Influencing Performance Essay Example | Topics and Well Written Essays - 750 words - 1

Influencing Performance - Essay Example When strategic goals are clearly communicated to the employees, they feel confident and motivated about it. Secondly, â€Å"equal pay for equal work† is an important compensation theory which works towards employee motivation (McIntosh 1998). Inequalities tend to generate between employees when they feel that some other person is getting more for the same work or he/she is not getting adequate compensation for his/her services. It is very important for the organization to observe equity theory of motivation (McShane and Von Glinow 2010) while designing the compensation packages. Also, training and development programmes for employees at different levels work wonders in enhancing performance as they give the employees a chance to increase their skills set. They become more competent to handle more responsibilities with greater enthusiasm and ability which automatically builds upon their positivity towards work. Understanding employee professional and personal needs is the key to their motivation and best performance. Sufficient promotion opportunities, clear goals, mutual working environment and celebrating each and every achievement of employees lies at the heart of bettering the employee performance. Workplace security, safety measures and constructive criticism also form an integral part of this. Describe one method effective leaders can use to improve individual and/or group performance in your organization. Include the role of theory in your discussion. Support your method with a minimum of 1 reference from the literature. Leaders are considered to be effective when they are able to direct the actions of their followers through motivation, planning and judicious implementation of plans. Leaders are considered as role models by the followers because of their charisma or the inherent qualities and values they possess. Leaders are said to be effective when they are able to transfer these to their followers (Leadership Expert webpage 2010). One popular

Corporate Finance Essay Example | Topics and Well Written Essays - 2500 words

Corporate Finance - Essay Example This will further estimate the market value of a share for each of the capital structures using the no growth share valuation model being considered and to comment on findings; to consider which capital structure is preferred under the approach; and to contrast and explain the assumptions and theoretical approaches to capital structure taken earlier. 1. (i) Explain the columns in the above tale given the scenario stated above. From the data, establish the amount of debt, the number of shares, the amount of tax and the EPS for each gearing level show workings The first column on capital structure displays the different debt to equity ratios and each capital structure has a corresponding level of debt interest rate in the second column which increases as the debt structure becomes more highly leveraged. That the direct relationship is obvious between the debt to equity ratio and the interest rate since higher debt would mean higher risk for the debtor as few creditors would be willing to lend at rate lower than contracted earlier by the debtor. This would also mean that higher level of debt in relation to capital would require the company to pay higher interest expenses to creditors in absolute amount and would also mean higher tax shield for the borrower since interest expense is tax deductible for income tax purposes. The same direct relationship is also expected on EPS which increases directly as the debt to equity ratio is increased. Further the same inference could be made with the required return on shares. This means that the investors or stockholders would require higher return for higher level of risk because of increase in debt to equity ratio or higher financial leverage. This higher required return on investment would be the same as the cost of capital that would be used in evaluating the acceptability of projects. Those falling under the

Meaning of Life and Thanksgiving Essay Example for Free

Meaning of Life and Thanksgiving Essay As the first pilgrims arrived at Plymouth Rock and had a feast with the Indians, they shared a moment of thanks together. They gave thanks for all their blessings, thus, creating our lovely day of Thanksgiving. When Thanksgiving is thought of, the first thing that comes to mind is turkey and a plentiful amount of food. Thanksgiving to me, is the time to be together with the ones you care about. Coming together for a day to just be with each other and to catch up is what Thanksgiving means to me. Family should be with each other to share memories and to realize the plentiful amount of blessings they have been given. Thanksgiving is not only a day for gorging on food or falling into a food coma, but talking with each other and just being glad to be with one another. Having family during Thanksgiving is a crucial part in my life. Having all of my relatives in one place for one day to talk and have fun with them makes Thanksgiving extra special for me. It is one of the few days of the year that I get to see everybody. The turkey, yams, cranberry sauce, mashed potatoes is just the icing on the cake. Everybody in my family loves the food. We eat and eat until we cant eat anymore. My family has a tradition of playing soccer afterwards but that goes only so far due to our full stomachs. My cousins and I play a friendly game of poker, afterwards our failed attempts for soccer, for first dibs on dessert. After a good game of poker, my cousins and I look for ways to entertain ourselves meanwhile the adults talk about their lives and brag about their kids. Society today makes Thanksgiving look like a day just to eat. As society advances the meaning of Thanksgiving deteriorates into a secular holiday. The meaning of Thanksgiving seems obsolete. I truly believe that Thanksgiving should be refreshed in its meaning and should be celebrated with family and love. As people come together to share a special day in our history, this should be a day which people will not take for granted.

Sequential and Simultaneous Linear Menus Essay example -- Finance, Cr

The user’s cognitive construction of a chore exemplify a set of probability as to what will be the result as well as what will lead to the result. With this in mind, we can see that menus structure or arrangement tend to focus on the user’s cognitive construction. Take for instance, when a person go the grocery store and when checking out and making payment for the item buy, the person will either pay in cash or use credit or debit card. Once the person decides to pay with the credit or debit card, after swiping the card in most cases the machine will ask if the person will be paying with debit or credit. In addition, if the person decides to pay as debit, the machine will ask if the person want cash back or not. The same can be said of an ATM. When using an ATM, the machine often asks if the person want to make a deposit, withdraw, or check account and many more. With this, we can say that menus are structures in such a way that the flow gives individual or user a tas k to accomplish their goal or goal. We can see why it indispensable that user is able to recognize the types of menus arrangement and the logic in which the menus flow. 2.0 Menus Selection Many researchers have anticipated theories about the different approaches that people across the globe use when they want to locate a recognized entry in an unordered list of options. Norman and Vandierendonck recommended that people could only process one menu at a time. This idea or recommendation that people can only process one item at a time could be related to sequential linear menu. However, they did not authenticate the low-level hypothesis empirically. Card S. K. the writer of â€Å"Visual search of computer command menus† proposed that people randomly choose which item t... ...see that for the most part, simultaneous menus layout overshadow sequential linear menus designs. However, the choices we may in choosing which type of design should be base not what would like to see and have your end users make on their daily or weekly basis. It should be base on the type of task and what you would like the result to be. For example, if you expect the user to be able to make multiple selections from either two or more menus, it would be wise to use simultaneous menus designs to enhance better performance. Furthermore, if on the other hand you want your target audience to just use or make one choice at a time, sequential linear menus would be a good deal. Let say for some reasons you want your menus design to be use for investigative undertakings, simultaneous would be a good choice in that situation because it provide continuous flow of summary.

