The client’s knowledge of the materiality thresholds that the auditor may apply when auditing the firm is very risky. The client may subvert the intention of the auditing procedures or may as well sabotage the integrity of the whole audit engagement.
Since auditors may acquire the client personnel documents so as to save costs as they perform other audit-related activities and prepare schedules for conducting the audit, the client may interfere with the entire process. The client may conceal some critical information from the auditor thereby decreasing the sample size for the audit, thus lowering the auditor’s materiality decisions.
The client is likely to present misstatements in organization’s financial statements. The client may also interfere with the evidence by manipulating the items of the financial statements leading to insufficient or misleading evidence during auditing. This is likely to interfere with the auditor’s judgment of the business risks that the client is engaged in (Strayer University, 2010).
In North Face Company, Crawford was the company’s chief financial officer that concealed fraud from North Face Inc. independent auditors in 1997 by not informing them of the oral side agreements made between him and the barter company.
Crawford’s knowledge of the materiality thresholds which Deloitte auditors would apply in auditing the company’s financial statement items and the adjustments that they would propose regarding the $1.64 million trade credits made him include the transaction, but did not inform the auditors of the $2.65 until after the completion of the 1997 audit.
Katz who was the company’s sales vice president also arranged for the signing of fake purchase orders by the two customers who owned substantial amounts of North Face Inc.’s merchandise to deceive the auditors that the two customers actually owned the merchandise (Knapp, n.d).
Guidelines for Revenue Recognition
The guidelines that determine when a company is to record revenue are that the exchange transaction should be complete and again the production earning process should also be complete. This means that the goods must be manufactured and delivered to the client and payment must be received either in cash or receivables at the point of sale.
According to Turner (2001), revenue should only be recognized after they have been realized and recognized by the company. For the revenue to be considered as realized and earned, there should be evidence that the arrangements exists; delivery should have taken place; the seller’s and the buyer’s prices should be determinable; and finally, collectability should be reasonably assured (Turner, 2001).
In the North Face Company, Crawford structured the $7.8 million transaction to recognize trade credits which are barter transactions as profit. Crawford instructed North Face’s accountants to record the trade credits of $1.64 million and $2.65 million as profit even though the oral agreements involved payments in phases.
Besides the payments involved, barter transactions cannot be recognized as revenues, meaning that the exchange transaction was not complete by the time the North Face recognized the revenues as profit. The company later reacquired the inventory in 1999 (Knapp, n.d).
Objectives of Work Papers
Its primary objective is to document all the audit procedures performed by the auditor or the auditing team. The procedures documented in the work paper should connect the flow of the information as well as the conclusions in the concluding audit report. Accurate and credible work paper provides the foundation for audit and the subsequent reporting.
It must contain the specific tasks performed as well as the observations and information acquired through inquiry. It has to contain the specific individuals consulted as well as the supporting documents and detailed narratives to support the information contained in the corresponding audit report (Strayer University, 2010).
The revision of the work papers that was done by Deloitte personnel in 1997 to replace the original work papers made new summary memorandum as well as adjustments schedule without documenting revisions in the work papers. Thus the revised 1997 work papers could not show that the revising team reached a different conclusion from the original team concerning North Face’s 1997 barter transactions (Knapp, n.d).
The Auditor’s Responsibility
The auditor’s role is to detect and prevent fraud in an organization’s business processes. They therefore have to evaluate the financial projects as well as the anticipated financial projects that the organization is about to enter and as such, provide reliable and timely feedback on the feasibility and the risks involved in the project.
The external and internal auditors measure the effectiveness of the executives’ decisions as well as the internal controls put in place by the executives. The auditors assess the quality of the decisions of the executives on the financial activities of the company and therefore determine their competence (Knapp, n.d).
They assess the financial reporting of the company and provide guidance for improving the internal control system to ensure that the company achieves operational as well as strategic objectives. Both the internal and external auditors focus on enabling the organization to provide reliable financial reporting.
The internal auditors are therefore involved in continuous control monitoring as well as in continuous auditing of the organization’s business processes (Zabihollah, 2002).
Reference List
Knapp, M. C. (n.d). The North Face, Inc.: An instruction case focusing on ethical issues involving financial accountants and independent auditors. Oklahoma: University of Oklahoma.
Turner, L. E. (2001). Speech by SEC staff: Revenue recognition. US Securities and Exchange Commission: USC SEC and Financial Reporting Institute. Retrieved from https://www.sec.gov/news/speech/spch495.htm
Zabihollah, R. (2002). Financial statement fraud: Prevention and detection. New York: Wiley & Sons.
Conducting an audit on a company’s financial statements is not an entirely popular idea. Many managers still hold the belief that conducting external financial audit is too intrusive. Thus, there are those managers who believe that conducting an audit, despite the assured benefits is counter productive. For instance, the cost of hiring auditors is too prohibitive to most companies. Thus doing annual external audit requires extra funds which have to be accounted for in the company’s annual budget.
This is likely to lower the company’s profit margins. Additionally, as mentioned earlier, some managers feel that auditing can be too intrusive. According to the Center for Audit Quality, audit involves “examining available evidence in support of a company’s financial statements” (CAQ 2011).
Thus, access, by external auditors, to company’s sensitive financial information is risky since such information is likely to be leaked to competitors, who are likely to use such information against the company. These assumptions seem to be precipitated by the fact that external auditors’ overarching aim is to provide a reasonable assessment of a company’s financials performance. External audit reports fail to indicate absolute truths about a company’s financial position.
The assertions made above are likely to be perceived as demonizing external audit. However, external audit involves a number of practices beneficial to a company. According to Bragg (2011), one of the preliminary stages of financial auditing involves establishing the terms of engagement.
During this process an audit firm conducts its own evaluation of the reputation of the company to be audited. Audit firms normally desist from engaging with company’s whose reputation is questionable. Thus, shareholders in a publicly listed company are likely to establish the company’s reputation from the caliber of the company’s auditors.
Besides establishing the terms of engagement, auditing also involves establishing standards for quality control. In doing this, audit firms largely depend on the willingness of the auditee’s top management to collaborate with the external auditor in setting the tone for quality assurance.
As such, external audits are stern tests on willingness of the company’s top management to establish high standards of quality control. Additionally, establishing standards for quality control involves a number of activities. These include establishing policies within which professional auditing is to be conducted.
Thus, by conducting audits, external auditors help a company improve its internal quality control systems. This implies that by engaging external auditors, firms are able to enhance quality management. This enhances accuracy in financial reporting which translates to improved performance by the company.
According to Center for Audit Quality, no two companies are the same. Each company is unique, in terms of financial reporting. Each company also has its own unique auditing challenges which require customized auditing standards (CAQ 2011). Nevertheless, this does not imply that external auditors develop completely new sets of auditing standards for each firm. According to Craswell (1990) internal auditors rely in international accounting standards.
Thus, CAQ’s (2011) assertion that external auditors customize auditing standards depending on the uniqueness of the company’s auditing challenges ought to be taken in light of the fact that customization of auditing standards is based on the international financial reporting standards.
It is imperative to note that the international financial reporting standards form the core of globally recognized financial reporting standards. Thus, by engaging external auditors, publicly listed companies in Australian test their financial reporting against internationally accepted standards. This gives shareholders an idea of how the company is likely to perform in the global market.
According to Nicoll (2005) conducting external audits amounts to opening a company’s financial records to public scrutiny. Based on assertions made by CAQ (2011), this seems to be unpopular with managers. However, external audit reports are valuable tools with which shareholders establish the authenticity of a company’s financial position.
Additionally, by opening the financial books to public scrutiny, external audits assist company’s management as well as shareholders in comparing the company’ performance against other companies whose accounts are also open to public scrutiny. This helps to identify a company’s position with regards to competition. Thus, external audit of a company’s financial record helps in identifying its market position.
This also assists the company’s management in making accurate decisions for the future. Additionally, despite CAQ (2011) assertions that external audit reports are unlikely to portray the absolute truth about a company’s financial position, these reports are nevertheless very reliable in portraying a company’s financial position. Thus, shareholders are likely to use these reports in making decisions their investment.
Conducting external audit on a company’s financial performance has it merits and demerits. For instance, engaging reputable external auditors is very costly. Thus for a company struggling to meet profit targets, such cost seems unnecessary. Nevertheless, external audits are beneficial than they are disadvantageous.
Not only is the company able to measure its performance against competitions but also able to establish its market position locally and globally. Such reports indicate an almost near truth regarding a company’s position. Thus, they are valuable tools with which shareholders measure the true status of the company’s performance. From a shareholders point of view, external audit is necessary.
List of References
Bragg, S. 2011.The new CFO financial leadership manual. New Jersey: John Wiley and Sons.
CAQ. 2011. In-depth guide to public company auditing: The financial statement audit. [online] Web.
Craswell, A.1990. Who audits Australia? Sydney: University of Sydney Press.
Nicoll, P. 2005. Audit in a democracy: the Australian model of public sector audit. Ashgate Publishing, Ltd. Burlington, VT.
The Goldman Sachs is a leading brand in the financial services sector. It has the same marketing message throughout its global markets although the ingredients used and the price is determined by a country’s economic condition and culture. The brand management always considers the two before introducing it to the markets because of a strong relationship between the brand and culture though they are separate disciplines.
They have also tried to reflect the meaning of brand in terms of cross-cultural and cross-national perspectives and have hypothesized that the religion, culture and other socio-cultural factors have some direct influence on the brand strategic management.
In order to address modern challenges that the organizations like Goldman Sachs are facing today, various scholars and researchers have suggested some interventional strategies. Which mainly focuses on the interaction level between the employees and targeted customers in the context of their cultural affiliations because it can be enhanced through developing synchronization between their cultures (Ruffino,49).
Goldman Sachs Performance Analysis
During the fiscal year of 2010, Goldman Sachs faced a number challenges. Still, the company revived its trust among the consumers by adopting diversity and offering services. Goldman Sachs reduced absenteeism and increased performance through this approach.
In order to revive performance and win back customers, the company started a scheme of bonuses for all employees if they achieved the benchmark levels of performance set by management. This policy showed significant changes in behavior and returned the company to profitability. The second kind of behavior learning is through negative reinforcement.
Punctuality is a persistent issue at almost every firm in the world. In order to reinforce a desirable behavior by removing the negative reinforce, the likelihood of repeating the negative behavior is diminished. Not until employees were pressurized and threatened that unless their punch cards were punched with the times, the employees would not be paid.
After a few reminders, the employees were using the time clock. Here, the possibility and threat of not getting paid served as a negative reinforce to get a desirable outcome of getting punched cards. Punishment serves to reduce the occurrence of the undesirable behavior. In extinction, the undesirable behavior is completely eliminated from being repeated by the individual.
Effectively Managing Diversity at Goldman Sachs
Diversity plays a significant role when it comes to efficiency of management and workers throughout the organization. It helps companies retain employees by encouraging them to work together to identify, discuss, and solve a variety of issues and welcome constructive conflict to solve their problems.
This approach has helped Goldman Sachs helped to solve a variety of customer problems as well and increase customer satisfaction.
Every person has a different style of thinking and utilizing his or her cognitive abilities. Some people are more inclined towards arts and some towards sciences and mathematics. This is termed as right brain thinking or left brain thinking. In any typical organization the amount of brain power used is rarely above 50 per cent.
As the seniority of the management increases and they become more cynical, the brain power reduces to a maximum usage limit of 35 per cent. In this competitive business world when organizations are seeking a sustainable competitive advantage, corporations should look towards building a culture that raises benchmarks of mental performance.
Goldman Sachs is a renowned regional financial service and provides personal banking, investment, lending services and advice to members to improve their financial well-being. They have employed the Whole Brain Dominance method in their organization to improve the communication and efficiency within the management team to assist with a cultural change towards better relationships with members and employees.
The management team of the company is engaged in a one day training session run by regional training specialist. By the end of the session, each member of the management team was able to identify their strengths and how they could leverage their strengths and improve weakness to be able to support the team (Ruffino,2009).
All this information proved out to be pivotal for the organization and managers. The result was a success leading to the whole team operating more effectively and opening communication between team members.
