Inditex Case Study

â€Å" INDITEX GROUP – ARE ITS â€Å"FAST FASHION† RESULTS SPEEDING UP AGAIN AFTER RECENT SLOW DOWNS ? † This case study has been written exclusively for use on the course Strategic Financial Management FINA 1035 at Greenwich University Business School and its partner institutions. It is to be used exclusively for this purpose. No part may be copied , emailed or reproduced for any other purpose other than stated above. Much of the data and material included in the case study is taken from the annual reports and accounts of the Inditex Group, its public statements and from its website . nditex. com. All other sources are shown in the case study. Author : Scott Duncan Lecturer Greenwich University Business School July 2010 INDITEX GROUP – ARE ITS â€Å"FAST FASHION† RESULTS SPEEDING UP AGAIN AFTER RECENT SLOW DOWNS ? Intr oduction Inditex Group – the owner of the Zara fashion chain and the world’s largest clothing and apparel group in te rms of sales – reported encouraging results for its first quarter of 2010.The Financial Times reported in June 2010 1) : â€Å"Inditex lent its weight to hopes of a recovery in European demand as the continent’s biggest fashion chain delivered forecast-beating first-quarter net profits and confirmed it would be moving its fast-fashion offer online later this year. Europe’s biggest clothing chain reported a 14 per cent increase in net sales to â‚ ¬2. 66bn ($3. 2bn) in the three months to the end of April 2010, as net income rose 63 per cent to â‚ ¬301m in response to, in particular, demand for its sharp-shouldered jackets and draped harem trousers. Sales rose 13 per cent from the beginning of February to June.The uptick comes after Hennes & Mauritz in April raised hopes of recovery in the European retail sector when it also beat net profit expectations in its first-quarter results and reported signs of improvement in the market at the start of the second q uarter. Inditex has been upbeat on prospects for the current year, with Pablo Isla, chief executive, predicting that same-store sales growth should turn positive again after a negative 2008 and virtually flat 2009. Mr Isla, who sells a third of all his clothes in Spain, was even upbeat about his home market on Wednesday. [The] reality in Spain is better than the perception you may have. I personally have a strong confidence in the dynamism of the Spanish economy going forward. † The gross margin, meanwhile rose to 59. 9 per cent against 56. 9 per cent. â€Å"[It is] likely to lead to consensus upgrades,† wrote Andrew Hughes, analyst at UBS, in a note. The shares rose 5 per cent to â‚ ¬46. 11. â€Å"Despite concerns of slower sales growth into the second quarter and as the year progresses, the first quarter beat [expectations] and stronger gross margin trends should more than compensate,† Mr Hughes added.Analysts also welcomed the news that Zara, which still ma kes a third of all its sales in Spain, would start trading online at the beginning of September in its main European markets: France, Germany, Italy , Portugal, Spain and the UK. â€Å"Online should act as a downward protection for trading news in the second half,† wrote Bernstein in a note. During the period, Inditex opened 98 stores in 29 countries, taking its footprint to nearly 5,000 stores in 76 nations around the world. Last month, it opened its first Indian shop in Delhi†.Histor y of Inditex Gr oup 2) Industria de Diseno Textil (Inditex) makes disposable chic fashions that are here today and gone tomorrow. The Spanish designer-cum-retailer uses technology and an armada of designers to master cheap chic. Inditex sells on a global scale, with over 4700 shops in 76 countries under eight different retail brands each offering different customer propositions : Stor e Br and Zara Zara Kids Pull and Bear Massimo Dutti Pr imar y Offer ing Mar ket 3) and Tar get Women†™s and men’s clothes.Childrens’ clothes Young women and men’s casual and â€Å"laid back† clothes and accessories Men’s and women’s clothes for the more â€Å"sophisticated† shopper. Also sells some children’s clothes Young women’s and men’s clothes . Stores have â€Å"cutting edge† look and are meeting points for fashion, music and street art Latest trends in young women’s clothes and accessories Women’s underwear, lingerie and nightwear Items for home eg home textiles, bedclothes, bathroom and table linen, glassware, cutlery and children’s bedding Fashion accessories eg handbags , footwear, leather goods and costume jewelleryBershka Stradivarius Oysho Zara Home Uterque The firm's stores answer to popular trends by telling designers in Spain what customers are asking for locally. Inditex responds in about two weeks with new designs. Amancio Ortega Gaona, Spain's wealthiest businessma n, founded Zara in 1975 and later created Inditex as a holding company. He got his start in the clothing business at the age of 13, when he went to work for a local shirtmaker in A Coruna , Spain, delivering the shop's goods, which included lingerie and dressing gowns.Ortega worked his way up to become an assistant manager, then shop manager, by the early 1960s. These positions gave Ortega experience not only in dealing directly with customers but also in purchasing fabrics and other materials for the shop's line of apparel. Working out of his sister's home, Ortega began developing his own designs. One day in the early 1960s, he hit upon the formula that was to become central to the operations of Inditex: that of reproducing popular fashions using less expensive materials in order to sell highdemand clothing items at lower prices.Ortega left his job and set up in business with just 5,000 pesetas (the equivalent of $25). Legend has it that Ortega's first project was to remake a popul ar but expensive dressing gown. Ortega cut the pattern himself, then, with the help of his brother and sister, began producing the dressing gown at his sister's kitchen table. Ortega's first customer was his former employer at the shirtmaker's shop. Before long, Ortega began supplying the dressing gown, as well as a growing range of housecoats and lingerie, to other clothing shops in A Coruna.By 1963, Ortega had saved up enough to open his first factory. From manufacturing, Ortega soon turned to retail, launching an initial format for his housecoats and lingerie in the early 1970s. In 1975, however, Ortega, then 39 years old, hit upon the formula that was to bring him his biggest success. In that year, Ortega opened a new retail store called Zara, which featured low-priced lookalike products of popular, higher-end clothing fashions. The store proved a success, and the following year Ortega incorporated his business under the name Goasam and began opening more Zara stores in Spain.De spite the stores' growing popularity, Ortega himself remained decidedly behind the scenes, avoiding the spotlight and developing a reputation for himself as a recluse–no photographs of Ortega were made publicly available until 2001. By the early 1980s, Ortega had begun formulating a new type of design and distribution model. The clothing industry followed design and production processes that required long lead times, often up to six months, between the initial design of a garment and its delivery to retailers. This model effectively limited manufacturers and distributors to just two or three collections per year.Predicting consumer tastes ahead of time presented inherent difficulties, and producers and distributors faced the constant risk of becoming saddled with unsold inventory. Ortega sought a means of breaking the model by creating what he called â€Å"instant† or â€Å"fast fashions† that allowed him to quickly respond to shifts in consumer tastes and to ne wly emerging trends. Ortega's dream remained unfulfilled, however, until he met up with Jose Maria Castellano. A computer expert, Castellano had worked in Aegon Espana's information technology department before becoming chief financial officer for a Spanish subsidiary of ConAgra.Castellano joined Ortega in 1984 and set to work developing a distribution model that revolutionized the global clothing industry. Under Castellano's computerized system, the company reduced its design to distribution process to just 10 to 15 days. Rather than placing the design burden on a single designer, the company developed its own in-house team of designers–more than 200 by the turn of the 21st century – who began developing clothes based on popular fashions, while at the same time producing the company's own designs.In this way, the team was able to respond almost immediately to emerging consumer trends as well as to the demands of the company's own customers – for instance by add ing new colors or patterns to existing designs. State-of-the-art production and warehousing procedures, as well as the installation of computerized inventory systems linking stores to the company's growing number of factories, enabled the company to avoid taking on the risk and capital outlay of developing and maintaining a large back inventory. The leaner, more responsive company – which adopted the name of Industria de Diseno Textil S.A. , or Inditex, in 1985 – captured the attention of Spanish shoppers. By the end of the decade, the company had opened more than 80 Zara stores in Spain. The company's fast fashion model, which completely rotated its retail stock every two weeks, also encouraged customers to return often to its stores, with delivery day becoming known as â€Å"Z-day† in some markets. The knowledge that clothing items would not be available for very long also encouraged shoppers to make their purchases more quickly. The success of the Zara model in Spain led Inditex to the international market at the end of the 1980s.In 1988, the company opened its first foreign store in Oporto, Portugal. The following year, Inditex moved into the United States. Success in that market remained elusive, however, and at the beginning of the 2000s, the company had opened just six U. S. stores. A more receptive market for the Zara format existed in France, which Inditex entered in 1990. The company quickly began adding new stores in major city centers throughout the country. Through the 1990s, Inditex added a steady stream of new markets. The company entered Mexico in 1992, Greece in 1993, Belgium and Sweden in 1994, Malta in 1995, and Cyprus in 1996.In the late 1990s, Inditex stepped up the pace of its international expansion, adding Israel, Norway, Turkey, and Japan (the latter in a joint-venture with a local partner) in 1997, then, in 1998, moved into Argentina, the United Kingdom, and Venezuela. While the bulk of the group's stores remained company owned, in certain markets, such as the Middle East, starting in 1998, Inditex's expansion took place through franchise agreements with local distributors. By 2000, Inditex had added another dozen or so countries to its range of operations, including Germany, the Netherlands, and Eastern European markets including Poland.At the same time as Inditex pursued its geographic expansion, it also began expanding beyond its flagship Zara retail format. The company launched the Kiddy's Class children's wear format as a subgroup of the main Zara concept in the early 1990s. In 1991, the company added an entirely new retail format, Pull & Bear, which began providing â€Å"urban† fashions. By the beginning of the 2000s, the Pull & Bear chain had grown to 300 stores in nearly 20 countries; it also produced its own offshoot format, Often, targeting the 20- to 45-year-old men's segment, in 2003.Inditex went upmarket in 1991 when it bought 65 percent of the Massimo Dutti group. Indite x took full control of Massimo Dutti in 1995 and began building it into a chain of nearly 300 stores in 23 countries. While Massimo Dutti appealed to a more sophisticated men's and women's fashions market, the company targeted the young female market in 1998 with the creation of a new format, Bershka. That retail chain quickly evolved into a network of more than 200 stores operating in 11 countries. Inditex continued adding new formats at the turn of the 21st century.In 1999, the company acquired Stradivarius, a youth fashion chain present in nine countries. In 2001, Inditex added its lingerie format, Oysho. In 2003, Inditex moved beyond the garment trade for the first time, launching its own home furnishings concept, Zara's Home and in 2008, launched its fashion accessories chain – Uterque. Meanwhile, Inditex had begun a corporate evolution as well. As Ortega approached retirement, and no members of his immediate family appeared likely to succeed him in the business, the com pany looked to the public market to ensure its future.In 2001, Inditex listed its stock on the Bolsa de Madrid, one of the most successful initial public offerings of the year. Ortega's sale of more than 20 percent of his holding in Inditex made him Spain's wealthiest man. In 2010, he still controls 59% of Inditex’s shares (see Annex 1) and was ranked by Forbes Magazine as the 9th richest man in the world in their annual list of billionaires – up 1 place from his ranking in 2009 – with a net worth estimated at $25 billion. He is now 74 years old. Inditex moved to a new corporate