Zara Marketing Plan Essay Example

Zara Marketing Plan Essay General introduction (including a concise consumers and category market/ trend overview) Entry mode -The suitable mode of entry for Zara to enter the clothing industry in Vietnam is franchising. -As Vietnam’s joint venture regulations are strict; the Vietnamese investors must own at least 51% of the enterprise’s capital. This will create some difficulties to Zara in term of controlling the business. Therefore, franchising is more suitable because the mode of entry is suitable for entering a small country and subject to significant cultural differences from Zara’s home base (Spain) as Vietnam. -In term of financial, franchising creates another source of income for Zara, through payment of franchise fees, royalty and levies in addition to the possibility of sourcing private label products to franchisees. In term of strategic, franchising can be Zara’s mean of spreading risk by multiplying the number of locations through the franchisees’ investment. SW OT analysis Market segmentation and targeting Segmenting and Targeting the market* -Zara’s target customers are paying attention in high trends and want to have the latest fashion trends. -Geography, demographic, psychographic, benefits, and usage rate are the main bases for segmenting consumer markets. -Demographic segmentation plays a big role for Zara. It includes gender, age, ethical norms, and family life cycle. -Zaras target market is mostly women and fewer men. Zara designs more clothing for women. -It is focused on people of different age, including generation X and Y. Those who earn enough money and are able to buy clothes from Zara shops. Positioning the company* -INDITEX currently runs 5154 stores segmented into eight branded chains: its flagship brand Zara5, Pull amp; Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterque. Zara has positioned its brand to deliver the latest fashion, well made, at a price that makes it attainable by millions of people. -ZARA is positioned more fashionable compare to its competitors but surprisingly with a relatively low price behaviour. Estimate market share Marketing objectives Set marketing objectives* *  · Fast lead time – differentiating the design, manufacturing and distribution progression keep costs down by keeping stocks low products are available on the shopping floor and regularly replaced, given the short life of items *  · Fast fashion – used information technologies and groups of designers through point of sale system into what the shops sell as their feedback is sent back to the head office *  · Brand name more well-known – international expansion (stores, distribution centres) *  · To deliver the right product, so that make sure meet the needs and expectations of specific target customer segment *  · Provide quality clothing and customer service at a reasonable price Marketing mix strategies According to Kotler, Keller and Burton (2009), marketing mix strategy is required to expand the segment positioning strategy, which includes all aspects such as product, price, promotion and place. Zara sells a largely homogeneous product for a global market (Flavian and Polo, 2000). Nevertheless, there are some adjustments in its marketing mix because of the customer’s size differences in Asian countries (Monllor, 2001). What differentiates Zara’s business model from that of its competitors is the turnaround time, and the store as a source of information. Zara’s strategies like just-in-time manufacturing, delivery and sales, flexible structure, low inventory rule, quick response policy and advanced information technology enable a quick response to customer’s changing demands (Castellano, 1993, 2002) Product and Brand Strategy Brand strategy raised its brand awareness by adopting several new brand strategies, for example, offering ultimate fashion at a low cost. educate this market and influences consumer shopping habits (Blanco and Salgado, 2004) to achieve the word of mouth throughout consumers and build positive brand equity. use social media such as YouTube, Facebook, and Twitter as a good communication channel to its consumers and a tool to develop brand community. not only focuses on customers but also its employs by applying internal branding, which prods its staff to better understanding, managing and delivering Zara brand. Product strategy Product strategy is one of key elements of a brand strategy that leads to the success of a brand strategy. create its culture to customers: â€Å"you better get it today because you might not find it tomorrow† by leaving large areas empty in its expensive retail shops and encouraging occasional stock-outs. gathering information to make the decisions on garments sold in all the markets where Zara operates (Bonache and Cervino, 1996). store managers decide the specific garments that will be put on display in the store to meet the customer’s taste in that area (Fabrega, 2004). launch new features with high quality standard differentiate its products to meet customer’s requirement and needs: product production and delivery in fifteen days; Changes of an existing garment can be put on display within two weeks; manufactures its â€Å"live collections†; lauching 11,000 new items every year (Ghemawat and Nueno, 2003). Service strategy* * Physical evidences Evidence is a product help consumers understand our product. It is not di rectly involved in consumer buying them, but it can influence consumer behavior. * Process This is the service process when customers entry into Zara store, including after-sales service * People The salespersons in our shop have a good and professional level of service. This is the most direct task that to improve satisfaction with consumers. * Customer Information Analysis and Reporting point of sale system: using data gathered through these chat transactions, feedback Pricing strategy set the price for its products =gt; marketers and product line managers do/buy research reports + to have a better understanding of Vietnamese expenses and its target consumer psychology + to get reference prices of existing competitors in this market. significant growth in brand awareness and fashion consciousness a high demand in fashion industry, especially on quality clothes, whose sales are projected to grow around 15% by the end of 2012. 