The company makes use of affirmative action in order to balance the organization. Nevertheless, if affirmative action is coupled with valuing of the differences, to some extent it will work better, if developed within that particular organization.
They must organize programs, which are designed to foster the awareness of the differences and acceptance of cultural differences. The lack of understanding may worsen situations but if organizations bridge cultural differences by these programs, the employees would be able to work efficiently together (Goldman Sachs)
According to Lynch (26), corporate strategy reflects the arrangement of objectives and goals of a corporation and a devising plan to meet those objectives. They are usually narrated to describe the present status of any company or to predict the future scenarios of the company. Two important aspects of corporate strategy are the sustainable competitive advantage and the value added resources or developments.
The major sources of sustainable competitive advantage include differentiation, low costs, niche marketing, high performance technology, superior quality, superior service, vertical integration, synergy, culture, leadership, and structure of organization.
Sustainable competitive advantage is the utmost requirement of strategic management research and practice. It has been developed that the organizational identity may serve as the supplement of sustainable competitive advantage because it designates an organization with the distinctive advantages over its competitors that it holds.
Various schools of thoughts provoked diverse concepts of organization theory. As a result, a sharp contradiction whilst conceptualizing organization theory could not integrate thinking among organizations. The new ideas emerging in organization theory should encompass novelty, consistency, and reliability.
However, the facts revealed that an overwhelming contradiction could be viewed in the existing schools of thoughts due to diverse and uncorroborated ideas. In order to reduce this contradiction, the organizations should adopt adaptability while reframing their organizational structure in accordance with changing trends (University of the Pacific, 123).
The element of diversity has also become a critical factor for organizational management these days. To work through such critical challenges, the organization theory should also contemplate diversity during this current era. The inter-organizational systems approach necessitates the incorporation of diversity so that the changing objectives of organization can be achieved accordingly.
For this very purpose, the educationists needs to revise the prevalent concepts of organization theory on the basis of modern trends so that the prospective leadership should hold extensive knowledge and must be capable to adapt with diversity and environment (Johnson & Fauske, 25).
Goldman Sachs has already strived through various challenging periods since its inception. However, this company still needs to implement novel concepts of organization theory so that it can meet the consumers’ demands with every change in environment. Goldman Sachs, though, has faced many challenges but still its leadership was competent to go through.
Affirmative Action in the Goldman Sachs
The operations in human resource section of Goldman Sachs has been changed by Affirmative action. In fact, the CEO of Goldman Sachs realized that he must create an atmosphere of fairness in the process of admitting employees into the company in order achieve success (Dooley 129). Several laws that regulate the employment processes have been enacted to promote the diversity.
These laws take into consideration all sections of society during hiring as well as the humane behavior based on remunerations, employment conditions and dismissal of employees. Affirmative action is a result of the demand from numerous activists and trade unions, who demand for fairness in the processes of employment.
In compliance, the Goldman Sachs has steadily embraced the affirmative action (Johnson and Fauske 120). Goldman Sachs has established a number of frameworks through which affirmative action can be achieved whereby inclusive recruitment course is one of them.
Recommendations for Interventions
According to Barak and Levin (22), the diversity of workplaces has led us to various serious issues, such as exclusion and lack of interest in organizational information.
LeFevre, (127) has also devised the conflict management strategies based on cultural diversity because they believed that strong interaction between heterogeneous groups would develop more productive effects relating to job performance and overall organizational achievements (Snavely and Bianco 126).
As far as the impacts of stress upon diverse employees’ personal lives are concerned, they usually suffer from various mental and physiological problems, like aggressive behaviors, moodiness, irritation, headache, increased perspiration, increased heart rate, and ultimately, job burnouts.
There are also some social issues associated with stress, which include imbalance between professional life and personal life, improper attitudes towards organization and increased absenteeism rates (Johnson and Fauske, 45).
Thomas and Robin (229) have recommended that strong leadership skills should be in the workplace, which should manage stress through team building and diversity training programs.
Similarly, the coping strategies have also been given importance by them because they believe that the working environment must keep the balance between the demands of employees and the organizational strategies to fulfill their demands (Kecia, 26).
Teamwork is the key element in many technical and non-technical work places (Sachs n. p.). However, the leveraging of diversity and teamwork may have direct influences on the overall performance of the team through many mediating variables. That is why; it is widely considered that the work group characteristics, communication, and task are the major indicators of team performance in relation to cognitive diversity.
However, it has also been disclosed that the systems operated by human-machines receive less benefits of team diversity and management teams in such systems have been found more efficient and result-oriented towards organizational goals and objectives (Ruffino, 52).
Similarly, communication is another important segment of teamwork, which needs to be conveyed continuously without interruption to provide support and guidance to the team. The nature of responsibilities itself is very complex in its nature because mediates the relationship between team diversity and performance management (Thomas and Robin, 229; Thiederman, 132).
According to Johnson and Fauske (24), the leveraging diversity plays an important role in performance improvement if certain conditions to control diversity programs positively and meet organizational objectives are to be met.
It was deliberated that the major paradigm shifts in the U.S. labor markets developed diversity in the work places successfully when the Bureau of Labor Statistics indicated the diversity in the field of labor because the managers felt at that team diversity should be criterion to hire talented work force (Dooley 126).
Additionally, this criterion of team diversity also led to the inclusion of new labor markets, enlarging the client markets for recruitment of labor pool.
In other words, multiculturalism was promoted in the name of team diversity by the various labor markets of the United States in order to accommodate diverse people as corporate citizens. The major activities as initiatives of team diversity included recruitment, skill retention, leadership development, external partnership, communication, training, and staff management (Ruffino,49)
Conclusion
Goldman Sachs should develop comprehensive tools of human management. However, the company should explore opportunities in the area of diversity and competitive pressure because these are the very areas through which company can grow further if it comes up with sustainable plans.
Works Cited
Dooley, Kevin. “Organizational complexity”. in International Encyclopedia of Business and Management. London: Thompson Learning, 2002. Print.
Johnson, Bob. & Janice Fauske. “Introduction: Organization theory, educational theory, and educational research”. Journal of Educational Administration. 43.1 (2005): 5-8.
LeFevre, Joseph. “The Value of Diversity: A Justification of Affirmative Action”. Journal of Social Philosophy. 34 (2003): 125–133.
Ruffino, Carr. Managing Diversity. New York: Pearson Learning Solutions, 2009.
Snavely, Kathryn and Peters Bianco. Cross-Cultural/ International Communication; Exporting; Globalization, 2010.
Thiederman, Sondra. Making Diversity Work: 7 Steps for Defeating Bias in the Workplace. New York: Kaplan Publishing, 2008. Print.
Thomas, David and Ely Robin. “Cultural Diversity at Work: The Effects of Diversity Perspectives on Work Group Processes and Outcomes”. Administrative Science Quarterly. 46.2 (2001): 229.
University of the Pacific. Cultural Diversity: Leadership Needed. 2006. Web.
The concept of marketing is very pertinent to any business, especially when introducing a new product/version into the market. The process encompasses comprehending and meeting the needs of the target customers. The aim of this paper is to develop a marketing plan for the Nissan Patrol Desert Edition through a theoretical and analytical approach. The reason for choosing the Nissan Patrol Desert Edition is that it is a relatively new version that has been introduced into the market.
Thus, the company needs to develop a marketing strategy to entice its loyal customers while at the same time attracting a new wave of clientele.
The research will include an in-depth analysis of the context and environment where the company operates, product overview, social responsibility and marketing ethics issues, core target factors, critical success factors, and the company’s position and intended market perception for its Nissan Patrol Desert Edition. The limitation of this assignment will be in identifying its strengths, weaknesses, opportunities, and threats during company’s SWOT analysis.
Analysis of the Context and Environment in which Nissan Operates
Political Factors
The government of the UAE has managed to control and maintain low oil prices. As a result, it has positively influenced the buying trends for the Nissan Patrol Desert Edition and other brands. An increase in the profit margins for the new version will allow the company to reduce the pricing of the car, reduce its debts, and even scale up its operations as part of its corporate objectives (Tischler 2002).
The liberal trade policy of the UAE such as low tariffs and few non-tariff trade barriers allow the company to have almost unlimited access to the region. This situation has had a positive influence on the company by allowing it to price the Nissan Patrol Desert Edition at an affordable rate for customers (Hoekman 1995).
Economic Factors
An increase in interest rates will negatively affect the sales of the Nissan Patrol Desert Edition due to the corresponding increase in the cost of servicing loans. Moreover, the increase will discourage spending while at the same time encouraging a savings habit by people who wish to benefit from the high rates from banks. Ultimately, the decrease in spending will reduce sales of the Nissan Patrol Desert Edition (Macdonald 1999).
Unemployment will be another major concern for the company, as it implies a reduction in disposable income of the target, which in turn reflects a negative move in its product sales. Moreover, Macdonald (1999) believes that unemployment increases the amount the government will have to spend on social welfare. This increase in government spending is compensated through increasing taxation on companies and/or products.
Social Factors
An increase in disposable income will have a positive impact on the product sales since consumers will have an extra income to buy the vehicle, which is essentially considered a luxury. A large proportion of a young population will have a positive impact on the company’s sales compared to the case of having a larger proportion of elderly people in the UAE. Luckily, statistical findings indicate that a majority of the region’s population lies between the age of 15 and 64, which is the company’s target market (Statistica 2016).
Technological
Pressure from the market continues to increase for the Nissan Company to come up with new products that have incorporated the aspect of improvement in terms of performance, reliability, and safety. This situation has prompted the company to formulate its power 88 strategy whose goal is to introduce a new product every six weeks for the next six years in an effort to stay ahead of the market.
For instance, the Nissan Patrol Desert Edition introduces a better Hydraulic Body Motion Control System that keeps the new version more stable when negotiating corners (Nissan 2012). With the increase in awareness on global warming, governments and individuals are beginning to demand the innovation of eco-friendly and/hybrid products. For instance, the Nissan Patrol Desert Edition has a reduced smoke emission in comparison with its predecessor.
Legal
The UAE government has laid out stringent laws and regulations on consumer protection. It requires the company to have a solid warranty plan to ensure that the Nissan Patrol Desert Edition is safe for use in the region. In addition, the company is expected to comply with all the taxes payable in accordance with the law.
Company and Product Overview
History, Products, and Mission/Vision Statement
Nissan Company was established in Yokohama City in 1993. Currently, it runs operations in 20 countries, including Japan. Among the company’s product portfolio are brands such as Nissan, Infiniti, Datsun, Heritage, and Mortorsports. The company records an average annual production of 2 million units.
This figure represents 4.9% of the global car market. The company’s mission/vision is to provide innovative and unique automotive products in line with supporting its vision of satisfying all its stakeholders through an alliance with Renault (Nissan Motor Co. 2015).
Performance from a Financial Perspective
Since 2010, the Nissan Company has had a steady increase in the global sales with the exception of drops in 2013 and 2015. The net sales dropped from 12.4 billion Yen in 2014 to 11.4 billion Yen. Nevertheless, despite the sales revenue drop, the company managed to maintain its net income at a level of 457 billion Yen (Nissan Motor Co. 2016).
Performance from a Marketing Perspective
In 2015, the company claimed 15.9 percent of the UAE’s car market, 8.5 percent in the US, 8.5 percent in China, and 25.8 percent in Mexico. These results placed the automaker among the top ten in terms of market share. It attributed the success to its aggressive global marketing strategy (Emirates 2016).
Current Marketing Goals
The company’s marketing goal is to remain focused on the consumer by ensuring that the current market needs are well understood and met. The goal includes understanding aspects such as affordability, comfort, and purchasing power. Moreover, the company’s primary target remains the low-level consumer market, which constitutes a large portion of the global population (Nissan Motor Co. 2016).
The company’s goal is to establish a strong position in the competitive automotive industry where it will continuously produce new products that are reliable, affordable, and appealing to customers (Nissan Motor Co. 2016).
