Culture's impact on a leader Essay Example | Topics and Well Written Essays - 2000 words

Culture's impact on a leader - Essay Example Notwithstanding this observation, Venezuela could also benefit from being a collectivistic society compared to Germany’s individualistic. In the interview conducted with the colleague from Venezuela, people in this country tend to measure success based on the quality of life as opposed to personal achievements. The results from this interview were confirmed by Hofstede’s results whereby the level of individualism in Venezuela is a low 12, meaning it is more of a collectivistic society. As a result, a leader in Venezuela understands that their success will be determined mainly by the impact they cause on others. In contrast, Germany is individualistic and tends to elevate competition. Being a German, the result is factual and has been backed by Hofstede’s 67 scores.Mostly, a leader in Venezuela could be limited if they do not understand that the power distance is high, meaning employees might not freely relate with them. Consequently, the concerns and opinions rai sed by the workers might not be taken seriously. On the other hand, the Germans can help their leader because of the interaction boosted by the culture of equality. Nonetheless, the Germans’ tendency to be individualistic might be detrimental to teamwork when competition becomes a norm. A high individualistic society tends to care primarily for close relatives alone specifically parents and spouses compared to a collectivistic one. Therefore, the level of success for leaders in both Venezuela and Germany will significantly depend on their understanding of how culture influences effectiveness.

Poverty reduction programs in india Essay Example | Topics and Well Written Essays - 2500 words

Poverty reduction programs in india - Essay Example According to the World Bank survey, anyone earning below one dollar per day is usually graded as poor. May of such people resides in Africa, parts of Asia countries, Latin American countries and India. However in the developed nations, the number of poor people is reduced due to higher levels of development and excellence strategies put in place to curb poverty conditions in these areas. The government’s response to issues of eradicating poverty amidst them is of prime importance as she is the key controller of the national funds. This paper will look at the success of various programs in India aimed at alleviating and eliminating poverty among the Indian populations. According to Parikh, (1994) over the one third of the Indian population is illiterate and a larger majority of these is not educated beyond the age of 15 years. In line with this, Jha & Srinivasan, (2001 ) note that; At the beginning of the new millennium, 260 million people in the country did not have incomes to access a consumption basket which defines the poverty line. Of these, 75 per cent were in the rural areas. India is home to 22 per cent of the world’s poor. Such a high incidence of poverty is a matter of concern in view of the fact that poverty eradication has been one of the major objectives of the development planning process (3785). This indicates a larger percentage of the people who are either unemployable or lowly employed. Illiteracy and ignorance according to Hulme & Paul, (1999) is the root cause of poverty in various parts of the world. The first step require in the elimination of poverty is therefore the need to elevate the education sector and increase awareness among the people. The Indian government is doing a lot concerning this with more practical educational systems adopted in order to develop skills rather than promoting mere learning in most of the Indian learning and education sector. As Ramaswami, (2002) notes, even among the educated Indian populations , all do not possess adequate employable skills worth generating independent income. All these problems according to Mehta, (2004) stems from the education sector which is not turned towards changing the economic scenario in the country. The rural areas carry the largest number of Indian population which is mainly agricultural. Even this is greatly affected by the dwindling amount of cultivable lands and lack of adequate rainfall for the development of arable farming systems. Irrigation farming in many of the Indian lands is not possible due large capital requirements. This has led to acute rural- urban migration whereby a large number of people are moving into the urban areas to look for greener pastures. These end up doing various menial jobs in the cities since they lack adequate and specialized education required for good employment in the industries and labor intensive companies in the country. This has brought in a double misfortune in the country as the largest agricultural l ands are evacuated by people moving into the urban centers in search of jobs. The urban centers for this reason have been largely crowded with people with less education and almost no skills for employment. Lack of relevant or adequate skills for employment practices among many urban dwellers have eventually led to the development of informal jobs and settlements in most of the towns contrary to the overall expectations of the development agenda. As a result the development image of many

Compare and contrast a well lighted room and A & P Essay

Compare and contrast a well lighted room and A & P - Essay Example When his boss embarrasses the girls by telling them they can’t come in to the store dressed that way, the narrator quits his job in protest, even though the girls don’t see or hear what he has done. In â€Å"A Clean, Well-Lighted Place,† two waiters are closing up a restaurant and talking about the old man who is their last customer. The young waiter is unkind to the old man, but the older waiter thinks he understands how the old man feels. After the young waiter gets the old man to leave, the older waiter thinks about a prayer where all of the important words are replaced by â€Å"nada,† Spanish for â€Å"nothing,† then goes to a bar. The two stories have two very different narration styles. In â€Å"A & P,† the narration is first-person, and is from the point of view of the nineteen-year-old clerk. It is in the language and tone that he thinks in, and it is clear and tells a distinct story. The audience sees his view of the customers, for e xample when he makes a mistake at the register: â€Å"She's one of these cash-register-watchers, a witch about fifty with rouge on her cheekbones and no eyebrows, and I know it made her day to trip me up† (Updike). The story is as the narrator imagines it, which the reader can imagine might not be the way things really happened.

