Geely Automobile Essay Example for Free

Geely Automobile Essay In the first part, the ECLIPTER factors including econography, culture, legal system, income profile, political risk, tax regime, exchange rate and restrictions, together with the multilateral institutions such as WTO, EU and ASEAN will be examined by using UK and Malaysia as examples. Then based on this analysis, it will provide an assessment of the company‘s overall international expansion strategy and process. In the second part, legal system and income profile, the two most important ECLIPTER factors on Geely‘ overseas operations, will be evaluated. Furthermore, the scheme which Geely used to deal with the impact of these two factors and leverage the multilateral institutions will be shown. Finally, this report will analyze whether the company‘s international adaptation of the business function is effective, and then give some recommendations and lessons. 2. ECLIPTER Factors Analysis 2. 1 Econography Econography refers to physical and human assets including distance from major markets, and natural resources of nations that affect industry performance. In the first, the close distance between parent company and foreign subsidiary can help the company to reduce the transport costs and overhead expenses; it also can improve the connection between them. If the parent company is in China, it is better to build a subsidiary in Asia such as Malaysia. Secondly, the natural resources used for making cars mainly include steel, copper, and aluminum. If the country owns rich mineral resources, it can greatly provide benefit in the production of automobiles. One of the major purposes for many multinational corporations establishing overseas subsidiaries is to exploit the foreign natural resources. This is good for companies to 5 International Business Environment II reduce production costs and get competitive advantages. As World Steel Association reported in 2009 that the crude steel production of United Kingdom is 13. 5 in 2008, whereas the crude steel production of Malaysia is 6. 1 in 2008. 2. 2 Culture This paragraph will analyze the effects of culture on auto industry through power distance index and saving rate. Firstly, power distance index measures the degree of inequality exists in a society (Hofstede, 1997). The power distance index is 80 in Malaysia whereas it is only 35 in UK (Hofstede, 2008). The unequal distribution of wealth makes most Malaysian citizens prefer to hold a commercial auto. So the inexpensive Geely auto could be a good option for them. Secondly, saving rate could be a standard to show the attitude of citizens. The saving rate of Malaysia was 47 per cent in the year 1998 which ranks second in Asia (Azia, 2004). In contrast, the saving rate in UK was significantly low, which was less than 10 percent in the past ten years. For instance, the saving rate of UK household in 2008 was only 1. 7 percent (chart 1)(Presser, 2008). So UK citizens are apt to consume a relatively high price car. Chart 1 Resource from Posser (2008) 6 International Business Environment II 2. 3 Legal system The auto industry has been affected by laws and government regulations since the 1960s. The first safety act passed in 1966 by Congress and was called the National Traffic and Motor Vehicle Safety Act (Highfill, 2004). This act forced manufacturers to improve the safety for the passengers, the driver visibility, and the braking of the car. Not only safety, but also environment is being growingly concerned even before the oil crisis. The Vehicle Air Pollution and Control Act passed in 1965 was the first act to set standards for automobile pollution. Then in the 1970s, Congress passed the Clean Air Act that led to a 90% decrease in automobile emission within the next six years (ibid). In the 1970s the oil crisis led to the approval of The Energy Policy and Conservation Act of 1975 which stated that all automobiles must meet a certain mileage per gallon. The act required that all automobiles had to meet a standard of 20mpg by the 1980 model and then 27. 5 mpg for the 1985 model (ibid). EU 2020 growth strategy also emphasizes the importance of low carbon automobile (Society of Motor Manufacturers and Traders, 2010). There are also many special laws for auto industry in different countries, such as Malaysia, which has built a free trade area for production and assembly of products for export-oriented enterprises. Companies can enjoy the minimum tariffs, raw materials and simplified mechanical equipment import formalities. Nevertheless, the Malaysia government regulates that more than 80% products should export to other countries (Daily News, 2006). Furthermore, the UK Byers Acts Measures to cut the average price of a car by ? 1,100 and save private car buyers around ? 1 billion a year. Although it may lower the profitability of auto industry, the number of consumers will increase gradually (DTI, 2000). 2. 4 Income profile Since automobile is not inferior goods, the demand of automobile would rise when income increases. In the economic aspect, income could be an indicator of the purchasing power of individuals and nations. Data from UK national statistics office (2010) demonstrated that despite the contracted 4. 9 percent of GDP in the whole year, the GDP increased 0. 4 percent in 7 International Business Environment II the fourth quarter of 2009. Furthermore, Household expenditure also rose 0. 4 percent in the fourth quarter of 2009 in UK (chart2). For Malaysia, the GDP growth in the fourth quarter of 2009 was 4. 5 though the figure was negative in the whole year (chart 3) (Malaysia statistics, 2010). It can be observed that the economy of both UK and Malaysia seem to recover from the global financial crisis. This positive signal predicts the growing demand and distensible market for Geely in both countries. Chart 2 Resource from UK statistics 2010 Chart3 Resource from Malaysia statistics 2010 8 International Business Environment II The core competitiveness of Geely automobile relies on its high performance-price ratio. Per capital GNI (Gross national income) in Malaysia was 25784 RM in 2008. By analyzing the 2004 United Nations Human Development (UNHDP) report, except the 20% population of richest and poorest class, Geely will be a better choice for the rest citizens in Malaysia(chart 4) (Lumpur, 2004). In comparison, the young people account for a great amount of population in UK. A source from HMRC shows the average income of under 20 years is ? 9,570 and 20-24 years is ? 13,200 which is below the average (chart 5). It implies that when young generation decide to buy a car, price is the first consideration factor. For medium quality car manufacture companies, young population in UK could be a potential group of customers. Chart 4 9 International Business Environment II Chart5 Median Age Band Under 20 years 20 – 24 ? 11,800 years 25 – 29 ? 17,000 years 30 -34 ? 19,500 years 35 – 39 ? 20,100 years 40-44 ? 20,200 years 45 – 49 ? 20,300 years Resource from Lumpur (2004) ? 28,600 ? 24,800 ? 35,400 ? 15,200 ? 20,100 ? 28,100 ? 24,600 ? 34,600 ? 14,900 ? 19,800 ? 26,800 ? 23,600 ? 31,700 ? 15,500 ? 20,100 ? 23,900 ? 21,600 ? 26,700 ? 16,400 ? 20,100 ? 19,300 ? 17,800 ? 20,600 ? 15,900 ? 17,800 ? 13,200 ? 12,400 ? 13,800 ? 11,200 ? 12,300 ? 8,130 ? 9,570 ? 8,490 ? 9,810 ? 7,990 ? 9,250 Median Income Mean Income Income (Men) (Men) (Women) (Women) Income Income Income Mean Median Mean 2. 