Current Marketing Objectives
The company aims at boosting its share in the global market to 8 percent in the next six years. This goal will be achieved through the company’s commitment to producing a new vehicle every 6 weeks in an effort to draw consumers by wooing them from its competitors (Reuters 2011).
Social Responsibility and Marketing Ethics Issues
Economic
The Nissan Company’s commitment to reducing the cost of manufacturing its brands has allowed it to competitively price the Nissan Patrol Desert Edition at a lower price of $69,430 compared to its competitors to foster its profitability goal (Nair 2015).
Legal
The Nissan Patrol Desert Edition comes with a company warranty once the consumer buys the car directly from the company or through its authorized dealers. The car also comes with an installed safety system that protects the driver from fatal injury in compliance with the consumer protection laws of the UAE (Nissan 2012).
Ethical
The model’s safety system complies with the consumer protection regulations of the UAE. The company also ensures that it prices its product on a level that is affordable in its target market without compromising its product quality (Nissan 2012).
Philanthropic
The company has devised a sustainable approach to philanthropy through encouraging the spirit of voluntarism from its employees by contributing to charitable organizations and cooperating with regional NGOs (Nissan 2012).
Pyramid for Corporate Social Responsibility
Core Target Profile
Benefits package
The product’s innovation was motivated by the company’s large market demand in the Middle East and the UAE, particularly for customers who were in need of an ultimate off-road SUV for driving in the rugged desert terrains. The company improved the performance of the vehicle through installing a powerful high performance engine.
For such customers who are concerned about their safety needs, the car comes installed with an automated safety system, including underbody protection and bead-lock wheels that allow the tyres to be usable at low pressures without the risk of coming off (Basit 2015).
Major Competitors
The Toyota Motor Corporation is an auto-company that is based in Japan operating under segments such as automotive operations and financial services among others. The company is considered one of the most valuable brands with a market capitalization of $239 billion.
The company has managed to establish a strong position in the global consumer market. Its brands, namely Toyota and Lexus, enjoy a large share in the market with 45.5% in Japan, 12.2% in the US, 13.4% in Asia, and a significant market share in Africa, South America, and the Middle East regions. Toyota’s strong market position has allowed it to continue enjoying high sales and profitability. It continues to expand to untapped territories. Nevertheless, its established brand has empowered its marketing capabilities globally.
Besides, the Jaguar Land Rover Company is considered the largest auto company in Britain with investments in research, development, and engineering. The company is regarded as a global leader in the manufacture of SUVs. It poses intense competition to other SUV makers such as Nissan and Toyota. The company has continued to grow with sales growth of 19 percent in Europe, 18 percent in the UK, and 14 percent in North America (Jaguarlandrover 2015).
Critical Success Factors
Strengths
Nissan Patrol was among the first 4-wheel drive SUVs to enter the MENA/UAE region where it earned the name, “King of the Desert”. The strong position in the market is a reputation that has been attributed to the car’s impressive performance. Moreover, its users describe the product as unbreakable, affordable, and reliable. Therefore, with the newly improved version, the company is optimistic that it will entice its loyal customers while attracting a new generation of consumers in the region (Nissan 2012).
Besides, Nissan Patrol Desert Edition has managed to maintain its loyal breed of customers over the years due to the company’s dedication to continued improvement of the car’s performance and luxury packages (Nissan 2012). Due to the UAE/MENA market demands for a SUV that can withstand the harsh conditions of the desert, the company has committed itself through its innovative team design, craft and test to fine-tune the new Nissan Patrol Desert Edition to suit its use for the region.
Weaknesses
In 2013, the company recalled 25,000 of the products in Australia after it identified an accelerator fault that it claimed would result in loss of power and hence pose danger to occupants and road users. Such recalls have affected its product image by resulting in reduced sales in the affected regions (Nicholson 2013).
Opportunities
After the reverse of the recession in 2010, the automobile industry has experienced a tremendous growth globally and in the Emirates region. The 6.6 percent growth in 2014 was attributed to the improvement of the UAE’s economy, the increased vehicle financing, and the augmented spending by individual households. Through exploiting its strong market position, the company can utilize the increased vehicle loan financing to market its product to potential new owners (Emirates NBD 2015).
In an effort to encourage the importation of products, the UAE government has committed itself to eliminating most tariffs. This move has had a positive effect for the company by allowing it to price its product fairly to increase its sales. Part of the company’s market position is the affordability of its products compared to its competitors. Therefore, the company can exploit this opportunity by reducing further its product price that would attract new customers (Hoekman 1995).
Threats
The company faces stiff competition from other market players such as Toyota and Land Rover that produce similar prototypes of the Nissan Patrol Desert Edition. The competitors have a negative effect on the company’s market share. To stay ahead of its competitors, the company devised the ambitious Power 88 strategy, which aims at producing a new product everyone and half months to attain an 8% market share by 2017.
This strategy is unattainable, owing to the reduction in the company’s sales in 2015 (Harner 2013). The increased cost of raw materials may potentially raise the price for the Nissan Patrol Desert Edition, thus threatening to cause a reduction in the car sales (Jurevicius 2013).
Increased demand for hybrid products poses a major challenge for the company in terms of marketing the Nissan Patrol Desert Edition to consumers who desire to purchase hybrid/eco-friendly vehicles. Therefore, the company should embark on an innovative strategy to develop a hybrid version of the Desert Edition to meet the needs of this market.
Critical Success Factors
Product’s Intended and Actual Position in the Market
Intended Position
The Nissan Patrol Desert Edition is perceived to raise the expectation of the company’s loyal customers and entice a new breed of clients due its high performance, reliability, safety, un-breakability, affordability, and comfort (Nissan 2013).
Intended Position
Actual Position
The Nissan Patrol Desert Edition has been acknowledged by both its critics and supporters as a high performance SUV that is suitable for the desert terrain. The high performance has been attributed to its 5.6 liter V8 400 horsepower engine. As a result, the car has been regarded as suitable for use in the tarmac and sandy terrain (Warrior 2016). However, some critics have regarded the Nissan Patrol Desert Edition as a standard performance vehicle with no significant modifications from its predecessor.
Nevertheless, both critics agree that the product comes with a safety skid plates at the rear and back side to protect the driver from excessive injury in case of an accident (Smuts 2016). In terms of affordability, the Desert Edition is cheaper compared to Range Rover and Toyota Land Cruiser prices at 90,000 and 80,000 USD respectively.
Actual Position
Conclusion
The Nissan Patrol Desert Edition is a high-performance SUV produced by the Nissan Company. The car is specifically designed for the rugged desert terrain in the UAE/MENA region. The company is affected by political, economic, social, legal, and technological factors each of which has its unique trends that collectively affect its overall marketing strategy.
The company commands a large market share both globally and in the UAE/MENA region compared to its major competitors, including Land Rover and Toyota. The company’s SWOT analysis reveals strengths such as strong market position while also revealing weaknesses such as product recalls. The company has managed to position its product as reliable, high-performance, safe, and affordable.
Hoekman, B. 1995, The World Trade Organization, the European Union, and the Arab World: Trade Policy Priorities and Pitfalls, World Bank Publications, London.
Jaguarlandrover 2015, Jaguar Land Rover Reports August Sales Performance | Jaguar Land Rover Corporate Website. Web.
Embraer Jets Company is located in Brazil which is one of the fastest-growing economies in the world. The country is endowed with numerous natural resources and has a well established foreign policy regarding importation and exportation (Central Intelligence Agency, 2012). Due to the rapid growth of the Brazilian economy, the airline industry is expected to continue growing. The main factors affecting the growth rate in the airline industry are globalization, developments in the tourism industry, communications advancement, sports, the need to exploit natural resources, trade liberalization and adequate national policies (Cateora and Graham, 2011).
Market size
Estimated industry sales for the planning year
The airline industry is expected to continue growing at an increasing rate. Embraer Jets Company forecast that the aviation industry will have more demand in Asia and Latin America. The airline expects that the major forces affecting this growth are the strong economic development in an emerging market, economic growth of middle cities, increased urbanization, high fuel prices and increased competition (Embraer, 2012b). The airline industry forecasts a 5% yearly growth in the Revenues Passenger Kilometre (RPK) over the next 20 years.
This will require approximately 32,800 new aircraft to be manufactured. The fastest-growing economies will be the Middle East, Latin America, and Africa. It is also expected that the population will become wealthier, and the number of people using the airline industry will increase. It is also expected that: Middle East, China and Latin America will experience a growth rate of 7%, the commonwealth countries will experience a growth of 5.6%, African countries will grow by 5.3%, while developed economies such as America will grow by 3.2% due to their market maturity (Embraer, 2012a).
Estimated sales for the planning year
The Embraer Company foresee that the demand for 20-120 seat jets will be 6795 for the next 20 years. This will represent a market value of US$ 315 billion. For the turboprop, it is expected that 670 new aircraft will be demanded over the next 20 years. Out of these, 54% will be used to replace the old aircraft, while 46% will support the increasing market. For the narrow and wide-body aircraft, a total of 5220 new aircraft will be demanded for the next 20 years, 41 % will replace the old airplanes while 59% will sustain the growing market (Embraer, 2012a).
Government participation in the marketplace
The Brazil government is at the forefront of promoting the development of the airline industry in the country. The government has also established a favorable business environment for foreign investors. These investors are allowed to repatriate their registered capital and earnings tax-free. This makes it easy for foreign investors to invest their capital in the country. To promote the exportation of aircraft and other goods, the government has reduced all import duties and removed most of the importation barriers.
This makes it easy for the airline industry to import parts and also export aircraft. The government is also improving the education sector, the channels of distributions, sports, transport and warehousing (Nes, 2011). All these are expected to promote the development of the airline industry. The main agencies that are involved in the importation and exportation include import agency, clearing, and forwarding agency, marketing agency and the national civil aviation agency of Brazil. These agencies assist companies in the importation and exportation of aircraft.
Regulations affecting the industry
The main regulation by the government that may promote or hinder the development of the airline industry include import and export restrictions, tax regulations, aircraft regulation drafted by the national civil aviation agency and other government regulation on domestic and international trade.
References
Cateora, P., & Graham, J. (2011). International marketing. (15 ed.). New York: Irwin McGraw Hill.
Training is an important part of any practice and profession, as it imparts the necessary knowledge into the concerned individuals to aid them in their operations. Many auditing firms carry out continuous education to their employees and other stakeholders. Public auditing organisations usually have programmes that are meant to improve their auditors’ proficiency and skill levels (Boolaky, Krishnamurti & Hoque 2013). This essay looks at a training strategy for auditors in a public auditing organisation. It focuses on the development of proficiency, skills, and communication for these individuals.
Mission and Vision
The improvement of proficiency in any organisation can lead to improved performance in areas such as productivity. Public auditing organisations often have young auditors whose experience may not be adequate for such organisations. A training programme is necessary where there is a need to improve the performance of such an organisation and/or to ensure accountability. A training strategy allows researchers and other people in the organisation to develop standards. The mission of this training strategy is to improve employee proficiency and skills in the public audit organisation. The vision is to ensure that the organisation is a global and national leader in audit operations.
Training Strategy
Importance
Training strategies are important in several ways, especially in the auditing area. All employees who work in the different audit organisations are academically qualified after having graduated from higher institutions of learning (Applegate 2004). However, the business environment is different from the gathered academic knowledge. Hence, organisations need to adapt their employees and auditors to their specific areas (Kupritz & Hillsman 2011). Just as most of the other professional areas, auditing is a field that witnesses constant change. Hence, organisations need to update their practices to reflect these changes.
Training strategies are important because they act as guides to the different organisational stakeholders. The public auditing organisations have the obligation of ensuring quality service delivery. As a result, training acts as one of the areas to improve in this area. Human beings are prone to forget the different things that they learn in their respective areas. Therefore, training acts as a way of ensuring that they stay at par with the changing world and professionalism. Another recognised effect of training is employee motivation. Beck and Wu (2006) recognise that training improves employee satisfaction at their respective areas, with this plan also affecting organisational output and performance.
