the low cost airlines, made it possible to implement their strategy before others and to benefit from first mover advantage, outlined by Lieberman and Montgomery (1988). ) The resource base required to perform the value-adding activities Ryanair’s resource heterogeneity In general, the airline industry is characterised by supply side similarity (Kay, 1993, in Meyer and de Wit, 2004), as only marginal differences between air carriers can be displayed, particularly in a deregulated environment. Ryanair's business model was designed to challenge the limitations of these constraints. The airline focuses on value-adding process or resources, which give them a superior position relative to its competitors and which seems most appropriate to draw boundaries in the airline industry.Ryanair’s internal characteristics are most relevant in achieving sustained competitive advantage, outlined by Barney (1986, 1991). In contrast to Porter, Barney assumes that firms within an industry or group may develop long-term superior resources that can be protected in their mobility across firms by some form of isolating mechanism. According to the resource based view already outlined by Edith Penrose (1959, in Meyer and de Wit, 2004) and extended by Wernerfelt (1984, n Meyer and de Wit, 2004), Ryanair can be argued to have a sustained competitive advantage, as their competitors in the same segment are unable to duplicate the benefits of their strategy. The â€Å"winner-takes-all† dynamic (Case Study, p. 15) in the low cost segment, seems to have only worked in combination with this first mover advantage. Ryanair’s assets, e. g. their capabilit ies and attributes, are not successfully implemented by any current or potential competitor, e. g. negotiation for airport deals, employee contracts and fleet prices.Budget airlines that attempted to enter Ryanair’s market segment lost money or were taken over, e. g. Go’s foray into Dublin (Case Study). Their main competitor easyJet has carefully differentiated by focussing on different geographical markets and higher value through better transfer situations of main airports, addressing the business segment. However, Ryanair’s external environment, e. g. a saturated market and changing customer demands, can threaten Ryanair’s future growth (outlined in section 2). 7 Global Corporate Strategy – A Case Study on Ryan AirRyanair’s Core Competence Approach Ryanair can be argued to follow the core competencies model of Hamel and Prahalad (1990), (inside-out perspective), as they build their strategy around their strength of distinctive competences , which offers an attractive base of competitive advantage, e. g. secondary airport approach. Ryanair competitiveness derives from an ability to build their competences at lower cost and more speedily than competitors. The real sources of Ryanair’s advantage are to be found in O’Leary’s ability to consolidate corporate-wide skills into competencies.Ryanair has strong relationships with their suppliers and a strong corporate identity. The airline can be argued to follow a strategic ‘stretch’ as they are overall resource led and create new opportunities, e. g. ancillary services. Strongly focussing on their core competences allowed for high strategic capability and potential access to a wide variety of markets, making a significant contribution to the perceived customer benefits of the end service and limiting the risk of imitation. The corporate centre tightly controls and co-ordinates by enunciating the strategic architecture that guides the compete nce acquisition process, e. . outsourcing. Ryanair’s resources include all means at the disposal for the performance of value-adding activities, e. g. through the acquisition of Buzz in 2003 (Case Study, p. 5), the airline gained a range of resources, e. g. know how, outlined by Preece as learning. The airline benefited from increased infrastructure and value-chain activities (leaning), integrated operations (leveraging), closer co-ordination of their vertical activities (leaping), expanded market opportunities and reduced competitive pressure (locking out). Resources consist of tangible assets, e. g.Ryanair owns all of its aircraft and holds net cash of 286 million euros (Money-telegraph, 2005), leading to the advantages that large firms have from large volumes enabling them to spread their costs (economies of scale), and intangible assets, e. g. the human capital; skills, competences and capabilities. Ryanair’s resource heterogeneity towards their competitors hinders other firms to conceive and implement the cost focus strategy, as outlined by Barney. Ryanair takes advantage of leveraging its resources, e. g. relationships and reputation, which are not readily transferable.They are inheritably attributed to O’Leary and his team and are influenced by the airline’s culture and governance. Ryanair possesses over a range of funny value-adding stories which defined their past, e. g. how Mr O’Leary ‘went to war’, driving in a military jeep to his competitor (Case Study). Personal involvement in battles of O’Leary against lobbying politicians, EU commissioners and competitors are part of the company culture and promote their