headquarters in Arteixo, outside of A Coruna in 2000.In 2002, the company began construction on a state-of-the-art logistics center in Zaragoza. At the same time, Inditex continued adding to its array of international markets, opening stores in Luxembourg, Iceland, Ireland, Jordan, and Puerto Rico in 2001; Switzerland, Finland, El Salvador, and Singapore in 2002; and Hong Kong in 2003. I n the 6 years from 2004, Inditex has more than doubled its number of stores from just over 2000 in mid 2004 to over 4600 by 31 January 2010. Inditex’s financial year end is 31 January.In line with Inditex’s annual reports, this case study refers to its year ending 31 January 2010 as â€Å"Financial year 2009† or â€Å"2009†. Similar abbreviations are made for earlier years . Inditex Gr oup Stor e Number s and Locations in 2010 At financial year end for Inditex for 2009 – 31 January 2010 – Inditex had 4607 stores as follows: The analysis of Inditex’ s 2009 sales for each of its 8 store concepts was as follows : Within the total, 3983 were company managed stores and 624 were franchised – see Annex 2 for details. In 2009, 92% of sales were in company owned stores.Geographically, 1900 of the stores were in Spain, 1856 stores were in other European countries, 485 stores were in Asia and Africa and 366 stores were in North and South America – see Annex 3 for details. The Group opened 343 stores in 2009 and increased its retail network in all of Europe's major markets with noteworthy growth in Russia (37 new stores) and Poland (34). In Asia, Inditex continued its strategic push into the region’s top three markets, which posted significant growth, with 41 new stores in China, 12 in South Korea and 10 in Japan.Retail sales area increased by 8% in 2009 – see Annex 4 for details by store concept. During its first quarter 2010 from 1 February to 30 April , Inditex opened a further 98 stores as follows : This took the total number of stores to 4705 at 30 April 2010. The percentage of Inditex’s sales achieved in each geographical region for the last 3 financial years was as follows : 2009 31. 8 % 45. 7 10. 2 12. 2 2008 33. 9 % 44. 8 10. 7 10. 5 2007 37. 5 % 42. 4 10. 8 9. 4 Spain Europe excl.Spain Americas Asia The Mar ket The apparel retail industry consists of the sale of all menswear, wom enswear and childrenswear. The sector also includes footwear, sportswear and accessories. The menswear sector includes all garments made for men and boys. It includes both outer and under garments. The womenswear sector consists of the retail sale of all women's and girls' garments including dresses, suits and coats, jackets, tops, shirts, skirts, blouses, sweatshirts, sweaters and underwear .Both womenswear and menswear can be segmented by: – purpose or use of the clothing item eg casual wear, essentials, activewear, formal wear , special occasion formal wear and outerwear – age group – lifestyle eg â€Å"sporty†, â€Å"conservative † , â€Å"fashion conscious† , â€Å"hippie†, â€Å"urban†, â€Å"rural† – ethnic group styles eg Afro-Caribbean , African American , Asian or middle eastern or music group styles eg â€Å"rapper†, â€Å"reggie†, â€Å"punk†, â€Å"rocker† – price eg ranges from low price to expensive designer label to exclusive â€Å"haute couture† of Paris, Milan, London, Tokyo and New York or by a combination of these factors.The childrenswear sector is defined as sales of garments for children between the ages of 0-2 years. The socio-political environments coupled with the need for individual and group identity makes retail clothing essential to consumers. Style, however, is an abstract concept that defines individuals, is often an extension of personality and therefore highly individualized. Fashion, by its very nature, is unpredictable. The products are determined by trends in society, designers and creative industries and are subject to sharp and unpredictable changes.Where customer brand loyalty exists, it is more likely to be to the designer than the retailer, although this is usually towards the top end of the industry. Counterfeiting of brands is a problem in parts of the clothing and accessories industry. Mar ket in Eur ope T he European apparel retail industry grew by 2. 1% in 2008 to reach a value of â‚ ¬287. 7billion ($420. 9 billion). Its recent history per Datamonitor 4) was as follows : The consumer market for clothing and footwear in the European Union (or EU) has undergone important changes in recent years 5).Arguably, the greatest impact has come from market forces under the auspices of the World Trade Organisation (WTO) as a ten-year transitional Agreement on Textiles and Clothing (ATC) came to an end with the abolition of textile and clothing import quotas on 31 December 2004. With the removal of quotas, there was an initial increase in relatively cheap imports of clothing and footwear into the EU, mainly originating from China. For example, in the first 40 days after the end of the ATC, imports of trousers from China were 3. 3 times higher than during the whole of 2004 and imports of pullovers 4. times higher. A bilateral agreement between the EU and China (the so-called Shanghai Agreement ) on a further, transitional period during which the growth of imports of clothing could be managed through until the end of 2007 was agreed in June 2005. In addition to trade developments, consumer groups and other bodies are increasingly holding manufacturers and retailers accountable for ensuring that social standards and working conditions of their suppliers meet international labour standards. There are examples of retailers responding to this pressure.For example, in October 2007 the Inditex group signed an International Framework Agreement on corporate social responsibility with the International Textile, Garment and Leather Workers’ Federation (ITGLWF), which expresses the company’s commitment to respect fundamental rights at work throughout their entire production chain. Fair trade garment initiatives have also been taken, generally to ensure that a fair price is paid to producers who meet minimum social, and in some cases environmental, standards and that tra ding relationships between producers and buyers are more equal, rather than guaranteeing core labour standards.There has also been a response within the EU to concerns about environmental and safety issues. These concerns have predominantly focused on the use of chemicals (such as dyes, pigments or bleaches in the clothing manufacturing process) and on waste water discharge. On 1 June 2007, new legislation on chemicals and their safe use came into force across the EU. REACH (Registration, Evaluation and Authorisation of Chemicals) aims to improve the protection of human health and the environment through the better and earlier identification of the intrinsic properties of chemical substances.Within the EU 5) : – household expenditure on clothing and footwear accounted for 5. 7% of total household consumption expenditure in 2005 – The vast majority of this, almost three quarters, was spent on clothing garments – Spending on clothing and footwear tended to rise as a function of income, with the upper income 20 percent in the 27 countries of the EU devoting 6. 1% of their total household budget to these products, while those in the lowest income 20 percent spent 5 % – the share of total expenditure spent on clothing and footwear was generally much higher among households with dependent children, rising to 7. % of the household budget for those households comprising two adults with dependent children, compared with 4. 6 % of the budget for single persons. – Annual expenditure on clothing and footwear averaged â‚ ¬800 per person in the 27 countries of the EU in 2006, with national averages ranging from â‚ ¬100 per person in Romania to â‚ ¬1200 per person in Italy . See Annex 5 for details of 2000 and 2006 expenditure per person. – Over the period from 2000 to 2006 , the volume of clothing and footwear bought rose in most countries of the EU particularly in the United Kingdom and Poland where volumes increased by ov er 40%.In contrast , Germany and Italy reported declines in the volume of clothing and footwear bought (the only member states of the EU to do so). Details are shown at Annex 6 for the 6 countries which account for over 70% of the EU’s population – Germany, France, Italy ,UK, Spain and Poland . – Over the same 2000- 2006 period, whilst consumer prices for clothing and footwear declined by 0. 1% for the EU overall, there were substantial differences in the â€Å"Top 6† countries listed above.The UK recorded price decreases of over 20% , Poland of over 15% and Germany of over 2%, whilst price increases were recorded in Italy (over10%) , Spain ( over 13%) and France ( 1%) – see Annex 6. – Between 2007 and 2008 , the volume of clothing and footware bought in the EU overall declined by 0. 5% . France , Italy and Spain recorded declines of over 2% whilst Germany , UK and Poland recorded increases – see Annex 6. – In 2008 , UK househo lds spent less on average per week on clothing and footwear than at any time since 2001-02 6) – Early indications are that volumes also fell in 2009 versus 2008 in Europe.France reported a year on year decline of 3. 6% . a) Mar ket Segmentation by Gender and Age Womenswear sales dominated the European apparel retail industry in 2008 4) generating 54. 4% of the industry's overall revenues – â‚ ¬157 billion ($ 229 billion) . Menswear accounted for 30. 9 % – â‚ ¬89 billion ( $130 billion)- and Infantswear the remaining 14. 7%. Details of womenswear market growth and segmentation in Europe are shown at Annex 7 and of the menswear market in Europe at Annex 8. b) Analysis by Major Countr y Italy accounts for 19% of the European apparel retail industry's value , Germany 18. % and the UK 14. 4% . Shares for other countries are shown below: c) Mar ket Value For ecast The European apparel retail industry was forecast by Euromonitor to grow by only 1. 3 % in 2009 ver sus 2008 – including price changes. In 2013, the European apparel retail industry is forecast to have a value of â‚ ¬320 billion ($467. 6 billion), an increase of 11. 1% from 2008. Details are shown at Annex 9. d) Retail Sour ce of Pur chases Consumers in Europe are able to purchase clothing and footwear from a wide variety and large number of retailers, specialised and non- specialised.Specialist clothing and footwear retailers comprise chains (such as H, C or Zara) and independent clothes stores. Nonspecialist retailers include department stores (that have clothing and footwear departments), hypermarkets and supermarkets, as well as mail- order retailers. According to Datamonitor, 69% of purchases of womenswear and 55% of purchases of menswear in 2008 was in chains or independent specialist clothing, footwear and accessories shops . Purchases at hypermarkets, supermarkets and discounters accounted for 19. 5% of womenswear sales and 12. 1% of menswear with department stor es taking a 6. 9% of womenswear and 24. % of menswear in 2008 ( see Annexes 7 and 8). There are generally higher levels of retail concentration in northern Europe5). The overwhelming majority of clothing and footwear sales in Germany, France and particularly the United Kingdom are made in non-specialist stores. The popularity of independent clothing and footwear retailers is considerably higher in southern Europe. For example, in Italy and Spain, the highest proportion of clothing sales was among independent retailers (65% and 53 % respectively in 2004), and this tendency was even stronger in terms of footwear (76 % and 88 % respectively in 2003).Despite these differences, clothing markets in Europe are generally becoming more concentrated, as clothing chains, department stores and supermarkets/ hypermarkets selling clothing and footwear open additional outlets in many of the countries that have joined the EU since 2004. Indeed, the structural make-up of clothing retailers in the EU has changed considerably over the past 15 years, according to a 2007 report on ‘Business relations in the EU clothing chain’ carried out for and funded by the European Commission 5).The market share of independent retailers in the five largest EU markets (Italy, Spain, France, Germany and the United Kingdom, that together account for almost three quarters of the EU’s clothing market) declined from 46. 8 % of total clothing sales to 27. 1 % by 2007. In contrast, there was steady growth in the share of speciality chains (from 18. 7 % to 25. 1 %), hypermarkets and supermarkets (5. 1 % to 6. 8 %) and emerging formats such as variety stores and large sports chains (whose share of clothing sales collectively rose from 14. 0 % to 27. 2 %).A recent survey on consumer satisfaction 5) provides further information on the shopping habits of European consumers for clothing and footwear. More than half (55. 7%) of those surveyed in the EU in 2008 replied that they themselves or a member of their household had bought clothing and footwear in a retail chain store, a somewhat higher proportion than for small, independent clothing retailers (50. 2 %). Department stores (30. 7%), supermarkets/ hypermarkets (23. 0 %) and street markets (16. 