The training strategy is important in the implementation of any training practices in several ways. Through training strategies, trainers and organisations can implement the training that is meant for their employees (Beck & Wu 2006). A training strategy allows time for organisations to organise their training techniques and establish the working ones. According to Beck and Wu (2006), employees who receive training should follow a general strategy for maximum results. Training strategies are generally utilised in any training course, especially in the organisational setting where such activity is mainly informal.
Training strategies ensure that the training exercise is well organised and less costly for the organisations that are implementing it (Chen, Yang & Yang 2012). For public auditing organisations that embark on training of their auditors, a training strategy is useful because these organisations have fewer funds at their disposal. Training strategies, in this case, also ensure that problem solving is done effectively and efficiently. Involved individuals have a better chance of achieving the training objectives as opposed to other forms of training that are done without any strategies.
What Auditors Need to Know
Auditing is a wide topic and subject that requires competence in different areas. Some of the topics that are useful in the training of auditors in public auditing organisations include general auditing, professionalism, problem-solving, communication skills, fraud, evaluating audit evidence, sampling, mathematics, data collection, presentation and reporting, and operations management (Siriwardane & Durden 2014). Some of the other areas that public auditors need to demonstrate knowledge in include management control, finance accounting, information technology, and managerial accounting (Siriwardane & Durden 2014).
Auditors should be conversant with the internal auditing process, especially planning, risk assessment, internal control evaluation, and knowledge of the audit procedures (Siriwardane & Durden 2014). Being in possession of this knowledge is important for auditors since it allows them to tackle any of the audit problems appropriately. The management of the audit department is important to know for auditors since they are at one time required to take over these departments and facilitate their operations.
Auditors should exhibit professional ethics in their operations, including the respect of the general ethics and auditing laws (Thépot 2008). Therefore, there is a need for these individuals to be acquainted with ethics in the professional area. Auditors need to know how to prevent fraud, detect any fraudulent activity, and/or investigate it (Maloş 2011). Therefore, it is important for auditors to be trained on fraud as a unit and subject. The audit departments in public organisations often face several challenges. Auditors should be trained to handle these challenges, with the initial requirement being to audit evidence. The other requirement is that auditors need to learn issues such as documentation and data collection since they form a significant part of their operation.
Implementing the Strategy
The audit training strategy is easy to implement, especially if it is well organised. The implementation of a training strategy should aim at integrating the strategy to the organisational objectives and goals (Herhausen, Egger & Oral 2014). The implementation process should also make the training process effective. According to Mascle (2013), training and development of employees form a means of investment in human resource. They constitute a partnership between the organisation and the individual. Mascle (2013) asserts that training does not occur in a vacuum. This claim reveals the importance of linking a training strategy to the overall organisational goals and objectives.
The implementation of a training strategy requires a financial investment. Organisations should plan ahead of time and budget for this activity. The next thing is the provision of training manuals and the necessary equipment or resources for use in the training. For example, public auditing organisations need to supply the materials for use in strategic training, including manuals and human resources to train auditors. When trainers are available, the organisation should shortlist the groups of people who are to receive the training and determine the areas and activities that will be learnt. The organisations should shortlist the areas of importance in the process of training.
Training should be targeted to the objectives of the organisation, including the goals that are to be attained. A timeframe is also necessary for the training of these individuals. This claim means that a timetable should be created to ensure that the training practices are done according to time and the objectives to be achieved. An evaluation of the teaching and training is important in any training strategy (Herhausen, Egger & Oral 2014). The public auditing organisations will offer a continuous assessment of the areas that are learnt in training. This strategy will act as a form of feedback. An effective training strategy should allow frequent training sessions to ensure that the participants’ knowledge and skills are reinforced.
Measurement and Evaluation of Training Strategy Outcomes
The assessment of the success of a training strategy can be done in a variety of ways. Individuals are assessed based on the knowledge they gather from the training and other areas of their practice. The target of a training strategy is to ensure improved performance of the individuals and the organisations in which they work (Bontaş 2012). Different areas may be assessed in the establishment of the training strategy outcome. These areas are assessed based on the targets.
Like other training and training strategies, assessment of success may be done in several ways that are dependent on the training variables as listed in this part of the essay. This assessment may be done in the acute period or after the training is over, depending on the goals of the training strategy. Hence, the assessment methods may be classified into short term and long-term assessment modules and methods. They include:
Assessment of trainees and the knowledge acquired after each of the training sessions. This activity takes the shape of examinations and assignments where the different areas are practiced.
Trainees are handed survey forms after the training to assess the satisfaction and/or of the training session (Bontaş 2012). The satisfaction evaluated from the surveys demonstrates one area of the success of the training.
Trainers need to evaluate knowledge acquisition for the public auditing trainees. This step can be done through examination after the training sessions (Bontaş 2012). This evaluation module establishes whether the training is sufficient for the auditors or whether there is still a need for further training.
The other assessment is whether the trainees have adequate behaviour application (Hiscock & Shuldham 2008). In this form of assessment, the trainers and organisation ask the question of whether trained individuals are applying the gathered knowledge and skills.
Another measure that may be applied both in the short term and in the long term is the assessment of business improvement. In auditing, the noted improvement should include increased accuracy and improved performance of the auditors.
For organisations that are involved in profit-making, a return on investment (ROI) may serve as a useful measure.
Developing Communication Skills for the Employees
Auditing is an area that requires adequate use of communication skills because it involves contact between different groups of people. Communication skills allow employees, especially auditors, to communicate their intentions, findings, and suggestions effectively to their clients. For public audit organisations that have significant interaction between clients and employees, communication skills are necessary since they allow them to improve on service delivery and any other service to their employees. There are some ways that these organisations may develop the communication skills of their employees. One of the most basic of these methods is participation in training. The respective organisations have to plan for internal and external training programmes for the employees.
Some of the most important communication skills include being loud and clear while making presentations or interacting with different people, along with their work. The auditors should ensure that they maintain eye contact because it communicates a sense of responsibility and confidence. Individuals who maintain good eye contact are convincing and/or can win major deals (Wardrope 2002). In the case of auditing, the maintenance of eye contact results in better communication. Public auditing organisations are better positioned to deal with the different types of auditing challenges in a diverse sector. Therefore, there is a need for effective communication.
Another important concept of communication is posture where the communicator is required to maintain a good posture while communicating (Bontaş 2012). Employees should be trained on what posture to maintain in the course of any communication, as this requirement is also an aid in communication (Wolters 2011). Auditors should be taught on the utilisation of brief notes where they are allowed to make some notes on the issue that they discuss. These notes complement the visual aids that objectify the ideas being communicated.
Motivation to be Included
The training strategy should incorporate several motivation plans for the participants. The plans include the provisions that motivate trainees to continue with the training and/or adopt the practices that are taught. Trainees who undergo any training exercise may be motivated in a number of ways since this activity is an ordinary learning process (Wolters 2011). Most of the motivation plans are easy to achieve and inexpensive to activate. One of the most common and effectively used forms of motivation plans is the provision of positive feedback for trainees (Kaymaz 2011). Just like other students, auditors who undergo any form of training respond positively to positive feedback.
Tasks that are assigned to the auditors should also be realistic and not too hard or easy for them. Auditors should also be provided with role models during their training sessions to ensure that they have personalities to emulate (Kaymaz 2011). This plan also acts as a form of benchmark for the training auditors in these public auditing organisations. For individuals who find the training hard, the other form of motivation that can be utilised is an encouragement and further training for such people. Financial motivation is also another option that can be adopted when implementing the training strategy for auditors in public organisations.
Solving Resistance
Resistance is a common experience in training strategies. There are several ways of dealing with it, including:
Allowing divergent views in the course of the training and/or creating their space in the training strategy
Providing alternatives to trainees so that they can adopt their different views
Allowing the input of the audit trainees while training
Incorporating different teams of trainers from different parts of the industry and different auditing areas
Holding discussions on the different methods and areas that are found to have controversy
Skills of the Team Leader
A team leader is a person who can lead a group to productivity and efficiency even in training. This person needs to have special skills, including:
A team leader should have adequate communication skills
The person should have appropriate organisational skills
Confidence is another characteristic that a team leader should possess
The individual should be respectful to team members and other individuals (Wolters 2011)
Leaders should be fair to their colleagues in the team
Honesty is a virtue that a leader should possess. He or she should exhibit integrity and influence (Parry et al. 2014).
Improving a Leader’s Communication Skills
Communication skills are also essential for leaders who should apply them in their leadership of the team. A leader offers direction to the team. Hence, he or she should be able to communicate with all members of the team. A leader’s communication skills may be improved in several ways, such as interacting with other team members. A useful method of improving communication skills is training where individuals obtain the necessary skills (Parry et al. 2014). Leaders get training in different subjects and areas. As such, their training should incorporate communication skills training (Parry et al. 2014). Training leaders should be an effective method for incorporating communication skills.
Communication skills should be incorporated in the training that leaders go through in the institutions where they are trained. Some of the other ways of ensuring better communication skills for leaders is to ensure that they participate in the group activities, especially groups that require the utilisation of these skills (Parry et al. 2014). This claim means that leaders should be encouraged early enough to undertake their leadership in the form of communication (Parry et al. 2014). The other method that can be used to develop communication skills in leaders is the provision of manuals and lessons on the same issue (Parry et al. 2014). When leaders attain communication skills, they can use them to influence their teams for better results.
Subjects for Team Leader
Team leaders should have basic training on leadership, especially on how to interact with different groups and types of people. Leaders should be taught in areas such as how to handle different classes of people based on the response of these two different circumstances (Muethel & Hoegl 2010). According to Muethel and Hoegl (2010), leadership training entails demonstration of different capabilities of leaders and their teams. Leadership training also incorporates areas such as crowd management together with how to correct individuals without hurting their egos (Muethel & Hoegl 2010).
Another area that leaders in an auditing training programme should be trained on is discipline and social interaction (Muethel & Hoegl 2010). Leaders should receive communication skills training to allow them to offer leadership to their teams while at the same time, delivering the best decisions in an excellent method and way. According to Muethel and Hoegl (2010), leaders should be trained in management, group psychology, and motivation. Some leaders face conflicts in the course of their leadership, especially in the area of auditing. Therefore, there is a need for leaders to acquire conflict management training where they are taught how to manage the conflicts that they may face.
Leaders should receive basic training in psychology and social interaction because they are involved in the control of other individuals. They need to learn how to exert influence and command respect to their team members (Muethel & Hoegl 2010). In auditing, financial management is a necessity for leaders since other auditors in other levels have to work on this area. They need to have the same training as other auditors in their team in addition to the leadership training that they get (Muethel & Hoegl 2010). Leaders should be trained on accountability, which in turn applies to them in their auditing work. These areas and modules of training should be crucial for all leaders.
Importance of these skills
The development of the above skills for auditors and team leaders bears special significance in their operations. This importance is analysed in this section.
Importance to Auditors
Auditors can carry out their auditing functions effectively without any interference. The different functions of auditors are learnt through effective training (Muethel & Hoegl 2010).
The development of management skills allows auditors to execute their responsibilities in an effective manner
While leaders provide direction for their team, auditors develop the cleverness of executing the different instructions based on the skills communicated to them by the leaders.
Different leadership models that are taught to auditors allow them to develop areas of strength for change. They allow them to teach their colleagues and improve efficiency.
Communication skills enable auditors to interact with their peers while developing sound reasoning in their work.
Importance to Leaders
Leaders also require the strategies and skills that have been listed above since they are important to them in a variety of ways.
Development of communication skills for leaders allows them to interact with different sets of people that they encounter in their leadership
The skills allow leaders to supervise their colleagues and/or facilitate them to achieve the goals that they stand for in their respective organisations
Leaders are also able to execute their mandate as per the area from which they operate
Leaders also acquire skills that are necessary for them in terms of making sound decisions, which relate to their work, including the formulation of ideas where they involve all participants
Leaders acquire the skill of managing a large number of auditors and/or verifying the different findings of their teams
Communication Plan for Stakeholders
An organisation should highlight the stakeholders that are important to their positive performance. A communication plan may be used to ensure that stakeholders in an organisation are aware of the different laws and guidelines in this organisation. The communication plan should be developed to cater for all areas of communication, including verbal and written communication. The communication map to deal with stakeholders and/or how to improve their awareness with the organisation’s laws and guidelines should incorporate the following:
The plan should be exhaustive. Besides, it should use the simplest language that all stakeholders can understand
The communication plan should also be developed in consultation with other stakeholders, including auditors and their leaders
Different stakeholders should be made to understand the different messages that are communicated to them. The communication plan should allow room for inquiries
Communication should be timely and well organised where auditors and leaders receive information promptly so that they can effectively utilise it
Appropriate communication skills should consist of communication devices such as placards and adverts. These tools should communicate appropriate information to all stakeholders
For leaders, effective communication skills should incorporate the latest evidence that captures what is best for their organisation and followers.