1 According to consumer behavior, it is shown in graph below that Vietnamese consumers spent 13. 9% of their incomes on clothes. (An image about Vietnamese expenses will be inserted here) Source: Vinaresearch Company (2012)) (RNCOS research report (2012), Vietnam Retail Analysis (2008-2012) ) Zara prices in international markets are generally higher due to longer distribution channels (Ghemawat and Nueno, 2003) can affect its positioning in those countries and therefore, its brand image (Ghemawat and Nueno, 2003). focus on providing fashionable clothes for teenagers and office people with an average and higher income. â€Å"Zara prices are based on comparables within the target market, subject to covering costs plus a target margin† the prices are estimated to be reasonably and affordable to these target customers. create deals by offering few pieces from the same collection as a batch for a lower price. Distribution Strategy Distribution is the main point of marketing strategy of company, including market logistics, online stores and physical stores retailers. Market logistics Zara has its own centralized distribution system Zara can open a distribution or satellite centers in Vietnam, where it is easier to deliver its products not only inside Vietnam but also China, Thailand, Singapore and other Asian countries around. open shops in big cities in Vietnam such as Ho Chi Minh City, Ha Noi, Da Nang, apply local sales program and pricing strategy to gain some advantages. Online Channel Zara sells its products via online shops at www. zara. com and launches application on IPhone to let browsers search through the latest information regarding new collections. build Zara Vietnamese website with Vietnam Dong only price, promotions, and so on, and restrict Zara website to deliver the products to Vietnam.. Retailing and stores Zara believes that its shop windows, the contents of which are also decided in La Corua are all the advertising it needs. Its promoting and advertising tool mainly bases on wordâ₠¬â„¢s mouth. + Vietnam: focus on choosing high population, many offices, universities and traffic areas such as District 1, 3 or Tan Binh District in Ho Chi Minh, commercial city, for settling its flagship stores. arrange its shops in prestigious districts neighboring other high clothing manufacturers, which establishes the recognition faster in the market. Globally, Zara standardises the key strategic elements, namely the location, window display, interior design, store layout, store display rotation, customer service, information systems and logistics. We will write a custom essay sample on Zara Marketing Plan specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Zara Marketing Plan specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Zara Marketing Plan specifically for you FOR ONLY $16.38 $13.9/page Hire Writer The rest of the elements are customised to the market to suit local preferences (Fabrega, 2004). + Vietnam: offer fresh assortments of designer-style garments and accessories—shoes, bags, scarves, jewelry and, more recently, toiletries and cosmetics—for relatively low prices in sophisticated stores in its prime locations to draw masses of fashion-conscious repeat customers. recruit employees locally to get a better understanding of the local market preferences (Martinez, 1997). Promotional mix (IMC), strategy and rationale* * Advertising (advertising budget) Unlike other fashion retailers, Zara only use 0. %, but impressive brand awareness around the world. The company believes that its shop windows, the contents of which are also decided in La Corufia, are all the advertising it needs. The companys success has achieved without any advertising or promotion and without outsourcing it’s manufacturing to low labor cost countries * Promotion Strategy Promotion will be primarily outdoor advertising, radio, and TV With Zara’s promotion we will compare results, analyze, track responses, and measure profitability to insure their promotions are profitable Zara will implement pull strategy in order to build consumer awareness and demand. The designers who are close to the consumer are effectively taking over forecasting duties, so that pulling the products through the supply chain (Jose, 2010). As Pearson (2010) mentioned, pull view is executed in response to a customer order, the demand is known with certainty, and as reactive processes that react to customer demand. Pull approach enables Zara to produce only what are women and men real required with right price, in the correct quantity and at the correct time. Implementation plan and measurement tools Product One of the greatest issues to face and overcome is how to make potential consumers. Place Choose a great place for advertisers to inform people with latest information of products. Price Compare Zara and Hamp;M Table Promotion The promotion is the key to gain distribution in the market by encouraging trial of Zara products. * Research and Development Aim 1) Identify and create products amp; services that are need in the market 2) Get feedbacks from the other companies Objective ) Complete identifying products and services 2) Develop platform Strategies 1) Assigning new tasks to employees 2) To form a questionnaire to do a research on the market 3) To compile and analysis the result of the questionnaire Implementation Plan Task| AssignedPersonnel| Given TimeFrame| Date CompletedBy| Look out for innovative products (if applicable)| | | | Forming a questionnaire| | | | Send out the questionnaire| | | | Compile and analysis the result of the questionnaire| | | | * Sales and Marketing Department Goal 1) To successfully market the product to the global market and by giving each type of product individuality, zara focus on the strengths that the product has. 2) To return customers make up for a lot of income. Objective 1) Increase our sales figures. 