Imagine you are a columnist or have been contracted to write an Assignment

Imagine you are a columnist or have been contracted to write an opinion piece, for a quality publication such as The Economist o - Assignment Example A good example is what is being witnessed in Greece where the economy has been observed to decrease by 5% every year. Governments should adapt to the idea of spending to boost the economy and also concentrate on balancing the books as the private sector facilitates the economy rise. It is strange how the people who believe in austerity see this as an impossible move and believe that you can not spend when you got a debt. Keynes Theory The stimulus vs. austerity argument arises the debate about if the money supply should be increased or reduced. The difference between function one and function three views of money brings up a big debate. Also the creditors and debtors have a conflict of interest here. Creditors prefer the level three. They are more concerned with the store of value and want their money to increase value and be worth something when they are paid back. Debtors propose to earn the less money and pay back real terms. Multiplier The battle between austerity and stimulus ma inly bases around money as a vital factor that greatly determines there strength. Money functions are sub-divided into three which include: a medium of exchange, a unit of account and a measure store of value. These three functions bring out the difference between the stimulus and austerity. ... 10) Money also functions as a unit of account where it is basically used as a common unit for measuring the difference in value between two commodities or more. For example in barter trade economy, you can exchange two sheep for three goats whereas in the money economy you can value the goats for six shillings. Money functions as a unit of account in that it tells what things are worth. For example a sheep is worth three shillings and a goat at two shillings. The other function of money is as a store of value, in this sense, money is attributed by the fact that it cannot be spend immediately it is gained. The view of money as a physical medium of exchange improves the economy positively. An increase in physical exchanges increases the level of trade thus leads to quick economy growth. If money is perceived as a store of value then it will negatively contribute to the economy .The less the amount of money stored, the more valuable it becomes. Restriction on the amount of money in supp ly increases its value. Problems of Applying A Keynesian Stimulus Everyone would agree with the fact that we are facing an economic crisis. Some people believe that this situation is caused by the government giving promises it can not deliver in the long run and the best way to solve this remedy is by austerity. Whereas other people think that it is due to the private sector inability to create jobs and growth and prefer stimulus .The stimulus folks point to Europe to indicate that austerity has failed. This did not only cure economic problems but it was also rejected at the polls. On the other hand austerity switches blame to the United States and argue that stimulus was disguised. It is strange with

Article # 6 (due 10-26) Essay Example | Topics and Well Written Essays - 250 words - 1

Article # 6 (due 10-26) - Essay Example According to Chris (2012) lack of basic patient information including the demographics of the patient, credit risk and the estimated price for the services leads to misrepresented bottom-Line financial results. To come up with an appropriate financial record, the health care provider has to come up with the collect payments and estimate costs. In relation to the financial affairs of the provider, it is difficult to charge the necessary costs on a patient if the patient information is wrong. Providing an appropriate bill for a patient and the appropriate treatment is difficult as a result of poor recording. Poor recording of patient information leads to misappropriation of bills and treatment records; this may cripple the operations of the organization due to the huge losses on the bottom-line financial records. According to the study works of Chris (2012) it is vital for the organization to record patient’s records appropriately to avoid getting appalling bottom-line financial

Race and ethnicity in the United States Census Essay Example for Free