References
Applegate, D 2004, ‘Training New Auditors’, Internal Auditor, vol. 61 no. 2, pp. 66-73.
Beck, P & Wu, M 2006, ‘Learning by Doing and Audit Quality’, Contemporary Accounting Research, vol. 23 no. 1, pp. 1-30.
Bontaş, D 2012, ‘Management and Leadership in Business’, Economy Transdisciplinarity Cognition, vol. 15 no. 2, p. 83.
Boolaky, P, Krishnamurti, C & Hoque, A 2013, ‘Determinants of the Strength of Auditing and Reporting Standards: a Cross-Country Study’, Australasian Accounting Business & Finance Journal, vol. 7 no. 4, pp. 17-36.
Chen, Y, Yang, Y & Yang, L 2012, ‘The IT productivity paradox: Effects of training in audit firms’, Human Systems Management, vol. 31 no. 3/4, pp. 241-254.
Herhausen, D, Egger, T & Oral, C 2014, ‘Auditing Marketing Strategy Implementation Success’, Marketing Review St. Gallen, vol. 31 no. 3, p. 55.
Hiscock, M & Shuldham, C 2008, ‘Patient centred leadership in practice’, Journal Of Nursing Management, vol. 16 no. 8, pp. 900-904.
Kaymaz, K 2011, ‘Performance Feedback: Individual Based Reflections and the Effect on Motivation’, Business & Economics Research Journal, vol. 2 no. 4, pp. 115-134.
Kupritz, V & Hillsman, T 2011, ‘The Impact of the Physical Environment on Supervisory Communication Skills Transfer’, Journal Of Business Communication, vol. 48 no. 2, pp. 148-185.
Maloş, R 2011, ‘Leadership Trait Theories’, Annals Of Eftimie Murgu University Resita, Fascicle II, Economic Studies, vol. 1 no. 1, pp. 215-220.
Mascle, D 2013, ‘Writing Self-Efficacy and Written Communication Skills’, Business Communication Quarterly, vol. 76 no. 2, pp. 216-225.
Muethel, M & Hoegl, M 2010, ‘Cultural and societal influences on shared leadership in globally dispersed teams’, Journal Of International Management, vol. 16 no. 1, pp. 234-246.
Parry, K, Mumford, M, Bower, I & Watts, L 2014, ‘Qualitative and historiometric methods in leadership research: A review of the first 25years of The Leadership Quarterly’, The Leadership Quarterly, vol. 25 no. 25, pp. 132-151.
Siriwardane, H & Durden, C 2014, ‘The Communication Skills of Accountants: What we Know and the Gaps in our Knowledge’, Accounting Education, vol. 23 no. 2, pp. 119-134.
Thépot, J 2008, ‘Leadership Styles and Organisation: a Formal Analysis’, Revue Sciences De Gestion, vol. 65 no. 1, pp. 287-306.
Wardrope, J 2002, ‘Department Chairs’ Perceptions of the Importance of Business Communication Skills’, Business Communication Quarterly, vol. 65 no. 4, pp. 60-72.
Wolters, A 2011, ‘Regulation of Motivation: Contextual and Social Aspects’, Teachers College Record, vol. 113 no. 2, pp. 265-283.
Service environment is vital in an organization because it gives the first impression of the products that are marketed in an organization. Whereas the quality of items in two firms could be the same, a consumer may prefer one over the other because of the environment in which the service is provided. It refers to the environment in which services are provided and comprises both interior and exterior factors. Also, customers and sellers interact.
Service environment of a local coffee shop
The local coffee shop has been chosen because of the cold environment in our locality. The shop is strategically located in the local market. There are several social amenities in the area. The target population is composed of workers from the surrounding area. The biggest population that takes coffee is composed of aging.
This is for the reason that they believe in the originality of local coffee. Due to the presence of many social amenities, there are many people who come to relax after work. The surrounding environment is cool with many trees around, making the environment still. Soul music is played at low volumes, and there is a television set that is centrally located in the shop. There is also a DSTV area where football fans sit and watch football as they take tea. Thus, it is a good place for relaxing after work.
The colors of the shop are bright enough to attract customers. The room has enough lighting. This makes customers prefer the shop rather than a nearby tea shop because of its dull colors. Utensils are usually clean and neatly arranged in the cupboards. They are medium-sized, and their colors are attractive and presentable. The walls of the shop have charts that give it a good appearance. The room is usually kept clean.
There is a source of power, which highly attracts many customers for the reason that consumers’ mobile phone and other electronics are charged for free. The shop also has introduced modern technology, i.e., WIFI. This allows customers to enjoy free internet services at unlimited rates. Power is not limited and many customers like coming to purchase coffee because it is affordable, and there are no regulations about power consumption. As a result, those who use the internet for leisure are frequent customers.
There are many trained staff members in the shop who dress in their neat uniforms. Ladies put on black skirts and white blouses, while gentlemen put on black trousers and white shirts. All uniforms have clear logos of the business organization. Some workers are trained in catering and hospitality, while others are trained in sales and marketing. Staff members who are trained in sales and marketing assist in marketing the shop within the locality.
In addition, some personnel is trained in customer relations. Customers know the staff by their names and vice-versa. Staff attendants are friendlier to customers compared with others in the nearby coffee shops who stare at new customers and offer them less assistance. Shop attendants explain the many options and suggestions to consumers.
The shop has good amenities, for example, the toilets are clean. Moreover, the shop has a community sense compared with other nearby shops. It participates in community development, giving it a good reputation. In addition to the fact that coffee from my shop is affordable, it is of high quality.
Conclusion
In conclusion, my coffee shop is very attractive, and many customers like coming to take coffee there. Their choices are driven by the factors aforementioned in this paper. For example, a sense of community, attractive colors, trained staff members, the presence of free internet services, and friendliness of staff members.
The Chinese labour market is highly competitive as multinational and domestic firms scramble for few qualified graduates. Bearing & Boodles is most likely to face similar challenges during recruitment processes.
The Graduate Recruitment Manager will apply a combination of strategies to recruit the best graduates in the Chinese labour market. These strategies would include using social media and networking sites, liaising with the best universities and other institutions in China and the US for Chinese students, working with HR firms and recruiting agencies, providing internship and part-time opportunities to determine candidate employability. The company may send successful candidates overseas for skill developments and they must return to China on company’s assignments.
The Environmental Audit
Although China has a large pool of university graduates, less than ten percent are fit to work in foreign multinational firms.
Therefore, multinational firms already in China face a severe shortage of qualified employees, particularly in critical areas like service and managerial jobs. According to Diana Farrell and Andrew Grant (2005) of McKinsey Global Institute, there is a fierce competition for talent between foreign multinational firms and fast-growing domestic firms.
Juro Osawa and Paul Mozur (2012) acknowledge that employee recruitment in China is tough in a narrow environment with a battle for rare, but same talents sought by Chinese firms with global ambitions and Western firms that expand in China.
The severe shortage and fierce competition for talents imply that Bearing & Boodles might not recruit the best candidates in China.
Bearing & Boodles must acknowledge lack of skills among graduates in China for a global role. For instance, communication is a major challenge among Chinese graduates. Many Chinese graduates do not speak English, which is the international language for business. This may affect interpersonal relations and skills (Tayeb, 2005). While communication and interpersonal skills are the most sought-after skills, they also remain the poorest skills among Chinese graduates in China.
Many Chinese graduates lack prior job experience. In most cases, Chinese graduates lack industry-specific knowledge, job requirements and roles in the sector.
In addition, other Chinese graduates do not possess business acumen, which is necessary in a highly competitive global environment.
While job search services in China are evolving along with its firms, traditional models of job search might not work in the Chinese labour market today (Osawa and Mozur, 2012).
On the other hand, Bearing & Boodles might benefit from Chinese language skills, Chinese market knowledge, intercultural adaptability, professional capabilities and practical business knowledge (in case of graduates with the prior industry experience).
Best Practices and Current Situation
Best practices require the Graduate Recruitment Manager or the HR department to apply global talent management (GTM) in China (Farndale, Scullion and Sparrow, 2010). The Graduate Recruitment Manager must acknowledge that China is different from the US where recruiting firms have developed at the same rate to match requirements of businesses and technology firms.
Some firms use traditional modes of recruitment and HR agencies, but they do not yield effective outcomes as new forms of recruitment methods emerge.
Today, many domestic Chinese firms and foreign firms have turned to social media to attract the best talents. Consequently, there are specific Chinese social networking sites, which have evolved to facilitate recruitment for firms. For instance, Lenovo has relied on social media to search for talents. The company uses LinkedIn as its main social recruiting site, but it also uses Chinese-based sites like Tianji (similar to LinkedIn). Therefore, the Graduate Recruitment Manager will also rely on new forms of recruitment to attract the best Chinese graduates.
Some firms use internship to understand the Chinese labour market and identify opportunities, which are available for Chinese graduates. It would also allow the Graduate Recruitment Manager to determine employability of Chinese graduates. Firms collect data from interns and use them as pre-entry guidance platforms.
The Chinese labour market also encourages graduates to seek for some levels of work experience through volunteering and part-time opportunities to allow such graduates to demonstrate their skills and job specific qualities for potential employers.
Companies send successful graduates overseas to expose them to the industry best practices. Such graduates return to work in China on company assignments.
Proposal to Execute the Consultancy Assignment
Based on the environmental audit, best practices and current situation, the Graduate Recruitment Manager should consider these approaches when recruiting Chinese graduates.
The Graduate Recruitment Manager should rely on Chinese top universities to target the best talents. At the same time, the Manager should also focus on some institutions, which have provided the best candidates in the past for the industry. Chinese employees in Bearing & Boodles should encourage their previous colleagues to apply for available positions in the company.
The Graduate Recruitment Manager will work closely with other Chinese HR companies, job fairs and recruitment agencies to gain access to the wider Chinese job market.
Given the shift in recruitment practices, the Graduate Recruitment Manager will consider social media, such as LinkedIn and other specific social sites for recruitment purposes. This would attract recent graduates, who prefer social networking sites and the ease of finding job opportunities through the Internet. In most cases, potential candidates display their qualifications and other important details. The Graduate Recruitment Manager will use such information to select the best candidates for further interviews.
The Graduate Recruitment Manager may also recruit Chinese students directly from the US universities. Such candidates may offer advantages associated with communication barriers, interpersonal relationships and cultural adaptability. It would also be critical for Bearing & Boodles to tout itself as the best employer in the industry. Establishing strategic links with Chinese institutions of higher learning and conducting direct recruitment drive would ensure that the company acquires some of the best talents in China.
Summary
The environmental audit reveals that both foreign firms and fast-growing domestic industries in China scramble for few graduates with suitable qualifications, particularly in service and managerial positions.
Today, the best practices and current situations require firms or HR departments to adopt different approaches in graduate recruitment in China for a global role. These may include the use of traditional recruitment methods and new forms of recruitment associated with social media and networking.
Individual Reflection
Summary
I realised that consulting projects require knowledge of a professional adviser. Apart from HR management knowledge and skills, a consultant must possess communication skills, interpersonal relationship skills, IT skills, analytical abilities and tendencies to ask questions.
I will need to develop knowledge and skills in different areas to succeed in HR consulting.
An Overview of the Experience
As a consultant in HR, I noted that specific knowledge in the field was imperative for success. While anyone can become a consultant based on required skills, a great and successful consultant in any area must develop certain skills and qualities that relate to the industry.