aggressive 8 Global Corporate Strategy – A Case Study on Ryan Air low cost image.Ryanair’s reputation for commitment to Safety and Quality Maintenance, not having â€Å"a single incident involving major injury to passengers or flight crew in its 20- year operating historyâ₠¬  (Case Study), is another value adding aspect. Ryanair’s distinct activity system provides the base for competitive advantage and raises the barriers to imitation. In conclusion, Ryanair does not follow a linear ‘inside – out’ or ‘outside – in’ approach. On the one hand, the airline continual upgrades its unique resources; on the other hand, it occupies specific market positions to emain competitive, creating superior value by closely fitting their services to customers’ needs and focussing on a relatively limited set of businesses and markets (narrow competitive scope). Ryanair increasingly focuses on exploiting market opportunities in their business environment though, e. g. expansion and horizontal integration, leaving their original organic growth model and benefiting from all aspects of the framework of international strategic alliances, outlined by Preece. External forces, e. g. he industry deregulation in 1997 that allo wed the airline to go continental and the technological advancement of the internet, also strongly influenced the airline’s success story (external value adding activities). Ryanir can be argued to have a discrete organisation perspective, emphasising on competition over co-operation, having high bargaining power and a highly independent approach with distinct firm boundaries. The airline has an essentially logical structure, characterised by planning and control, prediction and forecasting.Especially in relation to the dynamic hostile environment, the airline has a relatively deliberate strategy that is based on rational thinking. The limited complexity of the system is characterised by few organisational levels and centralisation. The airline benefits from the entrepreneurial spirit of O’ Leary who seemed to understand the activities that are likely to have a significant impact on Ryanair and that build valuable internal linkages within the boundaries of their busine ss model (organisational leadership perspective). So far, he was highly successful in understanding the low cost attributes that made Ryanair unique. Global Corporate Strategy – A Case Study on Ryan Air II An evaluation of the future strategic direction of the company The sustainability of a firm’s competitive advantage is said to be threatened by the development in the market. Customer needs and wants are in constant flux. The SWOT analysis of Ryanair, a tool for analyzing the internal strengths and weaknesses and the external opportunities and threats (see Appendix), outlined the paradox for Ryanair of creating alignment either from the outside-in (market-driven strategy) or from the inside-out resource driven strategy). So far, Ryanair has been strongly focussing on their core competences. Considering their environment, opportunities and threats, as the starting point when determining their strategy (outside-in perspective), is crucial though; to re-check the fit be tween their competitive advantage and the environment, as outlined by Rumelt, (1980). The model of ‘environmental consonance’ seems of great importance to the airline, outlining the requirement of continual adaptation of the business system to the demands and new opportunities in the market place.As outlined by Leonar-Barton (1995), Ryanair’s core competences seem to be simultaneously Ryanair’s core rigidities, locking them out of new opportunities (in Meyer and de Wit, p. 253), e. g. Ryanair’s â€Å"Dublin saga†, the fight over the desired second low cost terminal at Dublin airport instead of considering the creation of a new lucrative base in continental Europe, threatening easyJet’s. Ryanair should consider market development, outlined by Ansoff, e. g. Greece and Turkey, which have a combined population of around 70 million people and offer extremely profitable market opportunities through year-round and holiday flights.The airline should further initiate additional routes from the U. K. or Ireland to other locations in continental Europe that are currently served by higher-cost, higher-fare carriers. Market opportunities of new domestic routes within EU countries, especially new member countries, and increased frequency of service on its existing routes will allow Ryanair to remain focussed on low cost/price and prolong its unprecedented and high levels of growth without jeopardising their core competences. Rivalry among existing players could be reduced by damaging the package tourism industry, e. . Thomas Cook, Lunn Polly and Neckerman (Porter’s 5 forces). Further acquisitions should be considered in the long-term. Ryanair seems to have enough power to counterbalance the demands of buyers and suppliers, to outperform rival airlines in their market segment, and to discourage new firms from entering the business. Their main 10 Global Corporate Strategy – A Case Study on Ryan Air challenge will b e threatening easyJet in its home market, currently serving Athens, and to fend off the â€Å"Value