Race and ethnicity in the United States Census Essay Race is a biological entity, but it has been proven that the concept of race can be constructed or manipulated by societies that even though since an anthropological and biological perspective the barrier between races is very clear. Ethnicity isn’t a societal concept founded by the color of skin, since everyone knows individuals of the identical race have variations of skin color. For example in European circles, Middle Easterners such as Arabs, Jews, Iranians (Indo-Europeans or Aryans); North Africans like Berbers and Arabs; Latin Americans of pure Caucasian descent and Northern Indians and Pakistanis are not considered Caucasian or white, even though anthropologically and genetically they are. People can deny kinship or invent their kinship to people of other genetic markers if this makes them keep their status or way of life; this has to do with issues like migration, religion and the like. Race refers to the bodily and biotic features for specific sets of individuals. For example: anyone may recognize an individual’s ethnicity founded up skeleton construction, predominantly the cranium, since the various races have distinctive, skeleton structures. Diverse ethnicities have diverse bone concentrations. Afro-American’s have the thickest bone because they need to stockpile â€Å"calcium and vitamin D in their bones† because of the dusky color that does not allow the sun to simply infiltrate and produce the vitamins to protect their skeletal frame (Comer, 1972). White and Asian ethnicity produce smaller skeletal density since light skin permits the sun to infiltrate into the skin easier. This makes it easier to take up vitamin D from the sun. There are a large number of variations within ethical groups than may be condensed to tinier clusters of ethnic clusters. However, ethnic groupings are not unsubstantiated and illogical societal tags. There is a plethora of fabrication concerning race around, and most 19th century anthropology scientists that studied race were mistaken concerning many facts, however the entire theory should not be trashed. Even Darwin made mistakes concerning many facts, however it should not require the complete Theory of Evolution should be trashed as well.. A societal structure may function as an instrument of organization that sustains the domination of specific ethnic races and the subservience of other races. Race is described as being â€Å" ‘Race’ is first and foremost an unequal relationship between social aggregates, characterized by dominant and subordinate forms of social interaction, and reinforced by the intricate patterns of public discourse, power, ownership and privilege within the economic, social and political institutions of society† (Commer,1997). Ethnicity merely turns out to be genuine when societies act in other habits that cause subservience to last. It converts actual once society acts toward one another that maintain the subservience. Race often causes ethically emotional discourse which includes constant practices of displacement and ethnic suffering. Principles and individuality are also societal structures (permanent. The description of individuality by Sarikaya: â€Å"†¦identity is not only a story, a narrative which we tell ourselves about ourselves, it is stories which change with historical circumstances. And identity shifts with the way in which we think and hear them and experience them. Far from only coming from the still small point of truth inside us, identities actually come from outside, they are the way in which we are recognized and then come to step into the place of the recognitions which others give us. Without the others there is no self, there is no self-recognition† (Sarikaya, 2011). It is similar to a camera, the controlling scrutiny changes an individual to thing and â€Å"†¦the normalizing gaze [is] a surveillance that makes it possible to qualify, to classify and to punish, and it establishes, over individuals a visibility through which one differentiates and judges them† (Foucault,1991 pg. 25). Race has the capacity to change anyone into a historic minute outside of that which a person is unable to step out of. Race adopts the theory that there is a pattern of regularity and accurate, each person separate from this pattern should be conveyed to the pattern – the normalcy is considered to be a young, Caucasian, Christian, man. The societal imagination is a broad area that groups is now created, made-up, placed and formed by dominate dialogues and governing society. There is no social justice or injustice of classifying or not classifying people according to the race they belong to, some can say racial classifications are harmful to the unity of the group, that it causes racism, etc. It should not be something bad or something to be afraid of or something to avoid, there should be not prejudice in the concept of race, and everyone should be happy with their ancestry and celebrate their phenotype and genotype and not suffer prejudice from society for being descendant of certain people. References: Comer, J. P. , (1972). Beyond Black and White. New York, NY: Quadrangle Books. Retried from: http://kcmo. ent. sirsi. net/client/en_US/NKCPL/search/results/? ln=en_USq=Beyond+Bla ck+and+Whitert=rw=0. Foucault, M. , (1991). Discipline and Punish The birth of prison (2nd ed. ) New York, NY: Random House, Inc. Sarikaya, D. (2001). The Construction of Afro-Caribbean Identity in the Poetry of Linton Kwesi Johnson. Journal of Caribbean Literatures, (Spring 2011, Vol. 7, Issue 1, p161-175, 15p). Retrieved from: http://av4kc7fg4g. search.serialssolutions. com. ezproxy. apollolibrary. com/? ctx_ver=Z39. 