Female Power in Hamlet

Female Power in Hamlet I. Introduction William Shakespeare’s Hamlet is characterized by its tragic conclusion and its memorable cast. As a reflection of the time period in which Hamlet was written, the predominately male cast views the female characters as inferior. What the men do not realize is that the women have more control than what is initially predicted. Throughout the play, Gertrude uses her influence over Claudius to gain political ground while Ophelia uses her sexuality to have control over her relationship with Hamlet. This sense of female power also has a lasting effect on the theme of sexuality and corruption in the play.II. Gertrude A. Governmental Influence During the course of the play, Gertrude uses her status as a woman to establish herself as a capable and superior ruler. At the beginning of the play Hamlet chastises his mother for not only for her willingness to remarry after the untimely death of his father but for her marriage to Claudius, the brother of the recently deceased. Hamlet views this as incestuous; as did many others during the time the play was written (Pressley). We should keep in mind that she is the Queen of Denmark and has to make decisions that would best benefit her nation.Gertrude’s motivations were more political than unholy. Her marriage to Claudius gave the throne a more stable base of power which would make the people of Denmark feel more secure especially when facing a possible invasion by Fortinbras (Lenz). This union would also prove to the people that she was emotionally secure enough to be rule the state. King Hamlet also felt that Gertrude was strong enough to run the country because he made her the recipient of the throne after his death and not his eldest son which was traditional (Pressley).Gertrude uses her influence as a powerful woman to help make her country and her life more secure. III. Ophelia A. Sexual Power Many critics find Ophelia to be a pawn to the men in her life, but throughout the play she proves â€Å"herself to be neither silent nor merely obedient† (Fisher 130). This statement is only disproved in regards to her father. She does obey him when he tells her to stay away from Hamlet and when he asks her to be involved in a plan to determine Hamlet’s state of mind. She does not have the same submissive tendencies towards her brother and Hamlet.When Laertes tries to warn Ophelia about the dangers of pre-marital sex, she just rebukes him as a hypocrite and establishes the existence of a double standard surrounding the issue. While there is little doubt that Hamlet and Ophelia loved each other, sex was not involved in their affection. If they were to have a child out of wedlock then both of their reputations along with the reputations of their families would be ruined and the heir to the throne would be in question. She had a certain loyalty to her family and the status they held and Hamlet had certain expectations as the prince of Denmark.This restrain on their endeavors does not limit the power of Ophelia over Hamlet. She still uses the fact that they could be together one day to her advantage. They were playful with each other and at timely highly suggestive but this only shows the passions built up from their inability to act on their feelings (Neeley). Hamlet respects this silent sexual power when he tells her â€Å"get thee to a nunnery† in the hope of keeping her safely away from his madness (Shakespeare, 3. 1. 131). This conversation, though one sided, proves that Hamlet really did love and respect Ophelia enough to protect her from himself.IV. The Effect of Female Power on the Themes of Sexuality and Corruption in the Play Throughout the play, any sign of female power is portrayed as sinful or somehow connected with the fall of Denmark. Hamlet blames his mother more for his suicidal thoughts than his father’s death. This is shown through his preoccupation with his mothers â€Å"incestuous sheetsâ₠¬  and his lack of action to avenge his father’s murder (Shakespeare, 1. 2. 162). Hamlet views female sexuality as the single cause of corruption in Denmark leaving it no more than an â€Å"unweeded garden† (Shakespeare, 1. . 139). More specifically this moral corruption can be seen in Gertrude. When her political power is threatened by her son’s lover, she has her killed and stages it as madness induced suicide. Gertrude is the only person who describes Ophelia’s death and she repeats the word â€Å"drown’d† multiple times almost as if she is convincing herself that it is true. She also calls Ophelia a â€Å"mermaid†, originally another name for a siren, which was known for unintentionally drowning young men (Shakespeare, 4. 7. 201).Gertrude meets her death from the poisoned wine, drowning in a sense on the poison, meant for her own son. Sometimes you have to think outside the pages, but the effects of female power on the theme of s ex and corruption cannot be ignored. V. Conclusion While the women in Hamlet have few lines, they have a tremendous amount of influence over the men in the play Hamlet. Gertrude uses her influence to establish herself as an adept matriarch. Ophelia uses her power to keep her relationship with Hamlet despite their trials.