3 %) were also popular places for buying clothes and footwear – see Annex 10.Furthermore, compared with a number of other products, a relatively high proportion of European consumers used mail or phone order (8. 0%) or the Internet (6. 1 %) to purchase clothing and footwear. When purchasing clothing and/or footwear in 2008, 10. 9 % of EU consumers reported facing at least one problem 5). The most common complaint was product quality (69% of unsatisfied customers) followed by problems returning unwanted goods (9. 2% of respondents) then quality of service provided (8. 8% of respondents). Details are shown at Annex 11.This data also provides an insight into consumers’ priorities when purchasing clothing and foo twear . Mar ket in USA Americans spent almost $326 billion on clothing and footwear in 2009 equivalent to only 2. 98% of disposable personal income – the lowest ever in U. S. history. Spending on clothing as a share of income has fallen in 20 out of the last 22 years, from 4. 78% in 1988 to less than 3% in 2009 – see Annex 12 for details . Quality, variety and availability have all improved over the years . The same applies to footwear.Since 1992, prices in general have risen by 57%, while prices for clothing have fallen by 8. 5% – see annex 13. With significantly falling prices in real terms, clothing has become more and more affordable almost every year, requiring smaller shares of US household income. This has freed up disposable income that can now be spent on other consumer goods (eg electronics, travel, entertainment, etc. ). Mar ket in Asia Pacific 7) The Asia-Pacific apparel retail market has been growing at a robust pace for the last few years. The Asia -Pacific apparel retail industry generated total revenues of $224. million in 2008, representing a compound annual growth rate (CAGR) of 4. 1% for the period spanning 2004–08. The performance of the industry is forecast to improve further and to reach a value of $259. 6 million by the end of 2013. Key Retail Competitor s Inditex’s key competitors in Europe include : Hennes and Mauritz ( H ) Levi Strauss ( via franchised and company managed stores and third party retailers) Adidas sportswear ( including Reebok ). In the UK, key competitors include Primark ( a division of Associated British Food) , Next, and Marks and Spencer . ASOS. com is a major retailer of men’s nd women’s clothes and accessories via the internet and is now the UK’s largest independent on-line fashion retailer. Worldwide, key competitors also include Gap and â€Å"Fast Retailing† (Japanese parent company of Uniqlo and Asia’s biggest clothing retailer). In terms of s ales value, Inditex overtook Gap in 2009 and is now the world’s largest clothing and apparel retailer. Summary financial profiles of Hennes and Mauritz, Levi Strauss , Primark and Gap are shown at Annexes 14 ,15 and 16. A recent article about the current prospects for â€Å"Fast Retailing† is shown at Annex 17. Manufactur ing Sour ces – Gener alKey suppliers to the retail clothing industry are clothing manufacturers and wholesalers, with retailers able to source from both. Recently, significant increases in power cost, dyes & chemical cost and rapidly rising cotton cost have strengthened supplier power in an industry that relies on the availability of raw material. The wholesale and clothing manufacturing sectors in most countries, however, are fairly fragmented. As international trade liberalizes, clothing manufacturers in the developed regions such as Europe and America face substantial competition from manufacturers in low-wage regions such as Asia eg from Ch ina. Apparel manufacturing is almost always labor intensive, due to the difficulty of automating processes such as the sewing of garments. ). Key issue for clothing retailers in selecting its suppliers include : – price and quality – volumes – the ability of its suppliers to cope with sudden changes in demand in an industry susceptible to changes in fashion – social, political and environmental pressures to ensure that suppliers in developing countries meet minimum international ethical standards for working, social and environmental conditions.Many major retailers such as Inditex, Gap and Primark now undertake regular audits of their suppliers to ensure that such standards are met and maintained and report their findings as part of their corporate social responsibility in their annual reports. Manufactur ing Pr ocesses The key processes used in garment manufacture are as follows: Cloth manufacturing ( eg cotton or wool) – spinning – weaving – dyeing – pattern printing – finishing. Certain aspects are labour intensive eg sewing . Garment manufacturing from the finished cloth: – cutting – sewing and assembly – buttons and accessories attachment.There have been many technological developments in materials used over recent years including non-iron shirts, washable silk and man- made fibres. Key Aspects of the Inditex Business Model 3) A) Over view The Inditex business model has a high degree of vertical integration compared to other models developed by its international competitors. It covers all phases of the fashion process: design, manufacture, logistics and distribution to its own managed stores and has a strong customer focus in all its business areas.The key element in the organisation is the store, a carefully designed space conceived to make customers comfortable as they discover fashion concepts. It is also where Inditex obtains the information required to adapt the offer to meet customer demands. The key to this model is the ability to adapt the offer to customer desires in the shortest time possible. For Inditex, time is the main factor to be considered, above and beyond production costs.Vertical integration enables Inditex to shorten turnaround times and achieve greater flexibility, reducing stock to a minimum and diminishing fashion risk to the greatest possible extent. B) Design The success of Inditex’s collections lies in the ability to recognise and assimilate the continuous changes in fashion, constantly designing new models that respond to customer desires. Inditex uses its flexible business model to adapt to changes occurring during a season, reacting to them by bringing new products to the stores in the shortest possible time.The models for each season -over 30,000 in 2009 – are developed in their entirety by the creative teams of the different chains. Over 300 designers -200 for Zara alone- take their main inspiration from both the prevailing trends in the fashion market and the customers themselves, through information received from the stores. C) Manufacturing A significant proportion of production takes place in the Group’s own factories, which mainly manufacture the most fashionable garments.The Group takes direct control of fabric supply, marking and cutting and the final finishing of garments, while subcontracting the garment- making stage to specialist firms located predominantly in the North-West of the Iberian peninsula. The Group’s external suppliers, a high percentage of which are European, generally receive the fabric and other elements necessary for making the clothing from Inditex. The number of garments produced and available for sale at Inditex’s stores has grown as follows from financial years 2005 to 2009 :On 31 January 2010, Inditex had a network of 1,237 suppliers with which it maintains stable relationships and which are governed by its External Manufacturers and Workshops Code of Conduct. This code describes the minimum ethical, working practice, quality, safety and environmental standards expected of its suppliers and must be accepted to maintain commercial relations with the Group. Further details of Inditex network of suppliers is shown at Annex 18. Inditex audits its network of suppliers regularly and ceased using 145 suppliers in 2009 and 175 in 2008 because of their non-compliance.In 2008, the manufacturing sources in terms of volumes of garments produced for Inditex were as follows : 46% 11% 36% 5% 2% European Union Non –EU Europe Asia Africa Americas D) Logistics All production, regardless of its origin, is received at the logistical centres for each chain, from where it is distributed simultaneously to all the stores worldwide. The distribution takes place twice a week and each delivery always includes new models, so that the stores are constantly refreshing their merchandise and offer.The logistics system, based on soft ware designed by the company’s own teams, means that the time between receiving an order at the distribution centre to the delivery of the goods in the store is on average 24 hours for European stores and a maximum of 48 hours for American or Asian stores. Inditex logistics centres are located in Arteixo (A Coruna), Naron (A Coruna), Zaragoza, Meco (Madrid), Tordera, Palafolls and Sallent de Llobregat (Barcelona), Leon and Elche (Alicante).Together, their surface area exceeds one million square metres. Further details are shown at Annex 19. In 2008, 700 million garments were distributed by 5000 employees at Inditex logistics centres. E) Stor es In Inditex, the point of sale is both the end and start of its value adding processes, as the stores act as market information gathering terminals, providing feedback to the design teams for each of the 8 formats and reporting the trends demanded by customers. As retailers, the stores constitute the chains’ main advertising medi um.Their chief characteristics include: – Preferred locations in the world’s main shopping streets – Meticulously designed window displays – Unique internal and external store design – Tailored coordination and display of the product – Excellent customer service. The main development strategy for the Inditex sales formats is the opening of stores managed by companies in which Inditex is the sole or majority shareholder. In 2009, 86% of stores were own managed. In smaller or culturally different markets, the Group has extended the store network through franchise agreements with leading local retail companies.The main characteristic of the Inditex franchise model is the total integration of franchised stores with own managed stores in terms of product, human resources, training, window- dressing, interior design and logistical optimisation. This ensures uniformity in store management criteria and a global image in the eyes of customer around t he world. F) Other Aspects of Mar keting 1) Internet Each of Inditex’s 8 store formats has its own website and these are constantly updated with the latest fashion offerings. In 2009 , the store websites were launched and included in social networking websites. 2) Affinity cardThe Intitex Affinity Card is the Group’s payment and loyalty card valid for its holders in any Group establishment: Zara, Massimo Dutti, Bershka, Pull and Bear, Stradivarius, Oysho, Zara Home and Uterque. Available in Spain for more than 15 years, the Affinity Card is also held by customers in Mexico and Greece where it was launched in 2007, and in Portugal where it has been available since 2008. Currently there are more than a million Affinity Card holders in these four countries. All of them have a card that offers financial advantages and methods of payment based on the holders’ needs. Inditex Financial Per for manceA summary of Inditex’s financial performance over the last 6 yea rs is as follows : Details of Inditex’s : – P for 2006 to 2009 are shown at Annexes 20-22 – sales and contributions by store format are shown at Annex 23 – balance sheets for 2006 to 2009 at Annexes 24 and 25 – 2006 to 2009 cash flow statements at Annexes 26 and 27. Details of Inditex’s 1st Quarter financial results for 2010 are shown at Annexes 28 and 29. Boar d of Dir ector s Shareholders approved the 2009 report at Inditex’s July 2010 Annual General Meeting including the proposed dividend of â‚ ¬748 million – up 13% on the previous year.Inditex’s share price closed at â‚ ¬51. 20 on 29 July 2010 – up 38% on its price of â‚ ¬38 a year ago – see Annex 30. The board of Inditex consisted of 9 Directors as at 31 January 2010 – 3 Executive Directors and 6 Non Executive Directors. The Executive Directors are : Amancio Ortega Gaona ( Chairman) Pablo Isla Alvarez de Tajera ( CEO and 1st Deputy Chai rman. Appointed to board in 2005) – Antonio Abril Abadin ( Board Secretary and General Counsel). Their total remuneration was â‚ ¬4. 35 million in the year ended 31 January 2010. The senior management of Inditex who are not executive directors is shown at Annex 32.Their total remuneration was â‚ ¬10. 9 million in the year to 31 January 2010. Details of the board including the 6 non executive directors are shown at Annex 31. – Employees Inditex is a multi-cultural and multi-racial company with 92,301 employees at 31 January 2010 representing more than 140 nationalities. On-going training plays an essential role, particularly that of store staff. This training, which also includes basics in customer service, focuses on specialist knowledge of fashion trends and the ability to seize and interpret the information that store staff receive from customers every day.The number of employees has grown as follows : The largest percentage are employed in the stores as follow s : Inditex directly owns 13 textile manufacturing companies in Spain and 12 logistic companies including one for each of its 8 store formats. Inditex also has its own in-house building contractor and several companies to manage its store and other properties. These companies are wholly owned by Inditex and their financial results and employee numbers are fully consolidated in those of the Inditex group. In 2009 : – 81. 