Specific skills, knowledge and information in HRM practices would ensure that a consultant improves organisational core HR functions.
A consultant requires skills to work well with others because in most cases people work in groups. I noted that one must possess abilities to listen, ask and manage other people to consult successfully. This means that a consultant must have exemplary communication skills.
The job also requires service-oriented attitudes. A consultant must have the necessary motivation to complete a client’s task as scheduled. Therefore, time management and ability to use resources effectively are imperative in HR management consulting.
I also realised that consultants work with culturally diverse individuals and must develop leadership skills to meet their unique cultural orientations. Abilities to generate and use new ideas are critical skills in consulting services. This is imperative because a consultant must improve HR practices in an organisation. Executives depend on a consultant to improve their businesses.
Therefore, a consultant must be able to solve problems within his or her area of specialisation. While generating ideas might be simple, a consultant must have the ability to execute their ideas to achieve intended outcomes.
Personal Learning Goals
My major goal is to acquire all necessary skills in HR practices beyond my current knowledge. These skills will include IT, writing, reporting, business acumen, HR laws in different locations and presentation skills for senior executives.
I believe that these skills would allow me to join any HR consulting firm.
Reflection on the Experience and peer feedback
Currently, my strength as a consultant includes ability to listen and gather necessary information for a specific task. I have also developed specific knowledge necessary for succeeding in HR consulting. However, these skills might not be adequate.
Therefore, there are some areas, which further need developments. For instance, I noted the importance of abilities to speak other foreign languages. HR managers require such skills in countries where English might not be the business language. Cultural adaptability and effective communication are also areas, which require further developments.
Developing these skills will require further studies, practical experiences and interaction with other professionals in HR practices because the industry is socially challenging, service and people oriented.
Reference List
Farndale, E, Scullion, H and Sparrow, P 2010, ‘The role of the corporate HR function in global talent management’, Journal of World Business, vol. 45, no. 2, pp. 161–168. Web.
Marlboro is one of the most recognizable brands in the tobacco industry due to its strong attributes which have managed to attract large numbers of consumers in different markets. As a result, this has enabled the Philip Morris Corporation to set up manufacturing operations in more than 50 countries. The popularity of the brand has made it a household name in more than 150 countries where it is sold and consumed by millions of people.
The product has managed to appeal to customers in different parts of the world by using cowboy characters in its adverts who serve as symbols of power, vitality, independence and masculine charm. However, strict laws that regulate cigarette advertising have compelled the firm to look for alternative forms of advertising to continue to serve its customers. Therefore, the firm has opted to use alternative promotional and pricing strategies to maintain its competitive edge in a market that experiences rapid changes.
Introduction
Marlboro is one of the most popular cigarette brands known for its brand qualities and loyal customers. The cigarette which is manufactured by Philip Morris Corporation has been sold in the market for close to 100 years and it is one of the most popular consumer goods. It serves as the Philip Morris’ flagship product in the market due to its longevity, strong customer base and its ability to reinvent itself to attract new consumers.
For a long time, the Marlboro cigarette has been known for its power, vitality, and adventurous attributes as shown by American cowboy characters in its adverts. This has encouraged customers to associate it with attributes of strength, power and vitality and this has helped it to register a lot of success in different markets where it is sold.
This report will serve as a market audit of Marlboro which will focus on its current performance and will also further recommendations that Philip Morris needs to implement to help the firm to maintain its competitive edge in the industry.
Environmental Context Analysis of U.A.E
The U.A.E. has a population of about 5.5 million people, a majority of whom are Arabs. However, the country hosts a large number of foreigners who live there for different purposes. It is estimated that foreigners make up more than 70% of people residing in the country. The country has favorable taxation policies which encourage many firms to establish their operations there. The main language spoken by a large majority of the population is Arabic and Islam is considered a way of life which permeates all important segments of the society.
In addition, Emiratis are deeply conservative even though they have embraced different aspects of modernity to help their country move forward. Cigarette smoking and consumption is not highly restricted but manufacturers are required to provide labels that show the real contents of their products. There are several multinationals and local firms which manufacture and sell different tobacco products in the market.
The UAE practices a federal system of governance consisting of seven emirates whose capital is Abu Dhabi. Abu Dhabi is the main oil-producing emirate while Dubai serves as the center of tourism, transport, banking and hospitality. However, the country is ruled by a president who heads the Supreme Council that adopts and implements policies after consultations with monarchs of other emirates.
The heads of the seven emirates elect one of their own to act as president after every five years.UAE has experienced rapid rates of modernization in the last three decades which has increased the rate at which technology is used by the country’s citizens.
Dubain, Mattoo, Asia King, and British American Tobacco products are some of the most common cigarette brands which are popular with local consumers. However popular international brands such as Winston, Camel, Marlboro and Mild Seven command a significant portion of the market share. Lastly, the cigars market has been experiencing positive growth and the largest firm that dominates this segment is Imperial Tobacco.
Competitor Analysis
The main competitors of the brand include: Winston cigarette brand manufactured by RJ Reynolds and Mild Seven which is manufactured by Japan Tobacco. However, the brand has a large share of the global cigarettes market which is estimated at more than 40%. In UAE, Marlboro has a large loyal clientele and this enables Philip Morris to attain good profits from its operations.
On the other hand, British American Tobacco has a significant portion of the cigars and cigarettes market share. It has a strong cross-generational and cross–gender appeal which makes it attractive to people of all age groups in different markets where it is sold (Prahalad, & Ramaswamy, 2013, p. 61). Marlboro’s uses high-impact branding techniques which evoke positive emotional reactions from customers.
The firm’s competitive strategy focuses on unique packaging, strong brand themes and an effective market differentiation strategy that helps the firm to stay ahead of its competitors. The firm’s market plans are responsive to prevailing consumer needs in the market and this has helped it to reinforce its unique selling proposition to different customers. It has an elaborate distribution network that ensures most of its products are sold in various retail outlets in Dubai and Abu Dhabi making them easily accessible to consumers.
It appeals to middle-class and upper income clients in the UAE who identify with its brand message of freedom, individual expression and adventure (Prahalad, & Ramaswamy, 2013, p. 64). As a result, this approach has helped the Philip Morris to adopt more flexible pricing strategies for the product to satisfy consumers’ expectations in different markets where it is sold.
The brand’s ability to reinvent itself and to appeal to wider consumer segments has given it a higher competitive advantage in the industry. Since it has been in operation for about ninety years, Philip Morris has benefited a lot from its positioning strategy of Marlboro as a global brand. More importantly, the product is manufactured in more than 50 countries and this has allowed Philip Morris to establish joint ventures with other firms for easy market penetration.
Marlboro and other Philip Morris brands sold in UAE are manufactured in China and other Asian countries due to low labor and manufacturing costs (Prahalad, & Ramaswamy, 2013, p. 68). The firm has strong relationships with local suppliers who sell the product on its behalf in the local market. In addition, the firm’s use of standardized operations has helped it to maintain high levels of product quality and this has helped it to maintain the loyalty of customers in Marlboro.
Porter’s Five Forces Analysis of Marlboro’s Industry Environment
New Entrants
The UAE tobacco industry has a lot of barriers for new firms that seek to operate on a national and an international level. Manufacturing, distribution, marketing and product development costs are very high. Legal restrictions on cigarette advertising and strong customer loyalty to specific brands are additional barriers which new firms are likely to face.
Suppliers’ Bargaining Power
The power of suppliers in the UAE is low due to low tobacco prices. Since the firm can access cheap tobacco raw materials from different parts of the world, this has reduced the bargaining power of tobacco farmers in the industry.
Buyers’ Bargaining Power
The bargaining power of buyers is moderate and depends heavily on economic performance and personal incomes. In the early 1990s, Philip Morris was forced to reduce prices it charged on Marlboro cigarettes to protect its market share. However, in the last twenty years, industry trends have shown that many Marlboro buyers in UAE are not easily swayed by low prices charged on substitutes.
Power of Substitutes
The inelasticity of the market encourages consumers to opt for alternative lifestyle choices which may cause them to stop smoking. As a result, these alternative choices may impact on their purchasing decisions and this is likely to weaken Marlboro’s competitive position in the industry. Since consumers are easily tempted to try out other tobacco products, this affects the competitive position of major firms in the market.
Power of Competitors’
The main competitors of the company do not pose a serious challenge on its market share due to Philip Morris’ strong brands that have a large market share. Many companies have clearly defined markets and they use economies of scale to maximize returns in their specific target markets.
Market Research
The firm’s market research techniques focus on demographic traits, lifestyle patterns, consumers’ purchasing behavior, and other important factors that contribute to performance. The firm uses data gathered from its marketing research studies to find out effective advertising methods it can use to attract more consumers in different markets where it operates (Prahalad, & Ramaswamy, 2013, p. 71).
Consequently, this allows the firm to come up with effective strategies that enable the product to penetrate different global markets easily to increase its long-term revenues. This has helped the firm to choose more effective distribution channels and promotional strategies which have given it more leverage as it competes with other firms in the industry.
In addition, the firm has also improved its relationships with retailers and this has helped it to find out what consumers look out for before purchasing a particular product. Consequently, this has helped the firm to understand specific profiles of consumers who purchase its products in the market.
The firm needs to use technological approaches to build and maintain good relationships with its customers located in different markets. This will help the firm to understand generational changes that are likely to affect how Marlboro is looked at by consumers in the market and the long-term implications of these changes. In addition, generational changes will help the firm to understand how it was perceived in the past and how it can build on that to improve its current image.
Since many customers in Dubai and Abu Dhabi are exposed to modern lifestyles, they are more interested in being associated with a product that is known for its strong appeal. Therefore, Philip Morris needs to use effective strategies to make such customers appreciate the value they are going to obtain by consuming its products (Prahalad, & Ramaswamy, 2013, p. 75).
Consequently, the firm will be in a better position to use information gathered from its external stakeholders to improve its internal operations to safeguard the quality of its products in the market.
The company needs to find out specific government policies that have a direct impact on its operations in various markets where it operates. This will enable it to set short and long-term advertising strategies that conform to legal conditions enforced in countries where its operations are based. More importantly, the firm needs to evaluate other strategies it can use to reach out to customers in markets where promotional activities by cigarette manufacturers are outlawed.
This will help it to maintain a strong relationship with some consumers who do not know where they can purchase its products (Sivulka, 2012, p. 40). In addition, the firm needs to find out specific standards which are enforced in different emirates, to come up with more effective strategies that respond to existing market conditions. This will help it to improve its product development processes to come up with appropriate products for different markets.
Customer Analysis
Consumers are more interested in fulfilling emotional, symbolic, and social needs whenever they consume Marlboro cigarettes. Some of the branding concepts used to market Marlboro appeal to male customers in UAE because they are interested in the masculine perceptions which are associated with its marketing messages. As a result, this allows Philip Morris to develop closer relationships with its customers to make them understand the unique value they are likely to obtain from Marlboro.
Therefore, customers are attracted to the brand because they want to increase their self-esteem to help them relate better with other people in societies where they live. As a result, this has motivated more customers to participate in different promotional activities such as the Marlboro country where lucky winners are allowed to tour the firm’s ranch in Montana. Consequently, this has reinforced positive long-term attitudes towards the product in UAE (Sivulka, 2012, p. 43).
The Sheth and Howard’s model can be used to address specific inputs that influence customers to make different decisions before they choose to purchase the product in the market. Strong packaging and branding designs which are used to market Marlboro encourage consumers to have positive feelings towards the brand and they serve as significative stimulus (Sivulka, 2012, p. 47).
Cowboy characters that are associated with Marlboro have helped to maintain a strong visual appeal and they increase consumers’ confidence towards the brand. Therefore, they are symbolic stimuli which enable customers to internalize important values that are related to Marlboro. The self-awareness that customers have whenever they consume the product makes them associate it with other powerful influences in their lives.
As a result, feelings of adventure, freedom, and inner vitality which encourage customers to purchase the brand influence the manner in which they view social systems around them. Therefore, this helps them to engage with their peers in different social gatherings more effectively.