“Death of a Salesman” by Miller and “A Doll’s House” by Ibsen Essay

â€Å"Death of a Salesman† and â€Å"A Doll’s House† are two plays that were written in different centuries. In these plays, among other things, is presented the place that women hold in the family, as well as in the society. Although in many aspects, the two protagonists of the plays, Linda and Nora respectively, appear to have things in common, at the same time they are very different, since Nora seems to be more modern and liberal than Linda, which is ironic given the fact that Ibsen wrote his play seventy years earlier than Miller. The representation of the two women in these two plays is what will be discussed in this paper. In â€Å"Death of a Salesman†, Linda embodies the role of the traditional American woman, which was to take care of her husband, her children and the house, regardless of her personal aspirations, and dreams. The woman is expected to stay at home and engage in everyday house works, like cooking, cleaning and sewing, while the man, as the head of the family, is expected to find a well-respected job position because it was the man’s duty to provide for the entire family. So Linda has given up on everything she hoped for in her life, she sacrificed herself, just to be with her husband and her two sons, even though her husband doesn’t seem to be treating her very well. Willy disregards every word Linda attempts to interject in family conversations by interrupting her and accusing her of interrupting him. He shouts at her, he doesn’t let her speak and when she does, he speaks to her badly. A distinct example is the passage towards the end of Act I, in which Linda attempts in vain to speak her mind: Linda: â€Å"Maybe things are beginning to-† Willy: â€Å"Stop interrupting!† (1907), and later on when Linda tries again to say something Willie tells her abruptly â€Å"Will you let me talk?† (1907), while he is the one doing most of the talking all this time. Despite her husband’s constant degradation, Linda appears to be a woman who is very loyal, loving, caring and understanding to her husband. Not even once did she complain about Willy’s belittling behavior. Linda seems to be for Willy the perfect wife: she always speaks very nicely to him, she makes sure that his clothes are always mended, and that he has got everything he needs with him before he leaves for a trip. She loves him very much and she doesn’t seem to hold against him the terrible way that he treats her. A distinct example is the fact that right after the incident of insulting her, she proposes to sing to him a lullaby, so that he could relax : Linda: â€Å"Just rest. Should I sing to you?† Willy: â€Å"Yeah. Sing to me† (1909). At the same time, Linda stands up for him, takes his side, even if it means to get into a fight with her sons, for not treating him with the respect he deserves as their father: Linda: â€Å"He’s the dearest man in the world to me, and I won’t have anyone making him feel unwanted and low and blue †¦Either he’s your father and you pay him that respect, or else you’re not to come here† (1902). Also, and she tries to protect him by asking for their sons’ help, when she realized that he had been trying to commit suicide, since she didn’t want to do anything that would let Willy know that she has understood that he wanted to die. She was very concerned not to hurt her husband’s pride, realizing that if she confronted him, Willy would be devastated: â€Å"How can I mention it to him? Every day I go down and take away that little rubber pipe. But, when he comes home, I put it back where it was. How can I insult him that way?† (1904). Linda is also a very dedicated mother to her children, that she managed to raise in the best way possible, when she was all alone with them, while her husband was away for a long period of time. She has always been with them; she has educated them since the day they were born and she has tried to install in them good values. Even now, that her sons are adults, she still reprimands them about being selfish, impolite, rude and disrespectful towards their father. And her sons seem to love her and think very highly of her; for them she’s the perfect role model for a future wife: Happy: â€Å"Somebody with character, with resistance! Like Mom, y’know?† (1885) This is ironic, since her own husband doesn’t seem to appreciate her, and treats her  badly. On the other hand, Nora, the protagonist of â€Å"A Doll’s House†, represents the society’s notion for the women in the late 1800s, which is not very different from that of the mid 1900s, in the sense that the wife has to stay at home, taking care of her husband and children, and doing all the household chores. Under no circumstance is a woman expected to work and contribute to the family income for the man, for once more, the man is the one that works and brings in the money. Thus, poor Nora is financially dependent, in a great extent, on Trovald, and every time she wants to buy something she has to ask him to give her some money: Nora: â€Å"Your could always give me money, Torvald. Only what you think you could spare. And then I could buy myself something with it later on.† (1768). Nora, like all the women of her era, is controlled by her husband, who is the one that wants to make all the decisions for her, even what she would or wouldn’t eat, like when he forbidden her to eat the macaroons that she liked so much. Nora, just like Linda, is very concerned with her husband’s health, but instead of just watching she decides to do what she can to save his life, even if this means acting behind his back and hurting his pride, in order to get the necessary amount of money to save his life. Nora: â€Å"Torvald is a man with †¦ pride – it would be terribly embarrassing and humiliating for him if he thought he owed anything to me† (1775) because for a man that was considered to be strong enough, it would be regarded as an insult to admit that he needs the help of a helpless woman. What Nora did shows that although she appears to be a typical woman of her era, in reality she’s very different, she is a rebel that risks everything so that she won’t lose the man that she loves. In the end, when everything is revealed, she’s very hurt, for she realized that the man that she risked everything for never loved her, and that all she was to him was a beautiful toy-d oll to play with, and not a person with real feelings. The way that the men in her life have treated her is expressed in one word through the metaphor that Ibsen uses: a doll. That has been very confusing to Nora and her role as a mother of three children, since it has made her  also think her children as dolls. The only thing that Nora does with her children is to play games. She has completely trusted their upbringing to the nursemaid without worrying about them or trying to teach them values and how to behave, like Linda did. In the end, she realizes that she would have never become a good mother to her children, and in fear of hurting them or turning them into dolls she decides to leave them forever: â€Å"And never see the children again either. Never, never.† (1813). In the end, Nora realizes that she had been living a lie, and she is faced with the dilemma of engaging the responsibilities to her husband and children or the responsibilities to herself. But the need to break free from the simple, decorative roles that she has been assigned, and to find herself, is greater than anything else. She can’t be of any use to anyone without discovering her self first, and see what she can do on her own: â€Å"If I’m ever to reach any understanding of myself and the things around me, I must learn to stand alone† (1818). She’s young and beautiful, contrary to Linda who stayed until the end with her husband and children, and she has the whole life ahead of her to love and to be loved, make a new family, since she finally made the decision to leave Trovald and never come back, unless â€Å"a miracle of miracles† (1821) would happen. Both plays discuss the position of the women in the family and in the society. Two different women, from two different times were victims of their era. The one is old, unattractive but caring and supportive; she is Linda, the woman of the 1940s. The other is young, and beautiful but also more modern and demanding; she is Nora, the woman of the 1870s. Both of them weren’t happy with their lives, but only one of them, Nora, finds the strength to leave and change her life. And that is why the Linda was the victim of the capitalistic society, while Nora’s more of a feminist.