4% of Inditex’s employees were female – 18. % were male – 40% of employees were full time – 60% were part time. Inditex’s Str ategy At his presentation at the July 2010 AGM, Inditex’s Deputy Chairman and CEO, Pablo Isla underscored confidence in the Inditex business model and its clear strategic focus on international expansion, currently targeted at European and Asian markets. He confirmed that Inditex has earmarked about â‚ ¬570 million in capital expenditure to open between 365 and 425 new stores in its financial year 2010 of which approximately 95% will be in Inditex’s international markets outside Spain.Some 70% of the appropriate contracts have been signed although in some cases openings may be delayed until 2011. The planned increases by store format are as follows: â€Å"Our priority is to focus growth in Europe and Asia,† said Isla. â€Å"We see significant opportunities in Eastern Europe and the Russian Federation, and there is a great potential to expand profitably in Europe for many years, as our market share is below 1% in most countries. † He said the main areas of growth for Asia are China, Japan and South Korea. â€Å"We see huge long-term potential for Inditex in Asia markets,† he said.Over the next three years, the company expects to see space growth of between 8% and 10%. Isla was asked earlier by analysts why they aren't paying out an even bigger portion of net income in dividends given the group's huge cash balance. â€Å"Our main priority is t o invest in the future growth of the business. We always want a high level of flexibility – we always wanted more steady growth in the dividend, rather than big jumps,† he said. He also confirmed that Zara will start online sales in France, Germany, Italy, Portugal, Spain and the UK on 2 September, 2010.Key Issue to be Consider ed Is Inditex’s current strategy likely to succeed . If so why ? Or do you conclude that the strategy needs to be adjusted in light of your analysis of this case study ? If so, what changes do you propose and why ? References : 1) 2) 3) 4) FT article 9 June 2010 Answers. com 2010 Inditex Press dossier 2009 Datamonitor â€Å"Apparel retail in Europe† August 2009 . The industry value is calculated at retail selling price (RSP), and includes all taxes and levies. The data for Europe includes Russia, Poland, Czech Republic, Hungary, Romani and Ukraine.All currency conversions in the Datamonitor report and forecasts have been calculated at constant 2008 annual average exchange rates. 5) European Commission report â€Å" Consumers in Europe† 2009 published by Eurostat 6) UK Office for National Statistics January 2010 7) Datamonitor report â€Å"Apparel retail in Asia Pacific† August 2009 Shar eholdings of Dir ector s in Inditex as at 31 J anuar y 2010 Annex 1 Annex 2 Annex 3 Page 1 Annex 3 Page 2 Annex 4 Sales Ar ea by Stor e Concept – Squar e Metr es Totals 2,180,889 1,914,493 EU Expenditur e on Clothes and Footwear – â‚ ¬ per head 000 Countr y EU (27 countries) 700 Belgium 700 Bulgaria N/A Czech Republic 200 Denmark 800 Germany 800 Estonia 200 Ireland 900 Greece 600 Spain 600 France 700 Italy 1100 Cyprus 800 Latvia 200 Lithuania 100 Luxembourg1100 Hungary 100 Malta 500 Netherlands 800 Austria 1100 Poland 200 Portugal 600 Romania N/A Slovenia 400 Slovakia 100 Finland 600 Sweden 700 United Kingdom 1000 Memo : Turkey 300 Iceland 1100 Norway 900 Switzerland 900 2006 800 800 N/A 300 N/A 8 00 400 900 800 700 700 1200 900 N/A 400 1100 200 400 800 1100 200 N/A 100 500 200 800 N/A 1100 300 1100 N/A 900Annex 5 Source : â€Å"Consumers in Europe† 2009 edition published by Eurostat , the statistical office of the European Commission Pr ice and Volume Changes within Household Expenditur e on Clothing and Footwear – EU Aver age and Selected Countr ies (a) Annex 6 Germany France Italy UK Spain Poland EU Average (b) Cumulative Percentage Price Increase/(Decrease) 2000-6 (2. 6) % 0. 1 10. 4 (23. 5) 13. 3 (15. 7) 0. 1 % Cumulative Percentage Volume Increase/(Decrease) 2000-6 (1. 7) % 5. 8 (8. 3) 44. 5 2. 7 44. 3. 5 % Percentage Volume Increase/Decrease) 2006 -7 2007 -8 3. 1% 1. 7 0. 1 2. 7 4. 5 4. 5 2. 0% 1. 4 (2. 1) (2. 6) 4. 4 (2. 5) 11. 2 (0. 5)% (a) = The 6 countries account for over 70% of total EU population (b)= over the 27 member countries Eur opean Mar ket for Womenswear Annex 7 Annex 8 Eur opean Mar ket for Menswear Eur opean Appar el Mar ket Value For eca sts Annex 9 Page 1 Eur opean Appar el Mar ket Value For ecasts Annex 9 Page 2 EU Clothing and Footwear Sour ces of Pur chase 2008 Annex 10Note that these figures relate to trips made by consumers purchasing clothing and footwear, and they do not reflect the average expenditure or value of sales made in each retail format Customer Complaints – Pr oblems faced by Consumer s when Pur chasing Clothing or Footwear in the EU in 2008 Per centage shar e of those exper iencing pr oblems (multiple answer s allowed) Annex 11 Source: ‘Retail satisfaction survey’, IPSOS for the European Commission, August/September 2008 USA Clothing and Footwear Mar ket Annex 12 Annex 13USA Mar ket – Consumer Pr ice Index Changes Annex 14 Summar y Financial Pr ofiles of Selected Appar el Retailer s H – 1738 stores in 33 countries as at November 2008 Levi Strauss Gap Latest results for Gap for its financial year ended 31 January 2010 (â€Å"Fiscal Year 2009†) are shown in next annex . At average 2009 calendar year exchange rates of US $ 1. 3948 = â‚ ¬1 , Gap’s net sales totalled â‚ ¬ 10,179 million in 2009 – some â‚ ¬900 million lower than Inditex’s sales of â‚ ¬11,083 million for the same period ended 31 January 2010 .January 2010 average exchange rate was US$ 1. 4272 = â‚ ¬1 Exchange rate source : Banque de France Annex 15 Source : The Gap Inc. annual report and accounts Annex 16 Number of stores : 191 Number of stores opened in year : 12 – 5 in Spain -4 in the UK – 1 in each of Netherlands, Germany and Portugal ( first Primark stores in each country) Planned store openings in next year : 11 ( including first store in Belgium) Selling space : 5. 9 million square feet – an increase of 9% versus prior year Pr imar k – Key Data for Year Ended 12 September 2009Revenue for year : ? 2314 million ( ? 1933 m in prior year) Year on year sales growth : 20 % – partly increase in selling sp ace – partly like- for- like sales growth of 7% Operating profit for year : ? 252 million ( ? 233 million in prior year) Source : ABF annual report and accounts Annex 17 Cur rent Prospects for Uniqlo’s parent â€Å"Fast Retailing† Tadashi Yanai – the president of Fast Retailing, Japan’s wealthiest man (net worth $9. 2bn), has seen the value of his 27 per cent holding in the Uniqlo parent fall by more than a quarter this year.That’s a slump three times worse than the benchmark, making Asia’s biggest clothier the worst-performing retailer across the region. Having watched new lines like polo shirts and jeans fail to fly off the shelves, even after steep price cuts, Yanai-san is now betting big on camisoles, leggings and Silky Dry, a summer version of its blockbuster heat-trapping underwear. This is no ordinary lean spell sales growth slowed the most in four years in the three months to May, causing Fast Retailing to trim its net income estimate for the year ending August by 5 per cent.Nimbler rivals such as United Arrows (up 22 per cent since the beginning of the year) and Honeys (+143 per cent), both between 30-40 times smaller by market capitalisation, will want to ensure Uniqlo’s discounting continues. For all its determination to build overseas – this year it added stores in China and Russia to its UK, US, France and South Korean portfolios – the company is on course to get 95 per cent of this year’s operating income from anaemic Japan. It remains a hard stock to divest, though.Not only are Fast Retailing’s returns on invested capital consistently about 50 per cent better than peers’, it is that rare thing in Japan: a stock worth a fifth more today than it was ten years ago (over which period the Nikkei has shed more than two-fifths). BACKGROUND NEWS Japan’s Fast Retailing on Thursday cut its annual outlook for the first time in three years after the breakneck p ace of growth at its Uniqlo budget fashion chain came screeching to a halt in recent months, reports Reuters.Fast Retailing enjoyed strong sales last year even as other retailers were hit by weak consumer spending, attracting thrifty shoppers with hit products like heat-trapping underwear and savvy marketing. But Uniqlo’s same-store sales have been on the decline in the second half of the current financial year to August 31st, which some analysts see as a sign that the recent round of robust growth has run its course. Source – FT article Published: July 8 2010 Annex 18 Details of Inditex Suppliers Key supplier countries include Bangladesh, India, Turkey, Morocco , Spain, Portugal and Cambodia (Source : 2008 annual report)Annex 19 Inditex Logistics Centr es in 2009 Inditex Pr ofit and Loss Account for Financial Year s 2009 and 2008 Annex 20 Notes refer to details in Inditex annual report for 2009 – see Inditex. com/investor relations/annual reports/2009 Operating Expenses consisted of 2009 – â‚ ¬m 2008 – â‚ ¬m 2007-â‚ ¬m 2006- â‚ ¬m Staff costs 1,791 1,703 1,473 1,251 Store property 1,134 1,028 855 718 rental costs Other Store 1,027 976 898 831 operating costs, logistics and general overhead costs a) 3,953 3,708 3,226 2,800 a) = Including transportation of merchandise from logistic centres to stores Annex 21Details of â€Å"Financial Results† shown in Inditex P& L â€Å"Financial Results† shown in the consolidated P& L consist of ( â‚ ¬000) : And for 2007 and 2006 : Inditex Pr ofit and Loss Account for Financial Year s 2007 and 2006 ( in â‚ ¬000s) Annex 22 Net Sales Cost of merchandise Gross Profit Operating Expenses Other net operating expenses & income Oper ating Pr ofit (EBITDA) Amortization and Depreciation Oper ating Pr ofit (EBIT) Financial Results Equity Accounting Losses Income Befor e Taxes Income Tax Net Income Net income attributable to minority interests Net Income Attr ibutable to t he Par entEarnings per share (â‚ ¬cents) Notes refer to details in Inditex annual report for 2007 – see Inditex. com/investor relations/annual reports/2007. Details of Operating Expenses and â€Å"Financial Results† are shown in earlier annexes Sales and Pr ofit Contr ibutions by Stor e For mat 2007- 2009 Store Format No. of Stores at 31 Jan 2010 1608 626 497 651 515 392 261 57 4607 Net Sales in Financial Year 2009 â‚ ¬m 7077 771 790 1177 702 280 243 44 11084 Annex 23 Zara (incl Zara Kids) Pull and Bear Massimo Dutti Bershka Stradivarius Oysho Zara Home Uterque TotalsOperating Profit EBIT in 2009 â‚ ¬m 1105 101 117 196 149 38 25 (2) 1729 Store Format No. of Stores at 31 Jan 2009 1520 583 470 591 456 374 239 31 4264 No. of Stores at 31 Jan 2008 1361 519 426 510 381 290 204 0 3691 Zara (incl Zara Kids) Pull and Bear Massimo Dutti Bershka Stradivarius Oysho Zara Home Uterque Totals Store Format Net Sales in Financial Year 2008 â‚ ¬m 6824 720 722 1026 633 242 2 22 17 10407 Net Sales in Financial Year 2007 â‚ ¬m 6264 614 696 925 521 213 201 0 9434 Operating Profit EBIT in 2008 â‚ ¬m 1067 119 108 155 144 21 14 0 1628 Operating Profit EBIT in 2007 â‚ ¬m 1091 99 106 154 119 40 16 0 1625Zara (incl Zara Kids) Pull and Bear Massimo Dutti Bershka Stradivarius Oysho Zara Home Uterque Totals Inditex Balance Sheets for Financial Year s 2009 and 2008 Annex 24 Notes refer to details in Inditex annual report for 2009. The share capital of Inditex amounts to â‚ ¬93. 5 million divided into 623. 3 million shares each with a par value of 15 Eurocents – fully subscribed and paid – at 31 January 2010 . This has remained unchanged since Inditex’s financial year 2006 Inditex Balance Sheets for Financial Year s 2007 and 2006Annex 25 Notes refer to details in Inditex annual report for 2007 Inditex Cash Flow Statements for 2009 and 2008 Annex 26 Annex 27 Inditex Cash Flow Statements for 2007 and 2006 Inditex Gr oup P& L for 1st Qua r ter s 2010 and 2009 Annex 28 Annex 29 Inditex Gr oup Balance Sheet for 1st Quar ter s Ending 30 Apr il 2010 and 2009 Inditex Shar e Pr ice fr om August 2009 to J uly 2010 Annex 30 Source : Inditex. com/ Investor Relations Annex 31 Boar d of Dir ector s of Inditex as at 31 J anuar y 2010The 6 Non Executive Directors are : – Flora Perez Marcote ( representing Gartler S. L. , the holding company controlled by Mr Ortega Gaona and owning just over 50% of Inditex’s shares) – Carlos Espinosa de los Monteros Bernaldo de Quiros ( board member from 1997) – Francisco Luzon Lopez ( board member from 1997) – Irene Ruth Miller ( board member from 2001) – Juan Manuel Urgoiti Lopex de Ocana ( board member from 1993) – Jose Luis Varquez Marino ( board member from 2005) Senior Management of Inditex as at 31 J anuar y 2010 Annex 32