5 Political risk According to Guinger (2001), political risk describes the stability of government institutions. It can be measured in a variety of ways such as likelihood of foreign aggression and civil insurrection. The Transparency International (2009) showed that UK and Malaysia both face some problems of political corruption, which adversely affects the efficiency of economic operation. World Bank estimates that corruption could cost Malaysia as much as RM10 10 International Business Environment II billion a year – an amount equivalent to 1 or 2 per cent of GDP. The corruption in the UK is lighter than Malaysia, which ranked 17, whereas Malaysia ranked 56 in world in 2009 based on Corruption Perceptions Index 2009. But the corruption in UK is not unheard. Surveys by Control Risks and Simmons Simmons show that the awareness of UK laws against foreign bribery may be decreasing over time. In 2002, after the act came into force, 68 percent of respondents said they were familiar with its main points. But in 2006, 48 percent people said that they have totally ignored it (Global Corruption Report, 2009). 2. 6 Tax Regime Tax regime refers to the tax instruments that governments use to raise revenues from multinational firms, such as corporate taxes. The tax of Malaysia is transparent, the multinational corporate must be taxed 30% of the corporate income which is just the same as Malaysia companies Marketing directory, 2005) According to the tax incentive treaties, auto ( . industry may be eligible for pioneer status which is given by the way of an abatement of 70% of the profits for five years (ibid). The remaining 30% of the profits will be taxed at the prevailing corporate income tax rate. The profits abated are exempt from tax and will be available for distribution as tax-free dividends. In UK the resident corporate tax is the lowest in Europe, even the tax is zero for the small companies in 2002(Lawandtax-news, 2010). According to the tax treaties, multinational corporate which set up, purchase or control the companies in UK can follow the resident tax (Navstar, 2009). In the ordinary course of events, foreign companies cannot follow the low corporate tax, but with regard to double taxation and the agreement between UK and China, Chinese multinational corporates in UK now pay the low tax (ibid). 2. 7 Exchange rate Stable trade policies are extremely important for both the economic welfare of the countries and the multilateral trading system. Unfortunately, the liberalization measures were adopted by many countries. As Dornbusch‘s 1976 analysis has pointed out that when the exchange rate is used to provide protection for domestic firms, it is through undervaluation. An undervalued 11 International Business Environment II exchange rate protects domestic firms from imports and gives domestic firms greater incentives to export. For example, the Balance of Payments Committee of the WTO has received 39 requests from member countries for derogations from their international obligations and for a temporary increase in temporary protection. Moreover, several developing countries, such as Malaysia, have recently increased tariffs in response to financial crises even though the higher rates remain below the rates these countries bounded in the WTO. Moreover the analysis said China has become a great auto exporter, as a result of the huge subsidies, an undervalued exchange rate and dirt-cheap credit (Swaminathan, 2009). 2. 8 Restrictions Restrictions refer to the taxes and limitations that host governments place on foreign products and services or on foreign firms themselves when they enter or leave the host economy. Because of the policy of protecting their national automobile industry, the import tax of automobile is relatively high in Malaysia. Since 2004, Malaysia began to reduce the automobile import tax: for the import components the tax is reduce from 25% to 10%, and for the whole automobile the import tax is drop from 130% to 30% for the companies outside of Southeast Asia (MEI, 2009). In 2010, according to the agreement of ASEAN, the automobile import tax will be zero to all the regions of ASEAN. UK is a member of EU, it followed the economic agreement of EU which sets no import or export tax between members of EU and they must charge the same tax when they have business with the third country (European competitiveness, 2009). 12. International Business Environment II Scoring Analysis of UK and Malaysia Country Score Econography Culture Legal System Income Profile Political Risk Tax Regime Exchange Rate Restrictions Total (10) (10) (20) (20) (10) (10) (10) (10) (100) 8 7 18 8 8 8 7 7 71 7 6 16 15 5 9 8 9 75 UK Malaysia 3. Institutions 3. 1 WTO The major objectives of WTO‘s roles are ? the creation of a common automobile market through the elimination of barriers to intra-Community trade; the maintenance and expansion of a competitive world automobile industry; the use of voluntary import restrictions to prevent cheap imports and to maintain competitiveness? (European Commission, 2006). For example, in 2006, WTO announced the establishment of a panel to examine whether Chinas tariffs on imported auto parts violate WTO trade rules, following a joint complaint made by the United States, the European Union and Canada, who accused China for its discriminatory charges on imported auto parts. After examining China‘s related regulations, WTO panel declared that Chinas regulations are inconsistent with Chinas WTO obligations. China has agreed to make the necessary regulatory changes by September 2009 (Herd, 2006). 13 International Business Environment II. WTO facilitates Geely‘s international expansion since the elimination of trade barriers has cleared its path to world market and made it integrated to the world economy. In 2002, after China joined into WTO, 100 automobiles of Geely exported to Syria (Luo, 2005). 3. 2 EU EU functions as a rule-imposer. It sets strict requirements and institute rules and regulations to improve vehicle safety. Besides the vehicle crash tests executed by Euro NCAP (European New Car Assessment Program backed by European Commission), there are also some regulations set to protect the environment. First, in order to respond to the gradual aggravation of greenhouse effect, the European commission developed a mandatory emission standard to limit the emission of one major kind of greenhouse gas, CO2. The regulation set a fleet-average CO2 emission target for passenger cars, which is 120 g/km to be reached by 2015 (European Commission, 2010). The vehicle manufacturers must reach the CO2 emission target of 130g/km, with an additional reduction of 10 g/km to be provided by supplementary measures, such as the use of hydrogen fuel. A long-term target of 95 g/km to be reached by 2020 is also established by the regulation (ibid). This regulation will take effect in 2012. From 2012 onwards, vehicle manufacturers who do not meet this target will have to pay penalty for their excess emissions. According to DieselNet (2010), from 2012 to 2018, the penalties are â‚ ¬5 per vehicle for the first g/km of CO2; â‚ ¬15 for the second gram; â‚ ¬25 for the third gram; â‚ ¬95 from the fourth gram onwards. From 2019, manufacturers will pay â‚ ¬95 for each g/km exceeding the target. Another congressional mandate imposed by European Commission requires tire pressure monitoring systems on all new cars in 2012. According to Europe‘s Information Society (2010), many road accidents resulting in fatalities and physical injuries are linked to tire defects. Furthermore, under-inflated tires can result in severely inefficient use of fuel and cause an extra two million tons of CO2 emitted into the atmosphere per year. So this mandate enhances vehicle safety and protects the environment. 