Some of the variables that influence customers’ purchasing decisions include: purchase intentions, internalization of brand message and the extent to which the problem serves their peculiar needs. More importantly, the ability of consumers to interpret various messages released by Philip Morris regarding Marlboro helps them to understand the value they are likely to get from consuming the product (Sivulka, 2012, p. 47).
This shapes consumers’ understanding making them more prepared to accept improvements that are made on the product to improve their overall usage experiences. Therefore, this approach has influenced the long-term behavior of consumers towards Marlboro in different cities in UAE where the cigarette brand is sold. Consequently, this enables Philip Morris to forecast future patterns of consumer behavior that are likely to have a bearing on the long-term performance of Marlboro in the market.
Segmentation and Targeting
The firm mostly focuses on attributes such as gender, lifestyles, demographics, and spending patterns to guide its segmentation processes in the market. Since the tobacco market is highly homogenous, Philip Morris uses compelling branding concepts to give Marlboro a higher appeal in the market. Other factors like marketing restrictions, health warnings, and negative perceptions make it difficult for new cigarette manufacturers to enter and remain competitive in the industry.
Therefore, the firm relies on focus strategies to increase its growth in the UAE and to penetrate other underserved markets in the Middle East (Sivulka, 2012, p. 51). Consequently, this allows Marlboro to take advantage of its easily recognizable brand to increase the value attached to it by consumers in the market. Since its production processes are highly standardized, the firm constantly comes up with innovations that reinforce the value attached to the Marlboro cigarette brand in different global markets.
The main segments within the market are structured according to gender, lifestyle, social status, age, and demographics. The main segmentation dimensions which are used by Marlboro include product innovations that differentiate it between light and ultra light variants. The ultra-light variant serves customers who are sensitive to the health implications of smoking and it does not contain any tar.
On the other hand, light cigarettes have less tar than normal cigarettes and they target consumers who are not highly sensitive to the negative effects of smoking (Sivulka, 2012, p. 63).
Another dimension that influences the segmentation strategy adopted is cost. However, since many customers are attracted to particular brands, they are not easily dissuaded from purchasing their favorite brands due to a reduction in substitutes’ prices. Lastly, the product also appeals to different gender and lifestyle patterns in different countries where it is sold.
When Marlboro introduced filtered cigarettes in the 1950s, many male consumers felt that they were feminine and they were discouraged from purchasing them. However, it integrated a lifestyle aspect to the brand using powerful advertising that showed men who smoked filtered cigarettes were outgoing, respectable and ambitious.
This enabled the company to appeal to both male and female segments of the market. Later on, Marlboro’s advertising concepts that featured the cowboy as the main character helped to strengthen the product’s masculine appeal making it attractive to male smokers.
The flip-top packet helped to attract smokers of different ages and genders because it gave them a positive smoking experience whenever they used the product (Sivulka, 2012, p. 71). As a result, the product’s branding has been designed to appeal to customers who are conscious about their self-image. This approach helps Marlboro to attract both male and female consumers in the UAE who are ambitious and willing to try out new lifestyles.
The market also used its strong performance in the U.S. to help it to extend its operations into other countries in the world. This enabled the firm to use a geographic and cultural targeting strategy to increase its appeal in foreign markets. The firm took advantage of international customers’ preference towards American cowboy characters in movies to attract both male and female consumers in different parts of the world.
Similarly, the firm uses localized marketing strategies to attract cigarette consumers in the country by making them aware about how it conforms to their lifestyle patterns (Egan & Thomas, 2010, p. 31). Therefore, this has allowed the firm to make Marlboro attractive to consumers who prefer to socialize in closed circles in UAE where they can consume it as they discuss different issues.
Positioning Strategy
The positioning strategy which is used by Marlboro focuses on taking advantage of efficient processes in its value chain to give it the desired competitive edge over other substitute products in the market. Therefore, the product is mainly sold in retail stores, discount retail zones, bars and fuel stations. The product’s positioning strategy seeks to maximize revenues from consumers’ social perceptions towards smoking by making the product easily available in places where they hang out (Egan & Thomas, 2010, p. 36).
As a result, this approach has helped the firm to use its point of sale locations as advertising centers and this has helped it to increase its visibility in an industry with strict advertising policies. More importantly, the firm has strong partnerships with its retailers who inform it of changing consumption patterns that are likely to impact on its performance in the industry. This approach helps the firm to carry out constant improvements in its value chain processes to increase its appeal in the market.
The positioning strategy adopted by the firm is also closely related to consumption patterns which customers have in different markets. This has helped the firm to offer rewards to retailers to encourage them to give favorable displays of its products in various stores where they are sold. Therefore, the firm is able to gain more shelf space in specific retailing zones where its customers prefer to shop.
This approach has helped the firm to increase the demand for Marlboro cigarettes in different retail centers where they are sold (Egan & Thomas, 2010, p. 39). In addition, the strong promotional edge the firm has over its competitors has helped it to attract more retailers to establish viable partnerships. Since strict advertising laws have been enacted in different countries, Philip Morris relies on close relationships it has with distributors and retailers to maintain Marlboro’s good performance.
The perceptual map below will highlight different factors which firms in the tobacco industry must be aware about to strengthen their long-term business strategies. This will be used to describe the overall position Marlboro has in the market and how it has helped the firm to maintain a strong lead over other cigarette brands (Egan & Thomas, 2010, p. 41).
More importantly, the perceptual map will be used to describe factors that have helped Marlboro to maintain high levels of consumer loyalty in the market to give it a larger share of the market.
Strong Brands / Weak Brands
Ideal – Mass appeal to diverse groups, strong customer loyalty, higher levels of product recognition
Price Sensitive – Customers mostly attracted to low prices, low brand loyalty, little or no product differentiation
Moderate – Appeals to only specific customer segments, loyalty likely to shift due to various market changes
Low competitive power- short product cycle, low revenues, customers easily attracted to substitutes.
Product Strategy
The cigarette industry is in a mature life cycle and Marlboro needs to use its leverage as the market leader to attract new consumers to help it reinforce its position in the global market. High levels of awareness in the market and health strategies used by the government to discourage young people from taking up the habit have affected the performance of many tobacco companies. The product targets consumers who are willing to pay premium prices to obtain higher levels of satisfaction after consuming it.
Philip Morris uses a standardized approach by maintaining specific attributes the product is known for in the market to maintain its performance. In addition, some product features are designed to suit customers’ expectations in specific markets where Marlboro is sold to increase consumer appeal (Egan & Thomas, 2010, p. 46). For instance, the firm has developed flavored products such as the ice mint and menthol variations to appeal more to Asian consumers.
The company has also been forced to use alternative channels of distribution to overcome legal restrictions that are being enforced by various governments all over the world on cigarette consumption. As a result, this strategy has helped it to use other forms of marketing to appeal to its customers. In addition, the innovative packaging design and other accessories that are sold together with the product have helped the firm to improve perceptions which customers have towards its products (Egan & Thomas, 2010, p. 50).
For instance, the flip-top packet, attractive filter design, and different product variations have improved customers’ overall consumption experiences. Therefore, this has made more customers to be satisfied with the quality of products sold to them in different retail locations.
The firm’s product development requirements depend mainly on the needs of its clients in different markets. Philip Morris is also required to conform to FDA tobacco legislation to ensure all manufactured products satisfy health and safety precautions before they are sold to consumers. All internal quality procedures are strongly coordinated to ensure they conform to quality checks which are enforced by different market regulators in various countries where the firm operates.
The firm is also driven by technological trends in its product improvement processes to come up with innovative concepts that attract new consumers in different locations. The firm’s research and development teams are working on electronic cigarettes to determine its long-term viability.
This product will target customers who are put off by the smoke emitted from conventional cigarette products (Egan & Thomas, 2010, p. 53). As a result, Philip Morris seeks to create new demand for e-cigarettes in the market to help it maintain its competitive advantage.
The development of electronic product has been touted by the firm as a way of overcoming some legal barriers which it faces in the global tobacco industry. Electronic cigarettes allow users to inhale vapor which comes from liquid nicotine heated by battery-powered cigarette sticks. This shows that the firm has decided to take the health and safety of its manufacturing processes seriously to ensure it conforms to standards which have been established by tobacco industry regulators (Sheth, 2011, p. 103).
However, even though technological advances are likely to create a new shift in the manner in which cigarettes are smoked, the firm intends to identify new growth areas that can be exploited to increase its performance in the market. Therefore, the product development and innovation strategies that have been implemented by the firm are intended to help it overcome various challenges that have restricted its growth in the industry.
Pricing Strategy
Customers in developed countries have long-term attachments to specific brands and as a result, they are not sensitive to prices adopted by various firms that seek to gain new ground over their rivals in the market. However, some generic brands which have been introduced by other firms in the industry use price leadership strategies to appeal to consumers in low income markets.
These brands threatened Marlboro’s market share forcing the firm to adopt a competitive pricing approach to maintain its competitiveness in the industry, in the early 1990’s.
Since then, the firm uses a flexible pricing structure for its products in both local and foreign markets to sustain long-term relationships it has built with its customers over the years (Sheth, 2011, p. 106). Marlboro cigarettes have a high demand in different market segments and this advantage enables the firm to set prices that enable the product to sustain its long-term growth projections.
The price-setting strategy is mainly influenced by taxation, consumers’ income, competitive environment, and the positioning strategy that is used to sell the product in the market. Marlboro has mainly used these factors to set prices that address the needs of its customers in different market environments.
Competition from other market players in the industry has made the firm to use its economies of scale to come up with market prices which maintain Marlboro’s value in the market. As a result, this strategy has helped the company to maintain high levels of satisfaction which its customers get after consuming its cigarettes (Sheth, 2011, p. 109). Consequently, the firm has managed to increase the value perceptions which customers have towards the product in the market.
Philip Morris uses a value based pricing strategy to maintain the overall brand qualities of Marlboro in various markets where it is sold. This enables the company to establish long term relationships with new customers that are interested in sampling the product in different markets. Therefore, the price structure is forward looking because it helps to maintain customers’ attention to the strengths of Marlboro and this encourages them to lose interest in other similar products that are sold in the market.
In addition, flexible pricing strategies used by the firm help it to deal with uncertain trends in the market which are likely to reduce sales volumes (Sheth, 2011, p. 112). Therefore, a reduction in prices helps Marlboro to attract demand from new customers who are willing to switch from other brands to try out the unique taste of the cigarette.
Since Marlboro is an easily recognizable global brand, it relies on flexible pricing to attract consumers in different market segments across the world. This approach helps the firm to adopt localized marketing and distribution solutions that conform to specific conditions which exist in the industry.
As a result, this approach has enabled the firm to reduce the pricing gap which exists between its products and other generic cigarette brands in the market (Sheth, 2011, p. 114). This has helped it to maintain the long-term positive performance of the brand to increase its growth in various target markets. Consequently, this allows the firm to come up with additional strategies to increase its market dominance.
Distribution Strategy
Phillip Morris relies on bars, supermarkets, small and medium retail stores, and fuel stations to sell Marlboro products to consumers in various markets. The firm has agreements with all other smaller firms to display its products openly as a means of making them more visible in specific points of sale locations. In some instances, the firm relies on specific distribution channels which are able to access high and middle-income consumers in high-end establishments.
Some establishments offer specific smoking zones for consumers who are interested in smoking in a more relaxed environment where they can interact freely with their peers (Sheth, 2011, p. 119). As a result, this allows bars and other business firms that are part of the firm’s distribution channels to offer additional services which increase customers’ satisfaction. This approach has allowed Marlboro to maintain the value associated with its products in the industry.
Since the main distribution channels are those that are closely linked to customers, the firm focuses on ways of increasing its sales volumes in the market. Retailers are encouraged to offer incentives to customers to make them purchase more packets of Marlboro. The firm also has a strong liaison team that monitors the existing demand in the market and makes recommendations on specific amounts of products to be supplied to different retailers.
Therefore, this allows it to anticipate different changes in consumer demand that are likely to affect the volumes of products sold within specific periods of time (Sheth, 2011, p. 121). Moreover, this approach allows the firm to develop effective communication strategies that resonate with the needs of customers in specific target markets where its products are sold.