Agriculture and Wiley

Minerals can affect society in many ways for example; Surface mining destroys vegetation across large areas, increasing erosion. Open-pit mining uses huge quantities of water. Acid mine drainage is pollution caused when dissolved toxic materials wash from mines into nearby lakes and streams. Minerals is approximately 80 percent of mined ore consists of impurities that become wastes after processing. These wastes, called tailings, are usually left in giant piles on the ground or in ponds near the processing plants (Figure 12. 9). The tailings contain toxic materials such as cyanide, mercury, and sulfuric acid.Left exposed, they contaminate the air, soil, and water (Wiley, 2009). What is the difference between metallic and nonmetallic minerals? Provide two examples from each category and discuss their uses. Earth's minerals are elements which are typically compounds of elements and have precise chemical compositions. Sulfides are mineral compounds in which certain elements are combined chemically with sulfur, and oxides are mineral compounds in which elements are combined chemically with oxygen. Minerals are metallic or nonmetallic (Figure 12. 5).Metals are minerals such as iron, aluminum, and copper, which are malleable, lustrous, and good conductors of heat and electricity. Nonmetallic minerals, such as sand, stone, salt, and phosphates, lack these characteristics (Wiley, 2009). These valuable minerals are used for aircrafts, faucets, nails, wire, and alloy steel products. Mining How are minerals extracted from the Earth and processed? In extracting minerals first they need to decide which mining will be determined surface or subsurface mining will be used. Surface mining just means minerals extracted are close to the surface. Surface mining is muchless inexpensive and is more commonly used. Because even surface mineral deposits occur in rock layers beneath Earth's surface, the overlying soil and rock layers, called overburden, must first be removed, along with the vegetation growing in the soil. Then giant power shovels scoop out the minerals (Wiley, 2009). Processing minerals often uses a procedure known as smelting. Purified copper, tin, lead, iron, manganese, cobalt, or nickel smelting is done in a blast furnace. Figure 12. 7 shows a blast furnace used to smelt iron. The iron ore reacts with coke (modified coal) to form molten iron and carbon dioxide (Wiley, 2009).What are the different ways minerals can be mined? Provide a brief description of at least three types of mining. There are two kinds of surface mining, open-pit surface mining and strip mining. Iron, copper, stone, and gravel are usually extracted by open-pit surface mining, in which a giant hole, called a quarry, is dug in the ground to extract the minerals (Figure 12. 6A). In strip mining, a trench is dug to extract the minerals (Figure 12. 6B). Then a new trench is dug parallel to the old one, and the overburden from the new trench is put into the old one, creating a hil l of loose rock called a spoil bank (Wiley, 2009).What effect does extracting minerals have on the environment? Mining, particularly surface mining disturbs large areas of land. In the United States, functioning and abandoned metal and coal mines occupy an estimated 9 million hectares (22 million acres). Because mining destroys existing vegetation, this land is particularly prone to erosion, with wind erosion causing air pollution and water erosion polluting nearby waterways and damaging aquatic habitats (Wiley, 2010). Soil What is your definition of soil? What is soil composed of? Why is soil important to the environment?Soil is the uppermost layer of Earth's crust and supports terrestrial plants, animals, and microorganisms. Soil is formed from parent material—rock that is slowly fragmented into small particles by biological, chemical, and physical weathering processes. Soil is composed of mineral particles, organic matter, water, and air. Soil horizons are the horizontal l ayers into which many soils are organized, from the surface to the underlying parent material. Vast numbers and kinds of organisms, mainly microorganisms, inhabit soil and depend on it for shelter, food, and water.Plants anchor themselves in soil, and from it they receive essential minerals and water. Terrestrial plants could not survive without soil, and because we depend on plants for our food, humans could not exist without soil either (Wiley, 2013). What types of organisms are found in soil? Determine the relationship between soil and organisms. Soil organisms carry out nutrient cycling, the pathway of nutrient minerals or elements from the environment through organisms and back to the environment. What is soil erosion?How can soil become polluted? What effect does soil erosion and pollution have on the environment? Soil organisms provide ecosystem services such as maintaining soil fertility and preventing soil erosion. Water, wind, ice, and other agents cause soil erosion, the wearing away or removal of soil from the land. Soil erosion reduces fertility because essential minerals and organic matter are removed. Erosion causes sediments and pesticide and fertilizer residues to pollute nearby waterways ( Wiley, 2009). What is the purpose of soil reclamation?To undertake soil reclamation, erosion protection, Site restoration and reinstatement, taking into account natural processes, operational requirements and technical feasibility, to deliver post-construction land conditions as similar as possible to those prior to construction or as agreed with the relevant authorities and/or landowner (LMS, 2013). Forestry and Rangeland Resources and Management Strategies Differentiate between government-owned lands and public lands. Which government agencies are involved with government-owned lands? What is the purpose of government-owned lands?Private Citizens, corporations, and nonprofit organizations own about 55 percent of the land in the United States, and Native A merican tribes own about 3 percent. State and local governments own another 7 percent. The federal government owns the rest (about 35 percent). Government-owned land encompasses all types of ecosystems, from tundra to desert, and includes land that contains important resources such as minerals and fossil fuels, land that possesses historical or cultural significance, and land that provides critical biological habitat.Most federally owned land is in Alaska and 11 western states (Figure 13. 1). Federal land is managed primarily by four agencies, three in the U. S. Department of the Interior—the Bureau of Land Management (BLM), the Fish and Wildlife Service (FWS), and the National Park Service (NPS)—and one in the Department of Agriculture—the U. S. Forest Service (USFS) (Table 13. 1) (Wiley, 2009). Why is the forest an important ecosystem? Forests, important ecosystems that provide many goods and services to support human society, occupy less than one-third of Ear th's total land area.Timber harvested from forests is used for fuel, construction materials, and paper products. Forests supply nuts, mushrooms, fruits, and medicines. Forests provide employment for millions of people worldwide and offer recreation and spiritual sustenance in an increasingly crowded world (Wiley, 2009). What is your definition of forest management? What is its purpose? Describe the concept of sustainable forestry. Management for timber production disrupts a forest's natural condition and alters its species composition and other characteristics.Specific varieties of commercially important trees are planted, and those trees not as commercially desirable are thinned out or removed. Traditional forest management often results in low-diversity forests. In recognition of the many ecosystem services performed by natural forests, a newer method of forest management, known as ecologically sustainable forest management, or simply sustainable forestry, is evolving. Sustainable forestry maintains a mix of forest trees, by age and species, rather than imposing a monoculture (Wiley, 2009).What effect does the harvesting of trees and deforestation have on forests and the environment? Is there a preferred method for harvesting trees? Explain. In seed tree cutting, almost all trees are harvested from an area; a scattering of desirable trees is left behind to provide seeds for the regeneration of the forest. Clear-cutting is harvesting timber by removing all trees from an area and then either allowing the area to reseed and regenerate itself naturally or planting the area with one or more specific varieties of trees. Timber companies prefer clear-cutting because it is the most cost-effective way to harvest trees.The preferred method of harvesting tree is tree cutting as oppose to the other 3 methods (Wiley, 2009). What is a rangeland? Describe rangeland degradation and desertification. What effect does degradation and desertification have on the environment? Ra ngelands are grasslands, in both temperate and tropical climates, that serve as important areas of food production for humans by providing fodder for livestock such as cattle, sheep, and goats (Figure 13. 8). Rangelands may be mined for minerals and energy resources, used for recreation, and preserved for biological habitat and for soil and water resources.The predominant vegetation of rangelands includes grasses, forbs (small plants other than grasses), and shrubs. Land degradation is a natural or human-induced process that decreases the future ability of the land to support crops or livestock. This progressive degradation, which induces unproductive desert-like conditions on formerly productive rangeland (or tropical dry forest), is desertification (Figure 13. 9). It reduces the agricultural productivity of economically valuable land, forces many organisms out, and threatens endangered species. Worldwide, desertification seems to be on the increase.The United Nations estimates tha t each year since the mid-1990s, 3,560 km2 (1,374 mi2)—an area about the size of Rhode Island—has turned into desert (Wiley, 2013). What is overgrazing? What effect does this have on rangelands? Overgrazing is the destruction of vegetation caused by too many grazing animals consuming the plants in a particular area, leaving them unable to recover. Overgrazing accelerates land degradation, which decreases the future ability of the land to support crops or livestock. Desertification is the degradation of once-fertile rangeland or tropical dry forest into nonproductive desert (Wiley, 2009).What strategies can be employed for the management and conservation of forests and rangelands? Endangered U. S. ecosystems include the south Florida landscape, southern Appalachian spruce-fir forests, and longleaf pine forests and savannas. Criteria used to evaluate whether an ecosystem is endangered and to what degree it is threatened include its history of land loss and degradation, i ts prospects for future loss or degradation, the area the ecosystem occupies, and the number of threatened and endangered species living in that ecosystem (Wiley, 2009). AgricultureWhat is the difference between industrialized agriculture and subsistence agriculture? Industrialized agriculture uses modern methods requiring large capital input and less land and labor than traditional methods. Subsistence agriculture requires labor and a large amount of land to produce enough food to feed a family. There are three types of subsistence agriculture. In slash-and-burn agriculture, small patches of tropical forests are cleared to plant crops. In nomadic herding, carried out on arid land, herders move livestock continually to find food for them.Intercropping involves growing a variety of plants simultaneously on the same field. What effect do these methods of agriculture have on the environment? Environmental problems caused by industrialized agriculture include air pollution from the use of fossil fuels and pesticides, water pollution from untreated animal wastes and agricultural chemicals, pesticide-contaminated foods and soils, and increased resistance of pests to pesticides. Land degradation decreases the future ability of the land to support crops or livestock.Clearing grasslands and forests and draining wetlands to grow crops have resulted in habitat fragmentation, the breakup of large areas of habitat into small, isolated patches (Wiley, 2013). What is one agricultural challenge, other than soil erosion, that society faces? Explain your answer. Prime farmland in the United States is being lost to urbanization and urban sprawl. Global declines in plant and animal varieties have led many countries to collect germ plasm, plant and animal material that may be used in breeding.Farmers and ranchers strive to increase yields in many ways, including by administering hormones and antibiotics to livestock (Wiley, 2013). How would you describe sustainable agriculture? Ho w does it affect the environment? In regards to agriculture, what are the advantages and disadvantages involved with genetic engineering? Sustainable agriculture uses methods that maintain soil productivity and a healthy ecological balance while minimizing long-term impacts.Genetic engineering, the manipulation of genes to produce a particular trait, can produce more nutritious crops or crop plants that are resistant to pests, diseases, or drought. Concerns about genetic engineering include unknown environmental effects (Wiley, 2009). References WILEY PLUS: Berg, L. R. , & Hager, M. C. (2009). Visualizing Environmental Science (2nd. ed. ). Hoboken, NJ: Wiley. http://www. sakhalinenergy. ru/en/documents/45_Soil_Reclamation_and_Site_Reinstatement_E. pdf `University of Phoenix Material Environmental Resources Worksheet