2) Meet with customers often to establish a good relationship. Strategies 1) Sales Offer discounts to customers. Offer promotion deal. 2) Marketing Assign a product to each member of the group to take responsibility for coming up with original ideas to promote the products. Final ideas should have a strong impact on customers at first sight. Advertising Work with IT Department to market the product successfully on the Internet. Market research Frequent surveys, questionnaires, etc. Under Promise, Over Deliver Implementation Plan Task| Personnel and Departments Involved| Time Allocated for Task| Date to be Completed By| Communicate with customers to find out about their general happiness with the products. | | | | Coming up with ideas to promote the products| | | | Working with the Research Dept. to analyse the results. | | | Drawing up advertisements to hand in to IT department| | | | Implement the ideas| | | | Introduce promotion deals to customers| | | | Conclusion and strategic recommendations Tokatli, Nebahat; Journal of Economic Geography, January 2008, v. 8, iss. 1, pp. 21-38 Caro, Felipe; Gallien, Jeremie; Operations Research, November-December 2012, v. 60, iss. 6, pp. 1404-22 Philip Kotler, Kelvin Lane Keller. (2012). Chapter 9 Creating Brand Equity. Marketing management. England: Person Education. Simchi-Levi, D. , Kaminsky, P. , Simchi-Levi, E. 2008), chapter 9 Procurement and out-sourcing strategies, Designing and Managing the Supply Chain, 3rd edition, US: McGraw-Hill Irwin Kasra Ferdows; Michael A. Lewis, Jose A. D. Machuca (2004). Rapid-Fire Fulfillment. Harvard Business Review; Nov2004, Vol. 82 Issue 11, p104-110 Carmen Lopez, Ying Fan, (2009) Internationalisation of the Spanish fashion brand Zara, Journal of Fashion Marketing and Management, Vol. 13 Iss: 2, pp. 279 – 296 Castellano, J. M. (1993), â€Å"Una ventaja competitiva: el factor tiempo. El caso Inditex-Zara†, Papeles de Economia Espan? ola, Vol. 56, pp. 402-4. Castellano, J. M. (2002), â€Å"El proceso de internacionalizacion de Inditex†, Informacion Comercial Espan? ola, Vol. 799, pp. 209-17. (The) Economist (2005), â€Å"The future of fast fashion†, The Economist, available at: http://www. economist. com/node/4086117 (accessed 13 May 2013). Ghemawat, P. and Nueno, J. L. (2003), Zara: Fast Fashion, Case No. 703-497, Harvard Business School Press, Cambridge, MA. Flavian, C. and Polo, Y. (2000), Inditex (1994-1999), in Munuera, J. L. and Rodriguez, A. I. , Estrategias de marketing para un crecimiento rentable. Casos practicos, ESIC, Madrid, pp. 33-161. Monllor, C. (2001), Zarapolis. La historia secreta de un imperio de la moda, Ediciones del Bronce, Barcelona. Bonache, J. and Cervino, J. (1996), Caso Zara: el tejido internacional, in Duran, J. J. , Multinacionales espanolas I. Algunos casos relevantes, Piramide, Madrid, pp. 51-86. Fabrega, F. (2004), Zara. El modelo de negocio de Inditex, Claves de gestion, Madrid. Martinez, J . A. (1997), Jose Maria Castellano, Economistas, 73, pp. 118-126. Ghemawar, P. and Nueno, J. L. (2003), Zara: Fast Fashion, Harvard Business School Press. Case No. 703-497

Isabella of Portugal (1503 - 1539), Habsburg Queen

Isabella of Portugal (1503 - 1539), Habsburg Queen Isabella of Portugal Facts Known for: regent of Spain during long absences of her husband, Charles V, Holy Roman EmperorTitles: Empress, Holy Roman Empire; Queen of Germany, Spain, Naples, and Sicily; Duchess of Burgundy; princess (Infanta) of PortugalDates: October 24, 1503 - May 1, 1539 Background, Family: Mother: Maria of Castile and Aragon Maternal grandparents: Isabella I of Castile and Ferdinand II of Aragon.Maria was the second wife of Manuel IManuels first wife, Isabella, Princess of Asturias, was Marias sister,  the eldest daughter of Isabella I and Ferdinand IIManuels third wife, Eleanor of Austria, was a niece of both Maria and Isabella, Manuels wives Father: Manuel I of Portugal Paternal grandfather: Ferdinand, Duke of ViseuPaternal grandmother: Beatrice of PortugalBeatrice was a sister-in-law and first cousin of Afonso V of Portugal, and mother-in-law and second cousin of John II of PortugalBeatrices sister, also called  Isabella of Portugal, married John II of Castile, and was the mother of Isabella IManuel succeeded his first cousin, John II of Portugal, who was married to Manuels sister, Eleanor of ViseuManuels older brother, Diogo, was stabbed to death by John II Siblings of Isabella of Portugal: Miguel de Paz, Prince of Portugal and AsturiasJohn III of PortugalBeatrice, Duchess of SavoyLouisFerdinandCardinal AfonsoHenryEdwardMaria, Duchess of Viseau Marriage, Children: Husband: Charles V, Holy Roman Emperor (married March 11, 1526) Charles was Isabellas first cousinhis father was Philip the Handsome, Duke of Burgundy and Holy Roman Emperorhis mother was Joanna of Castile (known as Juana the Mad), a sister of Isabellas mother, Maria, both daughters of Isabella I and Ferdinand IIIsabellas brother, John III of Portugal, had earlier married Catherine of Austria, sister of Charles V, in 1525 Children: Philip II of Spain (1527 - 1598), who married four times: Maria Manuela of Portugal, Mary I of England, Elizabeth of France, and Anna of AustriaMaria (1528 - 1603), Holy Roman Empress, married to Maximilian II, her first cousinJoan of Austria  (1535 - 1573), who married her double first cousin, John (Joo Manuel) of Portugal; their child was King Sebastian of Portugal, who died without childrenThree children who were stillborn or died in infancy: Ferdinand (1529 - 1530), John (1537 - 1538), and an unnamed son (1539) Isabella of Portugal Biography: Isabella was born the second of the children of Manuel I of Portugal and his second wife, Maria of Castile and Aragon.  She was born in a year of sharp decline in  her grandmother, Isabella I of Castile, who died the next year. Marriage When her father died in 1521, her brother, John III of Portugal, negotiated a marriage with Catherine of Austria, sister of Charles V, the Holy Roman Emperor. That marriage took place in 1525, by which time negotiations had arranged for Charles to marry Isabella. They were married on March 10, 1526, at the  Alczar, a Moorish palace. John III and Isabella, brother and sister, were first cousins of the sister and brother they married: they were all grandchildren of Isabella I of Castile and Ferdinand of Aragon, whose marriage united Spain. Isabella and Charles may have married for financial and dynastic reasons she brought a large dowry to Spain but letters of the time show that their relationship was more than just a marriage of convenience. Charles V is known for creating a world empire, molding a great Habsburg empire which was rooted in Spain rather than in Germany.  