Category: Economics

Introduction

It is the prerogative of the United States government to ensure that financial activities benefit the country from an economic perspective. The government of the United States has for a long time used the services of the Federal Reserve in managing the countrys financial affairs. However, the Federal Reserve operates under the mandate of the Department of the Treasury (Lambert and Kristin 567). As indicated earlier, other critical agencies such as the Securities and Exchange Commission (SEC), the Federal deposit Insurance Corporation (FDIC), Consumer Financial Protection Bureau (CFPB) and National Credit Union Administration (NCUA) have different functions associated with the countrys financial situation.

There are other institutions mandated with regulation, supervision and oversight over financial activities. In this context, political factions such as the House of Representatives Committee on Financial Services and United States Senate Committee on Finance assume the regulation, supervision and oversight functions. The International Monetary Fund (IMF) and the World Bank plays a crucial role that affects the countrys financial stability. Therefore, this research paper conducts an in-depth analysis of the United States financial government agencies and institutions by focusing on their mission, functions and associated congressional oversight.

Federal Reserve

The mission of the Federal Reserve is similar to that of the central bank in the United States. In this context, the Federal Reserve is mandated with establishing a safe and stable financial system that addresses the countrys economic needs (Federal Reserve par. 1).

Functions

The Federal Reserve is obligated with developing a monetary system that improves the countrys employment rate. However, this is achieved through effective monetary and credit regulations that stabilize national prices and interest rates (Federal Reserve par. 1). The Federal Reserve assumes supervisory and regulatory functions especially over banking institutions (The Federal Reserve System. Purposes & Functions 59). From this perspective, lending financial institutions are monitored to ensure consumers rights are not violated from high interest rates. The Federal Reserve conducts a financial risk assessment to ascertain whether the countrys economy is facing future challenges. The Federal Reserve is considered the last resort by depository institutions that require financial services. In addition, the institution lends the government with monetary services.

Congressional oversight

The Federal Reserve incorporates Board of Governors appointed by the president and confirmed by the senate. The Board of Governors has a mandate to report to the senate on matters regarding monetary policy. In fact, the board submits a report to the senate on conduct of the banking organizations, as well as administration of federal laws pertaining to credit transactions. Moreover, the Board of Governors submits an annual report to the speaker of the House of Representatives. The Senate and the House of Representatives are mandated with the role of discussing laws that guide the Federal Reserve. From this perspective, the congress passes laws aimed at improving and reforming the Federal Reserve System. In addition, the Congress is obligated to revise the Federal Reserve Act and any other law affecting national finance policies.

Department of Treasury

The Department of Treasury mission is to ensure the economy remains strong and stable. In addition, the treasury ensures that the economy supports employment and job opportunities (Department of the Treasury par. 1). In addition, the Department of Treasury mission is to promote economic growth domestically as a strategy of improving national security from financial threats. Moreover, the department is responsible for the protection of the United States financial resources invested locally and abroad.

Functions

The Department of Treasury main role is to manage federal finances. Therefore, the role of collecting taxes, duties and tariffs, and bills to be paid to the United States government falls under the responsibility of the Department of Treasury. The issuance of currency and coinage, as well as control, is the responsibility of the department through the Federal Reserve. As a matter of managing federal finances, the Department of Treasury supervises government accounts, national banks and credit institutions (Department of the Treasury par 2).

The sole mandate of advising the government on matters of both domestic and international finance is attributed to the Department of Treasury. From this perspective, the department advises the government about monetary, trade and tax policies. Moreover, the department ensures other agencies and institutions implement and enforce federal finance and tax regulations. The department has the powers to investigate and prosecute tax violators. Moreover, the department prevents counterfeits and forgeries of products and services.

Congressional oversight

The Depart of Treasury is an establishment of the Senate and House of Representatives. Therefore, the congress forms the department through an Act that seeks to improve federal revenue management. In this regard, the congress assumes the supervision and regulation role. Personnel involved in operation the Department of Treasury are vetted by the congress upon their appointment by the president. The congress ensures that the departments personnel consist of the secretary, comptroller, auditor, treasurer, registrar and assistant secretary. The mentioned officers conduct is guided by predetermined responsibilities and code of conduct enshrined in the Act.

The congress supervision and control over the Department of Treasury is empowered through Congressional Oversight Panel (COP). The COP mandate is to evaluate data submitted by the Department of Treasury, as well as the performance of the department in handling matters related to finance and national economy. The COP operates in conjunction with the Office of Stabilization (OFS), especially in implementing important initiatives like the Troubled Asset Relief Program (TARP).

Securities and Exchange Commission (SEC)

The mission of the SEC is to ensure investors are protected and that there are orderly and effective markets that improve capital formation (Securities and Exchange Commission par 1).

Functions

SEC is mandated with the responsibility of enforcing laws of federal securities. From this perspective, SEC interprets laws and regulations attributed with the existence of federal securities. Moreover, the agency develops and issues new laws of federal securities, as well as make revisions to the same. It is the function of SEC to investigate and supervise security firms, brokers and associated agencies. Investment advisors and rating agencies are under the inspection radar of SEC. The agency ensures that public and private accounting standards are followed by private regulatory organizations, accountants and auditors. SEC is in charge of the United States securities regulation at federal, state and international levels.

Congressional oversight

The Congress advises the president to choose five commissioners as SEC top officials. The commissioners submit an annual report to the House of Representatives with details on various activities. Apparently, the commissioners are members of Public Company Accounting Oversight Board (PCAOB). PCAOB is mandated with conducting audits, filing reports and submitting the same to the Congress. The Congress expects PCAOB reports to be accurate and informative on issues regarding federal finance, investor protection and economy situations. The Congresss oversight is guided by the Securities Exchange Act of 1934 and Securities Act of 1933.

Federal Deposit Insurance Corporation

The mission of Federal Deposit Insurance Corporation (FDIC) is to instill stability and public confidence in the countrys monetary system (Federal Deposit Insurance Corporation par. 1).

Functions

Stability and public confidence are established through insuring deposits, managing receiverships and supervising financial institutions. FDIC ensures that customers are protected once a bank is under receivership (Teslik 5). In this context, the agency insures customers savings in their respective banks. FDIC is a regulatory authority in ensuring that banks have at least 8% of assets under reserve management. Failure to comply with the above regulation subject banks to FDIC regulations, receivership, and change of management or punitive measures. Moreover, lack of compliance with FDIC results to hefty penalties and change of banking practices.

Congressional oversight

The Congress is attributed with establishment of FDIC. The Congress provides the agency with the necessary authority to monitor bank practices especially in deposit insurance funds. In addition, the Congress provides FDIC with adequate funds to manage programs under the Federal Savings and Loan Insurance Corporation (FSLIC). Moreover, the Senate vets members of the Board of Directors managing FDIC upon their appointment by the president. The Congress directs the General Accounting Office to conduct regular audits on FDICs ledgers for accountability purposes.

Consumer Financial Protection Bureau

The mission of Consumer Financial Protection Bureau (CFPB) is to ensure that American consumers are protected from consumer financial products and services.

Functions

CFPB ensures that consumers are provided with the right information regarding consumer products and services (Consumer Financial Protection Bureau par. 2). It is the duty of CFPB to ensure that consumers are protected from abusive financial practices. Therefore, the agency supervises banks, credit institutions and companies in regard to conforming to consumer financial laws (Morris 12). The agency encourages consumers to submit complaints against financial institutions that promote abusive practices. Nevertheless, it is the mandate of CFPB to research on consumer behaviors and current financial market trends and associated risks.

From this perspective, the agency establishes rules on consumer financial protection and enforces the same. According to CFPB consumer financial protection laws, emphasis is given to deposit, mortgages, debt collection, loans and use of credit cards. Nonbank financial institutions and credit unions with assets worth over $10 billion are subjected to CFPB scrutiny (Government Accountability Office 12).

Congressional oversight

Since CFPB acts on behalf of the Federal Reserve, it is not necessarily monitored and controlled by the Congress. The only link that exists between the Congress and CFPB is the Office of Inspector General (OIG). However, the Senate vets the OIG after being appointed by the president. The OIG submits audit reports to the Congress, but not on behalf of the CFPB.

National Credit Union Administration (NCUA)

The mission of the NCUA is to ensure eligible consumers access services of the credit union.

Functions

The NCUA investigates the establishment of federal credit unions using the relevant law and regulations. Upon approval of the established federal credit union, NCUA supervises operations of the new institution (National Credit Union Administration par 3). In addition, insuring of depositor accounts in credit unions is an obligation of the NCUA. In this context, NCUA administratively spearheads operations of the National Credit Union Share Insurance Fund. NCUA provides charters to credit unions, examines, supervises and insures the same at an affordable fee.

Congressional oversight

Apparently, NCUA is a creation of the congress, and therefore, the Financial Stability Oversight Council ensures that National Credit Union Authority Act is observed to the letter. In this regard, the council is mandated to report annually to the Congress with recommendations on issues related with credit unions. The Congresss oversight in NCUA matters includes the agency budgetary allocations and policy making.

The United States Senate Committee on Finance

The Senate Finance Committee mission is to investigate, supervise and monitor matters related to taxation and revenue (United States Senate Committee on Finance par. 1).

Functions

The Senate Finance Committees main agenda is stabilization and advancement of the overall federal economy (United States Senate Committee on Finance par. 1). The committee is formed from members of the senate with a role to evaluate the performance of the various governmental agencies and institutions against the existing laws. The committee ensures that all agencies and institutions engage in practices that promote the welfare of the country and its citizens from an economic perspective. From this perspective, the committee has jurisdiction over the Office of the President, department of agriculture, commerce, homeland security, labor, treasury, health and human services. Other areas that the committee investigate and reviews performance include the Railroad Retirement Board, the United States International Trade Commission, Social Security Administration and the U.S. Tax Court.

Congressional oversight

Since the committee is formed by the senate members, its investigative reports and recommendations are submitted to the speaker of the senator before it is debated upon.

House of Representatives Committee on Financial Services

The mission of the committee is to provide an oversight role in terms of regulation, policy making and evaluating the performance of agencies and institutions in the financial service industry.

Functions

The committee investigates issues of banking from financial institutions especially on deposit insurance and federal policies. The committee proposes recommendations for debate by the House of Representatives where bills and laws are passed regarding finance, insurance and international monetary policies. Through the committee, issues of securities are investigated, reviewed and passed as law (House of Representatives Committee on Financial Services par. 1).

Congressional oversight

The committee submits findings to the House of Representatives and subsequently to the Senate for review and approval.

International Monetary Fund (IMF)

The IMFs mission is to stabilize international monetary system

Functions

The organization monitors a countrys financial policies and evaluates the same against the economic development. The organizational offers technical and financial assistance to countries with viable development projects (International Monetary Fund par. 1). The United States benefits from IMFs financial consultations and lending services.

Congressional overview

The House Financial Services Subcommittee evaluates the role of IMF in the United States and makes recommendations to the Congress. The committee evaluates IMF performance and areas of improvement in regard to the organizations domestic and international goals, and achievements.

World Bank

The mission of the World Bank is to end poverty and promote sharing of wealth.

Functions

The World Bank engages in partnership with governments, agencies and institutions in providing financial and technical assistance (World Bank par. 1). The institutions main target is the developing countries, where it offers low-interest loan and grants. The institution is attributed with promoting foreign investments and industrial developments in poor countries. The institution instills economic reforms in developing countries by offering technical advisory on matters of economy and financial management.

Congressional oversight

The United States Senate Committee on Finance investigates IMF projects in the country, as well as in other countries. The committee proposes to the IMF on projects requiring urgent attention. The committee ensures that IMF attends to the United States interest as a major member of the organization. The committee proposes critical policies for the IMF to consider when funding developing countries.

Works Cited

Consumer Financial Protection Bureau 2014. Web.

Department of the Treasury 2011. Web.

Federal Deposit Insurance Corporation (FDIC) 2009. Web.

Federal Reserve 2009. Web.

Government Accountability Office. Financial Regulatory Reform. Financial losses and protection impacts of the Dodd-Frank Act. GAO-13-180 Congressional Report. Washington: United States Government Accountability Office. Print.

House of Representatives Committee on Financial Services. n.d. Web.

International Monetary Fund. n.d. Web.

Lambert, J. Michael and Kristin D. Stanton. Opportunities and Challenges of the US Dollar as an Increasing Global Currency: A Federal Reserve Perspective. Fed. Res. Bull. 87 (2001): 567. Print.

Morris, S. Charles. What should banks be allowed to do?. Federal Reserve Bank Of Kansas City Economic Review, Fourth Quarter (2011). Print.

National Credit Union Administration. n.d. Web.

Securities and Exchange Commission. n.d. Web.

Teslik, L. Hudson. The U.S. financial regulatory system. Council on Foreign Relations. 2008: 1-6. Print.

The Federal Reserve System. Purposes & Functions 2005. Web.

United States Senate Committee on Finance. n.d. Web.

World Bank 2014. Web.

Introduction

Throughout history, the world economy has been significantly influenced by financial institutions and rules in the international monetary system, in ensuring financial stability. In particular, these institutions have played major roles, during financial crises, witnessed in recent years.

Even though there are numerous financial institutions, it has been argued that the International Monetary Fund is one of the most influential organs, with immense impact on the world economy (Peet 2009, p. 56). This can be proved by the manner in which it responds during critical financial moments, like during the Global Financial Crisis and the current Euro zone stalemate.

Since its establishment in 1944, at a United Nations conference held in Bretton Woods, IMF has initiated a wide-range of reforms in the global financial market. Importantly, only forty-four governments were represented as they agreed to develop a framework, aimed at enhancing economic cooperation among members.

This move was mainly triggered by devaluation errors, which had resulted into the Great Depression that was witnessed in 1930s (Peet 2009, p. 71). In addition, IMF stepped-up organized exchange arrangement, which was essential in promoting stability among its members. This further sought to eliminate competitive exchange depression, which had dominated the world at the beginning of the 20^th century.

