It is obvious that a good deal of thinking and planning has gone into the selection of the Indian Test squad for the tour of Sri Lanka. If you look closely, Kris Srikkanth and his team has chosen what is expected to be the first eleven and then has added one player for each of five specialist slots – opening batsman, middle order batsman, wicket keeper, pace bowler and spinner.
Murali Vijay is the third opener in the side which will under normal circumstances have Virender Sehwag and Gautam Gambhir opening the batting. In the middle order the first choices are Rahul Dravid, Sachin Tendulkar, VVS Laxman and Yuvraj Singh so Suresh Raina gets in as a substitute to cover up for any injury.
MS Dhoni has Wriddhiman Saha as his deputy, while S Sreesanth will be on stand by duty in case of injury (or lack of form) to Zaheer Khan and Ishant Sharma. Harbhajan Singh is the spin bowling certainty and will have the support of either Amit Mishra or Pragyan Ojha. Viewed like this, it can be seen that every department has been covered and overall it can be said that the selectors have done an admirable job.
Questions have already been raised on the exclusion of Rohit Sharma, Virat Kohli and Cheteshwar Pujara but the selectors have an embarrassment of riches where the middle order is concerned and not every player can be accommodated. There will be those who will miss out and perhaps will have to wait for their turn.
The same upbeat things can be said for the pace bowling department and while the likes of RP Singh, Ashish Nehra and Munaf Patel have their credentials when it comes to the Test team, it is right that Ishant Sharma and Sreesanth should get the nod. Both are ideal bowlers for cricket’s traditional format with their pace and hostility and can supplement Zaheer’s experience and swing bowling admirably as has been seen in the recent past.
Despite injury problems which have also resulted in his pace dropping Ishant remains a potent force and he should be persevered with. As for Sreesanth whatever his antics off the field and his appalling behaviour on it he is a bowler with immense potential.
However, this could be the last time for the bowler with the natural away swinger to cement his place in the side even as one wishes he has worked on his temperament. As far as spin is concerned Mishra, Ojha and Piyush Chawla are the three best young bowlers in the country today and any of them could be given a slot.
The return of Yuvraj Singh was always on the cards. No one doubts his potential as a match winner perhaps even in Tests. For various reasons he has not lived up to promise particularly in the traditional format.
His exclusion from the Asia Cup squad was a message to Yuvraj not to take his place for granted and to work on his form and fitness. Hopefully, he has done that. Despite the challenges from several young contenders he remains the best bet for the No 6 slot but could time be running out for him one wonders.
For me the only surprise is the exclusion of Dinesh Kartik who could have fitted in nicely into the dual role of second wicket keeper and third opening batsman. He came good in the Asia Cup final, winning the man of the match award with a timely knock and as such his confidence must on a high. Of course, his inclusion could well have led to the exclusion of Vijay and as such it would have been a 15-member squad which I believe is ideal for a short tour of three Tests and a warm up game in a neighbouring country.
So is it a team good enough to win a Test series in Sri Lanka, one of the toughest tasks in international cricket? The record is against the tourists for they have won just once way back in 1993, when Md Azharuddin was the captain and Tendulkar the only survivor from that side was at 20 his deputy.
Overall, they won three Tests and lost five in the island nation. The Sri Lankans at home are a formidable unit but can be beaten. Dhoni's team has the arsenal to win and prove why they are the No. 1 Test team in the game today.
Saturday, July 3, 2010
SIX SIGMA
Definition of Six Sigma
Six Sigma stands for Six Standard Deviations (Sigma is the Greek letter used to represent standard deviation in statistics) from mean. Six Sigma methodology provides the techniques and tools to improve the capability and reduce the defects in any process.
It was started in Motorola, in its manufacturing division, where millions of parts are made using the same process repeatedly. Eventually Six Sigma evolved and applied to other non manufacturing processes. Today you can apply Six Sigma to many fields such as Services, Medical and Insurance Procedures, Call Centers.
Six Sigma methodologies improve any existing business process by constantly reviewing and re-tuning the process. To achieve this, Six Sigma uses a methodology known as DMAIC (Define opportunities, Measure performance, Analyze opportunity, Improve performance, Control performance).
Six Sigma methodology can also be used to create a brand new business process from ground up using DFSS (Design For Six Sigma) principles. Six Sigma Strives for perfection. It allows for only 3.4 defects per million opportunities for each product or service transaction. Six Sigma relies heavily on statistical techniques to reduce defects and measure quality.
Six Sigma experts (Green Belts and Black Belts) evaluate a business process and determine ways to improve upon the existing process. Six Sigma experts can also design a brand new business process using DFSS (Design For Six Sigma) principles. Typically its easier to define a new process with DFSS principles than refining an existing process to reduce the defects.
Six Sigma methodology is also used in many Business Process Management initiatives these days. These Business Process Management initiatives are not necessarily related to manufacturing. Many of the BPM's that use Six Sigma in today's world include call centers, customer support, supply chain management and project management.
Six Sigma is a business management strategy originally developed by Motorola, USA in 1981. As of 2010, it enjoys widespread application in many sectors of industry, although its application is not without controversy.
Process Improvement Made Easy: The Six Sigma Process Improvement Method Explained
What is Six Sigma process improvement? Something to do with eliminating defects? Right so far. Is it a continuous process improvement methodology? Yes, it’s a disciplined approach to problem solving and continuous process improvement. Or is it just a load of really hard statistics? Well, there is some statistics involved but it’s not that bad! Here is the Six Sigma Process Improvement Method explained.
Stage 1– Define
What’s the problem, why is it important, who’s going to solve it? All of these questions need answered up front, using a host of tools and templates such as “project charters” and “critical to quality” diagrams. The more work done defining the problem, the more likely the problem will be successfully resolved.
Stage 2 – Measure
If you don’t know the process or how it’s currently performing, how will you know you’ve fixed it? The measure phase is about understanding and quantifying the current reality, by using tools such as process mapping, collecting and validating data. If it moves, measure it!
Stage 3 – Analyze
Now we get serious about flushing out the root cause of the problem. All sorts of statistical tests are done to determine which is the rotten apple spoiling the barrel. This is the point at which a highly trained Six Sigma “Black Belt” gets busy, as they perform the complicated number crunching. Mere mortals on the project team get involved in identifying non value adding steps in the process and making sure analysis paralysis does not creep in.
Stage 4 – Improve
You’ve found the rotten apples, now it’s time to throw them out. The improve phase is about eliminating the root cause of the problem and/or implementing a solution that will flag early if the process is on a slippery slope to defect land.
Stage 5 – Control
The control phase is about getting the process back to business as usual. The project team hands over responsibility to the people in charge of the everyday process, with the added benefit of having prevented the problem from occurring again, or giving them the tools to monitor the process and nip problems in the bud before they grow. The project charter is reviewed, to ensure all project charter objectives have been met, such as cost reductions and quality improvements. And then it’s time to party, and let the business know about the successful project.
Criticism of Six Sigma:
Lack of originality
Noted quality expert Joseph M. Juran has described Six Sigma as "a basic version of quality improvement", stating that "[t]here is nothing new there. It includes what we used to call facilitators. They've adopted more flamboyant terms, like belts with different colors. I think that concept has merit to set apart, to create specialists who can be very helpful. Again, that's not a new idea. The American Society for Quality long ago established certificates, such as for reliability engineers."[19]
Role of consultants
The use of "Black Belts" as itinerant change agents has (controversially) fostered a cottage industry of training and certification. Critics argue there is overselling of Six Sigma by too great a number of consulting firms, many of which claim expertise in Six Sigma when they only have a rudimentary understanding of the tools and techniques involved.[2]
Potential negative effects
A Fortune article stated that "of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since". The statement is attributed to "an analysis by Charles Holland of consulting firm Qualpro (which espouses a competing quality-improvement process)."[20] The summary of the article is that Six Sigma is effective at what it is intended to do, but that it is "narrowly designed to fix an existing process" and does not help in "coming up with new products or disruptive technologies." Advocates of Six Sigma have argued that many of these claims are in error or ill-informed.[21][22]
A BusinessWeek article says that James McNerney's introduction of Six Sigma at 3M may have had the effect of stifling creativity. It cites two Wharton School professors who say that Six Sigma leads to incremental innovation at the expense of blue-sky work.[23] This phenomenon is further explored in the book, Going Lean, which provides data to show that Ford's "6 Sigma" program did little to change its fortunes.[24]
Based on arbitrary standards
While defects per million opportunities might work well for certain products/processes, it might not operate optimally or cost effectively for others. A pacemaker process might need higher standards, for example, whereas a direct mail advertising campaign might need lower standards. The basis and justification for choosing 6 (as opposed to 5 or 7, for example) as the number of standard deviations is not clearly explained. In addition, the Six Sigma model assumes that the process data always conform to the normal distribution. The calculation of defect rates for situations where the normal distribution model does not apply is not properly addressed in the current Six Sigma literature.
Criticism of the sigma shift
The statistician Donald J. Wheeler has dismissed the 1.5 sigma shift as "goofy" because of its arbitrary nature.[25] Its universal applicability is seen as doubtful.
• Business process
• Design for Six Sigma
Six Sigma in Popular Culture
Six Sigma methodology is referred to extensively in "Retreat to Move Forward," an episode of the hit NBC comedy TV show 30 Rock. In this episode Alec Baldwin as Jack Donaghy points out the "Six pillars of the Six Sigma business philosophy - Teamwork, Insight, Brutality, Male-Enhancement, Handshakefulness and Play-Hard." Six Sigma is a recurring theme in 30 Rock.
Six Sigma stands for Six Standard Deviations (Sigma is the Greek letter used to represent standard deviation in statistics) from mean. Six Sigma methodology provides the techniques and tools to improve the capability and reduce the defects in any process.
It was started in Motorola, in its manufacturing division, where millions of parts are made using the same process repeatedly. Eventually Six Sigma evolved and applied to other non manufacturing processes. Today you can apply Six Sigma to many fields such as Services, Medical and Insurance Procedures, Call Centers.
Six Sigma methodologies improve any existing business process by constantly reviewing and re-tuning the process. To achieve this, Six Sigma uses a methodology known as DMAIC (Define opportunities, Measure performance, Analyze opportunity, Improve performance, Control performance).
Six Sigma methodology can also be used to create a brand new business process from ground up using DFSS (Design For Six Sigma) principles. Six Sigma Strives for perfection. It allows for only 3.4 defects per million opportunities for each product or service transaction. Six Sigma relies heavily on statistical techniques to reduce defects and measure quality.
Six Sigma experts (Green Belts and Black Belts) evaluate a business process and determine ways to improve upon the existing process. Six Sigma experts can also design a brand new business process using DFSS (Design For Six Sigma) principles. Typically its easier to define a new process with DFSS principles than refining an existing process to reduce the defects.
Six Sigma methodology is also used in many Business Process Management initiatives these days. These Business Process Management initiatives are not necessarily related to manufacturing. Many of the BPM's that use Six Sigma in today's world include call centers, customer support, supply chain management and project management.