88-2004ctx_enc=info%3Aofi%2Fenc %3AUTF-8rfr_id=info:sid/summon. serialssolutions. comrft_val_fmt=info:ofi/fmt:kev:mtx:jo urnalrft. genre=articlerft. atitle=The+construction+of+Afro-Caribbean+cultural+identity+in+t he+poetry+of+Linton+Kwesi+Johnsonrft. jtitle=Journal+of+Caribbean+Literaturesrft. au=Sar ikaya %2C+Dilekrft. date=2011-01-01rft. pub=Journal+of+Caribbean+Literaturesrft. issn=1086-01 0Xrft. eissn=2167-9460rft. volume=7rft. issue=1rft. spage=161rft. externalDBID=n %2Farft. externalDocID=338524281paramdict=en-US.

Beiersdorf Ag And The Cosmetics Industry

Beiersdorf Ag And The Cosmetics Industry Beiersdorf AG (BDF), together with its subsidiaries, engages in the manufacture and distribution of branded consumer goods primarily in Europe, the Americas, Africa, Asia, and Australia. The company operates in two segments, Consumer and Tesa. The Consumer segment offers skin and beauty care products under the Labello, NIVEA, 84, la prairie, JUVENA, atrix, Eucerin, FUTURO, Hansaplast/Elastoplast, and Florena brand names. The consumer division represents over 80% of the companys total value sales. The Tesa segment engages in the development, production, and marketing of self-adhesive system and product solutions for industrial customers and consumers. Beiersdorf Aktiengesellschaft was founded in 1882 and is based in Hamburg, Germany. The group has around 17,300 employees and over 150 affiliates worldwide. Since 2003, the company has been part of the Tchibo Group. The group recorded revenues of 5,120 million during the fiscal year ended December 2006, an increase of 7.2% over 2005. The operating profit of the group was 477 million during fiscal year 2006, a decline of 15.8% over 2005. The net profit was 664 million in fiscal year 2006, an increase of 99.4% over 2005. This report analyses the economic aspects of the business of cosmetics and the consumer segment of Beiersdorf AG. 2. Introduction In 2006, the cosmetics and toiletries industry posted $163 billion, a growth rate of more than 5% over 2005 $155 billion. Euromonitor International forecasts average annual growth of 3% to reach global sales of more than $313 billion by 2011. (GCI, 2007). The industry continues to benefit from a combination of strong macroeconomic trends (including a worldwide rise in consumer spending power); key demographic factors such as aging populations and higher life expectancies; an increased interest in appearance and personal care as a means of preventive healthcare; and lifestyle and climatic changes that are creating opportunities for new product niches. Legislative restrictions are having a positive impact by improving consumer confidence and facilitating international trade, and technological advances are improving product efficacy and providing manufacturers with new marketing tools and advertising opportunities. 3. Competition and Markets Microeconomics: Porters 5 Forces Based on Porters five forces model which determines the intensity of the industry competition and profitability (Porter 1980, p3), Beiersdorf has an advantage in the cosmetics industry; their heritage and unmatched leadership in skin care through NIVEA has created an immediate stronghold over its competitors in the industry as well as differentiation. However the threat of substitute products and services could affect Beiersdorfs popularity. Threat of New Entrants Medium A large number of firms differentiate their products and maintain a certain degree of control over their pricing. This monopolistic competition has relatively low barriers to entry and exit. Government regulation, mostly related to safety issues, and distribution channels appear to be the most significant barriers to entry in the cosmetics industry. Beiersdorf has the advantage of economies of scale, an established supply and distribution channels and high product differentiation, to compete and have an incumbent advantage. The capital requirements of entry, customer and supplier loyalty, legislation, and retaliation are moderate, which indicate that a new entrant is hindered to enter the market and compete. To stay competitive, Beiersdorf needs to continually innovate. Threat of Substitutes High The risk of product-for-product substitution is high as equivalent product benefits are available both in generic and branded form. Beiersdorf has contended with this risk by continuous innovation and