Making Radios Available and Challenges of Freeplay
Freeplay radio was established to increase the people’s awareness about AIDS in the African countries, as the inhabitants of these places lacked communication with the rest of the world (Tidd, Bessant, and Pavitt 1).
In this case, using the radio was one of the most effective instruments to increase the effectiveness of communication while reconciling the social agenda. Nonetheless, making radio freely available was difficult since the targeted communities did not have access to the electricity or enough money to buy batteries regularly (Tidd, Bessant, and Pavitt 1). In this case, the company had to propose an innovative solution and find additional sources of energy to make a new radio available to the target audience.
Despite the rising popularity of this new radio in the developing countries, Freeplay had to face some challenges when trying to sustain the business. In the first place, one of the major difficulties was an increase in expenses and the rise of the production costs, as the target audience continued to emerge (Tidd, Bessant, and Pavitt 1). The company had to optimize its production processes to decrease costs. Simultaneously, it had some issues with the distribution and development of new programs to satisfy the changing demands of the consumers. Based on the factors highlighted above, the major challenge pertains to communicating with the potential target marketing and corresponding with their target needs.
Being Inspired by Freeplay Story to Provide Drinking Water to Africans
Nonetheless, despite facing the challenges, Freeplay can be viewed as a bright example of how organizations can prioritize social responsibility in their actions. Nowadays, applying the communication-centered strategy is one of the most common approaches to enhancing relationships with the major stakeholders such as customers, community, and government (Coombs and Holladay 5).
Jennifer Perkins also wants to help local African communities, but she wishes to focus on the shortage of water. In the first place, one of the possible aspects is to underline the need for distributing information and providing the African population with different ways of how to clean the water. At the same time, the company can try to establish a partnership with the radio producer to ensure that the message is delivered to the target audience. To support the distribution of the idea, Jennifer may need to communicate with the governmental authorities directly and attract their attention to the existent problem. Using this strategy will help underline that the company is not only interested in financial prosperity but also wants to emphasize the importance of social responsibility.
Social Entrepreneurship Idea and Creating Business
All factors described above depict that Freeplay can be discovered as a social entrepreneurship idea. In this case, one of the major advantages of this business phenomenon is the fact that it tends to be a primary driver for societal change (Bornstein and Davis 83). It increases the firm’s social responsibility and creates a positive brand image (Bornstein and Davis 83). Nonetheless, when establishing a venture with a company supporting the social entrepreneurship concept, there are a plethora of challenges.
One of them is the fact that these business entities are often associated with a low return on investment and insignificant profit margins. Nonetheless, despite these critical drawbacks, the example of Freeplay should revolutionize the modern business world, as the trend of social responsibility is gaining popularity. In this case, the government and companies have to work together to increase the awareness of developing countries about the most common diseases and try to improve their living conditions.
Works Cited
Bornstein, David, and Susan Davis. Social Entrepreneurship: What Everyone Needs to Know. Oxford, Oxford University Press, 2012. Print.
Coombs, Timothy, and Sherry Holladay. Managing Corporate Social Responsibility: A Communication Approach. Hoboken: John Wiley & Sons, 2012. Print.
Tidd, Joe, John Bessant, and Keith Pavitt. Exploring Innovation in Action: Power to the People – Freeplay Energy. Web.
The proposed Business Case is aimed at discussing the implementation of RFID in the University of Hong Kong’s (HKU) Libraries. The Case elucidates the main goal of the project and provides a brief overview of potential alternatives. Hence, the recommended alternative suggests extending the implementation of RFID to other libraries. The Business Case discusses the key strategic aspects from different perspectives: customers, finance, learning, and growth (L&G) and internal performance. Also, it provides the evaluation of this IT project that comprises all the relevant calculations: PP, ROI, and risk assessment.
Executive Summary
The case study under analysis is devoted to the implementation of RFID technology in HKU Libraries. The core goal of this implementation resides in optimizing the library’s operation and making the service more effective. The strategy is aimed at ensuring long-term benefits for all the shareholders.
The proposed Business Case analyzes two alternatives. Thus, the project has been currently implemented in only one department – the Main Library. As a result, the first alternative resides in postponing further implementations until the projects’ outcomes might be analyzed in terms of the long-term effect. In the meantime, it is recommended to choose the second alternative that suggests the expansion of the implementation in other libraries. According to the performed evaluations, the current results show sufficient evidence of the project’s efficacy for it to be further extended.
Introduction
HKU Libraries were initially established to assist researchers and other members of the scientific community. The Main Library is situated at the Main Campus and manages the other six departments such as Dental, Music, Education, etc.
The key problem that the library has faced is the excessive amount of materials they have to handle. Thus, the operation would gradually become more complicated – the waiting time for check-ins increased, the staff was incapable of tracking all the resources, and a significant part of them was either stolen or lost. Moreover, the library had a critical staff disproportion with a considerable prevalence of support employees over professionals with the relevant degrees.
As a result, it was suggested that RFID was implemented to optimize the library’s functioning and raise the general satisfaction with the service in customers. The implementation of the technology has already brought some positive results; therefore, at the current point, it is presumed that the implementation of RFID in other libraries will assist in completing the initially targeted aim. Thus, the strategy is mainly aimed at ensuring long-term shareholder value. The table below shows the impact that the implementation is likely to have at different levels.
Table 1 “Strategic Map”
The table above shows the key strategic aspects that are likely to contribute to long-term shareholder value. Thus, from a financial perspective, it is expected that the implementation of RFID will help to minimize the risk of book losses.