for money† segment that threatens to substitute Ryanair’s services (Porter’s 5 forces).The industry attractiveness for long-term profitability, outlined by Porter (1985), will have a strong influence on Ryanair’s profitability. Porter had ignored the aspect that differentiation strategies can be used to increase sales volumes rather than to charge a premium price. With negative forecast for the low price market, with growth rates of no more than 20 to 25 % of the total market, market saturation is said to be not far off for budget airlines in Western Europe (Ottink, 2004). Instead of the lowest price, the optimal balance between service and price is seen to be the growth market of the future.Value market share will eventually hover around 60 % of the total market (Ottink, 2004). Regarding this threat, the main challenge will be to respond to changing demand s and at the same time to ensure consistency, effectiveness and the coherence of Ryanair’s low cost strategy. At this stage, Ryanair should not compete on service advantage by entering the value market, turning into a portfolio organisation. They should so far seek for other niches, than compromise their low cost approach by reactively adapting to the unpredictable development in the current market.Retrenchment involves cutting back to focus on your best lines, often referred to this as â€Å"sticking to the knitting†. Ryanair should consider the mistakes of their competitors entering new market segments, e. g. Lufthansa by offering deeply discounted flights to Mallorca and Nice, standing up to easyJet. Ryanair should therefore further engage in market penetration and strengthen their market development approach, rather than diversify their services, as outlined by Ansoff (Product Market Framework).However, Ryanair should be aware that its knowledge is a fluid mix of f ramed experience, values, contextual information and expert insight that provides a framework for evaluating and incorporating new experiences and information, as outlined by Davenport and Prusack. Even the company’s formula has been highly successful in the last decades; Ryanair has to check whether their organisational routines are still valid in the new markets (double or tripleloop learning), e. g. the way Mr O’Leary aggressively promotes the low cost strategy.Especially in the new EU member countries his practices, which are said to threaten industrial peace and put EU ministers at unease, need to be revised. 11 Global Corporate Strategy – A Case Study on Ryan Air The self interest of Ryanair might be best served by developing attitudes to ethical issues before they become acute, as the airline is especially vulnerable to hostile campaigns (Value Chain). Ryanair should consider ethical corporate behaviour and social responsibility, currently facing the para dox of profitability (shareholder value perspective) and responsibility (stakeholder value perspective), e. . policies regarding disabled passengers, employee rights and environmental standards. At the moment, the simplicity inside the company does not seem to match Ryanair’s complex environment. Ryanair has to differentiate its message to fend off competitors, e. g. the airline should consider the co-operation with environmental organisations, offering passengers the possibility to pay the price of competitors in the value segment and paying the difference to the original Ryanair price to an organisation that invests in solar energy to reduce the world emissions.Ryanair’s Boeings could be green and the message should be â€Å"flying cheap and doing good†. Customers that might otherwise have switched to the value segment do not mind the voluntary environmental charge and are likely to accept more difficult transfer situations for the â€Å"feeling of doing good †. This differentiation aspect will add value to the company’s reputation and public relations. Ryanair can become the first mover in an industry that will sooner or later need to address the issue of emissions. Creativity and radical innovation are a strategic orientation to sustained competitive advantage.Ryanair should further consider the involvement of employees in the search for unsatisfied customer demand, as outlined by Kim and Mauborgne (2004). Free exchange and flow of information will foster new creative knowledge and help the airline to continually transform itself, e. g. the contact between flight attendants and management should be increased to foster a climate of openness and trust and to capture opportunities. The concept of organisational learning, as outlined by Senge (1990) and extended by Pedler, Bourgoyne and Boydell (1991) and Wang and Ahmed (2003), is crucial to nurture new and expansive patterns of thinking. 2 Global Corporate Strategy – A Case Study on Ryan Air References Barney, J. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management. Vol. 17, No. 1, p. 99–120 Oklahoma State University. In: De Wit, B. and Meyer, R. (2004). Strategy: Process, Content, Context. An International Perspective. 3rd ed. London: Thomson Learning. Campbell and Goold (1998). Why Links Between Business Units Often Fail and How to Make Them Work. Capstone Publishing Ltd, Oxford. In: De Wit, B. and Meyer, R. (2004). Strategy: Process, Content, Context.An International Perspective. 