14 International Business Environment II These regulations have incurred a rise in car prices since vehicle manufacturers are forced to increase price to offset the cost of upgrading. These regulations put Geely in an unfavorable position. Since Geely is better known for making low-tech and cheap cars, making eco-friendly cars is not included in the competencies of the company and huge RD spending is inevitable for nurturing this competence. They set a high bar for the competition and limit Geely‘s ability to expand market in Europe. 3. 3 ASEAN ASEAN – Association of South East Asia Nations is a geo-political and economic organization of 10 countries located in Southeast Asia. China and ASEAN are both newly-emerged, rapidly-developing auto markets. Cooperation in auto industry between China and ASEAN will bring a win-win situation for the two sides and make their cars more competitive in a global competition. For instance, according to Xinhua News Agency (2006), a report released by the Ministry of Commerce Indonesia has announced that compared to the expensive Japanese sedans, the China-made ones gradually gain popularity for more favourable price-performance ratio. ASEAN country also needs investment from Chinese carmakers to expand local employment and for more price-favourable cars, said a Germany auto expert at the China-ASEAN Expo, 2006. Consequently, in general, ASEAN opens its gate to Chinese car companies including Geely to achieve a win-win situation. 4. Assessment of Geely’s overall international expansion strategy Geely‘s current international strategy is to produce affordable automobile, so the market size and consume power of a foreign market are highly valued by Geely. Malaysia automobile market resembles China more than UK, in the aspects such as the people‘s income, the similar culture, and the similar geographical position, etc. As by now most cars have been exported to some developing countries like South-East Asia, Ukraine, Russia, and Mexico, Malaysia will be good choice. Meanwhile, although UK does not represent a neighboring or ? home‘ market, 15 International Business Environment II as markets in South-East Asia do, UK could be seen as an interesting market with a potential for higher margins, higher price levels and a more mature market for branding, technology, etc, as the UK‘s income per capita, and the automobile sales volume are higher than that of Malaysia. Considering the future international development, Geely should focus on UK. Therefore, at first, it is better for Geely to develop its ? producing automobile which most of people can buy‘ strategy in Malaysia, and when Geely is able to enter high-end automobile market, UK will be a better choice. In terms of multilateral institution, after evaluating the influence of international organizations, we suggest that Malaysia is a better choice for Chinese car companies to exploit new markets. Firstly, a win-win situation guarantees a favourably corporate relationship between Geely and ASEAN (Eichengreen, 2006). Secondly, there are various quality-related requirements and constraints in EU and probably NAFTA, which puts up a strong challenge for those Asian auto makers. Moreover, by far, there is no evidence to prove the acquisition of Manganese Bronze and Volvo have considerably increased Geely‘s sale in developed nations. Thus considering the opportunities and threats faced by Geely, it is recommended that the company emphasizes on developing nations‘ markets, rather than the developed markets. 5. Marketing analysis 5. 1 Legal system According to Alistair Darling‘s pre-budget report, UK will bring new opportunities for the low-carbon industries. Through the Innovation Investment Fund and the Carbon Trusts Venture Capital scheme, UK will invest at least ? 160m in low carbon projects (Guardian, 2009). They will also invest ? 90m in the European Investment Banks new 2020 fund, which will put 6. 5 billion Euros of finance in green infrastructure projects. In this report, there are alterations to the climate change levy, company car tax, and fuel benefit charge (ibid). This is good news for Geely because now it dedicates itself to produce high-tech and eco-friendly automobile. In 16 International Business Environment II UK the amount of car tax depends on the price and the discharge amount for carbon, which is from 9% for electric motor car to 10%-35% for petrochemical car. UK also has a successful car scrappage scheme, which gives consumers a ? 2,000 discount off. If they scrap their old vehicle, it will help up to 125,000 families replace their inefficient boilers with new models (Julia, 2009). Through the government‘s support of low-carbon industry, Geely has more opportunities to innovate high-tech and eco-friendly automobile. Furthermore, because of the low tax and car scrappage scheme, customer is inclined to buy or change an electric motor car,. In 22nd March 2006, Malaysia published the new automobile policy (MEI, 2009). Since that day, the import taxes of CBU (Complete Built Unit) are reduced from 20% to 5% for the ASEAN members and 50% to 30% for other countries. The import taxes of CKD (Completely Knock Down) are 10%. In 28th October 2009, Mustafa Mohamed announced many new policies for auto industry which will give much more preferences and subsidies for the new energy automobile companies (ibid). 5. 2 Income profile It is known that the success of Geely relies mostly on keeping low cost and offering the affordable cars. For instance, Geelys best-selling four-door sedan, the King Kong, has been sold 6127 in April 2010 and the retail price is between 47,800RMB 58,800RMB (Jiang, 2010). Geely sold 329,014 passenger cars in 2009, making it is the third largest domestic car producer (Zheng, 2010). However, Geelys winning formula is under pressure in china because Chinese consumers are becoming wealthier; the higher-end models will gradually be affordable for them. Meanwhile, brands such as the Chery QQ, Ford Fiesta, and Honda Civic are threatening Geely‘s current market position. Geeky‘s winning formula is also challenged at the oversea markets like UK and Malaysia. Date from HMRC (HM Revenue Customs) indicates that nearly 50% of the population in UK earns ? 16400 annually which is much higher than the middle class income of Malaysia. This group of population could be a dominant power in the automobile market in UK. It is not a wise choice to sell its inexpensive cars in UK considering that low price would not be 17 International Business Environment II attractive for these relatively rich citizens. The similar situation also happened in Malaysia which made Geely‘s low price cars less competitive. This is because that the predicted real GDP growth in 2010, 2011 and 2015 are 4. 7%, 5. 0% and 5. 0%, Malaysian people are becoming richer than before(IMF, 2010). Their increasing incomes will directly affect their car buying choice. People nowadays prefer the higher-end models and the market share of Geely‘s lower-end models are estimated to reduce gradually. 