China Department Stores Essays

China Department Stores Essays China Department Stores Essay China Department Stores Essay China Distribution Trading Issue 61 July 2009 Department stores in China, 2009 IN THIS ISSUE : I. Overview II. Operation modes of department stores in China III. Developments of market players IV. Challenges V. Recent developments VI. Conclusion 10 11 19 6 2 4 Overview Department stores in China have enjoyed many years of boom, achieving a compound annual growth rate of 30% between 2003 and 2008. Sales momentum for department stores has deteriorated towards the end of 2008 as consumer cut back on discretionary and luxury spending; but there are recent signs of picking-up growth. Operation modes of department stores in China Department stores operators in China generate revenue from 1) commissions on concessionaire sales, 2) merchandise direct sales, 3) rental income from store tenants, and 4) management fee etc. Commissions from concessionaire sales are the predominant source of income. Developments of market players The competitive landscape for department stores in China is highly fragmented with no significant market leader. Foreign players tend to have wider national footprints and they mainly target the country’s high-income class. Domestic department stores operators mainly focus on regional markets. Challenges Department stores operators in China are often said to be acting like landlords – renting floor space to concessionaires or tenants and paying little attention to differentiation and brand management. Undifferentiated players have resorted to price competition to boost sales, hurting companies’ same-store-sales growth and eroding their margins. Other formats such as specialty stores and retail cannibalization are posing great challenges to department stores. Recent developments Lower-tier cities are the expansion focus. Department store operators focus on upgrading and differentiation. There is growing attention to transform merchandising practices. Export-oriented manufacturers pay growing attention to domestic market brings new potential for department store operators to expand merchandise mix. Department stores operators are grasping attention in the capital market. Many department stores operators have embarked on real estate strategies. Some department stores have explored the â€Å"click-and-mortar† model. Government encourages department stores players to enhance service levels and improve operation environment through awarding players with quality services. Li Fung Research Centre 13/F, LiFung Centre 2 On Ping Street Shatin, Hong Kong Tel: (852) 2635 5563 Fax: (852) 2635 1598 E-mail: [emailprotected] com lifunggroup. com/ Li Fung Research Centre Member of the Li Fung Group China Distribution Trading Issue 61 July 2009 Department stores in China, 2009 Department stores have long been one of the major retailing channels in China; they are the chief distribution channel for discretionary consumption items such as branded apparel, cosmetics, jewelry and watches, etc. In the eyes of many Chinese consumers, shopping in department stores represent quality lifestyle and status. For years, many consumer brands have viewed department stores as their top-of-choice in building their recognition in China. As Chinese consumers become growingly affluent, department stores in China has enjoyed years of rapid development in recent years. However, growth momentum of China’s department stores sales has slowed towards the end of 2008; dampened consumer spirits amid global financial crisis, increasingly fierce competition and immature management mindsets all pose challenges to China’s department stores operators. These have prompted department stores operators in China to evolve to stay competitive. Over the past few months in 2009, as China’s economy begins to demonstrate stabilized growth, sales momentum of department stores has picked up again. We believe, long-term prospect for department store sector in China is rosy, as consumption plays a bigger role in the Chinese economy. I. Overview Department stores1 have been one of the most important retail channels in China with an established history longer than other retailing channels such as supermarkets, hypermarkets, convenience stores and shopping malls. They are an important sales channel for discretionary consumption items such as branded apparel, jewelry, cosmetics and watches, etc, many of them targeting the country’s higher-income groups. Thanks to the increasing affluence and urbanization, department stores in China have enjoyed many years of boom. According to the National Bureau of Statistics of China (NBS), the total sales value of department stores was 180. 1 billion yuan in 2007; the 2008 full-year sales value is yet released but the China Chain Store and Franchise Association (CCFA) and Deloitte estimate the value to reach 219. billion yuan, representing a compound annual growth rate of 30% between 2003 and 2008 (see Exhibit 1). Exhibit 1: Total sales value of department stores, 2003 2008 * Estimated value by Deloitte Source: National Bureau of Statistics of China, China Chain Store and Franchise Association and Deloitte 1 Department stores are stores with sales area between 6,000 and 20,000 m2, usually multi-stor ey, selling wide range of merchandises with emphasis on clothing and accessories, footwear, cosmetics, household items and home appliances etc. Special counters and open shelves are the chief sales formats. Li Fung Research Centre Member of the Li Fung Group 2 China Distribution Trading Issue 61 July 2009 However, department store sector has witnessed some challenges over the past year. Amid the global financial crisis, retail sales growth in China has decelerated towards the end of 2008 and sales of discretionary items are more negatively impacted. According to the CCFA, discretionary and luxury retailers were under greater pressure than previous years. Sales momentum for department stores has deteriorated as consumers cut back on discretionary and luxury spending. Exhibit 2 demonstrates the key statistics of different format retailers. As shall be seen, daily transactions for department stores have registered negative growth of 5. 2% in 2008; the decline is the second biggest among other formats. Average ticket consumption also recorded slow growth of only 1. 5% in 2008. In 1Q09, according to CCFA and Deloitte, both sales revenue and profit for department stores was down by about 5% yoy. Exhibit 2: Key statistics of different format retailers, 2008 Sales revenue (million Retail format Hypermarkets Supermarkets Department stores Convenience stores Home electronics retailers Pharmacies 501. 64 37. 06 2. 0 7. 1 729 1,724 -7. 8 -3. 8 1,901. 0 48. 2 2. 3 1. 3 10. 8 23. 1. 0 -0. 7 yuan) 212. 90 72. 42 883. 97 4. 73 yoy growth (%) 12. 4 11. 3 11. 1 12. 3 Number of Daily transactions 10,059 4,554 10,839 758 yoy growth (%) 1. 0 6. 5 -5. 2 -2. 7 Average ticket consumption (yuan) 58. 1 43. 6 226. 4 16. 2 yoy growth (%) 11. 6 4. 5 1. 5 11. 1 Gross margin (%) 12. 9 12. 9 14. 1 16. 4 yoy growth (%) 0. 3 0. 9 0. 3 0. 0 Source: Ch ina Chain Store and Franchise Association and Deloitte The China Commerce Association for General Merchandise (CCAGM) conducted a research study on 60 major department stores operators in China; in 2008, average sales revenue of major department stores operators in China was up by 15. % yoy to 183. 74 billion yuan; the growth was lower than that of 2007 (17. 8%). 86. 