My Trip to the Grocery Store Essay Example | Topics and Well Written Essays - 750 words

My Trip to the Grocery Store - Essay Example On a hot summer’s day with the sun beating down on us, I was taken out to do some shopping with my mom. â€Å"Yes,† I responded, as my mother broke the news to me that we would be going to the most popular grocery store in Ahmadi City: the Sultan Center. This was located in Alshuwaikh and was some way out of the city. Although it took a long time to get there, this was quite a regular trip for me because I always enjoyed helping choose the food that would tie us over for the next week. As I had no concept of money at that stage in my life, I would pick up anything that took my fancy and places it in the shopping cart as fast as I could. To try and hide this from my mom, I would strategically place something else on top of it so that she would not notice anything suspicious. On this occasion, I wanted to find some chocolate. I loved chocolate! However, chocolate was not in its usual place. This was very confusing for me because it had always been in that one particular p lace without fail. Without giving it any thought at all, I was determined to set upon a mission to track down my beloved chocolate. I waited until the opportune moment—when my mother wasn’t looking—so that I could creep away as a spy would.   Very soon I had stumbled upon the candy aisle and began scanning the shelves for my beloved chocolate. After spending a couple of minutes looking, I was surprised to not be able to find what I was looking for. This had me really puzzled. Where could it be if not the candy aisle? I decided that the store must have been hiding it from me and so I continued my search for my prize. By this time, I realized that I had completely forgotten about my mom—she must have been worried sick. It was at this thought that a loud siren rang out over the intercom; although I could not comprehend what was being said. By now I had covered most of the store and could still not find the chocolate that I was looking for. My little legs were so tired from all the walking and crawling all over the store, so I sat down right where I was. All of the sudden the thought occurred to me that I had done a terrible thing—would I ever find my way back to my mom? I didn’t know what to do, so I be gan bawling my eyes out. It didn’t take long for a staff attendant to come over to me to see what the problem was. â€Å"What seems to be the matter,† they remarked. I communicated that I was lost and could not find my way back to my mother. The tall, blonde woman took the biscuits out of my hand and grabbed my hand. She reassured me that she would be taking me to a safe place where my mother would be able to find me. I climbed up the stairs and was placed on a chair in an office. This brought back memories of my trip to the dentist. At the thought of this, my tear started to flow. This was like my worst nightmare!

A personal interest Essay Example | Topics and Well Written Essays - 750 words

A personal interest - Essay Example However, as one grows up understanding reality and morality, one becomes able to better manage such desires. In other words, life is an effort to strike a balance between desires and reality. One BBC article named ‘A Brief History of Celebrity’ points out that thousands of years ago, the way to gain fame or to become a celebrity was through title. Another way was to become a warrior and show ones talent in wars by saving the lives of many people. Another way was the success in ancient Olympic Games. It was rather common in the ancient Rome to honor the celebrities by allowing life-long free meals, and by creating hymns praising them. Also, the famous ones got their faces imprinted on coins, thus becoming immortal (â€Å"A Brief History of Celebrity†). However, the point here is that I, like most other people in the world, want to become a celebrity, no matter what way it comes. However, the surprising thing at this juncture is the fact that I kindle this desire ev en after gaining the realization that becoming a celebrity, either in entertainment or in sports, is a near impossibility for me. This understanding and the desire to know the reason behind this longing take one back to the Structural Model proposed by Freud. According to Freud, all people are born with Id, or the pleasure principle. It is this Id that makes people look for things that make them feel good, and in search of this good, they give no attention to reality. It is this Id that makes children insist for various things without considering the viability of the demands. However, as people grow up, they develop Ego that makes them look into reality. Thus, Ego helps strike a balance between the irrational demands of Id and the realities of the situation. Lastly, there arises Superego, or, the moral principles of life. Once it is developed, it controls the actions of one by dictating what is right and what is wrong. However, the Id goes on looking for ways to feel good and happy with its ultimate selfishness. Here, I reach the realization that it might be my Id that lies in my mind that makes me nourish such wishes even though my Ego reminds me the realities. One can see Franz Kafka in ‘Letter to My Father’ pointing out how he failed to understand the benevolent acts of his father, and feared him. A look into the work proves that the writer, as he grew up, developed Ego and Superego that made him look into not only his present life, but also his past with a new insight. Again, one can see the writer acknowledging the fact that he is still in the grip of fear, and hence, is unable to explain everything. This shows the still strong impact of Id on his life as an adult. Kafka now admits that his father had always lived for the family, and as a child, Kafka enjoyed a high life ‘with complete freedom to study’ whatever he wanted. In addition, he had nothing to worry about food. Here, Kafka makes the acknowledgment that he is guilty of n ot understanding and acknowledging the good things his father had done for him. In addition, he admits that even without his father’s presence, he would still be a weak, fearful, hesitant, troubled man (Kafka, 6). Here, considering my desire to be a celebrity, I reach back the Freudian conclusion that all humans are suffering from some mental disorders. According to him, it is the strength of debilitation that decides the difference between the sane and the insane. If this concept is

Violent video games Essay Example for Free