My High School Experience Essay

My high school experience has been a success for me to get to college by taking all of the class I needed to get this far. I have came a long way during my high school career because I really thought I wouldn’t have made it this far due to struggling to keep my grades up but as I started it’s not hard at all to keep them up you just have to try hard and get the job done. Although being in Upward Bound has help me accomplish these goals to make it his far from ninth grade to twelfth grade. Due to being in Upward Bound I have learned a lot of things such as you have to do things own your own because nothings ever going to be handed to you. Now that I finally realize that I’m a senior in high school and that time has real passed by now I’m standing here with a diploma something I’ve been waiting for all my life. As I look back I’m not ready to leave high school yet because now I’m own my own in college and there’s no one there to t ell me what to do . As everyone would say â€Å"welcome to the real world.† Some people think of this as yes I’m finally out of the house with my mother and that their going to have fun and make new friends and party. I think of this as I want to go to college and be successful in life, get the job done, get my associate’s degree and move on up to the real world also I would love to be on the dean’s list every semester that would be a really great honor to me to let me know that I have did what I had to do in college and not just played the whole time .I know that I will miss it here being with friends and goofing around with others. But now it is for me to step on up to a new chapter in life by going to college and doing what I like to do working with children and their families. I hope that all of us will work hard to accomplish our dreams and do what we got to do to get what we want . It want be that hard I hope only if you just try and put your mind to it to do it. It want be as hard as you make it just do your best. I’m glad that all of us have made it to the end now that we can say that we â€Å"started from the bottom now were here.†Now that I have accomplished my task for today I would ask you to encourage me and others to always do their best in anything cause you never know what your going to get out of being the best that we can be and I hope you take this with you to remember the class of 2015.

Reaction paper Essay Example | Topics and Well Written Essays - 500 words - 1

Reaction paper - Essay Example Upon reading Judea’s move against Germany, I find it strange because what has been impressed upon me is that Germany was always on the offensive side. Having watched documentaries about Holocaust, I find it particularly absurd to hear for the first time that Germany was being attacked ( symbolically) by the Jews. First, rich American Jews conspired to make Jews leave Germany so they can return to their promised land. At first, this move seems to be an outcome of a religious struggle that started way back biblical times. But as you read the article and some commentaries about the whole event, it was an insidious event that had political intentions. Even the Jews in Germany were not even bothered by the Germans which comes as a surprise. So what led Germany to the brink of despair that made it round up Jews? The answer would all be found on the transcripts of Freedman’s speech. Indeed, there was no other recourse but to read the second article to know the truth. If Judeaà ¢â‚¬â„¢s declaration of war was a surprise, Benjamin Freedman’s speech was really a revelation. I believe that all history subjects should require these two important documents to get the other side of the story. Numerous clarifications have been made as what role the Jews assumed during WWI and WWII.

Company's interest regarding private equity buyouts Dissertation

Company's interest regarding private equity buyouts - Dissertation Example In just one generation the private equity industry has grew to become a dynamo for growth, innovation and enterprise (Kolade. W, 2008). Britain is a world leader in this sector with one of the largest private equity markets globally, second only to the US. There are over 450 active UK firms, which provide several billion pounds each year to unquoted companies. Despite private equity now being a recognised asset class, the rapid growth in market has provoked debate about private equity and its intensions. Private equity firms have been taking over some of the UK's most notorious names, many making phenomenal improvements to these companies, but there has still been criticism of their vilifying greed and heartless nature to others. Some have characterised these private equity firms as the ‘Gluttons at Gate’. Supporters of private equity, including the government, praise its ability to create jobs quickly and contribute to the economy (BBC, 2007). Private equity groups claim they are improving the performance of UK companies by giving them stronger management and market discipline. They also claim that private equity investors generate superior returns for their shareholders; that private equity is clean and simple, not cluttered by all the governance bureaucracy of the publicly quoted sector (superior doc). Conversely others would disagree, most notably employees at companies which have been bought by private equity groups only to see hundreds of job cuts being made. ... It’s questioned whether the private equity boom will provide good long-term investment results or whether we are seeing the inflation of yet another financial bubble, with the destruction of viable companies as a damaging by-product (Demaria, 2010). But perhaps the most controversial argument may be taxation implications. PE companies have been accused of using loopholes to pay too little tax, with the rate sometimes as low as 10% (BBC, 2007). Private equity executives pay taxes on their basic pay and bonuses, but a large part of their income comes from carried interest - the carry - which is the 20% slice of profits they can claim once they have paid back their investors. This money is classed as a capital gain and thanks to taper relief, it is only subject to a tax level of 10%. Critics say it should be charged at a normal tax rate. It is an emotive subject, with one private equity boss saying that some of the richest men in Britain were paying tax at a lower level than the cleaners who tidied their offices (BBC, 2007). Perhaps if the UK changes its tax regime, private equity investors will just move overseas. Ethical issues During this research, my main focus will be pay attention to the ethical issues. No data collected through any means will be used in any undesirable or negative way. Any information collected will be used only for the purpose at hand. Talking about the financial buy outs, ethical considerations must be given their due importance in that case too. Financial statements of any and every company should be made public as per the law and the information offered must be authentic. Blackstone Group is the former owner of Southern Cross as it bought the company in 2004 and left it 2006. Initially, Southern

End of like care in the United States Current Reality and futrue Essay

End of like care in the United States Current Reality and futrue Promise A policy review - Essay Example With age, serious health complications arise. Given the general body weakness and poor immunity, most chronic diseases are terminal to the old. Previous research has proven that open discussion on care treatment between patient and doctor improved the patient satisfaction among the elderly. The old experience less fear and anxiety, they feel an appreciation towards their wishes, and it provides them the opportunity to die with dignity. On the other hand, end life care can be a serious burden to the elderly suffering from chronic illness, it prolongs pain and suffering. It is also a heavy burden when bills ought to be paid to prolong the life that will soon end (Giovanni, 135). Most women than men experience end of life care due to their prolonged life span as compared to the male counter parts, as a result, most elderly women than men end up in nursing homes or homes for the elderly. The negative impact in this is the fact that a majority of this women end up widowed and alone (Giovanni, 135). A majority of the old individuals suffer from cognitive impairment; a condition characterized by memory problems beyond the expected aging process. End of life care program provide the necessary understanding and facilitate memory gain. A majority of the unaware would not handle the situation in the same manner. Older adults dying in countryside areas due to chronic illness are many due to the limited access of health care facilities, lack of transportation, limited social services, and lack of adequate housing. The benefits arising from end of life care to this category of the elderly include household care and respite care (Giovanni, 135). The elderly managed to receive medication and support from any

Social Context Account Essay Example | Topics and Well Written Essays - 1500 words - 1

Social Context Account - Essay Example Precisely speaking, we belong to the middle class; my father has a lucrative business. Despite the lucrative business that my father owned, I cannot categorically say that life was all rosy. There were tough times; the gambling took the better part of my father’s earnings to an extent that there was nothing left to fend for the family. The worst time came about when we lost our house and were forced to live in deplorable condition. I was brought up in Muslim family and therefore, at a tender age, I was exposed to Sharia virtues, which natured in me a variety of admirable core values. First, I am a staunch believer in the existence of Allah the father. This is my major core value and in my everyday life, I strive to live in accordance with the Koran doctrines. According to Achard (1993, pp. 103) â€Å"Core values are those fundamental beliefs that define how one conducts themselves." Core values, therefore, dictates and presents a guiding principle on one's action in the cours e of undertaking his daily activity. On a personal note, I believe I have core values that define my actions and decisions. Additionally, I belief that honesty is an integral value that everyone should possess as it makes one to earn trust among peers or colleagues. I always ensure that I speak the truth to my parent’s peers and colleagues, and this has enabled me to have a cozy relationship with everyone I interact with on various subjects. Kongstvedt (2006) avers that values play a great role to individuals as it dictates their decisions and actions from time, especially at the workplace. One notable role that values play in individual’s life is that it gives people purpose. When your values are clearly defined, you are less likely to drift and in all cases, you make decisions based on internal reflection. Lack of values makes life to lack direction and therefore, individuals will make decisions based on pressures and circumstances without deep reflection. Having cor e values restores purpose to life and provides direction on how one handle work-related challenges. When your core values are well cut out for you, all your decisions will be constituent with your core values. On the other hand, lack of apparent core values makes individuals to make decisions that they later on regret about and, which can even compromise on service delivery at the workplace (Archard, 2003). Core value also plays the role of making one to have confidence in one’s own ability. When you know your core values you gather courage because the decisions you make and your actions are based on the values you hold dear. Aries (2002) says that commitment to ones values give one the audacity to face job-related challenges head on because one belief in his own ability. Lastly, core values make life simple; one never debates on his decisions and actions they simply reflect if such actions align with their core values, which they hold dear. Core values offer an internal comp ass on how to handle the situation at the workplace during a crisis. Family is an important social unit that defines our roots. I am always committed to my family; I respect and am obedient to my parents, and I relate well with all my siblings. I subscribe to the adage ‘everything might change us, but we start and end with family’. My parents were a bit strict and my mother, in particular, has never allowed me to socialize with boys. My mother was very possessive she loved us so much and

Case#6 Case Study Example | Topics and Well Written Essays - 500 words

#6 - Case Study Example With regard to its definition, a visionary leader is a leader who is able to articulate their dream for an organization and inspire followers, allowing them to move together towards a shared dream of the future. The basis of my definition is that the ultimate role of visionary leadership is facilitative and an ideal principal is often to merely facilitate the vision rather than single handedly transforming an organization (school) within a given period of time (Mendels, 2012, P.55, Column 2, L. 2). As seen in the case study, Susan is seen alluding to a community culture means she is indirectly calling to attention the important of the beliefs, values as well as the collective thoughts of those who belonged to the broader community of the school. This is likely to be based on her strong personal belief that developing a school vision is a collective responsibility that should be carried out by all members and stakeholders of the broader school community. Generally, the potential conflict between professionalism and democracy often take a number of forms. Democracies often require taking into account the opinions of other members of an organization before making decisions. However, this may result in a time consuming bureaucratic process that may negatively affect efficiency and professionalism in the school or organization as more time may be required and compromise may have to be reached. For Example, during administrative decision making, responsiveness may require adherence to professionalism while the principle of democratic accountability demands adherence to the popular will or democracy (West-Burnham, 2003, P. 10, L.7). Based on my knowledge of school administration, the role that the principal plays in the building of the school vision is simply be participate and facilitate reaching a consensus on a vision that reflect the collective thoughts of the broader school community as opposed to single handedly