Six Sigma is a business management strategy originally developed by Motorola, USA in 1981. As of 2010, it enjoys widespread application in many sectors of industry, although its application is not without controversy.
Process Improvement Made Easy: The Six Sigma Process Improvement Method Explained
What is Six Sigma process improvement? Something to do with eliminating defects? Right so far. Is it a continuous process improvement methodology? Yes, it’s a disciplined approach to problem solving and continuous process improvement. Or is it just a load of really hard statistics? Well, there is some statistics involved but it’s not that bad! Here is the Six Sigma Process Improvement Method explained.
Stage 1– Define
What’s the problem, why is it important, who’s going to solve it? All of these questions need answered up front, using a host of tools and templates such as “project charters” and “critical to quality” diagrams. The more work done defining the problem, the more likely the problem will be successfully resolved.
Stage 2 – Measure
If you don’t know the process or how it’s currently performing, how will you know you’ve fixed it? The measure phase is about understanding and quantifying the current reality, by using tools such as process mapping, collecting and validating data. If it moves, measure it!
Stage 3 – Analyze
Now we get serious about flushing out the root cause of the problem. All sorts of statistical tests are done to determine which is the rotten apple spoiling the barrel. This is the point at which a highly trained Six Sigma “Black Belt” gets busy, as they perform the complicated number crunching. Mere mortals on the project team get involved in identifying non value adding steps in the process and making sure analysis paralysis does not creep in.
Stage 4 – Improve
You’ve found the rotten apples, now it’s time to throw them out. The improve phase is about eliminating the root cause of the problem and/or implementing a solution that will flag early if the process is on a slippery slope to defect land.
Stage 5 – Control
The control phase is about getting the process back to business as usual. The project team hands over responsibility to the people in charge of the everyday process, with the added benefit of having prevented the problem from occurring again, or giving them the tools to monitor the process and nip problems in the bud before they grow. The project charter is reviewed, to ensure all project charter objectives have been met, such as cost reductions and quality improvements. And then it’s time to party, and let the business know about the successful project.
Criticism of Six Sigma:
Lack of originality
Noted quality expert Joseph M. Juran has described Six Sigma as "a basic version of quality improvement", stating that "[t]here is nothing new there. It includes what we used to call facilitators. They've adopted more flamboyant terms, like belts with different colors. I think that concept has merit to set apart, to create specialists who can be very helpful. Again, that's not a new idea. The American Society for Quality long ago established certificates, such as for reliability engineers."[19]
Role of consultants
The use of "Black Belts" as itinerant change agents has (controversially) fostered a cottage industry of training and certification. Critics argue there is overselling of Six Sigma by too great a number of consulting firms, many of which claim expertise in Six Sigma when they only have a rudimentary understanding of the tools and techniques involved.[2]
Potential negative effects
A Fortune article stated that "of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since". The statement is attributed to "an analysis by Charles Holland of consulting firm Qualpro (which espouses a competing quality-improvement process)."[20] The summary of the article is that Six Sigma is effective at what it is intended to do, but that it is "narrowly designed to fix an existing process" and does not help in "coming up with new products or disruptive technologies." Advocates of Six Sigma have argued that many of these claims are in error or ill-informed.[21][22]
A BusinessWeek article says that James McNerney's introduction of Six Sigma at 3M may have had the effect of stifling creativity. It cites two Wharton School professors who say that Six Sigma leads to incremental innovation at the expense of blue-sky work.[23] This phenomenon is further explored in the book, Going Lean, which provides data to show that Ford's "6 Sigma" program did little to change its fortunes.[24]
Based on arbitrary standards
While defects per million opportunities might work well for certain products/processes, it might not operate optimally or cost effectively for others. A pacemaker process might need higher standards, for example, whereas a direct mail advertising campaign might need lower standards. The basis and justification for choosing 6 (as opposed to 5 or 7, for example) as the number of standard deviations is not clearly explained. In addition, the Six Sigma model assumes that the process data always conform to the normal distribution. The calculation of defect rates for situations where the normal distribution model does not apply is not properly addressed in the current Six Sigma literature.
Criticism of the sigma shift
The statistician Donald J. Wheeler has dismissed the 1.5 sigma shift as "goofy" because of its arbitrary nature.[25] Its universal applicability is seen as doubtful.
• Business process
• Design for Six Sigma
Six Sigma in Popular Culture
Six Sigma methodology is referred to extensively in "Retreat to Move Forward," an episode of the hit NBC comedy TV show 30 Rock. In this episode Alec Baldwin as Jack Donaghy points out the "Six pillars of the Six Sigma business philosophy - Teamwork, Insight, Brutality, Male-Enhancement, Handshakefulness and Play-Hard." Six Sigma is a recurring theme in 30 Rock.
BENCH MARKING
Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and/or best practices from other industries. Dimensions typically measured are quality, time, and cost. Improvements from learning mean doing things better, faster, and cheaper.
Benchmarking involves management identifying the best firms in their industry, or any other industry where similar processes exist, and comparing the results and processes of those studied (the "targets") to one's own results and processes to learn how well the targets perform and, more importantly, how they do it.
The term benchmarking was first used by cobblers to measure people's feet for shoes. They would place someone's foot on a "bench" and mark it out to make the pattern for the shoes. Benchmarking is most used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others.
Also referred to as "best practice benchmarking" or "process benchmarking", it is a process used in management and particularly strategic management, in which organizations evaluate various aspects of their processes in relation to best practice companies' processes, usually within a peer group defined for the purposes of comparison. This then allows organizations to develop plans on how to make improvements or adapt specific best practices, usually with the aim of increasing some aspect of performance. Benchmarking may be a one-off event, but is often treated as a continuous process in which organizations continually seek to improve their practises.
Popularity and benefits from benchmarking:
comprehensive survey on benchmarking was commissioned by The Global Benchmarking Network, a network of benchmarking centers representing 22 countries. Over 450 organizations responded from over 40 countries. The results showed that:
1. Mission and Vision Statements and Customer (Client) Surveys are the most used (by 77% of organisations) of 20 improvement tools, followed by SWOT analysis(72%), and Informal Benchmarking (68%). Performance Benchmarking was used by (49%) and Best Practice Benchmarking by (39%).
2. The tools that are likely to increase in popularity the most over the next three years are Performance Benchmarking, Informal Benchmarking, SWOT, and Best Practice Benchmarking. Over 60% of organizations that are not currently using these tools indicated they are likely to use them in the next three years.
Procedure:
1. Identify your problem areas - Because benchmarking can be applied to any business process or function, a range of research techniques may be required. They include: informal conversations with customers, employees, or suppliers; exploratory research techniques such as focus groups; or in-depth marketing research, quantitative research, surveys, questionnaires, re-engineering analysis, process mapping, quality control variance reports, or financial ratio analysis. Before embarking on comparison with other organizations it is essential that you know your own organization's function, processes; base lining performance provides a point against which improvement effort can be measured.
2. Identify other industries that have similar processes - For instance if one were interested in improving hand offs in addiction treatment he/she would try to identify other fields that also have hand off challenges. These could include air traffic control, cell phone switching between towers, transfer of patients from surgery to recovery rooms.
3. Identify organizations that are leaders in these areas - Look for the very best in any industry and in any country. Consult customers, suppliers, financial analysts, trade associations, and magazines to determine which companies are worthy of study.
4. Survey companies for measures and practices - Companies target specific business processes using detailed surveys of measures and practices used to identify business process alternatives and leading companies. Surveys are typically masked to protect confidential data by neutral associations and consultants.
5. Visit the "best practice" companies to identify leading edge practices - Companies typically agree to mutually exchange information beneficial to all parties in a benchmarking group and share the results within the group.
6. Implement new and improved business practices - Take the leading edge practices and develop implementation plans which include identification of specific opportunities, funding the project and selling the ideas to the organization for the purpose of gaining demonstrated value from the process.
Types of benchmarking
• Process benchmarking - the initiating firm focuses its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmark firms. Activity analysis will be required where the objective is to benchmark cost and efficiency; increasingly applied to back-office processes where outsourcing may be a consideration.
• Financial benchmarking - performing a financial analysis and comparing the results in an effort to assess your overall competitiveness and productivity.
• Benchmarking from an investor perspective- extending the benchmarking universe to also compare to peer companies that can be considered alternative investment opportunities from the perspective of an investor.
• Performance benchmarking - allows the initiator firm to assess their competitive position by comparing products and services with those of target firms.
• Product benchmarking - the process of designing new products or upgrades to current ones. This process can sometimes involve reverse engineering which is taking apart competitors products to find strengths and weaknesses.
• Strategic benchmarking - involves observing how others compete. This type is usually not industry specific, meaning it is best to look at other industries.
• Functional benchmarking - a company will focus its benchmarking on a single function to improve the operation of that particular function. Complex functions such as Human Resources, Finance and Accounting and Information and Communication Technology are unlikely to be directly comparable in cost and efficiency terms and may need to be disaggregated into processes to make valid comparison.
• Best-in-class benchmarking - involves studying the leading competitor or the company that best carries out a specific function.
• Operational benchmarking - embraces everything from staffing and productivity to office flow and analysis of procedures performed.
There are five key stages in benchmarking:
1. Proto-planning
1. Decide what you wish to benchmark
2. Decide against whom you need to benchmark
3. Identify outputs required
4. Determine data collection methodologies
2. Data collection
1. Secondary/background research
2. Primary research - from the benchmark
3. Analysis
1. Of the gaps
2. Of the factors that create the gaps (enablers)
4. Implementation
1. Implementation planning
2. Roll-out of new modus operandi (changes)
5. Monitoring
1. Collecting data
2. Evaluating progress
3. Iterative change.
Benchmarking can take place at different levels:
• Internal
• Competitor/peer
• Best in industry
• World class and these are explored below.
Internal- is looking at the differing levels of performance within your own organisation and highlighting best practice for dissemination to other parts. For example if an organisation has several factories making the same goods then it can analyse the best performing areas in each and then extrapolate these features to its other operations thus bringing all operations up to the best internal levels of operation. Due regard must be given to the context of the analysis as due to past decisions there will be differences in operations which must be allowed for, such as different IT or logistics systems, local variations in staff competencies or even raw material access, rail links etc such that the comparison is 'normalised'.
Typically this type of benchmarking is carried out as part of a cooperative study involving a significant number of players - e.g. the major banks; or the global custodians or the major retailers; often with the cooperation and involvement of the 'trade association' body which ensures that the study is 'fair' and using independent consultants/advisors who retain the level of confidentiality required.
Best in industry - is focussing on the firm that you consider to be the leader in your own field/industry sector and finding out what it is that it does that is so much better than you. This involves getting close to it and learning - but also exchanging information. Also it is likely that others in the industry will also wish to contact it so competition will be intense.