6. Geely’s reacts to the impact of the ECLIPTER First, since the middle of 2009, the sales of car exports decreased from 37940 in 2008 to 6297. Furthermore, although Geely exports to more than 50 countries, most of them are developing countries which are not so effective in the promotion of the brand image. In order to get rid of low-end image, Geely changed its strategy from ?produce automobile which most of people can buy‘ to ? do not produce cars which price is below 40000 Yuan‘ (Fang, 2009). Besides, Geely take over Volvo which also expressed its desire to promote the brand image. Geely‘s strategy changes starts in May 2007, which is focus on transforming its competitive advantage from price to technology. In 2007, Geely used three new motorcycle type—Yuan Jing, King Kong and Zi You Jian, which have relatively higher value added to substitute the Haoqing, Meiri and You Liou. For doing that, Geely scraped its old molds, jigs and production line which worth up to 8 billion Yuan. In 2008, the sales of these three new auto types grew 12% without discount marketing strategy (Geely annual report, 2009). Furthermore, in 2010, Geely will market 21 new auto types, and some of them were designed by Fabrizio Giugiaro, the Italy‘s famous auto manufacturer. Moreover, the new energy auto will also be produced in 2010, which will include Panda and DiHao (Wenqing, 2010). These new energy auto types have been showed in the Beijing car exhibition 2010 (Phoenix auto, 2010). In order to deal with these two factors, Geely also has a complementary strategy: cooperate or takeover other well-known international auto manufacturers. It will not only help Geely to promote its auto manufacture technology, but also improve its brand image. Geely has already cooperated with 18 International Business Environment II Britain‘s Manganese Bronze to produce luxurious brand-named taxi (China car Times, 2010) and assembled cars with Information Gateway Corp Sdn Bhd (IGC) in Malaysia, 2006 (Tan, 2006). 7. Leverage the multilateral institutions 7. 1 ASEAN One of the stunning news in 2005 was the political barriers Geely met in Malaysia, which was considered as the biggest challenge for its overseas expansion so far. Geely‘s President Li Shufu described Malaysia as ? an unexpected trap? because of Malaysia government‘s rejection on fulfilling the contract. After examining the ECLIPTER factors of Malaysia market, Li Shufu and his team regarded Malaysia as the first pillbox and cornerstone of its expansion to ASEAN countries. He believed the learning in Malaysia could be helpful. Therefore, in May 2005, Geely has made a joint contract with Malaysia IGC group for building CKD factory in Malaysia. However, Malaysia government denied the contract after a new document on automobile being published. According to the document, all cars made by foreign automobile manufacturers were prohibited to sell in Malaysia. Then the situation in Malaysia went against its expection of getting a huge sale. However, according to Geely officials, to some extent, ASEAN agreements have made Geely to reconsider the importance of Malaysia (Harwit). In South East Asia nations, there are some strict tariff-related regulations for automobile industry. Contrarily, tariff among ASEAN countries is in a minimum rate. According to an inner-ASEAN agreement, from 2003 to 2009, Indonesia, Thailand, Malaysia, Philippine, Singapore and Vietnam exempted auto import tariff for each other. From 2010, all ASEAN countries will implement zero auto import tariff for each other. At the same time, Indonesia, Thailand and some other ASEAN nations‘ demand of cars is increasing considerably (JAMA, 2008). Especially after an impressive increase in 2007, the car-sale in Indonesia becomes significantly dazzle. Therefore Geely 19 International Business Environment II planed to only manufacture cars in Malaysia and then export cars to other ASEAN countries, which seems like a forward-looking plan in a long-term development. Finally, Geely decided to move its Malaysia CKD manufacture center to Indonesia. However, its vision of leveraging ASEAN to pursue a sale performance in all ASEAN nations has not changed. 7. 2 EU In terms of EU regulations, since Geely has acquired 100% ownership of Volvo, the Sweden‘s company, Geely is no longer an outsider of European market. According to the EU Single market concept (European Commission, 2010), a free circulation of capital, labor, goods and services between EU members is granted. Geely now have got over tariff barriers and competes as an insider. 8. Implications and Recommendations One of the strategies of Geely is to promote new energy automobile, there are two advantages for this strategy: Firstly, Geely can get powerful support from government since the development of new energy is encouraged by the government. Secondly, since new energy automobile is environmental friendly goods, it not only reduces the carbon emissions, but also decreases the expenses on routine maintenance (Bond newspaper, 2010). However, there are also drawbacks, such as the inadequate facilities. Acquiring other world famous bands is the other strategy of Geely, which facilitates the company‘s global expansion. For instance, Volvo is well-known by its safety, which could provide Geely with a competitive advantage on its brand trust. It also provides a valuable, more upscale user image. Therefore, through merger or acquisition of international well-known brands, Geely can get greater international fame and advanced technology, integrate into the world market and attract more consumers. However, certain risks should be considered when Geely acquires Volvo. The first risk is that the culture conflicts between two countries. It has been reported that one of the hindering factors is that the union of Volvo in Sweden disagrees the acquisition for their reduced 20 International Business Environment II welfare and unemployment (Gasgoo, 2009). The second risk is that the value of acquired equity. It has been said that Volvo‘s vaunted reputation for safety has been challenged by other manufacturers which can also provide automobiles with same safety standard. In this case Volvo‘s ? safe? advantage may not be as competitive as before. 9. Conclusion To sum up, this essay has analyzed the ECLIPTER factors of Geely‘s two overseas markets, Britain and Malaysia, and examined influence of the related multilateral institutions. According to this matrix analysis, legal system and income profile have the most important impact on the auto industry. For multilateral institutions, ASEAN and WTO generally promote the Geely‘s international expansion strategy, while EU regulations are less favored in its expansion. Considering both ECLIPTER factors and related multilateral institutions, it is suitable for Geely to enter developing nations to acquire market share at its initial development. But for long-term development, Geely need to pay attention to research and develop higher-end models. With the development of Geely Company and the overall auto industry, Geely‘s focus will shift from developing countries to developed countries. Currently, Geely‘s low price strategy is challenged by the legal system and income profile of developed countries. Therefore, Geely is increasing its efforts in releasing new model cars and tapping into developed countries through merger or acquisition. Geely intends to promote its brand image and enlarge its market share through these strategic moves, although it has to face the risk of culture conflicts and the uncertainty of acquisition value. 21 International Business Environment II 10. References: Azia, A. Z. (2004) Malaysia-Encouraging Saving in a Dynamic Economy [Online]. Available at: h.