The library currently loses a large scope of books due to thefts and those cases when customers, either intentionally or not, place books at wrong locations. The salary savings will be determined by the fact that the number of workers on counters will be reduced with the implementation of the new technology. Lastly, the upgraded service might encourage more clients to buy subscriptions. Customers, in their turn, will receive an entire series of benefits: an extended choice of book and other printed materials, a more convenient access options and, most importantly, a simplified registration procedure. The latter is one of the most critical concerns at the current point.
From the internal perspectives, all the regular operations are expected to be significantly simplified. Thus, it will take personnel less time to perform inventory activities, order books, carry out check-ins and check-outs, etc. Finally, the implementation of RFID opens up new prospects – the electronic database allows tracking customers’ preferences and performing more efficient procurements. More tasks will potentially be completed without manual work, and the general cost of operations will fall.
Therefore, the desired value of the project resides in the general optimization of the service that will imply minimizing the time spent on operations, allow serving more clients, and will increase the revenues in such a manner. The increase of the clients’ number is not the strategic pivot of the proposed implementation. Thus, for instance, the first year of RFID’s functioning is not expected to bring new clients. However, the time spent on the completion of the relevant tasks will reduce substantially, so that insignificant revenue is expected within the first year already. Later on, in the course of the second and the third years, it is presumed that the quality of service will improve, and more clients will purchase the subscription – this will have a positive impact on the revenues’ growth.
Year
MOV
1
5% return on investment, the number of customers remains stable
2
10% return on investment, 200 new customers
3
15% return on investment, 500 new customers
Table 2 “MOV”
As a result, the proposed Business Case is aimed at pointing out the core benefits of the alternative solution that resides in extending the implementation of RFID in other libraries.
Alternatives
Alternative 1
At the current point, the implementation of the project is not fully accomplished; thus, some of the outcomes cannot be accurately assessed. As a result, the first alternative resides in postponing further implementations until the relevant statistics are gathered.
Alternative 2
As long as the project has already completed the initial stages of the implementation project, this experience might be transmitted to other libraries. Thus, the second alternative resides in implementing RDIF in all the HKU Libraries.
Analysis of Alternatives
The analysis of alternatives is performed with due consideration of the following criteria: financial, organizational, project, and external. The data collection was performed based on the information provided in the HKU Libraries Case Study.
The analysis of the comparative analysis of the two alternatives is represented below.
Criterion
Weight
Alternative 1
Alternative 2
Financial
ROI
35%
3
10
Payback
20%
4
10
NPV
35%
4
9
Risk
10%
6
2
Total Score
100%
4.25
7.74
Table 3 “Comparative Analysis of the Alternatives”.
The ROI was calculated relying on the following formula: total expected benefits – total expected costs/total expected costs.
The payback was calculated relying on the following formula: initial investment/net cash flow.
It is essential to note that the payback metrics were converted into years.
The NPV was found by calculating the correlation between the inflows and outflows cash. The potential risks’ score was logically retrieved from the general findings.
As a result, the comparative analysis of the two alternatives shows that the second alternative is more beneficial from the financial standpoint, even though it implies higher risks.
Critical Mistakes That Led to the Big Crash at AT&T
The first mistake was to undertake complex system upgrades without any emergency plans to handle any mishaps incase the project did not proceed accordingly. Although the company knew that an impending ruling on number portability would harm it, it failed to have a second plan and this led to its collapse. The industry had already delayed the ruling by a number of years and AT&T Wireless was counting on another postponement. Rather than have alternative plans for the outcome of the ruling, the company only ‘hoped’ that the ruling would still be delayed.
The downfall of AT&T Wireless began when it failed to clear issues regarding its staff’s future at the company, a critical mistake that would return to haunt the company. When the company hired a new CIO, Christopher Corrado, almost every staff member knew of his previous activities at Merrill Lynch, where he supervised the offshore outsourcing of sections of the company’s departments. Talks of an impending outsourcing were rife among staff and this created low morale among them since such an operation would have obviously caused job losses. Therefore, staff morale was very low even as the company was trying to play a catch-up game with competitors. If there was any time the management required the cooperation of its staff most, then it was at this time (Koch, 530).
Another mistake was the failure to set up effective CRM tools to handle the expected high number of calls emanating from its system upgrade. There was a low number of customer representatives to handle requests from customers wanting to switch onto the new system. However, the company did not act on time, consequently, there was also slow access to customer information and this hampered the switch process.
Warning signs that the company was on its deathbed were evident from as early as 2003 when it slipped from its position as market leader to third position. Other warnings include the failure by its customers to switch over to GSM from TDMA while Cingular was signing almost 75% of its customers, and the decline in new customer numbers.
AT&T Wireless should have had emergency plans for every system upgrade they carried out owing to the huge costs incurred in case the new system failed. It should have begun system upgrade as soon as its competitors had started upgrading their systems. Secondly, the company should have addressed staff fears regarding their future at the company when the new CIO arrived to boost their morale.
Effects of Rumours
Although outsourcing can bring several advantages to an organization, it has the potential to create low staff morale since it frequently reduces the number of staff required in the firm, hence causing a layoff. Therefore, an impending outsourcing or layoff plan can have a detrimental effect on staff morale, particularly if they are not assured of their future. In AT&T Wireless’ situation, low staff morale was caused by the fact that staff was not assured of their future with the company as the new CIO was known to favor outsourcing.
Outsourcing would have sent some employees out of the company and this was compounded with rumors of future layoffs. These rumors caused staff to have low morale since the new CIO had not faced them directly to inform them of their future in the company. Rather than directing all their efforts at the company, some members of the staff were looking for jobs elsewhere. Low morale could have also been caused by increased stress due to an expected heavier workload due to layoffs.