Before his marriage to Isabella, other marriages had been explored for him, including marrying a daughter of Louis XII and a sister, Mary Tudor, of Henry VIII of England, a Hungarian princess.  Mary Tudor married the King of France, but after she was widowed, talks had begun to marry her to Charles V.  When the alliance of Henry VIII and Charles V fell apart, and Charles was still in conflict with France, the marriage with Isabella of Portugal was the logical choice. Isabella has been described as frail and delicate from the time of her marriage. They shared religious piety.   Children and Legacy During Charles absences from Spain in 1529-1532 and 1535-1539, Isabella served as his regent. They had six children, of whom the first, third and fifth survived to adulthood. During one of Charles absences, Isabella died after giving birth to her sixth child, a stillbirth. She was buried at Granada. Charles did not remarry, though that was the usual custom for rulers.  He wore mourning black until his death. He later built a royal tomb, where the remains of Charles V and Isabella of Portugal are together with those of Charles mother, Juana, two of his sisters, two of their children who died in infancy, and a daughter-in-law. Isabella  and Charles son Philip II became ruler of Spain, and in 1580, also became the ruler of Portugal.  This temporarily united the two Iberian countries. A portrait of Empress Isabella by Titian portrays her at her needlework, presumably waiting for the return of her husband. Joan of Austria and Sebastian of Portugal This daughter of Isabella of Portugal was the mother of the ill-fated Sebastian of Portugal and ruled Spain as regent for her brother Philip II. Known for:  Habsburg princess; regent of Spain for her brother,  Philip II Title by marriage:  Princess of PortugalDates:  June 24, 1535 - September 7, 1573Also known as:  Joan of Spain, Joanna, doà ±a Juana, Dona Joana Marriage, Children: husband: Infante John Manuel, Prince of Portugal (married 1552)one child:Sebastian  of Portugal (1554 - 1578) Joan of Austria Biography: Joan was born in Madrid. Her father was King of Aragon and King of Castile, the first to rule the united Spain, as well as Holy Roman Emperor. Joan was therefore also an Infanta of Spain as well as an Archduchess of Austria, part of the powerful Habsburg family. Joan was married in 1552 to John Manuel, Infante of Portugal and expected heir to that throne. He was her double first cousin. The Habsburg family tended to marry cousins; both their parents were also first cousins of each other. Joan and John Manuel shared the same grandmothers, who were sisters: Joanna I and Maria, daughters of Queen Isabella of Castile and King Ferdinand of Aragon. They also shared the same two grandfathers: Philip I of Castile and Manuel I of Portugal. 1554 1554 was a momentous year. John Manuel had always been sickly, surviving four brothers who died before him. On January 2, when Joan was pregnant with her first child, John Manuel died, of consumption or diabetes. He was only 16 years old. On the 20th of that month, Joan gave birth to their son Sebastian. When his paternal grandfather John III died three years later, Sebastian became king. His paternal grandmother, Catherine of Austria, was regent for Sebastian from 1557 to 1562. But Joan left later in 1554 for Spain, without her son. Her brother, Philip II, had married the English Queen Mary I, and Philip joined Mary in England. Joan never saw her son again, though they corresponded. Convent of the Poor Clares In 1557, Joan founded a convent for the Poor Clares, Our Lady of Consolation. She also supported the Jesuits. Joan died in 1578, only 38 years old, and was buried at the convent she had founded, which became known as the Convent of Las Descalzas Reales. Sebastian's Fate Sebastian never married, and died on August 4, 1578, in battle when attempting a crusade against Morocco. He was only 22 years old. Myths of his survival of the battle and imminent return led to him being called The Desired (o Desejado).

The Impact of Every Child Matters on Workplace Case Study

The Impact of Every Child Matters on Workplace - Case Study Example Aside from briefly discussing the context of â€Å"Every Child Matters†, this report will examine the different UK public policies such as Equality Act 2006, the Disability Discrimination Act of 1995, Employment Rights Act of 1996, Sex Discrimination Act of 1975, and Race Relations Act of 1976 as a way of examining how the promotion of cultural diversity within the educational system could help each child prepare and protect themselves as soon as they are ready to look for employment opportunities. After discussing the significance of cultural diversity in the work environment, strategic ways on how to develop and create an effective inclusive learning environment for children with or without learning difficulties will be tackled in details. Specifically, the educational support needs of each child vary depending on their individual learning capabilities. Some students are fast learners whereas students who were born with mental or physical health problems may have difficulty in learning (Learning and Teaching Scotland 2007). In order to remove all the barriers to learning, the Scottish government has exerted so much effort on increasing the social complexity of each school. Under the current Scottish Executive Education Department, the Education Act 2004 promotes an equal opportunity for education regardless of the mental and physical condition of a child. The said Act includes rendering additional short- and long-term support needs related to social, socio-economic status, emotional, cognitive, linguistic, disability or family and care circumstances which may hinder a child’s learning development (Scottish Executive Education Department 2004; Killean 2003). Similar to Children Act of 2004, â€Å"Every Child Matters† was developed to ensure that the educational and health services that each child will receive equal benefits regardless of their physical and mental condition.  