Violent video games Essay Video violence is a major problem in our society. When people are exposed to the violent world of video games, their perceptions of reality are changed from a world with consequence, to a world where consequence does not matter. USA Today Magazine states, that video violence is a major component in the desensitization of mankind (Video violence desensitizes the brain, 2006). Exposing children to the repetitive violence in video games serves as a conditioning for violent behavior. Whether or not the allies of video violence believe that exposure to violent games does not cause a more violent society, teach motor skills and develop excellent problem-solving skills (White, 2004), without looking at the consequences of these games, our society is at risk for increased acts of violence. The history of video games It was not so long ago that the video game industry was not the billion dollar monster that it is today. The history of video games runs parallel with the development of computers and traces the advancements not only of technology, but also in the social and economical patterns of the United States over the last four decades. The first video game was patented in 1948, by Thomas T. Goldsmith. The game used eight vacuum tubes to simulate a missile firing at a target, controlled by four knobs. By the 1970s arcade machines and handhelds were added to already existing computer systems. This was known as The Golden Age of Arcade Games. Atari was founded in 1972. Pong, the first successful arcade game, consisted of hitting a ball across a simulated tennis net. Pong sold 19,000 units the first year it was released. The evolution of games progressed, bringing more realistic graphics that appeared to be life-like. The figures in the games movements seem like that of a human being. The three dimensional graphics created a simulated world much like that of today. In the games of today, Eakes (2004) states players actively participate in the simulated murder of police officers, women, minorities and innocent bystanders. The acts graphically depicted and include victims being shot, beaten to death, decapitated, burned alive, and urinated on. These games also present favorable depictions of prostitution, racism, misogyny and drug use (Eakes, 2007). The days of simply hitting a tiny ball back and forth, where the only goal was to avoiding missing, are long gone. Research in the world of Violent Video Games. Video game violence effects the brain, not only by making murder or robbery seem acceptable, but as stated in, USA Today, also by effecting the regions in the brain that are involved with recognizing, remembering, rehearsing or activating aggressive behavior (Video violence desensitizes the brain, 2006). By repeatedly playing these games, the participant has lower-levels of empathy. The brain stores everything, including the visions that are seen in some of the games. Some of the more violent games are conditioning the brain over and over with angry, vengeful images that encourage negative even prejudicial thoughts. A game on the market at this time is called Manhunt in which the player has to murder or beat the opponent to death. There is no consequence for the winner, only points and positive feedback. Until recently, violent video game research has mostly comprised of studies revolving around participants playing violent video games and then measuring the participants responses when the participant is placed in different real world situations. The new studies now include the use of highly sensitive diagnostic equipment such as MRI to measure actual responses in the brain. These studies are much harder to refute. A recent study now has found that exposure to video game violence results in diminished responses mentally to real life violence or death (Phillips, 2005). Participants brain waves were measured while playing violent videos using an EEG (electroencephalogram). The participants showed a desensitized view when shown violent or negative images. But when the players were subsequently given the opportunity to punish a fake opponent in another game, those with the greatest reduction in P300 brain responses meted out the most severe punishments (Phillips, 2005, para.7). Eakes,(2004) states the studies on the effects of violent video games, has long been a source of great debate. There has been over 3,500 research studies done examining the correlation between violence and violent behavior. All but 18 of the studies have shown that the more violence one sees, the more likely one is to be violent (Eakes, 2007, para. 5). This is particularly true because the violence in video games is so realistic and portrayed without pain and suffering. Defenders of Video Violence. The violence in video games today is not seen as a problem for some people, especially those in the gaming industry and adolescents. Even though there are exceptional amounts of research that supports the conclusion that violent video games cause aggression, their continued denial of these facts are due to one thing, money. There is billions of dollars at stake in the sales of video games and video game systems. To admit that video games do cause violence, could potentially cost the industry dearly. The arguments used by defenders of video violence are that these types of games are a meaningful form of expression. The defenders believe that video games teach motor skills and help children and young adults to solve problems. Having also been criticized for being a factor in the epidemic of childhood obesity, the defenders argue that playing games are highly social. The proponents assert that a child, who would respond to real life violence the same way he or she would respond to video violence, is emotionally disturbed already (Jenkins, 2004). The military has been using video imagery for decades to train soldiers in the act of war. The soldiers skill in shooting improves as well as the actual response to violence. Just as simulators help train players for real-world tasks, violent video games coax players into actual aggression and antagonistic attitudes (Walsh, 2005, para. 38). With repeated participation in violent video games, players improve not only their violent techniques, but their mental attitudes as well. On the Armys recruiting website, there is a video game called, Americas Army. The game is available to anyone who logs on and is free. The game cost the military six million dollars to develop, and not only serves a recruiting technique, but also as a way to teach players how to actually fire a M16 rifle, throw grenades, and learn weapons identification. The game trains in various weaponry and teaches the player where to hit the intended victim to cause the most severe outcome. Effect of Violent Video Games Video games have become a training ground for learning how to shoot and murder. Many of these games reward the player for hitting the victim in the most deadly of places. In the world of interactive video games, players play games that are endless. They play with people who are trying to kill them. Sometimes, when confronted with real life problems of violence a child or young adult, will not seek out adult advice due to the thinking that they can handle on the problem on their own as in the video game. Children who view repeated violence are more apt to accept violence as a way to settle conflicts. On April 20, 1999, two heavily armed boys walked into their high school in Littleton, Colorado, and shot 12 of