The Influence of the CIO Change
When Mike Benson departed from AT&T Wireless, staff were not fully convinced that he had ‘decided to retire’, as they were made to believe. His departure was unexpected since he had been at the company for 15 years. It is likely that he differed with the company’s management on some issues since the only explanation offered to staff was that Mike Benson had ‘decided to retire’, and there had been no information regarding his impending ‘retirement.’
Christopher Corrado’s previous undertakings at Merrill Lynch made employees to speculate that it would not be long before he begun offshore outsourcing at the new company. This caused a lot of rumor and problems at the company as staff had low morale. The company could have informed its staff of Mike Benson’s impending retirement so that they would be ready for a new CIO. Alternatively, AT&T Wireless’ management should have introduced the new CIO to staff as soon as he assumed his office, and clarify on the issue of offshore outsourcing.
CIO Corrado’s Management Style
Corrado uses an authoritative style of management. Rather than gain the respect of his subjects by leading through example, he commands them and constantly uses threats to ensure that staff tow the line. An authoritative leader tells his subjects the “what, when and how”, and emphasizes on setting goals and pushing employees to achieve them without showing them how. The success of this management style relies on fear.
By using an authoritative style of management, Corrado aims to instill fear on his subjects so that they can do whatever he tells them. Considering that there were already talks of offshore outsourcing, Corrado capitalized on this and increases fear among staff regarding the security of their jobs.
Negotiations Between AT&T and HP
Negotiations between AT&T Wireless and HP for shared services and offshore outsourcing of services came at a premature time. AT&T Wireless was at an advanced stage of getting the CRM system online and was required to show loyalty to its staff. The negotiation lowered staff morale and prevented them from directing all of their efforts on the CRM system as it was unreasonable to work hard on a system that would be handed over to someone else, moreover, there a was high possibility that some of them would be losing their jobs in the near future. This decision was an indirect message to the present staff that there their services would no longer be needed as soon as the new system was up and running.
AT&T Wireless should have first informed its staff of their future with the company, then engage HP in talks afterwards. Alternatively, it could have postponed the negotiations until the new system was up and running.
Public Relations Strategy Selection
Cingular had to convince customers that a change in management would lead to improvement of services and that radical changes to enhance customer satisfaction would be implemented. One of the biggest changes would be to move away from NeuStar and outsource the administration of number porting to TSI Communications so that interoperability problems experienced by AT&T Wireless customers would be eliminated.
A second PR strategy would be to put up a new CRM tool that would enhance service delivery and facilitate future system upgrades.
Radio frequency identification chips are beneficial for the large fashion retailers because they help in keeping track of the stock. Large retailers like Zara have struggled for a long time with keeping track of their inventory, especially in taking stock of different fashion lines. Companies like Zara have to keep up with sales to identify the brands that sell faster, and to establish the languishing fashions.
This helps in deciding which fashions to invest in, and how to arrange their products in the stores to promote the sales of the languishing fashions. RFID chips have been programmed to store information about items, and they make it easier to take stock. As revealed by Zara, the main benefit of using the RFID is its ability to make inventory taking easier and faster. Zara indicates that it took 40 employees around 5 hours to do the job previously, but with the chips, 10 employees can take half the time. This reduction in working hours and employees required for the process translates to a reduction in financial liabilities for the company.
The chips also help in determining the products to restock in the shelves because each sale is electronically transmitted to the systems in the stores, prompting the workers to fill in the products. RFID has replaced the use of bar codes, which need to be scanned one at a time. This process is quite hectic, but the RFID has made it simpler because it allows the inventory-takers to take stock in bulk. Zara also enjoys the efficiency of the system by conducting its inventory-taking every six weeks. The company used to carry out the inventory-taking process twice a year before adopting the RFID system. This has enabled Zara to have over 95% accuracy in its stock taking.
Why Wal-Mart Slowed its use of RFID
Wal-Mart slowed the use of RFID systems because it proved to be ineffective in the warehouses and stores. The company had initially developed a plan to implement the use of radio signals in its warehouses, that the practical application of the system was ineffective. This was likely due to the cost of installing the system. Unlike Zara, Wal-Mart and other warehousing companies could not afford to invest in buying sufficient chips to cover their entire inventory.
The radio signal system proved inefficient for Wal-Mart because they expected it to be as simple as the barcode system. It is also clear that the RFID system requires continual replacement of the products in a store, and this would require a very large team at Wal-Mart, which is not economical. The system is more appropriate for a company that has a limited number of products. In essence, the RFID system cannot be advantageous for a retail company with a large amount of products with faster sales.
The RFID system is best suited for the apparel business because it deals with a limited number of fashion products, and the companies have to know which products are doing well. Wal-Mart only needs a bar code system, which permits its information system to highlight the number of products of different types that are sold on a daily basis. The RFID system did not have any significant benefits for Wal-Mart. In any case, it was a liability to the company.
The cost of installation of the system is quite high as disclosed by Zara, and it needs a company that can respond promptly to the restocking process. Wal-Mart would rather deal with the bar code system because most of its products do not require inventory taking.