Moreover, IMF wanted to eliminate restrictions within the international market, which would hamper expansion of trade around the world. To achieve this, members agreed on the establishment of a multilateral payment structure that streamlined transactions among member states.

It is worth noting that these reforms aimed at stabilizing the international monetary system, which remains crucial in shaping the world economy. These initiatives have also been applauded for promoting economic growth, reduction of poverty and improvement of peoples living standards around the world (Peet 2009, p. 67). Based on ever-changing financial challenges, IMF has considered reviewing its mandate in responding to global financial crises.

This essay focuses on how the role of the International Monetary Fund has changed since its establishment in mid 1940s. More importantly, the analysis will explore some of the factors, which have contributed to the restructuring of the institution, on the basis of the world financial issues.

Based on this, the paper will also cover the bodys response to recent economic crises, which have had significant implications. Lastly, the essay will discuss the future of IMF, in terms of its functions as it enhances the stability of the international monetary system.

How the role of the IMF has changed since 1945

In understanding the role of the International Monetary Fund since its establishment, a lot of attention has always been put on how its role has continued to evolve. In fact, some people argue that what IMF does today, differs completely from what it used to do immediately after its formation. How has this evolution occurred?

Are there factors, which have contributed to the change of the bodys original roles? These are some of the questions addressed in this segment of the analysis. For better understanding, a chronological performance of the institution will be reviewed, in order to create a link between the past and the current status, of one of the most influential financial organs in the world today.

IMF after Bretton Woods

According to the history of the International Monetary Fund, it is believed that Bretton Woods agreement, which was signed in the 1945, was abandoned in 1970s. This period was primarily characterized by floating exchange rates, which led to a sharp rise in the exchange rate volatility, leading to a disrupted global financial system (Underhill et al. 2010).

Additionally, the institution appeared to have survived its significance and was unable to contain the bouts of financial volatility which surged frequently. Volatility was highly unpleasant to the market even though it was not easy to realize stable rates.

In addition, there was a high likelihood of reduced pressure due to the high level of uncertainties, and looming inflation that was to escalate as a result of intense devaluations. In this regard, most of the member states were not prepared to cope with uncontrolled floating rates. Nevertheless, developed countries played a major role in coordinating exchange rate policies, even though it was done without involving the IMF and undeveloped countries.

Furthermore, this period saw the International Monetary Fund shift its attention from member states to developing countries. For instance, it terminated the financing of the payment imbalances of developed countries, as its financial support gradually shifted to developing countries (Underhill et al. 2010). To be more specific, the last programs to be financed by the IMF in developed countries were carried out in the United Kingdom and Italy in 1977. This was mainly after the general move by countries to float exchange rates.

Unfortunately, the Funds shift to support developing countries did not have any impact on its overall view towards the causes and solutions for balance of payment crises, which had dominated the international monetary system. Even after the great crisis, which was witnessed in 1982, and left Mexico, Brazil and other developing countries Bankrupt, the IMF did not initiate any reforms, which would have helped the affected economies to recover easily (Kirshner 1995, p. 34).

The problem persisted until mid 1980s, when the Fund merged efforts with indebted countries to adopt structural reforms. Importantly, there is a new image that emerges by focusing on the adjustment programs, which were negotiated by the Fund in 1990s. In fact, the Funds help was mainly based on the structural reforms as opposed to the immediate measures of fiscal restraint.

This was clearly evident in 1997, when the IMF was authorized to take care of East Asian countries; fiscal restraint was temporarily terminated during the implementation of structural reforms (Eichengreen 2008, p. 134). This was the determining condition for the IMF to continue supporting the care-program. The following segment of this analysis discusses the role of the International Monetary Fund in the 90s.

The IMF in the 1990s

Unlike the previous period, 1990s was characterized by stable exchange rates among most member states. Despite the fact that floating exchange rates played a major role in defining the relationship between powerful currencies in the world, most countries remained obedient to fixed rates as they struggled to stabilize their exchange rates (Eichengreen 2008, p. 134).

This group comprised of several developing countries, which targeted to use stable exchange rates at the moment to tame inflation or eliminate trade uncertainties that were common for export-oriented economies. This environment of fixed and semi-fixed exchange rates favored the thriving of the International Monetary Fund.

By this time, it was clear that the functions of the IMF had tremendously changed, including its original mission, which had served as a major driving force in early years of its establishment (Eichengreen 2008, p. 172). There was uneven flow of capital in countries, as private capital flows became more dominant compared to public and multilateral flows. Additionally, a conservative anti-government ideology found its way in most Western nations, resulting into massive deregulation of private transactions and numerous privatization initiatives.

Consequently, the views of the IMF with regard to capital controls were treated with a reversal shock. Moreover, the Fund got concerned with not only the efficiency of capital controls, but also their desirability. On the other hand, it paid more attention to the efficacy of domestic financial sectors as it dealt with high volume of resources (Eichengreen 2008, p. 210).

Similarly, the Fund embarked on championing the cause of financial freedom, in order to allow free circulation of capital around the world by eliminating controls and restrictions, which were in place. Additionally, the IMF got interested in improving the financial sector in most developing countries, by allowing them to have access to foreign banks. Furthermore, the Fund went on to interfere with domestic financial policies of its members, through direct support of changes in domestic policies (Dodge & Murray 2006).

Lessons learned

From the above analysis, which featured the performance of the International Monetary Fund after its original mission was abandoned in 1970s, it is evident that the period was a true testing moment for the famous financial institution. Equally, the players involved found it to be the most challenging time in the history of the Fund (DArista 2009, p. 633). The crises, which were witnessed, served as reminders of how the world had significantly changed, with regard to the international financial system. From these experiences, the world appreciated the need of establishing a workable macroeconomic framework, with the potential of promoting economic growth and sustainability.

Another lesson borrowed from the experiences during this period is that every country is supposed to nurture an exchange rate scheme, which is more flexible to respond to financial shocks within the global market. Importantly, fixed exchange rates expose a country to several challenges due to high dependence on policies, which are either structural or fiscal (DArista 2009, p. 634).

In addition, the performance of the IMF demonstrated the interplay between a given financial sector with economic development in terms of growth and stability. This concept has played a major role in redefining the work of the Fund in a volatile financial environment.

A new Role for IMF

Unlike the last century where predictions were accurately made, the current financial system is characterized by several uncertainties, which cannot be explained. Several debates revolve around exchange rates and the ever-increasing reserves that have been witnessed in most emerging economies of the world. Additionally, most countries doubt the capability of existing financial institutions to confront major crises, like the ones that have threatened several countries in the recent past.

As a result, leaders have seen the need of implementing reforms in the Fund to make it more applicable and independent of political influence, which dominated its early years after establishment (DArista 2009, p. 633). Nevertheless, some of the suggested reforms have been viewed as impractical. Importantly, some of the new roles of the IMF draw significant support from the initial agreement, even though they have been perfectly aligned to the current changes and trends in the financial market.

While the International Monetary Fund is charged with countless functions within the global financial market, it is important to note that management of crises remains its core objective in the world today. This is based on how the institution responded to the crisis, which was experienced between 2007 and 2009.

During this period, the Fund stepped up efforts to offer support to all its member states. Several approaches were adopted, including increased lending and advising of countries on various economic policies, based on the Funds experience in dealing with an array of issues in different countries (DArista 2009, p. 633).

Stepping up crisis lending

In 2010, the Fund took a swift move towards the global crisis, and made several lending commitments, which totaled to $250 billion. This represented an increase of the money that was to be borrowed. The Fund agreed to quadruple the amount, which was given to low-income countries in order to help them out of the crisis that threatened several member states (International Monetary Fund 2012).

In other words, the International Monetary Fund strengthened its lending capacity and adopted significant changes on its lending policies to allow countries to borrow large amounts, depending on their abilities and existing financial situations.

In addition, the IMF launched a flexible credit line that was meant to address the issues that were facing strong economies of the world. In essence, a flexible credit line is mainly used in the management and prevention of crises, by allowing access to the Funds resources with a lot of ease. Importantly, a country, which is approved to join the facility, is never exposed to any conditions that may undermine its borrowing (International Monetary Fund 2012).

For the purpose of making the flexible credit line to be more effective, the tool was strengthened in August 2010. This made it more flexible and predictable. It benefited countries like Poland, Mexico, and Colombia, which were awarded a total of more than $100 billion.

As a way of stepping up crisis lending, the International Monetary Fund allows countries to access liquidity by applying flexible terms and conditions. This is based on the fact that extreme global stress may end up affecting countries, which have the least likelihood of being affected by the crisis (International Monetary Fund 2012). Recognition of such countries augments market confidence and mitigates the impact of the financial problem. This support is sometimes channeled to countries, which are less exposed to financial crises.

Furthermore, the IMF has implemented reforms, which are aimed at making lending to be more affordable by its members. For instance, the Fund terminated structural performance criteria for the purpose of securing loans, even in cases where the borrowing country is considered to be a low-income state.

Essentially, these reforms have remained significant in programs, which are supported by IMF, though most of its efforts have been redirected to areas that play a crucial role in the recovery of a countrys economic status (International Monetary Fund 2012). Furthermore, the IMF currently puts a lot of weight on the social protection of countries.

For instance, the Fund has actively been involved in supporting its members to guard and expand their social expenditure, coupled with social assistance. The institution is involved in encouraging higher expenditure and promotes the establishment of social programs, which are capable of reducing the impact of a given financial crisis in a society that is exposed to financial crises.

Supporting poor countries

As a way of responding to the financial crises, the IMF reviewed its policies, with regard to low-income governments. Due to this, the Funds programs are considered to be more flexible as they accommodate the needs of these economies. They have more flexible conditions and encourage the protection of a countrys social spending (Underhill et al. 2010).

The IMF also enabled the accessibility of resources to these nations through the Poverty Reduction and Growth Trust, between 2009 and 2014. This move was in line with the position taken by G-20 members in April 2009, which endorsed the doubling of concessional lending. By the year 2009, the IMFs concessional lending was valued at $3.8 billion, with 2011 registering a total of $1.9 billion (International Monetary Fund 2012).

More importantly, the IMFs flexibility has considerably increased, through increased spending and inclusion of deficits in recent years. As a result, Sub-Saharan Africa experienced an increase in fiscal deficits in the year 2009.

The IMF also plays a major role in responding to catastrophes, which hit its members around the world (International Monetary Fund 2012). This was conceived through the creation of a fund, aimed at addressing the aftermath of calamities around the world. In the year 2010, the Fund registered a total of $268 million as relief expenditure.

Providing analysis and advice

As much as IMF has played a leading role in responding to crises, it has also been involved in efforts to prevent future crises. This has been possible by engaging several governments around the world. As a result, there has been significance improvement in the manner in which risk analysis is carried out, based on warnings and international collaborations.

There are continuous efforts to analyze the relationship between economic stability and the entire financial system (Underhill et al. 2010). Other efforts, which have been initiated, include an understanding of the role of surveillance and how different factors exhibited in one country can influence the results in another. Lastly, the Fund is revisiting the issue of global monitoring of financial markets and its role in maintaining economic stability.

IMF Governance Reform

In order for the IMF to improve its legal performance, it has embarked on major restructuring efforts. According to the changes, which were proposed by G-20 countries, the Fund is likely to undergo enormous transformation in terms of its service delivery. They include transfer of voting power and doubling of the IMF quotas (International Monetary Fund 2012).

This was reached in December 2010, through a review process, which was conducted by the Funds board. As stipulated in the package, 6% of the quotas will be channeled to developing economies, without undermining the voting power of weak countries.

The Future of IMF

As an institution with over six decades in operation, the question most people ask is how the IMF will execute its mandate in future. Will it be able to confront crises and maintain stability of the international financial system? It is doubtless that the IMF will have to put in place strategies in order to strengthen its mandate in regulating global financial markets.

With the current crisis in the Euro Zone, the Fund has stepped up its efforts in containing the situation as the leading economic stabilizer in the world. On the other hand, mounting pressure from its members may result into future changes, which are likely to have significant impact on the world economy (Ingves 2009).

For instance, G-20 members believe that IMF has to shift its approach from crisis management to prevention in order to maintain a stable global financial market. As a result, IMF may consider establishing structures, which will allow it to issue warnings, identified within the financial system, that are potential threats. This can be made possible through partnerships with other organizations. A good example of this is the Financial Stability Board, which is likely to be helpful to the Fund in future.

In addition, the IMF is likely to adopt a system that links economic development in a given member state, with events in the global market through surveillance. In this respect, the Fund may have to develop the Financial Sector Assessment Programs further to improve its surveillance and ensure that its members adhere to set conditions.

Moreover, the role of the IMF is likely to be extended in order to cover capital flows and capital liberalization (Ingves 2009). The current system is limited in funding foreign trade. This expansion of the Funds mandate should be based on immense growth in international financial markets.

From the above analysis, it is doubtless that the role of the International Monetary Fund has continued to change since it was formed in 1945. Importantly, these changes have been necessitated by several factors, including financial and political. Nevertheless, it has been applauded for its active role in crisis management, with members pushing for its restructuring in order to offer preventive solutions to financial problems to its members.

References

DArista, J 2009, The evolving international monetary system, Cambridge Journal of Economics, vol. 33 no. 4, pp. 633-652.

Dodge, D & Murray, J 2006, The Evolving International Monetary Order and the Need for an Evolving IMF, Global Governance, vol. 12 no. 4, pp. 361-372.

Eichengreen, B 2008, Globalizing Capital: a History of the International Monetary System, Princeton, New Jersey.

Ingves, S 2009, Future role of the IM F in focus at the 2009 Annual Meeting in Istanbul. Web.

International Monetary Fund 2012. Web.

Kirshner, J 1995, Currency and coercion: the political economy of international monetary power, Princeton, New Jersey.