their classmates and a teacher to death. Then they killed themselves (Eakes, 2004). During the investigation, it was discovered that these two boys played thousands of hours of violent shooting video games. The boys pasted the pictures of their fellow classmates onto the games imaginary victims. Perhaps, this may not be the single reason these boys committed this horrific act of violence, but how can the hours spent rehearsing this act not be a factor? If nothing else, these games served as a training ground for the execution of the crime. Whether or not the boys were emotionally disturbed to begin with will be speculated upon for years but looking at the role these games played in this tragedy is essential. The use of violent video games has shown to have a negative effect on academic performance and social skills. Based on a survey of 189 high school students, users of violent video games held more pro-violent attitudes, more hostile personalities, were less forgiving, believed violence the norm, and behaved more aggressively in every day life. The researches were surprised the relation to violent video games was so strong (Anderson, 2007). Another issue of rising concern is regarding whether or not violent video games are addictive. On June 27, 2007 The American Medical Association called for more research in the designation of video games addiction a mental illness. The fact that a game is controlling someones behavior and taking over their daily lifes, is about compulsive behavior. Some of the games are played in an online community, where the game is demanding of the players time. Once a child is hooked, it becomes very difficult, for them to stop (Walsh, 2007). Today in South Korea, which has seen a widespread amount of video game addiction, there are over 40 treatment programs to deal with video game and internet addiction. If the situation in South Korea is any indication of what is to come here, we will be largely unprepared for the number and intensity of cases of such addiction (Walsh, Gentile, 2006, para. 16). Attempting to control video game violence The Entertainment Software Rating Board (ESRB) is an organization that rates computer, internet, and video games. The ESRB was created in 1994 to rate and restrict the sale of video games. Many of these games, even though they are rated M for mature, are sold to children. The new trend in violent video games is to hide explicit material within the game to avoid receiving a rating for adults only. Much speculation and questions surround the creditability of the ESRB. Recently, a game named Grand Theft Auto: San Andres, included sexually explicit material that could be accessed using a code found on the internet. This game already full of violence, with the players shooting police officers, beating up prostitutes and carjacking, also had an added bonus with graphic sex scenes. This caused a scandal as the game was only rated M for mature. Before long, the so-called Hot Coffee scandal, named after the modification that unlocked the extreme scenes, became a hot news item the rating was changed to A for adults (Terdiman, 2005, para. 7). That was after thousands of copies had already been sold. Even if the ratings alone were more reliable, it is almost impossible to enforce the rating system at the retail level. Everyday underage children buy games rated for adults or over 17 in stores all over America. According to the Federal Trade Commission (FTC), Bureau of Consumer Protection head, Lydia Parnes, There are still too many kids purchasing inappropriate games (Bangeman, 2006, para. 2). The commissions most recent study sent underage shoppers into stores and 42% were still able to purchase M-rated games. What can be done about Video Game Violence? If there was ever any doubt about the impact of video games on children of video games on children it has finally been laid to rest (Walsh, Gentile, 2005, para. 39). Whether there is a rating given to the games or not, many times the people who are selling the games are not responsible enough to make sure that these violent games do not fall into the hands of children. Video games are most likely going to remain a part of our society, so it is going to be up to the parents of children and young adults to strictly monitor what their children are playing. First and foremost parents need to pay attention to the relevant research and the industry needs to stop denying research-based conclusions (Walsh, Gentile, 2006, para. 8). Once parents come to terms with what is at stake, they should start limiting game time and keep mature rated games away from their children. Parents should also take advantage to new technology for parental controls in many of the current game systems. Educating children as to the dangers of viewing these games and being aware of what types of games they are being played will help to change the views on what is acceptable, and what is not. Perhaps the debate over whether or not violent video games cause violence will always be an issue. As long as there are billions of dollars at stake, clinical studies will be challenged, fingers pointed and denial will be used in the debate. One thing is for certain, video game violence does not add anything positive to the health and well-being of todays children or young adults. How can learning and practicing killing or robbing people have a positive effect on the brain? Children are spending large amounts of time playing violent video games during a fragile time when they should be learning healthy ways of dealing with life and solving problems peacefully. When will society accept that the world is full of negativity and exposing children to repetitive acts of violence reinforces that negativity? Hopefully, the answer will be sooner than later for the sake of all humankind. References Anderson, C, Buckley, K, Gentile, D. (2006). Violent video game effect on children and adolescents. Iowa: Oxford Press. Eakes, P.(2004). Do you know what video games your children are playing? The Video Game Revolution. Retrieved June 20, 2007 from http://www. pbs. com Jenkins, H. (2004). Reality bytes: eight myths about video games rebunked. The Video Game Revolution. Retrieved June 28, 2007 from http://www. pbs. com Phillips, H. (2005, December). Violent video games alter brains response to violence. New Scientist. Retrieved June 9, 2007 from http://www. newscientist. com Terdiman, D. (2005). Unlevel playing field for video games. Retrieved June 29, 2007, from http://www.cnetnews. com Video violence desensitizes the brain. (2006, April). USA Today Magazine, 134(2731), 13-14. Retrieved June 3, 2007 from EBSCO database. Walsh, D. , Gentile, D. , Walsh, E. , Bennett, N. , Rodideau, B. , Walsh, M. , Strickland, S. , Mcfadden, D. (2005). Tenth annual video game report card. National Institute on Media and Family. Retrieved June 10, 2007 from http://www. mediafamily. org White, J. (2004, September). Defenders of the video game realm. Playthings, 102(8), 10-14. Retrieved ProQuest database.