7% of the department stores recorded sales growth in 2008. The CCAGM also surveyed 205 of its member enterprises earlier and Exhibit 3 demonstrates some sales statistics of its member enterprises in the department store sector. Exhibit 3: Performance of the 205 membership enterprises of CCAGM, 2002-2007 2007 Sales income growth (% yoy) Sales margin (%) Sales margin growth (% yoy) 17. 8 8. 5 21. 7 2006 13. 7 8. 4 19. 5 2005 18. 0 7. 4 10. 1 2004 12. 7 8. 9. 9 2003 42. 9 7. 7 26. 0 2002 10. 8 8. 2 4. 1 Source: China Commerce Association for General Merchandise (CCAGM) Li Fung Research Centre Member of the Li Fung Group 3 China Distribution Trading Issue 61 July 2009 Despite poorer sales performance at the end of last year, growth momentum of department stores in China is showing some recent signs of picking up. With huge government initiatives to boost domestic consumption, the total retail sales of consumer goods grew by 15. 0% in the first half of 2009, according to the NBS. Consumer confidence in China is picking up as well. Department stores in China have undoubtedly benefited from China’s resilient retail sales growth; experts believe that growth in second half of 2009 will be even stronger. II. Operation modes of department stores in China Compared with many department stores operators in developed economies, which pay huge attention to differentiation and brand-building, department stores operators in China are often said to be acting like landlords – renting their floor space to concessionaires or tenants and paying little attention o differentiation. Department stores operators in China generate revenue from 1) commissions on concessionaire sales, 2) merchandise direct sales, 3) rental income from store tenants, and 4) management fee etc; and commissions from concessionaire sales are the predominant source of income. For instance, more than 70% of the revenue of Hong Kong-listed department stores operators such as Intime Department S tore ( (see Exhibit 4). Exhibit 4: Revenue breakdown of department store operations from selected companies, 2008 New World Intime Commissions from concessionaire sales Sale of goods direct sale Rental income Management fee income from the operation of department stores Source: Financial reports from respective companies ) and Golden Eagle Department Store ( ), come from the commissions on concessionaire sales Golden Eagle 71. 64% 26. 79% 1. 51% 0. 07% Department Store 68. 30% 15. 07% 5. 51% 11. 11% Parkson 56. 78% 37. 93% 4. 33% 0. 95% 70. 02% 23. 41% 4. 93% 1. 64% Concessionaire sales Under concessionaire arrangements, concessionaires are permitted to establish sales counters in designated areas with their own sales personnel and sell their branded merchandise. Department stores charge concessionaires a turnover commission, usually at a percentage of their total sales proceeds (see Exhibit 5). Usually there is a minimum commission based on the minimum turnover target, regardless of whether such target is achieved. Sales amount received from the concessionaire sales is first collected by the department store and later paid to the concessionaires after deducting relevant expenses, fees and commissions. Average payment settlement period ( ) for department stores is 45-60 days, while some can last for 90 days, according to Hong Kong Trade Development Council (HKTDC). For some smaller brands, payment settlement with department stores operators can pose cash flow pressure. Li Fung Research Centre Member of the Li Fung Group 4 China Distribution Trading Issue 61 July 2009 Exhibit 5: Average commission rate for different categories in department stores Product Category Clothes, shoes and leather goods Jewelry Gold Cosmetics Source: Hong Kong Trade Development Council Commission rate (Department Store: Concessionaire) 30:70 15:85 8:92 25:75 Generally, concessionaires are responsible for employing their own staff, but department stores operators often devise sets of detailed guidelines and rules of conduct in relation to the employment, assessment and training of the staff. Structured induction and training programs are offered to new recruits and staff in new stores in order to ensure service quality of department stores. Concessionaire arrangement allows department stores operators to lower inventory risk, as in the case of merchandise direct sales and the development of own store brands would involve. Merchandise direct sales Under direct sales arrangements, department stores purchase merchandise from suppliers and resell them in stores (e. g. merchandise at supermarket and home appliance sections). Those items are usually standardized with higher brand recognition, which are easier for operators to manage. Rental income from store tenants Some department stores also lease designated areas to operators of businesses that are complementary to the shopping experience at department stores, including restaurants, pharmacies and beauty salons etc. in order to offer onsumers an â€Å"one-stop shopping† experience. Fierce competition for floor space in department stores in China According to HKTDC, department stores operators usually require concessionaires to pay an average annual guarantee fee of 30,000 yuan to 80,000 yuan as the minimum entrance fee. There are many other miscellaneous fees to gain a place in department stores, which include advertising fee, promotion fee and ma nagement fee, etc. Concessionaires may also be requested to pay for renovation or move to other locations according to policies of department stores. Typically, brands with good market reputation and proven sales track record would have higher chance to secure a place in department stores. For brands that are new to China or lesser known in the market, entry is more difficult. One chief reason behind the so-called landlord phenomena is fierce competition for sales space in China; as brands rush to build their prominence, many department stores operators in China have little incentives to differentiate from competitors. The concessionaire agreements and supply agreements are typically reviewed every year. Department stores have right to terminate a concessionaire arrangement if the concessionaire does not perform well (e. g. , fail to meet its pre-agreed sales target for three consecutive months); thus department stores operators have lower risks in securing their income. Indeed, some consider differentiation, say nurturing their own store brands, costly and would not wish to take the risks such as bearing inventories. Li Fung Research Centre Member of the Li Fung Group 5 China Distribution Trading Issue 61 July 2009 III. Developments of market players The CCFA has released the ranking of â€Å"the top 100 retail chain operators in 2008† (the Top 100s) earlier this year. Among the Top 100s, there are 23 enterprises chiefly operating the department store format. With a 10% increase in number of stores, their sales value was up by 21% yoy in 2008. Selected enterprises are listed in Exhibit 6. Exhibit 6: Selected department stores operators among the Top 100s in China, 2008 Ranking among the Top 100s 3 5 11 Enterprise Bailian Group Co. , Ltd. Dalian Dashang Group Co. , Ltd. Chongqing Commerce (Group) Ltd. f which: ChongQing Department Store Co. , Ltd. : 14 15 20 Hefei Department Store Group Co. , Ltd. Shandong Commercial Group Corporation ( Limited 21 23 27 28 Wuhan Zhongbai Group Co. , Ltd. Liqun Group Shareholding Co. , Ltd. Changchun Eurasia Group Co. , Ltd. Beijing Wangfujing Department Store (Group) Co. , Ltd. 30 Parkson Retail Group Ltd. 10,691 18. 7 40 -2. 4 14,240 13,869 12,130 12,000** 25. 1 13. 