3rd ed. London: Thomson Learning. De Wit, B. and Meyer, R. (2004). Strategy: Process, Content, Context. An International Perspective. 3rd ed. London: Thomson Learning. Gilber, X. and Strebel, P. (1989). From Innovation to Outpacing. Business Quarterly. Summer pp. 19-22. In: De Wit, B. and Meyer, R. (2004). Strategy: Process, Content, Context. An International Perspective. 3rd ed. London: Thomson Learning. Hamel, G. and Prahalad, C. K. (1990). The Core Competence of the Corporation. May-June 1990. Vol 68. Harvard Business School Publishing.In: De Wit, B. and Meyer, R. (2004). Strategy: Process, Content, Context. An International Perspective. 3rd ed. London: Thomson Learning. Jameson, A. (2005). Ryanair confident of European goal. [Internet] Times Online. Available from: (http://business. timesonline. co. uk/article/0,,8209-1635966,00. html). [01/06/2005] Kay, J. (1993). Foundation s of Corporate Success: How Business Strategies add value. Oxford: Oxford University Press. In: De Wit, B. and Meyer, R. (2004). Strategy: Process, Content, Context. An International Perspective. 3rd ed. London: Thomson Learning.Kim, W. C. and Mauborgne, R. (1999). Strategy, Value Innovation, and the Knowledge Economy. Sloan Management Review. 40 (3), pp. 41-54. In: De Wit, B. and Meyer, R. (2004). Strategy: Process, Content, Context. An International Perspective. 3rd ed. London: Thomson Learning. Kim, C. and Mauborgne, R. (2005). Blu e Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. Boston: Harvard Business School Press. Liebermann, M. B. and Montgomery, D. B. (1988). First Mover Advantages. Strategic Management Journal. 9 (1), pp. 41-58. In: De Wit, B. nd Meyer, R. (2004). Strategy: Process, Content, Context. An International Perspective. 3rd ed. London: Thomson Learning. Porter, M. E. (1980, 1988). Competitive Strategy: Techniques for Analysing Industries and Competitors. The Free Press. In: De Wit, B. and Meyer, R. (2004). Strategy: Process, Content, Context. An International Perspective. 3rd ed. London: Thomson Learning. 13 Global Corporate Strategy – A Case Study on Ryan Air Marquardt, M. and Reynolds, A. (1994). The Global Learning Organization: Gaining Competitive Advantage through Continuous Learning. New York. In: De Wit, B. and Meyer, R. (2004). Strategy: Process, Content, Context. An International Perspective. 3rd ed. London: Thomson Learning. Money T elegraph (2005) Ryanair lands better result than forecast. [Internet]. Available from: (http://money. telegraph. co. uk/money/main. jhtml? xml=/money/2005/02/25/cnryanair25. xml) [5 June 2005]. Osborne, A. (2005). Ryanair rolls out plans for European domination. [Internet]. Business Telegraph Available from: (http://www. telegraph. co. uk/money/main. jhtml? xml=/money/2005/02/25/cnryanair25. ml enuId=242=/portal/2005/02/25/ixportal. html). [1 June 2005] Ottink, F. (2004). Winner in the wrong market. [Internet]. Yeald Available from: (http://www. yeald. com/Yeald/a/29541/ryanair__winner_in_the_wrong_market. html) [5 June 2005] Rumelt, R. P. (1980). The Evaluation of Business Strategy. In: De Wit, B. and Meyer, R. (2004). Strategy: Process, Content, Context. An International Perspective. 3rd ed. London: Thomson Learning. Ryanair (2005). Strategy. [Internet]. Available from: (http://www. ryanair. com/site/about/invest/docs/Strategy. pdf). 27 May 2005] Teece, D. J. , Pisano, G. , and Sh uen, A. (1997). Dynamic Capabilities and Strategic Management. Strategic Management Journal. 18 (7). Pp. 509-533. In: De Wit, B. and Meyer, R. (2004). Strategy: Process, Content, Context. An International Perspective. 3rd ed. London: Thomson Learning. 14 Global Corporate Strategy – A Case Study on Ryan Air Appendix: SWOT- Analysis Strength – Quality processes and procedures: features important to the clientele, e. g. punctuality, few cancellations, few lost bags, frequent departures, baggage handling and consistent on-time services. low cost – low fares approach (differentiated service) – Low aircraft equipment costs – Lower maintenance costs and low depreciation costs due to ownership of aircrafts – Fleet commonality – Focus on low cost alternative airports; low airport access and handling costs – Low customer service costs; Internet booking system avoiding costly systems, commissions and sales headcount – Low marketing costs – Revenue enhancing and cost-cutting features, e. g. no seat pockets to allow faster turnaround times – Relationships to suppliers; strong bargaining position with respect to aircraft procurement, e. g. argain price of Buzz acquisition, airport deals and staff recruitment – Concentration on core business through outsourcing – Low labour cost through performance related pay structure; high personnel productivity / staff efficiency ratio – Overall high value and profitability – Location of business; focus on Europe's largest airline market; the UK, in particular the London Area – Increased take-off and landing slots trough acquisition of Buzz, KLM subsidiary – Increased number of seats per plane, enabling lower individual fares but higher per plane income – Short turn-around