Give Peace a Chance

Give Peace a Chance Give Peace a Chance John Lennon was a singer, songwriter, musician, author and peace activist who was also one of the founding members of The Beatles. He died tragically on December 8, 1980 in New York City, New York. Lennon was shot and killed by Mark David Chapman at the entrance of the Dakota apartment building where he resided. Chapman was charged with murder and received a prison sentence of twenty years to life. He has been up for parole five times, which has been denied each time. Chapman remains at Attica State Prison in New York. John Lennons assassination shocked the world. The world had lost a great musician. Born on October 9, 1940 in Liverpool, England, Lennon had taken an interest in music at an early age. At seventeen, he formed a band called The Quarrymen that eventually became The Beatles. The Beatles looked to Lennon as their group leader. As Paul McCartney, a fellow band member stated, â€Å"We all looked up to John. He was older and he was very much the leader- he was the quickest wit and the smartest and all that kind of thing† (Goldman 672).From 1957 until 1964, the Beatles toured all over Europe. The group first appeared in the United States in February 1964. After their performance on The Ed Sullivan Show, The Beatles toured nonstop for two years, holding concerts, making movies, and writing hit songs. In 1969, the group split up and John Lennon began working on his first solo album. Throughout the 1970s, Lennon produced multiple hits and he had a successful solo career. He also recorded several albums with his wife, Yoko One, a Japanese-American woman who was several years older than Lennon. He had two sons, Julian from a previous marriage and Sean with Yoko Ono. Mark David Chapman was born in 1955, the son of a military family that moved around his entire childhood. He was bullied and teased at every school he attended. â€Å"He sought refuge in an imaginary world of little people where he achieved affection and the feeling of power† (Norman, 804). In his early teen years, Chapman experimented with drugs, but he later became a devout Christian. He went on to work for several worthwhile causes that Lennon would have approved- a YMCA program for Vietnamese people and he also spent time in Beirut during the Lebanese Civil War (Norman 804). At age 22, he began having psychiatric problems and attempted suicide. In 1979, he married a Japanese-American woman several years older than himself, much like Lennon. Chapman eventually developed a series of obsessions including John Lennon and the book The Catcher in the Rye. Chapman particularly obsessed about Holden Caulfield, the main character in the book. He believed that â€Å"if he put an e nd to John Lennon, he would be able to step into the books pages and become Holden Caulfield† (Norman, 805). His main comfort in his joyless life was Beatles music. On Friday, December 5, 1980, Mark David Chapman flew from his home in Honolulu, Hawaii to New York with a backpack and fourteen hours of Beatles music on cassettes. He checked into a YMCA and bought a copy of Double Fantasy, the latest album by John Lennon. Chapman left his copy of J.D. Salingers book The Catcher in the Rye at home in Hawaii, so he purchased a new copy in New York. His plan was to shoot John Lennon at that time, but instead just took some pictures. Chapman spent most of the weekend outside the Dakota talking to the many fans that always stood around hoping to get a glimpse of Lennon, but he did not see John Lennon until Sunday. On Monday, December 8, Chapman returned to the Dakota around noon. John left his building around 4 p.m., and Chapman was planning once again to shoot Lennon. This time, Lennon autographed Chapmans Double Fantasy album, Chapman hesitated when Lennon kindly asked, â€Å"Is that all you want?† This caught Chapman off guard and he could no t go through with his current plan. Later that evening, at 10:49 p.m., Lennon returned to his home. Lennon headed to the entrance of the Dakota. Chapman walked towards Lennon and was holding his autographed copy of Double Fantasy. He softly called, â€Å"Mr. Lennon† and produced a .38 caliber handgun, firing five shots. Within minutes, police arrived at the scene and took Lennon to Roosevelt Hospital. He was pronounced dead at 11:07 p.m. Police found Chapman leaning against the bricks outside the Dakota calmly reading The Catcher and the Rye. His gun and the Double Fantasy album were on the ground nearby. The inside book cover read â€Å"This is my statement† (Jones 22). â€Å"This† was underlined, it was signed â€Å"Holden Caulfield,† and The Catcher in the Rye was written underneath. Lennon was assassinated by a man similar to himself. â€Å"Both were troubled, self-absorbed, and emotionally unfulfilled children. Each came separately of age- Lennon in the rubble of post World War II England, and Chapman in the midst of Americas decade long war in Vietnam-in a confused and hypocritical world† (Jones 2). Both sought out music, art, drugs, and religion (Jones 1). Chapman was angered by Lennons infamous remark in 1966 that The Beatles were â€Å"bigger then Jesus.† Chapmans was obsessed with the theme of phoniness from The Catcher in the Rye. It was suggested that Chapman wanted to kill Lennon because he viewed him as a phony. Chapman later said that he felt the murder would turn him into Holden Caulfield. Both John Lennon and his assassin, Mark David Chapman, have surprised and forever altered history. Ironically Lennon had given an interview on the say of his assassination where he said that he felt safe enough to walk anywhere in the city. He was a simple man who wanted only peace and love in the world. These ideals where shown in his music and songwriting. His assassination robbed the world of a talented musician.

The New Frontier Essay -- null

John Fitzgerald Kennedy was one of the most famous and influential presidents in the history of the United States. During his presidency, he attempted to make several reforms, supported by his â€Å"New Frontier† legislature. The goals of the New Frontier were to improve school funding, civil rights, and foreign policy. The New Frontier was to make the American population feel as if no frontier was impossible to achieve, including the controversial final frontier of space. Despite the fact that many of his acts and bills were not passed or supported by Congress, the New Frontier was what led to many of the greatest advancements which helped shape America today. The date was January 20, 1961 when Kennedy first mentioned the New Frontier (Nelson 622). He used it as part of his presidential acceptance speech, along with his natural charisma, to pull in support for his highly progressive approach. The term â€Å"New Frontier† itself was something Kennedy created on his own, a term he believed represented the generation of those willing to make change in their country (O’Donnell 224). The New Frontier, an expansion of the New Deal, urged Americans not to ask how can their country contribute more, but rather how they can contribute to the country. The New Frontier did not promise Americans happier lives instantly, it promised gradual change which could only happen if the people of the United States were willing to accept it. (O’Donnell 224). Though there were many who would not accept it, this included a majority of congress, which was very often split on decisions, but this was mostly due to partisanship, a tendency to agre e with one’s political party at all times (Sorenson 342). A major change that came with the New Frontier was the P... ...8). Kennedy would find it difficult to appeal to both the American public and Congress, a problem that would persist throughout his entire presidency. Despite the numerous flaws in Kennedy’s presidency, it can very easily be looked at as a major success. Kennedy remained confident throughout his entire term believing that change can still occur. Though sadly, it would not be until his assassination in 1963, that people would finally begin to understand what his goals were. People no longer felt ashamed of his failures but felt gratitude for his successes, through the advancements in space technology to the civil rights acts, as well as the Peace Corps. He left behind a legacy that could not be forgotten, and an influence that continues to affect people today. Kennedy and his New Frontier changed more than just a nation, he changed the way people today think.