Peet, R 2009, Unholy Trinity: the IMF, World Bank and WTO, Zed Books, London.

Underhill et al. 2010, Global Financial Integration Thirty Years On: From Reform to Crisis, Cambridge University Press, London.

The United Arab Emirates has an active economy that makes it attract a lot of foreign investors. It is strategically located in the Middle East making it attractive to investors that want to set up operations in the region. The country main business hub, Dubai, is famous for its hospitality, financial and tourism sectors which have registered significant growth in the last two decades. The city is a famous transport hub linking visitors travelling to Asia, Europe, Africa and other parts of the world. This paper will analyze a variety of published sources to uncover economic conditions that affect demand and supply in the UAE. This will help establish how these factors impact on food production in the country.

UAE citizens have a high purchasing power and this makes the country attractive for investment. Emiratis have refined consumer tastes and this makes them demand high quality products in the market. The country is arid which makes it difficult for various food production and other agricultural activities to be done locally. It imports cereals, beef, fruits, milk and poultry products from other countries. The scarcity of these products makes them valuable in the country which drives up their demand. Many Emiratis have higher disposable incomes which has led to an increase in demand of various food items. However, UAE lacks a unified food regulation system, which slows down firms in the food industry from achieving specification and quality requirements. It is also difficult for firms to get credit for their operations and this restricts the amount of capital investments they are able to make.

The food sector is estimated to grow which opens up opportunities for firms interested in food production in the country. There are many supermarket chains in the country which make it easy for consumers to access food products sold. The market is has many expatriate workers from different countries who consume imported food products that are not easily available in the country. The region has modern transport infrastructure that makes it easy to deliver food products to their respective markets. It is estimated that more than 35% of imported food items are repackaged and sold to other markets. The food industry in the country is thriving because its main airports and sea ports are connected to other regions in the Middle East which makes it possible for finished products to be transported. This has also made distribution channels to be more effective which ensures products are delivered to various markets on time.

Some products are bulky when they are still raw and they need to be processed in areas they are sourced from. It is more economical to produce such products in areas that have low labor costs to make them more competitive in the market. Goods processed abroad can be repackaged in the country and later sold in neighboring countries in the region. Saudi Arabia, Kuwait and Qatar do not have well developed agricultural industries and can serve as ready markets for food products packaged in the UAE. The UAE has a higher comparative advantage compared to other countries in the region because of its thriving food industry. Therefore, the country is suitable as a packaging zone for raw and processed food items imported from other countries. It has positive trade ties with many South Asian countries which have low cost manufacturing zones. Therefore, these mutually beneficial trade relations make it possible for producers in the country to source food products at lower cost which can then be sold to consumers at higher returns.

Figure 1 showing the production possibility frontier showing manufacturing in UAE and South Asia. The figure demonstrates that it is more competitive to manufacture products in South Asia before they are shipped to UAE.

Technology can be used to improve the way different economic processes are performed in the country. The country needs to make it easy for investors to access different types of information through the internet to enable them understand crucial economic policies they need to satisfy. Investors need to be given information on taxes, stock prices, government policies and existing forms of finance to make it easy for them to transact. This makes the economy more competitive because different sectors are able to share crucial information to help them move forward. Business firms in the country need to be encouraged to institute automated payment systems to make them more efficient in their operations. This will help these firms reduce their labor costs to make their operations leaner and more efficient. Business firms in the country need to be encouraged to be more flexible to help them take advantage of opportunities that exist in local and regional markets.

In conclusion, the UAE has many economic opportunities which business firms need to exploit. The country has favorable investment policies that make it attractive for foreign direct investment from other parts of the world. The country acts as a gateway to the Middle East because it is strategically located and has adequate transport and communication connections with other regional economies.

Introduction

Gasoline refers to combustible organic compounds used in engine ignition. Gasoline normally exists in liquid form termed as petrol. Normally, it consists of organic compounds of about 10 carbon elements. Gasoline is vital to economic activities of any given country (Clayton, 2012). This is due to the importance of the transport system in the furtherance of trade activities as well as provision of employment access. Thus, gasoline consumption is higher in areas that are more business centered and economically stable. The transport system has a direct link to growth of regional, national and international markets resulted from quick access to health facilities, learning institutions, and employment services. Nonetheless, transport systems lead to ecological risks such as pollution along with social costs that negate national productivity. This results to negative human gratification and destabilizes the activities in urban areas. Gasoline degrades human life through pollution, road carnage, high energy usage, obstructions, and social unjustness (Jaja, 2010). This paper discusses the recent trends in gasoline consumption, pricing, and demand as well as supply variations.

Discussion

The article by Clayton (2012) acknowledges that gasoline consumption rate in united states has been low in the past, but positively responding to the economic conditions. Although low consumption of gasoline is meant to save cost, the elevated need for transport sector proved impossible (Clayton, 2012). On this note, transport system is considered to account for about 25% of global energy consumption while also accounting for roughly 55% of the oil demanded annually (Jaja, 2010). This is because transport system highly depends on petroleum and oil products such as gasoline. However, the increased consumption rate leads to economic saddle and emission of gases that lead to greenhouse effects in the global atmosphere.

Gasoline consumption rate in the transport sector is about 75% with the households accounting for the remaining share. The consumption rate is high in highways due to large numbers of personal and commercial vehicles transporting goods and people around the economic zones (Jaja, 2010). The change in gasoline consumption is highly affected by government activities such as subsidized and managed prices of energy products. Gasoline consumption is reduced by the increased use of new vehicle. Conversely, the application of power generators to provide energy has greatly been made possible because of reduced gasoline prices.

The increase in gasoline consumption trends is also resulted by high usage of old vehicles, poor roads along with poor road mapping and construction. In addition, economic development and increased level of activities raise gasoline consumption rate due to the support services required to maintaining a growing economy. This shows a high connection between population growth and trade along with industrial action and energy products demand (Clayton, 2012). Economic expansion drives growth in production, which calls for the transportation of raw materials to manufacturing locations along with the transportation of finished products to the market.

Raised economic activities meliorate household incomes, which improve their livelihoods. This gives rise to the desire for more personalized transport systems (Radchenko & Shapiro, 2011). As a result, high incomes increase individual transport needs and thus raise gasoline consumption rate. Economic stability and growth enhance personal incomes and satisfaction that increase the demand for cars and, therefore, increase energy uptake. Large populations demand improved transport system and services, which they use to go to their workplace. Population size largely determines the infrastructures and urban means of transport developed in a country.

In this regard, it is noted that minor regions that are incapable of sustaining a great choice of services along with facilities might compel occupants to travel longer lengths with the intention of accessing the required services. High gasoline consumption rates are largely allied to low population regions while dense metropolises lead to lesser gasoline usage per head. However, gasoline consumption varies according to the number of vehicles and the gasoline content of each (Clayton, 2012). Utility denotes the level of contentment obtained from the use of a product. Gasoline usage reduces the cost of producing and transporting products as well as reduced cost cuts for electricity usage in manufacturing. Minimized production cost increases personal as well as national wealth, which is used to create more job opportunities and fund projects (Blundell, Horowitz, & Parey, 2012). The created employment opportunities improve the living standards of the society and hence bring about general satisfaction (Radchenko & Shapiro, 2011). This, therefore, acts as a motivator for more activities that require the use of vehicles that consume gasoline. If the supply of gasoline remains constant, the increased demand for the product will lead to higher prices due to increased competition.

Conclusion

This article acknowledges that gasoline is an essential product in manufacturing activities along with the transportation of raw material and finished goods; thus, gasoline price is not vulnerable to demand and supply (Jaja, 2010). Therefore, if supply of gasoline is not increased in a growing economy, this could shift the price of gasoline upwards from the equilibrium price. The demand could be shifted greatly by the economic activity levels. However, if demand remains constant, supply could increase due to favorable production costs while reduced supply could be accounted by lack of raw materials along with unjust legal requirements. Increased level of gasoline supply saturates the market with the product and, therefore, results to a reduction in prices below the equilibrium price level (Clayton, 2012). In my own opinion, the demand for gasoline is price inelastic. This implies that gasoline does not have close substitutes and, thus, consumers do not vary their consumption with price change (Blundell, Horowitz, & Parey, 2012).

References

Blundell, R., Horowitz, J. L., & Parey, M. (2012). Measuring the price responsiveness of gasoline demand: Economic shape restrictions and nonparametric demand estimation. Quantitative Economics, 3(1), 29-51.

Clayton, M. (2012). Americans trend line on gasoline: Use less, spend more. ANTARA News.com. Web.

Jaja, C. Y. (2010). Recent Trends and Patterns of Gasoline Consumption in Nigeria. Africa Development, 35(3), 159-177.

Radchenko, S., & Shapiro, D. (2011). Anticipated and unanticipated effects of crude oil prices and gasoline inventory changes on gasoline prices. Energy Economics, 33(5), 758-769.

Higher education has many functions in the society among them developing human capital, developing knowledge bases and maintaining them. Higher education nurtures the skills required for research and innovation (Johnson, Oliff and Williams, 2011). For this and other reasons, higher education institutions in Georgia receive financial support from the state.

State support for higher education has been chosen as the topic for this study because education is expensive but the support of the state to institutions of higher education has been dwindling over the years. This support is necessary to reduce the cost of education. This means that an increasing number of students in Georgia are finding it hard to get higher education (Brack, 2011).

Georgia is the ideal state for this investigation because of its high poverty levels and low levels of participation in higher education for students coming from poor households compared to other states in the United States of America. Georgia is a state that has a below average income and this adversely affects the quality of education in that state. The purpose of this paper is to investigate the financial support that the state gives to institutions of higher education in Georgia.

Access indicators

Indicators of higher education in Georgia include the number of higher education institutions, the amount of funding available each year to support students and the average annual charges that undergraduate students pay for education. The number of institutions of higher education in Georgia is an indicator of how many students participate in higher education. Several universities and colleges exist in the state. Georgia State boasts of more than 35 higher education institutions (Johnson et al, 2011).

The proximity of these institutions to the students is a measure of accessibility to education. The charges students pay annually on average indicate how possible it is for the majority of students to get higher education. If these charges are high, then many students miss education and vice versa (Georgia State Facts and Higher Education Information, n.d.).

Another indicator is the amount of money available from the state to support students pursuing higher education. Currently, the funding of the state has gone down because in 2012, it is at its lowest since 1994. The funding of the state for higher education at present is only 54% having dropped from 75% in 1995 (Brack, 2011).

This shows that many students cannot access education. In terms of availability of higher education institutions, Georgia State has done a lot to ensure that education is accessible. However, the state has scored lowly in the area of funding because the amount of funds released has really gone down compared to other states. Based on the indicators used, the state still has along way to go in making higher education available to students.

Affordability indicators

Family income is one indicator of affordability to higher education. The higher the incomes of families in a particular state, the higher their ability to sponsor students in school. In Georgia, the poverty levels are high and therefore many families do not have the capacity to send heir children to higher education institutions.

Tuition fees payable to four year and two year universities and colleges is also an indicator. If the tuition fee is high, it means higher education is not affordable to most of the students. If the rates of tuition fees are low, then many more students can afford to get education (Johnson et al, 2011).

The amount of money released by the state annually to fund higher education also determines the affordability of higher education. Since many households are poor, they are unable to afford the charges levied. Funding from the state helps to reduce the amount of money required from the students hence making education easily affordable.

The average charges paid annually by students are also an indicator of affordability of higher education in Georgia. Since poverty levels in the state are high, the charges should be low to allow more students to afford education (Brack, 2011). High charges discourage people from pursuing higher education since they are not affordable. When charges are high they make education very expensive and unaffordable to the majority.

In conclusion, the paper has examined the indicators of accessibility and affordability of higher education in the state of Georgia. Reasons for picking on Georgia have also been given. Support is required from the state because of the importance of education to the economy and the high cost of higher education.

Accessibility to higher education in Georgia is indicated by the number of higher education institutions, the amount of funding available each year to support students and the average annual charges that undergraduate students pay for education.

Indicators of affordability include family income, tuition fees, the amount of money released by the state annually to fund higher education and the average charges paid annually by students. Georgia State has not done enough in making higher education accessible and affordable for students in the state.

References

Brack, E. (2011). Georgia Falling Behind Funding Higher Education. Like the Dew: Southern Culture and Politics. Like the Dew. Web.

Georgia State Facts and Higher Education Information. (n.d.). Web.

Johnson, N., Oliff, P., & Williams, E. (2011). An Update on State Budget Cuts: At least 46 States have Imposed Cuts that Hurt Vulnerable Residents and the Economy. Web.

Introduction and Definition of Customer Centric

In the modern-day era, the way business is conducted changing with most organizations realizing that the key to success lies with the number one priority of the organization who is the customer.

Organizations are (Davis 2004, pp. 14) becoming aware that consumers may not enjoy products that are designed just to drive the sales of the organization higher, rather than catering for the needs of the consumer through incorporating the consumer into every decision that is made by the organization (Davis 2004, pp. 14).

In most cases, large organizations strive to realize more revenues which are generated from the sales of already existing portfolio of products. However, generating increased revenue may be hard for large organizations through the sale of products which have already been launched by the organization, and this calls for the inevitable change by organizations through integrated solutions (IS).

Brandy at el (2005, pp. 4) defines integrated solutions as combining products and systems with services in order to specify, design, deliver, finance, maintain, support and operate a system throughout its life cycle. Firms, while moving to integrated solutions, can use their own manufactured products and services or the products and services of competitors.

One of the main reasons as to why firms are shifting to customer-centric (Davis & Hobday 2005, pp.10) is to stay afloat in the business in light of its competitors. Firms have realized that managing relationships with the already existing customer has long term benefits as opposed to being product or service-centric.

Integrated solutions, therefore, allows firms to compete with other firms in the industry, owing to the fact that firms that have incorporated integration offers coordinated products/services and sells them as a whole.