Conclusion
Benchmarking is more than just a comparative analysis - this sort of analysis has been undertaken for many years with little benefits. What benchmarking contributes is that 'lessons are learned'. The difference with a benchmarking study is that a better way of doing things is analysed and then the key factors - the enablers - are then used to close the gap. NB techniques and enablers that were critical in recent past will not remain the same so the processes should be revisited periodically to see if they are still extant and if not to find out what needs to be done. There are a few key issues for organisations beginning benchmarking efforts:
• top management commitment and participation are necessary
• sufficient time must be allowed for the project as it takes time
• an able, well-trained team is critical - where appropriate get outside help (consultants)
• it is heavy on resources: people, travel, research, consultants, and other factors are involved
• process rigour is an absolute sine qua non for success - you cannot 'graze the surface'
• quantitative data is often difficult and time consuming to obtain
In addition there are some principles that have evolved over time which form a framework to such studies:
• legality - you must be open and honest
• exchange - a quid pro quo
• confidentiality - it remains between you and the benchmark
• use - only for the purpose agreed
• preparation - is essential to succeed
• completion - of all tasks and implementation must be carried out
• understanding - of your processes, gaps, enablers [and their relevance to you] and the action to close the gap are key to success
Successful benchmarking requires three basic ingredients: a real problem with management willing to solve it; access to benchmarking partners who have previously resolved that problem; a knowledgeable benchmarking team with the ability to use quality tools and research practices to investigate process problems to their root cause. In most cases it is advisable to use external consultants who bring expertise and experience and can help you carry out a benchmarking exercise avoiding pitfalls and maximising return from effort.
Benchmarking involves management identifying the best firms in their industry, or any other industry where similar processes exist, and comparing the results and processes of those studied (the "targets") to one's own results and processes to learn how well the targets perform and, more importantly, how they do it.
The term benchmarking was first used by cobblers to measure people's feet for shoes. They would place someone's foot on a "bench" and mark it out to make the pattern for the shoes. Benchmarking is most used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others.
Also referred to as "best practice benchmarking" or "process benchmarking", it is a process used in management and particularly strategic management, in which organizations evaluate various aspects of their processes in relation to best practice companies' processes, usually within a peer group defined for the purposes of comparison. This then allows organizations to develop plans on how to make improvements or adapt specific best practices, usually with the aim of increasing some aspect of performance. Benchmarking may be a one-off event, but is often treated as a continuous process in which organizations continually seek to improve their practises.
Popularity and benefits from benchmarking:
comprehensive survey on benchmarking was commissioned by The Global Benchmarking Network, a network of benchmarking centers representing 22 countries. Over 450 organizations responded from over 40 countries. The results showed that:
1. Mission and Vision Statements and Customer (Client) Surveys are the most used (by 77% of organisations) of 20 improvement tools, followed by SWOT analysis(72%), and Informal Benchmarking (68%). Performance Benchmarking was used by (49%) and Best Practice Benchmarking by (39%).
2. The tools that are likely to increase in popularity the most over the next three years are Performance Benchmarking, Informal Benchmarking, SWOT, and Best Practice Benchmarking. Over 60% of organizations that are not currently using these tools indicated they are likely to use them in the next three years.
Procedure:
1. Identify your problem areas - Because benchmarking can be applied to any business process or function, a range of research techniques may be required. They include: informal conversations with customers, employees, or suppliers; exploratory research techniques such as focus groups; or in-depth marketing research, quantitative research, surveys, questionnaires, re-engineering analysis, process mapping, quality control variance reports, or financial ratio analysis. Before embarking on comparison with other organizations it is essential that you know your own organization's function, processes; base lining performance provides a point against which improvement effort can be measured.
2. Identify other industries that have similar processes - For instance if one were interested in improving hand offs in addiction treatment he/she would try to identify other fields that also have hand off challenges. These could include air traffic control, cell phone switching between towers, transfer of patients from surgery to recovery rooms.
3. Identify organizations that are leaders in these areas - Look for the very best in any industry and in any country. Consult customers, suppliers, financial analysts, trade associations, and magazines to determine which companies are worthy of study.
4. Survey companies for measures and practices - Companies target specific business processes using detailed surveys of measures and practices used to identify business process alternatives and leading companies. Surveys are typically masked to protect confidential data by neutral associations and consultants.
5. Visit the "best practice" companies to identify leading edge practices - Companies typically agree to mutually exchange information beneficial to all parties in a benchmarking group and share the results within the group.
6. Implement new and improved business practices - Take the leading edge practices and develop implementation plans which include identification of specific opportunities, funding the project and selling the ideas to the organization for the purpose of gaining demonstrated value from the process.
Types of benchmarking
• Process benchmarking - the initiating firm focuses its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmark firms. Activity analysis will be required where the objective is to benchmark cost and efficiency; increasingly applied to back-office processes where outsourcing may be a consideration.
• Financial benchmarking - performing a financial analysis and comparing the results in an effort to assess your overall competitiveness and productivity.
• Benchmarking from an investor perspective- extending the benchmarking universe to also compare to peer companies that can be considered alternative investment opportunities from the perspective of an investor.
• Performance benchmarking - allows the initiator firm to assess their competitive position by comparing products and services with those of target firms.
• Product benchmarking - the process of designing new products or upgrades to current ones. This process can sometimes involve reverse engineering which is taking apart competitors products to find strengths and weaknesses.
• Strategic benchmarking - involves observing how others compete. This type is usually not industry specific, meaning it is best to look at other industries.
• Functional benchmarking - a company will focus its benchmarking on a single function to improve the operation of that particular function. Complex functions such as Human Resources, Finance and Accounting and Information and Communication Technology are unlikely to be directly comparable in cost and efficiency terms and may need to be disaggregated into processes to make valid comparison.
• Best-in-class benchmarking - involves studying the leading competitor or the company that best carries out a specific function.
• Operational benchmarking - embraces everything from staffing and productivity to office flow and analysis of procedures performed.
There are five key stages in benchmarking:
1. Proto-planning
1. Decide what you wish to benchmark
2. Decide against whom you need to benchmark
3. Identify outputs required
4. Determine data collection methodologies
2. Data collection
1. Secondary/background research
2. Primary research - from the benchmark
3. Analysis
1. Of the gaps
2. Of the factors that create the gaps (enablers)
4. Implementation
1. Implementation planning
2. Roll-out of new modus operandi (changes)
5. Monitoring
1. Collecting data
2. Evaluating progress
3. Iterative change.
Benchmarking can take place at different levels:
• Internal
• Competitor/peer
• Best in industry
• World class and these are explored below.
Internal- is looking at the differing levels of performance within your own organisation and highlighting best practice for dissemination to other parts. For example if an organisation has several factories making the same goods then it can analyse the best performing areas in each and then extrapolate these features to its other operations thus bringing all operations up to the best internal levels of operation. Due regard must be given to the context of the analysis as due to past decisions there will be differences in operations which must be allowed for, such as different IT or logistics systems, local variations in staff competencies or even raw material access, rail links etc such that the comparison is 'normalised'.
Typically this type of benchmarking is carried out as part of a cooperative study involving a significant number of players - e.g. the major banks; or the global custodians or the major retailers; often with the cooperation and involvement of the 'trade association' body which ensures that the study is 'fair' and using independent consultants/advisors who retain the level of confidentiality required.
Best in industry - is focussing on the firm that you consider to be the leader in your own field/industry sector and finding out what it is that it does that is so much better than you. This involves getting close to it and learning - but also exchanging information. Also it is likely that others in the industry will also wish to contact it so competition will be intense.
Conclusion
Benchmarking is more than just a comparative analysis - this sort of analysis has been undertaken for many years with little benefits. What benchmarking contributes is that 'lessons are learned'. The difference with a benchmarking study is that a better way of doing things is analysed and then the key factors - the enablers - are then used to close the gap. NB techniques and enablers that were critical in recent past will not remain the same so the processes should be revisited periodically to see if they are still extant and if not to find out what needs to be done. There are a few key issues for organisations beginning benchmarking efforts:
• top management commitment and participation are necessary
• sufficient time must be allowed for the project as it takes time
• an able, well-trained team is critical - where appropriate get outside help (consultants)
• it is heavy on resources: people, travel, research, consultants, and other factors are involved
• process rigour is an absolute sine qua non for success - you cannot 'graze the surface'
• quantitative data is often difficult and time consuming to obtain
In addition there are some principles that have evolved over time which form a framework to such studies:
• legality - you must be open and honest
• exchange - a quid pro quo
• confidentiality - it remains between you and the benchmark
• use - only for the purpose agreed
• preparation - is essential to succeed
• completion - of all tasks and implementation must be carried out
• understanding - of your processes, gaps, enablers [and their relevance to you] and the action to close the gap are key to success
Successful benchmarking requires three basic ingredients: a real problem with management willing to solve it; access to benchmarking partners who have previously resolved that problem; a knowledgeable benchmarking team with the ability to use quality tools and research practices to investigate process problems to their root cause. In most cases it is advisable to use external consultants who bring expertise and experience and can help you carry out a benchmarking exercise avoiding pitfalls and maximising return from effort.
BRAND BUILDING AND MANAGEMENT
Brand Management
The process by which marketers attempt to optimise the 'Marketing mix' for a specific brand.
Branding involves decisions that establish an identity for a product with the goal of distinguishing it from competitors' offerings.
What is a Brand?
In Principles of Marketing, by Philip Kotler and Gary Armstrong a brand is defined as ‘a name, term, sign symbol or a combination of these, that identifies the maker or seller of the product’ ..
Brand Switching:
A consumer that purchases multiple brands of a product. For example, a consumer that purchases Pepsi one week and Coke the next week
Brand Impact:
A technique used to measure the effectiveness of advertising.
Brand manager - The individual in an organization responsible for planning, implementing, and controlling the marketing program for a particular brand. Brand managers are sometimes referred to as product managers.
BRAND BUILDING MODEL :BRAND BUILDING MODEL 4 Steps of brand building Brand building blocks Brand building implications
4 Steps of brand building :4 Steps of brand building Building brands, according to CBBE model, can be thought of as a sequence of steps, in which each step is contingent on successfully achieving the previous step: Ensure identification of the brand with customers & an association of the brand in customers’ mind with a specific product class or customer need Firmly establish the totality of brand meaning in the minds of customers by strategically linking a host of tangible & intangible brand associations with certain properties Elicit the proper customer responses to this brand identification & brand meaning Convert brand responses to create an intense, active loyalty relationship between customers & the brand
4 Steps of brand building (contd.) :4 Steps of brand building (contd.) These 4 steps constitute fundamental questions customers ask about brands: Who are you? (brand identity) What are you? (brand meaning) What about you? What do I think or feel about you? (brand responses) What about you and me?
Brand building blocks :Brand building blocks Resonance Judgement Feelings Performance Imagery Salience 4. Relationship What about you & me? 3. Response What about you? 2. Meaning What are you? Identity Who are you?