Death of a salesman- willy recalls his sons teenage years as fruitfull Essay

Death of a salesman- willy recalls his sons teenage years as fruitfull and charming. what evindence canwe find to show that the - Essay Example The form of illusion highlighted here may be termed as self-deception. Though Willy himself was never a big success and even at the age of sixty he had to borrow money from Charley to pay his bills, he is inquisitive and critical of his son Biff. Willy was critical of the fact that Biff has not yet â€Å"found himself† which was a disgrace. He seems to be oblivious to the fact that even he was not half as successful as Biff at that age. When Linda tells him not to be too critical of Biff since he admires him, Willy tells her, â€Å"I simply asked him if he was making any money. Is that a criticism?" (Miller 7) This shows his over consciousness regarding money matters and a reader who is not introduced to Willy’s state of mind and existence would think that he was perhaps a very successful businessman himself. This reflects a very significant symptom of the disease - confusion and illusions that lead to unorganized thinking. In fact he is to a large extent responsible f or his sons’ (Biff and Happy) immaturity and slow emotional development as he pampers them during their teenage years and tells them the importance of appearance over substance showing them the dreams of high promises held by their future. He recalls that Biff had a promising teenage but he lost many opportunities and hence could not make anything out of life. This also reveals his evasion from admitting that he is failure as a father. Biff has grown up admiring his father more by his words than actions. He has not been a successful student and failed in Math. Bernard, the son of Willy’s friend Charlie has always been a good grade achiever but according to Willy Charlie is not well liked like himself and following the same Biff responds to his father’s query about Willy’s popularity, saying that he is liked but not â€Å"well liked†. Willy even brags to his wife, saying that even though Bernard, the son of his friend gets good grades in schools, he cannot grow into a successful businessman unlike Biff and Happy. Willy’s comments at this juncture is worth taking a deeper reading, â€Å"Bernard can get the best marks in school, y’understand, but when he gets out in the business world, y’understand, you are going to be five times ahead of him. That’s why I thank Almighty God you’re both built like Adonises. Because the man who makes an appearance in the business world, the man who creates personal interest, is the man who gets ahead. Be liked and you will never want. You take me, for instance. I never have to wait in line to see a buyer.† (Miller 21) The above lines expresses his self boasting nature and setting a wrong example in front of his son Biff who ends up idolizing his father and following the wrong way. Staying around his father with a doting wife his sons cannot see his faults and all they end up learning is to give importance to appearance. Biff who has grown up with the habi t of a Kleptomaniac never faces his father’s disapproval when he lies about borrowing the things which he actually ends up stealing. When Willy tells Biff to study, the latter shows him the emblem of his University of Virginia he created on his sneakers. Bernard points out that those sneakers cannot obtain good grades for him. He also says, â€Å"I heard Mr. Birnbaum say that if you don’t start studyin’ math he’s gonna flunk you, and you won’t graduate. I heard him!† (Miller 20) Finally Willy ends up shunning away Bernard saying, â€Å"

Describe The Mandatory Rotation Of Audit Firm Accounting Essay

Describe The Mandatory Rotation Of Audit Firm Accounting Essay Introduction From the 2008 financial crisis, the weakness of audit system has exposed in several aspect. European Parliament and public consider that the auditors fail to play during the financial crisis. The European Commission said that the auditors only consider majority of banks had exposed a great quantity of loss from 2007 to 2009 in both on and off balance sheet in the financial crisis, however, it is a hard work for the public and stakeholders to know how the auditors to give the clean auditing reports to their principal. In addition, the European Commission takes into account preventing the concentration in the audit industry, which including restricting the choices and competition. Further, they also consider the independence of the audit firm and the reduction of the expectation gap. All things the European Commission do is to increase the quality of audit, so they think that the current auditing system should be reform. According to KPMG (2012), because of the failure of auditors in financial crisis, the lobby of small firms and the US has taken action on the independent issue. Meanwhile, in order to adapt to the environments, which contain changes to financial reporting and increasing the risk and going concern issue for the companies. The European Commission came up the proposals on 30th November 2011 to address the matters that appeal in the financial crisis and rebuild the confidence of the audit system. The proposals define the role of auditors and propose more restrict provisions for audit firms. It aim at strengthening the independence and professional skepticism of auditors, making the audit industry more diversification, enforcing the regulation, promote the cross-border stipulation of audit services and relieving the burden of the small and medium-size enterprise. To enhance the independence of audit firm and prevent the concentration of the audit industry is the main purpose of the propos als. The Elliott and Jacobson (1998) suggested that audit independence is an absence of interests that create an unacceptable risk of material bias with respect to the reliability of financial statements. The basic goal of audit is to assure the information which provide to shareholders are reliable. Further, as for audit independence, the direct role is to provide auditing serve and make the cost of capital market more efficiently. Consider about preventing the concentration, should make the audit industry more dynamic, such as decreasing the power of the Big Four audit firm (KPMG, Deloitte, Pricewaterhousecoopers and Ernst Young). In addition, the dynamic of audit market give the opportunities for small and medium-size enterprise to benefit from the internal market. In order to strengthen the independence of audit and make the audit market more dynamic, the European Commission brought up the proposals to perfect the audit system, the key elements of the proposals is mandatory rotation of audit firms, mandatory tendering, non-audit services, and European supervision of the audit sector, Enabling auditors to exercise their profession across Europe, Cutting red tape for smaller auditors. This essay is aim at discussing the issue of mandatory rotation of audit firm, one of the key elements to enhance the independence of audit industry. The essay will divided into three parts, firstly, it will describe the mandatory rotation of audit firms; secondly, it will analyses the argument for and against this issue; finally, it will come to a conclusion. Describe the mandatory rotation of audit firm In order to strengthen the auditor independence, the European Commission is considering introducing mandatory external rotation. In the previous years, only internal rotation is required, which means only auditors should be rotated, because they think that auditors may make less suggestions because the routine activities of