Customers needs are not static and they, therefore, keep on changing with time (Taylor 2000, pp. 41).

For organizations to effectively cater for the ever-changing needs of the consumer, integrated solutions are adopted where the organization is to provide the customer with a whole set of products and services that have been integrated into a whole and this means that the organization has to keep on searching for solutions to consumers needs even before the needs arise (Pine 1993, pp. 34).

Organizations do these in order to stay afloat in the market and always have solutions to consumers needs.

To be in a position to offer integrated solutions, firms adopt capabilities that allow them to foresee the needs of the consumer and also through mergers and acquiring competitors firms to offer a whole range of products and services to the consumer.

Of importance to note is that firms will merge or acquire competitors firms in order to merge their product or services with those provided by the competitors and helps firms in winning more customers.

Customer-centric is a new and emerging concept in the world of business with very few organizations walking the talk of catering for the needs of the consumer. An organization that is customer-centric tailors its resources in accordance to what the customer wants (Franke, Keinz & Steger 2009, pp. 67).

By resources we are referring to all those important aspects in the organization that are used or aid in the production of goods and services in an organization, for instance, human resources, capital resources, knowledge resources among others included.

Keegan, & Turner (2001, pp. 17) claim that customer-centric is dynamic, but the most basic aspect is the customer and what organizations are doing to fulfil his/her requirements.

Consumers have more knowledge of their rights in the modern-day era than before which Davis (2004, pp. 14) uses the term as sophisticated customer, so when focusing our attention as to why organizations are becoming more customer-oriented, we should also not fail to note that we are talking of consumers who have been empowered through the internet, know when there are treated well or not, have forums through the internet where they can engage with other consumers and share their experiences of certain products or the way a certain organization treats or reacts to its consumers needs.

With these said than done, organizations are more and more careful and therefore cannot afford to lag behind when it comes to shifting their focus from being product-based to consumer-centric. It is said that words spread like wildfire and when customers are not satisfied with a product or a service in the (Keegan, & Turner 2001, pp. 21) organization, they will often tell a friend who in turn will tell someone else.

Consumers have become more and more knowledgeable and this can be ascertained or assessed through the consumers buying habits and why they buy certain products and services. This calls for organizations to be smarter and sophisticated when providing the integrated solutions (Pine, 1993).

Characteristics of Firms that Offer Integrated Solutions

Firms that offer integrated solutions are able to conduct market research and identify the needs of the consumer. It is only through the assessment of consumers needs that firms can develop solutions through integrations and satisfy the consumer. This is the time that the firm will find it necessary to move from product/service strategy to being consumer-centric.

Organizations that move towards integrated solutions are more focused on creating customer relationships and trust with the customers.

This is a prime indicator that integrated solutions surpass the boundaries of selling products/services that are integrated and therefore are more confined to research and development, with emphasis placed on incorporating third parties on board to integrate and offer integrated products and services (Davis, 2004 pp 15).

Firms that move to provide integrated solutions specify the needs of the consumers and therefore, integrated firms also see integration as not only coming up with new products and services but also incorporating other organizations which may act partially to enable an organization to provide integrated solutions and thus become customer-centric.

Organizations that are consumer-centric care for their customers and this evidence is in the mission of the organization. By definition, an organizations mission illustrates what the organization aims to achieve and the intentions that the organization has in its operations in satisfaction of the needs of the consumer.

A consumer-centric organizations mission is geared towards satisfying the customer and the loyalty the organization has on the needs of customers.

When organizing for solutions, organizations analyze the buying blueprints of the consumer in trying to find out what the consumer specific needs.

Then the organization embarks on delivering products that address the consumers needs according to the analysis that has been made on the purchasing patterns of the consumer (Louwhoff 2007, pp. 22). In short, the organizations become self-motivated in finding out what the consumer needs, why the consumer needs certain product (s) with certain values and addresses such issues.

Galbraith (2002, pp. 198) ascertained that extant research shows that when firms make decisions to move to integrated solutions/consumer-centric, it is not always easy for the organization sacrifices short term objectives for it to benefit in the long run.

Therefore, organizations adoption of consumer-centric domain has to be in line with the vision of the organization, the long term objectives of the organization. This translates to the organization completely overturning their operations to focus more on the consumer, break the preexisting cultures where the consumer is not important and bring everybody on board into the inevitable change.

A consumer-centric organization cares for its customers, and this is even evident in the mission for the organization. By definition, an organizations mission clearly illustrates what the organization aims to achieve and the intentions of the organization in its operations.

Taking the case study of BT (British Telecommunications), it is one of the most influential companies in the telecommunications industry operating in 170 countries. It is a dynamic corporation and has been in existence since 1846.

The organizations core vision was geared towards being a leading organization in the world in the telecommunication industry. On the other hand, product-centric organizations will rarely include the consumer in their mission statement (Galbrath 2005, pp. 75).

The strategy for BT to achieve its vision was to take charge of all the opportunities that were at the disposal of the company in the global scenario and therefore BT in quest of fulfilling its vision engaged in numerous acquisitions around 1990s. The major event that shaped the company was the sale of government shares to the public in 1990.

The numerous acquisitions of BT made it increase its debts with the total debts skyrocketing to 27.9 billion pounds. However, the management of BT changed with Sir Christopher Bland taking over as chairman. It was during the reign of Sir Christopher that an integrated solution to BT was sought by transforming the structure of Britains oldest telecommunication company.

The structural transformation included changing the vision of the organization to be more customers centric and therefore focus more on the consumers (Davis & Brady 2000, pp. 20).

Therefore BT structural system was designed to take into consideration the market sector rather than the geographical aspect of the organization, for instance (to be a successful communications company in the world).

The restructuring of BT into Ignite, BT Open world, BT Wireless and Yell comprised the integrated solution offered by BT in order to offer complete solutions to their clients.

That is, Ignite was mainly for the provision of broadband IP business, BT Open world group selling in the internet industry, BT Wireless to offer mobile services and Yell for the world wide provision of directories and electronic businesses (Davis & Brady 2000, pp. 20).

Financial restructure of BT involved the sale of BT Wireless and Yell to help the company offset its financial debts.

With these major restructuring in the organization, BT vision could not remain the same and the focus was now on customers and how BT was to acquire benefits through shifting their focus to customers rather than the dogmatic vision that sought to cater for the interest of the organization while disregarding the customers.

By so doing, BT was conducting an analysis where the organization identified its opportunities (catering for the needs of the consumers) and capitalized on them. Therefore, the company had to restructure financially and structurally, which is part of offering integrated solutions to cater for the needs of the consumer and is also reflected in the vision of the organization.

Firms that offer integrated solutions also develop products from the consumers viewpoint other than from the organizations perspective. The organizations come up with innovations that are designed to create a whole new experience to the customer rather than offer services and products provided by the organization (Davis & Brady 2000, pp. 20).

For instance, in the restructuring of BT has had to develop services which involved moving away from old processes and coming up with new processes for the overall development of the services that it provides to the consumers.

Organizations that offer integrated solutions involve even the top management. Integrated solutions are geared towards the overall performance of the organization and improving the organization in the competitive arena. A classic example is how BT shifted from service/product based organization to providing integrated solutions to its customers after the chairman of the company was changed.

The chairman also brought on board a new C. E. O. to the company and a project coordinator clearly illustrating that the move to offering integrated solutions, the top management has to be involved.

Therefore, consumer-centric organizations in most cases, add some management departments to their organizations in order to implement their various activities as they shift from being product-centric. The departments serve as bridges between the consumer, the product and service to be provided and the solution that the organization offers.

The reason as to why the emphasis that shifting to consumer-centric should be an overall strategy from top management is because the head of the organization has to show the other employees that he/she values the customer other than paying lip service to the idea while pushing his/her employees to be customer-centric for success of any organization lies in how decisions are implemented in a hierarchical order (top to bottom).

The top management also has to pardon employees who show sluggishness in adopting the consumer-centric approach in the organization.

There are the people responsible in changing the culture of the organization, the norm that the organization had conformed to of treating the customer as a not important person in the organization for the consumer is the driver behind the steering wheel when organizations shift to consumer-centric approach.

Through integrated solutions organizations that shift their focus to providing an integrated solution for the consumer develops projects that are geared towards enabling the organization to satisfy the needs of the consumer more (Galbrath 2005, pp. 30).

For instance, BT came up with a project; BT 21CN (BT 21^st Century Newton) which acted as a platform that enabled the organization to continuously develop services for the ultimate goal of satisfying the consumer (Davis & Brady 2000, pp. 20).

Projects generated in light of integrated solutions allow the organization to generate multifaceted products/services using the technology that allows mass production of the multifaceted products and services. With time the organizations through the projects built comes up with new innovations that are geared towards the overall development of the company and satisfying the consumer.

For instance, BT 21CN, suppliers include Ciena, Lucent, Siemens and Ericsson among other suppliers. These organizations formed to create the BT 21CN and therefore provide complex products and services to consumers.

BT as a customer for the suppliers of Lucent, Ciena, and Ericsson among others encourages them to integrate for the overall benefit of the supplier and the projects that they form to provide integrated solutions (Davis, Brandy, & Hobday 2006, pp. 5).

An organizations integrated solutions involve interfacing with even the customers in order to come up with innovations that provide complex products and services. For instance, BT 21 Century Network. This is the platform through which BT has made innovations through such developed projects with the suppliers.

Firms that offer integrated solutions are also able to reach a wider market. They drag along their customers, but they offer complex products and services unlike selling to the customers the single/isolated products and services. The main focus for firms offering integrated solutions is the consumer.

However, engaging in integrated solutions where firms provide complex products to customers means that the firms have to segregate the market and identify the type of customers to serve.

Firms that provide integrated solutions are also able to reduce operational costs for in most cases, these firms merge with other firms to provide complex products and services.

When firms merge, they increase their area of operations and are therefore able to benefit from internal economies of scales, for instance, managerial economies, financial economies and research and development economies. For instance, the suppliers of BT 21CN offers integrated solutions to BT 21CN, which in turn integrates the solutions to come up with more sophisticated products and services.

Through integrated solutions (Davis, & Brady 2000), firms provide services and products that are geared towards providing solutions to consumers needs (Louwhoff 2007, pp. 25).

The consumer-centric organization acts on the needs of the consumer and develops products and services that addresses the needs of the consumer (Davies, A. 2004) and thus moving away from their traditional concepts of producing products just for the sake of producing products that will ensure the organization makes sales (Louwhoff 2007, pp. 32) to providing integrated products and services that meets the needs of the consumer.

For instance BP in shifting its focus to providing integrated solutions, shifted completely from their traditional way of doing business which saw the company merge with other companies in the 1990 and thereby increasing its debts to new ways of the company (BT) outsourcing their systems from other suppliers which is a complete shift from their traditional way of doing business from 1990.

Customer-centric/integrated solution organizations are able to increase their turn over for they have a broader pull of products from competitors. They develop systems which allow them to become better in their operations and are therefore able to face able compete with their competitors.

With BT21 CN project where its suppliers are Ericsson and Alcatel among others, the organization is able to offer integrated solutions to its customers on a global level, for instance, Unilever, Visa Bank of New York and HSBC among others. Firms offering integrated solutions gain their competitive advantage when customers re-signing contracts with them.

They are, therefore, able to continue services and products to loyal customers. Customer loyalty can only be achieved through firms offering product/service that are consumer-centric, which allows the firm to have a competitive advantage (Pankay 2003, pp 45). over other competitors.

Firms that provide integrated solutions treat the customer as an important aspect in the process of integration. While seeking to provide integrated solutions unlike product-centric organizations, customer-centric organizations also look at the customer as a major determinant for provision of integrated solution.

For instance, the organizations do not only look at how they are going to supply the developed complex products and services but also at how the buyer is going to demand the products and services. Therefore, the consumer is a major resource in the process.

While product-centric organizations are keen on devising ways through which they are going to improve their products to gain more sales from the consumer, consumer-centric organizations, on the other hand, are after ways in which they can improve their customers satisfaction by catering for his/her needs (Prencipe & Tell 2001, pp. 72).

Their force comes from their customers having new experiences with the organization, which translates to customer satisfaction and in turn, this yields long term benefits like customer loyalty.

Customer experiences for consumer-centric organizations is so exceptional to the extent that the experience the customer will have before a product or services is launched is anticipated in advance before the launching of the product/service while for the product based organization, customers experience is valued or measured after a product/service has already been released into the market for the product-centric organization is not so interested in the consumers feelings (Prencipe & Tell 2001, pp. 75).

Therefore, the level at which the consumer becomes satisfied acts as a platform through which the success attained by integrated solutions (IS) is measured.

There are various benefits that firms which have shifted their focus to being customer-centric enjoy. Organizations reputation is a ubiquitous benefit that the organization enjoys when its customers are well taken care of. As illustrated above, consumers through the forums that they use to interact with other consumers will not fail to mention or recommend a certain organization that treats its customers well.

This goes a long way in acquiring new customers for the organization through recommendations by other consumers and also retaining the ones the organization already has. This enables the organization to increase its competitive advantage over other organizations that are not consumer sensitive (Richard, Jacobs, Aquilano & Nicholas 2006, pp. 90).

The basic and most ideal priority for any organization is to satisfy the needs of the consumer so that it can market its products for the consumer is said to be the mean that is justified by the end (the organizations products and services).

Therefore, when a company employs the domain of consumer centricity as its strategy, the company can be said to be fulfilling its number one priority and in turn, gain new customers or increase its market share.

However, (Keegan, & Turner 2001, pp. 20) as provide integrates solutions to offer products that create value to the consumer, not only should the organization focus on the consumer as the centre stage but also place some emphasis on the organization.

In as much as the organization will provide products and services that have integrated the consumers needs, the organizations needs also need to rally behind the process of integration. That is, the organization should also have an overall improvement in providing complex products and services that meets the needs of the consumer.