Sub dimensions of brand building model :Sub dimensions of brand building model Loyalty Attachment Community Engagement Quality Warmth, Fun Credibility Excitement Consideration Security Superiority Social approval, Self-respect Primary characteristics & User profiles Secondary features Purchase & usage situations Product reliability Personality & values Durability & serviceability History, heritage Service effectiveness & Experiences Efficiency & empathy Style & design, Price Category identification Need satisfied
Brand building blocks :Brand building blocks Salience Performance Imagery Judgment Feelings Resonance
Brand salience :Brand salience What basic function does the brand provide to customers? Breadth & depth of awareness Product category structure
Breadth & depth of awareness (eg Tropicana) :Breadth & depth of awareness (eg Tropicana) At the most basic level, its necessary that consumers recognise the Tropicana brand when it is presented or exposed to them Beyond that, consumers should think of Tropicana whenever they think of orange juice, particularly when they are thinking of purchase in that category Additionally, consumers ideally would think of Tropicana whenever they were deciding which type of beverage to drink, specially when seeking a “tasty but healthy” beverage – some of the needs presumably satisfied by orange juice Thus , consumers must think of Tropicana in terms of satisfying a certain set of needs whenever those needs arise.
Product category structure (beverages) :Product category structure (beverages) Beverages Water Flavour Alcoholic Nonalcoholic Milk Juices Wine Distilled spirit Hot beverages Soft drinks Beer
Product category structure :Product category structure To fully understand brand recall, it is important to appreciate product category structure, or how product categories are organised in memory, for example beverages: As the configuration for beverages show, consumers often make decisions in top down fashion Implications: Understanding the hierarchy gives a clue on how to increase awareness, as well as position the brand In some cases, the best route for improving sales for a brand is not by improving consumer attitudes toward the brand but, instead, by increasing the breadth of brand awareness & situations in which consumer would consider using the brand. For example: - to increase consumption, Tropicana is extending orange drink to occasions beyond breakfast
Brand performance :Brand performance product itself is at the heart of brand equity, because it is the primary influence on what consumers experience with a brand, what they hear about a brand from others, & what the firm can tell customers about the brand in their communications: Designing & delivering a product that fully satisfies consumer needs & wants is a prerequisite for successful marketing To create brand loyalty & resonance, consumers’ experiences with the product must at least meet, if not actually surpass, their expectations
Brand imagery :Brand imagery Brand imagery is how people think about a brand abstractly, rather than what they think brand actually does. Imagery associations can be formed: Directly: from consumers own experiences & contact with product, brand, target market, or usage situation Indirectly: depiction of these same considerations as communicated in brand advertising or by some other source of information, such as W.O.M. 4 categories can be highlighted: 1. User profiles 2. Purchase & usage situations 3. Personality & values 4. History, heritage & experiences
Brand judgement :Brand judgement How customers put together all the different performance & imagery associations of the brand to form different kinds of opinions. 4 types of summary judgments particularly important: Brand quality Brand credibility Brand consideration Brand superiority
Brand feelings :Brand feelings emotions evoked by a brand can become so strongly associated that they are acessible during product consumption or use: Researchers have defined transformational advertising as advertising designed to change consumers’ perception of the actual usage experience with the product Following are 6 important types of brand-building feelings: Warmth Fun Excitement Security Social approval Self-respect First 3 types of feelings are experiential & immediate, increasing in level of intensity Later 3 are private & enduring, increasing in level of gravity
Brand resonance :Brand resonance resonance is characterised in terms of intensity, or depth of the psychological bond that the customers have with the brand, as well as the level of activity engendered by this loyalty: Behavioural loyalty Attitudinal attachment Sense of community Active engagement Finally, perhaps the strongest affirmation of brand loyalty is when customers are willing to invest time, energy, money, or other resources in the brand beyond those expended during purchase or consumption of the brand Strong attitudinal attachment or social identity or both are typically necessary, however, for active engagement with the brand to occur
Brand building implications :Brand building implications Customers own brands Don’t take short-cuts with brands Brands should have duality Brands should have richness Brand resonance provides important focus
Brands should have duality :Brands should have duality strong brands blend product performance & imagery to create a rich, varied, but complementary set of consumer responses to the brand by appealing to both rational & emotional concerns, a strong brand provides consumers with multiple access points to the brand while reducing competitive vulnerability
Brand should have richness :Brand should have richness the various associations making up the brand image may be reinforcing, helping to strengthen or increase the favorability of other brand associations, or may be unique, helping to add distinctiveness or offset some potential deficiencies: Strong brands thus have both breadth & depth At the same time brands should not necessarily be expected to score high on all the various dimensions & categories making up each core brand value
Building blocks can have hierarchies :Building blocks can have hierarchies Brand awareness: It is typically important to first establish category identification in some way before considering strategies to expand breadth via needs satisfied or benefits offered Brand performance: Often necessary to first link primary characteristics & related features before attempting to link additional, more peripheral associations Brand imagery: Often begins with fairly concrete initial articulation of user & user imagery that, over time, leads to broader, more abstract brand associations of personality, value, history, heritage, & experience Brand judgment: Usually begin with positive quality & credibility perceptions that can lead to brand consideration & then perhaps assessment of brand superiority Brand feelings: Usually start with either experiential ones (i.e, warmth, fun, excitement) or inward ones (i.e., security, social approval, self-respect) Brand resonance: Behavioural loyalty is a starting point but attitudinal attachment or a sense of community is almost always needed for active engagement to occur
Brand resonance provides important focus :Brand resonance provides important focus brand resonance is the pinacle of cbbe model & provides important focus & priority for decision making- regarding marketing: To what extent is marketing activity affecting the key dimensions of brand resonance? Is marketing activity creating brand performance & imagery associations & consumer judgments & feelings that will support these brand resonance dimensions? In a application of CBBE model, the M.R. firm, Knowledge Network, found that brands that scored highest on loyalty & attachment were not necessarily same that scored high on community & engagement (see Chart in next slide) However, by defining the proper role for the brand, higher levels of brand resonance should be obtainable
Principles
A good brand name should:
• be protected (or at least protectable) under trademark law.
• be easy to pronounce.
• be easy to remember.
• be easy to recognize.
• be easy to translate into all languages in the markets where the brand will be used.
• attract attention.
• suggest product benefits (e.g.: Easy-Off) or suggest usage (note the tradeoff with strong trademark protection.)
• suggest the company or product image.
• distinguish the product's positioning relative to the competition.
• be attractive.
• stand out among a group of other brands.
The process by which marketers attempt to optimise the 'Marketing mix' for a specific brand.
Branding involves decisions that establish an identity for a product with the goal of distinguishing it from competitors' offerings.
What is a Brand?
In Principles of Marketing, by Philip Kotler and Gary Armstrong a brand is defined as ‘a name, term, sign symbol or a combination of these, that identifies the maker or seller of the product’ ..
Brand Switching:
A consumer that purchases multiple brands of a product. For example, a consumer that purchases Pepsi one week and Coke the next week
Brand Impact:
A technique used to measure the effectiveness of advertising.
Brand manager - The individual in an organization responsible for planning, implementing, and controlling the marketing program for a particular brand. Brand managers are sometimes referred to as product managers.
BRAND BUILDING MODEL :BRAND BUILDING MODEL 4 Steps of brand building Brand building blocks Brand building implications
4 Steps of brand building :4 Steps of brand building Building brands, according to CBBE model, can be thought of as a sequence of steps, in which each step is contingent on successfully achieving the previous step: Ensure identification of the brand with customers & an association of the brand in customers’ mind with a specific product class or customer need Firmly establish the totality of brand meaning in the minds of customers by strategically linking a host of tangible & intangible brand associations with certain properties Elicit the proper customer responses to this brand identification & brand meaning Convert brand responses to create an intense, active loyalty relationship between customers & the brand
4 Steps of brand building (contd.) :4 Steps of brand building (contd.) These 4 steps constitute fundamental questions customers ask about brands: Who are you? (brand identity) What are you? (brand meaning) What about you? What do I think or feel about you? (brand responses) What about you and me?
Brand building blocks :Brand building blocks Resonance Judgement Feelings Performance Imagery Salience 4. Relationship What about you & me? 3. Response What about you? 2. Meaning What are you? Identity Who are you?
Sub dimensions of brand building model :Sub dimensions of brand building model Loyalty Attachment Community Engagement Quality Warmth, Fun Credibility Excitement Consideration Security Superiority Social approval, Self-respect Primary characteristics & User profiles Secondary features Purchase & usage situations Product reliability Personality & values Durability & serviceability History, heritage Service effectiveness & Experiences Efficiency & empathy Style & design, Price Category identification Need satisfied
Brand building blocks :Brand building blocks Salience Performance Imagery Judgment Feelings Resonance
Brand salience :Brand salience What basic function does the brand provide to customers? Breadth & depth of awareness Product category structure
Breadth & depth of awareness (eg Tropicana) :Breadth & depth of awareness (eg Tropicana) At the most basic level, its necessary that consumers recognise the Tropicana brand when it is presented or exposed to them Beyond that, consumers should think of Tropicana whenever they think of orange juice, particularly when they are thinking of purchase in that category Additionally, consumers ideally would think of Tropicana whenever they were deciding which type of beverage to drink, specially when seeking a “tasty but healthy” beverage – some of the needs presumably satisfied by orange juice Thus , consumers must think of Tropicana in terms of satisfying a certain set of needs whenever those needs arise.