My Philosophy of Education Essay -- Philosophy of Education Teaching T

My Philosophy of Education TEACHER ROLES: I believe that the teacher of elementary students has many roles. I will sometimes be a facilitator-guide, sometimes a supportive, nurturing mother-like figure, and sometimes a sage who imparts knowledge. I will encourage my students to become more self-aware and self-managing. I believe that elementary school teachers must focus significant classroom time on the acquisition of social and community skills such as mutual respect, cooperation, friendship-building skills, and kindness. INTELLECTUAL DEVELOPMENT: In order to be prepared for our rapidly changing, global society, children must begin early to learn how to think critically and to question. I will plan a curriculum which demands my students to analyze and to judge, especially in the disciplines of writing, social studies, and science. MOTIVATION: I believe that teaching and learning are creative and very social. In order for classroom learning to take place at all, there must exist in the community a sense of order and rules. In order for order to exist, students must learn to become self-managers. I will need to convince my students that it is in their best interest to behave appropriately. I will need to convince them that good things will immediately happen to them if they make good behavior choices. In addition to motivation toward good behavior, I will often need to help motivate my students in their pursuit of learning. Providing motivation and persuasion are crit...

Hnd Judge How the Business and Cultural Environments

HND Business Birmingham Metropolitan College Mathew Boulton Campus Riddle of the day A woman shoots her husband. Then she holds him under water for over 5 minutes. Finally, she hangs him. But 5 minutes later they both go out together and enjoy a wonderful dinner together. How can this be? 3. 3 judge how the business and cultural environments shape the behaviour of a selected organisation This builds to answer; Judge how Lloyds TSB has been behaviour has been affected by political, economic, social, technical, legal, and environmental pressures.Industrial concentration Over the last 100 years the size of firms has generally been increasing. 50 years ago in the UK most shops were privately owned and supplied the local area, however over time larger shops have become more and more important. Tesco for instance is a huge employer in the UK and now serves millions of customers with an estimated one in every seven pounds spent on retail being spent in Tesco, it has now extended well beyond the UK and is operating in many different companies.In 2002 Walmart was the biggest earning firm in the world, with an annual revenue of $219 billion. This was a higher figure than the GDP of many countries. As a general rule different industries are dominated by a smaller number or larger firms. This trend is referred to as industrial concentration. How has industrial concentration been achieved? It has happened in a number of different ways, primarily many of the firms have naturally gained in size, e. g. opened more and more stores, or built bigger and bigger factories.However it has also been achieved through mergers, where firms combine themselves together And By takeover where one firm will buy out another firm Why grow in size? One of the major reasons or advantages of growing in size is to achieve economies of scale. Merger as a method of growth Mergers offer firms a great advantage because over night they can grow substantially, they can become more secure, gain great econ omies of scale and have greater diversity. Case study Barclays In 2003 Barclays Bank was looking for a major European Bank to merge with.It started looking at mergers for three main reasons Barclays had previously been a target for a takeover, by being a larger organisation it is a lot harder to become a target for takeover The bigger it becomes the greater the economies of scale it could gain It allowed Barclay’s access to European markets, far more easily than setting up its own branches abroad. Merging gave Barclays overnight access to a large customer base that was already established, additionally it gave Barclays technical experience of Europe.What economies of scale do you think Barclays gained from expanding abroad? †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚ ¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Vertical mergers Vertical mergers are mergers of firms in the same chain of production, for example a brewer merging with a farmer (producing the raw ingredients hops) or a brewer merging with a pub. Both of these are examples of vertical mergers because they are in the same chain of production e. g. eer The brewer merging with the farmer would be a vertical backwards merger, because the brewer is merging with someone at an earlier stage in the production chain. From the farmers point of view merging with the brewer would be a forward vertical merger, because he is merging with someone at a later stage of production. Motives for vertically backward mergers Firms can gain a number of advantages by vertically merging backwards these might include Economies of scale Guaranteed supply Not supplying competitors without knowledge (might mean not supplying any competitors) Motives for vertically forward mergersMost manufacturers never sell directly to t he public, they rely on retailers to do it for them, by merging with a retailer demand for your product is guaranteed. You can stop your competitors products being stocked (or controlling them, e. g. charging a higher price for them Key factors in a merger Both firms must feel they are gaining from it, they must both feel they are gaining more control Horizontal mergers A horizontal is where firms at the same stage of production merge. These firms usually produce the same goods and are usually at least to some extent in direct competition with each other.Motives for horizontal mergers Greater efficiency, for example getting rid of duplicated management roles Greater use of staff, under-utilised staff might be used at another plant or location Greater control of the market Greater combined buying power, therefore gain economies through bulk buying. Job saving, redundancies almost always follow mergers, and this creates cost savings for the new organisation Eliminate competition; what better way to eliminate a competitor than to merge with them, this helps reduce down competition and mean price competition is reduced. We have seen how governments may oppose this) Increase market share, you will gain new customers, possibly in locations where you didn’t have any before Examples of horizontal mergers P & O and Stena Line merged in November 1997 saving 1000 out of a combined workforce of 5000 Commercial Union and General Accident merged, the merger caused nearly 3000 redundancies Lateral mergers Lateral mergers are where two firms that are at the same stage of production, but where the products do not directly compete. For example a brewery with a soft drinks manufacturer. The products are likely to be sold in the same places, e. . shops, restaurants, pubs etc, but they do not compete directly against each other. They do not lure each other customers away. So a pension company (Scottish Widows) merged with Lloyds TSB, they didn’t compete directly agai nst each other, but they were in a related market. Reasons for lateral mergers Economies of scale can be gained, but one of the major reasons will be to have a wider range of customers in more diverse markets. Both firms will have access to customers they didn’t have before. The new firm only gains in customers from the combined companies E. Lloyds TSB could access customers from Scottish Widows, and Scottish Widows had access to a lot more customers than it had before at Lloyds TSB. Conglomerate mergers This is a merger where the two firms have nothing in common, for example a brewery and a washing machine manufacturer. The two have nothing in common Reasons for conglomerate mergers Some economies of scale can be gained, but mostly it is risk bearing that is the major drive, both firms are more likely to be secure in the new form where they have a combined much wider range of products over possibly a much wider area Case study The merger of Carlton and GranadaIn 2003, Carlto n and Granada TV companies announced their intention to merge and form a firm worth about ? 