times increasing the available operational hours per plane. Strong brand and low fare reputation -foreign exchange hedging in transactions invo lving the euro, UK sterling and the US$ Weaknesses – falls in fare yields – Transfer situations from Airports – reputation – no non-essential extras – falling load factors due to continuing decline in unit costs – Decreasing frequency of flights due to need for high load factors, reducing business travel – climate protecting charge on aircraft taking off and landing in the EU, environmental fee might double no-frills operator’s fares, disproportionately greater effect on budget airlines – Ethics and Corporate Social Responsibility 15Global Corporate Strategy – A Case Study on Ryan Air Opportunities – initiating additional routes from the U. K. or Ireland to other locations in continental Europe, currently served by higher-cost, higher-fare carriers – Developing European market for budget sector with large population base / expansion into 10 new EU states – New domestic routes within continenta l Europe. Strongly moving into intercontinental business â€Å"using the principle of simplification and cherry picking† – increasing the frequency of service on its existing routes – considering possible acquisitions that may become available in the future, e. . Lufthansa – connecting airports within its existing route network -Exploiting profitable destinations with both a tourist as well as business segment – Conversion from low fares to a no-fares airline – Fall in average ticket price and increased threat of entry for competitors – loosening of regulations – Decreasing competition – Increased ancillary service revenues – Increasing in-flight sales on longer flights – employee loyalty – focus on environmental issues – innovative marketing for differentiationThreats – Limited market in the North of Europe resulting in low occupancy levels and efficiency of usage of planes – To ugher competition from the traditional and charter airlines which offer cheap hard to beat all-in holiday packages in continental Europe. New competitors in home market – Adaptation of Ryanair’s business model by competitors and innovative substitute services – Incumbent airlines selectively copying the tactics of Ryanair’s on competition routes – small potential markets – high speed trains, subsidised by the state in GER and France, – high speed rail plan in Benelux region -good highway connections in the major market around cities in the Middle and Southern Europe – Scarcity of appropriate located, low cost airports around major cities / decreased bargaining power of airlines – Price war – increasing landing charges – Dependency on world jet fuel prices – war and terrorism – epidemics – EU commission decisions – lobbying politicians – formation of a trade union for pilot s – the weakness of sterling against the euro – Mergers between competitors, e. g. Air France and

Marriot Corporation Essay

2. Is the proposed restructuring consistent with management’s responsibility? 3. The case describes two conceptions of managers’ fiduciary duty (p. 9). Which do you favor: the shareholder conception or the corporate conception? Does your stance make a difference in this case? 4. Should Mr. Marriott recommend the proposed restructuring to the board? Marriott Corporation (A) 1. Why is Marriott’s chief financial officer proposing Project Chariot? What is your assessment of MC’s financial condition? Is this project necessary for the company’s survival?. 2. Is Project Chariot consistent with management’s responsibilities? To bondholders? To shareholders? To the public? 3. The case describes two conceptions of manager’s fiduciary duty. Which do you favor: the shareholder conception or the corporate conception? Does your stance make a difference in this case? 4. Should Mr. Marriott recommend the proposed restructuring to the board? 5. Who will be affected by Project Chariot? Should MC make any concessions to the bondholders? ————————————————————————————————————————————– Ans. 1 Project Chariot involves a conflict of interest between the shareholders and the bondholders since in this case the debt being held by Marriott Corporation (MC) is risky. Project Chariot aims to create MII with low debt and HMC with high debt. Thus bondholders will find that their investment gets tied to risky real estate assets whose appreciation is uncertain. Food management which is a major segment of MC remains with MII. Thus Project Chariot aims to give shareholders the business upside and bondholders the real-estate downside. Hence this appears to be a case of risk shifting. Shareholders stand to gain while bondholders will lose if Project Chariot is implemented. Ans. 2 This seems to be a case of ‘Cashing out’/’Wealth Transfer’ where the ‘overall’ wealth is being transferred from the bond holders to the equity holders. The following points lead us to the direction of it being a ‘wealth  transfer’ type of conflict: * Chariot will result in a loss to bondholders and a gain to shareholders as the bonds will be downgraded by rating agencies and the returns of the bondholders will be attached to a heavily indebted duty * Total Debt will become more