Consumer-centric organizations take into consideration a whole range of factors that entice the consumer and factors that the consumer is concerned with besides producing the product or the service (Gulati 2010, pp. 120). Consumer-centric organizations do not solely concentrate on the end product, other than they produce products that are appealing to the consumer even with the way the products are produced.

Product centric organizations measure the value of the product in terms of money for their ultimate goal is to make money and maximize profits, and they try to cut down expenses that drive operational costs high.

Customer-centric organizations differ from product-centric organizations through the way employees in these two diverse organizations are trained to handle customers.

For the former, the organization continuously engages the employees in training programs that provide refresher courses on how to handle the customers with every employee of the organization getting involved for the organization realizes that being consumer-centric does not only touch on the department of sales and marketing while the latter, the organization, is so absorbed in the products and services that it offers to customers to the extent that the training programs are mostly geared towards improving the products of the organization to appeal to the consumers.

Product centric organizations also assume that training on how to handle customers is entirely in the department of sales and marketing. In light with training programs geared towards educating employees on how to handle customers, the guiding principles for customer-centric organizations are tailored towards aiding the consumer to be delighted by the interaction of the consumer with the organizations employees.

Product centric organizations are mostly interested in the features of the products and services that they are offering to consumers. The products are attractively packaged to entice the consumer into buying the products and in most cases, they gain their competitive advantage through the way their products are branded differently from other companys products.

According to Richard, Jacobs, Aquilano, & Nicholas (2006, pp. 75) such organizations offer products that have generalized the consumers needs and the reason as to why these organizations are very different from consumer-centric organizations.

Product centric organizations assume that consumers do not have varying needs when it comes to products and assumes that consumers are generally attracted to the same product or services.

Product centric organizations also gain a niche in the market ahead of their competitors through their pricing strategies. They play along with how they price their products with some organization employing tactics of psychological pricing to the consumer where the difference in prices between one organization and that of the competitors is a small margin, for instance, less than a 1 Dollar.

The department of customer relationship continuously grows in a customer-centric organization. The continuous interaction of the consumer and the management of the organization create benefits for the organization for the consumer is no longer treated like an outsider but as an important person who the organizations function around.

Customer-centric organizations act as an assurance that organizations do not turn a deaf ear to customers but are keen on catering the needs of their customers (Davis & Hobday 2005, pp. 22).

One may wonder how being customer-centric will improve the customer relationship management of the organization (Davis & Hobday 2005, pp. 18). Well, the answer lies in how consumers are able to give feedback to the organization regarding its products and the way the organization continuously grows through research and development on its products which is obviously enabled by the consumer.

When customers are treated well, they are not afraid to voice their concerns on what needs to be improved in the organization and what makes the customer happy in the organization (Louwhoff 2007, pp. 34).

This in turn works in helping the research and development team in improving the organization for we are all familiar with incidences where an organization would want to self evaluate itself through giving out questionnaires and interviewing its customers but the customers fail to respond for the same organization does not give them attention when it comes to addressing their concerns.

Consumers are known to buy products that are less costly and this is in this area that product-centric organizations gain their competitive advantage. The law of demand stipulates that consumers will tend to demand more of a product when the price of the product is low and demand less of the product when the price of the product is high.

Therefore, product-centric organizations employ the tactic of pricing in winning consumers. However, product-centric organizations have to recognize that offering attractive prices on their products is no longer adequate enough to stay afloat in business for consumers are more informed about the products and services that organizations are offering (Pine 1993, pp. 47).

While product-centric organizations engage in cementing the already existing policies that have no value for the customer, consumer-centric organizations are mostly interested with improving policies that will ensure that the customers needs are catered for.

For as long as the policies within the product-centric organizations are bringing good turnovers, the product-centric organization will be more than interested in improving the product to gain more sales than focus on policies that take the interest of the consumer at heart.

With these said and done, product-centric organizations continue implementing the same old policies and see no need for new policies in the organization. Consumer-centric organizations, on the contrary, seek to improve the policies of the organization to suit the emerging trends of the consumer, for instance, the buying habits of the consumer.

One of the ways through which customer-centric organizations are organizing for solutions is through bridging the psychological gap between the consumer and the organization. In most cases, organizations provide products that are generalized about what the customer may need without interacting with the customers themselves and finding out what they would want to be incorporated into the organizations products.

Organization nowadays are moving out from their cocoon of comfort and reaching out to the customer to find out what the consumer wants and in turn, gives the consumer an upper hand in identifying and acquiring the incorporated solution.

For example, for organizations that are involved in manufacturing, when the customer is the epicentre of the organization, the organization tailors its products incorporating the views of the customer. This is known as customization in the world of business (Keegan, & Turner 2001, pp. 12).

Consumer-centric organizations also offer integrated solutions through Prencipe, Davis, & Hobday (2003, pp. 45) accurately measuring the major determinants influencing consumers into buying a particular product. Consumer-centric organizations do not equate the value of their products through the monetary worthiness of the product rather than the value the product provides to the consumer.

Other than money that is commonly used to measure the value of the product, other drivers of sales for a particular product involves things like the effect the product will have on the environment, whether the organization in producing a particular product is geared towards maintaining the environment, the various processes that a product passes through from the beginning to the time the product is delivered to the consumer among other factors.

Prencipe, Davis, & Hobday (2003, pp. 45) through Organizations providing integrated solutions, organizations are combining values into their products to come up with products that meet the value the consumer expects to get in a certain product or service and this involves listening to the consumer(s).

Organizations are providing consumers with products and services that combine different values and function well when compared to a product or service that does not have an integrated value. Therefore, organizations are continuously improving their products and services, a trend that is emerging in business practices (Davis, & Brady 2000, pp. 67).

I would say that the future belongs to those organizations that are able to offer integrated solutions to the consumer through their products and services (Davis, Brandy, & Hobday 2006, pp. 77). For instance, technology is evolving on a daily basis creating new ways in which organizations are to produce products and services and therefore organizations have to ensure that their products and services are in line with the advancing technology.

If we take a case study of the mobile industry, mobile phones were initially developed for calling and text messages services, but as the industry advanced, mobile phones that have cameras, Google maps and acts as tracking devices have been developed, further echoing my point that the future organizations are the ones which will be able to offer integrated solutions in their products and services through continuous improvements (Galbraith 2002, pp.15).

From the above analysis, organizations aiming to shift to consumer-centric have to forego their short term objectives and concentrate on the long term objectives. How many organizations would be willing to forego the profits that they are making through selling their products and services in exchange for long term benefits like consumer loyalty and therefore continuous sales?

It would take a no guts  no glory approach or attitude for an organization to decide to change and become consumer-centric. However, for the organizations that have already implemented the consumer model into their operations, we say kudos for they are the organizations that are changing the face of business and putting some value to the customer.

References

Davis, A. & Brady, T. 2000. Organizational Capabilities and Learning in Complex Product Systems: Towards Repeatable Solutions. Research Policy, Special Issue: Innovation in Complex Products and Systems. 29, 931  953.

Davis, A. & Hobday, M. 2005. The Business of Projects. Cambridge University Press. Chapter 7 & 8.

Davis, A. 2004. Moving Base into High  Value Integrated Solutions: A Value Stream Approach. Industrial and Corporate Change. Vol. 13. No. 5. 727  756.

Davis, A., Brandy, T. & Hobday, M. 2006. Charting a Path toward Integrated Solutions MIT Slogan Management Review, Spring, 2006, Vol. 47, No. 3: 39.

Franke, N., Keinz, P. & Steger, C. (2009): Testing the Value of Customization: When Do Customers Really Prefer Products Tailored to their Preferences? Journal of Marketing: Vol. 73: Pp. 103  121.

Galbraith, J. R. 2002. Organizing to Deliver Solutions Organizational Dynamics. 31 (2). 194  207.

Galbrath, J. 2005. Designing the Customer  Centric Organization: A Guide to Strategy, Structure and Process, San Francisco, Jossey  Bass. Business & Management Series.

Gulati, R. 2010. Reorganize for Resilience: Putting Customers at the Center of Your Business. Harvard. Harvard Business Press.

Keegan, A. & Turner, J. R. 2001. Quantity Versus Quality in Project  Based Learning Practices. Management Learning. 32 (1), 77  98.

Louwhoff, R. 2007. Meeting Customers Requirements in a Converged World. London, White Paper, BT Global Services.

Pankay, G. 2003. Globalization: The Strategy of Differences: The Wall Street Journal: November. pp.5

Pine, J. (1993): Mass Customization: The New Frontier in Business Competition: Boston: Harvard Business Press.

Prencipe, A. & Tell, F. 2001. Inter  Project Learning: Processes and Outcomes of Knowledge Codification in Project  Based Firms Research Policy, 30, 1373  1394.

Prencipe, A., Davis, A., & Hobday, M. 2003. The Business of Systems Integration. Oxford University Press. Chapters 1 & 16.

Richard, C., Jacobs, F. Aquilano, R. & Nicholas, J. (2006): Operations Management for Competitive Advantage: New York: McGraw  Hill.

Taylor, M. 2000. Cultural Variance as a Challenge to Global Public Relations. The Wall Street Journal. pp. 41.

Introduction

To illustrate the ides of continuous improvement strategy the organization to be used as the case study is Bank central Asia. This is a financial institution that specializes in providing financial services to the public.

It mainly deals with all types of accounts, loan provision as well as foreign exchange services. Continuous improvement strategy has been applied in this organization for the purpose of ensuring that all the activities are being carried out in accordance to the changing trends.

The electronic world is evolving at a very high rate and the most effective organizations are the ones which update their systems frequently to counter these changes. Bank central Asia is one of the leading banks in the region and most of the monetary activities are conducted from there.

Most commercial banks, apart from those owned by foreigners, for example, obtain their credit from this bank, and it determines the rate of interest that they should use when disbursing loans to the public.

This organization is owned by the government, and just like all the other central banks, it performs tasks such as minting and distributing currency, banker to the other commercial banks, banker to the government and also as the foundation for the establishment and maintenance of the countrys monetary policies.

Bank Central Asia has been in existence since the days of informal money. This was in the form of a regulatory body that would attach value to the products being evaluated. It has grown over time, and with the changing trends in the money market.

With the introduction of currency, the organization evolved in its function, and became a storage and exchange point for traders. That is why it has remained the central monetary unit in the region, implying that it authorizes the operations of all other financial institutions.

Quality imperatives

This refers to the most important factors that affect the quality of services and the general performance in the organization. They are classified into three broad categories namely the economic imperatives, social imperatives and the environmental imperatives.

The economic imperatives in this case involve the factors affecting the performance of the economy such as the rate of inflation, unemployment rate, production levels and the foreign exchange value. These are detrimental factors to this banking institution as it is expected to ensure that these are kept in check.

Raising levels of inflation is an indication that the Bank Central Asia has failed in its role as the regulator of the amount of currency in circulation. The result of this is an increase the general prices of commodities as well as an increase in the rate of unemployment.

The other quality category of quality imperatives is the social imperative which deals with the determination of peoples living standards. Bank Central Asia is faced with the task of ensuring that the basic commodities are affordable to the majority of the population by controlling inflation.

This way, most people will be able to live above the poverty levels, hence increasing their productivity. The third quality imperative is the environmental imperative, which deals with the provision of services that can bring about an improvement in the condition of the environment.

An example of this is the offering investors affordable loan, especially the ones inclined to real estate development. These factors are considered to be important in the quality determination of the operations in Bank Central Asia since in the long run, they determine the satisfaction accrued by the clients from the companys operations.

In relation to continuous improvement strategy, the quality imperatives determine the direction and position of the organization in relation to the other like organizations. In order to improve the performance of the organization, the management should first concentrate on improving on these quality imperatives.

This means that the bank should concentrate more on preventing inflation by regulating the amount of money in circulation, reducing the cost of living for the people and shifting most of their focus to financing the investment projects in the country.

This ensures that there is a sustainable rate of growth and development, while at the same time preventing the country from incurring external debts for development purposes.

With time, these needs might change and the institution should therefore be on the lookout to ensure that they are not left behind. This is the whole idea behind continuous improvement strategy.

Strategic importance of quality

Quality in simple terms refers to the excellence in performance. In a banking institution like in our case, it may include aspects such as customer satisfaction, profitability and sustainability of the organization. Services of good quality must not be necessarily expensive.

The organization can develop a plan that ensures they offer affordable services that are of good quality. In most cases banks undertake the strategy of offering loans to the public and then they attach a high rate of interest to the loans.

This may attract a number of people in the high social ladder category, while this does not guarantee the bank an increase in the profitability level.

The quality of the services might be of high caliber but only attainable to the lucky few. Other banks and financial institutions prefer developing strategies that are friendly to the majority middle class, and this does not imply that the quality of their services is low.

Quality is an important strategic aspect in this organization, and others like it as it determines the level of operations measured by the number of customers and the profitability. Quality administration is in fact a separate department in the organization faced with the task of performing the total quality management or the TQM.

Proper management of quality ensures that the organization is able to achieve its long term goals without having worry about losing their share of the market. Most of such organizations face stiff competition from their counterparts, and the quality of services they offer is what determines the size of their market share portion.

When making normative decisions affecting the organization from inside, the management should therefore concentrate on improving quality as this will put most of the external forces affecting the organization into place.

Quality philosophies

Quality has been an important aspect in many countries attracting the attention of philosophers such as Deming, Crosby and other philosophical gurus. These philosophies, according to Beckford (2010), form a basis for the modern quality discipline, used in most of the organizations (53).

The high competition that is still rising over the years requires that good quality products and services be offered by the respective organizations if they are to survive in the market. Deming, one of the philosophers, developed the idea of using statistics in the manufacturing process.

His approach to quality management was a revolutionary one rather than evolutionary, as he believed that the best way to counter competition through quality management is to do away with the old system completely and introduce a new one. He also put across fourteen points to be considered by managers wishing to improve the quality in their organizations.