Industry consolidation may be taken to mean the merging of industries so that they can be in a position to realizing their competitive advantage. It’s through this merging of the industries that you will find that they will be in a position to improve on their investment returns and this will be achieved through cost-cutting, more productivity gains plus the economies of scale which the companies through merging will experience. So in this case, the industry consolidation of the radio industry is changing so much hence leading to the change of its economic structure. The industry has now changed from working independently hence leading to the merger of the radio industry so that they can be in a position to cut so many costs hence leading to the realization of their competitive advantage. It is argued that since the telecommunication Act of the year 1996 relaxed its ownership restriction in the US, more than 12,000 radio stations in the US have so much changed hands. This is because they have tried to change the way they do their daily business and this is evident as a result of the deregulation of this industry. This is because there are no independent, local broadcasters. It is through the industry consolidation that so many local radio markets have highly been affected since the industry through merging has been in a position to wear away the local radio market. This is because they have not been in a position to compete with the larger industry hence leading to low performance in the local radio market. This is because it is out of the industry consolidation that the industry has become a powerful firm hence the local radios have not in a position to compete with the industry. So through the paper, am going to try and analyze some of the effects of the local radio market as a result of the radio industry consolidation. This is very much important in trying to analyze the effects of the radio consolidation as far as the local radios are concerned hence be in a position to try and develop various measures which can be used to ensure that these local industries have remained firm since they are too contributors to the economic growth of the country hence the need to try and protect them. (Barnouw, 2002).
Monopoly
The consolidation of the radio industry would encourage monopolies hence leading to a higher ad rate. This is because, after the radio consolidation, you would find that most of the costs, in this case, would be cut down, the advertising would be more hence many people would be in a position to access the radio station, unlike the other local radio. Most of their advertisement would involve the use of the new technology which is not so common in the local radio stations. It is out of this particular fact that the issue of monopoly would arise in this case. Monopoly in this case can be taken to mean the domination of a single market in the marketplace. You find that it is out of the industry consolidation that the radio industry has been in a position to dominate the whole market hence making it hard for the local radio markets to compete well with the industry. It was after the radio consolidation that the company was in a position to cut most of its expenses say through advertising since they have merged hence meaning that most of the expenses which the company was facing earlier can now combine their efforts and hence cutting down their expenses. It is also out of the economies of scale which has made the company compete well in the market hence providing the monopoly in the market. So you will find that it’s through the economies of scale which can be enjoyed by the radio industry which has made the local radio not to compete well with the radio industry simply because the market is so much competition for them. It’s through their increased advertisements say through the internet due to the rise of the new technology which has made the company compete so well hence cutting down its many expenses. Monopoly is one of the market systems which are so much competitive hence meaning that if a certain single producer gets control over the market, it will mean that most of the consumers will be attracted to that industry simply because its services are more advanced, unlike the small scale producers. So most of the local radios have experienced huge losses since most of their services are not of good compared to the radio industry hence leading to more losses in the local radios. (Polgreen, 2005).
Low performance
It is out of the industry consolidation which has led to a low performance by the local radio stations. This is because the radio industry through its merging has tried to dominate the market in the US hence meaning that the local radio stations will be closed down simply because they can’t compete with the large radio firms. This will also have an effect on the societies simply because you tend to find that most of the local radio stations are found in the rural areas and depend largely on the local radios. So, you will find that due to the increased competition from the large firms, these local radios will end up been closed hence the people from the local communities will not be in a position to hear from this local radio. So the consolidation of the radio industry will have a dual impact on both the rural people and the local radio since they will be cut from the market due to the many losses they will incur. It’s through this that you will find that the economy of the country will go down since these local radios are still contributors to the econ0my of the country but when they have been cut from the market, or when they are less effective, you will find that the economy will be low and also affect their living standards. So the merging of the radio industry will have so many effects on the local radio station since monopoly is one of the poor market systems hence government should intervene to ensure that the local radio stations have been protected from the large firms through the giving of incentives to try and motivate them and also cut down their many expenses hence leading to the realization of their competitive advantage. (Mundy, 2000).
The issue of profits also applies in this case. You find that most of the local radios have low profits when compared to the large firms. This is because they have not been in a position to strategically manage themselves. You find that in any business, strategic management is very much important. It’s through strategic management that the company can be in a position to realize its set goals and objectives. But for the case of the local radio, you find that they have not been in a position to try and differentiate their services like the large firms hence leading to poor services. You tend to find that due to the rise of the new technology, so many people would like to go with the new technology hence would prefer only those services which use the new technology. So for this case, many customers would use to listen to those radio stations which try to please them so much hence try to neglect the local radio stations since they have not adapted to the new technology. This is because differentiation of services is very much important in any organization. But due to the fewer profits they get, most of their services are not preferred by many people hence leading to their closure. They have not been in a position to meet the so many expenses which are associated with the performance of the industry hence leading to the realization of its competitive disadvantage. (Hall, 2005).
Unemployment rates
The consolidation of the industry will also have an effect on the rate of unemployment. This is because it’s through the industry consolidation that many local stations will be closed hence contributing to the unemployment rates. This is because most of the local radios will not be in a position to compete so well with the large firms since the large firms will be in a position to use the new technology hence becoming cost-effective. It’s due to this fact that most of the local radio stations will not be in a position to use the new technology hence meaning that the services will be poor when compared with the services from the large firms. Definitely, this will lead to the closure of the business hence so many people will be rendered jobless hence the economy of the country in this case will be affected too. It is due to the deregulation of the radio industry that all these problems have arisen since you tend to find that there are not any laws that have been imposed to ensure that these people are protected. It is due to this particular fact that you will tend to find that the large firms have dominated the whole market hence getting the largest share. (Alger, 2000).