4. 1 billion. It was estimated that the new company would control about 50% of the television advertising market. Advertisers and media agencies both expressed their fears over the potential creation of a single airtime sales house if the two existing houses owned by the two companies combined. The Competition Commission decided that an investigation was in order, and they produced a 456 page report into the proposed merger. What are the benefits for the two companies in merging? †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â ‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. Why was the Competition Commission so concerned over the merger? †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã ¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚ ¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..Multinational corporations Perhaps an inevitable consequence of industrial concentration was the multinational corporation. These are firms that have extended beyond their native counties and have become global organisations, that in many cases are worth many billions. Why have they grown? Beyond economies of scale there are other advantages, a firm might be nearer its customers, be able to modify its product and not have to pay import duty. Other advantages can include lower labour costs i n other countries Lower production costsBeing closer to raw materials (therefore transport costs are reduced) Growth of multinationals There has been a rapid increase in multinationals from 7000 in 1970 to 40,000 in 1995. More than half of multinationals come from five counties United States, Japan, Germany, France and the Netherlands By going global many of these firms have been able to expand hugely, some are economically more significant then small countries. Exxon for instance has comparable economic size to Chile BP which is the UK’s largest multinational is placed as being more economically significant than Cuba, or UruguayConcerns about multinationals Many people are concerned over multinationals, concerns include Power they have over many governments due to their size Some have been accused of exploiting cheap labour They control many of the planets resources, e. g. gas and oil is largely controlled by a number of multinationals. Financing growth Not only can firms ga in money to grow from the traditional routes of borrowing money from banks, they can also gain revenue from rights issues and venture capital. Rights issuesIf a firm is expanding it may well look to its existing shareholders to help finance that growth Rights issues allow shareholders to buy new shares in the company in proportion to what they already own, usually at a better price. So if a firm was planning to expand shareholders will be contacted and asked to see if they want new shares in this new venture, shareholders will be offered preferential rates (it is usually seen as a reward for shareholders) The firm gains extra revenue, but with a huge advantage that it doesn’t need to pay the money back (like a bank loan) If a shareholder wants to get their money back they will sell the shares.Both firm and shareholder can see it as a good option, hence forth it is a popular way to raise revenue. Venture capital Venture capital firms, or individuals will look to see if they ca n get a good bargain. This is very much want the Dragons on Dragon’s Den aim to do. Venture capital firms will inject money into the firm, but often will gain a significant share of the business as part of the deal. They may well want to have directors positions and may also want some kind of control in the business. This is not always a bad thing for the business, where the new company can gain valuable management help from the venture capital firm.Venture capital investment can happen at a number of different stages Seed investment; providing at the very earliest stage, possibly before a product has been fully realised Early stage investment; helping a firm in its opening stages, which can quite often be a difficult time for a business Expansion and later stage financing; helping a more mature company to expand Turnaround financing; helping failing firms to regain themselves Joint ventures Joint ventures are very similar to mergers, this will be where two firms form a separ ate division or new company.It will be financed and staffed by both companies, it might be used for instance for one firm trying to break into a new market, or a new country. By using a joint venture a company might gain all the experience of another firm, adding to its own advantages. However no upheaval or loss of staff. Outsourcing This is where an individual or another firm carries out some of the operation of the business, for example carries out the cleaning services carried out at the organisation. The firm gains by using outsourcing by Saving money that it doesn’t have to spend on training staff There are no recruitment costsThere are no issues with redundancies or sacking of staff because they are employed by another company The firm can start a new service very quickly by using outsourcing By outsourcing it may be easier to get the experts needed. The firm wont have to worry about covering staff absences, the firm doing the contracted outsource work will have to wor ry about it instead. It can offer a quick and cheaper alternative (because there are no recruitment costs etc) to employing staff at the firm It is very good if the service is only needed in the short term. Technology and innovationResearch and development is very expensive and doesn’t always work. However if it does work it can offer the firm huge advantages offering a new product or service that wasn’t available before. Because of copyright, many of these products will remain exclusive to the firm. Research and development is effectively another economy of scale, because usually only the large firms can afford it, and can afford it when it goes wrong. It is usually just major corporations that carry out research and development. Top 11 research and development companies 2002 1 Ford 2 General motors Siemens 4 Daimler Chrysler 5 Pfizer 6 IBM 7 Ericsson 8 Motorola 9 Matsushita Electric 10 Cisco 11 GlaxSmithKline Looking at the above firms, what are the main areas that r esearch and development is carried out for? †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã ¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Why do you think these areas have a lot of research and development carried out in them? †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Labour market trends A very important consideration for businesses is the state of the labour market. A higher rate of unemployment gives a firm an advantage to pick suitable workers from a wider pool. The bigger the choice the easier it is for them to get the right member of staff, and significantly without increas ing wages. As the pool of workers reduces down so it is harder to get the right worker.On a similar basis the skills of the workforce are also very important, many positions in firms may require significant training. Proportion of managers with qualifications 2003 | All| Men| Women| Degree or equivalent| 48%| 55%| 39%| Higher education| 38%| 44%| 33%| A – level equivalent| 23%| 25%| 18%| GCSE or equivalent A – C| 17%| 22%| 13%| Looking at the above figures what doe it suggest is the trend between managerial