Late Development And The Challenges Facing Late Developers Economics Essay

Late Development And The Challenges Facing Late Developers Economics Essay On the world stage, the list of the wealthiest countries has been dominated by European nations for the past six hundred years. Mid-last century a shift occurred that has seen the emergence of Asian countries growing at rapid rates. The surge was led by Japan and was quickly followed by those now known as the Asian Tigers. What problems did these countries overcome to grow so quickly while at the same time so many other nations are trapped in the quagmire of poverty and debt? Additionally, what challenges do the countries attempting development later than others face if they wish to emulate the Asian Tigers? This essay will briefly explain the problem of late development before outlining the challenges faced by late developers. Broadly speaking development implies wish to shift from an undesired state to a more desirable state; in this case a movement away from the situation of inequality and poverty to that of more equality and less poverty. Inequality in terms of social, cultural, economic and political needs is widespread in the world, not just between nations but within populations of nations. Such inequality leads to the poverty experienced by the populations of the undeveloped and developing nations of the word, causing millions of needless deaths every year around the world. Before any explanation or hypothesis regarding development of nations can be carried out, the term poverty requires discussion. An orthodox view of poverty is not having sufficient money to buy food and other basic material needs  [1]  . An alternate view of poverty is where people are not able to meet their own material and non-material needs through their own effort. The subtle difference between the two definitions will be expanded later in this essay. Additional to discussing poverty, the term development needs discussion. To determine the status of a nation as developed, developing or underdeveloped requires the use of a metric, criterion or standard of some kind. Which form of measure is hotly debated and is a very contentious issue. Different measures that can be used are national gross domestic product (GDP) per capita, level of economic industrialization or the Human Development Index (HDI) to name a few and the selection of which one determines the rankings of nations. During the Cold War, the terms First, Second and Third World were used to describe the USA, Soviet and non-aligned blocks of countries. The term Third World became synonymous with underdeveloped and developing countries and to this day is misused to describe these countries. THE PROBLEMS OF LATE DEVELOPMENT The same problems face developing countries, regardless of the metric used to measure a nations development ranking. The prime problem facing developing nation is their late start compared to the more advanced industrialised countries that are generally accepted as being developed. Late development precludes nations from using the first mover advantages of economies of scale, positive network effects and the ease of sourcing investment funds  [2]  . Nations that get a head start in an industry have the ability to compete evenly against other nations starting at the same time in that industry. As capacity builds, the high costs of initial production, research and development, and low levels of output alter because of innovation and improvement leading to more effective and cheaper production methods, enhanced products, and higher levels of output. All these factors enable the distribution of fixed costs, such as production and transport costs, across the greater output, thus lowering the final cost of an item. These economies of scale enable the first mover to produce a product at a lower cost than a late developer, which in turn, allows the first mover to either undercut late starters or make more profit when selling at the same price  [3]  . Late developers hence need to find ways around the economies of scale factor such as using cheaper local labour for production, leveraging off any local raw materials or new areas to in novate. A good example of the economies of scale at work is the early motor vehicle industry. The Ford Motor Company is generally credited with the first use of a production line type manufacturing method in the automotive industry that enabled Ford to mass produce cars at prices much cheaper than the completion. Follower companies adopted the same technology, but not after Ford had gained a significant market share in North America and enabled the company to create a world-wide manufacturing base that was not seriously challenged for over half a century  [4]  . Starting an industry or sector of technology first attracts people and firms into the area where that technology is found, thus creating a centre of excellence in terms of equipment and personnel. The network effect  [5]   of a centre of excellence also adds to the economics of scale effects, as raw material supplies are only shipped into one area and conversely distribution centres can also be centralised. Additionally, distributed manufacturing within such a network is sped up and costs reduced due to close proximity, thus reducing costs and time effects. Late starters wishing to build their own competing centres of excellence face the obstacle of attracting expertise away from established areas. The inability to match wage rates and favourable conditions of established centres of excellence need to be countered at the new location, often by government subsidies, low tax rates and favourable trade conditions. Well known examples of successful secondary centres of excellence are the Japanese automotive industry following America and the New Zealand and Australian movie production centres following in the footsteps of Hollywood and Bollywood. The effects of globalisation and easy flow of information and technology are continuing to reduce the need to physically concentrate people and industry; hence the network effects are being reduced for the first mover. Sourcing investment funds for any new industry is a challenge, yet sourcing funds to compete against a developed nations established industry is even more difficult. The first mover nations have the advantage of having the first opportunity to attract investment capital, whether internal to the nation or externally via foreign investment. Regardless of the source of investment funds, late developers seeking funding must compete against established industries with proven return rates and known levels of risk, therefore pay higher interest rates. These higher interest rates further erode the profit margin of the late developer and make their products less attractive on price and company success rates lower. THE CHALLENGES FACING LATE DEVELOPERS In light of the problems face by late developers, why is striving for development so important? United Nations former Secretary General Kofi Annan described a developed country as one that allows all its citizens to enjoy a free and healthy life in a safe environment implying that developing and undeveloped countries citizens do not enjoy a free and healthy life in a safe environment. The