Conclusion
Radio consolidation has had so many effects on the local radio markets since its implementation. It was out of the deregulation of the radio industry which led to the rise of the merging of this industry hence leading to the realization of its economies of scale. This can be seen in the field of advertising whereby the radio industry has been in a position to cut its many costs hence leading to huge profits which are accrued by the industry. You tend to find that it has created its monopoly hence meaning that it has dominated the whole market hence the local radio stations can not be in a position to compete with the large firms. It’s due to this fact that measures have to be taken to ensure that the local radios are not affected hence leading to the closure of so many radio stations due to the losses they get. The government should ensure that they have controlled this monopoly since it is not affecting the local stations alone but you also find that the economy is too affected.
Reference
Alger, D. (2000): The mega media: How the giant corporations would dominate mass Media. Lanham, Maryland. Littlefield Publishers, Inc.
Mundy, A. (2000): The radio merger to bring more opportunities. The capital district Business Journal. Vol. 8(1).
Polgreen, J. (2005): The death of the local radio. Washington Monthly Journal. Vol. 32.
Barnouw, T. (2002): Conglomerates and the media. New York: The New Press.
Hall, H. (2005): Radio networks swell. Caribbean Business Journal. Vol. 6(3).
Each company has short-term, medium-based, and long-term plans. All these are presented in terms of budgets and approximations as long as they are quantifiable items. However, due to the changes between the time of budgeting and the running of the business and other unexpected events, the budget does not represent the real accounts in the running of a firm. This gives rise to the need for an analysis of the budget so as to find out the variance and later on find the remedy for the variance. There are two types of variances; positive variance and negative variance. Positive variance is that which exceeds the approximations while negative variance reflects performance below the approximations. This paper analyzes the performance of a radio department manager by the budget performance.
Budgetary variances
Item Budgeted actual variance
DRG A cost $ 114, 750 $150,000 $35,250
DRG B cost $ 192,000 $ 200,000 $ 8,000
DRG C cost $ 0 $ 95,000 $ 95,000
DRG A quantity 9 10 (1)
DRG B quantity 24 20 (4)
DRG C quantity 0 1 1
Total cost $ 306, 750 $ 445,000 $ 130,250
Total volume 33 31 (2)
Average cost $9,295 $ 14,355 $ 5,060
Analysis
From the face value, the approximations that had been done five years ago are well below the actual targets that the company has witnessed. This is depicted by the positive variances that are registered by virtually all products in terms of costs. However, there is the negative variance that is recorded in terms of the quantities (Collier & Agyei-Ampomah, 2009).
It is a common scenario that due to the inflationary effects the cost of living goes higher than expected. This is most cases is pushed by the rise in the cost of commodities. Even though the budgetary team may be able to foresee the events that can lead to such occurrences, some events are unforeseen. This seems to be the case for the company in question. The approximated costs are below the actual costs. It is expected that the rate of inflation is thus higher than what was expected at the beginning of the five years.
Introduction of a new product
For a company to introduce a new product it must have been catered for in the budget. However, if it is not then its performance has to measure against the existing products of a firm. From the available information, the company had not budgeted for product C. however, its introduced beard fruits as it moved 1 volume in the year of introduction. When compared to the previously existing products- A and B, product C may appear to be performing poorly. The volume of C is ten percent that of A and five percent that of B. however, it is not feasible to measure a new product with established products. This volume can even rise above the volumes moved by the established products once the product is also established in the market (Collier & Agyei-Ampomah, 2009).
Negative variance in quantities
From the data above it is evident that the established product experienced a negative variance in volumes. This scenario is often caused by several factors. One of the common factors is the introduction of a new competitor without an increase in market size. This implies that the existing products have to give out part of their market to the new competitor. From the analysis, the new competitor cannot be the new product C. the aggregate positive variance of products A and B is far above the positive variance of product C.
The other scenario that may lead to a decline in volumes that are moved by a product is the loss of market to an existing product. This means that the volumes that are moved by the competing product are increased by the same variance. This is only proven once the competitors release their financial records. At that time data that is needed for such comparison is available (Prowler, & Morgan, 2005).
The loss of market to a competitor can be explained by two major reasons; laxity by the marketing team, and production of products of lower quality than before. However, improved marketing by competitors and improvement on the quality of the competing product without equal change to products A and B could as well have resulted in this scenario (Prowler, & Morgan, 2005).
Similarly, change in prices affects the number of volumes that are moved by a particular product in the market. According to the cost figures that are provided, the average costs of A and B recorded positive variances. It is expected that the variances are reflected in the prices of the same products. This may explain the decline in quantities from what was budgeted. However, this is only possible if the competitors either did not alter their prices or had a less price increase than the company (Prowler, & Morgan, 2005).
Average cost
The average cost is the cost at which each item of the company is sold at. From the data available, the average cost of the company had a positive variance. This is a result of the positive variance that is evidenced in the budgetary variance table above which is discussed in other sections of this paper. It is worth noting that, the changes in volume whether positive or negative do not affect the average cost variance. A product and a company can report a positive variance in average cost but due to negative variance in volumes report a negative variance in profits (Cleverly, Cleverly & Song, 2010).
Effectiveness of the manager
The manager is trying to fight the effects of positive variance in costs to sustain the market. The positive variances in A and we are 33% and 2 % respectively while the negative quantity variances are 1% and 16 % respectively. This implies that the manager has performed poorly in product B and commendably in commodity A. the manager should thus work towards rectifying the performance of product B either to be at per with the cost variance or even lower (Cleverly, Cleverly & Song, 2010).
Conclusion
From the above information, it is evident that the products of the company were not performing badly in terms of costs. This is commendable as long as it does not result in loss of market to the competitors. However, the marketing department should work towards getting back the lost market. The marketing of the new product C should also be stepped up o that it can perform at comparable levels with products A and B.