Product category structure (beverages) :Product category structure (beverages) Beverages Water Flavour Alcoholic Nonalcoholic Milk Juices Wine Distilled spirit Hot beverages Soft drinks Beer
Product category structure :Product category structure To fully understand brand recall, it is important to appreciate product category structure, or how product categories are organised in memory, for example beverages: As the configuration for beverages show, consumers often make decisions in top down fashion Implications: Understanding the hierarchy gives a clue on how to increase awareness, as well as position the brand In some cases, the best route for improving sales for a brand is not by improving consumer attitudes toward the brand but, instead, by increasing the breadth of brand awareness & situations in which consumer would consider using the brand. For example: - to increase consumption, Tropicana is extending orange drink to occasions beyond breakfast
Brand performance :Brand performance product itself is at the heart of brand equity, because it is the primary influence on what consumers experience with a brand, what they hear about a brand from others, & what the firm can tell customers about the brand in their communications: Designing & delivering a product that fully satisfies consumer needs & wants is a prerequisite for successful marketing To create brand loyalty & resonance, consumers’ experiences with the product must at least meet, if not actually surpass, their expectations
Brand imagery :Brand imagery Brand imagery is how people think about a brand abstractly, rather than what they think brand actually does. Imagery associations can be formed: Directly: from consumers own experiences & contact with product, brand, target market, or usage situation Indirectly: depiction of these same considerations as communicated in brand advertising or by some other source of information, such as W.O.M. 4 categories can be highlighted: 1. User profiles 2. Purchase & usage situations 3. Personality & values 4. History, heritage & experiences
Brand judgement :Brand judgement How customers put together all the different performance & imagery associations of the brand to form different kinds of opinions. 4 types of summary judgments particularly important: Brand quality Brand credibility Brand consideration Brand superiority
Brand feelings :Brand feelings emotions evoked by a brand can become so strongly associated that they are acessible during product consumption or use: Researchers have defined transformational advertising as advertising designed to change consumers’ perception of the actual usage experience with the product Following are 6 important types of brand-building feelings: Warmth Fun Excitement Security Social approval Self-respect First 3 types of feelings are experiential & immediate, increasing in level of intensity Later 3 are private & enduring, increasing in level of gravity
Brand resonance :Brand resonance resonance is characterised in terms of intensity, or depth of the psychological bond that the customers have with the brand, as well as the level of activity engendered by this loyalty: Behavioural loyalty Attitudinal attachment Sense of community Active engagement Finally, perhaps the strongest affirmation of brand loyalty is when customers are willing to invest time, energy, money, or other resources in the brand beyond those expended during purchase or consumption of the brand Strong attitudinal attachment or social identity or both are typically necessary, however, for active engagement with the brand to occur
Brand building implications :Brand building implications Customers own brands Don’t take short-cuts with brands Brands should have duality Brands should have richness Brand resonance provides important focus
Brands should have duality :Brands should have duality strong brands blend product performance & imagery to create a rich, varied, but complementary set of consumer responses to the brand by appealing to both rational & emotional concerns, a strong brand provides consumers with multiple access points to the brand while reducing competitive vulnerability
Brand should have richness :Brand should have richness the various associations making up the brand image may be reinforcing, helping to strengthen or increase the favorability of other brand associations, or may be unique, helping to add distinctiveness or offset some potential deficiencies: Strong brands thus have both breadth & depth At the same time brands should not necessarily be expected to score high on all the various dimensions & categories making up each core brand value
Building blocks can have hierarchies :Building blocks can have hierarchies Brand awareness: It is typically important to first establish category identification in some way before considering strategies to expand breadth via needs satisfied or benefits offered Brand performance: Often necessary to first link primary characteristics & related features before attempting to link additional, more peripheral associations Brand imagery: Often begins with fairly concrete initial articulation of user & user imagery that, over time, leads to broader, more abstract brand associations of personality, value, history, heritage, & experience Brand judgment: Usually begin with positive quality & credibility perceptions that can lead to brand consideration & then perhaps assessment of brand superiority Brand feelings: Usually start with either experiential ones (i.e, warmth, fun, excitement) or inward ones (i.e., security, social approval, self-respect) Brand resonance: Behavioural loyalty is a starting point but attitudinal attachment or a sense of community is almost always needed for active engagement to occur
Brand resonance provides important focus :Brand resonance provides important focus brand resonance is the pinacle of cbbe model & provides important focus & priority for decision making- regarding marketing: To what extent is marketing activity affecting the key dimensions of brand resonance? Is marketing activity creating brand performance & imagery associations & consumer judgments & feelings that will support these brand resonance dimensions? In a application of CBBE model, the M.R. firm, Knowledge Network, found that brands that scored highest on loyalty & attachment were not necessarily same that scored high on community & engagement (see Chart in next slide) However, by defining the proper role for the brand, higher levels of brand resonance should be obtainable
Principles
A good brand name should:
• be protected (or at least protectable) under trademark law.
• be easy to pronounce.
• be easy to remember.
• be easy to recognize.
• be easy to translate into all languages in the markets where the brand will be used.
• attract attention.
• suggest product benefits (e.g.: Easy-Off) or suggest usage (note the tradeoff with strong trademark protection.)
• suggest the company or product image.
• distinguish the product's positioning relative to the competition.
• be attractive.
• stand out among a group of other brands.
REPUTATION MANAGEMENT.
Reputation Management is the response to reputation damaging information. Bad postings, negative feedback in blogs, horrible testimonials in popular forums, unrealistic scam allegations, and product reviews from false users can potentially put a company out of business and its Reputation Management.
Reputation management is the process of tracking an entity's actions and other entities' opinions about those actions; reporting on those actions and opinions; and reacting to that report creating a feedback loop. All entities involved are generally people, but that need not always be the case. Other examples of entities include animals, businesses, or even locations or materials. The tracking and reporting may range from word-of-mouth to statistical analysis of thousands of data points.
Search Reputation Management
Reputation has always been the linchpin of business: it is the face of a business, the reason why people do or do not buy their products or engage their services. The internet adds a whole new dimension to this issue. Consumers now use the internet to research products, find suppliers, and leave customer reviews. If your company does not have a solid internet reputation, there are always more businesses from which they can choose. Search reputation management, therefore, is increasingly important in today's business world.
Search Engine Reputation Management (SERM):
Search Engine Reputation Management involves both social media marketing and social media optimization. Unhappy consumers, political groups, competitors and disgruntled employees may have an interest in posting negative information about your company. We take control of search engine results employing optimization as well as marketing to manage and control damaged identities and reputations on the Internet.
Social Media Marketing (SMM):
Social Media Marketing (SMM) uses social networks to place your brand, product or service in front of the the networking community. Social Media Marketing is a term that describes the act of using social networks, online communities, blogs, wikis or any other collaborative Internet form of media for marketing, sales, public relations and customer service.
Social Media Marketing is important in maximizing positive references, creating online identities and solving online reputation problems. Goals for Social Media Marketing include building a brand, brand management, building up reputation, causing media coverage, and driving traffic to physical business locations. Organizations such as non-profits and political parties also use Social Media Marketing to promote ideas.
Online Identity Management (OIM):
Our Online Identity Management (OIM) service offers all necessary aspects needed to fulfill a successful, ongoing identity management campaign. Starting with strategy creation to implementation through reporting and measurement, our solutions encompass the needs of any online identity management campaign. Online identity management (OIM) is a set of methods for generating a distinguished presence of a person on the Internet. That presence could be reflected in any kind of content that refers to the person.
Social Media Optimization (SMO):
One aspect of Reputation Management and Personal Branding is Social Media Optimization (SMO). This is a set of methods used to improve (or reduce) the position of a website in internet search engines. The quality of a lead you receive through organic search engine placement is very high. When someone searches for your keyword(s) and finds your site, there is an excellent possibility they are a rock-solid lead. Organic placement through Social Media Optimization is beneficial both for your Company and your bottom line.
Online Reputation Management (ORM):
Online Reputation Management (ORM) involves managing your search engine results on the web. Protecting your online brand is more important then ever as buying decisions are decided by what is found on the World Wide Web.
Online Reputation Management (ORM) involves both marketing and public relations along with search engine marketing. Visibility and high search engine indexing with good publicity which displaces negative publicity is the goal. This results in a increase in positive web presence, helping you own top spots in search engine rankings. Online Reputation Management enables you to protect and manage your reputation and brand becoming actively involved in the outcome of search engine results. Reputation Monitoring research and analysis may also be considered Online Reputation Management.
Personal Branding:
Personal branding is the process by which people and their careers are marked as brands. Also known as online image management is a set of methods for generating a respectable presence of a person on the Internet. That presence could be reflecd in any kind of content that refers to the person, including participation in blogs, personal web sites, social media, pictures or video.
Brand Reputation Management:
Brand Reputation Management is the application of marketing techniques to a specific product, product line, or brand. It seeks to increase the product’s perceived reputation value to the customer and thereby increase brand franchise and brand equity. Traditional media, social media, blogs, forums and other groups can leave you vulnerable if you are not involved.
Design and Maintenance:
We offer remarkable Web 2.0 products with well crafted strategies. Products that are extremely powerful and yet have a User Interface which is easy and simple to use. Web 2.0 Website Design, Web 2.0 Programming, Internet Marketing and Maintenance. We strive hard to accurately represent your values, mission and character with strategic thinking, personal attention and competitive prices.
Reputation Management Monitoring Services:
We offer Comprehensive, Automated Reputation Management Monitoring Products for our SERM clients. Learn who is talking about you, your brand, company or products on websites, videos, news, blogs and social networks.
Reputation Management Performance Reports
We generate Reputation Management performance reports. We track Google, Yahoo, and MSN. We can also track Ask, AOL, or any other major search engine.
Optional Services
For custom strategies involving Link building, Pay Per Click, Viral Marketing, Social Media, Reputation Management, Video, Article, Newsletter, Press Release creation and implementation: Please contact us and we will provide you with a package tailored to your needs.
Reputation Management Monitoring Services
We offer Comprehensive, Automated Reputation Management Monitoring for Clients. Learn who is talking about you, your brand, company or products on websites, videos, news, blogs and social networks.
Impact on Business
Consumers often search the Internet for opinions and experiences with products and services. You can face a difficult conflict when attempting to remove negative reports on the Internet where disgruntled employees and customers take their grievances to the public. How do you defend your reputation from this negative publicity?
Negative Posting Removal
We can assist you to remove negative ad reports from first page search engine results.
Negative Posting Prevention
If your Company needs assistance with bad publicity prevention we can help.
Annoying Complaints
Possibly you recently found negative publicity from a review website in search engine results. It is difficult to measure the impact from customer complaint sites but there are losses as a result of such sites. While the complaint sites may only be a nuisance to large corporations, they can be devastating to smaller companies.
Consumer Complaint Sites
The greater part of complaint sites are consumer complaint sites. These sites usually collect stories of bad customer service or a deficient product. The list of these sites is growing.
Competitor Complaints
Some complaint sites may be run by a competing company or its employees.
Other Sites
In addition to disgruntled employees and consumers, companies may face Internet sites backed by environmental or other activist groups seeking to promote their political causes. There are many examples of these types of Web sites.
Power of the Web
Much to the annoyance of company administrators, Internet complaint web sites have become the tool of choice for irritated customers, disgruntled employees, political activists and anyone else to air their bellyaches economically and effectively. Concealed by anonymity and powered by a worldwide audience, Internet complainers can impose chaos on your Company.
Reputation Management is Critical
Reputation Management is critical when considering fiscal implications. Reputation Management through analyzing and influencing search engine results, can prevent the loss of business or career and ensure ongoing success for you and your Company.
Retail & consumer challenges
• Corporate governance
The recent wave of business scandals and ethical lapses have heightened public, press, and investor scrutiny of companies, creating demand for a corporate culture of integrity-driven performance and a new corporate transparency. Management and Boards now feel compelled to ensure that proper governance processes are in place to protect corporate reputation, brand image and shareholder value. According to PricewaterhouseCoopers’ 8th Annual Global CEO Survey ( Dec 2004), 50% of retail industry CEOs believe there is a strong relationship among all elements of GRC ( governance, risk and compliance) and that effective governance can be a value driver and a benefit, versus a cost, to their companies.
Market value recognition
market valuation in the retail industry — Retailing & consumer Reporting in the 21st century — there has been a strong tendency to undervalue companies in the retail and consumer goods industry. One of the reasons is that intangibles, such as brand value and customer loyalty, have traditionally not been included as performance benchmarks. The widespread implementation of IFRS (International Financial Reporting Standards), which will enable international, industry-specific comparisons, will likely have significant effects on the market value of retail and consumer companies.
Globalization/Consolidation
Competitive pressures, especially the pressure on sales growth and profit margins, are encouraging companies of all types to pursue globalisation through M&A and industry consolidation. The availability of information technology and data capabilities have made serving and sourcing from global markets easier, thus permitting the adoption of new product and sales strategies, economic models and inventory management techniques to fuel growth. Consolidation, resulting in greater operational efficiencies and economies of scale, is shaping the retail industry and is seen as a way of strengthening one’s position in an industry with fewer, larger players.