introducing unique formulations across global markets. Beiersdorf has worked to expand its presence in the global personal care market by promoting its flagship brand NIVEA, which launched a global marketing campaign last summer that intends to cover 64 countries by mid-2008. To increase sales by presenting consumers with innovative new products, Beiersdorfs expenditure on RD rose 7.6 per cent to 127m in 2007 and this investment is expected to help the company launch successful new products in the years ahead (Cosmetics Design, 2007). Bargaining Power of Buyers Medium Buyer (customer) concentration is moderate as product differentiation and distributed markets ensure relative price differences that ensure profitability. This indicates reduced bargaining power of the buyers. Loyalty to Beiersdorfs products is relatively high and the cost of switching buyers is medium. The risk of supplier acquired by the buyer is less as the products are proprietary formulations. Beiersdorf also differentiates through choice and first to market innovation. As such, they should be unwilling to accept compromises on quality. This will also be true for emerging economies, where, as they develop and innovation becomes a competitive differentiator, buyers will be less willing to compromise on quality. Bargaining Power of Suppliers Medium Ingredients are individually sourced from suppliers and blending them into unique proprietary products has traditionally been Beiersdorfs primary strength. Suppliers concentration is high with the added risk of buyer being acquired by the supplier. However, the cost of switching suppliers is moderate and overall, suppliers increasing costs is less impactful on the profitability. Competitive Rivalry High Despite an unfavourable environment in Beiersdorfs key region of Western Europe, the company has managed to consistently outperform global sales of cosmetics and toiletries over the review period and by one percentage point in 2006. Beiersdorfs global sales growth (6%) is above that of its direct competitors Procter Gamble and Unilever, although LOr al outperformed by one percentage point. However, like LOreal and other major global players, much of this growth is derived from emerging markets. This performance tends to demonstrate that Beiersdorfs growth strategy is successful. However, the degree by which Beiersdorf outstripped overall sales has lessened. It is essential for Beiersdorf to continually invest in RD to maintain their competitive differentiation and profitability. The recent revision of Beiersdorfs growth strategy indicates that the company identified the right targets for growth, both at product category level, such as with a focus on mens grooming products, and at a geographical level. The slight departure from the previous focus on North America seems wise, as sales in this region are forecast to remain sluggish over the period 2006-2011. On the other hand, increased efforts to launch Beiersdorfs brands in high-growth countries such as China and Russia should prove very beneficial. 4. Market demand and understanding the consumer The law of diminishing marginal utility holds for the cosmetics sector. A shift in the demand curve will be seen as a result of changes in demand due to factors other than price, such as increases in consumer income, changes in taxes on the product, changes in price or availability of competing products, and changes in expectations of future prices (Wilkinson 2005, p.82). Various elasticity concepts, including own price elasticity, income, advertising and cross-price elasticises of demand as well as consumer indifference curves are very important to the company as they influence the pricing and advertising strategies (Jones 2004, p.98). The demand curve for Beiersdorfs portfolio can be expressed as D1, displayed in Figure 3. P1Q1 represents the market equilibrium point for quantity and demand for the pricing strategy. Beiersdorf expansion of its market share in 2007 by focusing on product innovation and emerging markets with a special focus on the Chinese market was supported by high sales of Nivea Visage and Nivea for Men, and sales in China increased 45.1 per cent in 2007 contributing to a 7.6 per cent rise in the companys turnover to 5.5bn, indicated by an outward shift in the demand curve from D1 to D2. At this price point, quantity sold was higher (P2Q2). Sales were up 12.8 per cent and the jump in profits was also due to the companys logistics and production revamp, which has centred on its hair and skin care operation in Europe during the past two years. Thus, the demand curve may well have sloped more sharply upwards than it appears in Figure 3. This raises the equilibrium quantity from Q1 to the higher Q2. These curves demonstrate that Beiersdorfs overall revenue has grown considerably from 2006. In its financial results for 2007 the company reported sales of 5.5bn for the fiscal year, which adjusting for currency translated into a 9.1 per cent increase on 2006. Also, Beiersdorfs growth is driven by advertising and promotion, alongside heavy research and development investments. Faced with growing maturity in its key market Western Europe, Beiersdorf has not limited its growth strategy to product innovation. In addition, the company is focusing on alternative retail channels. 