3 21. 3 13. 2 630 866 1 8 17 10. 5 3. 1 63. 6 6. 3 ) 14,800** 5. 7 33 6. 5 New World Department Store China 19,400 18,716 23. 8 34. 8 125 164 26. 3 69. Chinese Mainland Chinese Mainland Hong Kong Chinese Mainland Chinese Mainland Chinese Mainland Chinese Mainland Malaysia Sales value* (million yuan) 94,329 62,555 26,255 8,236 yoy growth (%) 8. 3 24. 6 18. 4 18. 3 Number of stores* 6,418 150 294 115 yoy growth (%) -0. 6 3. 4 11. 8 16. 2 Place of origin Chinese Mainland Chinese Mainland Chinese Mainland Chinese Mainland * Value includes other formats of the department store operators ** Estimated value Source: China Chain Store and Franchise Association (CCFA) Li Fung Research Centre Member of the Li Fung Group 6 China Distribution Trading Issue 61 July 2009 The competitive landscape for department stores in China is highly fragmented with no significant market leader. For example, the Dalian Dashang Group ( ), a very strong department store player in northern China with 52 department stores in China in 2008, accounted for less than 1% of the total number of department stores in China, according to Euromonitor. In China, many department stores do not operate as chains but as single-store independents. Chain operation for department stores is not as popular as other retail formats such as supermarkets and hypermarkets. Indeed, many layers are active in restricted localities only. Foreign players tend to have wider national footprints; targeting the country’s high income class China approved the setting up of the first department store by foreign enterprises in 1992. Shanghai No. 1 Yaohan ( ) from Japan was the first foreign player setting foot in China. Over the past decade, foreign players have been expanding ag gressively in China. With better management expertise, most foreign department stores target China’s higher-income consumers. Today, a number of them have already developed an extensive national network. Different from most domestic counterparts, foreign players tend to have wider national footprints. Exhibit 7 demonstrates the store network of selected foreign players. Today, a number of foreign department stores operators have built their market recognition in China and are battling locals for market share. Hong Kong-based New World Department Store is an example. Having a national coverage of 17 cities, the operator has pursued the expansion strategies of â€Å"multiple presences in a single city† and â€Å"radiation cities† in order to dig deeper into the market. Today the department store operator has built their recognition successfully in cities such as Shenyang and Wuhan. The rationale behind such strategy is to build a critical mass in these cities so that it could expand its influence more easily. This also paves the way for the operator’s further expansion into nearby cities or provinces. Exhibit 7: Store locations of selected foreign department stores operators in China, as of July 2009 Department stores operators Parkson Retail Group Ltd. Place of origin Malaysia Store locations Anshan, Beijing, Chengdu, Chongqing, Dalian, Guiyang, Harbin, Hefei, Kuming, Mianyang, Nanchang, Nanning, Qingdao, Shanghai, Shantou, Shenyang, Taiyuan, Tianjin, Urmuqi, Wuxi, Xi’an, Yangzhou, Yantai, Yueyang, Zhengzhou, Zunyi New World Department Store China Ltd. Hong Kong Anshan, Beijing, Changsha, Chengdu, Chongqing, Dalian, Harbin, Kunming, Lanzhou, Nanjing, Ningbo, Shanghai, Shenyang, Taizhou, Tianjin, Wuhan, Wuxi Aeon Group Far Eastern Group Isetan Co. Ltd Japan Taiwan Japan Beijing, Dongguan, Foshan, Guangzhou, Huizhou, Qingdao, Shenzhen, Yantai, Zhongshan, Zhuhai Beijing, Chengdu, Chongqing, Dalian, Shanghai, Tianjin Chengdu, Shanghai, Shenyang, Tianjin Li Fung Research Centre Member of the Li Fung Group 7 China Distribution Trading Issue 61 July 2009 Department stores operators Ito Yokado Lippo Group The Store Corp. Shin Kong Mitsukoshi Lotte Group Lifestyle International Holdings Ltd. Source: Company websites Place of origi n Japan Indonesia Malaysia Taiwan Korea Hong Kong Store locations Beijing, Chengdu Tianjin, Chengdu Jiaxing Beijing Beijing Shanghai The global financial turmoil has brought unprecedented challenges to consumer markets in many developed economies; while some foreign operators are becoming more conservative in their respective capital expenditure (for instance, Barneys New York Inc has shelved plans for expansion in Beijing), some others with stronger capital strength are accelerating expansion in emerging markets such as China to counter the depression in their home markets. For instance, the UK-based Marks Spencer has made its debut in China by opening a flagship store in Shanghai in October 2008. The Store Corp. ), one of the largest department stores operators in Malaysia, also announced their ) planned to invest US$42. 3 million to expansion plan in China. Japanese department store giant Takashimaya ( launch its first store in Shanghai in 2012. Domestic department stores operators mainly focus on regional markets With stronger local knowledge and connections as well as longer history, domestic operators tend to have stronger footholds in their respective cities of origin (see Exhibit 8). For instance, Dalian Dashang ( Eurasia ( ) and Changchun ) are very successful regional big names in northeast China. Besides, the fact that many domestic layers have already occupied prime locations gives them natural advantage. Nonetheless, when compared to their foreign counterparts, domestic enterprises tend to be more reluctant to expand to other regions, partly due to concerns over regional differences in consumer culture. Li Fung Research Centre Member of the Li Fung Group 8 China Distribution Trading Issue 61 July 2009 Exhibit 8: Department store locations of selected domestic department stores operators in China, as of July 2009 Company Intime Department Store (Group), Co. , Ltd. Golden Eagle Retail Group Ltd. Beijing Wangfujing Department Store (Group) Co. Ltd. Store locations Beijing, Ezhou, Hangzhou, Jinhua, Ningbo, Wenzhou, Wuhan, Xi’an, Xiangfan, Xianning, Zhoushan Huaian, Kunmin g, Nanjing, Nantong, Suzhou, Taizhou, Yancheng, Yangzhou, Xi’an, Xuzhou Baotou, Beijing, Changsha, Chengdu, Chongqing, Guangzhou, Hohhot, Kunming, Luoyang, Nanning, Taiyuan, Urumqi, Wuhan, Xining, Xuzhou Dalian Dashang Group Co. , Ltd. Dalian and 4 other cities in Liaoning, Daqing and 3 other cities in Heilongjiang, Yanji in Jilin, Kaifeng and 3 others cities in Henan, Chengdu and Zigong in Sichuan, Qingdao Maoye International Holdings Ltd. Beijing Xidan Department Store Co. , Ltd. Fujian Dongbai Group Co. , Ltd. Changchun Eurasia Group Co. , Ltd. Hangzhou Jiebai Group Co. , Ltd. Chengshang Group Co. , Ltd. Shandong Yinzuo Co. , Ltd. Hefei Department Store Group Co. , Ltd. Zhongnan Commercial (Group) Co. , Ltd. Wuhan Zhongbai Group Co. , Ltd. Guangzhou Friendship Group Co. , Ltd. Guangzhou Grandbuy Co. , Ltd. Source: Company websites Chongqing, Shenzhen, Wuxi, Zhuhai Beijing, Chengdu, Lanzhou, Xining, Urmuqi Fuzhou Changchun Hangzhou Chengdu, Mianyang Dongying, Jinan, Zibo Bengbu, Bozhou, Hefei, Huainan, Huangshan, Lu’an, Tong Ling Wuhan Wuhan Guangzhou, Nanning Guangzhou, Zhaoqing, Zhanjiang, Hengyang Li Fung Research Centre Member of the Li Fung Group 9 China Distribution Trading Issue 61 July 2009 A number of domestic players have received huge local government support with their state-owned background. For instance, Nanning Department Store Co. , Ltd. ( ) and Guangzhou Grandbuy are both state-owned. There have been sayings that