Marketing effectiveness
Consumer packaged good (CPG) companies spend significant amounts on media advertising, trade promotions and other marketing expenses to raise consumer awareness, increase market share and revenues, and build a brand franchise with consumers. At the same time, retailers are extending their operations around the world, making their stores and their private label products increasingly visible to consumers.
Reputation management is the process of tracking an entity's actions and other entities' opinions about those actions; reporting on those actions and opinions; and reacting to that report creating a feedback loop. All entities involved are generally people, but that need not always be the case. Other examples of entities include animals, businesses, or even locations or materials. The tracking and reporting may range from word-of-mouth to statistical analysis of thousands of data points.
Search Reputation Management
Reputation has always been the linchpin of business: it is the face of a business, the reason why people do or do not buy their products or engage their services. The internet adds a whole new dimension to this issue. Consumers now use the internet to research products, find suppliers, and leave customer reviews. If your company does not have a solid internet reputation, there are always more businesses from which they can choose. Search reputation management, therefore, is increasingly important in today's business world.
Search Engine Reputation Management (SERM):
Search Engine Reputation Management involves both social media marketing and social media optimization. Unhappy consumers, political groups, competitors and disgruntled employees may have an interest in posting negative information about your company. We take control of search engine results employing optimization as well as marketing to manage and control damaged identities and reputations on the Internet.
Social Media Marketing (SMM):
Social Media Marketing (SMM) uses social networks to place your brand, product or service in front of the the networking community. Social Media Marketing is a term that describes the act of using social networks, online communities, blogs, wikis or any other collaborative Internet form of media for marketing, sales, public relations and customer service.
Social Media Marketing is important in maximizing positive references, creating online identities and solving online reputation problems. Goals for Social Media Marketing include building a brand, brand management, building up reputation, causing media coverage, and driving traffic to physical business locations. Organizations such as non-profits and political parties also use Social Media Marketing to promote ideas.
Online Identity Management (OIM):
Our Online Identity Management (OIM) service offers all necessary aspects needed to fulfill a successful, ongoing identity management campaign. Starting with strategy creation to implementation through reporting and measurement, our solutions encompass the needs of any online identity management campaign. Online identity management (OIM) is a set of methods for generating a distinguished presence of a person on the Internet. That presence could be reflected in any kind of content that refers to the person.
Social Media Optimization (SMO):
One aspect of Reputation Management and Personal Branding is Social Media Optimization (SMO). This is a set of methods used to improve (or reduce) the position of a website in internet search engines. The quality of a lead you receive through organic search engine placement is very high. When someone searches for your keyword(s) and finds your site, there is an excellent possibility they are a rock-solid lead. Organic placement through Social Media Optimization is beneficial both for your Company and your bottom line.
Online Reputation Management (ORM):
Online Reputation Management (ORM) involves managing your search engine results on the web. Protecting your online brand is more important then ever as buying decisions are decided by what is found on the World Wide Web.
Online Reputation Management (ORM) involves both marketing and public relations along with search engine marketing. Visibility and high search engine indexing with good publicity which displaces negative publicity is the goal. This results in a increase in positive web presence, helping you own top spots in search engine rankings. Online Reputation Management enables you to protect and manage your reputation and brand becoming actively involved in the outcome of search engine results. Reputation Monitoring research and analysis may also be considered Online Reputation Management.
Personal Branding:
Personal branding is the process by which people and their careers are marked as brands. Also known as online image management is a set of methods for generating a respectable presence of a person on the Internet. That presence could be reflecd in any kind of content that refers to the person, including participation in blogs, personal web sites, social media, pictures or video.
Brand Reputation Management:
Brand Reputation Management is the application of marketing techniques to a specific product, product line, or brand. It seeks to increase the product’s perceived reputation value to the customer and thereby increase brand franchise and brand equity. Traditional media, social media, blogs, forums and other groups can leave you vulnerable if you are not involved.
Design and Maintenance:
We offer remarkable Web 2.0 products with well crafted strategies. Products that are extremely powerful and yet have a User Interface which is easy and simple to use. Web 2.0 Website Design, Web 2.0 Programming, Internet Marketing and Maintenance. We strive hard to accurately represent your values, mission and character with strategic thinking, personal attention and competitive prices.
Reputation Management Monitoring Services:
We offer Comprehensive, Automated Reputation Management Monitoring Products for our SERM clients. Learn who is talking about you, your brand, company or products on websites, videos, news, blogs and social networks.
Reputation Management Performance Reports
We generate Reputation Management performance reports. We track Google, Yahoo, and MSN. We can also track Ask, AOL, or any other major search engine.
Optional Services
For custom strategies involving Link building, Pay Per Click, Viral Marketing, Social Media, Reputation Management, Video, Article, Newsletter, Press Release creation and implementation: Please contact us and we will provide you with a package tailored to your needs.
Reputation Management Monitoring Services
We offer Comprehensive, Automated Reputation Management Monitoring for Clients. Learn who is talking about you, your brand, company or products on websites, videos, news, blogs and social networks.
Impact on Business
Consumers often search the Internet for opinions and experiences with products and services. You can face a difficult conflict when attempting to remove negative reports on the Internet where disgruntled employees and customers take their grievances to the public. How do you defend your reputation from this negative publicity?
Negative Posting Removal
We can assist you to remove negative ad reports from first page search engine results.
Negative Posting Prevention
If your Company needs assistance with bad publicity prevention we can help.
Annoying Complaints
Possibly you recently found negative publicity from a review website in search engine results. It is difficult to measure the impact from customer complaint sites but there are losses as a result of such sites. While the complaint sites may only be a nuisance to large corporations, they can be devastating to smaller companies.
Consumer Complaint Sites
The greater part of complaint sites are consumer complaint sites. These sites usually collect stories of bad customer service or a deficient product. The list of these sites is growing.
Competitor Complaints
Some complaint sites may be run by a competing company or its employees.
Other Sites
In addition to disgruntled employees and consumers, companies may face Internet sites backed by environmental or other activist groups seeking to promote their political causes. There are many examples of these types of Web sites.
Power of the Web
Much to the annoyance of company administrators, Internet complaint web sites have become the tool of choice for irritated customers, disgruntled employees, political activists and anyone else to air their bellyaches economically and effectively. Concealed by anonymity and powered by a worldwide audience, Internet complainers can impose chaos on your Company.
Reputation Management is Critical
Reputation Management is critical when considering fiscal implications. Reputation Management through analyzing and influencing search engine results, can prevent the loss of business or career and ensure ongoing success for you and your Company.
Retail & consumer challenges
• Corporate governance
The recent wave of business scandals and ethical lapses have heightened public, press, and investor scrutiny of companies, creating demand for a corporate culture of integrity-driven performance and a new corporate transparency. Management and Boards now feel compelled to ensure that proper governance processes are in place to protect corporate reputation, brand image and shareholder value. According to PricewaterhouseCoopers’ 8th Annual Global CEO Survey ( Dec 2004), 50% of retail industry CEOs believe there is a strong relationship among all elements of GRC ( governance, risk and compliance) and that effective governance can be a value driver and a benefit, versus a cost, to their companies.
Market value recognition
market valuation in the retail industry — Retailing & consumer Reporting in the 21st century — there has been a strong tendency to undervalue companies in the retail and consumer goods industry. One of the reasons is that intangibles, such as brand value and customer loyalty, have traditionally not been included as performance benchmarks. The widespread implementation of IFRS (International Financial Reporting Standards), which will enable international, industry-specific comparisons, will likely have significant effects on the market value of retail and consumer companies.
Globalization/Consolidation
Competitive pressures, especially the pressure on sales growth and profit margins, are encouraging companies of all types to pursue globalisation through M&A and industry consolidation. The availability of information technology and data capabilities have made serving and sourcing from global markets easier, thus permitting the adoption of new product and sales strategies, economic models and inventory management techniques to fuel growth. Consolidation, resulting in greater operational efficiencies and economies of scale, is shaping the retail industry and is seen as a way of strengthening one’s position in an industry with fewer, larger players.
Marketing effectiveness
Consumer packaged good (CPG) companies spend significant amounts on media advertising, trade promotions and other marketing expenses to raise consumer awareness, increase market share and revenues, and build a brand franchise with consumers. At the same time, retailers are extending their operations around the world, making their stores and their private label products increasingly visible to consumers.
HUMAN RESOURCE ACCOUNTING & AUDITING
Definition:
Human Resource Accounting is Assigning, budgeting, and reporting the cost of human resources incurred in an organization, including wages and salaries and training expenses.
Human is the core factor and which is required to be recognized prior to any other 'M's But till now an urgent need based modification is required while identifying and measuring data about human resources. In this paper my objective is to identify the extensive use of Lev & Schwartz model of Human resource accounting, in spite of several criticized from various sides regarding its applicability. Further more, it also portrays the applicability in wide variety of organization of such model (some pubic sector units and IT based sector).
It is one of the most important 'M' associated, which is considered while taken care of 4M's associated with any organization and they are money machines, materials and men. But the most interesting thing is that the first three are recognized and find a place in the assets side of the Balance sheet of the organization. But in case of fourth one ambiguity prevails among the accountant. In spite of its usefulness has been acclaimed is various literature over the decades but its application still remain a suspectable issue, the IASB and the ASB in different countries have not been able to formulate any specific accounting standard for measurement & reporting of such valuable elements.
It is a popular phenomenon among the Indian corporate world is to disclose information relating to human resource in annual statements. In this context, it is necessary to conduct a study to assess the disclosure pattern of HRA information in Indian corporate World.
It first promulgated by BHEL (Bharat Heavy Electrical Ltd), a leading public enterprise, during the financial year 1972-73. Later it was also adopted by other leading public and private sector Organization in the subsequent years. Some of them are Hindustan Machine Tools Ltd.(HMTL). Oil and Natural Gas Corporation Ltd.(ONGC), NTPC, Cochin Refineries Ltd. (CRL), Madras Refineries Ltd.,(MRL), Associated Cement Company Ltd.(ACC) and Infosys Technologies Ltd.(ITL).
However, adaptability of various model (mainly Lev and Schwartz model, Flamholtz model and Jaggi and Lev model) and discount rate fixation and disclosure pattern ie. either age wise, skill wise etc in BHEL, SAIL, MMTC (Minerals & Metals Trading Corporation Of India Ltd.) HMTL, NTP make it clear, that there has been no uniformity among Indian enterprises regarding HRA disclosure.
Financial Audit is different from financial Accounting
There is a simple distinction between Accounting and Audit.
Accounting means proper recording of monetory transactions and Audit means examination of Accounts.
In HR parlance this would necessarily mean accounting of transactions involving employee salaries, employee training and such other expenditure depending on the company policy. Audit would be examination of such records.
Risk & Audit Management also enables risk and audit professionals to simplify the various functions of the legal and regulatory process and gain control, get insight and get the job done quickly and confidently while reducing risk, cutting costs, and establishing a viable long-term strategy for compliance success.