audit. However, the internal rotation cannot enhance the independence of the auditors, because the audit firm and audited entity build up partnership, no matter which auditors engage in the audit procedure, they have closely relationship, the independence of auditors cannot be enhanced. Therefore, current environment has suggest that the internal rotation is not sufficient, the external rotation should be taken in account to achieve the independence of audit. The proposal required the audit firm should be rotated after at most six years (with some exception). In addition, it should be after at least four year before the same audit firm can be entrusted again by the client, this is stated as the cooling period. The cooling period ensure the mandatory rotation can be implemented effectively, because if there is not the cooling period, the client can entrust the same audit firm after a short time, so that the closely relationship cannot be avoidance. There is a exception that the period of rotation can be extend to nine years if joint audits are engaged. This means that if an audited entity entrust at least two audit firm, it can extent the period of rotation to nine years, because the joint audit can make each audit firm work harder to avoid another audit firm find out their failure, this can increase the quality of the audit, so called four-eye principle. Hence, the joint audit is encouraged. According to Bocconi, which do a survey of the effect of mandatory rotation in Italy. The investigate shows that 69 % of managers of listed companies approve of rotation. 14 % consider it negatively. The survey presents a positive result, because they consider that in previous years, auditors focus on routine activities rather than making improvement. The people including in the survey agree the mandatory rotation in Italy can strengthen the independence. Discussion of the mandatory rotation The argument for the mandatory rotation of audit firm Firstly, the mandatory rotation of audit firm can reduce the risk of familiarity threat. If there is not mandatory rotation, the audit firm may have closely relationship with the audited entity, which would lead to several problems. For instance, the proposal (2011) of the European commission suggests that the audit firm tend to know well about the management of the audited entity, so that they may think the audit work as a routine work, which just repeating the work annually, and they pay less attention to make an improvement and find out the mistake the audited entity made. In addition, the auditor may be less suspicious of the audited entity, instead, they may decrease the difficulties so as to maintain the good relationship with the partner. The long period of engagement will cause routine, which may affect the competence and the quality of audit, hence, the mandatory rotation is necessary for reducing the familiarity threat. Secondly, according to Hoyle (1978), short term engagement will encourage the auditors to do better. If the audit firm fails to make the improvement in their auditing period, however, the next audit firm detects the unreported information, the reputation of the previous audit firm may be affected, so that the auditor will minimize the errors for managing the reputation. Further, the mandatory rotation can avoid the mistake or unreported information continue, because the next audit firm will scrutinize the document provide by the former audit form. Also, the long term engagement of the same auditor may cause the auditor trust the previous auditing procedure, so the rotation can reduce the risk of the auditor regards the engagement as the repetition of the last years work. Therefore, the mandatory can improve the quality of audit. Thirdly, the rotation provide the small and medium-size entities good opportunity to enter the competition in the segment of market. Although, the Bocconi study (2002) showed that the mandatory rotation did not provide the small and medium-size entity opportunity to compete in the audit market, they cannot compete against the large audit firm for the public-interest entities. However, take the mandatory tendering into account, the situation can be changed, the rules allow the small and medium-size entity to bid in the tendering, so that the rotation and joint audit enlarge the choice of audit firm for the audited enterprise. Therefore, combined with the mandatory tendering, the mandatory rotation can encourage the competition of the audit firm and provide more opportunity for small and medium-size entity to enter the audit market. Last but not least, the rotation can reduce the risk of fraud, which the audited entity collude with the audit firm. If both of the audited entity and audit firm fraud the public, when rotation implement, the fraud will be exposed by the coming new audit firm. The scandal of Enron can give a good example of this, if the rotation enact, the deceptive accounting may be found early or the audit firm will not collude with Enron in order to prevent the impairment of the reputation. So the mandatory rotation can reduce the risk of fraud. The argument against the mandatory rotation of audit firm According to the Bocconi study (2002), the opinion the audit firms and managers argue is that the cost of auditing fees as well as man-hours will increase under the mandatory rotation. It takes time for the incoming audit firm to read the sufficient document to know the audited entitys business. If the incoming audit firm do not know the audited entity enough, the quality of audit will decrease. Further, because there are many kinds of industry, it is difficult to maintain the industry specialization and may cause lack of choice of audited entity. According to Chi et al. (2004), they do not agree the mandatory rotation, they hold the opinion that the rotation may have negative impact on the quality of audit. They show the explanation that in the last year of audit before the rotation, the auditors may abandon their independence because they do not need to worry about the loss of quasi rents for they will not be re-elected. These can lead to the decrease of the last periods auditing quality. Bigus and Zimmermann (2007) said that because of the rotation, the quasi rent had been decreased, which implies the rotation may not increase the independence of audit firm. Consequently, the mandatory rotation cannot increase the quality and independence of audit firm as expect. Conclusion When come up the new proposals, there will have different voice because of the different role they play. As for the rule of the mandatory rotation of audit firm, according to the European Commission, the Big Four hold the opposed attitude, they insist there is studies that have certify the mandatory rotation affect the quality of audit firm; the Mid Tier Firms and small and medium-size entities also do not stand by the rule, they consider the increase cost and harm to the quality of audit firm; the investors had divergent opinion; some of public authorities did not favor of the mandatory rotation, while others think the rule will be beneficial, one of the idea regards to the issue they came up it to allow the committee to decide whether the rotation of a firm should be needed. To sum up, the new rule of the mandatory rotation of audit firm may be beneficial, but only under certain situation. For example, the cost of fees and man-hours can be low to change audit firm; the negative impact of last period of audit before rotation can be avoid. So that, the proposal can be beneficial if more detail and rules can be add in to make the mandatory rotation more perfection.