state-owned department stores are often run less efficiently; these years, though, some have strived hard to improve their operations. For instance, Guangzhou Grandbuy has adopted the Stockholder Rights Plan in 2008, hoping to increase management’s incentives. Indeed, some industry experts believe that a number of state-owned department stores would find themselves hard to survive if they do not upgrade themselves. IV. Challenges As mentioned, department stores in China have witnessed some challenges over the past year. Besides macroeconomic slowdown, there are some other factors hindering the growth of department stores in China. First of which is that many department store players in China have immature operation and management mindsets. Due to the huge market demand of department store floor space in China, many operators have been quite passive in their operation strategy and do not feel the need to differentiate from the rest. Unlike in some developed markets, where many department stores operators have paid huge attention to brand management, such as through unique product assortment and developing private labels to enhance shopping experiences, department stores in China are often said to be acting like â€Å"landlords†. Commission and rental income are the major revenue sources for many. Few department stores have focused on differentiation and brand building. Besides, heavy initial capital outlays, lack of experience in sourcing, long nurturing period for own store brands are also common concerns. In recent years, many department stores in China have frequently reviewed and reshuffled their merchandise portfolio to improve their income. However, the problem of having highly similar brand and tenant mix is still very common. The fact that the market is crowded with a large number of undifferentiated players has made many resorted to price competition to boost sales, especially during more difficult times. Last year, many players have held aggressive promotional activities (e. g. buy-200-get-100 campaigns, anniversary sales events, issuing coupons) to attract footfalls. Discount-driven promotions are hurting companies’ same-store-sales growth and eroding their margins. On the other hand, competition from other format retailers is not to be ignored. According to the NBS, the share of department stores has dropped from 14% in 2003 to 10. 14% in 2007. Specialty stores, in particular, are posing great challenges to department stores as they offer brand owners more flexibility in operations – e. . , brand owners can have more say in product ranges and offerings, store layout designs, thus can better deliver their brand message across. Indeed, Chinese consumers also growingly favor specialty stores as they usually deliver more unique shopping experiences and offer better service levels. Last but not least, many department stores operators have embarked on rapid expansion over t he past years; retail cannibalization has hurt many retailers’ profit margins. Competition is the fiercest in the eastern coastal regions. As a result, many have slowed down their store expansion and put more focus on enhancing same store sales performance, say revamping old stores. Li Fung Research Centre Member of the Li Fung Group 10 China Distribution Trading Issue 61 July 2009 V. Recent developments 1. Lower-tier cities as the expansion focus In view of fierce competition in first-tier cities, many department stores are eyeing the opportunities in China’s lower-tier cities. Indeed, according to AT Kearney, middle class population in China’s second- and third-tier cities will account for 75% of the country’s total in 2017. Although consumers in lower-tier cities are currently much less affluent than those in first-tier cities, their consumption power is growing fast. In view of this, many department stores operators are viewing lower-tier cities as their major expansion focus. For example, Dashang Group has opened new department stores in Kaifeng, Xinyang and Xinxiang in 2008, all of which are lower-tier cities in Henan province; Guangzhou Grandbuy also planned to expand into lower-tier cities including Jieyang and Huizhou in Guangdong province and Chengdu in Sichuan province during 2009. Nonetheless, China is known to be a heterogeneous marketplace and adaptation to local tastes is the key for success. There are already many regional players with strongholds in local markets and have already occupied stores in better locations, making new entries challenging. For instance, Intime Department Store, a successful player in Hangzhou, faced fierce competition with local players when expanding into both Beijing and Wuhan. Beijing Wangfujing Department Store ( ) also quitted Nanning in 2008 after three years of operation. . Department stores operators focus on upgrading and differentiation The department store sector in China is crowded with many undifferentiated players. Today, a growing number of department stores operators are beginning to reinvent themselves in order to differentiate from rivals. Some department stores now adjust merchandise mix more frequently at each local store by monitoring consumer preferences, consumption patterns, spending power and level of comp etition. Some others also seek to â€Å"rebrand† to target specific segments. For example, New World Department Store has embarked on a new dual-concept stores initiative to â€Å"rebrand† its stores to â€Å"Fashion Gallery† or â€Å"Living Gallery† stores. â€Å"Fashion Gallery† focuses on the concept of â€Å"mix-and-match† with the introduction of exclusive private label brands and trendy products; while â€Å"Living Gallery† will introduce more leisure elements with 30% of gross floor area dedicated to dining and leisure services. On the other hand, some operators have upgraded their shop floors to attract more established brands. This is particularly true for the lower floors of the department stores; many operators hope to ride the consumer upgrade trend in China and attract more luxury brands to take up their space has been rising. Many department stores operators have also strived hard to improve customer loyalty, say, expanding VIP customer base. Some have collaborated with banks to issue co-branded credit cards. Credit card co-launched by New World Department Stores and Bank of Communications Co. , Ltd is a case in point. Holders of VIP membership cards and cobranded credit cards can enjoy discounts with their purchases. VIP customers can also accumulate gift points and exchange for selected merchandise in stores. Li Fung Research Centre Member of the Li Fung Group 11 China Distribution Trading Issue 61 July 2009 3. Growing attention to transform merchandising practices As Chinese consumers become more sophisticated, more and more are looking for unique shopping experience. There is growing attention for department stores operators to improve merchandise mix and assortment such as through launching private label brands or increase direct merchandising. For example, Intime Department Store has collaborated with Shenzhen Espresso ( ) to exclusively launch its Justin Time female fashion brand in 2007. The entry of Marks Spencer in 2008 also introduces Chinese consumers the concept of buying private label products. Some department stores operators in China, such as Vans Department Store ( ), are learning from their foreign counterparts and have started training their own merchandisers to bring consumers more exciting merchandise portfolio. However, the nurture period, capital outlays, and inventory risks are still some major concerns. It is believed that more and more department stores operators will experiment with new merchandising practices, but the transformation will be gradual. 