Since it has manufacturing operations in different countries in the world, Marlboro has developed closer links with other firms that have attained strong performance in specific market segments. This has enabled the firm to integrate important marketing communications with its supply chain processes to increase efficiency in its operations (Stone & Desmond, 2007, p. 53).
As a result, all important sections of the value chain perform their responsibilities as single entities, thereby reducing the amount of time it takes before products are sold to target customers. This approach allows the firm to be in control of its operations to understand how its value chain processes impact on the performance of its products in the market.
Promotional Strategy
The main objectives that influence Marlboro’s promotional strategies include: customer loyalty, sales targets, competition, prices, overcoming legal barriers that restrict tobacco advertising and creating new demand for the product. Philip Morris has used different promotional tactics to ensure Marlboro sustains its positive performance in different markets (Stone & Desmond, 2007, p. 55). As a result, this has enabled the product to be promoted in a manner that encourages customers to make positive purchasing decisions.
More importantly, the firm uses specific strategies that make customers aware about the values that shape the product development process to increase their attachments to it. Therefore, this strategy enables the firm to take note of its competitors’ activities in the market and how they affect its long-term growth plans. Consequently, the firm uses alternative promotional channels to engage with its customers to make them more interested in consuming its products.
The product uses different types of messages and creative strategies to make an impact on its customers in different locations. One of its memorable creative strategies is the Marlboro Country which was started in the 1960’s. This strategy attracts lucky consumers to go to the company’s ranch based in Montana where they get to experience various attractions which are closely associated with the firm’s brand. For a long time, the firm used cowboys in their real life settings to display some of its powerful attributes to consumers.
This enabled it to develop close relationships with consumers in different markets to make them aware about its core values. More importantly, this has allowed customers to want to be associated with the firm’s strong heritage that reflects the lifestyles of middle-class Americans (Stone & Desmond, 2007, p. 58). Promotional messages for the product make consumers aware about self-confidence, freedom, a sense of adventure, and the attractive social status associated with consuming the product.
The legal environment in many countries places a lot of restrictions on cigarette advertising due to health problems associated with smoking. Therefore, the firm mainly uses personalized selling and point-of-sale promotions to market its products to consumers. The product also benefits from dominant display on shelves of various retail outlets to make it more visible to customers who are interested in consuming it.
As a result, this allows customers to make quick purchasing decisions after recognizing the product being displayed in a particular retail zone (Stone & Desmond, 2007, p. 61). Customers are offered additional incentives to make them see the value they are likely to obtain from consuming the brand compared to other competing brands in the market. As a result, coupons, temporary reductions and additional products are offered to encourage consumers to have more positive attitudes towards Marlboro as a product.
The firm is also involved in sponsorship campaigns but on a smaller scale compared to two decades ago. In the past, the firm was involved in the sponsorship of sports events such as motor racing, Ferrari Formula 1 Team and other entertainment events in different parts of the world. In addition, the firm is also famous for giving prizes to customers who participate in various competitions to encourage them to be more loyal towards its brands (Stone & Desmond, 2007, p. 65).
One of the most popular methods is annual sweepstakes that are done to increase the sales of Marlboro in different markets where lucky winners get to win free holiday tickets, land, and other monetary awards. This approach has helped the firm to increase the performance of the Marlboro brand in different markets. All these strategies are used to pull customers to be more loyal to the brand to increase its sales in different markets where it is sold.
Customer Service and Relationship Activities
Philip Morris uses strong branding concepts to make Marlboro maintain its competitive edge in the industry. This approach allows the firm to use integrated marketing communications strategies to stay in touch with its consumers in different locations across the world. The firm has established different variants of Marlboro to conform to specific cultural influences and lifestyles in different countries.
The company has a reliable sales team that works closely with retailers who are given rewards to encourage them to offer high-quality customer service (Stone & Desmond, 2007, p. 69). More importantly, retailers are encouraged to relay to the company any information that customers have regarding the quality of products sold to them to respond to key issues that arise. This approach allows the firm to address any concerns that customers have regarding its products quickly.
The main relationship activities which the firm organizes are visits to its ranch where lucky customers get to bond and share experiences they have regarding the product. Philip Morris organizes annual sweepstakes that allow lucky customers to get vacations, financial awards and a visit to Montana to help them find out more about Marlboro’s history and its corporate values. In addition, the firm also endears itself to customers and other stakeholders by sponsoring sports and other events which attract millions of people (Stone & Desmond, 2007, p. 72).
This helps it to improve its own reputation in public because it is able to show that it appreciates different events that have a lot of meaning to many people in different societies. Moreover, the firm also warns its customers about the dangers of smoking to allow them to make their own choices whenever they purchase and consume its products. Therefore, this allows the firm to participate in awareness programs that sensitize customers on the health risks they expose themselves to as a result of smoking.
All these customer service and relationship activities have been instrumental in the firm’s growth in the industry. They have helped it to sustain the value of its brand in the market thereby increasing its revenues.
More importantly, the firm has integrated modern lifestyles to become part of its main brand message allowing customers to have emotional connections with Marlboro in different locations where it is sold. In essence, this has allowed the firm to rely on its strong American roots and values to come up with a brand that conforms to middle-class lifestyles of its target customers across the globe.
Conclusion
Philip Morris needs to find ways of making the product more appealing to new customer segments. Since the global tobacco market’s life cycle has reached the maturity stage, the firm needs to look at other ways to develop the product to create new demand in different locations where it is sold. In addition, the firm also needs to use the strong brand loyalty Marlboro commands in the market to attract new customers who are interested in electronic cigarettes.
The electronic cigarettes segment has the potential to offer the firm a lot of returns in future because many consumers are willing to try out alternative tobacco products. This will help the firm to increase the amount of revenues it earns in the industry in the long run.
One of the most critical challenges facing the tobacco industry is the restrictive legal environment. This has created a lot of problems for various firms that are interested in establishing strong relationships with their customers. As a result, the firm needs to invest in strong risk management procedures to help it overcome different types of risks it is likely to face in its operations.
More importantly, the firm needs to find out specific avenues through which it can be able to establish stronger collaborations with its stakeholders to help it attain good results in the long run. Consequently, this will make it easy for the firm to identify new opportunities it can exploit to increase the value of its operations in the industry.
Recommendations
Improvements in research and development programs will enable the firm to come up with innovative products which can allow it to increase its sales revenues in the long term.
The firm needs to find out other distribution and marketing channels it can use to reach other customers who rarely visit different retail outlets.
Philip Morris needs to come up with ways of marketing the electronic cigarette aggressively to deal with problems that are likely to arise due to maturity of the market’s life cycle.
The firm also needs to use online distribution channels to cut on distribution to reach customers who are interested in consuming its products but cannot access various retail stores where its products are sold.
It also needs to find new ways of engaging with female consumers by introducing product variations that have sophisticated designs, tastes and attributes.
The use of technological processes will help the firm to streamline its manufacturing, product development and supply chain processes to improve its long term performance in the industry.
Lastly, Marlboro needs to avoid using price leadership strategies in various locations where it operates because this may have a negative impact on the quality of its brand in the long run.
References
Egan, C., & Thomas, M. (2010). CIM handbook of strategic marketing. New York, NY: Taylor and Francis.
Prahalad, C. K., & Ramaswamy, V. (2013).The future of competition: Co-creating unique value with customers. Boston, MA: Harvard Business Press.
Sheth, J. N. (2011). Winning back your market. New York, NY: Marketing Classics Press.
Sivulka, J. (2012). Soap, sex, and cigarettes: A cultural history of American advertising. Mason, OH: Cengage Learning.
Stone, M. A., & Desmond, J. (2007). Fundamentals of marketing. New York, NY: Routledge.
Introduction to the service and environmental scan of the target country
Introduction
The modern age is characterized by a great rivalry. That is why it is vital for every company, which is going to start a new business or open its new department in a new country, aiming to introduce a new product or service, to analyze every aspect of this process. It is important to take into account the peculiarities of the culture of people who comprise the targeted audience of a new service. Moreover, the activity of a company should be organized in accordance with laws and ethical business norms which exist in the country where a new department is going to be opened. With this in mind, the necessity of a good analysis of peculiarities of the market is obvious.
Resting on this fact, deep and precise analysis of the main conditions of the market in the United Arab Emirates is made, and some main suggestions connected with the promotion of a new service are outlined.
Overview of the country
Economy
From the very beginning of the analysis, it should be said that the UAE seems to be one of the best possible choices for the promotion of a new service, especially connected with digital devices. There are several reasons for this statement. The UAE takes seventh place among the world’s richest states (Richest Countries in the World n.d.). It means that people who live there can afford almost any purchase, and the only thing is to create a good marketing strategy. Moreover, the majority of citizens of the UAE have a high yearly income, that is why they have to organize the distribution of their funds in order to obtain benefits. With this in mind, a service which we are going to introduce to this market will meet a great demand.
Culture
First of all, it should be said that the UAE is an Arab state. It means that it has an absolutely different culture, which might seem strange and confusing for representatives of the Western world. Obviously, it can influence sales and demand for a service or product greatly. If it does not take into account traditional gender roles peculiar for Arabic states, a product is doomed to failure. Moreover, it can evoke protests, which can lead to the collapse of a company. That is why a new good should first of all be aimed at men, as they are usually the main buyers in the Arab world. Moreover, a new service should take into account the religiosity of people in the UAE. It is vital not to hurt the religious feeling of a targeted audience.
Policy
Moreover, there is one more factor which should be minded while planning a new marketing strategy. Peculiarities of the legislative system of a country are also of great importance. A state can regulate the market in order to promote the development of its own manufacturers and business. Under these conditions, some additional taxes can be provided. That is why the UAE can be called an ideal place for the development of a new business project. The UAE’s economy is steadily expanding, and new investments are appreciated (Doing business in The United Arab Emirates n.d.). There are seven Emirates with a developed infrastructure that are interested in foreign investments and companies. Abu Dhabi is usually considered to be the best place for the business as it has a well-developed infrastructure and provides a great number of opportunities.
Market audit, preliminary marketing strategy, and plan for the service
Market audit
The first important thing which should be taken into account is the local market. It is obvious that the more companies suggest the same services, the lower the chances a new one has. That is why it is vital to investigate the demand for a good and the number of existing providers of the service. Resting on this fact, it is possible to say that the UAE’s market is not overfilled with the suggestions of the same service as we are going to introduce (Why Start a Business in the UAE? n.d.). That is why it seems to be the best place for the further development of a service.
Description of a service
The project we are going to introduce to the new market is called Square Register. It is “the perfect point-of-sale system, available in the App Store and Google Play. It’s designed to run on a smartphone or tablet, on your counter or on the go” (Square Register n.d., para. 1). Moreover, this software provides different ways of managing all the finances of the owner. It can be a very convenient application for people who have to work with money and their distribution. This service also takes care of digital receipts, inventory, and sales reports and provides valuable analytics and feedback (Square Register n.d.). With this in mind, it is possible to say that it can be very convenient for business owners.
Main steps
There are several possible steps to make this product popular. First of all, it is obvious that a good advertising company is absolutely necessary. Taking into account a great number of different digital devices which citizen of the UAE have, the Internet and applications for mobile devices seem to be the best choice for it. It is possible to add already existing advertising movies to some popular websites. Moreover, the accent should be made on the onliness of this service and its innovational character for customers to feel as proud owners of something unique. Furthermore, taking into account peculiarities of the culture of the UAE, it is possible to say that the idea of the unique character of service will be rather beneficial.
Another important step is to guarantee its availability and ease of use. It should be understandable enough for people to be able to use it under different conditions. The next step in the plan should be a bright presentation of the software in some trading center with a perfect demonstration of its possibilities and benefits. Moreover, some limited versions can be distributed free of charge for people to understand the advantages of their usage. Having used it for several days, potential buyers will have to buy the full version, which will provide even more possibilities for managing their business and saving time and efforts.
Reference List
‘Doing business in The United Arab Emirates’ n.d., Out-Law. 2015. Web.