5. Market supply and understanding the companys costs Market supply is the aggregate of individual firm supply, determined by factors affecting firm supply. The market supply function for a product is a statement of the relation between the quantity supplied and all factors affecting that quantity (Hirschey 2005, p.110). With the dual aim of halving working capital requirements and saving costs, the Company embarked on a restructuring of its supply chain in 2005. Originally managed locally, all major supply chain processes, including planning, sourcing, production, delivery and returns are now moving towards more central management. Processes are being optimised, in order to reduce the time-to-market for new products, and products and processes are being standardised as much as possible to achieve economies of scale. In Europe, Beiersdorf has already adapted its production sites and logistics centres to reflect actual demand and has reduced overcapacity. For example, early 2007, the company sold its production and logistics facilities in France, as well as its Hamburg-based logistics centre and its Heitersheim-based soap factory both in Germany. In Asia, Beiersdorf conducted an in-depth analysis of its product and supply chain during 2006. It is expected to roll out its Asia restructuring plan in 2008. Meanwhile, on the back of beneficial business tax reform net profit leapt to 132m from 74m in 2006. Although Beiersdorf began to focus a large part of its efforts into strengthening its position in high-growth regions such as Eastern Europe, Latin America and Asia-Pacific, the company is behind many other international manufacturers. Many players identified the same areas as key targets over the last few years. Without first-mover advantage, Beiersdorf will have to match its competitors in terms of distribution, price and product support in order to reach new customers. 6. Market analysis, failure and responses Market failure is the situation where the market mechanism fails to allocate resources efficiently (Wilkinson 2005, p.473). There are a number of reasons why market failure might occur: inefficiencies, imperfect competition due to oligopoly in the cosmetics market, external economies and diseconomies of production, pure private and pure public goods; and government intervention in the form of taxation and subsidies to try and restore social equity while exercising other options such as legal measures and persuasion. Annual sales growth in the cosmetics and toiletries market has fallen gradually from 21.2 per cent in 2002 to 11.3 per cent last year to $20.9bn. Overall growth figures are slowing as the market matures although breaking down the figures suggests high double-digit growth is still achievable in the market for more sophisticated products. Picking out two categories for comparison, premium cosmetics sales increased 15 per cent last year whereas deodorant sales grew by only 8.2 per cent (Cosmetics Design, 2008). Beiersdorf should achieve growth figures in Central and Eastern Europe with targeted growing niches and expanded market share. In addition, Beiersdorf paid 269.45m in October for an 85 per cent stake in China-based C-Bons Hair Care, which owns the Slek and Maestro brands (Cosmetics Design, 2007). This will significantly strengthen Beiersdorfs market share in China. 7. Market structures and company strategies Economists classify market structures into four main types: perfect competition, monopoly, monopolistic competition and oligopoly (Wilkinson 2005, p.313). The cosmetics business is an oligopoly. With competitors such as Unilever, LOreal, Proctor and Gamble, Avon, Est e Lauder Cosmetics, and other large corporations, Beiersdorf attempts to maintain a technological superiority through path-breaking innovations and their highly successful soft-sell techniques. The constant research and development of cosmetics, combined with the universal human desire to look the best they can, suggests that the industry has great potential. The strategies used by Beiersdorf are an attempt to differentiate itself from other competitors in the industry. Despite an unfavourable environment Beiersdorfs global sales growth (6%) is above that of its direct competitors Procter Gamble and Unilever, although LOreal outperformed by one percentage point. This performance tends to demonstrate that Beiersdorfs growth strategy is successful. The recent revision of Beiersdorfs growth strategy indicates that the company identified the right targets for growth, both at product category level, such as with a focus on mens grooming products, and at a geographical level. The slight departure from the previous focus on North America seems wise, as sales in this region are forecast to remain sluggish over the period 2006-2011. On the other hand, increased efforts to launch Beiersdorfs brands in high-growth countries such as China and Russia should prove very beneficial. 