4. Export-oriented manufacturers pay growing attention to domestic market brings new potential for department stores operators to expand merchandise mix As China’s exports shrink amid global economic woes, the domestic market is winning the attention of many exportoriented manufacturers. For the first time ever, China’s largest trade exhibition Canton Fair, which traditionally targets only overseas buyers, held a session targeting domestic retailers in end-April this year. Department stores operators in China such as Beijing Wangfujing Department Store and Dalian Dashang Group attended the fair. The made-to-export products, which are usually with higher quality as they need to comply with western quality standards, are reportedly to be very wellreceived. Many believe that domestic demand for these products would be huge. However, the road to tap the domestic potential is not easy. To enjoy autonomy in domestic sales, enterprises engaging in processing/ assembly operations and compensatory trade (TFPs) have to transform their registrations into foreigninvested enterprises (FIEs). In early March, the Ministry of Commerce (MOFCOM) vowed to simplify and speed up the transformation process for troubled Mainland-based Hong Kong TFPs who want to sell their products to domestic buyers. Guangdong province also took a similar initiative earlier. In August 2008, the Guangdong government issued a set of guidelines for the on-site transformation of TFPs into FIEs without production stoppage. The Guangdong government would also provide financial support in the transformation process. It is hoped that, by making the procedure of transforming TFPs into FIEs simpler and more transparent, particularly in Guangdong, policies restrictions will no longer be a barrier to domestic sales. Apart from regulatory issues, many export-oriented manufacturers are still hesitant with domestic sales: the order volume is much smaller in size and it takes longer time and is more difficult for them to collect money from domestic buyers. It also takes time and money for them to familiarize with and develop their domestic sales channels and build their market recognition. Last but not least, manufacturers have to customize their products to meet Chinese consumers’ tastes. Li Fung Research Centre Member of the Li Fung Group 12 China Distribution Trading Issue 61 July 2009 Nonetheless, as China’s consumer market expands, we believe more and more manufacturers will engage in domestic sales. This would have important implications for China’s department stores operators, i. e. , the operators can have more choices in merchandize sourcing; and this may accelerate the transformation of their merchandising practices as well. 5. Department stores operators grasping attention in the capital market China’s department stores operators have received huge investors’ interests in recent years. Riding the tide of investors’ interests in mainland consumption-related stocks, a number of department store players have sought public listings over the past few years. Exhibit 9 demonstrates some of the recent listing activities. Exhibit 9: Selected recent IPOs of department stores operators in China Company Your-Mart Co. , Ltd. Newhuadu Industrial Group Co. , Ltd. Better Life Commercial Chain Share Co. , Ltd Maoye International Holdings Ltd. Guangzhou Grandbuy Co. , Ltd. Times Ltd New World Department Store Ltd. Jiahua Stores Holdings Ltd. Intime Department Store (Group) Co. , Ltd. Source: Li Fung Research Centre, newspaper articles Date of listing 2009/7/17 2008/7/31 2008/6/19 2008/5/5 2007/11/22 2007/7/16 2007/7/12 2007/5/21 2007/3/20 Place Shenzhen Shenzhen Shenzhen Hong Kong Shenzhen Hong Kong Hong Kong Hong Kong Hong Kong Besides, many department stores operators in China view mergers and acquisitions (MAs) as a means to expand their market presence quickly, especially into places they are less familiar with. MAs offer them a fast route to acquire local knowledge and connections. Some recent MAs in the sector include Dalian Dashang’s acquisition of Zhenghong International Department Store ( Store ( the future. Li Fung Research Centre Member of the Li Fung Group ) and Xuchang Hongbao Department Store ( ) in Henan in 2008; the acquisitions of Qinhuangdao Jindu Department Store ( ) and Mianyang Xingda Department Store ( ), Taiyuan Liuxiang Department ) by Maoye International Holdings ( ) in 2008. As China’s department store sector is highly fragmented, we expect the waves of MAs to continue in 13 China Distribution Trading Issue 61 July 2009 6. Department stores operators embarking on real estate strategies Over the past years, there has been stiff competition for prime retail locations in China. To secure retail sites and better control rental expenditure, growing numbers of department stores have embarked on their own real estate strategies. In order to speed up its expansion in China, some department stores operators have sought to collaborate with property developers. For instance, Guangzhou Grandbuy ( ) has partnered with RF Properties ( ) for its entry in Chengdu; Grandbuy would be the anchor tenant in the RF Tianhui Mall ( Mall) in the city. Nonetheless, it is observed that some property developers have used department stores to promote their residential projects, without paying enough attention to the profitability of the stores. Some department stores operators have also taken their own initiatives to transform into shopping malls by incorporating different kinds of retail formats in their floor areas. On the other hand, some department stores operators such as Beijing Hualian Department Store ( benefit from the long-term land appreciation. ) in China have actively considered increasing the number of self-owned properties to control rental expenditure and hopefully 7. Department stores operator exploring the â€Å"click-and-mortar† model Online retailing has been one of the major bright spots in China’s retail sector in recent years. Attracted by the huge online traffic flow, some department stores operators have explored the opportunity online by developing their own shopping websites. For instance, Marui Department Store ( ) from Japan has recently announced the cooperation with Alipay, China’s online payment platform giant. Consumers purchasing on Marui’s Chinese website can now pay via Alipay. The Dashang Group, on the other hand, has committed itself to building a business website which boasts 12 product categories and 500 subclasses of goods. Nonetheless, the â€Å"click-and-mortar† model is yet mature in the department store sector in China. Browse rate is low for many department stores websites. Many operators have yet generated much revenue, let alone profit from the online platforms. For instance, online sales revenue accounted for only 5% of Shuangan Department Store ( Beijing Wangfujing Department Store (Group), since the launch of its online platform ( instance, some online platforms have displayed inconsistent information with the offline stores. ) of the ) in 2007. Besides, some consumers have also expressed dissatisfaction with the websites launched by department stores operators; for 8. Government encourages department store players to enhance service levels and improve operation environment The MOFCOM issued the Circular on the Classification and Grading the Retail Enterprises ( 2008 ) in 2008.