orthodox, or liberalist, view of development describes its purpose as the requirement to move from a subsistence economy to an industrialised and modern economy  [6]  . Compare such a view with the alternate or more socialist view, where the purpose of development is to create human well-being through sustainable societies in social, cultural, economic and political means. These two viewpoints differ significantly but suffer from overlapping sets of challenges that need addressing to successfully develop a nation. The orthodox view of development identifies a strong trend between development and industrialisation. This view sees industrialisation as a better path for growth of a nation than agriculture or resource extraction as there is a greater potential for capital accumulation. This growth is due to the higher productivity achieved with successful industrialisation, which in turn leads to better wage growth, better skill and expertise growth, and the unlimited potential of the free-market. Such an approach generally requires a top-down governmental control process, using external capital investment to attract technology and stimulate private sector growth. Using industrialisation as the pathway to growth and development has the disadvantages of exposing a nation to both the good and bad aspects of globalisation. Fast and freer information flows, financial deregulation, access to technology and exposure to the global villages cultural influence can have positive and negative effects on both markets and populations. The effects of global financial institutions such as the World Bank, International Monetary Fund and open finance markets can lead to a nations own monetary policy having little control on capital availability and exchange rate control; a critical factor in ensuring a stable economy  [7]  . Ostensibly, small and vulnerable nations can be either manipulated easily or must flow global trends with few ability to cause self-determination in the globalised finance market. The alternate view of development takes a different approach to development. In this view the final target of development is not necessarily parity with developed nations using convention metrics, such as GDP per capita, but a more holistic vision of a journey towards self-sufficiency, self-reliance and unity rather than outright fiscal wealth. In this respect, development is more a process rather than a target. The fundamental difference to the orthodox view is that the alternate view is a bottom up process and involves the respect of nature and culture, political inclusion of marginalised groups and local control of resources and investments. Comparing the two very different approaches identifies that there are challenges to both, including some common challenges. The orthodox view has the advantage of potentially providing greater growth rates and hence reducing inequality between nations, but often at the cost of higher internal inequality as the gap between the richest and poorest within a nation widens. This effect is sometimes called the unavoidable consequence of economic growth  [8]  . Opponents to the orthodox view also content that sustained development is only viable through further growth within a global free-market, which benefits the suppliers of the initial capital more than the nation seeking development  [9]  . Conversely, the alternate view of development suffers the potential problem of creating slower growth rates than embracing outright industrialism and its side effects. This approach also requires assistance from external to the country, but more often in the form of education and material re sources, rather than direct capital injection. The Chipko movement in India and the rubber tapper movement in the Amazon are examples of successful grass roots versions of the alternate development methods  [10]  . Both are relatively small scale and limited to regions and ethnicities rather than whole nations. Both approaches suffer from the challenges of overcoming education, literacy, environmental and health issues which all slow rates of growth. Additionally, corruption is seen as a huge obstacle to developing nations, specifically in autocratic and flawed democracies. Later in the development cycle nations that grow strongly need to be able to keep their exchange rate competitive by neutralize the tendency of the exchange rate to head toward overvaluation  [11]  . This problem is related to the Dutch disease  [12]  , the policy of growth with foreign savings, and to exchange rate populism. CONCLUSION In summary, it can be seen that development of countries is import to reduce the gap between the most advanced nations in the world and the least. Development leads to a reduction in suffering by people who cannot meet their own needs through their own means, while at the same time enabling societies to become sustainable in economic, political and cultural terms. The process of development is slow and the challenges are many. Overcoming the problems of being a late developer is complex and difficult, but demonstrably possible as the Asian Tiger nations and other Newly Industrialised Countries have proven. Striving to industrialise by increasing exports has been a successful development strategy for the Asian Tiger countries, but not all nations have been successful using this technique. Local political, geographical and geological environments can both help and hinder development, as can the effects of globalisation by open both market and financial flows. While the history of development success shows that the crux of change is primarily national and local, such change now takes place in an increasingly globalised world of ever tighter political, economic, and cultural ties. The problems faced by developing nations are many and no universal answer or solution exists. Each nation that wishes to develop needs to create a development plan unique to their nation, based on their specific politics, cultures, resources, skills and geography. Only then can real and sustains development occur. Word Count = 2050

Reflective assessment on health and well-being

Reflective assessment on health and well-being References Care Council for Wales (CCW) (2002). The Code of Practice for Social Care Workers. Cardiff: Care Council for Wales. Care Council for Wales (CCW) (2003). National Occupational Standards for Social Work. Cardiff: Care Council for Wales. Douglas, T. (1978). Basic Group Work. London: Routledge Department of Health (DoH, 1998). Partnership in Action: New opportunities for jointworking between health and social services –A discussion document. London: Department of Health Healy, K. (2005). Social Work Theories in context: Creating frameworks for Practice. Hampshire: Palgrave Macmillan. Johnsson, E. Svensson, K. (2005). Theory in social work – some reflections on understanding and explaining interventions. British Journal of Social Work. Vol 8 (4) pp. 419-433. Maclean, S. Harrison, R. (2008) Social Work Theory A straightforward Guide for Practice Assessors and Placement Supervisors. Staffordshire: Kirwin Maclean associates Ltd. Payne, M. (2000,a). Team Work in Multi-Professional Care. Basingstoke: MacMillan. Payne, M. (2005,b). Modern Social Work Theory 3rd Edition. Hampshire: Palgrave MacMillan Vigars et al. (2008). Faculty of Health and Social Care: Aids of Practice Cards. The Open University. West Turner (2009) Understanding interpersonal Communication 3rd edition. USA: Wadsworth Cengage Learning. Wright, S, et al. (2012). Evaluation of Early Parental Intervention Pilot Project. XXXXX. Welsh Assembly Government. Retrieved from: http://www.scie-socialcareonline.org.uk/profile.asp?guid=13a77ca2-2f61-4dbc-a8b0-368ff694ffe1 [Accessed 23/10/2012]. Lindsey, T. Orton, S. (2008). Group work Practice in Social Work: Transforming Social Work Practice. Exeter: Learning Matters Lang (1981) .Welsh Government. (2010). Fulfilled Lives Supportive Communities. Cardiff: Welsh Government Welsh Government (2013) Stats Wales. Persons with learning disabilities by LA, service and age range. Retrieved 27/04/2014 from https://statswales.wales.gov.uk/Catalogue/Health-and-Social-Care/Social-Services/Disability-Registers/PersonsWithLearningDisabilities-by-LocalAuthority-Service-AgeRange