Meaning Of Human Resource Accounting:
HRA has been defined by American Accounting Association's committee –"HRA is the process of identifying & measuring data about human resources & communicating this information to interested parties". According to Eric. G flamholtz HRA represents-"Accounting for people as an organizational resource. It is the measurement of the cost & value of people for the organization".
Although HR valuation has important implication for external financial reporting, in the contemporary economic scenario valuing HR has been greater significance for internal HRM decision.
Problem Statement: Understanding the way of valuation of human resources by using Lev & Schwartz model and how valuation of such asset are related with the other financial variables for financial reporting purpose.
Research Objectives:
• To asses the way of presenting HRA information in the financial statement by selected companies
• To identify HRA methods and models (mainly the extensive use of Lev & Schwartz model) which are used to arrive at human resource value.
• How human resource are related with the other accounting variables for the purpose of human financial reporting in selected companies.
PRODUCTIVITY & PERFORMANCE INDICATORS
The ways of presentation of HRA information disclosed by some of the companies:
Name of the organization
HRA introduce in the Year
Models of Human Capital Valuation
Many models have been created to value human capital. Some are based on historic costs while some are based on future earnings. But each has its own limitations and one model has proved to be more valid than other. Although the Lev and Schwartz model has been the most widely use model for its ease of use & convenience.
The Lev & Schwortz Model
The Lev and Schwartz model states that the human resource of a co is the summation of value of all the Net present value (NPV) of expenditure on employees. The human capital embodied in a person of age r is the present value of his earning from employment
Under this model, the following steps are adopted to determine HR Value.
i) Classification of the entire labour force into certain homogeneous groups like skilled, unskilled, semiskilled etc. and in accordance with different classed and age wise.eg. In Infosys the classification is based on software professionals & support staff etc.
ii) Construction of average earning stream for each group.eg. At Infosys Incremental earnings based on group/ age have been considered.
iii) Discounting the average earnings at a predetermined rate in order to get present value of human resource's of each group.
iv) Aggregation of the present value of different groups which represent the capitalized future earnings of the concern as a whole,
Where, Vr = the value of an Individual r years old
I (t) = the individual's annual earnings up to retirement
t = retirement age
R = a discount rate specific to the cost of capital to the company.
Critical appraisal of the Lev & Schwartz model: –
• It is essentially an input measure .It ignores the output i.e. productivity of employees.
• Service state of each individual employee is not considered.
• The training expenses incurred by the company on its employees are not considered.
• The attrition rate in organization is also ignored.
• Factors responsible for higher earning potentiality of each individual employees like seniority, bargaining capacity, skill, experience etc. which may cause differential salary structure are also ignore.
Conclusion
The conceptual thinking about valuation human resources is still in a developing stage. No model of HR accounting is accepted by the accounting bodies all over the world. However, still we find some application of Lev & Schwartz model is most public sector units and IT based sectors. In knowledge based sectors where human resources are considered to be the key elements for monitoring the business activities to attend their goals successfully, may not overlooked this side. Hence, considering the great significance of HRA proper initiation should be taken by the government along with that other professional & accounting bodies both at the national & international levels for the measurement & reporting of such valuable assets.
Human Resource Accounting is Assigning, budgeting, and reporting the cost of human resources incurred in an organization, including wages and salaries and training expenses.
Human is the core factor and which is required to be recognized prior to any other 'M's But till now an urgent need based modification is required while identifying and measuring data about human resources. In this paper my objective is to identify the extensive use of Lev & Schwartz model of Human resource accounting, in spite of several criticized from various sides regarding its applicability. Further more, it also portrays the applicability in wide variety of organization of such model (some pubic sector units and IT based sector).
It is one of the most important 'M' associated, which is considered while taken care of 4M's associated with any organization and they are money machines, materials and men. But the most interesting thing is that the first three are recognized and find a place in the assets side of the Balance sheet of the organization. But in case of fourth one ambiguity prevails among the accountant. In spite of its usefulness has been acclaimed is various literature over the decades but its application still remain a suspectable issue, the IASB and the ASB in different countries have not been able to formulate any specific accounting standard for measurement & reporting of such valuable elements.
It is a popular phenomenon among the Indian corporate world is to disclose information relating to human resource in annual statements. In this context, it is necessary to conduct a study to assess the disclosure pattern of HRA information in Indian corporate World.
It first promulgated by BHEL (Bharat Heavy Electrical Ltd), a leading public enterprise, during the financial year 1972-73. Later it was also adopted by other leading public and private sector Organization in the subsequent years. Some of them are Hindustan Machine Tools Ltd.(HMTL). Oil and Natural Gas Corporation Ltd.(ONGC), NTPC, Cochin Refineries Ltd. (CRL), Madras Refineries Ltd.,(MRL), Associated Cement Company Ltd.(ACC) and Infosys Technologies Ltd.(ITL).
However, adaptability of various model (mainly Lev and Schwartz model, Flamholtz model and Jaggi and Lev model) and discount rate fixation and disclosure pattern ie. either age wise, skill wise etc in BHEL, SAIL, MMTC (Minerals & Metals Trading Corporation Of India Ltd.) HMTL, NTP make it clear, that there has been no uniformity among Indian enterprises regarding HRA disclosure.
Financial Audit is different from financial Accounting
There is a simple distinction between Accounting and Audit.
Accounting means proper recording of monetory transactions and Audit means examination of Accounts.
In HR parlance this would necessarily mean accounting of transactions involving employee salaries, employee training and such other expenditure depending on the company policy. Audit would be examination of such records.
Risk & Audit Management also enables risk and audit professionals to simplify the various functions of the legal and regulatory process and gain control, get insight and get the job done quickly and confidently while reducing risk, cutting costs, and establishing a viable long-term strategy for compliance success.
Meaning Of Human Resource Accounting:
HRA has been defined by American Accounting Association's committee –"HRA is the process of identifying & measuring data about human resources & communicating this information to interested parties". According to Eric. G flamholtz HRA represents-"Accounting for people as an organizational resource. It is the measurement of the cost & value of people for the organization".
Although HR valuation has important implication for external financial reporting, in the contemporary economic scenario valuing HR has been greater significance for internal HRM decision.
Problem Statement: Understanding the way of valuation of human resources by using Lev & Schwartz model and how valuation of such asset are related with the other financial variables for financial reporting purpose.
Research Objectives:
• To asses the way of presenting HRA information in the financial statement by selected companies
• To identify HRA methods and models (mainly the extensive use of Lev & Schwartz model) which are used to arrive at human resource value.
• How human resource are related with the other accounting variables for the purpose of human financial reporting in selected companies.
PRODUCTIVITY & PERFORMANCE INDICATORS
The ways of presentation of HRA information disclosed by some of the companies:
Name of the organization
HRA introduce in the Year
Models of Human Capital Valuation
Many models have been created to value human capital. Some are based on historic costs while some are based on future earnings. But each has its own limitations and one model has proved to be more valid than other. Although the Lev and Schwartz model has been the most widely use model for its ease of use & convenience.
The Lev & Schwortz Model
The Lev and Schwartz model states that the human resource of a co is the summation of value of all the Net present value (NPV) of expenditure on employees. The human capital embodied in a person of age r is the present value of his earning from employment
Under this model, the following steps are adopted to determine HR Value.
i) Classification of the entire labour force into certain homogeneous groups like skilled, unskilled, semiskilled etc. and in accordance with different classed and age wise.eg. In Infosys the classification is based on software professionals & support staff etc.
ii) Construction of average earning stream for each group.eg. At Infosys Incremental earnings based on group/ age have been considered.
iii) Discounting the average earnings at a predetermined rate in order to get present value of human resource's of each group.
iv) Aggregation of the present value of different groups which represent the capitalized future earnings of the concern as a whole,
Where, Vr = the value of an Individual r years old
I (t) = the individual's annual earnings up to retirement
t = retirement age
R = a discount rate specific to the cost of capital to the company.
Critical appraisal of the Lev & Schwartz model: –
• It is essentially an input measure .It ignores the output i.e. productivity of employees.
• Service state of each individual employee is not considered.
• The training expenses incurred by the company on its employees are not considered.
• The attrition rate in organization is also ignored.
• Factors responsible for higher earning potentiality of each individual employees like seniority, bargaining capacity, skill, experience etc. which may cause differential salary structure are also ignore.
Conclusion
The conceptual thinking about valuation human resources is still in a developing stage. No model of HR accounting is accepted by the accounting bodies all over the world. However, still we find some application of Lev & Schwartz model is most public sector units and IT based sectors. In knowledge based sectors where human resources are considered to be the key elements for monitoring the business activities to attend their goals successfully, may not overlooked this side. Hence, considering the great significance of HRA proper initiation should be taken by the government along with that other professional & accounting bodies both at the national & international levels for the measurement & reporting of such valuable assets.
RETAIL MANAGEMENT
Meaning:
Retailing is the set of business activities that adds value to the products and services sold to consumers for their personal or family use. Often people think of retailing only as the sale of products in stores. But retailing also involves the sale of services: overnight lodging in motel, a doctor’s exam, a haircut, a video-tape rental or a home-delivered pizza. Not all retailing is done in stores. A retailer is a business person who sells products or services or both, to consumers for their personal or family use. Retailers attempt to satisfy consumer needs by having the right merchandise, at the right price, at the right place, when the consumer wants it. Retailers also provide markets for producers to sell their merchandise.
RETAIL MANAGEMENT
The Indian Retail Industry is the largest among all the industries,accounting for over 10% of the country's GDP and around 8% of the country's employment. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. Find the right course to start your career in retail.
Retailers are the final business in a distribution channel that links manufacturers to consumers. A distribution channel is a set of firms that facilitate the movement of products from the point of production to the point of sale to the ultimate consumer. Retail Management is a comprehensive textbook designed to meet the needs of all the students and teachers of the subject, professionals in this field and those pursuing MBA and diploma in business and retail management. It is also a valuable source of information for industrialists associated with retail and managers and employees working in malls and retail store establishments. It provides an in-depth coverage of retailing theory and explains the key concepts of retailing through numerous illustrations, examples, exhibits, tables, figures and case studies.
Beginning with introduction the book discusses retail location, store design and layout, brands, pricing and retail promotion strategies. The book also discusses challenges faced by retailers in India and other developing countries. It goes on to discuss category management, supply chain management, human resource management, inventory management, internet retailing, information technology and retailing. Finally, it discusses strategies to deal with booms and slumps, and legal and ethical issues in retailing.
SUPPLY CHAIN MANAGEMENT
Lower your Inventory Investment : Consolidated view of inventory including the need at each point of sale facilitates optimum inventory at each point of sale. Also ensures that stock can be transferred to the point of sale at short notice. This lowers investment & increases the return
Increase your ROI : Identify non-moving stock across the chain, transfer them to where they are selling and/or return them. Also, identify and return non-moving stock at purchase value to avoid any loss on non-moving stock return. Such effective stock transfers coupled with purchase returns increase the ROI.