8. Economic output and national wealth Economic output is measured with actual growth and potential growth. Actual growth may be defined as the actual annual increase in national product or real GDP per annum, normally expressed as a percentage or on a per capita basis. In contrast, potential growth is the annual increase in a countrys productive capability. Actual growth may fall short of potential growth if the economy is working at less than full capacity, which is if it works within its production possibility frontier. Economic growth is perceived to be desirable since higher growth benefits the population of the country. However, high shorter term economic growth using non-renewable resources, causes slow long term growth. Cosmetics industry contributes positively to the GDP due to its manufacturing activity. Beiersdorfs products are manufactured across the world and in all its major markets it has manufacturing facilities or agreements with affiliates. Beiersdorf also supports beauty salons and massage parlours with its professional products and thus indirectly supports local economies. 9. Economic growth and business cycles The global economy recorded sound growth in the early part of 2007. However, in late summer the ongoing slowdown on the U.S. real estate market triggered fears regarding the creditworthiness of financial market products and institutions in the U.S.A. and Europe. U.S. monetary policymakers moved to counter rising cyclical risks by cutting interest rates. Nevertheless, the drop in real estate prices, rising default rates for mortgage loans, and the jump in jobless rates at the end of the year led to a market slowdown in the growth of U.S. consumer spending and hence in the economy as a whole. Against this background, the U.S. dollar came under strong pressure in the second half of 2007. In addition, the euro appreciated significantly against the yen, impacting the international competitiveness of European companies. Continental European economies were dominated by robust growth in exports and investments and further improvements on the job market, but were impacted by an increase in inflation risks, fuelled by rocketing prices for oil, energy, and food. Figure 7: Inflation in 2007 Source: Beiersdorf Annual Report, 2007 The ongoing rapid expansions of the Chinese market, where growth rates are at about 12%, continue to offer sales opportunities for European producers. At the same time, Chinas growing demand for raw materials led to price rises on the global commodities markets. Although Continental Asian countries saw dynamic development, Japanese growth is below expectations. In Latin America, growth remained stable at around 5% in 2007, while in Eastern Europe it was 6%. Business cycles effect on Beiersdorf, as a factor of investment and consumer spend on goods and services, is limited as its products cater to virtually every age-group among consumers and its flagship brand NIVEA and its extensions as an umbrella brand have gained immense value and loyalty. It is true that mass-market cosmetics are not essential for life, however, the relative low-cost of the products, and the heavy reliance on image enhancement, especially in women, prompt that cosmetics would not be the first items to be forsaken in time of economic hardship. This makes the industry more resistant to recessions and other economic downturns. 10. Capital accumulation and technological progress In addition to Beiersdorfs acquisitions, the investments in operating activities amounted to 106 million relating to intangible assets and property, plant, and equipment in 2007. Innovative product development is a strategic factor at Beiersdorf for ensuring competitive strength and group growth, based on over 80 years of research and development. In 2007, the company spent 127 million on research and development (2.3% of sales). On a global level, 870 members of staff without C-BONS Hair Care are employed in research and development. 