References
Collier, P. & Agyei-Ampomah, S., 2009. CIMA Official Learning System Performance Strategy. New York: Butterworth-Heinemann
Cleverly, W., Cleverly, J. & Song, P., 2010. Essentials of Health Care Finance. New Jersey: Jones & Bartlett Learning.
Prowler, M. & Morgan, E., 2005. Financial management and control in higher education. New York: Routledge
Reduced requirement of time of existing employees.
Immediate cash outflow of $ 35,000.
Training of employees to use mechanized system – time and cost.
Over the period, ROI will ensure increased cash flow.
Over the period, enhanced sales and reduced manpower will lead to increased profits.
Digital Dashboard
Microsoft Office 2000.
Customized to provide access to employee filed, email, company databases, & web sites.
More beneficial than web portals.
Customized information for each employee.
Based on Microsoft Office 2000; exemplary support and technical service.
Digital Dashboard Starter Kit from Microsoft.
Easily used by all employees.
Microsoft Data Engine (MSDE).
Organizational software compatible with SQL server.
One or more HTML page.
Provides framework functions of a digital dashboard.
Joint Application Design (JAD)
Implementation of Joint Application Design (JAD) is worth considering from an IT perspective for enhancing the organizational efficiency. “is a group-based tool for collecting user requirements and creating system designs. JAD is most often used within the system analysis and system design stages of the SDLC” (Rainer & Turban, 2009 ¶ 74). However the system is time consuming and requires provision of extensive training to staff.
Implementing JAD
Research available systems.
Address options, employee preferences:
Time sheets;
Work schedule;
Menu updates;
Tip tracker.
Develop system programmed to specific needs of Club IT.
Implement testing phase and utilize kiosk.
Gather inputs for changes or adjustments.
Begin employee training and use of kiosk.
Recommendation
ROI at 34.77% is a good return and NPV is positive at $ 25,750.65. Therefore the project is viable to consider.
Implementing Digital Dash Board of Microsoft would make running the current Club IT as an efficient organization having a sustainable competitive advantage over the competitors.
It will also enable Club IT open more outlets with operating in an efficient and cost-productive way.
Training of the staff is an important task which Lisa has to consider.
Looking at the cash flows for the immediate investment on the system is another factor to consider.
Reference
Rainer, Kelly R. & Turban Efraim. (2009). Introduction to information systems, 2nd ed; Acquiring information systems and applications Ch 10. Web.
The development of Satellite Radio began in 1991 when a venture capitalist, David Margolese invested $1 million in Robert Briskman’s company. This company had designed the unified S Band. This technology was the core of the future satellite radio. Briskman had a great idea, but lacked the funds to implement it. Margolese fell in love with the idea and set out to commercialize it.
The idea was to provide radio services nation-wide and of high sound quality. This was in contrast to the existing analogue radio that existed locally and faded once one moved out of the locality. This new radio service required the company to put satellites into space to broadcast the signal. Before putting the satellites into space, the company had to purchase a license from the Federal Communication Commission (FCC). This license, together with the cost of satellite installation was projected to be quite high. However, Margolese believed in the idea and was willing to put in the required capital. He projected that this new radio would be operational latest by 1997.
Apart from the cost, there was the question of how to convince potential customers to purchase new radios that could support the new technology. This would be difficult since almost everyone already had a radio at home and in his or her car. Secondly, cable TV companies also provided some form of satellite radio at no cost to their subscribers. It would be challenging to convince people to subscribe to this new radio when they could get the old form free. However, the company did market research and found that customers were willing to pay for superior quality radio.
The company also faced opposition from Association of National Broadcasters, which predicted that this new technology might lead to the downfall of local AM, and FM radio stations. This would lead to loss of jobs and local content that residents relied on. XM radio was the second company licensed to provide satellite radio services.
External Environment
The grand plans for satellite radio faced stiff competition from traditional radio. This radio was already established and relatively free. No monthly subscription was required as opposed to Satellite radio, which required users to pay. In order to counter this hurdle, both XM radio and Margolese’s company –now called Sirus Radio- entered into deals with car manufactures to install their satellite radios during manufacturing. This would force the car buyer to subscribe to satellite radio too.
The second threat was internet radio. This is also free as long as the customer has an active internet connection. Unlike local AM and FM, Internet radio had the advantage of ubiquity. Users could access it anywhere in the world. Satellite radio also promised to provide service to the whole country, thus creating competition.
The third threat was cable radio that came with cable television. Most Americans already subscribed to cable television. Most cable television companies provided cable radio free with the package. Those that charged did not put a high price to the radio. It was almost free too.
Sirus Radio would compete with XM radio for satellite radio subscribers. There was a difference of $2.96 in their subscription fees, Sirus Radio charging the higher fee. Sirus justified this fee with the fact that it aired zero commercials on the music channels. XM radio aired a few commercials and planned to earn money from these commercials rather than charge a high subscription fee. The formats for both radio companies were almost similar, differing in very few respects. Sirus had three motor vehicle companies and XM had two motor vehicle companies as strategic partners. These companies would install their radios in their cars.
Threats and Challenges
These companies needed to install satellites in space to broadcast their signal. Each company planned to install two satellites and have a third one on standby ready to launch in case of emergency. This project would cost Sirus and XM $1.2Billion and $1.1 Billion respectively. They were to be launched in 1999 and 2000. This means that the original timeline for launching the satellite radio was pushed forward by over two years. Margolese’s investment would not pay off as fast as he had imagined.