Inspiration of Arundhati Roy to an Activist Essays -- Activism Music

November 2nd, 2004 was a difficult evening for me. Having helped stage protests against the invasion of Iraq, having urged friends to support the HRC and the struggle for gay marriage, it was difficult to watch the election returns come in, making it seem as though all I had done had been futile. One of the things that got me through was Arundhati Roy’s CD, Come September, which I’d left in my car’s CD player. Driving home from the grocery store I heard her read an excerpt of her article, â€Å"The End of Imagination,† in which she offers a skeptical friend another way of dreaming: The only dream worth having, I told her, is to dream that you will live while you’re alive and die only when you’re dead. â€Å"Which means exactly what?† she asked, a little annoyed. I tried to explain, but didn’t do a very good job of it. Sometimes I need to write to think. So I wrote it down for her on a paper napkin. This is what I wrote: To love. To be loved. To never forget your own insignificance. To never get used to the unspeakable violence and vulgar disparity of life around you. To seek joy in the saddest places. To pursue beauty to its lair. To never simplify what is complicated or complicate what is simple. To respect strength, never power. Above all, to watch. To try and understand. To never look away. And never, never to forget.1 When I think about it, the words are rather trite, easily imaginable within a pop song or a greeting card. These words, however, were being spoken by Arundhati Roy, and in the car I, like many others who have drawn inspiration from her words, from Howard Zinn, to Judith Butler, to Ani DiFranco, felt a little more able to go back in my house, unpack my groceries, and face the next four years. T... ...d from the CD version of â€Å"Come September.† 9 When I first wrote this paper, I wrote it as a presentation. I took this quote off of an article found on Lexis Nexis and did not mark down the information. I have since been unable to find my print out or log on to Lexis Nexis, as it has to be through a university computer. A final version of this paper will include the citation. Sorry, folks. 10 Taken from Singh’s interview, available online at http://www.narmada.org/archive/tehelka/eh100200arundhati1.htm. Seen Works Cited for complete citation. 11 Taken from Bunting’s article, available online at http://www.commondreams.org/views02/0307-01.htm. See Works Cited for complete citation. 12 Taken from the interview with Howard Zinn following â€Å"Come September.† See first footnote. 13 Taken from the interview following â€Å"Come September.† Please see first footnote. Inspiration of Arundhati Roy to an Activist Essays -- Activism Music November 2nd, 2004 was a difficult evening for me. Having helped stage protests against the invasion of Iraq, having urged friends to support the HRC and the struggle for gay marriage, it was difficult to watch the election returns come in, making it seem as though all I had done had been futile. One of the things that got me through was Arundhati Roy’s CD, Come September, which I’d left in my car’s CD player. Driving home from the grocery store I heard her read an excerpt of her article, â€Å"The End of Imagination,† in which she offers a skeptical friend another way of dreaming: The only dream worth having, I told her, is to dream that you will live while you’re alive and die only when you’re dead. â€Å"Which means exactly what?† she asked, a little annoyed. I tried to explain, but didn’t do a very good job of it. Sometimes I need to write to think. So I wrote it down for her on a paper napkin. This is what I wrote: To love. To be loved. To never forget your own insignificance. To never get used to the unspeakable violence and vulgar disparity of life around you. To seek joy in the saddest places. To pursue beauty to its lair. To never simplify what is complicated or complicate what is simple. To respect strength, never power. Above all, to watch. To try and understand. To never look away. And never, never to forget.1 When I think about it, the words are rather trite, easily imaginable within a pop song or a greeting card. These words, however, were being spoken by Arundhati Roy, and in the car I, like many others who have drawn inspiration from her words, from Howard Zinn, to Judith Butler, to Ani DiFranco, felt a little more able to go back in my house, unpack my groceries, and face the next four years. T... ...d from the CD version of â€Å"Come September.† 9 When I first wrote this paper, I wrote it as a presentation. I took this quote off of an article found on Lexis Nexis and did not mark down the information. I have since been unable to find my print out or log on to Lexis Nexis, as it has to be through a university computer. A final version of this paper will include the citation. Sorry, folks. 10 Taken from Singh’s interview, available online at http://www.narmada.org/archive/tehelka/eh100200arundhati1.htm. Seen Works Cited for complete citation. 11 Taken from Bunting’s article, available online at http://www.commondreams.org/views02/0307-01.htm. See Works Cited for complete citation. 12 Taken from the interview with Howard Zinn following â€Å"Come September.† See first footnote. 13 Taken from the interview following â€Å"Come September.† Please see first footnote.

Behavioral Problems with Budgeting and Beyond Budgeting Model

All organizational Managers have to do certain management functions such as planning, control, coordination, staffing, motivation, leading, communication and organizing.These functions differ from organization to organization due to different organizational cultures, nature of activities and its complexity, size, staff profile in terms of values and skills, internal political activity its intensity and is level external environment in which they exist in terms of social, political, legal and environmental issues they face and its nature in terms of stable or dynamic and the Management philosophy of the senior and executive level of management.The traditional Budgeting is a tool for planning and control activities such that it enable the organization direction as well to coordinate activities and compare actual performance with Budgets so that to identify variance and investigate the causes and determine whether they are controllable or uncontrollable and revise plans if the organizat ion cannot achieve the panned performance because of uncontrollable factors. The traditional budgetary process has many advantages.The advantages are that it forces managers to formulate detailed plans for achieving the targets for each department and operation, promotes coordination and communication, clearly defines the areas of responsibility for the achievement of the budgets, enables remedial action to be taken as variance emerge, motivates employees by participating in the budgetary process of setting or formulating the budgets, improves allocation of scarce resources. Economizes management time by using the principle of management by exception. However they have serious drawbacks, They are mostly of a behavioral type. Page: 2The drawbacks of the traditional Budgets are that budgets may be perceived by the lower level managers and employees as it is imposed by the senior management and thus affects labor relations as well it may also tend to have inaccurate record keeping, In addition budgets may increase conflict over the resource allocation or they may blame others if they don’t meet the targets as well in practice it is difficult to reconcile individual goals with corporate goals and the plans cannot be accurate in a dynamic environment and detailed planning consume considerable time and resources of managers and they mayPerceive it as a futile activity. The budgeting also may induce mangers to spend all what they get even though they can spend less because of the attitude â€Å" we better spend it or we will lose it†. In the traditional Budget as a plan and control tool managers can also over estimate expenditure because of the fear they will be blamed if expenditures are not within the budgets and sales budgets will be under estimated for the reason that the sales people may fear if they don’t meet the sales target and for the fear of losing performance pay if such a rewarding system exists.In a global economy in the current 20t h an 21st century the changes in technological economic social and political climate