The first one of these points is to be constant in the improvement of the services, second is adopting new philosophies, third terminating the dependence of public inspection. The fourth point is stopping the habit of awarding business on price tag alone and fifth improving the system infinitely.

The next point is leadership institution followed by institute training. Eight, is driving out fear and the ninth one is breaking down barriers between staff members. The tenth point is about eliminating slogans, exhortations and targets for the workforce.

Next, is to eliminate the numerical quotas, then removing the barriers to pride of workmanship. This is followed by instituting a vigorous program of education, and retraining, and finally taking action to accomplish the transformation (Williams 1994, p. 23).

Deming indicated further that the success of the quality management would be guaranteed if the organization adhered to all these points and not just a few of them.

Crosby is the other quality philosopher who insisted in doing things the right way at first to avoid the menace of trying to fix them later on (Silverman & Propst 1999. p. 86). The cost of compromising quality is higher than most people ever imagine.

He therefore asserts that the management should spend most of their time improving on the quality as this will save them a lot of costs in future. Other gurus in quality philosophy include Armand Feigenbaum who developed the concept of total quality control, customer defined quality and cost of nonconformance (George & Weimerskirch 1994, p. 78).

The other philosopher is Kaoru Ishikawa, and he is remembered for the development of the cause and effect diagram. He is the person behind the use of quality circles and the idea of internal customers (Williams 1994, 30).

Genichi Taguchi is the other quality guru who developed the loss function and an adaptation of orthogonal arrays to designed experiments.

He also championed the concept of robustness(Beckford 2010, p. 55). The communication of these philosophies in the organization should be carried out during training to ensure that new employees are aware of what is expected of them in relation to quality management.

Quality tools

These are the tools used to assess the quality of production in an organization. In the banking industry, it involves assessing the customer turnover, time taken to serve and the profitability resulting from these operations. It involves a lot of statistical processes of drawing and interpreting performance graphs and charts.

The first tool used in quality management is benchmarking. This is whereby a standard is set over which future performance is compared against. This standard is determined based on past experiences and the capacity of the organization as well as the general performance of the entire industry.

The other quality management tool is the house of quality which is an illustration of the relationship between the desires of the customer and the production capacity of the organization.

It resembles a house with the correlation matrix as the roof top, the wants of the customer in relation to the features of the product as the main part of the house and competitor evaluation as the porch among the others (Silverman & Propst 1999, 40).

Pareto charts are the other set of quality management tools whose purpose is to prioritize the issues affecting the organization in terms of what should be dealt with first. It describes the frequency distribution of any given characteristic of data.

It is also referred to as the 20-80 rule owing to the fact that it explains how the small percentage of an element can contribute a higher percentage to the success of an organization (George & Weimerskirch 1994, p. 80). This explains how quality in an organization can be determined by a few numbers of factors being taken into consideration keenly.

It is not about a large amount of input but proper utilization of the little input that is available. Prioritization is the most important aspect in this case, and it ensures that the most important elements in quality assurance are taken into consideration first. The other tool for measuring the quality in an organization is the Baldrige awards.

These awards are given to organizations that perform best in the economy, and this performance is what defines the quality of the services provided therein. Next is the six sigma. This is a business management strategy used to improve the quality of process outputs by identifying and removing the causes of defects and minimizing variability in the business processes (Beckford 2010, 58).

In this, the organization is expected to produce goods that are almost 100% free of defects if a high level of quality is to be attained.

The human resource management has direct /indirect influence on the quality produced owing to the fact that they determine the quality of labor brought into the organization. This is in fact the most important department when analyzing quality management issues.

Management of Quality

Management of quality is one of the most important elements in an organization since it directly determines the performance of the organization. Strategic alliances improve on the performance of the organization, since it allows the exchange of ideas hence an improvement in the quality of the services being offered.

One of the ways of managing quality is through supplier development. Here, the management establishes strong links with the suppliers, and this results in constant supply. They are therefore able to meet the demands of their customers effectively and on time.

The other way of managing quality is using the total quality management strategy or TQM as well as adhering to ISO9000, a quality standard determined by the International Standards Organization.

Quality assurance is also used when managing quality and this involves the management taking the initiative to ensure good quality services are being provided to their customers.

Finally, is the skill based quality management and this is whereby duties in the organization are allocated according to the skills of the individuals and the employees are encouraged to specialize in one area of operation. This ensures that they are able to deliver the services to the best of their ability.

Quality problems in the work place

Quality problems in an organization are mostly brought about by lack of motivation from the employees. The source of this is the management since they determine the working conditions in the organization. As a result of there being a compromise in the quality of services, the credibility of the organization tends to decrease with time.

This brings about loss of profits owing to disappearance of the customers. In such organizations, there is a constant friction between the management and the employees. This is brought about by unmet deadlines and poor performance in terms of customer relations.

These organizations also have a problem in maintaining their employees since people do not like being associated with organizations that are not performing well.

Conclusion

From the discussion above, it is clear that quality is the overall factor in determining the success of an organization. Besides ensuring customer satisfaction, it also ensures employee satisfaction hence ensures that the organization can maintain its employees for long periods of time.

This means that the level of expertise in the employees continues to develop over time and they provide even better services.

Quality management is the responsibility of the management who in some cases hire external quality assessors, who can determine the quality of the organization without any bias. This allows the manager to take note of the areas that compromise quality and so make any necessary changes in this regard.

Reference List

Beckford (2010), Quality: A critical Introduction 3rd Ed, London, Routledge.

George, S, & Weimerskirch A (1994), Total quality management: strategies and techniques proven at todays most successful companies. New York, Wiley.

Silverman, l, & Propst, L (1999), Critical SHIFT: the emerging future of quality in organizations. Milwaukee, Wis, ASQ Quality.

Williams, R (1994) Essentials of total quality management. New York, Amacom.

Introduction of the background information necessary to understand the marketing situation in the case study

One of the banks in Australia, ING Bank, is known to be one of the major banks capable of lending substantial amounts on credit to willing customers. There was launching of debut securitization by ING Bank Australia an occurrence which is known to be very rare with the company.

This is seen as a strategy geared towards boosting residential mortgage-backed securities. The means of achieving this is by splitting the deal into different tranches. Government agencies have tried this method as means of improving the level of competition which exists amongst mortgage lenders (Rhee and Mehra, 2005, pp 505-515).

Financial position of any institution helps in creating good reputation which could be considered by investors for future loans. Management team focuses on strengths since this is the core which determines the status of each section of the company.

Calculations on financial ratios are basically derived from information obtained from the accounting records. The ratios provide the required guidelines of measuring the progress within any institution and at the same time alert the management on the problems which might occur within different segments of the institution.

The profitability ratios indicate the level of efficiency on how capital is being utilized. Liquidity ratios on the other hand help in indicating the ability of the hospital to continue with its normal operations even in the midst of unexpected problems. Growth ratios are best used in the process of tracking down the financial progress within the hospital (Keegan and Green, 2002).

Literature review on marketing strategies

Financial institutions always have very clear focus on how to venture into new levels and attract more investors since they maintain high quality services and globally respected image. The institutions maintain their values for employees and customers, which helps in improvement of their services.

Quality services are maintained despite numerous branches that are run by the bank. This helps in winning consumers confidence irrespective of their locality. The reputation of the organization should be maintained based on excellence of service and quality of the products offered.

Diversification within the financial market helps in maintaining good customer base, this goes along with the intensive research and development. This is a prerequisite in identifying the consumer tastes and could even expand their resources for the purposes of accommodating the low income earners (Laroche, 2010, pp 1-3).

Control on banking rates is one of the major factors which determine whether consumers are able to honestly pay their loyalty towards the organizations image. Increase on rates will of course either make clients to shy away from buying the services of the bank or feel attracted to the bank.

ING Bank adopted new technologies which assists them in improving their marketing abilities and command. The companys market share has so much grown on the basis that it has a strong reputation amongst the consumers owing to its involvement in offering residential mortgage-backed securities.

The institutions at times apply the use of customer-value based where global Institutions first of all determines the worth of the products to consumers. In this the institutions are made capable of setting affordable financial rates and decisions convenient to all consumers based on the quality services offered.

However, within the competitive global market the interest rates charged on the basis of costs appear vulnerable to some fraudulent activities, and may present consumers with huge losses. Performance-based pricing is the recommendable alternative since it values quality and consumer interests.

This pricing method also ensures that there is good relationship between seller and buyer based on charges. The buyer has the opportunity of paying only for the level of performance that is given which must be measurable (Rhee and Mehra, 2005, pp 505-515).

The visual imagery of the bank forms a good basis for future development within cross cultural contexts; this has made ING Bank Australia one of the sole leaders in residential mortgage-backed securities. Financial institutions apply the use of accommodative rates for the purposes of providing best banking facilities.

ING Bank utilizes the available resources in providing and winning reputable names. There is need for applying workable marketing strategies for competitive purposes within the financial markets. This help in offering one of the most conducive environments to consumers by treating them as equal partners.

In order to strengthen their foundations, the institutions need to increase their relationships with other stock markets for security reasons. Financial institutions prove to be very creative in terms of coming up with new annual strategies.

This has encouraged more similar companies to follow and emulate ING Bank strategies, hence encouraging differentiation. The institutions most of the time focus on offering quick services for the convenience of both high and low income earners (Rhee and Mehra, 2005, pp 505-515).

Several areas have been identified in this case touching on the role of competition, price and demand in defining marketing strategies applied. Research reveals that a big percentage of Australians now operate accounts cheaply as compared to earlier years (Lee and Dawes, 2005).

Banking service providers focus mainly on economics, policies and strategies which encourages promotional activities, marketing and competition. They also focus on where the general public applies the services in relation to rates offered by various institutions (Lee and Dawes, 2005).

The financial rates on services within Australia are no different from other parts of the world except that they regulate and limit on the level of transactions. The prices of service transactions are much lower as compared to the prices from other banking facilities around the world.

The on-line banking services were found to provide easy access to customer transactions and other vital information from financial sector. There is possibility of using lowly rated services towards consumers (Rhee and Mehra, 2005, pp 505-515).

It was discovered of equal importance that the institutions decision to start programs enabling utilization of internet services which led to high rate of operations. It is important to provide consumers with convenient rates which enable smooth flow of transactions.

Most of the consumers find it convenient to use the on-line services to share information; some use it to for the purposes of gathering information, communicating and conducting transactions between companies.

Despite all these services, statistics shows that more people are currently utilizing banking services in Australia and are not even aware of the difference in cost when switching on-line accounts (Lages et al, 2008, pp 304-325).

Evaluate the current marketing strategies for this organization

Service firms require appropriate marketing strategies for the purposes of giving better services to consumers. The move also increases the level of customer loyalty hence increased sales leading towards organizational efficiency.

However, achieving expected level of efficiency requires up-graded managerial skills working hand in hand with superiority of product services being offered. Marketing and operations are always integrated to enhance organizational performance amidst moderation by competitive strategies.

When service organizations experiences high level of strategic fit amongst the three fundamentals namely; operations, marketing and competitive strategies, then higher business performance is guaranteed (Kotler et al, 2010).

The company tried the use of soft sounding methods which granted the required channel for the transactions. A number of comparables were used to develop guidance a midst swaps. The bank at the same time implemented the use of on-line services. The bank resorted to offering best interest rates to investors which provides great benefits towards boosting investors savings.

Consumers are provided with better alternatives hence no need for leaving their savings with accounts which pay less interest on savings. Research shows that Australians currently loose over $ 4 billion each year on potential interest through the actions of maintaining their savings on non-interest bearing account.

ING bank is using a special variable introductory rate of over 4% per year on their Saving Maximiser. This presents an offer of 1% over the common standard variable base rate they have been charging.

The bank also utilized the use of promotional activities like the use of no monthly fees on those operating on-line accounts. These promotional rates have made many people to open accounts with the bank, the statistics revealed almost 40% of the people responded positively.

Special bonus rates are always dealt with in promotion as fixed contrary to special offer involving a margin which rates above standard variable rate. ING Bank Australia resorted to boosting its residential mortgage-backed securities for the purposes of catering for the level of investor demand (Kotler et al, 2010).

Big deals are made available for those operating as home buyers who are offered cheapest loans through the non-banks. These loan offers are accompanied by an interest options and repayment holidays which is of benefit to those borrowers with specific plans concerning family issues or vacations.

Customers are allowed to borrow up to 95% of their security value; repayment of the loan within half of the stipulated years guarantees a bonus discount rate of 0.15%. The company has laid down strategies to help in overcoming the distractions that might cause inconveniencies to customers.

It was discovered that for the company to achieve all these goals it was necessary it invests thoroughly on its IT department which works tirelessly to protect any financial information data from the customers (Kotler et al, 2010).

Analyze the proposed alternatives detailing the pros and cons of each

One of the proposed alternatives on savings is on-line savings and term deposits. On-line savings makes it easier for an individual to pounce on several opportunities whenever necessary. The on-line accounts gives the advantage of easy switching from one account to another, this is since there are no costs involved. It requires a lot of shopping around for customers to get real benefits.

Term deposits also presents the consumers with the ability to keep away from frequent withdrawals. One disadvantage is that its not possible to access savings in case of any emergency, since the penalty seems costly. The advantage of term deposit is that it provides alternatives on the frequency of interest payment.

The higher the frequency on interest payment the higher the return due to the benefits received as a result of compounding.

The other disadvantage is the issue of rolling over at maturity owing to decreasing rates making it necessary to organize close follow-ups. It is important for customers to consider different maturities since banking institutions focuses at particular buckets at any given time (Kotler et al, 2010).

Proposal of recommendations for adoption and outcomes expected to occur as a result of adopting the solutions

Application of these methods assists in providing assurance services to clients who are involved in internet based transactions and is developed by the global accounting profession which is a licensed accounting profession in Australia. The encounter with other new systems like term deposits proved a number of relevant features.