The companies also needed to install repeaters to amplify the sound since America was full of tall buildings that interfered with its path. In addition, special studios were necessary for transmission. Infrastructure for this venture was proving to be quite expensive.
Sirus and XM both delayed further in entering the market due to technological problems. Sirus had trouble with its receivers while XM had trouble with its satellites. Sirus took two years to resolve its issues while XM took one. In the end, XM launched nine months earlier than Sirus, in2001. This gave XM first mover advantage. By the end of 2002, Sirus had also launched its services. Unfortunately, XM had ten times Sirus’ customers. This trend continued over time. It was enhanced further by the fact that Sirus charged higher subscription fees than XM.
The huge capital requirements meant that these companies would take longer to break even than initially projected. XM, the leading company, hoped to break-even by 2004. This was four years after the initial launch. XM’s lead was also enhanced by the speed with which its automobile manufacturer firm partners installed XM’s radios. In contrast, Sirus’ partners took much longer to install their radios, hence slowing the growth of their customer base.
This delay in launching and long time to break even took a huge toll on Sirus. The company almost went bankrupt in 2002. However, it managed to raise more capital in form of debt and equity to keep it afloat. XM radio also faced cash flow problems in 2003 and sought to raise more capital to survive. The company managed to raise an extra $475 million. This way, it was able to survive the difficult times.
XM radio also has some trouble with its satellites. They are degrading faster than expected. This has reduced their useful life by seven years. This will also be an additional capital expense in 2008.
The huge capital requirements meant that these companies would take longer to break even than initially projected. XM, the leading company, hoped to break-even by 2004. This was four years after the initial launch. XM’s lead was also enhanced by the speed with which its automobile manufacturer firm partners installed XM’s radios. In contrast, Sirus’ partners took much longer to install their radios, hence slowing the growth of their customer base.
This delay in launching and long time to break even took a huge toll on Sirus. The company almost went bankrupt in 2002. However, it managed to raise more capital in form of debt and equity to keep it afloat. XM radio also faced cash flow problems in 2003 and sought to raise more capital to survive. The company managed to raise an extra $475 million. This way, it was able to survive the difficult times.
XM radio also has some trouble with its satellites. They are degrading faster than expected. This has reduced their useful life by seven years. This will also be an additional capital expense in 2008.
Competitive Advantage
Sirus and XM both tried to outdo each other and win more market share. Sirus spent a lot of money signing deals to access exclusive content. The company hoped this exclusive content would motivate subscribers to join its network. The most significant deal was with National Football League and it cost $188 million. Sirus hoped to recover this from increased subscriber numbers. The company also signed Howard Stern for $500 million. This exclusive content was projected to attract new subscribers.
XM did not take these moves lying down. They also sought their own exclusive deals to counter. They signed a deal with Major League Basketball that gave them exclusive rights to broadcast their content. Additionally, they signed a shock jock that had previously been banned from radio. These new additions would cost subscribers some extra money. For $1.99 per month, subscribers could enjoy the channels. The deal with Major League Basketball cost the company $650 million.
These two companies reduced their competition when they signed a deal to develop a common radio that could receive both their channels. This meant that subscribers’ switching costs between the two service providers was now quite low.
Financial Performance
Initially, satellite radio was projected to be launched in 1997. Unfortunately, this delayed until 2001. On launching, the operating costs were still too high and the companies were projected to break even only after 2004. This did not happen. Analysts pushed this broadcast forward to 2007 for XM radio and 2008 for Sirus Radio. The forecast predicted that in 2007, XM would earn a positive cash flow of $51.1 million while Sirus would still make a loss of $154.2.
What had seemed to be a grand business idea that Margolese had planned to invest $500 million in, turned out to be a financial disaster. Over ten years after the original idea was conceived, investors were still pumping money into satellite radio with no tangible returns. This is the mark of a bad business idea. It is evident that neither of the two companies carried out proper market research. They were fascinated by the idea and proceeded to invest in it without doing the groundwork. Unfortunately, it failed the test of time.
Satellie Radio Today
Poor financial performance and inefficient operations led the two satellite radio companies to merge in 2008 to form Sirus XM radio. There was stiff opposition to this move by other stakeholders who believed that a monopoly was not in consumers’ best interests. However, consolidating operations was the only way Sirus and XM would survive.
This consolidation proved successful and the new company, Sirus XM posted a profit for the first time in 2009. The company has continued to pursue growth through deals with automobile, aeroplane and boat manufacturers.
Conclusion and Recommendation
Satellite radio was a noble idea. However, its implementation has cost XM and Sirus much more than the returns. It is unfortunate that so much has already been invested into this idea. The companies, which started out as competitors over ten years earlier, have ended up merging into one. Satellite radios are continuing to be installed in new automobiles. However, drivers are still reluctant to subscribe for this service after the trial period expires.
The challenge for Sirus XM is to continue marketing and target the new, younger drivers who are more likely to adapt to the idea.
This is a business operations plan for Touch Fm radio station transmitting on 106.5 Frequency Modulation in the city of Baltimore. The area of coverage is approximately 120 kilometers radius. Touch Fm will offer radio listeners in Baltimore a unique blend in variety of music and localized news intended to distinguish it from most mainstream radio stations in the area. Touch Fm intends to position itself strategically to attain a good market share by branding itself as a 24-hour urban commercial radio station. This plan outlines factors that are important to the long-term success of the business adhering to ethical and best business practices.