The Circle Essay Example | Topics and Well Written Essays - 1500 words

The Circle - Essay Example The images and sounds are equally pitiful and terrifying for the viewer. In quick summary, the movie begins with a miraculous event- the birth of a child. Unfortunately, the joy never follows because the child is a girl, even though the doctors told the family it would be a boy. Then the viewers meet Arezou and Nargess who have escaped from prison. They try to find their way to what they hope might be a country paradise. Another woman, Pari, is pregnant, but since her husband has been executed, she cannot get approval for an abortion. She is trying desperately to get one anyway. Yet another woman is trying to abandon her young daughter with the hopes that another family will take pity on her and give her a happy home. A prostitute, a luckily remarried woman, and a woman whose husband remarried while she was in prison round out the cast. It should be noted that the cast was not one of Hollywood starts, but of real Middle Eastern women. This lends a feel of authenticity and reality to the film. All of the women in director Jafar Panahi's film suffer from two things: their gender and their marital status. Single females in Iran are open to torturous and demeaning treatment every day. Their dress, travel, work, and hobbies are all subject to male approval. Their struggles are incomprehensible to women in the western world who alternate between voicing dismay at their plight and conveniently avoiding it. For these reasons. Panahi's film stings so deeply into the cores of viewers everywhere, especially women. Western society cannot understand, let alone justify, these treatments of women. Fortunately, two Middle Eastern women can provide explanations about the substance of this film as it relates to life for women in Tehran and the Middle East as a whole. Suad Joseph is currently a Professor of Anthropology of Women and Gender Studies and the Director of Middle East/South Asia Studies at the University of California at Davis. She is a native of Lebanon and has spent years researching women, family and children in her native land. Her research focuses on their concepts of self, citizenship and rights. She has written several books on the subject including Gender and Citizenship in the Middle East and Intimate Selving in Arab Families. She is the founder of the Association for Middle East Women Studies and of four American universities in the Middle East. Shemeem Burney Abbas is a native of Saudi Arabia. She has taught at colleges in both Islamabad and in Texas. She spent the years from 1987 to 1992 at the University of Austin in Texas and then at the Allama Iqbal Open University in Islamabad from 1992-1999 and then again from 2002-2003. She has given lecture of her article "The Female Voices in Sufi Ritual: An Ethnography of Speaking at the University of Texas, the University of North Carolina, Duke University, Columbia University, and the University of Pennsylvania in the United States. She currently holds a Ph.D. in English Language. According to Joseph, in Gender Citizenship in the Middle East, an examination of the legal documents related to citizenship has revealed that citizenship is extremely gendered in all arenas, particularly the political, economic and cultural. Joseph argues that the struggle for women to gain a sense of self and identity through citizenship has been compromised by the nations' struggles for identity themselves. The nations of the Middle East, on

Paper on Personal Values and Ethical Standards Essay

Paper on Personal Values and Ethical Standards - Essay Example The paper will discuss issues in Human Service Profession as they relate to the code of ethics. Such issues include the legal definition of insanity and human differences. Ethics and values are an essential part of any person. These are important in that they guide a person in making decisions and they influence the behavior of any given person. They guide the person in making a choice between two options and in knowing what is acceptable to him and what is not. The values and ethics are different depending on the individual, and they are formed within the social context that one finds themselves in. there are several forces that combine to influence the values and ethics of a given person(Burger 2010). Values are those things that one considers important or valuable in his life. They are the philosophy by which one lives. One’s values are an embodiment of what one stands for, or what one believes in. The values form the basis of behavior for a person, and every person has his own set of values by which he lives on, and through which he makes his day-to-day decisions and choices. Ethics on the other hand work to guide a person on what is right or wrong, what is moral and what is immoral, what is just and what is criminal, and what is good or evil. It is the system of one’s moral principles and works to govern how one behaves. Ethics and values are unique to every individual and they are acquired in a variety of ways. Every person begins to develop their own set of values and ethical standards from earlier on in life by observing what goes on around him. As one continues to grow and mature, one begins to realize the difference that exists between right and wrong. The values and ground rules that I use to govern my life have been learned and influenced by various people and institutions. There are also several events that have happened in life that have influenced my value system. As

Summery Essay Example | Topics and Well Written Essays - 500 words - 2

Summery - Essay Example An ethical decision, according to this model, requires ethical awareness, ethical judgment, ethical intention, and ethical behaviour. The Multidimensional Ethics Scale is then used by the authors to evaluate the level of justice and ethical decision making power in the accounting students. For the purpose of this study, the authors use samples of accounting students from 2 different countries, the US and Taiwan. The study aims to examine how culture affects the ethical decision making power of accounting students specifically. The four dimension model used with MES revealed that US students were more motivated to use egoism for decision making in the given 3 scenarios. On the other hand Taiwanese students used deontology dimension. The relativism is often ignored by the US students, whereas, Taiwanese students gave it more consideration in one of the scenarios presented. The individualism is a leading concept in the US culture. Hence, it can be related to the egoism that is apparent in the judgements of the US students. Taiwanese place more emphasis on uncertainty avoidance for rules and contracts; hence, deontology in the Taiwanese ethical judgements is expected as per their cultural practices. Hence, the study achieves its aim of concluding that there, indeed, is a relationship between ethical judgments and cultural

Bank Failures over Last 25 Years Essay Example for Free

Bank Failures over Last 25 Years Essay The banks began to fail because of misappropriation of funds and loose lending practices to the majority of the US citizens living above their means. The government estimated 2,657 closures from bank failures from 1987 to 2012 (http://bankvibe. com). Currently, there is a total 7,074 FDIC insured banks (http://www. mybankertracker. com/banks). This caused was from credit stipulations were lowered to allow the subpar credit working Americans to obtain personal loans, car, homes or other amenities. Most banks were very stable but were not prepared for the financial bubble to burst in the distance near future. Moreover, in my experience with working for a few financial institutions, I observed the credit parameters amended to fit a customer’s financial state. These loans stipulations were as follows: no documentation, no income, no assets, or no verification job; underwriting went only off credit score in some cases. The small, mid-size, and corporate banks are all competing for the public’s business which caused disarray of bad banking decisions. Hence, the banks that failed from 1987 until present time in researching last 25 years; we don’t read much about these failures in our daily newspapers, simply just; there is an over abundant of banks failures every day and this has become very common (www. davemanuel. com/history-of-bank-failures-in-the-united-states. php) Nevertheless, these banking behaviors caused a massive failure of mortgage banks and commercial banks. This caused the government to become very involved when Freddie Mac and Fannie Mae were affected by these lending behaviors (Johnson, 2010, p. 4-28). My research will display the trend of failing banks over the last 25 years and data will give insight on the numbers of banks. The Federal Reserve had centralized banking responsibility to save the banks, they deemed too big to fail. The depositors decide to simultaneously withdraw their funds from banks, which resulted in a bank panic. If several banks experience these actions at same time, this throws the banks into a bank panic. The Feds loan the banks money at a discounted rate to sustain these indiscretions (Hubbard O’brien, 2010, p. 37). Consequently, the US Congress started holding hearings, and questioning these huge corporate banks whose bonuses, incentives, and other loose business practices. These banks closed, sold, or merged with other banks to survive inevitable reality of failing (NAOAKI, 2011, p29). The investment banks were also involved in the buying and selling of bundled mortgages, investments, or other banking products to raise their capital. Lehman Brothers, Bear Stearns, and Countrywide were guilty of such practices as seen all over the TV national news. These companies have been either sold or closed down after the hearings on Capitol Hill. Currently, In order to resolve this crisis, banks have drastically changed their lending practice and the closure of failing banks has slowed down. Corporate banks were also beginning to receive stimulus funds to save them from failing. The government found themselves in a position of using the Feds to prevent catastrophic melt down of financial industry. The 12 districts are replenished to keep the general public getting loans; thus, keeping money in circulation (Hubbard O’brien, 2010, p. 438). All banks did not take the stimulus funds, but devised a plan to prevent failure. Therefore, banks had to pay back the loans in the billions, but were not charged interest if they paid the funds back early. The small to mid-size banks were left to fail, because they were not too big to fail. A double standard was shown to small businesses the backbone of America (http://economics. bout. com/). A bank of ineffective practices has shown small mom and pop banks they should not try to compete with Corporate Banking in America. They are not going to be bailed out, and allowed to fail. These small or mid-size banks are microeconomics not in macroeconomics equation of America big businesses. In conclusion, the bank failures are significant to our economy tremendously regardless the size, from the housing market, investments, or checking/savings accounts. The Feds saved the banks worth saving to boost the economy and slow down inflation. Perhaps, further research conducted to answer the following questions, and ask the questions: Do you think if people were given the stimulus funds instead of the banking institutions? What kind of economic boost would banks have, if the citizens were given stimulus funds? How does the government determine who receives funds to survive a financial set back? Why are parts of corporate America deemed too big to fail?