risky, and bonds will be downgraded to ‘below investment grade’ level * MC would be divided into two separate companies. MII would do MC’s lodging, food, and facilities management businesses, whereas HMC would retain MC’s real estate holdings and its concessions on toll roads and in airports, Hence bond holders will now have a claim on only the payoffs of HMC and not MII. So, because of the above reasons ‘Project Chariot’ seems like a case of ‘Wealth Transfer’ conflict of interest. Ans. 3 We believe in the broad view of manager responsibility. We think that managers should not only consider the interests of shareholders but also the interests of bondholders, employees, and other related parties. This responsibility is even more important in the case of a B2C company like Marriott. If they get†¦ 1. If the Project Chariot is implemented i.e. Marriott is divided into 2 companies Marriott International(MI) with the risk free profit generating operating hotel and service business while the other Host Marriott(HM) a would own Marriott’s hotel and undeveloped real estate businesses and other non service businesses, this will affect the following players: a) Shareholders: Shareholder now have majority stake in a corporation with a lower probability of default while all the risk is transferred to debt holders. So all the risky investments are highly leveraged with bond holders exposed to the risk. On the other hand MI backed mainly by shareholders equity and performing assets and thus would be able to issue new debt increasing value for both shareholders and the corporation. Thus the shareholders would gain at the expense of bond holders and the equity value of the company would increase. b) Bondholders Bondholders had a lot to lose as according to Project Chariot almost all the debt would be assigned to HM. Given the problems in real estate and hotel markets there was a concern of HM’s ability to meet its debt payment and there was a high probability of default. This meant that the risk was issued at investment grade but now was not backed by valuable assets of the companies which were to be spun off to MI which was to be backed by equity. The value of the bonds would decline substantially and the bond holders would loose a lot of their investment. c) Management(The Mariott brothers) The management gains from the spin off since it is able to split its distressed assets from the profit driving assets and there was a new company which was not under distress thus helping them retain their management positions and start from scratch. They can concentrate on core businesses thus improving efficiency and value. d) The value of the whole company: The spin off does not create value for the company as a whole but only distributes the†¦ What: Under Project Chariot, Marriott Corporation (MC) would become two separate companies. The new company, Marriott International Incorporated (MII), would consist of MC’s lodging, food, and facilities management businesses, as well as the management of its life-care facilities. The existing company, renamed Host Marriott Corporation (HMC), would retain all MC’s real estate holdings and its concessions on toll roads and airports. Why: This project is being proposed because the economic slowdown in the late 1980s and the 1990 real estate market crash left MC owning many newly developed properties for which there were no buyers, together with a massive burden of debt. The new company (MII) would have the financial strength to raise capital in order to take advantage of investment opportunities. The existing company (HMC) would take on the newly developed properties and most of the existing debt. HMC would be valued for the chance of appreciation in the property holdings when the real estate market recovered, not on the basis of earnings, thereby reducing the pressure to sell properties at depressed prices. 2- The fiduciary duty of management is to the shareholders  because they are more than creditors; they are the actual owners of the firm. Management is entrusted with the responsibility to increase shareholder value and their main focus should be on investing in projects that accomplish that task. As stated in the case: â€Å"U.S. courts had held that corporations have no responsibilities to safeguard the interests of bondholders other than those spelled out by the terms of the bond indenture†. 3- I first looked at the initial market reaction; the change resulting from October 2, 1992 (pre-announcement) through October 7, 1992 (post-announcement). I used October 7 for my initial market reaction because in 1992 many people may have still relied on newspapers for investment information. In addition, I assessed this narrow amount of time separately because widening the range of dates used to evaluate the change in prices may allow other variables outside of Project Chariot to come into play. However, I also looked at a wider range of time [October 2, 1992 (pre-announcement) through December 31, 1992]. If you can reasonably assume no extraneous variables affected the prices during this time, widening the range of dates assessed can give an idea of the impact to prices after the initial market over/under-re†¦