Ownership information
Touch Fm is registered as a limited liability company owned by Black Entertainment under the Companies Act 1946. In Maryland, Limited Liability Company is regarded as an entity separate from the owners (Companies Incorporated, 2011). There are four directors in Black Entertainment each with equal shares in revenue and liability. The directors’ functions and responsibilities are detailed in Black Entertainment’s company Articles of Association and memorandums. The directors are all residents of Maryland.
Organization structure
Touch Fm’s organizational structure is designed to ease communication in the organization. According to Craig W. Fontaine, “Organizational Structure is critical both for a company and its employees”, ( 2007).The executive producer is the chief executive officer of the organization. The human resource manager works closely with the executive producer. Human resource manager is senior to the station director and the marketing manager. The human resource manager is also in charge of the
information technology and security. The-marketing department through the human resource and broadcast through the station manager are directly under the human resource office. The station manager directly supervises the News editor and the presenters. The station manager supervises the news reporters directly. Marketing manager supervises the sales agents.
According to McCarty, (2009 ) new employees need to be matched well with their duty for the organization to operate effectively. The proprietors of Touch Fm have partnered with a human resource firm that has already interviewed and after deliberations, hired five top managers at the station. These managers will constitute a committee that will interview and recommend candidates for positions in the organization. The human resource manager in conjunction with the executive producer are the hiring authorities in the organization. The studio director and the marketing manager are responsible for training in their departments.
The main function of the executive producer is to coordinate external initiatives and management of the station. Executive producer advises the board of directors on the entire management operations. His main functions are:
Radio station’s personnel management.
Management of the station’s finances.
Management of the station’s programs.
Human resource manager empowers employee relationships in the station his main functions are:
Personnel recruitment.
Placement of personnel.
Personnel evaluation.
Personnel compensation and development.
The station manager is responsible for the smooth running of the station including.
Scheduling of commercials from marketing department.
Slotting news from the reporters.
Ensures that the equipments are running at optimum level.
Handles disciplinary issues at the station.
Ensures tidiness at the station.
Schedules & welcomes guests to the station.
The station manager supervises the news reporters who collects as well as edits news and the presenters who are studio based and broadcast information. The marketing manager coordinates activities of the marketing and sales agents and the public relations of the radio station. The marketing manager is responsible for branding of the station and all promotional activities. The Finance manager collects money from the marketing department and banks it. The finance manager also keeps financial records of the station and balances the books.
Profile of management
Lynn Brown is the executive producer, Touch Fm radio station. She has sixteen years experience in the radio broadcasting industry. She is an expert in audio production, radio station management, business administration and marketing.She owned a successful audio recording studio in Randallstown. Lynn has ten years of experience with Hot FM a leading radio station in the Washington DC area, attaining the role of Marketing Manager; Managing director.She has a master’s degree in mass communication and a diploma in information technology.
David Oling is the human resource manager at Touch Fm. He is a graduate of Coppin State University with a master’s degree in human resource management with five years of experience in management. He has been the human resource manager of CTS news Network Company for five years.
Klein Otila is the studio director at Touch Fm and has a bachelor of creative arts from Morgan State University.He also has a diploma in studio engineering from Phoenix school of audio production. Otila has ten years experience in broadcasting industry and started as a presenter for radio One where he worked three years. He has worked as a news reporter for GG international radio for two years and Studio manager at Capital FM for five years. Prisca Devito is the marketing manager at Touch Fm. She has bachelors of commerce from Towson state University and a diploma in public relations.She worked for four years in Prime Colors an outdoor advertisement firm and was public relation officer at orange media for three years. She has worked three years in Koch Network as a marketing manager. Peter Devinski is the finance manager and has bachelors of commerce from Kensington College. He is also a certified accountant with three years of experience as an accountant. Peter as worked as a financial administrator at Technipicture printers for the last four years.
Operating procedures
Touch Fm is a 24-hour radio station; presentations starts at 5 am every morning and ends at 11 pm from Monday to Friday. The early morning presenter gets to the station 30 minutes early in order to prepare for the show. There are four paid presenters and
weekend guest presenters. All presenters report 30 minutes prior to their shows. The Station Manager avails an advertisement log sheet for every presenter and gives necessary instructions before they go on air. At the end of the scheduled programs that end at 11 pm, the Station Manager provides a play list that would run the whole night and this includes the commercials and station’s signature tunes. The News team is composed of four trained, qualified and experienced personnel. They collect – business, political, entertainment, local and sports news. The reporters are paid per story and are considered to be at work at all times. The reporters have news outlet points and a fully equipped outside broadcast vehicle.
The marketing manager starts the day with meeting the agents’ and schedules their engagements. The agents work is to seek commercial advertisements and program sponsorships. They operate using the station’s program and rate card. The agents deliver the advertisement specifics to the marketing manager who delivers the details to the studio director for broadcast and corresponding payments to the finance manger.
Touch Fm is located in downtown Baltimore on the seventh floor of Calvary Towers. “While every organization is different, all organizations strive to become more competitive, effective and provide the best workplace possible for its employees” (International Facility Management Association, 2009). Touch Fm’s facility plan is shown in the following diagram. The colored area is the common areas of the facility and WC refers to water closet, these are the rest rooms. The diagram does not show doors and windows but gives a clue of the entire facility set up in a 5000 square feet area.
Craig W. Fontaine, P. (2007). Organizational structure. Northeastern University College of Business Administration.
International Facility Management Association. (2009). Facility Planning. A White Paper on Strategic Facility Planning. International Facility Management Association.
McCarty, D. (2009). Ensuring Employee Alignment In 3 Vital Areas. Web.