It necessary for the bank to have controlled and sound practices which give conducive environment enabling profitable work with above average assurance in data entry. The transactions developed should have the provision of legitimacy and reliability due to clarity which is involved (Lazer and Shaw, 2000, pp 65-67).

Web-based transactions through Web-Trust services would ensure that the businesses have updated activities after every few hours. This service would help in providing the ability of controlling information, hence maintaining privacy of customers personal details like credit card number and personal data.

This provides investors with businesses having easy access to their website in case of any complain, in addition there is enough information they provide in guiding and assisting internal auditors (Levitt, 1983, pp 92-102).

The customers should be provided with insurance, since this makes them continue peacefully with online transactions. Their services are easily understood since there are no technicalities involved. This may seem to provide safe environment to investors transacting their businesses online.

This could assist in boosting confidence since the consumers feel protected from any kind of theft, this acts as good tool for marketing. The encounter also made it clear that Safe trade is a public company hence enjoys government protection (Winn, 2004).

Conclusion and recommendation

The institutions efforts towards evaluation of financial performances from the consumers point of view contribute largely to the performance of ING Bank Australia.

The processes through which they deliver services are defined by quality measures, cost of production and time which contributes a lot towards customer satisfaction (Gumbus and Lussier, 2006).

ING Bank paid much attention towards services and satisfaction of customers on their products; they dealt with issues such as complain from customers and product follow up issues. These processes enhance the Institutions image amongst consumers because of their high performance level.

The institution emphasizes so much on service delivery as one of the important quality drivers. The institution should also focuses on offering good training to its employees for the purposes of ensuring that they are acquainted with the right knowledge which enables them to handle current consumers issues.

This made ING Bank to survey the market in order to establish on efficiency of their services to consumers within the market. Monitoring of delivery services should be done through some systems of evaluation such as on-time deliveries.

ING Bank should at the same time implement the use of efficiency as the basis of making conducive charges to its customers (Niven, 2010).

Application of Web Trust in transactional processes should provide business clients with twenty four hours monitoring in order to reduce on the cases of liquidation. This would create some level of confidence within investors.

Due to the fact ING bank does not qualify as direct assurance service provider, it should ensure that thorough investigation is done on the background of any business transactions to avoid fraudulent cases. This would ensure that all the risks involved in providing mortgage services are dealt with (Pierre et al, 1999, pp 37-58).

The Institution should expand on its market coverage to cater also for those within the rural parts of Australia. This would help the company to build on its brand name and also increase the number of loyal clients who would contribute towards the companys profitability.

The banking systems should further be upgraded in order to avoid situations whereby consumers find it very inconvenient to cater for their financial emergency requirements.

They should at the same time develop detailed plan which enables them disseminate effective services through communication. Determining the level of success of previous campaigns would help in setting up more workable plans for the benefit of future customers (Pierre et al, 1999, pp 37-58).

ING Bank should make crucial improvement on some customer metrics such as timing of delivery services; this is since such metrics contributes tremendously towards customer satisfaction. The improved performance of ING Bank could be attributed to positive responses received from potential consumers.

The company needs to place lots of emphasis on customer views and comments towards their services. This could be done efficiently through conducting of customer surveys which makes it easier to analyze consumer tastes, preferences and expectations.

Reference List

Keegan, M. & Green, K., 2002. Global marketing management. NY: Prentice hall.

Niven, P., 2010. Customer perspective. EPM Review. Web.

Pierre B., Hulbert, J.M. & Pitt, L., 1999. To Serve or Create? Strategic Orientation Toward Customers and Innovation. California Management Review 42 (2), pp 37-58.

Rhee, M & Mehra, S., 2005. Aligning operations, marketing and competitive strategies to enhance performance: An empirical test in the retail banking industry. The international Journal of Management science, (34), pp 505-515.

Lages, L. F., Jap, S., & Grif
th, D. A., 2008. The role of past performance in export ventures: A short-term reactive approach. Journal of International Business Studies, 39(2), pp 304325.

Laroche, M., 2010. Globalization, Culture and Marketing Strategy: Introduction to the Special issue. Journal of Business Research, (2), pp 1-3.

Lazer, W., & Shaw, E. H., 2000. Global marketing management: At the dawn of the new millennium. Journal of International Marketing, 8 (1), pp 6577.

Lee, D. Y., & Dawes, P. L., 2005. Guanxi, trust and long-term orientation in Chinese Business markets. Journal of International Marketing, 13 (2), pp 2856.

Levitt, T., 1983. The globalization of markets. Harvard Business Review, (61), pp 92 102.

Winn, J., 2004. Making It Big case study. Entrepreneurship theory and practice. CA: Baylor University Press, pp 185-196. Print.

Introduction

The Euro is expected to fall in the coming year. Speculations are that the EU will not be able to retain its common ground and, therefore, will lead to the fall of the EU economies. This is discussed in the article published in The Economist on 26 November 2011 (Economist, 2011). The article discussed for macroeconomic analysis is based on the recent speculation on the prospect and future of Euro that arose due to the increasing debt burden of some of the European Union countries. The article provides a detailed understanding of the impact the fall of Euro will have on the economies and the reasons why such a future is expected to arise. This paper first discusses the article in detail and then presents an analysis of the issues discussed from economic perspective. Then it attempts to provide a possible solution to the problem derived from the analysis.

The Article

The article in The Economist discusses the increasing pressure on the eurozone countries of the increasing debt burden that is leading to monetary tightening, lower investor and consumer confidence, and subsequently lower growth. The article discusses the surging pressure of Euro as many of the countries like Greece and Italy have to be bailed out of their public debts. The currency index for Euro has gone down to 47.2, which is considered bad when below 50. The German bonds failed to be sold in auction this year, and the bond yield for some countries like Spain and Italy has gone up to 7% mark. The article presents the apprehension of the eurozone getting into a recession due to the following reasons credit crunch, tighter fiscal policy, and a dearth of confidence (Economist, 2011).

However, the Euros exchange rate has not declined, and the reason is in the consolidated Euro fund, but the households and the private sector will soon be affected due to the paucity of credit and increasing interest rates. Due to the weakening of the financial position, governments, like that of France, Spain, and Italy, are aiming at budgetary cuts and austerity. This is expected to reduce growth in the economy, and overall it is expected that the growth rate will be down by 1 percent in 2012 (Economist, 2011). This, again, will reduce investors confidence and consumer confidence. Therefore, a fall in demand for industrial goods and consumers durable like automobiles will affect the manufacturing industry and will, therefore, affect the growth of the economy.

A declining growth will, therefore, affect the internal functioning of the economy, thereby increasing unemployment, due to which tax receipts will decline. This, in turn, will increase deficits for governments. The reason for the woes of the EU countries, especially the like of Greece, Spain, and Portugal is its high amount of debt to foreign investors. The problem arose when the private banks received a lot of cheap foreign finance but were unable to pay back to their investors. This led the governments to pay for their debts, and in the process, buying those private debts, which the government too was not in a position to pay back. This led to the large debt burden on the economy. The next section will analyze the article using macroeconomic tools.

Analysis

The article presents three adverse economic indicators that are causing alarm to the analysts:

• Increasing bond yield.
• Falling demand for industrial goods.
• Increasing interest rates.
• Increasing unemployment.
• Declining growth rate of GDP.
• Declining tax receipts.

These indicators presented in the article show that the economy of the EU is facing a serious macroeconomic problem. This section of the paper will discuss how intense is the problem in the EU from the details presented in the article.

Figure 1 shows that shows the indicators referred in the article and their change from 2000 through 2010 (Eurostat, 2011; Eurostat, 2011; ECB, 2011). The main problem that has been referenced in the article is the increasing price of bond yield and the increasing government debt. Government debt is the amount of money that the governments owe to private or foreign financial institutions. This shows that the government debt of EU has been increasing constantly since 2007. In 2010, it increased to 80.1%.

Government Debt

Increasing debt of the government created pressure on the economies. As countries like Greece failed to give back their loans to foreign financial institutions, EU loaned Greece to pay back its debts. However, this created a negative sentiment for EU in the international financial market. Financial institutions had become averse to lending out money to EU countries specially Greece, Spain, Italy, and Portugal. Therefore, bonds that are sold by governments to gather finances to meet their developmental and general expenses lost their credential in the international market. The reason was lowering of confidence in the EU economy among foreign investors. Therefore, demand for bonds declined in the international market. For instance, the article states that even Germany, which still posts strong economic fundamental, failed to sell its bonds in auction. Clearly, demand for EU bonds in international market reduced as confidence on the EU economy declined. Reduced demand for bonds led to increase in bond yield. Bond yield is actually the cost of bond to a country.

Bond Yield

Bond yield is actually the interest paid by the government for the loan that it gets through selling of bonds to the investors. Therefore, as bonds demand reduces, the cost incurred to the governments to sell bonds, i.e. bond yield increases. Figure 1 shows that the bond yield in the EU has been increasing since 2008. A monthly analysis of the bond yields in 2011 shows that the bond yield increases initially of 2011 (Eurostat, 2011). Figure 2 shows that there is an increase in bond yield for the last one year in the EU area has been increasing. Therefore, increasing bond yield shows that the cost to sell bonds for countries in EU has been increasing constantly. Very high Bond yield for other EU countries other than Germany, which is below 4%, while that in other EU countries average to close to 6%. Banks are selling off government bonds to increase cash flow. The increase in the supply of bond in the market led to the decline in its price, which led to fall in demand. The increase in bond yield created credit crunch, as there were no takers of bonds of these economies. Therefore, the decrease in credit availability in the economy leads to decline in consumer demand and lack of availability in loans, led to the decline in investment.

Interest Rate

Figure 2 shows that, as there is an increase in the bond yield of the EU, there was an increase in the unemployment rate. Interest rates, on the other hand, started declining. As investment declines, there is a decline in the demand for consumer durable goods. As goods demand declines due to lack of investment in the economy there was a fall in the growth of the economy. Figure 3 shows that there was a decline in the quarterly GDP growth of the economy. Initially the central bank interest rates declined due to the monetary policy of the central bank to increase liquidity in the market. However, this led to further credit crunch, and therefore, interest rates was increased further.

Unemployment Rate

The effect of the decline in GDP growth led to the decline in production and therefore, less income in the economy. In 2009 there, real GDP growth became negative. As there was less income and investment in production there was an increase in unemployment rate of the economy since 2007. Increased unemployment rate led to the decline in the income, which in turn affected the government receipt of revenues through tax receipt.

Tax Rate

There has been an increase in the decline in tax rate. As there has been a decline in investment and therefore production, this led to the decline in income. Figure 4 shows that there is a decline in NNI as a percentage of GDP has been decreasing since 2007. Further, there is a decline in the consumption leading to a decline in demand for consumer durable goods. As there was less money in the economy, there was a decline in the tax receipt which led to a decline in the tax rate.

Conclusion

The increase in the bond yield is an indicator of the weakening of the financial and money market of EU. As there is a weakening of the monetary market, there is a decline in GDP growth and therefore there was a decline in the employment, increasing unemployment rate. Employment fell due to the cringing of the investment leading to reduction of production. Increase in unemployment rate would lead to decline in consumer expenditure therefore further shrinking the economy. the outcome of the present economic condition of the EU is expected to be worsening of the EU economy. due to the high bond yield, declining interest rates, and decline in the money supply in the economy, there is expected to be a greater credit crunch. Lack of liquidity in the market would lead to a decline in production in the economy. A the article indicates, there is already a decline in the investment in the industrial sector. Credit crunch would also decline in the demand for consumer durables like automobiles, which in turn would reduce production. Decline in production would reduce GDP. If this situation continued, this would also lead to a decline in the Euros exchange rate, which so far had been holding stable due to the EU consolidated fund. However, with declining investor confidence in EU, this too would start declining leading to the dissipation of the joint currency.

References

ECB. (2011). Statistics. Web.

Economist. (2011). Beware of falling masonry. Web.

Eurostat. (2011). Eurostat. Web.

Eurostat. (2011). Selected Principal European Economic Indicators. Web.

Introduction

With the increasing marketing globalization, the concept of international trade has been widely applied all over the world. This has been enhanced by the increased formulation of appropriate foreign policies by various countries and good business relations.

The countries are able to conduct businesses in other foreign countries based on foreign countrys policies. The international trade has made the world a global village where various investors can do businesses any where in the world as long as they possess the required qualifications (Branch 2006, p2).

The countries are able to interact with others and facilitate the flow of information and business ideas from one nation to the other as well as making products available to resource-deficiency nations.

The following report will try to analyze how a company dealing with cutlery can move its business activities from one country (United Kingdom) to another country (France), the strategies involved, factors to be considered and if need be the challenges that may be involved.

The Concept of International Trade

International trade is simply the process of exchanging goods between two or more countries. A company in a particular country may opt to sell its products in foreign markets for several reasons including but not limited to expansionary reasons, creation of extra markets or the desire to evade high competition from the companys home country due to numerous companies offering similar goods (Reuvid & Sherlock 2011, p.78).

Before a country begins exporting goods to a foreign country, there are number factors to consider for instance the political, economic, social and environmental factors regardless of which industry a country is involved in. Another important factor to consider is the foreign countrys exchange rate and see whether it is favorable to facilitate the desired business activities.

In this context, the product to be exported is cutlery products thus one characteristic feature of the product is, it is a non-perishable product.

Therefore, looking at the possibility of United Kingdom or the companies in the particular country that are interested in extending its business activities, is very essential before rushing into the country without a comprehensive market survey.

Analysis of Frances Business and Market Environment

France is the fifth largest economy in the world. Before any country launches its products to France, it has to be understood that this is a very competitive market and the appropriate policies have to be formulated to enable the particular market players survive in the competition.