position and qualification †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢ € ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Generally the UK government realises the need of UK business for a more skilled workforce. This was behind the labour parties policy of encouraging high er education amongst the population and encouraging modern apprenticeships. However this has still not been enough. Many firms have looked outside of the UK for skilled workers at a lower cost. Additionally with the growth of communications technology it is easier for firms to employ members of staff in other countries. PEST of Lloyds TSB Lloyds Banking Group plc is a financial services group based in UK.It was initially known as Lloyds TSB Group plc and covers 40 countries in the world. However, its primary market is UK and it operates in three verticals namely, retail banking, wholesale and international banking and insurance and investments. The Lloyds Banking Group plc acquired the Halifax Bank of Scotland plc or the HBOS on January 16th this year (Company Profile par. 1) The subprime crisis which started in the US had its effect on those countries whose financial companies were participating in the US based risky financial instruments.UK was one of those countries and approxima tely around November 2007 the banking sector saw the unfurling of a major crisis (Caine). $323 billion was the amount of total assets write-down and credit loss in the world’s top 100 banks till May 2008. Amongst these, UK banks were also present; HBOS had a loss of $5. 9 billion while RBS or Royal bank of Scotland lost $15. 2 billion (Onaran). Due to the subprime and credit crisis towards the end of 2008 UK went into recession and since then the crisis has deepened. This is evident from the fact that the UGK GDP has declined further by 1. % in the period between January- March 2009. This has also been the sharpest decline since 1979. It is being predicted that the fall in GDP would be even more than 3. 5%, which was the common estimation among experts last year. The IMF has also predicted that the UK economy would decline by 4. 1% in 2009 (Monaghan par. 1, 3, 5, 13). But in comparison to other EU members the UK economy is in a slightly better condition. Yet public finances w ill be in a very bad condition in comparison to its EU member states. Also, the country’s government deficit is predicted to be amongst the worst in EU for the next year (Giles, par. , 2, 10). Macro economic forecasts by different agencies have also predicted a depressing picture for the economy in the near future. GDP growth is predicted to be less than 0. 5% in 2010 while the Retail Price Index inflation is going to be between 2% to 2. 5%. Consumer Price Index inflation on the other hand is predicted to be at 1. 5%. Current account for 2010 would be at least -? 26 billion by April (Forecasts for the UK economy 12-13). http://mb atermpapers. om/an-analysis-of-lloyds-tsbs-current-strategic-position-part-i/ PESTEL Analysis of the Banking Crisis and Royal Bank of Scotland POLITICAL There are numerous entities comprising RBS’s political arena, including but not limited to: The Bank of England (BOE), BOE’s Monetary Policy Committee, Chancellor of the Exchequer, Fin ancial Services Authority (FSA), HM Treasury, HM Treasury’s UK Debt Management Office, UK Financial Services and Markets Tribunal (which provides judicial review of the FSA), and Treasury Select Committee (which reviews HM Treasury’s activities).Each entity influences RBS’s ability to compete in a highly regulated sector. Each entity’s influence originates from their ability to sway and/or enact legislative acts which envelope RBS’s investment activities, reporting procedures, costs of capital, international participation and horizontal and/or vertical integration. The overall political mood of these government entities during the current banking crisis inculcates numerous feelings and perspectives, including but not limited to such attitudes as   i). angst about available credit to businesses and consumers; ii). repidation towards watchdog groups like rating agencies and government inspectors; and iii). worry concerning free market capitalism an d the nationalization of key industrial sectors. Immersed in such a political atmosphere, RBS’s expectations include augmented publicly scrutiny regarding loan portfolios and lending activities, even greater banking regulation, increased governmental activities such as inspection parameters and enhanced reporting requirements. RBS’s political arena is struggling to recompense constituents for the government’s inability to stave off volatility despite huge expenditures of taxpayer dollars.RBS will identify trend lines in each governmental entity in order to position each entity into a governmental landscape attempting to redefine itself as a public body capable of ascertaining significant risks to the economy. By analyzing the decisions of entities like the BOE, FSA, UK Financial Services and Markets Tribunal, and Treasury Select Committee – RSB may fully assess the country’s political framework, the direction being taken by the government on a per entity basis and the ramifications upon the socio-economic canvas.One political activity is the HM Treasury’s establishment of the Bank Recapitalization Fund and the UK Debt Management Office’s 2008 Credit Guarantee Scheme. These programs are part of the Government’s attempt to stabilize the financial system and to protect and promote confidence in depositors, borrowers and other clients of RBS and other financial institutions. Under these programs the government will possess the capacity to set RBS’s dividend policies and bonus schemes. It will also require RBS to support lending to small businesses and home owners. Moreover, in October 2008 the HM Treasury purchased approximately ? billion in RBS preference shares[1], for which RBS will have to pay approximately ? 600m per annum. The government also underwrote a ? 15 billion share issue for Royal Bank of Scotland – as a result of which the government gained a 58 percent stake in the company. The performance of RBS’s Corporate and Global Banking divisions – in an atmosphere inundated with public and private institutions who failed to ascertain an accurate picture of the credit markets and banking industry – may be expected to benefit from funds made available from HM Treasury’s programs.Regarding the FSA, it has been perceived by some to be relatively weak and ineffective. FSA behavior is often criticized as being reactive rather than proactive. Some banking experts assert the FSA has allowed irresponsible banking and the FSA’s ineptitude may have precipitated the credit crunch. Indeed, the public acquisition of Northern Rock in mid-February 2008, and the takeover of HBOS by Lloyds TSB are key indicators that the FSA may have failed to oversee with insight and expertise.Once recent activity is that in September 2008, the FSA announced a ban on short selling to reduce volatility in difficult markets, including financial institutions. Another recent activity is the FSA’s Consultation paper entitled ‘Financial Services Compensation Scheme reform’. Published in January 2009, the paper recommends that a potential seven-day time limit, after the collapse of their account providers, for paying out to depositors could be imposed on the Financial Services Compensation Service (FSCS) in future.FSA also recommended a simplification for the eligibility parameters for depositors and for the processes of account providers transferring their customers’ information on the FSCS. ECONOMIC: The economic state of the nation will propel RBS towards activities based on reduced GNP growth, reduced demand for credit, decreases in consumer confidence and reductions in revenue sourced from interest rate spreads. However, clients in RBS’s Wealth Management division may realize long term gains if the market is currently near the bottom and grows in the future.With historical lows in interest rates and a monetary policy flooding the banking sector, RBS may capitalize upon low costs of capital and potential increases in the demand for credit. However, due to the economic climate, RBS is expected to be substantially risk averse and may avoid the tried and true real estate market. Large and small businesses seeking working capital, companies seeking merger financing and product development financing are potential opportunities for RBS given the current real estate climate.RBS’s may be expected formulate strategic merger opportunities, gravitate towards a greater risk averse position, raise capital through selling assets and increase the quality of its capital base. RBS may sell assets like its 10% stake in Bank of China[2]. The RBS has also placed t its near-1,000 pub estate up for sale, as it looks to improve its balance sheet with cash holdings[3]. RBS is also poised to cut around 3,000 jobs from its Global Markets investment banking division. 