Best Purchase : As you pool your requirements, the volume of purchase goes up. This allows you better negotiating leverage. Combining this with the analysis of your sales, purchase and inventory data, allows you source products from the cheapest and best.
Lower Operating Cost : Optimal utilization of man power, optimal utilization of store space, effective inventory management etc. leads to lower operating costs
Centralized Financial Control : As your business moves to a model of depositing the entire receipts/collections with the HQ and all payments are made from HQ, you get better financial control over your business.
Fraud Prevention: Real-time / Periodic upload of point of sale data to the HQ prevents any tampering with data at the point of sale. This builds better awareness among point of sale staff and prevent fraud
Prevent poor practices from becoming bad habits: Audit trail help HQ know the activities done at the point of sale and identify the poor practices such as stock updation, temporary stock addition etc. Corrective action for such poor practices can be taken by training the personnel at the point of sale. This helps in making sure poor practices do not become bad habits
Item Normalization: This helps in providing a standardized, complete and accurate data across the item master files of both the retailer and wholesaler. Item normalization helps to analyze the data more accurately and provide high quality reports.
Definition of a retail strategy enables areas within the organizations
Sales/Marketing Management
The definition of a retail strategy enables other areas within the organizations to determine their strategies. Primary among these are:
1) Store Location
2) Merchandising
3) Pricing
4) Marketing
The primary areas that is influenced by the business strategy to be adopted by the retailer, is the decision on store location,. For years, experts have argued that the three most important aspects of any retail business were Location, Depending on the business model that is to be adopted by a retailer, the store location to be chosen. A strategy for tapping the up market consumer requires that the store be located in a place where such a consumer will shop. Similarly for building a model based in discounting may not really require prime locations in which case a lager place may be what is needed.
The second factor that is influenced by the strategy is the type of merchandise to be stocked. If the retailer chooses to dominate the market place based on product selection he needs to ensure that he has the largest and widest selection of a product category imaginable or merchandise that is so unique, people will seek out the store. The merchandising strategy has to draw from the overall business strategy to understand and determine the types of products that will be needed in the store and the kind of prices that will have to be determined. The merchandising strategy has to match the selling strategy. Very often, the merchandising strategy is based more on long term vendor relationships or competitive distribution issues than on well thought out business strategy that is written down and communicated throughout the organization. Merchandize strategies should be based on consumer research. Selling strategies should also be based on research, but not merchandise based research that indicates to the retailer what consumers want consumers to buy, but relationship based research which indicates to the retailer how they want to be treated when they buy.
Related to the concept of merchandising is the concept of pricing which again is influenced by the business model that the retailer has chosen to adopt. Very often, being the price leader is till a valid strategy. However, it is not necessary to be low price leader. The other and of the pricing spectrum also presents an opportunity. Lastly, the complete marketing strategy adopted by the retailer is a reflection of the overall strategy of the overall business strategy. It is a combination of the advertising, promotions communication, sales staff, the level of customer service and the complete shopping experience offered to the end consumer.
The process of strategy formulation in retail is the same as that for any other industry. It starts with retailer defining or stating the mission for the organization. The mission is at the core of the existence of the retailer. The other aspects of the strategy may change over a period of time or may vary for different markets. After defining the mission of the organization, an analysis of the internal strengths and weakness and external threats and opportunities is undertaken to help management decide on the best way to carry out the organization’s mission. The options that can be pursued are then examined and the objectives set.
Reality Companies and Retail Investors:
The demand for real estate comes from enhanced economic activity as a result of constant growth in GDP over past few years and the optimism that this growth will continue for a few more years. Commercial and housing needs itself in our country is huge. This is due to historical reasons, current size of the population, demographic changes, economic growth and change income levels that we are witnessing. It is estimated that every year for next 25 years or so, about 7 million new small to medium size houses will be needed to take care of demand. When all this young population enters workforce, commercial space is further needed employing them and so on. So there is no debate about the potential of this sector.
Before we make a case for investment in real estate it is important to understand the risk return profile of various asset classes. It is important to note some fundamental differences between other markets and real estate markets. Most large markets have ease of transaction and low costs there of which is not the case with real estate market. The table below shows that there is a probability of high return with comparatively lower risk as compared to stock market. However do not forget that if the real estate company shares are listed on stock exchange then one has to combine the profile of shares as well as real estate investment.
Investment Avenue
Return Volatility Liquidity Risk
Stock Market High High High High
Bond Medium Medium High Low
Bank Deposits Medium Low High Low
Precious metals High Medium Medium Low
Real Estates High Low Low Medium
Retailing is the set of business activities that adds value to the products and services sold to consumers for their personal or family use. Often people think of retailing only as the sale of products in stores. But retailing also involves the sale of services: overnight lodging in motel, a doctor’s exam, a haircut, a video-tape rental or a home-delivered pizza. Not all retailing is done in stores. A retailer is a business person who sells products or services or both, to consumers for their personal or family use. Retailers attempt to satisfy consumer needs by having the right merchandise, at the right price, at the right place, when the consumer wants it. Retailers also provide markets for producers to sell their merchandise.
RETAIL MANAGEMENT
The Indian Retail Industry is the largest among all the industries,accounting for over 10% of the country's GDP and around 8% of the country's employment. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. Find the right course to start your career in retail.
Retailers are the final business in a distribution channel that links manufacturers to consumers. A distribution channel is a set of firms that facilitate the movement of products from the point of production to the point of sale to the ultimate consumer. Retail Management is a comprehensive textbook designed to meet the needs of all the students and teachers of the subject, professionals in this field and those pursuing MBA and diploma in business and retail management. It is also a valuable source of information for industrialists associated with retail and managers and employees working in malls and retail store establishments. It provides an in-depth coverage of retailing theory and explains the key concepts of retailing through numerous illustrations, examples, exhibits, tables, figures and case studies.
Beginning with introduction the book discusses retail location, store design and layout, brands, pricing and retail promotion strategies. The book also discusses challenges faced by retailers in India and other developing countries. It goes on to discuss category management, supply chain management, human resource management, inventory management, internet retailing, information technology and retailing. Finally, it discusses strategies to deal with booms and slumps, and legal and ethical issues in retailing.
SUPPLY CHAIN MANAGEMENT
Lower your Inventory Investment : Consolidated view of inventory including the need at each point of sale facilitates optimum inventory at each point of sale. Also ensures that stock can be transferred to the point of sale at short notice. This lowers investment & increases the return
Increase your ROI : Identify non-moving stock across the chain, transfer them to where they are selling and/or return them. Also, identify and return non-moving stock at purchase value to avoid any loss on non-moving stock return. Such effective stock transfers coupled with purchase returns increase the ROI.
Best Purchase : As you pool your requirements, the volume of purchase goes up. This allows you better negotiating leverage. Combining this with the analysis of your sales, purchase and inventory data, allows you source products from the cheapest and best.
Lower Operating Cost : Optimal utilization of man power, optimal utilization of store space, effective inventory management etc. leads to lower operating costs
Centralized Financial Control : As your business moves to a model of depositing the entire receipts/collections with the HQ and all payments are made from HQ, you get better financial control over your business.
Fraud Prevention: Real-time / Periodic upload of point of sale data to the HQ prevents any tampering with data at the point of sale. This builds better awareness among point of sale staff and prevent fraud
Prevent poor practices from becoming bad habits: Audit trail help HQ know the activities done at the point of sale and identify the poor practices such as stock updation, temporary stock addition etc. Corrective action for such poor practices can be taken by training the personnel at the point of sale. This helps in making sure poor practices do not become bad habits
Item Normalization: This helps in providing a standardized, complete and accurate data across the item master files of both the retailer and wholesaler. Item normalization helps to analyze the data more accurately and provide high quality reports.
Definition of a retail strategy enables areas within the organizations
Sales/Marketing Management
The definition of a retail strategy enables other areas within the organizations to determine their strategies. Primary among these are:
1) Store Location
2) Merchandising
3) Pricing
4) Marketing
The primary areas that is influenced by the business strategy to be adopted by the retailer, is the decision on store location,. For years, experts have argued that the three most important aspects of any retail business were Location, Depending on the business model that is to be adopted by a retailer, the store location to be chosen. A strategy for tapping the up market consumer requires that the store be located in a place where such a consumer will shop. Similarly for building a model based in discounting may not really require prime locations in which case a lager place may be what is needed.
The second factor that is influenced by the strategy is the type of merchandise to be stocked. If the retailer chooses to dominate the market place based on product selection he needs to ensure that he has the largest and widest selection of a product category imaginable or merchandise that is so unique, people will seek out the store. The merchandising strategy has to draw from the overall business strategy to understand and determine the types of products that will be needed in the store and the kind of prices that will have to be determined. The merchandising strategy has to match the selling strategy. Very often, the merchandising strategy is based more on long term vendor relationships or competitive distribution issues than on well thought out business strategy that is written down and communicated throughout the organization. Merchandize strategies should be based on consumer research. Selling strategies should also be based on research, but not merchandise based research that indicates to the retailer what consumers want consumers to buy, but relationship based research which indicates to the retailer how they want to be treated when they buy.
Related to the concept of merchandising is the concept of pricing which again is influenced by the business model that the retailer has chosen to adopt. Very often, being the price leader is till a valid strategy. However, it is not necessary to be low price leader. The other and of the pricing spectrum also presents an opportunity. Lastly, the complete marketing strategy adopted by the retailer is a reflection of the overall strategy of the overall business strategy. It is a combination of the advertising, promotions communication, sales staff, the level of customer service and the complete shopping experience offered to the end consumer.
The process of strategy formulation in retail is the same as that for any other industry. It starts with retailer defining or stating the mission for the organization. The mission is at the core of the existence of the retailer. The other aspects of the strategy may change over a period of time or may vary for different markets. After defining the mission of the organization, an analysis of the internal strengths and weakness and external threats and opportunities is undertaken to help management decide on the best way to carry out the organization’s mission. The options that can be pursued are then examined and the objectives set.
Reality Companies and Retail Investors:
The demand for real estate comes from enhanced economic activity as a result of constant growth in GDP over past few years and the optimism that this growth will continue for a few more years. Commercial and housing needs itself in our country is huge. This is due to historical reasons, current size of the population, demographic changes, economic growth and change income levels that we are witnessing. It is estimated that every year for next 25 years or so, about 7 million new small to medium size houses will be needed to take care of demand. When all this young population enters workforce, commercial space is further needed employing them and so on. So there is no debate about the potential of this sector.
Before we make a case for investment in real estate it is important to understand the risk return profile of various asset classes. It is important to note some fundamental differences between other markets and real estate markets. Most large markets have ease of transaction and low costs there of which is not the case with real estate market. The table below shows that there is a probability of high return with comparatively lower risk as compared to stock market. However do not forget that if the real estate company shares are listed on stock exchange then one has to combine the profile of shares as well as real estate investment.
Investment Avenue
Return Volatility Liquidity Risk
Stock Market High High High High
Bond Medium Medium High Low
Bank Deposits Medium Low High Low
Precious metals High Medium Medium Low
Real Estates High Low Low Medium
Subscribe to:
Posts (Atom)