have become more rapid and dynamic as well unpredictable than ever before and the competition has increased mostly in all industries at least in advanced industrialized countries and in some parts of Asia, Latin America, Eastern Europe and in Middle East. In this context if organizations are not adaptive and responsive in a timely manner to meet customer needs compared to its competitors and Page: 3have products tailored to satisfy these needs organizations must react quickly and its planning and decision making mechanisms must be flexible and managers must be able to make decisions and must have the authority and responsibility to react quickly and organizations must devolve power to managers of profit centers and decentralize organizations and performance measured in general terms relatively measured comparing different profit centers and be customer focus culture at all levels in general terms an d allow managers to make decisions to make returns on equity more than its competitors by satisfying customer needs profitably and have an information system to assist such process rather than plan in detail which is traditionally done which may stifle innovation and flexibility of the organization in a dynamic environment. The Beyond Budgeting Model is a model to address the limitations and behavioral disadvantages of the traditional budgeting in organizations. As well it is not a new planning tool but it is a new management idea. That is to change the organizational structure and organizational culture from a hierarchical organization to a network organization and decentralize decision -making and to devise a management information system, which enables mangers to share knowledge and instill new ideas and empower managers to make decisions to respond to unexpected events and to create an entrepreneur culture.That is to make the organization to become more flexible and adaptable an d create systems processes and products, which satisfy customer needs profitable, compared to its competitors and monitor emerging needs and respond quickly Page: 4 to satisfy the emerging needs more effectively than its competitors and benchmarking its processes and products on a continuous basis. There fore the success or failure of Beyond budgeting depends on how the model is introduced in the organization and the phase of its introduction and how management has overcome resistance to change and how mangers are trained and the phase of overcoming competitive culture and become a more co-operative and team culture and the possibility of this happening in the organization.So in effect the success or failure of Beyond Budget Model itself depends on how it is implemented and whether the managers perceive this as another method imposed by the senior management and how senior management can overcome such behavioral constrain. If this can be done given the managers profiles in terms of their entrenched management practices and the senior managements effectiveness and their leadership qualities to change behavior Beyond Budget may become a more adaptive process and may overcome some grave disadvantages of the traditional budgeting system. That is in other words to be a workable model the Beyond Budget Model must have the appropriate culture and structure introduced effectively. In practice it is not an easy task and there is no silver bullet. However in practice it has been implemented in some organizations particularly in large, small and medium organizations.But the number of organizations adopting this model is very small even in large organizations. As well this model is mostly applicable to knowledge industries mostly than other organizations and the traditional model with good budgeting practices may work effectively than the Beyond Budget Model. For example Sevenska Handelsbanken a Swedish retail bank with Page: 5 branches all over Northern Europe and in Gre at Britain have had no Budget since 1970. (http://www. juergendaum. com/news/02_24_2003. htm). As well other examples of Beyond Budget model implemented successfully are Toyota an Automobile manufacturer, Aldi a German Retailer, South West Airlines, the American Airlines. (http://www. 12manage.com/methods_fraser_beyond_budgeting. html). In addition there are also other less well-known examples adopting Beyond Budget Model. They are Ahlshell, the Swedish materials wholesaler, ISS, the International Danish facilities service group, World Bank and small non-profit Sight savers International, a UK charity. (http://www. 12manage. com/methods_fraser_beyond_budgeting. html). As mentioned above in page 4 these examples demonstrates the Beyond Budget Model can be successful in any size however it is mostly applied by Knowledge Industries and the examples are very few this may be due to the fact this model is a recent model and it may increase in the future.However there are many organization s using the traditional budgeting model indicates the traditional model at least to be perceived by these organization to have some value to them as well it may be effective for many organizations or they adopt good budgeting processes. In summary it can be argued that the Beyond Budget Model certainly can overcome some behavioral problems in budgeting. However it has its own behavioral issues to be resolved to be more effective and in some circumstances it may not be effective and traditional budgeting process may work more effectively than Beyond Budget model as discussed Page: 6 Above. Its effectiveness is dependent on many factors as well as discussed above. Applying these behavioral issues as discussed above to the scenario one must assume about the organizational culture and organizational structure.If suppose one assumes the organization is a centralized organization and the top management believes in the beyond budgeting process and value the usefulness of budgeting and mana gers want to compete with other managers with resources and there exist considerable political activity then it can be argued it is very difficult to implement by top management the beyond budgeting model due to excessive conflict and empire building processes which may inhibit the successful implementation of the new Beyond Budget model. Any new model will have resistance due to changes in the status quo and managers may resist changes to protect their power and turf in the organization.There fore if the senior management does not have the leadership to influence and overcome resistance and change behavior and introduce the model in a phase which, is perceived by the managers and staff as imposition it may affect their performance and effective implementation, That is the top management must consider behavioral issues involved in introducing Beyond Budget model because it is a radical change from the traditional model and the culture may resist such change and it may be counter pro ductive and may not reap benefits theoretically expected by introducing this model. As well even if managers in this scenario do not like detailed budgets they may not have the skills and motivation and hindsight to plan and if the organization is a centralized organization not a decentralized organization the beyond budget model may not work in such circumstances. In effect management must consider Page: 7 the behavioral implications and behavioral issues of this model before considering this model and not considering good budgeting processes and use of technology and tools for budgeting as the traditional budgets have several advantages to organizations as well to its own behavioral limitations.As discussed above the Beyond Budget Model do not overcome all issues in Budgeting and even it addresses some issues it has its own behavioral issues to be resolved to be effective in all organizational circumstances and the behavioral issues may vary from one organization to another. It is also necessary to recognize to change a culture takes time and any culture cannot be changes in short time. This is a very important to consider because the Beyond Budget model is a radical change in culture and insists and based on considerable behavioral modification and change. This is a very important limitation of this model in practice and management must be aware of this before planning to introduce this in to organization without giving prior considerations of the complexity and the radical nature of its model in terms of behavioral implications, which is very difficult to predict.