To Kill A Mockingbird Essay: Parallels and Differences -- Kill Mockin

To Kill a Mockingbird:   Parallels and Differences  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Jill McCorkle's Ferris Beach, a contemporary novel, shares numerous characteristics with Harper Lee's To Kill a Mockingbird, a novel written in the 1960's. Like To Kill a Mockingbird, McCorkle's novel documents the life of a young girl in a small southern town. The two narrators, Kate Burns and Scout Finch, endure difficult encounters. A study of these main characters reveals the parallels and differences of the two novels. Jill McCorkle duplicates character similarities and rape from Lee's To Kill a Mockingbird to show the reader how young girls think and develop. People throughout the world consider America the supreme country in terms of freedom. As a result of this assumption, many countries attempt to model their culture after the United States. The idea of imitating a successful organization or product exists in literature as well. Many authors write pieces of literature that modify other works they have previously read. Jill McCorkle's Ferris Beach, a contemporary novel, shares numerous characteristics with Harper Lee's To Kill a Mockingbird, a novel written in the 1960's. Like To Kill a Mockingbird, McCorkle's novel documents the life of a young girl in a small southern town. The two narrators, Kate Burns and Scout Finch, endure difficult encounters. A study of these main characters reveals the parallels and differences of the two novels. Jill McCorkle duplicates character similarities and rape from Lee's To Kill a Mockingbird to show the reader how young girls think and develop. In To Kill a Mockingbird, Scout Finch represents a young southern tomboy who strives to find her identity. The adults in her town of Maycomb... ... establish a critical view towards human eccentricities.       Ferris Beach accurately extends themes of To Kill a Mockingbird and develops them in interesting ways. The incorporation of the nicknames Scout and Kitty, as well as Boo and Mr. Radley, proves Lee imposes a significant influence on McCorkle's literature. However, the author gives her main character different characteristics and encourages her to react to situations in mature fashions. Kitty's description of Mr. Radley does not seem nearly as fantastic as Scout's evaluation of Boo Radley. Similarly, the two young girls react differently to their experiences with rape. The different weaknesses Scout and Kitty share increases their ability to handle more complex situations. Jill McCorkle extends Harper Lee's themes to explore various aspects of young females and their livelihood.   

Communication Encourages Learning Essay -- Education Teaching Papers

Communication Encourages Learning The classroom needs to be an open forum in which students and teachers are allowed and encouraged to share opinions and experiences. When this communication breaks down the learning environment also fails. I remember being in the first grade and one of the students in our class was trying to say something to the teacher. Obviously this was not a real stimulating conversation as we were only in the first grade. When the student started talking the teacher became irritated and told the student to stop talking. The student tried again to say something to the teacher, at this point the teacher went ballistic yelling and screaming for the class to be quite and not talk. This teacher proceeded to place the student in the corner to punish her, when the student again tried to say something to the teacher, the teacher tied her to her chair and ordered everyone in the room to stay silent. Observing this display had an enormous effect on all the people in that room. We as students felt that we did not have anything of value to say, and therefore should not speak up. We also learned a fear of reactions that may come by expressing what we had to say. Fortunately since this experience I have not encountered another such teacher, and have had teachers who have gone out of their way to encourage class discussion. I think it is also important for teachers to be aware of the games students are playing. My sister and I can both remember being in grade school and playing game like the farmer and the dell, in this game kids stand around in a circle and one student calls other students into the circle to be a part in the song. The problem with this is that the kids who are quite or shy tend to get left out, and ... ...icate is in the classroom, where they spend most of their time. If people can communicate with each other, and have an understanding that not everyone will agree, then they will be much more productive in life. They will be able to get their point across while at the same time hearing another point of view. This skill is imperative to survival in our growing and changing society. WORKS CITED Cheney, Lynne V. "PC: Alive and Entrenched." The Presence of Others. Comp. Andrea A. Lunsford and John J. Ruskiewicz. New York: St. Martins, 1997 112-123. Hooks, Bell. "Keeping Close to Home: Class and Education." The Presence of Others. Comp Andrea A. Lunsford and John J. Ruskiewicz. New York: St. Martins, 1997 85-96. Rose, Mike. "Lives on the Boundary." The Presence of Others. Comp. Andrea A. Lunsford and John J. Ruskiewicz. New York: St. Martins, 1997 97-111

Julius Caesar - Summary Of Act I-v :: essays research papers