It is advisable to look in to the economic situation of France before the interested market players sell their products to the country. The stability of the economy has to be fully understood and the possibility of fluctuations well looked into (Capela 2008, p.119).

This is due to the fact that various economic factors such as depression, recession and stagflation tend to affect business activities in that particular country and subsequent collapse of many of them. These are very crucial factors since no business can do well in an economy characterized by uncertainties.

It is believed that those countries with fluctuating economies tend to discourage investors from other countries since no investor would wish to conduct any kind of business where uncertainties prevail (Branch 2006, p10).

The market demand for goods will be affected largely by the above-mentioned economic factors. The cutlery business in France considering the products are not basic goods can be largely affected by these economic factors thus causing huge losses to the investors.

The Frenchs business policies with regard to foreign investors are other important considerations that should not be left out. Every country has its own specific policies, laws and regulations that have to be complied with by any investor willing to conduct business in that particular country.

The investors of cutlery business from UK have to determine whether the policies are favorable and promising and can permit the success of any foreign business.

In some instances, countries do impose unfriendly and harsh policies that discourage foreign investors especially if the country wants to protect its domestic producers from other foreign competitors (Albaum & Duerr 2008, p.52).

This has been the case in some developing nations that are inefficient producers and fear the competition from the advanced countries. This does not mean that the developed nations are not using the same tactics to cushion out their domestic producers from competition.

Some favorable conditions that the investors must look into are whether French offers any incentives to foreign investors and the mode of taxation for the foreigners (Daniels, Radebaugh & Sullivanm 2009, p.213). Some countries have created incentives and ensured the corporate tax for foreign investors is not oppressive (Capela 2008, p.103).

Others have imposed restrictions to their foreigners such that they find it difficult to invest in those particular countries. If the taxation policies in France do not guarantee any reasonable returns to the foreign investors, then it may be impossible for investors from UK to invest in France.

In the year 2006/07, the French government passed a legislation that allowed foreign direct investment based on national champions and unrelenting obstacles to foreign investors. In the year 2001, France removed all possible barriers that could hinder foreign takeovers that were facilitated by commercial pressures and European Union law.

The French government has also portrayed its full support for multilateral trade and liberalization that means the company will enjoy the benefits associated with multilateral trade. These are favorable conditions for the survival of Cutlery Company in the French economy.

In the event that the Frances policies can guarantee promising and conducive business environment for cutlery products, the companies interested in supplying the cutleries can go ahead and look in to other factors that may hinder possible penetration in the French market.

The competitive nature of the Frances economy taking into consideration the number of companies in France offering similar types of goods, that is cutlery products has to be considered.

The competitive position of any company willing to supply cutlery products has to be determined to assess its strength in terms of competition to other French companies dealing with cutlery.

This include cost-effective and the ability to produce high quality products. The two factors will determine the pricing for cutlery in the foreign markets.

If the interested investors in UK are in a position to produce cutlery products and based on the French policies, export them to the country and realize reasonable revenues, then the interested marketers can go ahead and launch the product.

However, French customer satisfaction must be met and a strategy must be adopted to differentiate products from those of other competitors in France. The cutlery sellers have to follow the theory of comparative advantage (Capela 2008, p.98).

Under this theory, a nation can improve its living standards by focusing on the production of goods or services in which it can best produce at low cost and export those goods to other countries that cannot produce them more efficiently.

In this case, the cutlery dealers have to analyze cutlery industry in France and see how effective the industry is and upon realization that the cutlery production or selling expenses in France are higher than UK, then it should utilize the opportunity and flood the products to the French market.

The political stability and the countrys ability to maintain a peace avenue to increase investor confidence is another factor that Cutlery investors should consider before establishing their marketing activities in France.

Political instability is highly correlated to insecurity and the history holds that those countries without sound and peaceful political systems tend to drive away investors thus hindering investment in their countries (Branch 2006, p2).

The environment in which the company will be selling its products is also very crucial as well as the infrastructural situation. The infrastructure in France can be analyzed in terms of transport, telecommunication, power and the availability of labor in France to assist in the marketing and distribution of the products.

These will depend on the companies availability of resources that they are willing to invest in the French market. The countrys infrastructure is very important in determining the success of various economic and business activities.

Poor infrastructure will definitely imply higher operational costs hence reducing the companys profitability and making it difficult for the company to invest in the French market (Capela 2008, p.122). The ability of the French population to provide cheap and quality labor necessary for provision of high quality services should also be put into consideration.

Some European Organizations beneficial to the operation of Foreign Business in France

Any nation falling within European Union can benefit substantially in the event that it is willing to invest in another foreign market within the union. Some various countries within specified economic blocs have formed trading and economic organizations that have facilitated trading and business activities among the member states.

One such organization is Organization for Economic Cooperation and Development (OECD). This organization is based in France and has about 25 member countries together with other 33 countries categorized as partners in a transition programme forum warranting the industrialized states to create an avenue for conducting business (Branch 2006, p18).

Some of the achievements of OECD in the recent past include employment opportunities creation, growth of member countries economies, and improvement of peoples living standards through fiscal, monetary and other structural adjustments and proper management of competition among the member countries.

The OECD does not have supernatural legal powers or financial resources and therefore does not give any financial support to its member states.

Its principal function is direction of cooperation and creation of better trading economic zone to its member countries. The cutlery company may take advantage of this organization since the target market is one of the member countries of OECD meaning some benefits can accrue to the company.

Analysis of Market Segmentation and Distribution Channels in France

Market segmentation evaluation and analysis allows thorough examination of the target market identifying the functions of several sectors with regard to consumer groups. It helps in determination of how roles and functions need to be adjusted to achieve the desired goals (Branch 2006, p11).

Market segmentation analysis is considered important before launching a product in the target market for a number of reasons. Firstly, it helps identify different consumer groups and classes in terms of age, social status, gender, economic status among others.

In the context of the companies offering cutlery goods, this analysis will help determine the demand status of their products in France and who are the possible ultimate consumers of cutlery products.

It is a complicated analysis bearing in mind that cutleries are durable products whose demand is very different from so many consumables that are bought so often and therefore the supply ought to be constant

Market segmentation analysis helps identify the key provider groups and other relevant marketing programs of the product in question. The providers might be public, commercial or non-governmental organizations. This will help the provider of goods know the strategy to use to penetrate in to the market.

In most cases, when government provides products, they tend to be relatively cheaper than when provided by the private sector. This is because the government aims at providing goods or services without any profit-making motive and their principal concern is to ensure the availability of goods to the consumers (Albaum & Duerr 2008, p.55).

The state can even provide products at break-even. This can be enhanced through government parastatals or state corporations. On the other hand, private sector provides products at relatively higher costs to make profits for the owners of private organizations.

Non-governmental organizations may offer products voluntarily to support the livelihoods of particular groups in the society. Therefore, it is imperative for the UK Company to determine various providers of cutlery items in UK that will enable the company determine appropriate pricing methodology to use.

The issue of ease of substitutability of the product also needs to be taken into consideration. That is how the consumers are able to substitute cutlery products for other related products that will have an impact on the demand of the cutleries.

The distribution channels to be used need to be thoroughly analyzed to give an overview of the possible modes of transporting and distributing the product to France. United Kingdom can export cutlery products to France by use of roads or rails since the product is durable.

Besides, transportation of the cutlery from UK to France through other means for instance air transport may not be possible since these are metal products that are very heavy and bulky. It is recommendable that the once the products lands in France, an indirect means be used to penetrate the product to the French market.

This may be done through a specified agent who has some reputation and can influence the penetration of the product to the market (Griffin & Pustay, 2008, p.93). The best way to reach the customers is through wholesalers since it might be less costly and in a foreign market, reaching consumers directly may not be easy.

Possible Strategies that can be adopted to increase Market Penetration in French Market

Moving product from a particular country requires comprehensive strategies that can guarantee business success (Branch 2006, p14). The cutlery product need to focus on the best strategies that are more suitable to be adopted and used in French market to increase the chances of survival.

One strategy that the company can rely on is mergers and acquisitions. The company can seek collaboration from a company in France that deals with cutlery products since by doing so the marketability of cutlery in France will have been made easier.

Merging with an existing company in a foreign market is one of the best strategies that can help a company grow in foreign markets. This is due to the fact that the already existing company has established itself and the consumers already have confidence in its products.

Once the company has fully established itself and their unique products known by the customers, it can decide on getting to the market alone.

Product differentiation in the French market is another possible strategy. This can be enhanced as long as the company is capable of producing high quality cutlery items that can increase its competitive advantage over other cutlery dealers in the French market.

The consumers are always interested in products that are likely to yield more utility and that can be counted in terms of high quality (Albaum & Duerr 2008, p.47). Based on the analysis of the market segment, the cutlery company can incorporate differentiation by developing products that suit different social and economic classes of French civilians.

Either, the company can opt to sell the cutlery products in France at the lowest possible price, which, in this case is the break-even price to cover the production costs during its initial entrance.

This option is usually used by many marketers that are pioneers in the market industry and despite increasing market penetration, the company can easily drive away market competitors from the market (Reuvid & Sherlock 2011, p.33).

Some companies end up gaining monopoly status out of the strategy. Once the cutlery company has strengthened its roots in France, it can go ahead and raise the prices of its products considerably to cover up the costs incurred in market penetration.

Financial issues and practicalities that may be associated with moving Cutlery products from UK to France

The companys financial strength and other resources at hand are crucial in determining its capabilities of entering a new market (Albaum & Duerr 2008, p.47). This is because the initial costs of market entrance into a new territory are usually higher.

The costs of production in UK need to be appropriately analyzed to ascertain whether the company possesses any competitive advantage in relation to other companies in French. In the event that there are unavailable resources, the company should strategize on how best it can mobilize the required resources.

The reason behind extension of the product in question might be driven by two reasons. The firm might be evading the stiff competition from UK industry that it could not survive and therefore, the best option is to look for external markets.

This might be so dangerous and since France is a developed nation with stable economy, the nature of competition in the country might be very stiff. This calls for companys financial strength to apply all the possible policies and reach out French consumers.

The other reason might be desire to expand business activities outside the country and try financial prospects of the company elsewhere outside the company (Branch 2006, p4).

The company can too look into financial situation in France and the countrys monetary system to assess whether it is in a position to provide business loans to foreign investors.

This should take into consideration the countrys banking rates and the basic requirements. Having established the necessary requisites and the ability to operate in the French economy the company can go ahead and supply the cutlery products to the French market.

There are various financial issues that need to be considered before a company or a country sells its products to a foreign country (Czinkota & Ronkainen 2007, p.117).

The investors from UK ought to consider the appropriate mode of payment to use and how risky it can be or time consuming before the money leaves the ultimate consumers and finally reaches the company. The mode of payment also incorporates the currency and the exchange rate system that seems to be more favorable.

The investors may either choose to receive their payments using their own or French currency. However, it is advisable if it is possible that they use their own currency to improve their countrys balance of payments. The product needs to be promoted in the French market taking into consideration the French peoples culture and their interests.

The promotion campaigns need to match the investors goals. Great care has to be taken so as to avoid any risks that may be involved in the supplying the product. One way of doing this is supplying small amounts of the product to the France and see whether the marketability is good (Wild, Wild &Han 2008, p.178).

Recommendation

Based on the analysis already done about the French market, it is possible for the investors from UK to supply their goods to the French market. The nature of the marketing environment is conducive for any foreigner to conduct the business in the country (Hill 2009, p.77).

The transport and distribution channels are appropriate to facilitate the convenient movement of goods between the two countries. However, there are challenges involved that for instance the initial entrance into a new market where the consumers have become used to products from other suppliers.

The opportunities available for the UK cutlery dealers are for example stable economy in France and large population that may provide he market for the suppliers of products. The opportunities available for the country outweigh the risks involved and therefore any interested investor can supply the products to the France.

Conclusion

The concept of international trade has greatly helped business investors in establishing business activities in other foreign countries. However, this depends on the other countrys foreign policies where the country desires to invest.

This is due to the fact that some countries may formulate policies that may completely hinder any person or business entity willing to invest in that particular country (Albaum & Duerr 2008, p.67).

But the business relations has been made easier by increasing global economic liberalization that has seen the formation of various economic blocs that provide conducive business environment through setting up common economic policies and removal of any restrictions that may interfere with good trading relations.

Crucial factors have to be considered in establishing business activities in a foreign country for instance political, economic and social factor (Capela 2008, p.112).

The above analyzed report has looked in to the possibilities and strategies of shifting a product from United Kingdom to France, the two developed nations and at the same time belonging to some common economic blocs.

Though there is a possibility of moving cutlery products from UK, there are associated difficulties in terms of the companys strengths to penetrate French market.

References

Albaum, G & Duerr, E 2008, International Marketing and Export Management, Financial Times Prentice Hall, New Jersey.

Branch, A 2006, Export Practice and Management, Cengage Learning, Thomson

Capela, J 2008, Import/Export for Dummies, Wiley, Washington.

Czinkota, M & Ronkainen, I. A 2007, International marketing, 7th ed., Thompson, South Western, 2007.

Daniels, J. D, Radebaugh, L. H & Sullivan, D. P 2009, International business, 12th ed., Pearson Education, New Jersey.

Griffin, R & Pustay, M 2008, International business: a managerial perspective, 5th edn, Pearson/Prentice Hall, Upper Saddle River, New Jersey.

Hill, C. W. L 2009, International business: competing in the global marketplace. McGraw-Hill Irwin, New York, NY.

Hitt, M. A 2009, Strategic management: competitiveness and globalization: concepts and cases. Cengage Learning, South-Western.

Reuvid, J & Sherlock, J 2011, International Trade-an Essential Guide to the Principles and Practice of Export, Kogan Page, New York.

Wild, J. J, Wild, K. L & Han, J. C 2008, International business: the challenges of globalization, 4th ed., Prentice Hall, Upper Saddle River, New Jersey.