Naturalistic Observation Research Results

Naturalistic Observation Research Results Observation is categorised as one of the core skills of user research. Naturalistic Observation is a research method that involves observing the subjects in their natural environment without intruding or changing it in any way. The observer is required to carefully watch the naturally occurring behaviour without letting the subjects know that they are being observed. This type of research is advantageous primarily because it permits the researcher to directly observe the subject in a natural setting. It allows the researcher/observer to study aspects that cannot be manipulated in a laboratory due to ethical concerns. It also serves the purpose of supporting the external validity of the research as the findings that are observed are occurring in the natural environment. Study: 1 Date: 19th July, 2014. Day of the week: Saturday. Time: 11:00 A.M. – 12:00 P.M. (morning) and 6:00 P.M. – 7:00 P.M. (evening). Location: Cafà © Coffee Day, C G S Chamber, Ground Floor, Nagarjuna Hills, Near Road Number 1, Banjara Hills, Hyderabad – 500034. Near GVK One. Duration of observation: each session was of an hour each (60 minutes). Collectively, two hours (120 minutes) of observation. Not so important, yet Observer: Prakriti Dasgupta. Background: I did two sessions of observation of both an hour each and on the same day at Cafà © Coffee Day, Banjara Hills, Hyderabad. The first at 11:00 A.M. 12:00 P.M. in the morning and the second one at 6:00P.M. – 7:00P.M.in the evening. The whole purpose of carrying out two sets of observation was solely based the concept of finding out whether there is a difference in the crowd and the way they behave when they visit the Cafà © in the late hours of the morning in contrast to those that visit the Cafà © in the evening. Layout of the Cafà ©: The Cafà © remains open for the most part of the day as well as night. It is located in one of the busiest streets in the city and therefore caters to a large variety of customers ranging from early morning office goers to college students. It can be identified as a â€Å"hang-out spot† for a group of friends or just a place where lonely soles sit down with a cup of coffee and a book, spending their time the way they desire. Within the first fifteen minutes, I observed different kinds of customer behaviour patterns. The first session consisted of people who were present at the Cafà © to attend an official meeting with their fellow office co-workers presumably over breakfast, while there were others who were resting which I assume is due to the hectic night shifts at their workplace. This is more or less confirmed by the way they were dressed and the tired look on their faces. Stages of observation: Systematic observation of the Customers: Entry of the customers Abiding by the social norm of standing in a queue Purchase The wait after the purchase is made Finding seats preferably Between 11:00 A.M. – 12:00 P.M. Entry of the customers: With due respect to the fact that every individual is different and behaves differently, we can categorise them into those which are in great hurry and those which have plenty of time in their hand. On entering the Cafà ©, some of them directly stood in the queue, without wasting a single moment to even look around, while there were some who directly grabbed food from the compartments and then stood in the queue. Ignoring the ones that were in a hurry, when we shift our attention to the ones which aren’t, we find them to be looking around, with calm expression on their faces. They look like the ones who do not have to meet any deadlines. There were also a small group of girls who had friends waiting for them. They were carrying school bags and were dressed in casuals which indicates that they were college students. While in a queue: There was no interaction between the people who were standing in the queue. They kept themselves busy by looking at their phones and listening to music. Some attended calls while one lady kept justifying over the phone as to why she was late and wasn’t at her workplace yet. Two men and one woman took out their wallets and purse respectively. The group of young girls kept giggling and laughing about a certain boy whom they find attractive, back in college. At this point, at around 11:33 A.M. a well dressed woman (L 1) rushes into the Cafà © and tries to persuade a slightly older man, ahead in the queue if he would allow her to make her purchase before he did. She justified her request by saying that she was late for work and had two kids waiting in the car and they had to be dropped to school. The man, seemed to be in two minds which I assumed, owing to his facial expression but however was convinced and allowed the lady to stand in the queue before him. At this point, another woman (L 2) who had been waiting in the queue for the past 15 minutes, raises her voice to object and asks the lady (L 1) to go back and stand in the queue. Clearly she (L 2) was late for work as well. As soon as she (L 2) objected, all the others standing in the queue begin to support her. This was followed by several other verbal objections from other people standing in the queue. Some of them even exchanged dirty looks. A small argument took place among them where the lady with the kids (L 1) used her kids as bait and the other (L 2) asked her not to use her children as an excuse for violating certain social norms. Ultimately the lady (L 1) was forcefully ejected from the line. Having no choice, she went and stood right at the end of the queue and awaited her turn. Purchase: Most of the customers carried a bag with them and not a single customer was standing in the queue without a phone in their hand. This reflects how man is unable to move around without technology. It has become a necessity more than luxury. One important thing that I noticed was that none of them took a look at the menu card or what the cafe served which indicated that they were regular customers at the cafe and they were aware of what was available. However, there were four young boys who were seated at one corner of the cafe, intently looking at the menu and discussing what each of them would like to have. Most of the people in the cafe took the coffee and sandwiches they purchased and ran out of the cafe while only a few sat at the cafe and had their food. There was this little girl with her mother who looked at the cupcakes on the counter and then very carefully and ordered one for herself. The wait: Most people crowded around the counter, awaiting the food that they had just ordered with numbered bills in their hands. They were restless and impatient. They kept taking a glance at their watch in a frequent manner. The group of college girls kept enquiring for their order every five minutes and they ultimately managed to annoy the manager seated at the counter. Most of them opened their bags and wallets and kept the excess change they had inside it. Along with that they either kept their phones in their pockets of inside their bag. Since, almost all of them had ordered a cup of coffee irrespective of whether they had purchased anything else to eat with their hot beverage or not, it was seen that they took the coffee with their right hand and simultaneously picked up a lid and a straw with their left. These were the ones that were in a rush and as they ran out of the cafe as soon as they received their order. The ones that were eating in the cafe carefully carried the tra y to their seats making an effort not to spill the coffee. Finding preferable seats: It was observed that if people did not get the seats of their choice they simply stepped out of the cafe. Nobody waited for the seats to become empty. This indicated that there were other choices available outside as well from where they could acquire food. There was a group of five men, who entered the cafe at around 11:47 A.M. who left as soon as they failed to find a completely empty table. This also indicates the fact that people are not ready to sit with other unknown people even when one or two seats were empty in the other occupied tables. Difference in the ‘Type’ of customers that visited the cafà © from 11:00A.M. 12:00P.M. in the morning and those who visited the cafà © in the evening from 6:00P.PM. 7:00P.M. : It is important to note that the crowd that the cafe catered to, at the peak office hours was different from that they catered to in the evenings. In the evenings, the people who visited the cafe were mostly the young crowd consisting of teenagers in contrast to the office goers in the morning. The cafe catered mostly to single customers in the morning who stop by the cafe to pick up their breakfast but, in the evenings most of the people are in groups who are sitting and talking about different insignificant things that bother them, sipping their piping hot coffees, biting into their sandwiches and partially gossiping. The environment is relaxed and nobody seems to be in a hurry. The manager at the counter also seems to be settling the accounts in peace and there is no time crunch and deadline s that need to be met. Observations and interpretations: The lady objected and stopped the other lady from jumping the queue. As soon as she opposed to it, there were other people in the queue who supported her. Violation of social norms such as cutting into queues is not an appropriate thing to do and is not acceptable by the crowd as such. Perhaps jumping queues would have been an easier thing to do in the evenings when the crowd is more or less understanding and easy going. Early research indicates that people were reluctant to challenge queue jumpers which basically suggests that our spontaneous social order maintenance is weak. Milgram’s experiment also concludes that in only 10% of the occasion’s queue jumpers were physically ejected from the line. On about half of the occasion people hardly cared to react or take an initiative to stop it. Milgram attempts to explain that most people are too scared to intervene or challenge a queue jumper because challenging queue jumpers could mean losing your own place in the line. Th ere is chance that a fight may take place and everyone is delayed while it is being sorted out. This reflects on the idea that social systems have to tolerate some deviance otherwise they might hastily collapse. Moreover, when people stand in a queue, in a coffee shop, group formation is difficult and as a consequence of which social order is extremely weak. People tolerate queue jumpers as they themselves want to avoid social disorder. People left the coffee shop when they did not find a completely empty table because people do not like to sit and share the table with complete strangers. Some of the people took out their wallets as soon as the stepped in to the coffee shop which indicates three things: they might be in a hurry or they are running late for some important work, or they are extremely hungry or they prefer to be prepared before they start on doing anything, in this case, standing in the queue. People are very impatient and restless and they do not like waiting. Women are more impatient than men are. Men have a tendency to wait quietly. Although, men remain quiet, their faces give away their restlessness. In spite of that their patience level is higher than that of women. This aspect however, does not fit into the stereotype which says that women are more patient than men. Young girls are attention seeking, therefore, they try and attract attention towards themselves by their gestures and the way they speak to one another. They make use of inappropriate words to even greet each other, for example: â€Å"Hi bitch†. The word â€Å"bitch† is being casually used in this context and is not meant literally. The use of crass language among the girls and the boys of this generation is basically an attempt on their part to appear â€Å"cool† and popular among their peers. Also, they cannot stay without taking a glance at their cell phones every now and then. These assumptions and generalizations are purely made on the basis of this particular observation. They differ in every case. Study: 2 Date: 19th July, 2014. Day of the week: Saturday. Time: 3:00 P.M. – 4:00 P.M. Location: Lamakaan, an open cultural space. In Lane Adjacent To CBay, Opposite GVK One, Road No. 1, Banjara Hills, Hyderabad, Telangana 500034. Duration of observation: 2 hours (120 Minutes) Background: I attended a discussion, on whether the education system kills creativity or not. The discussion was held at Lamakaan. Being an observer I was restricted to participate in the discussion actively. Several eminent educators, mentors, school/college professors and industrialists from different sectors were present, who were willing to share their views and opinions on the matter that had been raised for discussion. There were 36 people who attended the discussion. Observation and interpretations: The entire event was well organised and effectively carried out by Man1. The discussion proceeded in an orderly manner. Before the discussion began, there was a session where all the people present for the discussion had to introduce themselves. This session was overlooked by Man1 himself. This was the first instance of interaction between the participants present. This session was characterised by appreciation for fellow participants, to a certain extent only. Man1 exhibited leadership qualities. His characteristics were those of a democratic leader. He did not restrict the participants in anyway. The discussion was more or less informal in nature. Although the discussion started on a calm and controlled tone, the environment in the room soon changed. A series of heated arguments, aggressive gestures, difference in opinions and eventually conformity among all the participants is how the discussion can be described. I observed different social behaviour throughout the course of the discussion. In order to simplify the task of observing, I named a few fellow participants who were actively taking part in the discussion. Members: Man2, Man3, Lady1, Lady2, Lady3, Girl1, Girl2. To be noted: all the members taking part in the discussion were well read and were aware of the current scenario prevailing in the education sector and the impact of the flawed system. Man2 was an influential speaker. He managed to convince all the people in the room by stating relevant facts, but failed to convince Lady1. His justification for the statements he had made, did not appeal to her. She constantly scrutinised his argument. Both were aggressive in nature and constantly argued throughout the discussion. In due course of the argument, Man3 who was intently noting down every statement, interrupted the argument and spoke up in support of the lady1. The only interpretation that can be derived by this is that, lady1 was successful in convincing, if not all, but one participant. Her argument, therefore could not be dismissed. At this point, Man1 intervenes and tries to control the situation. He was still calm, composed and confident and held on to his composure in spite of the chaotic scenario and considered the perspectives of both Man2 and Lady1. He takes the midway path and succeeds in convincing both the participants. He states valid facts and speaks logica lly. When the situation appeared to be more or less controlled, it still wasn’t. Followed by this when lady2 makes a statement, she is opposed by Girl1 and Girl2. Both of them are students and they continue to argue with Lady2 in an aggressive tone. All this while, there was a small detail that I had forgot to mention. The participants were already sitting with people whom they already knew from before. Only the 5 participants who came alone for the discussion sat beside other fellow participants who they did not know. They were in groups throughout the discussion. People were talking among themselves, arguing, and there was complete chaos in the room at one point. People spoke out of chance, raised their voices in an attempt to put their views across. This is when Lady3 takes control of the situation. She makes her statement on another aspect and states her facts out loud thereby, shifting the focus of the argument to another concept related to the same topic. She was extrem ely persuasive and gave just reasons to the participants to agree with her. It was very interesting to observe how she was single handily successful in putting her ideas across. When lady3 entered the discussion, she exhibited all qualities of an influential person. She was confident, consistent, and had unbiased views. Minority influence refers to a form of social influence where the individual with contrastingly different beliefs in comparison to the other people, should have correct ideas and should resist social pressure and abuse. Her views were influential and convincing to such an extent that other people who were confused and were in two minds, along with the ones who had strong contrasting opinions conformed to Lady3. Conformity refers to any change in behaviour that is caused by another person or a group of people i.e. Lady3 has acted in a certain manner which had influenced the others to conform to her statement. But there was one such boy who took an active part in the d iscussion but, was hesitant to accept the ideas put forth by Lady3. In due time, he as well conformed to her. Conformity was studied by Solomon Asch, who conducted an experiment which concluded that it was primarily social pressure from perhaps a majority group that could affect a person to conform. In this case, it was primarily informational conformity as Lady3 stated accurate, and rational facts and figures to prove her idea and statement. It is basically the power of the situation that regulates and influences all human behaviour. It is the power of the situation that brought about instances of social influence and conformity. I observed that people belonging to the same age groups thought alike. Their opinions and views converged and they behaved in a similar manner. They had similar patterns of thinking and interpreting the situation. They reacted to certain situations in similar ways as well. This is possibly because all of them have grown up experiencing the same dynamic changes in the society. Also, this might reflect similar bringing up patterns. In course of the discussion I attained an in-depth insight on the different social behavioural patterns which man tends to exhibit depending on the prevailing scenario. Acknowledging the advantages of Naturalistic Observation, this research technique also has quite a number of disadvantages that we cannot ignore. In this kind of research technique, people may behave differently if they come to know that they are being watched. They become conscious and may try to behave in a certain way in order to conform to what they believe the observer expects to see. One major drawback of this research method is that different observers may draw different conclusions on the basis of their observation of the same witnessed behaviour, owing to their ability to make accurate assumptions which is again a rare scenario in most of the cases. However, observing different human behaviour patterns closely and then drawing meanings out of them poses as a challenge to all those researchers who carry out experiments on the basis of this research technique. The end. Tata Institute of Social Sciences. Name: Prakriti Dasgupta. Roll No.: H2013BAMA28. Subject: Social Psychology. BA 2nd Year, Semester: III. 1