The Tragedy of Julius Caesar is a play about loyalty, betrayal, love, and deception. There are many characters with fairly in-depth personalities. Some of the main characters are Cassius, the crafty, deceptive, witty man who is the leader of the conspiracy that killed Caesar. Brutus, the noble, honest, honorable man who is one of the key members of the conspiracy. There is also Antony, who is Caesar’s right hand man. He is shrewd and ruthless man, willing to do anything to get revenge for Caesar’s death. Act I is centered around introducing the play and some of its characters. The play opens around a crowd of people waiting for Caesar’s return after his victory over Pompey’s sons. As the parade marches by, a soothsayer bids Caesar to "beware the ides of March." Later in Act I, Cassius persuades the frightened Casca to join the conspiracy during a violent storm. They both plan to visit Brutus later with fake petitions to help persuade Brutus to join the conspiracy. Act II opens with Brutus contemplating whether to join the conspiracy or not when Lucius brings Brutus one of Cassius’s petitions. Cassius and five other conspirators enter. Brutus agrees to become a conspirator, but refuses to take and oath, including Cicero in the conspiracy, and killing Mark Antony. Brutus then leaves with Caius Ligarius for the Capitol. Later in the morning, Caesar’s wife, Calpurnia, begs Caesar not to go to the Capitol. He is finally persuaded to go by Decius. Mark Antony and the conspirators enter, and they all leave for the Capitol together. On the way, Artemidorus tries to warn Caesar of his impending death with a letter, which never makes it to Caesar. Portia sends her servant, Lucius, to the Capitol for news while she speaks with a soothsayer who will try to warn Caesar a second time. In Act III, Caesar, along with the conspirators, makes his way to the Capitol. The soothsayer and Artimedorus both try to warn Caesar to no avail. He is killed at the Capitol, stabbed first by Casca with the words "Speak, hands, for me!" All the conspirators except Brutus follow Casca’s lead and stab Caesar. Caesar tries to fend off all the blows until he sees Brutus’s raised dagger. Caesar dies after Brutus stabs him with the words, "Et tu, Brutè? Then fall, Caesar!" Brutus then explains the conspirators reasons for killing Caesar at his funeral. Julius Caesar - Summary Of Act I-v :: essays research papers The Tragedy of Julius Caesar is a play about loyalty, betrayal, love, and deception. There are many characters with fairly in-depth personalities. Some of the main characters are Cassius, the crafty, deceptive, witty man who is the leader of the conspiracy that killed Caesar. Brutus, the noble, honest, honorable man who is one of the key members of the conspiracy. There is also Antony, who is Caesar’s right hand man. He is shrewd and ruthless man, willing to do anything to get revenge for Caesar’s death. Act I is centered around introducing the play and some of its characters. The play opens around a crowd of people waiting for Caesar’s return after his victory over Pompey’s sons. As the parade marches by, a soothsayer bids Caesar to "beware the ides of March." Later in Act I, Cassius persuades the frightened Casca to join the conspiracy during a violent storm. They both plan to visit Brutus later with fake petitions to help persuade Brutus to join the conspiracy. Act II opens with Brutus contemplating whether to join the conspiracy or not when Lucius brings Brutus one of Cassius’s petitions. Cassius and five other conspirators enter. Brutus agrees to become a conspirator, but refuses to take and oath, including Cicero in the conspiracy, and killing Mark Antony. Brutus then leaves with Caius Ligarius for the Capitol. Later in the morning, Caesar’s wife, Calpurnia, begs Caesar not to go to the Capitol. He is finally persuaded to go by Decius. Mark Antony and the conspirators enter, and they all leave for the Capitol together. On the way, Artemidorus tries to warn Caesar of his impending death with a letter, which never makes it to Caesar. Portia sends her servant, Lucius, to the Capitol for news while she speaks with a soothsayer who will try to warn Caesar a second time. In Act III, Caesar, along with the conspirators, makes his way to the Capitol. The soothsayer and Artimedorus both try to warn Caesar to no avail. He is killed at the Capitol, stabbed first by Casca with the words "Speak, hands, for me!" All the conspirators except Brutus follow Casca’s lead and stab Caesar. Caesar tries to fend off all the blows until he sees Brutus’s raised dagger. Caesar dies after Brutus stabs him with the words, "Et tu, Brutè? Then fall, Caesar!" Brutus then explains the conspirators reasons for killing Caesar at his funeral.

Review of rahomomn

‘Rashomon' directed by Kurosawa is considered one of the most highly ranked foreign films. This film was made in the early 50's and was one of the first films to introduce the element of flashbacks. The film is entirely based on the concept of flashback with 3 witnesses; all giving their accounts on the murder that had taken place. All 3 take the blame upon them and confess to have been the culprits. There is a build up of confusion at this point and constant questions are raised as to who is the real culprit?And who has wronged whom? Rashomon' portrays flashbacks unlike any other, and explains how flashbacks are about both the truth and the false. The truth is presented through the events the witnesses think took place or experienced. The false aspect however, comes in as Kurosawa explains how human beings are wired in a way that they can never tell stories involving them without using manipulation. The other thing that is absolutely hard to miss is the phenomenal skill of the actors in the film.For someone who is alien to the language of the film, it usually becomes ard to understand what is really going on, however in ‘Rashomon', despite it being in Japanese and the subtitles being off, it is relatively easy to understand what is going on because of the exaggerated acting of the actors. The acting is so expressive and it may not necessarily explain every detail of the plot, but one can say that language is no longer a great barrier. Also, the film was more or less silent and based on the actions and emotions rather than the dialogues.This is similar to a silent film, and for this reason it is easier for an alien viewer to comprehend too. The setting also plays an extremely important role in portraying the behavior of the characters and to get a better understanding of the plot! In my opinion there are two distinct settings, that of the wilderness and that of the temple. There is a clear difference in the behavior of the characters in the wilderne ss and that in the temple. I find that since the rape and the murder both take place in the forest too, it throws light on the fact that the behavior in the wilderness is not controlled, and rather savage.Whereas the behavior in the temple is more composed and sane. This leads me to my next point, which is that often our surrounding has a great impact on us and almost has a direct effect on our environment. The behavior of the two men fghting in the forest reminded me of savages. It was as though all their emotions and feelings had touched the surface and they were no longer in any state to behave in a composed manner. This is very similar to another film I had watched, called â€Å"Heart of darkness† by Joseph Conrad. Just like in that film, ‘Rashomon' too, reveals layers of human behavior.There are also humorous moments intertwined in the film to break the serious mood, almost acting like a comic relief. The entire film is shot in black and white, which serves as a gl oomy atmosphere, but also highlights the darkness of the events that take place in the movie. The director nas paid attention to every small detail in movie, be it the setting, the use of dialogues, the importance of the seasons etc. For instance, the movie opens with the scene of heavy rainfall; this may or may not be foreboding and suggestive of the darkness of the events that may take place.