11. Labour markets and unemployment Though unemployment is creeping, unbridled inflation has played havoc with commodity prices and interest rate turbulence. This can lead to loss of jobs as companies may trim their expenses in an effort to counter inflation. Beiersdorf enjoys a healthy growth rate of over 6% against the industry growth of 4% average. There is no threat of unemployment and labour market issues for Beiersdorf due to its unassailable market share and brand loyalty across the world. The resilience of the economy could be impacted by unemployment, but is unlikely to directly impact demand for Beiersdorfs products, due to its strong heritage and the NIVEA brand pull. 12. Role of government and fiscal policy Government expenditure and taxation is the basis for fiscal policy. Cosmetics are regularly taxed and such taxes have a notional effect on demand of Beiersdorfs products. However, customs and import duties on raw materials and finished goods have an impact and the company appears to counter such effects with local manufacture and continued product innovations. 13. Role of government and monetary policy Since inflation and money supply determine the monetary policy, inflation is countered with a change in interest rates to affect a control on money supply. Beiersdorf indicates that currency, interest rate, and liquidity risks are subject to active treasury management. In most cases they are managed and hedged centrally. Derivative financial instruments serve solely to hedge operational activities and financial transactions essential to the business. The Company limits potential default risks relating to the investment of the Groups liquid funds by only making short-term investments with prime-rated counterparties. Consumer impact of monetary policy may affect spending on cosmetics. However, brand loyalty and preference for personal grooming offset any adverse impact. 14. Foundations of international trade The law of absolute advantage and the law of comparative advantage are the basis for international trade. Countries specialise in goods and services which they have the greatest aptitude for producing due to natural resource endowments, or because of the acquired skills of their workforce. These factors of production are largely immobile between countries so trade takes place in the goods which they produce. The terms of trade of a country might change as the result of a change in the composition of its exports or imports, or a change in the price of its exports or imports. For the former, businesses selling higher priced products such as software as opposed to low level manufactures would be one cause of an improvement in the terms of trade. This leads to the issue of free trade against protectionism, such as import tariffs, quotas, exchange controls, export subsidies and administrative barriers. Beiersdorf with 150 affiliates worldwide is a major player in international trade. It leverages inherent strength of each country it operates in and extends these advantages across its global markets. Beiersdorf projects that the consumer segment of its business will continue to enjoy growth of approximately 8 per cent due to its increased China focus, which is double the cosmetics market as a whole. China does not however carry the burden of delivering sales growth for the company alone and Russia, Brazil and India have been identified as fellow drivers for growth. This is more confident than the outlook of competitor LOreal which, on the back of recent results affected by the weak US dollar, pulled down its expectations for the full year to just under 6 per cent growth (Cosmetic Design, 2008). 15. Conclusion The cosmetics industry, business and market analysis, based on the 12 strands of the Grenoble syllabus, identify several important issues. Central to the planning and development of strategies within the business environment is based on an understanding and interpretation of micro- and macro-economic factors. Applying the above twelve economic factors to Beiersdorf performance, it is clear that market, governmental and global forces act upon the company, affecting strategic decisions. The business is consumer-oriented and market driven. Sustaining market share and ensuring growth in this free and highly competitive market requires continuous application of information analysis, strategic decision-making and rapid execution. Constant innovation, vast potential in emerging markets, maturing markets in Western Europe and US, varied preferences of consumers across global markets who also seek consistent quality and product standards, may result in dramatic shifts along the demand curve. An oligopoly, the cosmetics business thrives on capital accumulation and technological progress, ensured by economic growth, business cycles and international trade. Fiscal and monetary measures by the governments and labour issues influence the business to a limited extent. Beiersdorf is a successful global company in this sector and its growth and expansion over the decades indicates a healthy and competitive advantage.