4] Moreover, RBS will compete in an econo mic climate experiencing increases in unemployment. The company’s layoffs are indicative of the financial sector reducing payrolls in order to streamline operations and enhance profitability. However, the economy’s overall increases in unemployment may facilitate a corresponding increase in small business start ups such that RBS may make loans to unemployed workers attempting to start their own firms.Per the aforementioned real estate situation, housing prices experienced a plunge of approximately 16 per cent last year, the biggest annual drop on record and RBS is poised for another turbulent year in real estate investment activities. The fall during 2008 established a current average house price at ? 153,048,   down ? 20,000 since December 2007[5]. However, in a discounted real estate market, RBS may facilitate real estate investors seeking long term gains and may also conduct businesses unrelated to real estate i. e. manufacturing, technological, agricultural, and health care.SOCIAL Social aspects of the credit crisis include, but are not limited to: career attitudes, consumer confidence, and worries regarding pensions. Career attitudes may be improved if RBS campaigns for unemployed workers to attempt to start their own small business. Consumer confidence may increase if RBS markets the low costs of capital for borrowers. And worries regarding pensions may be alleviated by RBS’s Wealth Management division and subsequent campaigns emphasizing investments in staple sectors, emerging markets and firms experience above average growth.TECHNOLOGICAL The aforementioned FSA’s Consultation paper entitled ‘Financial Services Compensation Scheme reform’ also recommends Britain’s banks spend approximately ? 1bn on upgrades for information technology systems. The proposed IT investment facilitates a bank’s capacity to produce a list of all customers’ deposits within 48 hours of the institution failing. This may support the FSCS’s ability to ensure that bank customers get their money back within seven days.Such a system may also limit the risk of a collapse of confidence from spreading. Furthermore, technological variables like software platforms based on data mining, neural networks, risk analysis and algorithms scanning financial criteria may offer RBS the tools necessary to optimize networks, maximize knowledge procurement and minimize data absence such that assets, liabilities, expenses and revenue streams are analyzed, assessed and reported upon in order to alert management on significant changes and/or potential problems. LEGALRBS confronts numerous legal issues, including but not limited to: securities law, bank note regulation, separation of lawful matters centered on England and Scotland, country specific regulatory committees and a trade structures negotiated separate from England. RBS is poised to capitalize on the Scottish reputation for developing a wealthy nation s uch that, the concomitance of national legal frameworks may expedite innovation, facilitate the discovery of economic tools and promote a banking sector that leads the international economy into a more efficient, less volatile and improved transparency framework.By immersing itself in the legal framework of both regions, RBS may reap insight into the legislation the behind domestic economy and participation in an international marketplace. ENVIROMENTAL Several groups assert that RBS is one of the world’s top financing sources for oil and gas extraction. Allegations that RBS is funding oil and gas extraction in politically and environmentally sensitive regions and further entrenching dependence on oil and gas. These believes have resulted in campaigns against RBS   Protests have taken place at some RBS and Natwest branches in the UK.RBS supplies financial services to firms constructing coal-fired power stations and developing new coal mines at sites all over the world. RBS i s accused of helping billions of pounds over the last two years to E. ON, and other companies emphasizing coal. On 17 January 2008 environmental groups wrote to RBS hoping to resolve environmental problems associated with the ABN AMRO-financed Sakhalin II project (RBS, Fortis and Banco Santander acquired ABN AMRO in 2007).RBS’S green holdings may alleviate these antagonistic positions while also offering investment returns in industries experiencing relatively positive growth rates. As alternative energy becomes a viable source for transportation and electricity, RBS may identify and locate potential businesses (whether small businesses or conglomerates) that offer above average yields. Further, RBS may spearhead the banking industry’s emphasis on alternative energy in a marketplace poised to replace oil even during a banking crisis.Industrial Analysis: Current Market Forces in Banking Sector There are several forces operating in the banking sector. A few of these are related to the current crisis and others are constant parts of the banking sector. Such forces include, but are not limited to: i). a demand for reform; ii). a supply of private money (whether publicly financed or not) that has experienced a constraining shift in risk adversity; iii). a nationalization of private sectors; iv). uncertain alterations of capital standards; v). ossible shifts in portfolio risks; vi). homeowner and depositor protection; and vii). possible prioritization of small and medium sized business. These demand and supply issues are drivers of change. Other drivers of change include regulatory bodies, private organizations and competitors within the banking industry. As alterations in portfolio risks shift capital, changes in specific industries may occur. For example, an influx of capital into alternative energy alongside a reduction in real estate investment may fuel energy independence.As alterations in capital standards occur, banking companies are expected to change attitudes towards riskier loans. And as small and medium sized enterprises become a priority, the may be changes in the rate of innovation, the effect of small transactions and general economic data like unemployment or personal consumption. A banking sector’s industrial analysis would note that banking has existed so long that ascertaining the whole sector’s position in the life cycle is rather difficult.However, the sector is experiencing a nationalization, which in turn reverts back to antiquated stages of the sector’s life cycle. On the other hand, banking could be poised to accelerate its position in its life cycle due to the current economic crisis i. e. necessity is the mother of invention and the banking sector may invent methods to draw the economy out of the current crisis MADEAN2. WORDPRESS; http://madean2. wordpress. com/business/swot-pestel/ (2012) http://www. youtube. com/watch? v=1cV-R26kMrU&feature=related